Mr. TUCKER:

It appears that the hope for recovery entertained by the government is the hope that private industry will absorb unemployment, and that this program is designed to take up the slack in the meantime. Now I have been following some of the newspapers, as doubtless other hon. members have from time to time. I find that one of the industries in which there should be a great deal of employment during the coming year is the housing industry. In the city of Toronto, according to the report of Lieutenant Governor Bruce, there are no less than 2,000, possibly more than 3,000 dwellings which by reason of unsanitary, verminous and grossly overcrowded conditions constitute a definite menace to the health and decency of the occupants, and "if reasonably full employment were to return and marriages delayed by the depression were to take place it is probable that a shortage of some 25,000 dwelling units would become apparent." In other words, in the city of Toronto there should be the possibility of building 25,000 dwelling units at once.

In the Saskatoon Star-Phoenix of April 4 last, Mayor Pinder of Saskatoon is reported as saying that Saskatoon spent on relief in 1935 the sum of $209,000, and he said further:

There was a great shortage of housing accommodation in the city, His Worship told those present, impressing listeners that a program affording work to those now on relief and at the same time providing better housing accommodation was needed badly.

Then I find this further article in the Star-Phoenix of April 3 last, from North Battle-ford:

"Fifty small modern houses are urgently needed here if we are to retain in this city people whose logical business centre is North Battleford, but who are being obliged to live elsewhere on account of the house shortage," Mayor W. M. Bowers declared this morning.

There is a note at the end of that article that Yorkton also has reported a shortage of houses. And so it goes; all over the dominion

there is a shortage of housing. If the housing needs of this country were to be supplied by a real building program within the next year or so, thousands of men to-day out of work would be employed, those engaged in the heavy industries would have more work, and housing conditions throughout the country, which to-day in parts of many cities and towns are a disgrace, would be remedied. When there is this great need for housing, why is it that private enterprise is not entering the field? Something was said about the housing program in England where so many houses have been built during the last few years and so many people have been absorbed into industry by virtue of that great building program. I believe one of the reasons the housing program has flourished in England is that the cost of the dole-the equivalent of unemployment relief here-is largely carried by the central government, whereas in Canada we have placed a large part of it upon the municipalities. The chief means by which the municipalities may raise money is by impositions upon improvements and real property. If we are going to place the main burdens of this unusual era upon real property and upon improvements to real property, burdens in the way of increased interest payments, increased expenditures for unemployment, and so on, how can we expect private industry to invest its wealth in a building . program when the buildings, the result of such programs, may face confiscation as a result of undue burdens placed upon municipalities. That is the situation confronting the committee.

We take the attitude that the present unemployment problem is only temporary. Very well; if it is temporary let the dominion government through means of taxation which it has and which do not bear upon improvements and private real property absorb the burden of these unusual conditions. In other words we would relieve the municipalities from Halifax to Vancouver of the burden

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which is preventing private enterprise from entering the building trades. By our attitude of failing to consider the problem as a temporary one and to look after it through the efforts of our national government we are bidding well to make it permanent.

For a moment or so I should like to deal with some figures which I suggest bear out my contention that the tendency is to confiscate improvements on real property. I have in my hand a clipping from the Winnipeg Free Press of March 17, in which it is indicated that the gross total arrears in taxes in the last ten years has risen very much. Although the table is given I shall not take time to read it. I will however read the figure for 1929. In that year the arrears of taxes in Winnipeg amounted in round figures to $7,550,000 and in 1935 had increased to $12,040,000, or an increase of about $5,000,000 or almost seventy per cent. What is the result? The article goes on to state:

More property was sold for taxes last year than in any previous year. The taxes standing against it amounted to $580,304. The property sold for taxes in each of the last ten years was as follows-

And then the article goes on to give figures showing the amount of taxes against property sold for taxes in Winnipeg. In 1929 the taxes due on property sold for taxes amounted to $199,662. The taxes against property sold in 1935 had risen to the sum of $580,304. The statement continues as follows:

Just what the taxpayers have been up against is seen from the tax sales of the last three years. The property sold for taxes in those years had more than $1,500,000 of taxes against them. They were worth considerably more than that. And the amount of improved property, business places and homes going into the tax sale has greatly increased.

The article continues later on:

But more improved property is passing through the tax sales now. and the city may be expected to obtain title to an increasing number of such properties.

Then, may I read an excerpt from an editorial of the Free Press of March 17 last:

The taxes actually collected under last year's budget were nearly three-quarters of a million dollars less than in 1931, in spite of the imposing of a new tax on motorists, an increase in the water rates for general revenue purposes, and an increase in the business tax. A large amount of property again passed into the city's hands at the last tax sale, and hundreds of small home ow'ners again asked for the privilege of working on the streets to earn their tax money and save their homes.

And later:

There are thousands of individual taxpayers who find it extremely difficult to pay the levies on their homes and many have lost their homes to the city or mortgage company.

Why do we have this confiscation of money invested in private homes throughout Canada? One of the reasons is shown in a tabulation prepared by Professor H. Carl Goldenberg, M.A., B.C.L., F.R. Econ. S. I shall read only a few figures to indicate what is happening in Canada. I submit that sitting here in parliament it is our duty to face and study the facts, and to base our opinions upon facts, and not upon theory.

Since I have come to the House of Commons, on many occasions I have heard the statement that there is no royal road out of the depression, that there is no easy way out of it. The statement is made that there is no panacea. Are we to shut our eyes and refuse to face the facts, or are we to look the facts in the face and try to find some solution? It is not sufficient to oppose reform far-reaching enough to meet our problems because it is said there is no royal road or no panacea. Of course that is exactly what has stopped progress in the past. There has been the old cynical cry, "There is no royal road." I submit it is up to the House of Commons to find some road out of our present situation, whether it is a royal road or not.

I find on page 2 of the report figures which indicate that the decline in the assessed value of real property has been accompanied, in many cases, by an increase in the tax rate. For example, in 1929, the tax rate in Kitchener was 36-75, and in 1935 it had increased to 41-7. In Ottawa the rate in 1930 was 31-35 and in 1935 it was 36-80. In Montreal the tax rate in 1931 was 24-8 and had risen in 1936 to 27-7. Coming to western cities we find that the rate in Winnipeg in 1929 was 33, and in 1935 it was 34-5. In Saskatoon the rate in 1933 was 42-9 and in 1935 it was 44-9. The tax rate was recently struck for the year at slightly over 45. That means a tax of almost five per cent on real property in Saskatoon, and five per cent on sixty per cent of the improvements thereon. Coming to Calgary we find that in 1929 the rate was 44-5 and that in 1935 it had risen to 50. In Nanaimo the rate in 1929 stood at 47 and in 1935 had risen to 55.

There is the situation. We have a confiscatory tax on real property and improvements. The increase in tax rates has brought about an increase in tax arrears. What do we find in connection with arrears? The tax arrears are a first charge on the real property or the homes of the people of Canada. We find that in the city of Montreal tax arrears in 1931 amounted to $15,650,000 and in 1936, to $23,083,000, an increase of about $8,000,000 which stands as a charge against the homes and business places of Montreal, wiping out

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the equity of the owners to that extent. The arrears for the city of Oshawa, which in 1929 amounted to $230,301, were $601,559 in 1936. The figures for the city of Winnipeg indicate arrears of $4,818,000 in 1931 and $6,288,000 in 1934. For Saskatoon the figures are $1,134,000 in 1929 and $2,969,000 in 1935, an increase of more than 100 per cent in that city. The figure for Edmonton increased from $1,754,000 in 1932 to $2,130,000 in 1933. This increase represents a charge against improvements and against the homes of Canadian people. The tax burden of the municipal taxpayer has been inoreased because these people have had to shoulder the burden of looking after the unemployed and meeting the ever increasing interest of their public debt.

I should like now to deal shortly with another set of figures without giving them all. I have here a table showing municipal expenditure on unemployment relief and how it has grown. The expenditure on unemployment relief in the city of Montreal, for example, which in 1931 was $2,309,000, had risen in 1935 to $6,324,000, an increase of more than 200 per cent, an increase of more than $4,000,000 for the city of Montreal alone. In the city of Winnipeg in 1931 the expenditure on unemployment relief amounted to $905,750, and in 1935 it had risen to $1,886,000, an increase of 100 per cent. In Saskatoon-and here are some striking figures-the expenditure on unemployment relief in 1930 was $4,231; in 1935 it had risen to $290,000, in a city of about 40,000 people. All that extra burden was placed upon the people and had to be met largely by taxation on real property and improvements, and yet we expect people faced with that ever increasing burden on their homes, the future extent of which burden is unknown to go into a building program. There is the situation, and it is something which the house should recognize. We have this ever increasing burden of unemployment; more and more homes are being sold to carry that increasing burden, and yet we expect people to go into an increased building program.

Just for a moment I should draw to the attention of the committee our attitude towards those who in the past have invested in homes and in industry in this country as compared with those who have invested their capital in bonds. Let us take a citizen with, say, $10,000 to invest. Suppose he puts $5,000 into a home and $5,000 into some industrial enterprise giving work to people. We will suppose that his neighbour across the road says: I will not do that service; I will not bother risking my money in an industrial enterprise, nor will I build a house; I will

buy government bonds. Just let us see what is the difference in our attitude towards these two citizens. To-day the man who put $5,000 into a house in the city of Edmonton, for example, will have to pay roughly $250 a year, a five per cent tax on that home. On account of the heavy taxation upon industrial enterprise in this country a great many industries are not making anything at all with which to pay interest on the bonds they have issued, and the result is that the man who invested in industrial enterprise in many cases has lost his income from that source. How has that come about? Because above all things the dominion government has so far refused to adopt a more advanced policy in regard to banking and monetary reform. Instead they say: We will force the municipalities to borrow from private institutions at high rates of interest; we will not help them out at all in that regard. And so they have had to devote a large part of their revenues to payment of debt charges. There has also been placed to a great extent upon the backs of the municipalities the burden of looking after unemployment, without any promise on the part of the dominion government to relieve them of that burden. On the other hand the man who put his $10,000 into government bonds draws his interest regularly, while his neighbours are being sold out. Homes have had to foe sold because their owners were unable to meet the increased tax burden, yet all the while the government bondholder continues to draw almost five per cent on his $10,000 of government bonds; in other words, his neighbour must lose his home and his position in order that he shall be paid the $500 interest on his bonds every year. It seems to be quite all right to confiscate the capital invested in homes, but if we suggest that we should leave the bondholder his principal intact and take only some of his interest in order to lighten the burden on the home owner and the factory owner, we are told that is confiscation.

I put it to you this way. On the one hand, the home owner has his home, his capital, confiscated. There is no thought of his income, for that went long ago. On the other hand, the bondholder has his principal intact, and he howls to high heaven if you touch even his interest. You are selling out the home owner and the factory owner in order to pay interest to the bondholder.

I submit to you, Mr. Chairman, that this high court of parliament must now look that situation right in the face. It cannot afford longer to accept dictation from the financial interests of this country. It must put the best interests of the people ahead of the dictation

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of any financial interest in the whole of Canada, in order- to save the homes of this country, in order to encourage private enterprise. It must lift this intolerable burden from the backs of the home owners. It is, I think, the duty of this government, if it believes that this is only a temporary problem, to treat it as such, and to lift off the backs of the municipalities the burden of looking after unemployment. Then people will see that the burden against their homes or against any houses they may build under the government program will not become intolerable. Can you expect people to put money into houses when they see the rapidly rising tax rate against them? Unless there is a change of policy they are going to say: No, apparently the thing that is always going to be protected in this country is government bonds; we will not put our money into homes or industrial enterprise because people who have done so in the past have lost what they put in; we will put our money into government bonds where the principal is safe, and the interest on which will be paid even if the government have to use the entire police force of the country to see that we get it.

Is not that what we are saying to the people of this country? Is it not time that we faced that situation? Is it not time that we saw that if we continue to tax and in effect to confiscate the money that is put into homes, people will not put money into homes? We must take steps to lift that intolerable burden from municipalities if we expect them and their citizens to put their money into enterprises which will provide labour for their fellow citizens.

Mr. FOULIOT:

Mr. Chairman, I would like to ask the minister if the government will be bound by the recommendations of the commission.

Mr. ROGERS:

I think it appears quite clearly from the wording of the National Employment Commission Act that the answer is in the negative.

Mr. POULIOT:

Thank you. But if the government is not bound by the recommendations of the commission, no one sees the use of it. I wonder if during the last election one single Canadian took into consideration the national employment commission when registering his vote. I do not think it affected his vote one way or the other, and for a very good reason. At the time no one knew what the commission would be, and Canadians are not very strong for abstractions; they prefer concrete facts. In my constituency the suggestion of an employment commission did not

change a single vote. The people voted to defeat the late government because of its responsibility in regard to the increase of unemployment in this country. I cannot understand why no one has yet brought to the attention of the house the responsibilities of the late government in regard to the increase in unemployment. They are many. I shall be very brief, but I cannot let this debate come to an end without mentioning some of them.

First, in 1930 the leader of the opposition (Mr. Bennett), before he became Prime Minister, stated that he considered seasonal employment as permanent employment. Second, when unemployment was only a municipal problem, he made it a federal issue. Third, he made it a question of dollars and cents when it should have been considered from the social point of view. I should like to repeat what was said by the hon. member for Fort William (Mr. Mclvor), that this matter should be considered not only from the point of view of common sense, but from the point of view of Christian common sense. I commend those admirable words to the attention of the committee.

Fourth, the right hon. gentleman thought that unwarranted and uncalled for high tariffs would cure unemployment. Does the committee remember the special session of 1930, at which time employment was normal and even better than it was in the previous year, according to the statistics published in 1931 by the then Minister of Trade and Commerce (Mr. Stevens), when the leader of the opposition said: "We will cure unemployment by high tariffs?" He gave us high tariffs and we had more unemployment. I do not doubt his sincerity, but he was very badly informed. He made many mistakes in judgment; he gave us wrong advice, and the country suffered. He said: "I will end unemployment or perish in the attempt," but he probably never thought that it was the country that would perish while he would survive. Fifth, he imposed a heavy burden of expenditure upon the provinces and the municipalities, a thing entirely wrong from the constitutional point of view. Sixth, he imposed upon the railways a program of new and branch line construction at a time when it was not necessary in the public interest. Seventh, he was responsible for the construction of unnecessary works by joint dominion, provincial and municipal expenditure, when such works should have been spread over a period of years. Eighth, he overestimated the spending power of the provinces and municipalities and induced them to spend beyond their means and capacity

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to pay. Ninth, he shifted the accounting for relief from one fiscal year to the other and used red tape in order to make dominion contributions to private and public works. Tenth, he took advantage of the relief legislation to give several dominion guarantees to public bodies, to Newfoundland, a foreign country, and to private corporations, without authorization of parliament.

All this is very serious. It is not simply a matter of procedure; it is not simply a matter of interpreting one word this way or that. The country has been destroyed, and to paraphrase the words of Georges Sorel when speaking of Jaures, the right hon. gentleman has been a profiteer of popular illusion. In my bumble view a change of government does not consist merely in the moving of a few pictures from the opposition caucus room to the government caucus room or from one lobby to the other. The people of this country meant it when they voted for a change.

I do not see how this legislation can be submitted to parliament. I am against it. I am a Liberal and at times I fought alone against the Tory machine. I am not ashamed of that; I am proud of it.

There is much satisfaction in being a member of this house. We meet many good friends from all parts of the country and we are able to speak freely for the benefit of the country as a whole and try to take the country out of the hole which was dug by the previous government. The motto of hon. members should be not only the motto of Raymond's jams and preserves, "We aim to please"; it should be "Ich dien," the motto of the Prince of Wales. We are here to serve.

It is most unpleasant to have to disagree at times, because we generally like to agree with our friends; but the greatest joy and satisfaction that a man can have is to be able to speak freely according to his best judgment. That is one privilege we have here. A member does not represent only his own constituency; he represents Canada as a whole, Canada at large.

This legislation has been drafted very badly. What can be said about Bill No. 19 can be said also about Bill No. 14. This legislation seems to have been drafted along the same lines as the social legislation of 1935. It has been drafted by people who apparently wanted to please both major parties in order to save their skins because of their failure last year to draft good legislation. We are here principally to pass legislation. That is why we assemble in this chamber and the Senate assembles in another part of this building. It would be better

for the country, even if a session lasted six months, that parliament Should pass only one good piece of legislation, even if it took up only one page. We must remember that the commandments of God are only ten in number of two lines each. Twenty lines of commandments have governed mankind since Moses came down from the mount.

The other day the comments of two great Canadians, Mr. Pitblado and Mr. Bradshaw of Toronto, were quoted in connection with legislation. When legislation is brought before the house it should be well and clearly drafted. It would seem that this legislation has been copied from the legislation of other countries, but it should be remembered that conditions in other countries may not be the same as they are here. We should consider the facts. I take this opportunity to warmly congratulate the Minister of Labour on having given us plain facts, Canadian statistics. Everyone can make mistakes and I made one last year when I censured high officials of the Department of Labour; I have put the blame on them. Every one is apt to make mistakes and I must admit mine when I make any. But I have noticed that the reason why it was impossible to get information last year was that instructions had been given by the previous government to keep us in the dark with regard to the real facts abount unemployment. It was for that reason that a member of the house had to communicate with the municipalities in order to obtain information which was refused him by the Department of Labour, under the instructions of those who now pontify from the other side of the house. This is very bad, and since it has occurred there has been a change in the Department of Labour; a new minister has come in and has opened the windows, and now it is easy to get some information from that department. These men who did nothing under the previous government are now doing very well and they should be congratulated on the very excellent forms which they have prepared in connection with the classification of the unemployed. I repeat, they have done very well. In that regard the minister deserves praise, and they also are deserving of commendation; for praise should be given to those to whom it is due. But, sir, what is the use of having these able men if they have nothing to do? What is the use if advantage is not taken of their capabilities to assist in framing a policy for unemployment relief?

I firmly believe in what the Prime Minister -I mean the present one-said during the last capaign with regard to parliamentary control. Here we are, 245 members represent-

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ing every part of the country, ready to speak on behalf of our own people, whose interests may diverge at certain angles, but who should understand one another for the common good. Speaking of parliamentary control, there are two major parties-there are other groups or parties in the house. Every one has an opportunity to express his views, whether here, in caucus or elsewhere, by letter or otherwise, and to make suggestions. In my humble view, this is the way in which legislation should be drafted. There are caucuses of every party and it is the privilege of members on the government side to submit their suggestions to the government in party caucus. And the same can be done in opposition caucus. I suggest that the government of the day should take advantage of all these recommendations to frame a policy which should be submitted to caucus; legislation should be submitted to caucus and then brought into the house, and by way of amendments, constructive suggestions could then be offered to the government and to the committee of the house. Then, sir, when there is a very important piece of legislation it should be referred to a special committee composed of members of the house from each province, who can call in witnesses and have the facts presented which they have not already obtained. The same thing could be done in the senate, and legislation would then be better than when, according to the words of the present leader of the opposition, it is prepared by the officers of the crown who know nothing about the conditions of the country at large, and when legislation prepared in that way is boldly forced upon the house by the government and left to the courts to be decided upon. What kind of legislation have we then? We have unworkable legislation. I have great confidence in the present Minister of Labour and most of his colleagues. I have respect for them and in my humble view he has a great responsibility with regard to unemployment relief. He should therefore dispense with this commission and should decide the whole thing with his colleagues of the cabinet. This is the way it strikes me. In this way the government would not be faced with any obstacle when it came to deciding yes or no, and the government would be more respected for that reason. There are promises that are serious and others that are not. In my humble view the employment commission scheme is in flat contradiction of the statements of the present Prime Minister with regard to parliamentary control as against the blank cheque, and to the effect that parliament should be responsible for every expenditure that is made. I know what the answer will be; the answer will be that the first bill creating the employment commission is a matter of investigation - investigating the causes of unemployment. I remember distinctly that last year or the year before, in the month of June, I quoted a speech which the leader of the opposition made in Calgary late in December, 1930, or early in January, 1931, a very admirable speech in which he said that it was the duty of the government to find the causes of unemployment. I congratulated him on that speech; but through the chair he prevented me from reading the entire quotation from his speech. It was probably the best speech he has made in the last ten years, because it was sensible; he spoke sensibly. I wonder if that is the reason why he objected to my quoting his utterances, so full of common sense.

Now here we are; the government has a very important policy to carry out, and that policy should not be that which has been left as a legacy by the previous government; it should be a new, bold, red-blooded Canadian policy, a Canadian policy for the relief of those who have been plunged into distress by the silly policies of the previous government. This is what the country is asking, Mr. Chairman, and I know this statement will be approved by the great majority of those who on October 14 last voted to defeat the former government.

Having put these considerations before the committee I need not elaborate them, but it seems to me it would be much more satisfactory to the minister concerned, to the government and to all of us if that legislation were dropped so that the country might be governed as it should be governed, under parliamentary control, under which the minister would not be responsible for the mistakes and blunders that may be made by the commission. In addition, Mr. Chairman, I have an offer to make to .the minister. I do not see the need of a commission to classify the unemployed, because the member for Temiscouata did it by himself in two months. The actual work was done in two weeks; it took a month and a half to gather the information, because the member for Temiscouata had no sanction. The minister has that sanction; he can say to the provinces and municipalities? "If you do not supply that information you will not get a cent of relief," and they will send the information right away. That is the minister's sanction. It is different from the sanction of the bureau of statistics, which says that those who refuse to give information are liable to fine or imprisonment. That is Tory coercion.

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On the other hand the minister, who has power to tell the provinces, the municipalities and all those concerned that if the information is not supplied no relief will be granted, will be sure of a prompt response, much more so than will be the case with this new commission. So, Mr. Chairman, I do not see the use of having that commission, which is to be presided over by a man who may be a very excellent gentleman but who is associated with big American interests and who is interested in explosives. I do not see why he should come here and burst in this country. He may be a very good man, but there are good Canadian citizens who could do the job very well, and one of them is the Minister of Labour. He could be helped by his staff, on which there are some very able men, and it would be so much the better for the country at large.

This is my humble protest, Mr. Chairman, but it is in line with what is being said by many people throughout the country, humble people if you like, who have no titles or wealth with which to impress. No, but a humble man can have the good sense which may be refused to millionaires. These people think the best way for them to be heard is by having as chairman of the commission, instead of a millionaire from a big city, a gentleman from the ranks of the people who has been sworn in by .the representative of his majesty as one of his constitutional advisers. At times I regret very much that some people show so much learning about matters of no concern while on the other hand they seem to have forgotten their alphabet. You know, when one goes to school he has to begin by learning his alphabet. That is something that should not be forgotten, because if the alphabet is forgotten it is pretty hard to read scientific books on economics.

I wonder if this humble suggestion will be accepted. It is given in all good faith and for the good of the country.

Mr. CHURCH:

In connection with this last section of the bill, which I think is the most important section of the measure, before it is too late I should like to plead wtih the government to add) some rider or subsection with regard to the obligations which are to be created under this, the largest blank cheque ever to be issued by parliament. This is nothing but a blank cheque. There are no estimates of the cost or of standard plans, as there are in the United States; there are no detailed estimates. It is just a matter of creating obligations. Instead of naming March 31 next year as the day on which

(Mr. Pouliot.l

these obligations must be wound up I think it would be far better to name April 1, because as far as I can see April Fool's day would be more in keeping with the spirit of this measure.

I agree with much that has been said by the hon. member for Rosthern (Mr. Tucker) and the hon. member for Vancouver-Burrard (Mr. McGeer). I am very glad to hear some government supporters assert their rights and prerogatives as private members, because private members are the connecting links between the government of the day and the electors, and when they sit at their desks here and cease to function all parliamentary government is at an end.

May I say, Mr. Chairman, that the statement read to-day is only a partial statement of the situation with regard to the municipalities as far as Ontario is concerned. Under the British North America Act the government of this province is paid a cash subsidy of about 83,000,000 for the maintenance of provincial institutions, and other provinces are paid proportionate sums. In all the provinces with the exception of Ontario something is done to help maintain municipal institutions; for example, some of the provinces give subventions to the municipalities for the maintenance of courthouses, gaols, registry offices, land title offices, schools, hospitals and so on, and some of these institutions are constructed with provincial aid. In Ontario that has not been done. In the thirty-two years during which Sir Oliver Mowat was premier of Ontario the government of this province went outside the four corners of the federal subsidy grants' and loaded all these provincial burdens on the municipalities, with the result that to-day the home owner is practically ruined. In the days of Macdonald and Laurier we were a nation of property owners and Canada's citizens were becoming proletarian, but now no one wants to hold real estate. Taxes are so high as to amount practically to a rent in themselves. Not only have the municipalities been loaded up with federal and provincial burdens of this kind; in addition the right to impose income tax has been taken away from them. The field of income tax was a purely and exclusive municipal field, the exclusive prerogative of the municipalities; it helped to maintain municipal institutions from 1867 to 1918. Then this parliament imposed a duplicate income tax in 1918. Then along came the province and imposed a triplicate income tax, with the result that business has become so burdened by taxation that not only is the home owner losing his property but the intolerable burden on business is such

Unemployment

that it is hard for a business man, as the hon. member for Parkdale (Mr. Spence) said the other night, to carry on business. I take this last opportunity to plead with the minister and the government to put a clause in this bill to protect the government and enable them to deal directly with the larger municipalities. The government are going to hand out this money; it is given to the provinces, and what do they do? They deduct from what is supposed to go to relief a large amount which does not go to relief at all. With the conditions imposed by the provinces the municipalities do not get the amount allotted by this government for relief. The provinces deduct overhead and other charges, and federal funds thus do not go directly in toto to be handed out to people on relief. The result is the municipalities have bad to cut down on bread, sugar, tea, and many of the necessaries of life, and hospital charges are curtailed. It would be safer for the government to lend money directly for relief to the municipalities than to the railways or some of the bankrupt provinces, from which it never comes back. Some of the railways and harbours do not pay even the interest and sinking fund back. It would be far safer to lend the money to the municipalities on a suitable definite plan to get people off the dole and back to work and for a surburban areas plan where they can have an acre or two of land and maintain themselves in part out of the small crop. It will take a little federal aid for two or three years, but that would be far better than lending money to railways Did you ever hear of a railway paying back money? Go over the grants to the railways of this country; read the Drayton-Acworth report about what was paid back and not paid back. I venture to say the government has a far better chance of getting back money that they lend to the municipalities. In 1919 the government of the day did lend money to the municipalities for housing, and it got back from the municipalities ninety-five per cent of that money. Some of the railways and harbour commissions have never paid even a dollar of interest. The municipalities have many of them about reached the end of the game; they cannot any longer have this federal burden loaded upon them; property will not stand it. Taxes have been going so high that not only does no one want to own property but there is such a burden of debt that the municipalities are starved; they have not a dollar for capital charges to build municipal requirements for the future.

I believe this whole matter is wrapped up very largely also with lower bank, mortgage and insurance rates in their relation to unemployment and lack of building. You can lower your relief costs a great deal and help many home owners to retain their property. Last night criticism was expressed of the United States government, but the United States home owners' property act has saved a million workers' homes from foreclosure. No government in this country has done anything like that. And the minister has given us not one line as to what the cost is going to be. Where is the standard plan? What is he going to do about decreased bank interest and mortgage rates, and prevention of foreclosure, and the high cost of life and fire insurance? What is he going to do about the shark loan companies that are charging seventy-five per cent, according to the survey given before the Ontario Teachers' Association last week in Toronto. Action on these matters of home owners' protection certainly would get people off relief; if the government would wield the big stick on some of these lending corporations the poor home owner would be enabled to hang on a little longer. In the United States the insurance companies are doing something to aid the home owner. The New York Life at Gravesend Beach in Brooklyn last year lent S25,000,000 for the building of small homes.

I ask the government once more, where is the plan? When parliament meets next year we shall see the haphazard manner in which these arrangements are made and money handed over to the provinces because the provincial governments are friendly to the government of the day. If the government wants to save itself and its friends let it hand some of this money over to the larger municipalities that have to deal with the burden of relief and that are being driven bankrupt by this government imposing on them a burden that does not belong to them If there was a war the municipalities would not be asked to pay the expense. There is a war in this country for the industrial workers who have lost their jobs, and we load the burden on the municipality. The municipalities have always repaid money lent to them. In Italy the federal power is lending money to build municipal institutions for the needs of the next forty years: trunk sewers, breakwaters, schools, courthouses, registry offices, hospitals, irrigation schemes and public buildings of all kinds. Yet we have not one line in this bill which enables this government to deal directly with the bodies that are responsible, the municipalities, which under the 1919 legislation paid back every dollar up to ninety-five per cent of what they owed this government by way of guarantee for housing. This bill is going

Unemployment

to be a flat failure unless the government has a way of escape by adding a clause giving it power to make direct agreements with cities of over 50,000 population.

Mr. COLDWELL:

While there seem to

be many divergent views on some points, I believe that everyone in this committee is seized of the tremendous problem which faces the Minister of Labour. A few minutes ago I was looking across from my desk and saw a headline in to-day's paper. It simply stated, "The Men Are Cracking." It referred to the situation in Nova Scotia. But when I saw that headline I thought that if we as a people had the will and the determination to end this problem of unemployment and find remedies for it to the same extent as that group of noble men in Nova Scotia have the will to bore through the rock to rescue three men, we could find a way. The difficulty is that we are discussing theories and panaceas, as someone has said, when there is an immediate and real problem confronting us. I say to the Minister of Labour that although I do not believe the setting up of another commission is going to assist very much, nevertheless if the minister can succeed in marshalling the resources of this country in a manner similar to that in which resources have been marshalled at Moose River during the past few days, I am quite sure that we shall reach at least a measure of success in regard to this problem. I speak on behalf of men and women on the farms of this country who are cracking, men and women in the cities who are cracking too, men and women who are looking to this parliament for assistance at the present time, that we may be able, through a consensus of opinion rather than through a fruitless discussion of things which perhaps are not of immediate moment, to arrive at something that can be done at once to assist the people in this hour of need.

Mr. MACKENZIE (Vancouver):

I have

the following amendment to section 2:

That section 2 be amended by adding thereto the words "and whenever used in this act, the word 'Minister' shall mean the 'Minister of Labour.'"

The CHAIRMAN (Mr. McPhee):

Shall

the preamble carry?

Mr. MACKENZIE (Vancouver):

I have

an amendment to the preamble. I move:

That the first three lines of the preamble be deleted and the following words substituted therefor: "Whereas it is in the national interest that Canada should cooperate with its provinces, and with certain organizations and individuals in their"

Mr. ROGERS:

Yesterday the hon. member for Weyburn (Mr. Douglas) directed attention to what he described as an apparent discrepancy between figures in a sessional paper and figures I had given indicating the monthly cost per man in relief camps. I told him then that I would be pleased to look into the matter, and that I felt sure there would be no difficulty in giving an explanation. On examination of the sessional paper I find that the figure quoted by the hon. mem'ber was the figure not for the relief camps maintained by the Department of National Defence but for those maintained by the Department of the Interior. The monthly figures for the Department of National Defence relief camps indicate an amount of $36.80 for 1934 and $39.80 for 1935. These figures agree wdth the daily figure submitted by me during the course of the discussion yesterday afternoon.

Preamble as amended agreed to.

Bill reported.

Hon. C. H. CAHAN (St. Lawrence-St. George):

Mr. Speaker, the Minister of

National Revenue (Mr. Ilsley) has referred to the most important amendments to the Customs Act which are proposed in this bill. As stated by him, they are the repeal of section 36, subsection 2, of the Customs Act, the repeal of section 37, the amendment of section 41, subsection 1, clause (e), and the addition to section 43 of a new subsection 3.

I shall not refer to the sections dealing with the Territorial Waters Act because I understand from the minister that these sections will be struck from the bill and a new bill will probably be introduced this session dealing with these matters, when there may be a full discussion. Otherwise I should have dealt with them at some length.

The amendments which are now proposed, as the minister states, are proposed to carry into effect two collateral agreements made by this government, one with the government of the United States, which is collateral to the trade agreement made with that country, and the second to an agreement made by

the Prime Minister, as Secretary of State for External Affairs, with the government of Japan.

The minister has read the letter of Mr. H. H. Wrong, Canadian Charge d'Affaires, addressed to the Hon. Cordell Hull, Secretary of State of the United States, dated November 15, 1935, and the extract from that letter to which I desire particularly to refer is this:

I am directed by the Secretary of State for External Affairs to state for the information of your government that it is the intention of His Majesty's government to invite parliament at its next session to enact legislation amending the provisions of the Customs Act presently fixing the methods of determining the value of merchandise for duty purposes, ...

The house will note the deference to parliamentary institutions and to the rights of parliament in this letter, which states that it is the intention of the government to invite parliament at its next session to enact certain amendments to the Customs Act, but in another letter which I shall read shortly, addressed to the Japanese government, it will be noted that that condition is omitted from the letter. This implies that the collateral agreement made with the United States is subject to the approval of parliament, but it will be noted later in the Prime Minister's letter to the Japanese government, which was in part read by the Minister of National Revenue, that no such reservation of the rights of parliament is made, and that the Prime Minister in his letter to the Japanese minister assumes to exercise supreme authority without reference to or regard for the legislative jurisdiction of the parliament of Canada. This, as will appear later, is a very significant omission in the letter addressed to the Japanese minister.

In order that we may more clearly understand the nature of these amendments I shall refer to certain sections of the existing Customs Act. Section 36, subsection 2, of the present act, reads as follows:

(2) Provided that the value for duty of new or unused goods shall in no case be less than the actual cost of production of similar goods at date of shipment direct to Canada, plus a reasonable advance for selling cost and profit, and the minister shall be the sole judge of what shall constitute a reasonable advance in the circumstances and his decision shall be final.

That provision with regard to the exercise of a certain judicial discretion by the Minister of National Revenue has characterized our customs legislation for many years past. The change proposed in the letter of the Canadian charge d'affaires of November 15 last to Mr. Hull is as follows:

(a) The value for duty established under authority of section 36 (2) will not include

Customs Act-Mr. Cahan

an advance for selling cost or profit greater than that which in the ordinary course of business under normal conditions of trade, is added, in the case of goods similar to the particular goods under consideration, by manufacturers or producers of goods of the same class or kind in the country of export.

That proposition to Mr. Hull certainly is that the value for duty will not include an advance over the selling cost or profit greater than that which in the ordinary course of business under normal conditions is added, in the case of goods similar to the particular goods under consideration by the manufacturers or producers of goods of the same class or kind in the countiy of export. I suggest that it does include the selling price of goods for export and does not apply to goods sold for consumption in the United States. There is a very distinot difference between the low costs or prices at which United States exporters sell for export and the higher costs or prices at which they sell for consumption in their own country. I may deal with that later. The amendment proposed in this bill is to carry into effect the Prime Minister's engagement with the United States, since the charge d'affaires at Washington was acting on behalf of the Prime Minister as Minister of External Affairs in writing to Mr. Hull. The proposed amendment reads:

36. The value for duty of new or unused goods shall in no case be less than the actual cost of production of similar goods at date of shipment direct to Canada plus a reasonable advance for selling cost and profit, such advance not to be greater than that which in the ordinary course of business under normal conditions of trade, is added, in the ease of goods similar to the particular goods under consideration, by manufacturers or producers of goods of the same class or kind in the country of export.

That section, will serve Canadian interests if it is cleauTy and distinctly stated that the addition or advance should in no case exceed that which is added by manufacturers or producers of goods of the same class or kind in the country of export for consumption and use in the country of export. A considerable difference is made by manufacturers in the United States between the prices which they charge when they wish to sell in competition with the industries of another country and the prices which they charge to dealers for consumption and use in their own country.

It will be noticed that in the section now proposed the words "and the minister shall be the sole judge of what shall constitute a reasonable advance in the circumstances and his decision shall be final" have been eliminated from the existing text. These words are struck out by the terms of the bill now

before the house, but I should like to suggest to the minister that when we enter upon a full discussion of these sections in committee of the whole he should be prepared to state who is to determine the component parts of the fair market value for duty under the engagement which the Prime Minister has made with the United States if he, as Minister of National Revenue, is no longer authorized to determine what is "the actual cost of production of similar goods at date of shipment direct to Canada, plus a reasonable advance for selling cost and profit." Is the proposed change an indication on the part of the Prime Minister of his lack of confidence in the Minister of National Revenue, or his lack of confidence in the advisers and expert assistants of the Minister of National Revenue, or his lack of confidence in the good faith of all combined? Possibly it is the intention of the government that subsection 4 of section 35 will still apply. We should like an explanation of this when we come to discuss the exact terms of the proposed amendment.

Section 35 reads as follows:

35. Whenever any duty ad valorem is imposed on any goods imported into Canada, the value for duty shall be the fair market value thereof, when sold for home consumption, in the principal markets of the country whence and at the time when the same were exported directly to Canada.

2. In the case of importations of goods the manufacture or produce of a foreign country, the currency of which is substantially depreciated, the value for duty shall not be iess than the value that would be placed on similar goods manufactured or produced in Great Britain and imported from that country, if such similar goods are made or produced there.

3. If similar goods are not made or produced in Great Britain, the value for dpty shall not be less than the value of similar goods made or produced in any European country the currency of which is not substantially depreciated.

4. The minister may determine the value of such goods, and the value so determined shall, until otherwise provided, be the value upon which the duty on such goods shall be computed and levied under regulations prescribed by the minister.

I understand that it is not proposed to amend or to repeal that section. If the section is still to stand and is to be acted upon by the minister and bis expert advisers, then I suggest that the engagement or undertaking made by the Prime Minister through the charge d'affaires at Washington with Mr. Hull cannot be carried out in good faith.

The letter dated November 15, 1935, from the Canadian charge d'affaires to Hon. Mr. Hull, Secretary of State of the United States, also declared that:

Customs Act-Mr. Cahan

(b) No rate of discount established under section 37 will operate to increase the value for duty of any goods beyond the price at which such or similar goods are freely offered for sale to purchasers at the time and place of shipment in the country of export, in the usual quantities and in the ordinary course of trade.

The government propose to solve questions of "price," "usual quantities" and "ordinary course of trade" by repealing section 37 in its entirety.

A most important amendment is proposed to section 43 of the Customs Act. That section now reads as follows:

43 (1) If at any time it appears to the satisfaction of the governor in council on a report from the minister that goods of any kind not entitled to entry under the British preferential tariff or any lower tariff are being imported into Canada either on sale or on consignment, under such conditions as prejudicially or injuriously to affect the interests of Canadian producers or manufacturers, the governor in council may authorize the minister to fix the value for duty of any class or kind of such goods, and notwithstanding any other provision of this act, the value so fixed shall be deemed to be the fair market value of such goods.

(2) Every order of the governor in council authorizing the minister to fix the value for duty on any class or kind of such goods, and the value thereof so fixed by the minister by virtue of such authority, shall be published in the next following issue of the Canada Gazette.

These provisions of section 43 still stand, despite the amendments proposed in this bill. This government, in its letter of November 15, 1935, to the Secretary of State of the United States, declares that:

(c) In the case of any value for duty which may be established under the authority of section 43, other than those provided for in schedule I of the trade agreement signed today, opportunity will be afforded for appeal to the tariff board respecting any such value in order to ascertain and make public the finding whether, to what extent and for what period, such value ihay be required to prevent the importation of the goods into Canada from prejudicially or injuriously affecting the interests of Canadian manufacturers and producers.

That letter from the government of Canada to Mr. Hull, Secretary of State of the United States, did not override the well considered policy of successive governments in Canada with regard to hearings before the successive tariff boards. It is quite consistent with that letter that an opportunity should be afforded to any dissentient to appeal to the tariff board and that, as hitherto, an inquiry should be had by the tariff board, a report made by that board to the minister, and that report laid upon the table of the house, leaving parliament free in the exercise of its discretion as to the extent

to which that report and that finding should be enacted in the customs legislation of Canada. In other words that letter merely implied that an opportunity would be afforded for an appeal to the tariff board in respect of the value for duty fixed by the minister under section 43, subsection 1, and that the finding of the tariff board would be available for the consideration of the minister and of the government. There is no suggestion in the letter of November 15, 1935, that the tariff board would be empowered to make a final decision overruling the decision of the Minister of National Revenue previously given under the authority of an order in council of his government. But when the government came to consider the controversy which had arisen with the Japanese government it made concessions to the Japanese government which are not in accord with the policy which the previous governments of this country have hitherto followed in relation to investigations and reports by the successive tariff boards. In order to comply with the demands of the Japanese government the Prime Minister went further, and without legislative authority, without any suggestion that parliament had any right or discretion in the matter, he gave a pledge which I suggest is unprecedented in any previous government's dealing with the Customs Act and the customs regulations of this country.

The letter of December 26, 1935, from the Prime Minister to the Japanese government contains the following:

Sir.-I have the honour to inform you that the Canadian government, in accordance with its general policy respecting trade and tariff matters, has decided to make the following modifications in its customs regulations.

I suggest that if that bad been an accurate statement it would have Tead: "I have the

honour to inform you that the Canadian government, dealing in an unprecedented manner with the general policy which has hitherto prevailed respecting trade and tariff matters, has decided to make certain modifications in the customs regulations," for the special benefit and advantage of Japanese producers and exporters.

The letter proceeds:

Opportunity will be afforded for appeal to the tariff board of Canada respecting any value for duty which may in future be established under section 43 of the Customs Act. In the event of such an appeal the value for duty in force will, upon the expiration of three months after the date of appeal, cease to have any force or effect unless the tariff board, following a public inquiry, finds that such value or some lower value is required to prevent the importation of the goods into Canada from prejudiciously or injuriously

Customs Act-Mr. Cahan

affecting the interests of Canadian producers or manufacturers. If a lower value is found by the tariff board to be appropriate, such lower value will promptly be made effective.

Even there, although that pledge implied that there should be an. appeal to the tariff board and that the tariff board should have the right of investigation, the right of making a finding and the right of overruling and destroying the effect of an order in council of the government and a decision of the Minister of National Revenue under that order in council, still it might have left the impression that such lower value would be promptly made effective by a submission to parliament thus safeguarding the rights of parliament. But certainly that is not the clear and distinct pledge which was intended to be made by the Prime Minister on that occasion. I ask the minister, in all sincerity: When did it become the general policy of the government of Canada that the value for duty of imported goods should be finally fixed by the tariff board of Canada? When, in the past history of customs regulations, under either the previous tariff board or the present board, did it ever become the general policy of Canada that the fixing of its tariff should be taken away from parliament and vested in a tariff board appointed either under the old tariff board act or under the present act? I suggest that the answer to that question is that it never became the general policy but the special policy of this government only when the Japanese government made an unprecedented demand, in compliance with which this government suddenly decided to make concessions to Japan which were unprecedented in the tariff history of this country.

When goods are imported into this country it is provided in section 38 of the Customs Act that the customs appraisers shall, by all reasonable ways and means in their power, ascertain, estimate and appraise the true market value of the goods at the time of exportation and in the principal markets of the country whence the same have been imported into Canada. Then it is provided in subsection 4 of section 38 that the board of customs may review the decision of the appraisers as to the fair market value of goods for duty purposes. Section 11 of the Tariff Board Act of 1931 provides that whenever in any act of parliament the board of customs is mentioned or referred to, the tariff board shall be substituted therefor. Upon the insistence of the present Prime Minister during the debate on the Tariff Board Act these words were added to subsection 2 of that section:

Any right of appeal from decisions of the board of customs shall continue as provided by the Customs Act.

The present Prime Minister, then leader of the opposition, was then insistent that there should be no radical change of policy; that the tariff board, substituting for the customs board, upon investigation might render a report, but that such report would be valid and have force and effect only when approved by the Minister of National Revenue. So I repeat, lest we forget it, that the present Prime Minister was most insistent that the decisions of the tariff board should not be final. Subsection 4 of section 38 of the act, therefore, as really in effect, amended by the Tariff Board Act, and omitting the irrelevant words, may be properly read as follows: "The tariff board may review the decision of any appraiser or collector as to the fair market value of goods for duty purposes, and the decision of the tariff board in regard to the value of goods for duty purposes in any case or class of cases shall, when approved by the minister, be final and conclusive except as otherwise provided in this act." We are cow inserting a new provision, under which that finality which was expressed only by the approval by the minister of the decision of the tariff board shall now come into effect without any reference to the minister, to the governor in council or to the parliament of Canada.