April 11, 1933

THE BUDGET

CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE


The house resumed from Monday, April 10, consideration of the motion of Hon. E. N. Rhodes (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, the amendment thereto of Mr. Ralston and the amendment to the amendment of Mr. Lucas.


IND

Angus MacInnis

Independent Labour

Mr. ANGUS MacINNIS (Vancouver South):

Mr. Speaker, like many speakers who have preceded me in this debate I find much in the budget I do not like. However I am going to refer particularly to only one item, namely that which affects those civil servants who are in receipt of pensions for war services. I am not going to say very much concerning this item because I have been given to understand that the government have been discussing the matter and will probably revise the proposal as it appears in the budget. I hope they will do so, because I can see no justification for the government dealing differently with civil servants in receipt of a pension than with civil servants in receipt of any other income. I sincerely hope that they will not proceed with this item as stated in the budget.

However, I cannot say that I am particularly disappointed in the budget, as I do not see that there is much that the government can do as long as they continue along the lines they are following at the present time. It seems to me that there are two courses open to the people and governments of the world at this time. The first is to make capitalism function, that is to make it provide the people with the means of life. I believe governments are doing that to the best of their ability, though without very much success. The other course, and I think a much better one, would be to realize that we have reached a stage in our industrial development where the policies of the past no longer suffice and that we must adapt ourselves to the new conditions that almost everyone to-day admits are here. However, I do not expect that the government for some time will take that position. Until they do I see no alternative except a continuance of budgets such as we have at this time, each worse than the one preceding it. The government seem to have abandoned every effort to do anything in a constructive way. The hopeful declarations and optimism of 1930 seem to have evaporated into the mists of

The Budget-Mr. Maclnnis

hopelessness and- despair of 1933. But I would like to point out that this is the same Dominion of Canada which the Prime Minister so eloquently and fervently eulogized during the election campaign of 1930. The natural resources of that time are still here, the soil is just as fertile, the mechanical means of production are still here in all their former efficiency, and the human element is still with us as capable and as willing as it was in 1930. Yet hopelessness, starvation and misery stalk the land, while the government stands impotently by hoping that something will turn up that will get us out of our difficulties.

I referred to the optimism of the Conservative party in 1930. Let me quote from a speech by the Prime Minister at that time- and may I say that I am not at this time quoting it to draw attention to promises made, I am quoting it to show why it is that he cannot do anything, no matter how much he may want to, unless he breaks the bounds within which he formerly worked and which restrict him at the present time. This is from a speech made at Renfrew, Ontario, on July 16, 1930, reported in the Ottawa Journal of July 18. He said:

There is no excuse for unemployment in our country. . . . There is no excuse for poverty. We have the people and the resources. We have the capital, but capital will not allow itself to be used unless there is stability and certainty.

I wish to read this again as I am going to draw from it a conclusion different from that which was drawn, I believe, when I heard it quoted in the house once before.

There is no excuse for unemployment in our country. . . . There is no excuse for poverty. We have the people and the resources. We have the capital, but capital will not allow itself to be used unless there is stability and certainty.

Stability and certainty of what? What is capital used for? Used to make a profit. [DOT]And unless there is stability and certainty of profit, the owmers of capital will not allow it to be used. Now note the assertion, "We" have the people, "we" have the capital. The people and the capital are put in the same category, and the "we" who have the capital are the "we" who have the people. And the "we" who have the capital and the people will not allow the capital and the people to come together unless there is certainty of profit, and stability of profit. There you harm the reason why the Prime Minister did not and cannot end unemployment no matter how much he wants to. It is because the capitalist class of this country will not allow him to. World development has come to the stage where it is SS719-247

no longer possible to invest with profit or to make a profit, consequently it is impossible to put an end to unemployment.

Unemployment is not a new thing. Unemployment we have always had with us since we have had capitalism. As a matter of fact it is absolutely essential to capitalism, and it will be with us as long as we have capitalism. Every time profits are created unemployment is also created, because profits are made out of the surplus values that the working class produce, the surplus value over and above what they receive in wages; and because over a cycle of time these surplus values accumulate to such an extent that industry has to slow down in order that they may be consumed when production is not taking place. Now I maintain that there you have the reason why the government could not end unemployment, granting of course that the will to end it was there.

Let me put alongside of that statement by the Prime Minister the following statement of the Minister of Finance (Mr. Rhodes) in his budget speech of March 21, as reported at page 3209 of Hansard. In referring to the banks he said:

The annual bank statements which have been issued recently indicate an exceptionally strong and liquid position, while the chief concern or our banks would appear to be the difficulty of finding satisfactory outlets for the investment of their surplus reserves.

"Satisfactory outlets for the investment of their surplus reserves" means investments giving a profitable return on capital. Because these satisfactory outlets cannot be found the industry of the country languishes, regardless of the fact that people are in need. There again you have the nature of capital and its function under the present system; that is to produce profits for its owners.

To substantiate further my contention as to the nature of capital, let me refer to a speech made by the hon. Minister of Trade and Commerce (Mr. Stevens) before the Association of Automotive Engineers in the city of Toronto on October 5th last year. According to the report, Mr. Stevens asked the engineers if when considering the introduction of certain progressive machines, they had thought of the problem they were laying on the doorstep of the government of their country when machines displaced thousands of workingmen. It was that vital problem they should consider, he said. I maintain it is not the automotive engineers only who should consider that vital problem, it is the government of the day, if they are going to

The Budget-Mr. Maclnnis

allow the owners of machinery to use that machinery only when profits can be made. He said:

We are choked with goods, yet it is not a matter of too much goods but it is the distributive system that is at fault.

The report goes on:

Consideration of the last three years had led him ... to the strange fact that the so-called depression was a depression resulting from plenty. Plentiful supply of goods was the chief embarrassment.

There you have the nature of capital, producing goods not to supply human needs but to be sold, and if the would-be purchasers have not the price the goods are not sold. Let me say that the goods produced in a country never can be consumed within that country under capitalism, because under our method of production and distribution the purchasing power is not provided. Now 1 will quote from the report of the speech of the Minister of Railways and Canals (Mr. Manion) before the Canadian section of the American Water Works Association on March 23 of this year:

"This crisis of abundance," the speaker continued, "made us wonder what was wrong with our system when we could erect so efficient a machine for production and yet have such suffering."

We need not wonder why we have such suffering; the wonder would be if we did not have it, considering the purpose for which the machine is made and the way it operates. Then the minister went on:

He was certain that there was no one remedy; it could be solved by no one country, nor a single leader. The main cause for the whole situation, he thought, was the war, which had left in its wake debts, the Russian experiment, nationalism and restriction of trade, lowering of commodity prices and unemployment.

The war is responsible for a great many things, but like everything else the war too had a cause. May I say just here that unemployment to-day is caused by the same thing that brought about the war of 1914, that is, capitalism and the impossibility of finding markets for the production of the workers of the world. That was the cause of the war; that has been the cause of the unemployment and distress which we find all over the world to-day. That a war of destruction should cause a crisis of abundance is something beyond my comprehension, and I should like the Minister of Railways to explain it.

Then yesterday we heard the hon. member :or Stanstead (Mr. Hackett), who is not in

*iMr. Maclnnis.]

his seat at the moment. In concluding his remarks he made a very peculiar statement, bearing in mind that we have an embarrassment of plenty and a crisis of abundance. He said:

If our people can be made to realize that services must be paid for, and that the people must pay for them, they may be willing to yield up in aid of economy a good many of the excellent services which are being lavished upon them at the present time, not because those services are not well administered, not because they do not add much to the ease of life, but because at the present time the Canadian people cannot afford them.

Surely we have a confusion of thought here. The Minister of Trade and Commerce (Mr. Stevens) says that a plentiful supply of goods is the chief embarrassment; the Minister of Railways and Canals tells us this is a crisis of abundance, and the hon. member for Stanstead comes along and says we must give up many of the things we now enjoy because we cannot afford them. The hon. member tells us we must economize. What are we to economize on? I should like to ask. Every time we economize-and we have been doing nothing else for the last three years- we further accentuate and add to our difficulties. Are we to economize on wheat and other food stuffs when we have more in the Dominion of Canada than we know what to do with, and when they will have to be destroyed if they are not consumed? Shall we economize in our use of clothing when there is a super-abundance of the raw material out of which our clothing is made and of the machines and workers to make it? Must we economize in the use of our railways or our hydro electric power? Shall we economize in our education, in our sanitary improvements or the thousand and one things which were not known to our fathers but which have resulted from the accumulated labour and knowledge of countless generations? Of course not. We should not economize; we should find ways and means of breaking away from the dead weight of privilege and monopoly which exacts its tribute from every productive effort. Let us hope the viewpoint held by the hon. member for Stanstead is not shared by very many people in the Dominion of Canada to-day. I should like to commend to the hon. gentleman a statement made by a man who has been quoted in this house very frequently. For that reason I have a little hesitancy in reading this quotation, but I believe it is so much to the point at present that the time of the house will lbe well spent in listening to it. I quote from Sir Arthur

The Budget-Mr. Maclnnis

Salter's book Recovery. In the epilogue we find the following:

Before the vast magnitude of the tasks ahead, man's spirit has for the moment faltered and his vision contracted. The public mood is apprehensive where it should be bold, and defensive where broad and generous policy is most required. Everywhere men fly to new tariffs and restrictions, to nationalist policies, domestic currencies, parochial purchasing and personal hoarding-like frightened rabbits each scurrying to his own burrow. Surely it is for the moment only. Which country of us has not, but a few years since, shown the resources we now require of courage, of personal devotion, of industrial and financial leadership, of public direction, in a need no greater and in a cause less worthy? We are, if we could but grapple with our fate, the most fortunate of the generations of men. In a single life time science has given us more power over nature, and extended further the range of vision of the exploring mind, than in all recorded history. Now, and now only, our material resources, technical knowledge, and industrial skill, are enough to afford to every man of the world's teeming population physical comfort, adequate leisure, and access to everything in our rich heritage of civilization that he has the personal quality to enjoy. We need but the regulative wisdom to control our specialized activities and the thrusting energy of sectional and selfish interests. To face the troubles that beset us, this apprehensive and defensive world needs now above all the qualities it seems for the moment to have abandoned-courage and magnanimity.

I would commend this quotation to the attention of the hon. member for Stanstead; I should like him to ponder it and see if there is any reason in the world why we should economize when we have so much material upon which to draw.

The only hopeful aspect of the world situation, according to the remarks of the Minister of Finance (Mr. Rhodes), is the world economic conference which is to meet in London some time in the future. Even here the minister admits that the success of the conference rests on the solution of many of the problems which now are being discussed, such as reparations, the settlement of war debts, the disarmament question, and so on. If the success of the disarmament conference however, is any criterion of the success of the world economic conference, I believe we shall have to look elsewhere for a way out of our difficulties. It seems to me that only an incorrigible optimist could look hopefully for any successful result from the world economic conference. Cooperation, like charity, should begin at home, and before we look to London for cooperation with the nations of the world we should look for ways and means of removing the obstacles to cooperation here. It seems to me that that would be a Canada first 53719-247J

policy worthy of the effort. However, for this government, considering their attitude since assuming office in 1930, to look beyond Canada is a hopeful indication. In 1930 we had the Canada first policy, and in 1932 we had an empire policy. We were then told that we were going to have the rest of the world pay tribute to us. Now it seems to me that if we are to have international cooperation we cannot bring it about so long as we exact tribute from the rest of the world; we cannot go to the world economic conference in that spirit. We must go there with open arms, willing to cooperate.

I have often wondered how much the Canada first policy depended on the fact that there was a Labour party in office in Great Britain in 1930. The events of the time would lead one to believe that our imperialists were preparing ito cut the painter in case the Labour party in Great Britain took steps to end capitalist exploitation. In any event, we found the great empire party, that is to say the empire party of former times, coming out for the first time with the Canada first policy as the battle cry. Then we had the special session of parliament when imperial preferences were reduced; that is, the tariffs were increased against Great Britain. The Prime Minister then went over to Great Britain to attend the Imperial economic conference, where he made his proposals which were so very cleverly designated by the Right Hon. J. H. Thomas. Of course, we had also our High Commissioner, the Hon. Howard Ferguson, stating that he accepted the position in order to save Great Britain from the socialists.

However, 1930 passed on, and with it went the hope of settling our problems through the Canada first route. In 1931 there was an

election in the motherland and Great Britain was made safe for capitalism once more; the empire was saved for capitalism. Then our Prime Minister went across to the old land, but this time he left his bluster on this side of the Atlantic. Then came 1932 and all our hopes were based on the imperial conference; we were told there would be wonderful results. Some of us were rather doubtful of governments being able to increase trade without increasing purchasing power, and the trade returns would seem to indicate that our fears were justified. The imperial conference having proved as fruitless as the Canada first policy, we are now asked to look forward to a world economic conference to settle the world's difficulties. Let me warn this house

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

Thomas Cantley

Conservative (1867-1942)

Mr. THOMAS CANTLEY (Pictou):

Mr. Speaker, before forgetting to do so, I should like to compliment my fellow Nova Scotian the Minister of Finance (Mr. Rhodes) upon the splendid presentation he made when delivering his budget speech. While I cannot equal the eloquence of the hon. member for Inverness (Mr. Macdougall), I none the less agree fully with his opening remarks of yesterday when referring to the finance minister. By virtue of the right of every member of parliament to ask for the righting of grievances before granting supply, I desire ts say that I dissent from some of the proposals made by the Minister of Justice (Mr. Guthrie) in connection with the penitentiaries appropriations for the present fiscal year. So far this session I have not burdened Hansard' or bothered the house with any lengthy dis-

The Budget-Mr. Cantley

cussion and I now crave indulgence if my remarks seem to be unduly personal. As I proceed, I fancy that the object I have in mind will become apparent.

After eight and forty years of continuous work, I planned a holiday a few years ago. I planned to visit portions of the old country and Europe which I have not seen since sometime before the war and in carrying out that plan I sailed from Montreal on May 6, 1921, making my thirty-third trip across the Atlantic on one of the new Canadian mercantile marine boats, the S.S. Canadian Commander. The passage was a slow one, occupying a fortnight. As I had nothing to do I mingled with the members of the crew, among whom was a young chap named Harris. At one time this man had been a member of the crew of one of the Thompson liners running out of Saint John, New Brunswick. I should like to relate his experience as an illustration of the prison discipline in the old country and what it means to those who have had the opportunity, the privilege or the misfortune-it depends upon how you look .at it-to experience it. Upon reaching Liverpool young Harris deserted, got into bad company and undertook to do some house-breaking. Later on he was apprehended by the police, convicted and sentenced to prison at hard labour. If my memory serves me right, he was sent to AVormwood Scrubbs. His experience there, illustrating what hard labour in a British prison means, is, in substance, as follows: For some weeks after sentence be was given daily alternating periods of exercise on the treadmill, followed with an equal period of picking oakum. I fancy none of my hon. friends have had much experience in picking oakum. This means teasing by hand old, hard, tarred hemp rope into its original fibre which is afterwards used for the caulking of ships. The treadmill is built inside a wooden tank which is connected with a water main. The treadmill is geared to a pump, and while the treadmill continues to work, it pumps the water out as fast as it comes in. If the man ceases to pump, the water rises and drowns him out; he has either to pump or drown. After forty minutes of this type of exercise, he is given forty minutes picking oakum, the idea being that a period of forty minutes on the treadmill is about as much as he can stand physically.

He had five hours of this exercise in the forenoon. Then he got some dinner or lunch composed of thin skillet and black bread which is a mixture of whole wheat and barley. He got just sufficient of this to maintain life and a little more and at the end of six weeks

he had lost forty pounds in weight. His narrative in regard to the scarcity of food is very interesting. He said that every crumb that could be salvaged in any way or stolen from somebody else, was utilized. If a crumb fell on the stone floor, he stooped down, moistened his finger, picked up the crumb and was glad to get it. While on the tread. mill the operatives fell under the observation of the prison doctor who watched them closely, and in the case of near collapse varied somewhat the forty minute treadmill period. In short, this man was worked to the limit and fed pretty close to the point of starvation. After he got through, he took very good care, so far as the future was concerned, not to enter again a British prison or risk another period of penal servitude. In this connection it occurs to me that if some of our young bucks that are to-day occupants of St. Vincent de Paul, Portsmouth or Dorchester, had six months' similar experience, this might induce them to give some thought as to the advantages of leading a regular rather than an irregular life, and our prisons would be less popular than they apparently are at present with a considerable section of our criminal class. What is a particularly serious consideration is the startling increase of crime among the young men of this country, practically all of whom are armed, as the prison commitments of recent years so clearly show.

In this connection it might be interesting to compare the crime statistics of Great Britain with those of our southern neighbours or even our own Canadian criminal record during the past decade. It might also be interesting to note that during the past ten years practically one-half of the prisons of Great Britain have been closed, due to lack oi*occupation. Contrast this with the great increase in the record of prison occupation in 'Canada over the same period.

The prime object of our penal system is the protection of society. To this end, the main thing is to have punishment of crime, first, sure; second, swift, and, third, most unpleasant for the criminal. In dealing with the matter of prison discipline, we should be neither vindictive nor sentimental. In Canada to-day too much sentiment is wasted on selfdetermined criminals. Men convicted of crime should not be regarded as other than what they are-enemies of society.

Penitentiaries are penal institutions and those incarcerated therein are there as a punishment for crime committed in defiance of law, order and the general welfare of society. All such enemies of society, while undergoing prison sentences, should be

The Budget-Mr. Cantley

deprived of all luxuries and given only a minimum of wholesome food with reasonable periods for rest after toil. Allowances of tobacco or any luxuries I would not permit, and be it known that during the year ended March, 1932, there was spent in Canadian prisons for pipes, tobacco, and so forth, nearly $18,000; for dental services for the same inmates, nearly $10,000, and for medical and hospital treatment over $37,000. These sums, particularly that spent on tobacco and cigarettes, will, I take it, this year be much larger and, in all, for luxuries and hospitalization, will probably exceed $75,000. For library and literature last year the cost was $6,000. Notwithstanding these expenditures, some of our decayed clerical morons and antique virgins of Toronto and some other places are not yet satisfied and have expressed the view that greater luxuries should be available for these gentry. As regards physical punishment, this, under certain conditions is not only justifiable, but necessary, and is the only effective punishment for some types of offenders. For rape and robbery with violence I would prescribe the old sea-going eat^o'-nine tails, a good stiff application of say, thirty lashes, immediately after entering prison to be followed by a similar quarterly application, lest they forget.

During January last, I received a letter from one, Reverend Phillip Jones, Ml, D.D., of Toronto, enclosing some printed matter, one an appeal from the Social Service Council of 'Canada, Toronto, and another from the Canadian Prisoners' Welfare Association of Montreal, each covering several typed pages of advice tendered to the Minister of Justice. The opinions 'therein expressed and the advice so freely offered are an indication of the type of officious, meddlesome idlers who suggest. that our prison population should be given suitable recreation, with payment while in prison, and whose well-being should be the subject of careful consideration by a special board to be composed of a judge, a lawyer, a physician, a clergyman, an industrialist, a social worker, a college professor and an editor, the duties of the latter, I presume, to be to broadcast the views and wishes O'f the prisoners. According to these gentry, corporal punishment is discredited, instead of which, prisoners should have the finer influences of literature and music, and the physical side of the inmates Should be catered to by healthy exercise such as football, baseball and similar forms of reoreatiom. Furthermore, in the achievement of such progressive and up to date treatment 'the prison authorities should have the aid of unofficial workers, and the prisoners' recreation should be in

accordance with the national ideas of sport. Those, Mr. Speaker, are the ideas held by these gentlemen in Toronto, including the Rev. Phillip Jones, M.A. D.D., and so on. With practically all of such suggestions I am in distinct disagreement, and have some doubts as to the mental condition and capacity of those making them.

Referring to the new penal regulations as published in the Montreal Star of December 30 last, miay I say that in my judgment the greater consideration there shown for prisoners is am entirely mistaken departure in prison policy. Men convicted of serious crimes should not be regarded otherwise than what they are, namely, enemies of society. Our penitentiaries are penal institutions, and those incarcerated therein are there as punishment for crimes and misdemeanours committed in defiance of Canadian law, order and good behaviour. In view of this, in my judgment these men should be deprived of all luxuries and comforts and given only sufficient wholesome food and reasonable periods of rest.

Referring to the Ticket of L/aave Act and the matter of the release of prisoners who have served but a portion of the sentences originally imposed upon them-of which, so far as I am aware the last outstanding examples are those of that precious pair of scoundrels, Mowat and MacGillivray-may I say that the idea that buccaneers of that type should escape with little better than one-half of what, in popular judgment, was certainly not an excessive prison sentence, is provocative of indignation particularly on the part of those who were cognizant of and suffered from the operations of these brokers. The minister is not in his seat, but I Should like to say that I do not wish my fellow members to suppose that I hold him personally responsible for the release of those gentlemen. Unfortunately, the law was, and still is, such that he had no choice in the matter.

A reasonable diminution in the time to be served by prisoners, based on good conduct, is not objectionable. I submit however that such diminution should not exceed thirty days per year of service. In other words a man given a ten-year sentence, if his conduct were uniformly good throughout the period of incarceration, might be entitled to 300 days good conduct rebate, and given his liberty after having served say, nine out of a ten year sentence. Such treatment would in my judgment be reasonable, and I submit the present law in connection therewith should be amended.

That practically exhausts what I have to say concerning the treatment of prisoners,

The Budget-Mr. Cantley

tickets of leave and discipline. I know of no possibility of reforming criminals except by punishment. The eternal law is that punishment of some kind must follow a crime, that the way of the transgressor is hard is true and as it should be, and the sooner these gentry understand it and the sooner it is drilled into them by practically the only way in which they can be reached, namely by physical discomfort, the quicker we will be rid of that herd of young men who to-day are occupying our prisons in practically double the number of a few years ago.

Another interesting point in connection with prisoners is that of their ages. We are told that the world is upset, due to the world war. But if we look over the prison records of most of the young men in our penitentiaries to-day we will find they range between the ages of eighteen and twenty-six. They constitute also by far the most dangerous part of our prison population. What do those young men know about the war? When the war began most of them were just out of the cradle, and were only ten or twelve years of age when it ended. Therefore the war cannot be blamed for the increase in our prison population; we will have to look somewhere else for the reason. I believe we should look first in the homes, and consider the home training. There is no such training in the homes of to-day as obtained fifty or sixty years ago. Practically every hon. member in the house familiar with these matters must agree with that statement. The period when I have to look after my family has passed. But there are men within my hearing to-day who might well consider giving more attention to the younger members of their family than a good many people in Canada are giving to-day.

Mr. Speaker, I thank you for the courtesy shown me.

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

Thomas F. Donnelly

Liberal

Mr. T. F. DONNELLY (Willow Bunch):

Mr. Speaker, I am sure the hon. member for Pictou (Mr. Cantley) will hardly expect me to follow him in his criticism of the treatment of prisoners, and his observations concerning prison reform. I am not competent to discuss those matters, in fact I am not much interested in them, because I have no friends in penal institutions.

Some time ago the house had a budget presented to it by the Minister of Finance (Mr. Rhodes). May I say that the presentation was made in a most capable and efficient manner; the minister made the best of a bad job. He had a difficult task on his hands which he performed in an efficient and

capable manner, and I wish to join with other hon. members who have complimented him upon his presentation.

I should not be disposed to take up the time of the house discussing the budget were it not for certain remarks and criticisms by hon. members opposite, particularly the Minister of Trade and Commerce (Mr. Stevens) who made comments concerning speeches made by hon. members on this side of the house. The hon. member for S'helburne-Yar-mouth (Mr. Ralston), acting as the official financial critic, made a very capable and efficient speech. He made a careful analysis, and his criticism still stands four square. Replies by hon. members opposite have had no effect whatever upon the remarks by the official opposition critic. His statements stand unanswered. In fact, so far as I am concerned, he covered the ground so completely it will not -be necessary for me in any way to spend further time in detailed criticism. The budget has been criticized and analysed thoroughly by the public; they look upon it as just another Tory blunder, as the work of a blundering government that has done nothing but go from one mess into another. They feel that in presenting the budget the government has just stepped into another mess, they see no good whatever in it. The point which stands out most prominently in their minds, and strikes them in the face when they look at it, is the two cent tax on sugar. With sugar at four cents a pound there is an excise tax of two cents. That is the one part of the budget which people generally throughout the length and breadth of Canada are condemning. It enters into the costs of living of our people. When I went to school there was a saying that such and such an act was as ridiculous as taking candy from a baby. This government does not take candy from the babies, but by the two-cent tax it taxes the candy out of the babies' mouths.

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

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

Terrible.

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

Thomas F. Donnelly

Liberal

Mr. DONNELLY:

Yes, it is terrible, I believe it. But perhaps the hon. member is one of those not affected. There is only one class of people not affected, that is those who due to their physical condition cannot eat sugar. The government has always looked after the big financial interests, these big corporations, so now they are looking after the individual with a big corporation who does not dare to eat sugar. That is so my hon. friend can say "hear, hear." Throughout the length and breadth of this country that is the only individual who is exempt from this tax. In

The Budget-Mr. Donnelly

the past we have had budgets known as Robb budgets, we had the budget known as the Dunning budget, and we had one known as the Bennett budget, but this budget is known to-day from one end of Canada to the other as the diabetic budget.

I will now refer to some remarks made by the hon. Minister of Trade and Commerce. He started his discourse on this budget by painting a particularly rosy picture, and then he said something to the effect that it may even be grim, but we are looking to the future with a great deal of confidence. He deplored the condition that the country is in at the present time, spoke of the terrible depression affecting all the world, and then turned around and tried to picture to us the wonderful amount of trade we are doing, extending our trade with different nations of the world. After I had listened to him for five or ten minutes I was almost persuaded that there was no depression in Canada at all. The minister told us about the volume of our trade. Instead of dealing with values as one would naturally expect he began dealing with volume. Of course a man in business to-day can increase the volume of business done, all he has to do is lower his prices. If a business man is financially embarrassed what he does is to put on a sale and sacrifice his goods at a lower price. And that is what the primary producer in Canada is doing to-day, he has got a fire sale on, or you might say a bankruptcy sale, he is selling his goods at a loss. Naturally we sell a larger volume, but we are not getting anything for it.

But let us look more closely into the figures quoted by the Minister of Trade and Commerce. I have before me his speech made on the 28th of March. This is what he said:

I have here a calculation made for me by the Bureau of Statistics, which indicates that the fall in the volume of our trade as compared with 1930. is only five per cent. I refer to the total exports to all parts of the world.

Notice what he said, he said this calculation was made for him. Well, it must have been made especially for him, because I got a report from the Bureau of Statistics for the year 1932, under the same Minister of Trade and Commerce. I turn to page 3, and this is what I find:

. . . while exports on a volume basis decreased in 1931, 15-9 per cent, and in 1932, 21-4 per cent. . . .

The minister says they decreased only five per cent, but his department says they decreased on a volume basis 21-4 per cent. Now someone is wrong. Who is wrong 1

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

Edward James Young

Liberal

Mr. YOUNG:

The minister.

Topic:   THE BUDGET
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LIB

Thomas F. Donnelly

Liberal

Mr. DONNELLY:

Well I would not like to say who it is, but he says this was made specially for him, so probably that is the reason. Probably he is dealing with it in the same way as he dealt with a question I asked him here a year ago in connection with the gambling in wheat, to which I intend to refer later on. There is an old saying that figures do not lie, but-some people should not figure. This seems to be one of the cases.

Then he goes on to say:

We take the volume of business in 1932, and measure it by the price level of 1930, or apply to the volume of business in 1932, the price of 1930. Revaluing the 1932 exports at the 1930 price we have this result-

In 1930 the volume of business done was

8895.000. 000. I do not know where he gets that, I cannot find it. I looked all over for it and could not find it. But looking up the report of the Department of Trade and Commerce I find different figures entirely. This is what I find, on page 10, under Canada's Trade 1932. I find our exports, to which he was referring at that time, were, in 1930, SI,144,938,070. Taking 1932 and taking this reduction said by his own department to have taken place, that is 21'4 per cent, I find that the volume of trade in 1932, if put on the 1930 price level,' would be only $899,921,323. We would therefore have a drop of over

8200.000. 000, not what the minister says at all. I do not know where he got those figures, they seem to be absolutely wrong. I will show more than that; I will show that practically every figure that he has used here is wrong.

I cannot find one that is right. And further may I say that volume of trade is a comparison of no value whatever; the amount of money is what we are interested in.

Then he goes on to deal with tariffs, and his dealing with tariffs is the most ridiculous thing of all. The hon. member for Souris (Mr. Willis) tried the same thing. There was an hon. member for Mackenzie who at one time tried this, a Progressive Tory or Tory Progressive, and then he got a job on the tariff board. Probably they thought they . might get one too. But that job has been filled, there is no more chance, and I advise them to desist because they are not going to get anything of the kind. Anyway the public is wise to it.

The minister began to analyze the trade and tariffs of the country. Probably I had better read what he said, and you will know more particularly what I am criticizing. Referring to what had been said by the hon. member for Shelburne-Yarmouth, "Up went the duties

The Budget-Mr. Donnelly

and down went revenue," the Minister of Trade and Commerce said:

Let us take the average duty on goods imported from the United Kingdom, other than alcoholic liquors, for the term in which my hon. friends opposite were in office. You have an average rate of 17-9 per cent. In 1932, under the present government's increased tariffs condemned so much by my hon. friends, we have a rate of only 18-62, about I of 1 per cent increase on the average on dutiable goods imported from the United Kingdom.

Before the last election our friends went up and down the country telling us how they were going to make tariffs fight for us, how tariffs were going to 'bring back prosperity, how the tariff was going to work for the farmer. But if we have only got j of 1 peT cent increase I can understand why the farmers are not very well off; f of 1 per cent increase is not going to do much good. 1 wonder if that is the reason. As a matter of fact, Mr. Speaker, there is nothing in that a-t all; it is absolutely absurd and ridiculous. There is no sense in comparing averages in connection with tariffs; it cannot foe done. It is like the story -they tell of the man who was making sausages. They asked him what he was using to make them, and he said he was making -them from horses and rabbits. They asked how he mixed them and he said, "I am mixing them fifty-fifty." They questioned that and he said, "Yes, fifty-fifty; one horse and one rabbit." That is about all it amounts to when you compare these averages in connection with tariffs. It is no good at all. Let me give an example. When the Liberals were in power we were paying 40 cents a pound for butter. If there had been a tariff o-f 8 cents per pound ait that time it would have meant a tariff of 20 -per cent. Not very long ago the price of butter was 20 cents a pound, and we have a tariff of 8 cents; that meant -a tariff of 40 per cent on butter. So when you talk of percentages in this way it means nothing at all; it is of no use whatever. Then again, Mr. Speaker, we know that it is quite possible to have a long list of goods on the free list and another long list of goods with an extremely high tariff; the result will be -that none of the goods under that high tariff will come into the country, so -everything entering will be free simply because the tariff is so high that it keeps everything out. That is what this government is doing; it is -making the tariff so high that it is keeping everything out of the country; it is cutting off our trade by prohibitive tariffs, and that is why averages such as these do not -mean anything at all.

Even if the averages were of any value the figures given by the Minister o-f Trade and Commerce are absolutely ridiculous. They d-o not mean anything; th-ey -are not correct, as I shall endeavour to show. The minister said:

Let us take the average duty on goods imported from the United Kingdom, other than alcoholic liquors, for the term in which my hon. friends opposite were in office. You have an average rate of 17-9 per cent.

That is wrong.

In 1932, under the present government's increased tariffs condemned so much 'by my hon. friends, we have a rate of only 18-62, about I of one per cent increase on the average on dutiable goods imported from the United Kingdom.

I say that is wrong, and my authority for that statement is the sa-me report from the minister's own department, which I have before me. Turning to page 12 I find the following:

Canada's dutiable imports from the United Kingdom, less imports of alcoholic beverages and tobacco, but plus imports free of duty under the preferential tariff,-

Then the figures given by the minister are quoted. One or the other is wrong; either the man in the bureau of statistics who compiled this report is wrong or the Minister of Trade and Commerce is wrong. I leave it to the house; hon. gentlemen know well enough that the figures given by the minister were wrong according to the figures set out in this statement issued by his own department. But this is in line with what the minister has done all the way through, in one thing after another.

Let us go a step further. Not only are the minister's figures wrong; I say that if he had taken the right figures on these dutiable goods coming in from the United Kingdom under Liberal rule from 1922 to 1930, the period to which he referred, he would have found that the average was about 18.35 per cent. In 1932, the first full year of Conservative rule, we find that the dutiable imports from the United Kingdom totalled approximately

879,693,000, and that the duty paid amounted to about $23,305,000. The liquor imports totalled $21,694,000 and the duty paid amounted to $10,111,000. Thus the average duty on all the imports from the United Kingdom, with the exception of alcoholic beverages, was 22.75 per cent instead of 18.62 per cent, which was the figure given by the minister.

But that is not all, Mr. Speaker; there is something else to be taken into consideration.

The Budget-Mr. Donnelly

This government put an excise tax on all goods coming into this country, which is the same as a duty. All goods had to pay that excise tax of one per cent.

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An hon. MEMBER:

Three per cent.

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LIB

Thomas F. Donnelly

Liberal

Mr. DONNELLY:

No, it was made 3 per cent in 1932. I want to be fair to the government, and these are the returns for the year ending March 31, 1932, while the 3 per cent tax was not put in force until the end of March, 1932. It must be remembered also that this excise tax is collected on the duty paid value, so that gives us a total of 23.98 per cent. But even that is not all. This duty is calculated on the basis of the pound at $4, but the duty was collected on the basis of the pound at S4.86J. So now we have the duty totalling 29.16 per cent. That looks more like it. These people had some grounds for saying they were going to make the tariff work, but I leave it to the public to say what kind of work it has been doing. This government raised the tariff all right; we will admit that. They raised it from 18.35 per cent under Liberal rule to 29.16 per cent for the first full year of Conservative rule, and it will be higher than that this year, because now we have the 3 per cent excise tax. When we figure it out we will find that the average will be about 32 per cent instead of 29.16. They have raised the tariff, all right; they have shut off our trade with the outside world, and now they are trying to prove that they have not raised the tariff at all. I am willing to give them all the credit they deserve for raising the tariff, but I think if there is one thing in the world to-day more than another that has caused our present depression it has been this extreme nationalism, this prohibitive tariff, this idea that we must have higher and higher tariffs and that each country should live to itself and not trade with its neighbours.

I submit, Mr. Speaker, that the only true index of tariffs is the duty collected. Under the Liberal rule we collected 6 per cent on farm implements; at the present time they are collecting 25 per cent. That is all we need say. The present tariff on cream separators is 25 per cent; under Liberal rule they were free. What is the tariff on barbed wire now? It is 10 per cent, but under Liberal rule it was free. That is all we need to know, and that is the only true test. The other night I listened to my hon. friend from Rosetown (Mr. Loucks) tell us that he had been in Montana and North Dakota and could not find any difference in the prices of farm implements there as compared with the prices

in Canada. I have under my hand a list of prices of farm implements in the United States and a list of prices of implements in Canada, and I shall be glad to show them to any hon. member who wishes to see them.

I shall give only one or two figures so that the house may have an idea of the comparison. Here is a new Deere gang plough, which is the usual plough used in western Canada, fourteen inch, extra heavy. In Canada it is worth S152 cash and in the United States $118.75, or a difference of 833.25. That is not very much to the hon. member for Rosetown but it is a whole lot to me. I find also a Van Brunt single disc drill, twenty-two runs, two poles, made for four horses. Anyone who has ever farmed in the west knows what it is like. This drill sells in the United States for $182.40, while across the line in my constituency the price is $233, or a difference of $50.60. You can compare all the others and you will see a difference right through, but I give these as examples. The price in western Canada is practically the United States price with the addition of the tariff, twenty-five per cent, notwithstanding that we live just across the line. We can see their implements and we know what prices they pay, so that it is ridiculous for anyone to say that the prices of farm implements on the Canadian side are the same as the prices in the United States. Possibly $25 on the hundred may mean nothing to some hon. members, but when I put my hand in my pocket it means a good deal to me. I have had a ten per cent cut along with other members and I know what the difference is.

I come now to a matter discussed by the Minister of Trade and Commerce, namely, the stabilizing of the price of wheat-at least, what he calls the stabilizing of the price. I should not like to describe it in that way, because I remember that when hon. gentlemen opposite came into office the price was from 95 cents to $1, and the only stabilizing they have done has been to keep the price dropping steadily. They kept it going down and down, until it reached 40 cents-

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An hon. MEMBER:

38 cents.

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LIB

Thomas F. Donnelly

Liberal

Mr. DONNELLY:

Yes, it was as low as

38 cents, and that is the only stabilizing I have ever seen them do. As I say, they have kept it going steadily down. The minister went, some length to tell us of the activities of the government in connection with this matter. May I say that I have been interested for some years in the handling of wheat. For some time we had two bodies handling wheat. In western Canada we gave

The Budget-Mr. Donnelly

the grain pool our wheat and they were told to sell it and pay us our money back at the end o{ the year, whatever average they may have received. They did no hedging; at any rate they were not supposed to do any hedging but were supposed to sell so much wheat from week to week and month to month, so that we should have an orderly market. If we had 12,000,000 bushels they would sell

1,000,000 bushels a month, thus securing an orderly marketing of the product. But they were not supposed to be gambling in wheat; they were not supposed to use the exchange for any such purpose. They may have done so, but that was never the intention. That was one method of handling grain. We had also the organized grain trade, and whenever they would buy wheat in the country they would wire the head office in Winnipeg, informing them that they had bought so much wheat to be delivered in June or July as the case might be; and they would go on the market the next day and sell that wheat; to be delivered in June or July or whatever month it might be.

The pool, which was handling our wheat in western Canada, met with more or less success, and the price of wheat was going up. But they made the mistake of not selling the wheat in an orderly way as guaranteed. They were holding a certain quantity over and the result was that in 1929, when the price began to break, they were caught with a good deal of wheat on hand. They had made advances to the farmers on the wheat, and when the break came the price gradually fell until it dropped below the amount of the initial payment given to the farmers, and the advances which they had received from the banks were consequently in danger. In this situation it seemed that they were going to break and they asked the government for assistance, which was given them. In 1930 Mr. John I. McFarland was put in to sell the carryover of this wheat; he was instructed to sell the wheat which the pools had left over from the 1929-30 crop. That was what he was supposed to do-to sell the wheat which the pools had left over from that crop. After he had been there for a while what did the Minister of Trade and Commerce, as the hon. gentleman informed us, tell Mr. McFarland to do? I would refer the house to Hansard at page 3468, where the minister is reported as follows;

Recognizing this fact and appreciating the serious loss which would be entailed, particularly to the producer, the government authorized Mr. John I. McFarland, the head of the pools sales agency, to purchase grain for future delivery. . . .

Not to sell grain at all, but to purchase grain for future deliveries. Remember what I said he was put there to do. He was put there to sell the carryover of the 1929-30 crop, but here we have the government telling him to purchase grain away back in 1930. When we were sitting in the committee with James Robertson, and Smith and the others, dealing with this very matter, John I McFarland had been authorized at that time, I am told, to buy wheat. Thus it came about that last spring I asked the Minister of Trade and Commerce a question with regard to this very point, whether John I McFarland was buying futures and whether he did have any wheat. Listen to what the minister said on April 15, 1932. At page 2084 of Hansard of that year the hon. member for Weyburn (Mr. Young) had said;

May I say that in the Financial Post of last week the statement appeared that when Mr. McFarland undertook to sell the 1930-31 crop he at the same time bought futures against it, and that as a result of his activities the government to-day is holding millions of bushels of future wheat which it cannot get rid of, except at a loss, until the price goes up.

What answer did the Minister of Trade and Commerce make to the hon. member for Weyburn? He said:

I do not know of a bushel of wheat held by the government, either directly or indirectly.

What are we to say to that? Here he turns round now and tells us that instructions had been given to buy wheat. What do you make of it? What do you think of a man standing on the floor of the house a year after telling us that he did not know of a bushel of wheat that was held by the government, either directly or indirectly, and making the statement which the Minister of Trade and Commerce made to this house the other day? When telling us the other day that John I McFarland had been told to buy wheat, he said, addressing the hon. member for Charlevoix-Saguenay (Mr. Casgrain):

Let me again assure my hon. friend (Mr. Casgrain) I had this written out merely for the purpose of accuracy owing to the importance of the subject and my desire to get before the house as clear a statement as I could give it on this very important matter.

So that this is no haphazard statement, but one deliberately thought out.

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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

Prepared by the government.

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LIB

Thomas F. Donnelly

Liberal

Mr. DONNELLY:

Yes, prepared for delivery by the minister in the house. He had told Mr. McFarland to buy wheat, and in this very statement he said that this was not.

The Budget-Mr. Gagnon

a gamble but the most conservative form of *doing business. Well, if any man appeared in a court of law and said that the buying of wheat futures was not a gamble, he would be laughed out of court. I suggest to the Minister of Trade and Commerce that he go into western Canada and tell them that the government was buying wheat futures and that it was not gambling. Let him do that and see what they will say to him. If that is not gambling, no one in western Canada has ever gambled in wheat. That is the way they all gamble and it is the only way they can gamble, outside of buying puts and calls. Very little of that is done, the gambling in wheat is done principally by the buying and selling of futures. Mr. McFarland buys wheat to be delivered in July. When July comes he has either to take delivery or postpone *delivery to some other month. He must pay the interest and the carrying charges. But this is only conservative business, it is not gambling at all. I would remind the minister of what his leader has said, I refer him to page 779 of Hansard of 1931, where his leader is quoted as follows:

What is the cause of the great depression in western Canada? Hon. gentlemen opposite know that the most important cause is speculation.

The Prime Minister was very hostile at that time and he was telling the farmers how they had lost their substance in gambling and riotous living. Later on in the same session the Prime Minister referred to Mr. Priestly, the vice-president of the United Farmers of Ontario, who had appeared before the Stamp commission in the city of Calgary. He quoted a newspaper report, as follows:

While on occasions farmers have been borne to the crest of prosperity on the wave of the system, they found on looking back that they had spent more time in the "trough of poverty" than in the joy of prosperity. Dirt farmers now believed that "paper wheat" had too much influence on the price of real wheat.

Dealing with the money side of the question, Mr. Priestly quoted the results of his survey which showed the losses in excess of one hundred million dollars.

Individual losses, he declared, were all the way from a few hundred dollars to $168,000. "In some instances it was shown that farmers lost everything-land, crop and equipment," said Mr. Priestly.

That is what the government has been doing. The other night the hon. member for Peace River (Mr. Kennedy) stated that the farmers were pleased with the wheat stabilization plan, but I want to say to him and to the government that I have not met a single farmer in western Canada who believes that the stabilization plan has had one particle of effect upon the wheat market. Does the hon. member know that hundreds of speculators bought wheat in Chioago and came over to Winnipeg and sold it to the government? The government was buying not only Canadian hedges but American hedges as well. We have seen the results of cither attempts .at stabilization. Look at what happened in Brazil when an attempt was made to stabilize the price of coffee. Look at the United States where the farm board poured hundreds of millions of dollars into the market in an effort to stabilize the price of wheat. Their efforts had absolutely no effect, and yet this great Samson of ours was going to go out to put his shoulder under the wheat market to hold up the price. It was absolutely ridiculous. It is the world's supply and demand that governs the price of wheat. We hope that later on in the session the minister will tell us how much wheat was purchased and how much money the government expects to make. There is a chance that they will be able to get out. All of us have been in t'he wheat market at some time or other; some of us got out with a loss and some with a gain, while others will be lucky to get out with their hides.

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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

The hon. member has

spoken for forty minutes.

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LIB

Thomas F. Donnelly

Liberal

Mr. DONNELLY:

We must all take off

our hats to the wheat trade. They started in and they skinned the wheat pool until they were broke; they skinned the western provinces until they were broke; they skinned the western fanners until they were broke, and now they are skinning the Dominion government.

Mr. ONESIME GAGNON (Dorchester); Mr. Speaker, I hope the hon. member who has just taken his seat (Mr. Donnelly) will pardon me if I do not attempt to follow his line of argument. I was obliged to leave the chamber and did not return until he had been speaking for almost twenty minutes. Therefore, I shall not attempt to reply point by point.

I desire to express my humble views upon the budget, which views I hope will be shared by my constituents in Dorchester. The discussion upon the budget affords a member an excellent opportunity to discuss not only the problems which confront the country as a whole but the special conditions arising in his own province and constituency. It provides also an excellent occasion to review and compare the policies of the different political parties and ascertain whether they are for

The Budget-Mr. Gagnon

the welfare of the country. Canada is struggling along under enormous difficulties and the Canadian people expect a continuance of that masterful leadership which so far has saved the country and which I hope will, with the aid of divine Providence, continue fearlessly for the common good. It has been said that adversity puts statesmen on trial. The Minister of Finance (Mr Rhodes) has undertaken a courageous and excellent task in finding the ways and means to balance the budget. I have no hesitation in offering here, as I will before my constituents, my most sincere congratulations. The Canadian people as a whole are appreciative of the enormous strain to which he and his colleagues have been subjected in their efforts to preserve the integrity of this country. Canadians of all classes recognize that the ship of state would soon be on the rocks if we were to apply the vacillating and conflicting theories of hon. friends opposite or the strange and somewhat revolutionary principles underlying the Cooperative Commonwealth Federation movement.

I need not repeat what has been better said by those who have preceded me, that the government is doing everything humanly possible to maintain the integrity of this country, to safeguard its institutions, to provide the unemployed with food, clothing, fuel and shelter and to keep the nation in peace, order and security. The Canadian people understand that the actions of the government are, as are all human acts, open to criticism but that in the main they have been guided, inspired and directed by the highest motives. In these days of suffering and depression the people look for real statesmanship and not for narrowness of vision or bitterness which will destroy the harmony now existing among the different provinces and races in Canada. In my opinion the financial critic of the Liberal party, the hon. member for Shelburne-Yarmouth (Mr. Ralston), a distinguished barrister and parliamentarian, has been more desirous of securing political advantage than offering his sincere cooperation. May I also express my amazement at the action of some hon. members opposite, for instance, the hon. member for Quebec East (Mr. Lapointe) who has not yet spoken on the budget, but who, on March 28 in Quebec City, safely surrounded by his political friends, indulged in his usual sectional attacks upon this government, which, according to him, does everything for western and nothing for eastern Canada. Such attacks are, as I shall later demonstrate, wholly unfounded.

What is the main doctrine propounded by those two distinguished gentlemen to bring back Canada to the road of prosperity? What is 'the measure of their cooperation? W'hat constructive suggestions do they offer? Nothing but vague and nebulous theories which do not receive the approval of all Liberals in this country. May I give an example? Is it not surprising to .recall that those two hon. gentlemen insinuated in their budget speeches that the government was using money derived from taxation to promote radio broadcasting throughout Canada? Such views are not only erroneous but made deliberately with the ideia of misleading the people and creating discontent among the poor. Everybody in this country knows that money spent on radio broadcasting is not collected from the taxpayers generally but is paid by radio set owners who are scattered all over Canada. The government has wisely decided that those who can afford radio sets are able to pay for the service they get from the state which has to provide for them the free enjoyment of our air channels and ait the same time to enact regulations whereby the marvellous invention of radio will be used for the diffusion of arts, sciences and culture and at the same time be an instrument of harmony between the different races of Canada. Is i.t necessary to emphasize again that to maintain abate control over radio, control which was adopted unanimously by the house last year, not a single cent is collected fiom the taxpayers at large? Radio set owners are called upon to pay for that service, and while in our country radio set owners pay only S2, yet the report of the Commission on Radio Broadcasting which was created by our hon. friends opposite, shows that in Great Britain, for instance, radio set owners pay .ten shillings a year for a licence whilst in Germany and Japan they pay $6 a year, in Australia, twenty-four shillings a year, and in some other countries even more. In Canada the licence fee is only $2 a year and it is only this money which is put down this year in the estimates in order to provide radio broadcasting in Canada. I maintain further that last year when the government decided to increase the licence fee from 81 to $2, it entered with the radio set owners into a contract whereby it bound itself not to expend this money for other purposes than for the betterment of programs and the expansion of radio broadcasting in this country. Therefore my hon. friends opposite are certainly making a narrow criticism when they try to induce the people to believe that this

The Budget-Mr. Gagnon

government is now providing for radio set owners something at the expense of the poor and, indeed, of all the taxpayers. It is easy to surmise what themes will be developed by hon. gentlemen opposite in the approaching election. I hear them assailing the government violently, saying, "People starve and yet the government spends their money on music." Knowing these Liberal tactics, I condemn such insinuations as being cowardly and oonitemptible.

Before commenting further on the attitude of our hon. friends opposite, let me come back to the situation of our country since April 1, 1932. A year has passed, one which has brought no happiness to this country nor to the world, one which has not given us more wealth or prosperity, but which has certainly strengthened our confidence in our institutions, which has also strengthened to a great extent the bonds of friendship between the different elements of the Canadian nation and which has instilled in our hearts the true sentiment of courage and hopefulness. In 1931 everybody remembers that the Bank of England went off the gold standard. In 1931 and 1932 in the United States thousands of state banks closed their doors and I cannot do better than use the words uttered by the hon. member for Shelburne-Yarmouth when, a few days ago he described the appalling situation of banks in the United States in these words:

A few weeks ago, despite the inconvenience and humiliation in connection therewith, the people of the United States turned the key in the door of every bank from Massachusetts to California and from the forty-ninth parallel to the gulf of Mexico; because they believed it was necessary so to do, they did it.

Why in this country was the government not obliged to resort to such desperate means? It was because the government was vigilant enough to foresee what might happen and to take the necessary precautions to prevent such a disaster, by passing the necessary orders in council preventing the hoarding and export of gold which have had such calamitous effects in other countries.

When speaking about the banks we do not, may I humbly suggest, reflect enough on the fact that banks are the only instruments whereby the savings of the nation may be safeguarded, and those who sometimes wildly attack our banks, are not mindful of the interests of depositors. I admit, however, that the laws with respect to banks and banking ought to suit the needs of the moment and this is why the legislators of all political parties have deemed it wise that the Bank

Act should be revised every ten years. It now seems opportune that I congratulate the government very warmly on the creation of a commission to investigate banks and banking in Canada. I hope this commission will begin its work very soon and if I might offer a humble suggestion, may I recommend that the scope of the proposed inquiry be extended as much as possible in order that the commission may study the vexed question of public and private debts which has been discussed in the house and in the banking committee by the hon. member for Red Deer (iMr. Speakman)? May I ask the government that this commission study attentively the problem of rural credits for our farmers? May I repeat what I have already said and what I believe to be true, namely, that the Canadian farm loan board legislation is certainly not very practical for the farmers of eastern Canada; its workings are too expensive and its interest charges are too high. The fact that the board does not operate in the winter time causes great prejudice to the farmers of eastern Canada. I understand that on account of snow covering the ground in the winter, the inspectors cannot inspect the land of the farmers who apply for loans. This objection has some force. On the other hand it seems it could be overcome if the Bureau of Statistics had carefully noted in their files all details with respect to land under cultivation in Canada. Time does not permit me to dwell at greater length on the subject. Nevertheless I hope the commission will recommend that the legal rate of interest be lowered. Not being an expert on the matter I shall not attempt to say to what extent it should be decreased, and I shall not be presumptuous enough to dictate what the commission should do. However with my humble knowledge I simply ask that the commission advise the government as soon as possible to take the necessary steps to lower the rate of interest on bank deposits and on all sorts of loans.

Need I state that the most important announcement in this year's budget is for the benefit of the farmers throughout Canada, and especially those in eastern Canada. I refer to the creation of a stabilization fund to apply to farm produce. Last year the hon. member for Dufferin-Simcoe (Mr. Rowe) and myself asked the government which, to a great extent had helped the western farmers, not to be unmindful of the pitiful condition of agriculture in eastern Canada. We both recommended that a bonus be given to farmers to promote the export of their farm produce.

The Budget-Mr. Gagnon

This year we have been quite surprised to hear from hon. members opposite that the bonusing of farm exports was unsound in principle. Last year, however, some Liberal members opposite were in agreement with me in that connection, and during the by-election at Maisonneuve and South Huron held during the past summer hon. members opposite blamed the government for not bonusing the farm produce of eastern Canada. During those election campaigns they assailed the government by repeating their accusation: Nothing for the east and everything for the west. Now, when the government which has helped the western farmers takes a most appropriate and effective step towards helping the farmers in eastern Canada hon. members opposite say, "This help you purpose giving the farmers by way of the creation of a stabilization fund is unsound in principle." Everybody deplores the fact that owing to the depreciation of the pound sterling the price of farm produce exports has decreased to such an extent that some farmers in eastern Canada as well as those in western Canada have lost faith in the future. But the creation of the proposed stabilization fund, not only for the benefit of farmers but for the benefit of the fishermen of the maritimes and Quebec, will certainly prove that the government has given to these different problems its most careful attention.

As I said a moment ago the creation of the fund is the most appropriate and effective way of helping the Canadian farmers to increase their domestic production and to increase the volume of their exports. I have in my hand the Bulletin des Agriculteurs which, by the way, is the best informed agricultural newspaper on agriculture published in eastern Canada. I have before me the issue of March 30, 1933, on the first page of which appears an article signed by Mr. Donat C. Noiseux, one of the best informed economists in the province of Quebec. He writes as follows:

(Translation):

The new measure, announced by Mr. Rhodes, must bring joy to all farmers: it is the organization of the agricultural stabilization funds. Few newspapers pointed out the importance of this measure to farmers who devote themselves to mixed farming, this, therefore, applies to us, from the province of Quebec.

I shall not attempt to read the whole article, and shall conclude by reading the last words:

This act of the Dominion government which establishes an agricultural stabilization fund to the benefit of the eastern farmers certainly deserves our congratulations, and we believe that we are doing an act of justice by proclaiming it.

Any hon. members who are interested in this newspaper, published in the interests of the farmers of the province of Quebec would do well to direct their attention to this article which discusses in detail the proposed stabilization fund for farmers. Almost all farm products exported will benefit from the operations of the fund. Those affected would be animals, including meats such as bacon and ham; then there are poultry, fish, both fresh and canned, tobacco, cheese, milk products, canned fruits, canned vegetables, maple products, eggs and honey. Who will say that the farmer of the province of Quebec will not receive enormous benefits from that legislation?

I wonder why the hon. member for Quebec East and his friends so strongly condemn the stabilization, fund, and why he has attacked it so violently. Speaking in Quebec city on March 28, and referring to the national protection policy of the Conservative party, he accused the government of pursuing a stupid policy. We have not forgotten that the hon. member for Quebec East, who likes sometimes to abandon himself to violent flights of oratory, said in 1931 in the city of Ottawa, that the policy of Canada first was pure folly. Who could be surprised at this time to learn that the hon. member has stated, the stabilization fund for farmers is just a stupid policy based on an unsound principle.

In 1930, before the party on this side of the house took power, Canada had become the dumping ground for all foreign countries. Our distinguished leader, realizing the fact that Canada was in a very critical situation, owing to the fact that the United States, Germany, France, and many other European countries had raised their tariffs sky high, decided to go back to the national policy of protection which had saved Canada in days of depression in the past. In his famous speech delivered at Winnipeg the present Prime Minister enunciated in his program the steps he considered necessary for the restoration of prosperity in Canada. Realizing the absolute necessity of Canada protecting itself against foreign competitors, and at the same time the necessity to find new markets for Canadian agricultural products, in his usual energetic fashion he expressed his policy and stated that if necessary Canada would blast its way through the markets of the world.

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

Some hon. MEMBERS:

Oh, oh.

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

Onésime Gagnon

Conservative (1867-1942)

Mr. GAGNON:

We can hear the laughs

and the derisive comments of hon. members opposite. Certainly they were not used to such definite expressions from their leader.

The Budget-Mr. Gagnon

We remember, for instance, that the former Prime Minister and the hon. member for Quebec East, stated we ought not to raise our tariffs for fear of offending the United States. They remind me of the mother who would try to prevent the dogs from barking for fear they might awaken her baby.

Do hon. members know how those words of the present Prime Minister were explained during the last election campaign in the province of Quebec? How did they explain the expression that if necessary we would blast our way to the markets of the world? Hon. members opposite explained those words by saying that they meant a new step towards conscription. We are not surprised when they are not able to understand that the language of diplomacy may sometimes be firm and not cease to be diplomatic. History will show that our great leader was right, and anybody reading what has taken place in Canada since 1930 will acknowledge that in oertain ways Canada has blasted its way through the markets of the world.

Let us state briefly what has taken place. In 1931 we made treaties with Australia and New Zealand, so drafted that now, although New Zealand butter dealers are shipping thousands of pounds of butter to Canada, this butter remains in bond until the sale of it will not be injurious to the butter producers of Canada. We secured at the Ottawa conference of 1932 substantial and profitable preferences for our goods in all markets of the empire. We have also concluded satisfactory arrangements with Germany, in a few days we hope to conclude a satisfactory treaty with France, and we already see the dawn of the day when the United States of America will come to us and offer to lower the tariff walls which have proven so disastrous to our Canadian agricultural producers. Why should we not be proud of our achievements, why should we not boast of our accomplishments, why should we not be optimists, when our conscience tells us that we have done everything possible to help agriculture all over Canada?

It is true, Mr. Speaker, that this stabilization fund will assure more than $10,000,000 to Canadian farmers, and consequently this measure of salvation will be an additional burden on the exchequer of the country. Therefore the hon. Minister of Finance has been obliged to increase taxation, because revenues have decreased, because the deficits of the Canadian National Railways have increased to an appalling extent and because, as the hon. member for Shelbume-Yarmouth 53719-248

has frankly admitted, in relieving unemployment the government has spent lavishly. I am pleased that the hon. member for Shel-burne-Yarmouth has made that admission, in view of the fact that this afternoon the hon. member for Vancouver South (Mr. Maclnnis) said we had done nothing practically to relieve unemployment. Now, Mr. Speaker, we have to find the money for that stabilization fund, for the relief of unemployment and to continue to pay pensions to soldiers. Naturally the Minister of Finance must find it somewhere. Therefore he has decided that this year he would impose a tax on sugar. Hon. members opposite profess to be horrified. The hon. member for Quebec East, speaking in Quebec on March 28, characterized such taxation as infamous. Our Liberal friends are fond of such moderate expressions. The hon. member for Vancouver South last fall referred to the Ottawa conference agreements as "iniquitous documents." And a few weeks ago the same hon. member, when discussing the railway legislation, called it an "iniquitous bill." But now the hon. member for Quebec East wants to get first prize for using wild expressions, so he calls this sugar tax "infamous." Let us consider for a moment the various aspects of that taxation. We find that refined sugar before the war sold at ten cents a pound, and during the war it sold at even more than thirty cents a pound. Since our party came into power, whether it is because the refiners were afraid of the energetic action that the government might take in using against them the Combines Investigation Act if they tried to crush the consumer, or on account of some other cause at any rate the fact is that the refiners kept the price of sugar at about five cents per pound. Now even if we add two cents a pound tax, sugar will still be selling at three cents less than it sold before the war all over Canada. Now, Mr. Speaker, why should we wonder that the hon. Minister of Finance believed that a tax of two cents a pound could reasonably be levied on sugar, when it is recognized that such a tax can be collected at the refineries, thereby saving an enormous amount that sometimes has to be spent for the collection of taxes? I have no hesitation in saying that the principle of such a tax is just, because it causes no discrimination against any class of taxpayers. Poor people, Mr. Speaker, are certainly willing to share the burden of taxation, because they are patriotic enough to understand that a government which is spending lavishly, as the opposition says, for the relief of unemployment and for pensions, and which is burdened with a heavy deficit on the rail-

The Budget-Mr. Gagnon

ways, must find the money from some source. They are courageous enough to do their share to help the exchequer of Canada. It has been said that this tax of two cents a pound on sugar will not represent more than ten cents a week to any family, be it rich or poor. I ask you earnestly, who are the people who receive pensions in Canada, who are the people who receive relief money, who are the people receiving old age pensions, who cannot spend ten cents a week extra on sugar to help the exchequer of Canada in such times of need and depression? Mr. Speaker, those who condemn the action of the government in imposing a tax upon sugar, who call it an "infamous" tax, who take pride in imitating Robespierre and Lenin by attempting to set class against class, certainly are misjudging the sense of patriotism of the poorer classes in Canada when they accuse them of being unwilling to help the Canadian exchequer to the extent of ten cents a week. I will go further, I will say that this tax will not constitute a burden on the farmers of this country. Refined sugar is mostly used in the manufacture of candy, cakes and pastries, which are seldom purchased by our farmers in these times of depression. The tax on refined sugar will on the contrary help the farmers of eastern Canada, since this tax does not touch maple sugar and maple syrup, which last year was sold at distressingly low prices. Here we may admire the far-sightedness of the government which on the one hand helps the maple sugar producers by giving maple products the benefit of the proposed stabilization fund and on the other hand taxes refined sugar which is certainly a competitor of maple sugar products.

It is not inopportune to say a few words with respect to the maple sugar industry, which is properly called the oldest industry in Canada, and which adds much to the prosperity of the province of Quebec, and my county of Dorchester. Last year I asked the hon. Minister of Trade and Commerce to help the maple sugar producers by finding ways to increase the sale of their commodity. I am pleased here publicly to thank the minister not only foT having listened to my humble views with sympathy, but also for providing this year for a publicity campaign all over Canada to stimulate the sale of maple products. This publicity campaign will be paid for in part by the maple sugar producers of the province of Quebec, in part by the Quebec government and in part by the federal government. I am pleased to tell this house that with my hon. friend for Quebec West (Mr. Dupre), the Solicitor General, I have been [Mr. Gagnon.)

in close touch with the chief of the maple industry for ithe Department of Agriculture in the Quebec government, Mr. Cyrille Vaillancourt, who, by the way, ds a native son of Dorchester and a devoted and competent official of the Quebec government. We have studied together, since I have been a member of 'this house, to find means to help the ma.ple sugar industry which unfortunately had been forsaken and abandoned in previous years. Mr. Vaillancourt is largely responsible for the revival of the maple sugar industry in Quebec. Eight years ago, he established a cooperative society of maple sugar producers, called the Quebec Maple Sugar Producers, and endeavoured to put the industry on a paying basis. In one of the pamphlets published by the Quebec government I find the following:

Before a prospective member is accepted by the society, he has to sign a contract undertaking to make his product according to the methods recommended by the society, and further, always to gather and boil his maple sap under the most sanitary conditions possible and to ship only an absolutely pure product.

Each member is given a number, and labels bearing the member's number accompany each shipment made to the society. It is thus an easy matter to check up on the producers if any attempt is made to defraud, since, when the syrup reaches the society's warehouse, it is immediately inspected and graded by officials of the Department of Agriculture.

A school is supported by the Quebec provincial government, which is attended by young men who desire to acquire a better knowledge of the best methods of manufacturing maple syrup and sugar, and a refinery has been established at Plessisville which last year received twenty thousand barrels of maple syrup, each containing thirty gallons, from the two thousand members of this cooperative society. I am glad to say that chemists are at the disposal of the government, who devote their researches to the improvement of the product. A new refining plant has been established at Valley Junction, near my county, and I am glad to say that this government helped in the construction of that plant in 1931 under the unemployment relief scheme. This will be a great benefit to the maple sugar producers in my county and in the municipality of Valley Junction. I should like to thank the Solicitor General (Mr. Dupre) who supported my humble efforts to have the government cooperate with the province of Quebec and the municipality in the construction of this plant.

May I add that since we have been in power we have lost no opportunity to help the maple sugar industry. In December of 1930, for instance, we put into force by proclamation the Maple Sugar Industry Act and

The Budget-Mr. Luchkovich

Regulations which, in a letter to myself dated March 4, 1932, the Minister of Agriculture (Mr. Weir) described as follows:

The Maple Sugar Industry Act and Regulations . . . became effective one year ago. It benefits the industry by prohibiting the adulteration of maple products, by establishing standards of quality, by requiring sanitary conditions in sugar camps and processing plants, and by requiring proper identification of table syrups or sugars which resemble or imitate the pure maple products. The fruit branch, charged with the administration of this act, has conducted some educational work in regard to maple products which, with the administrative work in regard to the act, will undoubtedly stimulate the interest of the producers in the production of quality products and tend to increase the demand for maple syrup and sugar, not only from the housewife but from manufacturers of ice cream, confections, etc.

As I said a moment ago, Mr. Speaker, the inclusion of maple sugar products under the proposed stabilization fund will prove a substantial help to the industry, but on this side of the house we propose to do more to encourage the maple sugar producers in Canada. Last fall, for instance, just after the Imperial conference, Mr. Vaillancourt went to England, where he succeeded in organizing successful exhibitions of maple products in London, Liverpool, Plymouth and Glasgow, Scotland'. He even went to France, where he tried to promote the sale' of 'Canadian maple products. I have several times requested this government to cooperate with the provincial government of Quebec in that regard by enacting new tariff regulations which will prove more favourable to the sale of maple products in England and France. I understand that within a few days we hope to conclude a new trade treaty with France, and I would ask the Minister of Trade and Commerce (Mr. Stevens) to take the necessary steps to see that Canadian maple sugar and syrup are allowed free entry to the French market. At the same time I would ask the minister to open negotiations with the British government in order that our maple products may secure a more favourable rate of duty. It is true that Canadian maple sugar and syrup enjoys a preference on the British market at present, but I would ask that the necessary steps be taken to ensure the entry of Canadian maple products to the British market free of duty.

I do not like to detain the house too long, but I had three reasons for bringing up these points. The first was to prove to my constituents in the county of Dorchester, many of whom are engaged in the maple sugar industry, that this government is doing its best to 53719-248J

help them. My second purpose was to show that the government was extremely willing to cooperate with the provincial authorities, and in the third place I wanted to prove to the house that the imposition of a tax on refined sugar would be very helpful to the producers of maple products in Canada. These producers are not only in the province of Quebec; there are a great many of them in the province of Ontario and in the maritime provinces as well.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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April 11, 1933