Mr. TAYLOR (Nanaimo):

If we are Canadians we should make every effort to see that our worth shows itself in everything we do. It would be a very simple matter to deal with the matter at the proper time and in the proper place.

Mr. CAHAN:

Is the reason the minister has given for reducing the appropriation for the Canada-United Kingdom service on the Atlantic the same as he would give for reducing the Canada-China-Japan service by $149,000?

Mr. EULER:

I think I gave the hon. member for Vaneouver-Burrard (Mr. McGeer) a reply to that question a moment ago. The reason for cutting down the subsidy for the service to China and Japan was, as I said, in the interests of economy. My good friend the Minister of Finance, to whom reference has been made by the leader of the opposition, was rather insistent that we should get our estimates down. He had no particular influence, I might say for his benefit, in regard to these estimates, but the general principle was that the main estimates were to be reduced all along the line; we had to cut here, there and in the other place, and this was one item that was cut for that reason. So far as I am concerned, if this is of any interest to the committee, I am opposed to subsidies. I do not like the idea of subsidies at all, but we have to adopt ourselves to conditions as we find them. I would like to compliment the leader of the opposition upon the assistance he gave and the clarity with which he expressed his view on the question of subsidies. I agree with him. That of course does not mean that the principle of subsidies is particularly sound, but if it is necessary, as it-is, to maintain our trade routes and all the rest of it, we have to adapt ourselves to conditions as they are. For my part I do not desire to go into the granting of subsidies to any greater extent than is absolutely necessary, and from that it follows that any action that might be taken will be in the direction of cutting down subsidies, if that is at all possible, having regard to the service necessary for the Canadian people. I make that observation just by the way. My inclination would be, in the language of the street, to

Supply-Trade-Mail Subsidies

let every tub stand on its own bottom. After all, these are private businesses conducted for a profit, although in most cases these companies are not making any profit; in fact they are suffering losses. But in a general way I should like to save the treasury just as much as possible on subsidies.

Mr. CAHAN:

I quite understand the position which the hon. gentleman takes with respect to subsidies. That is a large question, but parliament has voted subsidies for steamship services for many years; whether a Liberal or a Conservative government was in office, both initiated such votes.

Mr. EULER:

I hardly regard that as a good reason.

Mr. CAHAN:

No; but certainly the hon. gentleman does not suggest to the committee that he is reducing the subsidies on two of the most important services of Canada, one by $250,000 and the other by $150,000, without taking into consideration or entering into such negotiations as would assure him that the services will not deteriorate or in fact become obsolete if these subsidies are reduced.

Mr. EULER:

I am not very much afraid of that.

Mr. CAHAN:

The minister is not very much afraid of it, he says. Well, I suggest that he is not as astute as he usually is because if he would look into the facts with regard to both these services I think he would have very grave doubts whether they will be maintained as efficiently without these subsidies. Take the Pacific service. I remember that when it was up before our own government a year ago I looked into the Pacific service which is carried on by the Canadian Pacific Steamship Company. I found that they were operating under enormous losses at that time, if my memory serves me aright, and I regard a reduction of $149,000 in the subsidy for that service as likely to deteriorate the whole service and render it impossible for an efficient service to be carried on. With regard to the Atlantic service I was astounded to hear the suggestion from the minister that it is being operated fit an enormous profit.

Mr. EULER:

I did not say that. I said that they were two and a half million dollars better off than they were the year before.

Mr. CAHAN:

That depends on what "better off" means, and with w'hat the comparison is made. Can the hon. gentleman lay on the table the figures from which he deduces that there has been a more profitable operation to the extent of two and a half million dollars?

SMr. Euler.]

Mr. EULER:

Perhaps I might answer my hon. friend if he wants the answer now. I may have taken the committee into greater confidence than I was entitled to do because these figures are confidential. The reason for making the cut in the Atlantic service was that the company, while still operating ostensibly at a loss, operated at a very much smaller loss than they did the year before. While I am on my feet, I might also say although I do not desire to interrupt my hon. friend, who is rather vehement in his language with regard to the cut on the China service that from 1920 to 1931, as the leader of the opposition very well knows, there was no subsidy at all for that service. They are still being allowed $600,000, so that is not dealing so very harshly with the company.

Mr. CAHAN:

I am not talking about dealing harshly with the company.

Mr. EULER:

Well, I am.

Mr. CAHAN:

I am just asking what

ground the hon. gentleman has for concluding that with a reduction of this large amount the service can be efficiently operated either on the Atlantic or on the Pacific. I have dealt particularly with the Pacific.

Mr. EULER:

I have given the reason. Let me speak about the Atlantic service for a moment. I am certainly justified in believing that when that company by its statement shows that it is three or four or five or six times better off than the amount of the cut in the subsidy, it will be able to give at least as good a service as it did before when its loss was much greater.

Mr. CAHAN:

But it is still run at a loss.

Mr. EULER:

I gave the figures a little while ago. Surely there is no reason to assume, when their loss is now so much less, that they are going to give a worse service than when their loss was greater; that when their loss has diminished they are not going to give as good a service as before.

Mr. CAHAN:

I should think otherwise. When a company has been operating at a loss for so many years it comes to a stage when such losses can no longer be incurred, and if the company has been making an effective effort to overcome that loss I should think it might be encouraged by granting the subsidy until such time as it has made up an income which will meet the current expenses for carrying on the service.

Mr. McGEER:

I had not intended taking part in this debate until I heard that the only reason for the reduction of the subsidies

Supply-Trade-Mail Subsidies

to the Pacific coast services was one of economy. That kind of 'economy will not prove to be worth much to the dominion. If that is the kind of economy necessary for the purpose of balancing the budget, apparently we are going to have a balanced budget at the expense of the Canadian people, at the expense of Canadian trade expansion and at the expense of Canadian institutional services advancing with, from the Canadian government, some measure of assistance such as other national governments throughout the world are giving to similar services. Such action will not prove to be an economy; it will prove to be an effective way, not of balancing the budget, but of continuing an unfavourable balance to Canada and the suffering of losses on the part of companies and seamen.

If there is one place where we should be acting to meet intensive competition made possible by national activity, it is on the Pacific ocean. We should not forget that during the last fifty years Japan has risen from a place unknown to the position of one of the leading nations of the world. By appropriating to their own use all that has been developed in western civilization in the way of culture and education, in politics and finance, in industrial and productive activity, in commerce and diplomacy, and in war power, tlie people of Japan have risen to the first rank of the leading nations.

Mr. BAKER:

Therein lies the danger.