Right Hon. R. B. BENNETT (Leader of the Opposition):
Mr. Speaker, I desire to congratulate the Minister of Finance (Mr. Dunning) upon the very complete statement he made a few days ago and for the clarity of his exposition of the position of the country with respect to its finances.
I derived some satisfaction from listening to him, for I recall that in his budget speech delivered on May 1, 1930, his only endeavour to make it into a budget speech was to estimate in May what the revenues and expenditures had been during the year ending the previous March 31. I suggested that it was desirable that in this house we should have a real budget speech in the true sense of the term, and on June 1, 1931, I suggested five factors that should be considered in the making of a budget speech. They were: first, that the financial operations of the dominion for the fiscal year should be shown; second, *that the balance sheet of the dominion as of the preceding March 31 should be shown, together with assets active and non-active and liabilities direct and indirect; third-, that reference should be made to trade and commerce; fourth, that there should be an estimate of the revenue and expenditure for the twelve months ending March 31 following; and fifth, the ways and means which would be adopted for the purpose of providing the necessary revenues to meet the proposed expenditures. It is a matter of some satisfaction, Mr. Speaker, to know that since that date every budget speech has followed that practice. So that I can congratulate the Minister of Finance the more readily in that he adopted suggestions made in 1931.
It does not occur to me that there is any very good reason why we should take any great length of time, considering all the circumstances, in discussing details of revenues and expenditures. There will be ample opportunity in connection with estimates and matters of that sort to discuss questions of expenditures; but presently I shall have some-
The Budget-Mr. Bennett
thing to say with respect to the revenues, and the effect that the raising of them has had upon the capacity of the people to pay.
So far as I can see, the minister was quite right the other day when he said that taxation had been imposed upon the Canadian people to raise a sum nearly as large as, if not larger, than at any time in their history. I can say only this, that it is my firm conviction that any effort to raise from the Canadian people by taxation any substantial sum in excess of 8400,000,000 is to put upon them a strain which they cannot bear. I think that is not an unfair statement to make, having regard to our general economic conditions, and the views expressed by economists as to conditions in new countries such as this, and their ability to stand taxation.
In this regard however I should like to revert to just one observation made by the financial critic of the party now in office, when it sat in opposition, with regard to the general raising of taxes. On April 23, 1934, speaking for the then opposition, Mr. Ralston said:
But if my right hon. friend the Prime Minister is looking for the privilege of having it said of him that he imposed taxation in this country surely his ambition is satisfied in the increase of the sales tax from one to six per cent, in the imposition of an excise tax which did not exist when he came into power but which lias been put up to three per cent, in the imposition of a two cent tax on sugar, in taking away exemptions from the sales tax, in the reduction of exemptions in the income tax; in these and in every other field of taxation I think my hon. friends opposite will be given full marks and will be held fully responsible when they come to the people of Canada, for having invented and imposed many new and onerous forms of taxation.
I wonder what Mr. Ralston, would have said if he had seen the sales tax raised to eight per cent? I wonder what he would have said had he known that this government, which has now brought down two budgets, still retains the same taxation? I wonder what he would have said had he known that hon. members who declared that a three per cent excise tax was another form of protection, as a government in its second budget would still retain that three per cent excise tax? I mention that because it is amazing, if nothing else, to find a government which in opposition so loudly declaimed against the tax on sugar, so loudly declaimed against the increase in the sales tax and the imposition of an excise tax of three per cent, now in its second budget making the declaration that it proposes to make no changes with respect to ways and means for raising the revenue of the country.
With respect to the income tax, charged as we were with increasing it, the minister was frank the other evening in saying that he had increased it slightly. And so all along the line we have the same position.
Now. I was apprehensive, remembering as I did the history of the matter, when the hon. gentleman said he proposed to make no changes with respect to taxation; for I recalled that on the first of May, 1930, standing in the place he now occupies, he reduced the sales tax from two per cent to one per cent, in the face of a deficit in this country, in the face of abnormal conditions, in the face of 824,000,000 less revenue than had been expected in the last six months of 1930, a condition which must have been known; in the face of dwindling trade in every country of the world. Why was it done? Does anyone suggest it was done to balance the budget, when a deficit was known to be inevitable? Was it for any purpose other than merely political, and was it not because of the knowledge that an election was not far off? When I hear that declaration made that we will make no concessions to the taxpayer I wonder if the same idea is in the mind of the minister and the government which pervaded their minds in 1930, and if in due season, when the occasion offers, they will make a great gesture to the people with respect to a reduction of taxation, even as they did in 1930? Those are the facts to which attention I believe might fairly be drawn.
All that may be said with respect to the balance sheet is that we have an increase in the national debt of something less than
8100.000.000. If we left out the 88,000,000 to which reference was made as coming from the profits on grain sales, we would have a deficit of approximately $95,000,000. The minister budgeted for a deficit of 8100,000.000, and this little windfall of 88,000,000 to which I shall presently refer means that the deficit is 887.000,000 instead of 895,000,000.
I do not propose therefore, Mr. Speaker, to deal at length with the balance sheet items, except to point out that we are increasing by leaps and bounds the responsibilities of the consolidated revenue fund in connection with many funds for which we are really trustees. The minister is not to blame for that. It has been the practice in this country for a generation, if not for more than that, to put into the consolidated revenue fund moneys received for superannuation funds, for annuities, for Indian lands and from the sale of school lands, and they provide working capital for the country, on the theory-
Subtopic: DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE