Mr. J. L. BROWN (Lisgar):
Mr. Speaker, in the course of this debate hon. gentlemen have said many things to which one would naturally wish to reply, but it would be impossible for everyone to deal fully with the matters upon which he might desire to make comment. I am sure it will be generally conceded that the Minister of Finance (Mr. Rhodes), in his presentation to the house some days ago of the economic condition of the country, discharged his duty in a highly creditable manner. It could not have been an altogether pleasant task to present to the house and to the people the condition in which Canada finds herself at the moment,
The Budget-Mr. Brown
nor do I imagine that the minister took any keen delight in announcing the new measures of taxation which he deemed necessary. However we may differ as regards the policies that have been pursued by the government, although we hold that the difficulties in which they are involved are largely of their own making, still we would be less than human if we did not manifest some sympathy for those who are now floundering in a morass. We can therefore very well afford, without relieving the government of any of its responsibilities, to congratulate the Minister of Finance upon the manner-and I say only the manner-in which he discharged the very onerous duty that his position imposed upon him.
The discussion of the general financial condition of the country has already been dealt with from this side of the house by one more capable than I, and let me extend to the hon. member for Shelburne-Yarmouth (Mr. Ralston) my hearty congratulations for the manner in which he performed the duty that was laid upon him by his party. The special resolutions of the budget I -think we can perhaps best deal with when the Speaker has left the chair and the house finds itself in committee of the whole. So far as the budget speech itself is concerned I shall content myself with referring to a few salient features which I think call for some comment, and perhaps it will be indicated in the course of my remarks that I heartily approve of the amendment which has been moved by the hon. member for Shelburne-Yarmouth. Before dealing with that phase of the subject I -wish to -take a few moments to discuss a matter which was referred to yesterday by the hon. Minister of Trade and Commerce (Mr. Stevens).
The hon. Minister of Trade and Commerce undertook at one point to give us a lecture in the kindergarten of economics. He showed that the revenue of the country, collected as it is under our system by a series of indirect taxes, must necessarily reflect the condition of trade in the country. If he had left it at that he would have been wise, but after emphasizing that very elementary fact he went on and intimated that the mentbers on this side of the house had frequently asserted that the true test of the burden laid upon the country was not the rate of taxation but the actual amount that was raised. He had listened to many speeches in the house, he said, in which that position was asserted.
Here are his own words:
Mr. Stevens: If it were possible to do so briefly, and if I felt warranted in doing so, I might remind my hon. friends of how frequently
in the past they measured the burden of taxation upon the people of Canada by the amount of revenue raised through taxation.
Mr. Browm: Oh, no.
Mr. Stevens: Oh, yes. When it suits their argument hon. gentlemen opposite frequently state that the rate of taxation is measured by the revenue produced or collected from the people. In my long experience in this house I recall having heard that argument frequently.
Mr. Brown: That came from hon. gentlemen opposite.
With the Minister of Trade and Commerce I can say that in my long experience in this house I recall having heard that argument frequently, but invariably it was from those who now sit on the government side of the house and never from those on this side. Having made that statement, the obligation rests upon me to prove that -what I say is true. I go to the Hansard of 1927, where at page 396 of Hansard I read these words of the present Prime Minister (Mr. Bennett), who was then simply the member for West Calgary:
But that is not all. Let us take the figures and consider them in the light of the statements made by the minister himself. In 1925-26 the Department of Finance shows that there was taken in customs duties as taxes from the people of this country the sum of $127,355,000 in round figures; this year the amount is $141,500,000-an increase of
$14,144,000, or $1.50 for every man, woman and child in this country, which represents, Mr. Speaker, an average of $7.50 for every Canadian family. That is the reduction in taxation enunciated by the hon. Minister of Finance!
But that is not all. With respect to excise duties as distinguished from excise taxes, we find that for the year ended March 31 last there was taken from the Canadian people for these duties $42,923,549.03, and this year there has been taken from them $47,500,000-an increase of $4,576,450.97, equivalent to practically 48 cents a head for every man, woman and child in Canada.
, It was in vain the Finance minister of that day pointed to the large revenue which was flowing into the coffers of the dominion. The revenues were buoyant, he said, because trade was flourishing. In that same budget debate I felt it incumbent upon me to correct that fallacy of the hon. member for West Calgary. I said:
I have been amazed at some of the fallacies
I am not so easily amazed as I was then:
to which utterance has been given during the debate by some hon. members opposite, from the first hon. member who spoke, the hon. member for West Calgary (Mr. Bennett) almost down to the last. It was urged upon us that taxation had not been reduced, and elaborate figures were produced to show that such was the case.
I need not read all that I said on that occasion. I simply pointed out the very
The Budget-Mr. Brown
obvious truth which the Minister of Trade and Commerce himself pointed out yesterday.
The Minister of Justice (Mr. Guthrie) is the one who generally suffers from these references to the Hansard of old days. In his criticism of the budget of 1929 he said this:
Now this is where the precise language in his budget speech fitted in so well. How careful he was when speaking on taxation to use these words:
' The rate of taxation has been reduced."
Well, even that statement was not true before Friday last, but who cares about the rate of taxation? The rate does not count. The only thing that counts in this world in regard to taxes is the burden of taxation.
Then he went on to quote Mr. Gladstone- not very pertinently I think, because Mr. Gladstone was speaking of an entirely different set of circumstances, and I think the hon. Minister of Justice misquoted from Mr. Gladstone.
May I also quote from my speech of last session when I said:
Something else upon which I would congratulate the Minister of Finance is that he has evidently come to a recognition of the fact that the volume of revenue does not necessarily depend upon the rate of taxation, or at least that the rate of taxation is not the only factor in determining the volume of revenue.
Further on I said:
As I have said, .the Minister of Finance has evidently learned, speaking generally, that all he is able to do is to fix the rates of taxation, tor the volume of taxation will be determined by the amount of business that is done when those different rates are in effect.
I trust now that we have heard the last of these very foolish arguments that we listened to in the last parliament, and I hope that when we have a government in power again with the revenues of the country buoyant, brought about by expanding trade, we shall not hear those foolish arguments from hon. gentlemen opposite.
In reference to the reduction in customs duties, the Finance minister in his budget speech the other day said that the customs duties had been reduced in the last fiscal year to $102,891,000, or about $29,000,000 less than in 1931, and $84,000,000 less than in the peak year of the last five years, in 1928-29. He said this was due in part to the encouragement given to the production of goods in Canada. I do not know whether the Minister of Finance holds the extreme views, I might almost say the fanatical views, of the Prime Minister in regard to protection. On two occasions I have asked the Prime Minister how certain changes he proposed to make in the tariff were going to affect revenue. His answer was something like this-quoting
Henry George as authority: When it was a matter of protecting Canadian industries the question of revenue was not to be considered. I should like to ask the Minister of Finance whether in view of the reduction in customs receipts, brought about, as he himself has admitted, by the policy of protection, that is the policy of encouraging the production of goods in Canada, he is still prepared to ignore the question of revenue when he proposes increases in the tariffs. That he is not disposed to ignore the question is abundantly clear from the fact that he has added two per cent to import duties. Now, do not let us be confused as to what that tax really means. We call it an excise tax, but it is just as truly a custom tariff tax as the other twenty or thirty per cent. I should like him to explain how he expects to get more revenue from the two per cent additional tax when the hitherto existing tariff taxes have already resulted in a reduction of revenue. That is his own statement. It may be urged that that tax is not high enough to exclude goods that are now coming in under the free list. That may be true. Rut if it is true, as is the implication of his remarks, that goods are not coming into Canada because the tariff barriers have been raised against them, is it not just as likely that other goods will be added to that class which is now being excluded? So that as to there being any increase in revenue from this new tax that is being imposed, it is a question whether the Minister of Finance will get more than an even break. He may possibly get some increase on those goods that have been coming in on the free list or the one per cent duty of last year, but it is also possible that further goods will be excluded, and to that extent our revenue will be reduced. Certainly that will be the case if he allows his colleague the Minister of National Revenue (Mr. Ryckman) to sit up night and day devising means whereby he can stop goods from entering Canada. I may remark that on a former occasion I mentioned the dilatory tactics of the government when it was a case of allowing some hay into southern Manitoba that the farmers there needed to feed their starving cattle; there was a delay of six months before any action was taken; but when it is a case of increasing the tariff to protect an industry that is manufacturing some trifling article, the government can take action overnight.
The Minister of Finance derives great satisfaction from the fact of a so-called balance of trade. That has been well dealt with by the hon. member for Shelburne-Yarmouth, but I
The Budget-Mr. Brovm
might repeat a few of the figures. It is said that the balance is now in our favour to the extent of $25,000,000, as opposed to a former unfavourable balance of $70,000,000. I suppose there is no more contentious subject than the true significance of the difference between imports and exports, the excess of one over the other. I do not think the Minister of Trade and Commerce did any credit to himself when he criticized the method by which the hon. member for Shelburne-Yar-mouth emphasized the point. He ridiculed it by saying: "You should not say, ' Black is not white,' but you should say, ' White is not black,' " or something of that kind. But the hon. member for Shelbume-Yarmouth was trying to call attention to the fact that this so-called balance of trade was brought about not by increasing exports, but by decreasing imports. Of course, I know from the standpoint of the Minister of Trade and Commerce that that is good policy, because in one of his famous advertisements that he sent out to the papers he wanted to exclude $800,000,000 worth of imports of goods that he said could be manufactured in Canada. However, we cannot agree with that point of view. Certainly it may be doubted whether we have any reason to congratulate ourselves regarding this so-called favourable balance of trade when it is brought about by decreasing our total foreign trade by almost one third. These are the figures given by the Minister of Finance himself: For the eleven months ending February 28, 1931, $1,591,939,000; as against $1,067,602,000 for the same period ending February 29, 1932, or a total loss in our foreign trade during that period of $524,-
The Minister of Finance stated there would be no major tariff changes pending the meeting of the imperial conference. I cannot say that we were surprised by the statement, for the farmers of the country have learned that so far as reducing the burden laid upon them by the tariff that this government has imposed is concerned, they have nothing to hope for. We have to content ourselves with the announcement that the last straw which was to break the camel's back, that is the imposition of a higher tariff on repairs for agricultural implements, has been deferred for another year. Let me say to those who represent farming constituencies in the west that they had better get busy during the next year and make representations to the Minister of Finance so that the application of that higher tariff will be postponed indefinitely. I suppose, however, it is a small measure of relief for which we must be
thankful, but the Minister of Finance must not expect us to tumble over ourselves in our enthusiasm for his budget.
Last year the then Minister of Finance (Mr. Bennett) when introducing his budget announced a five cent bonus on wheat. He said it was a compensating adjustment. He would not admit the tariff was a burden, but the Minister of Agriculture (Mr. Weir) has admitted it for him, for in his speech in the early part of this session he said something to this effect; that he had scanned the Whole field for possible means of relief for the farmeT from the burdens of the tariff, and this was the one that appealed to him. I wonder how the Minister of Agriculture feels now when that small measure of relief is absolutely withdrawn. Does he and do other members from the west representing farming communities feel satisfied with the tariff policy of the present government? I know they do not.
A few weeks ago Ithe hon. member for Marquette (Mr. Mullins) .placed on the .records ol the house a well-reasoned and weULprapared statement of the investment of a farmer on a three hundred and twenty acre farm, including the equipment necessary to work it. I commend that Statement to all members of the house. In the list he had one item of $2,500 for farm implements-a modest item for there is no notice taken there of threshing machines or of tractors. But yet the hon. member in the session of 1930, and again in (the session of 1931, by his vote endorsed the government that -had raised the tariff on farm implements from rates ranging from six to fifteen per cent up to a flat level of twenty-five per cent. Now it is twenty-eight per cent, for I insist again, Mr. Speaker, that that three per cent on all imports must be considered as an additional tariff tax. The biggest internal problem before us to-day is the rehabilitation of the farmer. One of the most prominent farm leaders a few days ago made a statement something like this. He said his father had pioneered on a bush farm in Ontario; he himself had operated ithe farm for a number of years after that, and now his son was on it, and he stated that the young man is having a harder time to make things go to-day than was -the case with either his father or his grandfather.
The question confronting us is this: Are
our farmers to be men living on and farming their own land, finding satisfaction in the work of the farm and yet capable of taking an interest in national and international affairs, of enjoying good literature and everything that ministers to the moral, the intellectual and the spiritual life of man, or are
The Budget-Mr. Brown
our farmers to sink to the status of peasants, operating rented farms, caring for nothing except the wresting of a bare living from the soil, becoming simply hewers of wood and drawers of water, men with weak heads and strong backs? It seems to me those are the alternatives presented to our farmers to-day, and I am afraid that present conditions will produce a tendency that is all in the latter direction. We hear a great deal said about having turned the corner. There can be no turning of the corner until the farmer gets a crop he can sell at a price that will leave him some measure of profit, and what is true of wheat, our main product in the west, is true of all agricultural products to-day. Every article produced on the farm is being produced at a loss, and there can be no turning of the corner until this is all changed.
Indeed, Mr. Speaker, it may be just at this point that the farmer is faced with his greatest danger. To-day there are many men still on farms simply because the mortgage companies or other creditors do not think it in their interest to put them off. There is no sale for land and it has no productive value. The danger is that with the first sign of returning prosperity the creditors will swoop down upon the farmer and strip him naked. The accumulated obligations of the last three years have become enormous. Even before that time the farmers incurred liabilities which, had prices prevailing at that time remained in effect, they might reasonably have expected to meet at maturity. The result of the drop in prices, as has been stated time and again in this house, has been simply to increase the burdens of the farmers threefold.
So to-day we have our western legislatures discussing the question of debt adjustment. I suppose under our constitution that is a Question for the provincial legislatures rather than 'or this government, but that does not mean there is nothing this government can do. This government can do much to lift the burdens that have been placed upon the farmer, and everything possible should be done to make sure that his cost of production is reduced. I am not unmindful of the fact that Canada is one of the nations of the world, that to-day as never before the world has to be considered as a whole, and that if one nation suffers all nations suffer. It would have been well if hon. gentlemen opposite, during the election campaign of 1930, had kept in mind that fact which they now like to emphasize, instead of going through the country proclaiming that they of themselves were going to take steps which would bring prosperity to Canada. That is the obligation which rests upon this
government and this parliament, to see that every possible step is taken to bring about the rehabilitation of the farmer.
I feel that I cannot close without commenting on the reference by the Minister of Finance to the coming imperial conference. His words will toe found at page 1768 of Hansard:
While the world is close knit to-day in matters of trade and finance as never before in its history-and we cannot expect normal or prosperous conditions apart from the general world trend-nevertheless some one nation, or group of nations, must assume the leadership and point the way. To that end an opportunity unique in history is afforded to the British nations, whose representatives will assemble in Ottawa at the Imperial economic conference in July next.
If the delegates who assemble here meet in an atmosphere charged lvith determination to approach their deliberations from the viewpoint of mutual advantage, there will result measures which will give a marked stimulus to Empire trade.
Those are splendid sentiments, but my fear is that if hon. members opposite adhere to the policies they have followed hitherto those sentiments will evaporate into thin air. I said that I was in perfect accord with what the Minister of Finance said, 'but perhaps that is hardly correct. He referred to the opportunity as being unique. If by "unique" he meant that there never had been a similar opportunity, I disagree. A similar opportunity was afforded the Prime Minister and the government at the last imperial conference in 1930, but the result was absolute failure simply because of the truculant attitude of the right hon. gentleman. By the application of his blasting policy he led one of England's -ministers to describe his propositions as humbug, and humbug they were. It is a tribute to the forbearance and the courtesy of the English people that someone did not say it sooner. That is a thought^provoking statement of the Minister of Finance:
. . . nevertheless some one nation, or group of nations, must assume the leadership and point the way.
Some trivial -circumstance has often changed the whole current of human history; it has been frequently given to nations to exercise an influence upon ithe -affairs of mankind far out of proportion to the extent of their territory or the size of their population. Such was the case with Israel of old; such was the case with Greece. From the little island of Iona off the coast of Scotland, in the early centuries of the Christian era, radiated an influence that left its mark upon Great Britain and Ireland, and which still extends to the remotest comers of the earth. Canada has a
The Budget-Mr. Brown
vast stretch of territory. It is true that our population is comparatively small, but we would gladly believe that to-day we are exercising an influence upon the affairs of the world that is not measured by the number of our people. We could wish for no higher honour than that our country should give a lead to the British Empire and, through the British Empire, to the world in all those policies which make for peace, such as disarmament; the breaking down, so far as may be possible, of race and national prejudices; the removal of trade restrictions, the cessation of that insane policy that seeks higher and higher tariffs. Can anyone say that this was the course we pursued at the last imperial conference? Positively no, but the reverse. What was done there was not calculated to make for peace and harmony but for strife and discord.
An attempt has been made to cast ridicule upon the present leader of the opposition when as Prime Minister he expressed concern as to who should represent us at the imperial conference. The result of that conference showed that that concern was well founded. It is still a matter of concern to us, not as to who shall represent us, for we know that, but as to what policy shall be presented at that conference. Is the same course to be followed or is a different attitude to be taken? There is reason to hope, from the statements made by the Minister of Trade and Commerce, that to some extent at least the government have seen the error of their ways. Let us hope that when the conference meets it will be in a spirit of good will.
The hon. member for Shelfoume-Yarmouth quoted the closing words of the budget speech of the Hon. Mr. Dunning. I quoted those words on every platform during the last Dominion election. They seemed to me to express, . as well as language could express, the attitude which Canada ought to assume at the conference, and I believe that hon. members opposite upon whom the responsibility is cast should study these words and grasp the principles that were emphasized; and when they go to meet our fellow citizens from all parts of the empire I hope that they will go in a spirit of tolerance and good will, so that the result of this conference will bring good not only to Canada and to the British Empire but to the peoples of the world.
Then let us pray that come it may,
(As come it will for a' that.)
That Man to Man. the world o'er, Shall brothers be for a' that.
Subtopic: CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE