But can you say, sir, that this will not be paid out of the tax imposed on sugar, and all the other taxation that has been imposed by this government? I do not see how you can deny any member the right to give the history of taxation since this government has been in power, on any item in the estimates. If the minister tells me that he will not receive a cent-
Sir, each member here takes his duties seriously and each of us is the guardian of the public exchequer. We must tell the people where the money comes from, and when I say that I only repeat what was said by the Prime Minister when- he was leader of the opposition and later from his place in this house as Prime Minister. If the Minister of Agriculture will give his word that he will not receive one cent from the Department of National Revenue to make up that million dollars, I will speak on another item. But the minister cannot give that assurance; he knows the money will come from the Department of National Revenue. That department is rightly named, because it supplies the money for most of the other departments of the government. I have a right to tell this committee where the money comes from when an expenditure is made, the more so, sir, because of the statements made by the Prime Minister to the effect that Canada had reached the limit of her credit and the further statement by the Minister of Finance (Mr. Rhodes) quoted in Le Canada of Montreal, to the effect that two years ago Canada was bankrupt. Therefore, it is my right and privilege to tell the people of this country where the money comes from that is spent so carelessly by this government. As a man of learning and high attainments at the bar of vour province, sir, you cannot deny this right to any of your colleagues in this chamber.
I have given the figures for 1931 and 1932. Now let us come to 1933, one year after the Ottawa agreements were concluded; let us see the burden of taxation imposed on the people of this country because of the decrease in trade which resulted from the illogical, inconsequential, unwarranted and uncalled for changes made in the tariff by this govem-92582-264
ment. What was the revenue derived from the sugar tax, which was imposed in spite of many protests that came from all over the country? From March 22, 1933, to June 30,
1934, the receipts were $17,149,159.85, and from July 1, 1934, to February 28, 1935, they were $7,517,851.39. There was a special excise tax of ten per cent imposed on cosmetics and toilet preparations which, from March 22, 1933, to February 28, 1934, brought in $1,561,926.72. The next is a special excise tax of five per cent on automobile tires and tubes, yielding $1,593,871.20 for the same period. Then we come to cigarette papers and tubes in connection with which there is a special excise tax of two cents per one hundred leaves of cigarette papers and five cents per fifty tubes of cigarette tubes, yielding $1,558,526.55. The next is a special excise tax of twenty-five cents per gallon of unfermented wort, yielding $3031546.15. Then there is a note attached to the return indicating that the tax was repealed on malt products and unfermented wort as from July 1, 1934. Then, we have indicated a special excise tax of fifty cents per pound on malt syrup or powder, extract of malt or other malt products for the brewing of beer, yielding $27,161.02. In connection with that item the same observation applies as in connection with the preceding one. These two returns to which I have been referring are sessional papers Nos. 277A and 277B, references 218 and 219 of March 25,
But that is not all. There were more taxes imposed upon the Canadian people. An order for return of March 20, 1935, contains the following:
What were, from 1933 to date, the total returns of each of the following changes of the 1933 budget to taxation:-
1. (a) Increase to 121 per cent on incomes of corporations; (b) removal of $2,000 exemption; (c) 131 per cent tax on corporations filing consolidated returns;
2. Reduction of personal income tax exemption: (a) from $2,400 to $2,000; (b) from
$1,200 to $1,000 and (c) in the case of dependent children, from $500 to $400;
3. The new schedule of rates of taxation on personal incomes, commencing at three per cent on the first $1,000 of taxable income?
Here are the answers given by the department to questions 1, 2 and 3:
Information not available inasmuch as while the tax changes and exemptions took place it was not possible to record statistically how much extra revenue was obtained by these changes, for the simple reason that the extra revenue in greater or lesser amounts was also affected by general business conditions as to profits and losses, likewise increases and decreases in salaries, professional incomes, etc.
But, sir, that is not all; there is more. I find another sessional paper before me containing this question:
What were from 1933 to date the total returns of each of the following changes of the 1933 budget to taxation:-
1. Five per cent tax on non-residents;
2. Five per cent tax on interest or dividends cashed at a premium.
The answer indicates that under the first item the amount is 89,236,957.70 as at March 19, 1935, and for the second item $1,326,386.66 as of the same date.
Then, turning to the last return I have in my hand I find that still further taxation was imposed. It is sufficient to show the burden of taxation placed on the shoulders of the Canadian people during the sessions of 1931, 1932 and 1933. In this instance the
What were, from 1933 to date, the total returns of each of the following changes of the 1933 budget:
(1) Removal of three cent stamp tax exemption on cheques of $5 or under.
In connection with that question there is no answer from the Post Office Department, and the Department of National Revenue states that it is unable to determine the amount. Then, the second question refers to the increase of tax on postal notes from one cent to three cents. The same answer is received from the Department of National Revenue, and the Post Office Department gives the following answer:
2. Fiscal year 1933-34 $143,712 46
Fiscal year 1934-35 109,982 00
Note: It may be pointed out that the above figures represent the total amount collected as revenue tax on postal notes. Separate figures are not available for the extra revenue derived as a result of the increase from one to three cents.
Then, question No. 3:
3. Increase to $2.50 per proof gallon of excise duty on distilled spirits used in the manufacture of proprietary medicine, extracts, essences, perfumed spirits and pharmaceutical preparations.
The Department of National Revenue answered: "Unable to determine the amount." Then, question No. 4:
4. Excise duty of $1 per proof gallon on spirits used in the fortifying of native wines.
The answer indicates a return, of $38,66023 on that item. I have indicated the taxation for three years, and although it is not complete it is sufficient to give an idea of what has been going on. Trade has decreased and taxation has been increasing. What is the most noticeable factor? It is this, that the government is unable to say-not to figure out-unable to say or to declare what the revenue from certain taxes has been.
Each year in his budget speech the Minister of Finance states that the revenue from a certain tax will be so and so. He makes a guess, but when we ask for figures in a return, there is no answer. Under the department's accounting system it is impossible for them to say how much money has been derived from certain impositions on the Canadian people. This is wrong. While acting as Minister of Finance in 1931 the Prime Minister told us that he would tell the House of Commons and country how a budget speech should be made. Now we find, however, that the government cannot tell us the returns from half of the taxes they have imposed since 1930. This is dll wrong, and a great mistake. Where does it lead? They do not know. It is about the same condition as we find in connection with the unemployed; they do not wish to know, and they close their eyes. They try to get all they can from the pockets of the people.
It is hard to play with millions of dollars. Of course the minister may feel like a million dollars because he is going to spend a million dollars in connection with the marketing act. Oh, it is sad when we think of the suffering of our poor people who have not enough to live on and who, in order to pay the taxation imposed by this government, have to take the bread from the mouths of their children and deprive them of sugar.
And, sir, an hon. member laughs. Did he not have to pay a contribution of $400 a year towards the expenditures made by this government? If the government were thrifty I would not say anything about it; I should not mind if they tried to economize, and so on. But what silly expenditures they have made from coast to coast-millions of dollars for no one knows what. Over a million dollars for radio broadcasting. The salary of General McNaughton is increased, in defiance of the law of the land. Then, there is the scandal of the stove pipe letter boxes. Let us consider the expenditures in connection with the trip to Egypt, and the trip to Madrid which radio fans will not forget. Let us consider how the pets of this government are treated. When it comes to a consideration of tenders the highest is accepted, provided it comes from a pet of the government. We have an example of that in the Department of Marine where a tender of $30,000 was submitted, as my hon. friend from Charlevoix-Saguenay (Mr. Cas-grain) can bear witness, and yet the minister accepted a tender for $49,000 in order to give the contract to one of his pets at an
exorbitant price. That may 'be considered a trifle, but an accumulation of trifles makes a mountain of trouble.
I am opposed to this vote, Mr. Chairman, because it is just a bluff in view of the election in order to deceive the people of this country again as they were deceived in 1930. But, sir, they have had five years to think over that. When the people were promised that they would foe led into the garden of Eden they never thought that the so-called garden of Eden would be hell. Think of that guarantee that was given to Newfoundland and which was mentioned this afternoon. The government took advantage of the relief act, of the peace, order and good government clause to guarantee bonds for Newfoundland to the amount of hundreds of thousands of dollars, and now that Newfoundland has a surplus over expenditure I wonder if this government will collect a cent of that money. The Prime Minister said that it was a guarantee. Yes, a guarantee that never will be paid. The Minister of Public Works (Mr. Stewart) said one day that the sixty million dollars which was borrowed by the railways was not to be paid back. We heard that from a minister of the crown. Think of a guarantee of sixty million dollars to the Canadian Pacific Railway under the signature of the Prime Minister before he had consulted his colleagues or parliament! Think of all those concerns which have been favoured by this government at the expense of others.
One cannot be too careful about taxation. As I have already stated, the Minister of Finance in his budget speech spoke of the possible revenue from taxation, but far from being comforting the returns which have been tabled in this house by the government show that the government are unable to say how much they have got from the Canadian people in taxation. It is unbelievable. What kind of accounting system do they have under the treasury board this so-called efficient treasury board, this brain trust which is supposed to control expenditure and to tell the government what they are to do with regard to estimates? Is the treasury board so efficient after all? No other prime minister would tolerate such a state of affairs in this country. I am sorry that the hon. gentlemen who sit on the treasury benches cannot enjoy my freedom to tell whom it may concern what I have already stated to this committee. But I shall not insist in the matter because what I say goes into deaf ears on the other side of the house. In the country, however, it is different, and from the records that have been tabled in this house the people of this 92582-204 i
country will know the real story about taxation, not the story told by the Prime Minister when he was leader of the opposition or when he was Minister of Finance, but the true story as told in the official returns tabled by this government in the house.
Mr. Chairman, after listening to the eloquent oration by my colleague from Temiscouata (Mr. Pouliot) I shall bring this discussion down to a more commonplace basis by asking the minister if he will kindly break down this item of $1,000,000, being the further amount required for the administration of the Natural Products Marketing Act, bearing in mind that a few days ago we were asked to vote $500,000 to take care of the expenses of different schemes under that act. I think we are justified, when asked to vote this $1,000,000, in wishing to know exactly how the minister contemplates that this money shall be spent.
of the committee will know, the most complicated branch of the whole industry of agriculture perhaps is that of the dairy industry. The value of the dairy industry from year to year has 'been roughly estimated1 to run from $175,000,000 to $200,000,000. There are three or four features in which the greater part of this industry finds itself in operation. First we have butter. That takes perhaps the leading place. Then we have the fluid milk market of the great cities; then evaporated and- condensed milk factories. But next to butter perhaps should rightly be placed' cheese. One of our difficulties has been this, especially during recent years. Because of the fact that we have been able to hold the price of butter above the world market price there has been a greater tendency to send the milk or the fat from the milk from the cheese factories to the creameries. If that continues at the same rate as during the past number of years, even as far back as 1920, the result will be such an increase in the production of butter that we shall be on the world1 market with reference to 'butter. That is to say, our farmers will have to compete on an equal footing with the farmers of New Zealand and other countries which have very great natural advantages.
In April, 1933, the world price of butter was a little over eleven cents a pound. That was the price in London, which is taken as the world price. That is comparatively the same as the price would be at Montreal if it were not for the tariffs that we have
against butter entering Canada from other countries because the cost of laying down butter from New Zealand and Australia at London is practically the same as laying butter down at Montreal. Had we been on the world! price at that time the dairy farmers of this country would have received only about half the amount they did receive for their butter fat.
How can this great dairy industry with all its complications that arise from the flow between one product and another be equalized to give a greater assurance that butter will not find itself, over a long period at least, on .the world market with the disastrous effects that would have for our dairy farmers? The purpose is that the greater part of this vote shall be used to equalize the dairy industry by giving assistance to the farmers who are having their milk processed into cheese to prevent .them as far as possible from sending more and more of this milk to be made into butter, which would thereby bring us more and more on to a world market basis with reference to our butter. As I have stated, for a number of years there has been a decrease in .the production of cheese and an increase in the production of butter. In 1925 we manufactured in Canada 177,139,113 pounds of cheese. The next year there was a drop of almost six million pounds; in 1928 it went up to 144,000,000pounds; in 1929 it dropped to 118,000,000pounds; in 1930 it went up to 119,000,000pounds; in 1931 it dropped to 113,000,000pounds and in 1934 it went down to
99,754,500 pounds. From. 1920 on there was a regular increase in the production of butter. Those interested in the dairy industry anxiously awaited the publication of the figures to see if this increase would continue. The first information we have had completed is for the month of May and .it shows that there has been a decrease of a little over 18 per cent in the .production of cheese with an almost corresponding increase in the production of butter. The result is that in pounds of butter fat there have been 57,000 odd pounds more go into the manufacture of butter than has come from the manufacture of cheese. Farmers who are vitally interested realize the danger if this is allowed to continue.
As I mentioned at the outset by means of the tariff we are able to keep the price of our butter above the world market. By means of milk boards which have been established in the different provinces we have been able to stabilize to a certain extent the price of fluid milk going into the markets in the large
'Mr. R. Weir.]
cities and keep it above the price to which it might have dropped had these markets been utilized by all the producers. Those who are interested have been viewing the situation with alarm and have been trying to discover some means of stabilizing the dairy industry. It was thought that while this was being worked out the duty of the government was to take what steps it could to equalize this industry and it was proposed to use the greater part of this sum of 81,000,000 in order to make payments to the farmers who send their milk to the cheese factories in order that they may continue to do so rather than to flood our butter markets.
Mr. Chairman, I have listened very attentively to the minister's explanation of the purpose of this vote of $1,000,000. Before asking the minister one or two questions I should like to point out to him that he is departing on a course fraught with endless danger to the Canadian taxpayer. The minister has said that part of this vote is to be used in. an attempt to equalize the price of cheese with the price of butter, but, as he says, he is only making a start. This $1,000,000 will not be sufficient to equalize these prices; it will be like the little boy who has told his first lie and is forced to follow it up with about fifteen others. I suggest that the committee consider this vote very carefully, not only because it is to cost the taxpayers $1,000,000 but because it is the second, the third or the fourth step towards creating in this country an1 impossible position whereby ten and a half million people are to be taxed in order to help the British consumer of Canadian cheese .pay for an article produced in the cheese factories of- this country. May I repeat that this is a beginning of a policy of taxation of the consumers and producers in all branches of Canadian industry and consumption in order to bonus or to equalize the price of an export article which is consumed by the people of another country. We are going to pay part of the price which the Englishman pays for Canadian cheese.
through the export bounty, would be paying part of the price which the British consumer of Canadian cheese would pay for Canadian cheese. In other words, as I have said1 repeatedly with all the vigour of language at my command, we are departing from an economically sound policy, and this is about the fourth dangerous step. Indeed, it is the most drastic step taken up to the present time, and if this policy continues-and I expect to see mere of the same sort of thing if I come back here and this government happens to be in power -it will simply mean disaster to our lumbermen, our fishermen, our fruit growers and every other branch of Canadian industry. The benefit- will not be derived by Canadian industry or the Canadian consumer, because what we are doing here is assisting the British consumer, through Canadian taxation, to pay for the Canadian cheese he eats. Let me say to the minister that this is all wrong; it will not work and it has never worked. It is economically unsound.
May I deviate here to advise the Minister of Agriculture to take a rainy Sunday afternoon off and read the history of the scheme whereby the British people were going to pay off the war debt to the United States through the control of raw rubber. Through the control of rubber production they were going to pay off the war debt to the United States,, and rubber dropped from 18 cents to li cents a pound. Once again I plead with the minister, whoever his advisers may be, to consider this question from the practical standpoint, to read1 the history of similar attempts in other countries, and to realize that it can only end in an additional burden of taxation on the Canadian people, with only an infinitesimal benefit, if any benefit at all, to the dairy industry of this country. I would ask the minister to take his mind back to the election campaign of 1930-and I assure the committee I do not want to interject politics here-and to a period before that, regardless of the government that was in power, when we were importing a large tonnage of New Zealand butter. I am not going to go into the ramifications of reciprocal trade or the results that followed from our financial and economic capability of absorbing that butter, but the reason that butter came into Canada was the fact that Canada, through the ability of the Canadian people to consume enormous amounts of foreign butter during a period of prosperity, was able to import butter from New Zealand . That is why Canadians could consume New Zealand butter at a higher price than butter sold on the British market.
The statement which the hon. member has made, that we were able, because of our prosperity as a people, to consume large quantities of butter from outside Canada, is not really correct. The reason we did eat butter from outside Canada was that our production at that time was not nearly as high as it is at the present time. There is one other point. We are in no way, in this scheme, paying for any cheese consumed by the British consumer. The question is simply one with regard to the price of our dairy product?, butter and cheese, * butter particularly; and this plan we have in contemplation means as much to the butter manufacturer as it does to the cheese manufacturer, if not more.