February 3, 1938

CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

I say that we have in Canada a nucleus around which could be built a much larger population than we now have, and while it might be undesirable in certain respects that large numbers should be admitted, still I do think we should be developing a plan for bringing into Canada, placing them in areas where they are required, selected immigrants of a class and kind that can be easily assimilated and who will fit into our national development.

I am sure that at the imperial conference the subject of defence was also discussed, but we have no reference to any policy in connection with defence in these troublous times. These are two subjects, Mr. Speaker, upon which I think we might have expected some pronouncement from the government in the speech from the throne.

Reference is made in the speech to the coronation. Those who had the privilege of attending and witnessing that splendid spectacle will never forget it. It had a peculiar significance. It was a magnificent demonstration of the strength, unity, and dignity of the British commonwealth of nations, all coming together and taking part in a solemn dedication. We believe that their majesties are firmly established in the affection and confidence of the vast numbers of their subjects, and we recognize Great Britain today as the greatest single national influence making for peace and security. I am sure that as a member and partner in this great commonwealth of nations, we all agree that it is our privilege and our duty to keep in constant communication and consultation with Great Britain, and to cooperate so far as circumstances will permit in achieving that peace and security which this world so sorely needs, if indeed it is possible to achieve it at this time. The impression made upon the world must indeed have been most favourable, the coronation coming, as it did, just after a great constitutional crisis. The two taken together must have convinced the representatives of the different nations of the world assembled in London of the strength and capacity of the commonwealth to which we belong.

51952-9$

The next subject referred to in the speech from the throne is that of economic recovery and trade expansion. That has been dealt with so thoroughly by many speakers who have preceded me that I do not propose to discuss it at any considerable length. Emphasis is placed upon our expanding revenues. So far as these indicate an increase in the volume of our trade it is a matter for satisfaction, but so far as our expanding revenues are attributable to increased taxation the condition is not so satisfactory, because, as we all know, the revenues of this dominion are derived from taxation, and the people of Canada are groaning today under the weight of taxation that they have to bear in the various fields.

We used to hear a lot about nuisance taxes. But we still have them. We used to hear from our friends opposite that the revenue required for the operation of radio should be obtained from a tax on tubes or by some means other than through a licence fee. It was suggested that the licence fee of one dollar should be abolished. It was raised to two dollars, and that was pointed to as an act of injustice and unnecessary taxation. But a recent proposal was to raise the fee to three dollars, and finally a compromise apparently was reached at $2.50. So that to those who thought the licence fee of one dollar should be wiped out, and that two dollars was an excessive charge, $2.50 now seems to be just about right. And not only is it $2.50 for a radio licence, but $2.50 is to be exacted in respect of every radio which one may have, whether in his house, in his car, or anywhere else.

If one had time to analyze the extent of our trade expansion it would be found that a substantial part of it is due to the negotiation of the empire trade agreements that were completed in 1932. There is no doubt that our increase in percentage is greater on our trade with the empire than in any other direction, and the cumulative effect of the working of these agreements over a period of four or five years is very important in connection with our trade expansion. There will be an opportunity at a later time to go more extensively into details in connection with this matter. Suffice it for me to say at the moment that we have a preference in the best and most extensive market in the world, a preference that was acquired after years of effort by both political parties. Let us see that that preference is preserved, and in our commendable anxiety to expand our trade in other directions let us be careful that nothing

The Address-Mr. Stewart

is done that will detract in any way from the great and permanent advantages secured by that undertaking.

New trade agreements have been negotiated. That is of course satisfactory, but I would suggest to the government that they are inclined to place too much emphasis upon the foreign market. There is an old saying that faraway fields look green, but sometimes when you arrive at those far-away fields they are not as fresh and green as they appear from a distance. In our desire to secure foreign markets let us not overlook or neglect or endanger the great home market. It is a market which is under our control, it is ours, it cannot be taken away from us unless we give it away, and it consumes a very large portion of our natural products. Already there is alarm on the part of primary producers of agricultural products in the dominion that in the negotiation of trade agreements their interests may be adversely affected. I have had representations in this connection from vegetable growers and other primary producers; and I hope that the government, in the negotiation of these treaties, will not open too many doors for entry into our own market, which it may be difficult to close. It is all very well to say that tariffs should be lowered, but it is in times of depression that these tariffs are most needed. Living as we do beside a nation of 130,000,000 people, immediately a depression sets in there is an inevitable tendency to dump on the markets of Canada the products of that country, and it is then that a tariff reduced below a reasonable level fails to protect Canadian producers.

I say again, we have the home market; let us appraise it at its true value-for I fear we do not always appreciate its value. Let us be careful that in our agreements we do not barter it away, that we do not leave it, in the times of depression which will inevitably come, in an exposed and defenceless position.

Reference is made to prairie drought rehabilitation. This is the continuation of a policy which was started some years ago; it is commendable, and I hope that the results will be satisfactory. The same remark applies to youth training. The Department of Agriculture reorganization is hardly worthy of mention in a speech from the throne. Such reorganizations take place from time to time, and I have looked in vain for any new policy or anything different from what has prevailed

in that department in the past with respect either to administration or to the marketing of farm products.

Reference is made to the reports of commissions that have been investigating subjects referred to them from time to time. A great deal has been said, and some of it with force, to the effect that governments are inclined to pass over to commissions responsibilities and the discharge of duties which in the ordinary course they should assume themselves. That is not always true. Commissions are in some cases useful and helpful. But I submit that at least one of these commissions is an expensive and a useless duplication of existing machinery. I refer to the commission appointed to investigate the textile industry. As hon. members know, we have a well-constituted, well-established tariff board set up in an independent position, free from political influence, with all the machinery, staff and equipment required for the investigation of conditions in connection with any industry in the Dominion of Canada, competent to discharge that duty, and from day to day discharging it on references to it in the ordinary course by the Minister of Finance (Mr. Dunning) or by the government. We naturally ask ourselves, why was this competent organization not entrusted with the duty of investigating conditions in the textile industry? It would appear to be within the scope of its authority and in the line of its duty; it would appear to be an undertaking for which it has special qualifications.

Another objection which I take to this investigating commission is that at times its proceedings appeared to have a political slant. Of the other commissions I have no similar remarks to make. As to the veterans' assistance commission, we have been expecting a report from it for a long time; we pressed for it last session but for some reason we were not able to get it. The national employment commission is of a different type. It has made a report which will be read with interest by hon. members. From time to time interim reports have been made, and statistics have been gathered and classified; that appears to have been the principal work of the commission. We hope that as a result of its report we shall have some action by the government which will help in the solution of this question.

The facts about unemployment as I gather them are these, that it began its last cycle in 1929, continued in 1930, and has been with us since. The extent of it in 1929 and 1930 was not appreciated or understood by the

The Address-Mr. Stewart

government of the day, and accurate, reliable statistics were not available at that time. I have endeavoured to follow the proceedings of this government and of this commission, and I can find no really effective change in the policies that were adopted from 1930 to 1935 to deal with this very difficult problem. In fact, in what is being done I see a tendency on the part of the government to back-track and to pick up some of the policies which they condemned in the years I have referred to. They condemned, of course, the camps, and having condemned them they abolished them, with the result that we find travelling up and down the country on the trains men who ring doorbells and beg from house to house-men who when these camps were in existence found a comfortable lodging and proper care and attention.

The speech from the throne refers to the appointment of a body of investigation known as the Rowell commission, and in that paragraph it refers to the stresses and strains that have developed in confederation and the need for Canadian unity. We all agree that these conditions exist. Some of them are the results of changed and changing conditions and of misunderstandings in a federal constitution, with a divided authority, the line of demarcation being in some cases difficult to define. Another cause is the temptation, for purely political expediency and advantage, to proclaim conflicting policies in different parts of Canada on fiscal and other questions. There is an old saying that if you sow the wind you will reap the whirlwind. A political party may advocate in some parts of Canada, no tariff, in other parts of Canada, a low tariff, and in still other parts and at other times a tariff for revenue, and free trade, wherever such appeals may be advantageous; and that party may secure power on the strength of such conflicting appeals. But the advantage is temporary. You may for a time criticize and condemn an expenditure of eight or ten million dollars for national defence, and later-not very much later-attempt to justify an expenditure of thirty-five millions for the same purpose. When such a policy is adopted it is easy to understand why there are differences of opinion, why there is misunderstanding, and why there are these stresses and strains that have developed over a period of years.

Unfortunately the present government and some of their supporters have adopted this policy in years gone by; they have sown the wind and we are now reaping the whirlwind of misunderstanding and enmity and. national divisions in Canada. There is a lesson in this for us all, for every party, and

a lesson for the individual. I hope that we shall take it seriously to heart. This should be avoided if the spirit of confederation is to be preserved and if we are to develop harmony and a national outlook. Parochial, provincial and sectional policies, if they ever had any value in Canada, have outlived their usefulness, and through them we cannot deal with and solve the problems that confront us to-day.

A subject that is mentioned in the speech from the throne is the amendment of the British North America Act, our constitution, now seventy years old. This is a subject that must be approached with great care; it is a subject that must be dealt with if we are to go forward, if we are to achieve the objects of confederation, and if we are to discharge our duties and responsibilities at this time. We must go slowly, with patience and tolerance, with good will and a sympathetic desire to understand all the conflicting views and interests. At the outset there should be, in my opinion, unanimous assurance that the rights of minorities as defined and set out in the British North America Act will not be the subject of discussion and will not be a matter for consideration in the revision of the constitution. If this is done and if the amendments are properly considered, I am sure the same courage and faith that were manifested by those who framed our constitution will enable us to solve our present problems.

As regards unemployment insurance, I think it is long overdue. It was, I believe, a plank in the platform of the present government as far back as 1919; and now, almost twenty years after that time, they are proceeding to deal with it. We had a law providing for unemployment insurance. Efforts were made to establish a scheme, but that law was destroyed by premature reference to the courts on material that was by no means exhaustive and definite or concrete. Unemployment insurance will not give any immediate relief *to a very large number who find themselves out of work; it will be limited in its application and there will be a lag between the time of its enactment and the time it comes into effective operation.

Another matter is the export of electrical power, a subject which I submit is of great importance to this dominion. During the years that have passed in this century, from time to time commissions of conservation, governments, and others familiar with the production of hydro-electric power in Canada have emphasized its value, its importance to the development of the country; and from time to time it has been pointed out that the

The Address-Mr. Stewart

interests of Canada demand that as far as possible this valuable resource should be retained for the benefit of the Canadian people. This has been the policy of succeeding governments, and I hope that when the matter comes up for discussion we shall approach it from that standpoint; that we shall deal with the question entirely upon its merits and not be influenced by challenges, threats, propaganda or lobbying, even though these proceed from the premier of a great province in the Dominion of Canada.

There are one or two other matters to which I wish to refer briefly, matters more or less of local interest. The Farmers' Creditors Arrangement Act was passed in 1934 and was brought into force in different parts of the dominion at different times during that year. Its objects were the very worthy ones of keeping efficient producers on the farm; of enabling them to effect compromises or reductions of their liabilities.; of bringing the best possible results to the creditors at the same time, rather than having the assets liquidated to the disadvantage of both. A large number of proposals have been submitted under the act. The return brought down recently by the Minister of Finance (Mr. Dunning) carries the operation of the act up to March 31, 1937, and as of that date 26,543 proposals had been submitted, of which some 19,000 had been disposed of. The average reduction on the secured debt was 28-78 per cent and on the unsecured debt 44-14 per cent. The total average reduction on both was 30-69 per cent. The total debt dealt with in this way was $107,500,000 odd and the total reduction about $33,724,000. A large number of these applications remain to be dealt with yet. During the year preceding March 31, 1937, there were 5,776 applications dealt with, and on that date there remained to be considered some 4,261 applications, while new applications filed during the year numbered 5,407. It would seem that the applications disposed of almost equal the new applications received.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Rather more last year. They have speeded up quite a little bit.

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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

I would expect that to be the case last year; I think the minister is right. My personal knowledge agrees with his statement in that respect.

This return gives detailed statistical information which is very interesting. It is well known, Mr. Speaker, that it was not the intention that this act should remain on the statute book for all time. It was passed to meet an emergent condition which existed, a condition w-hich to some extent has cleared up since that time. I am going to ask the

minister to consider very carefully the situation, to review the statistics for the past year and to decide whether in his opinion and in the opinion of the government the time has not come when the operation of the act should be limited to the applications that are now on file. I should judge that it would take a year or so to clear those up. The minister might also consider whether it would not be wise to have the act repealed on this basis in certain of the provinces and allow it to remain in force in other provinces if that is deemed advisable.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Would my hon. friend permit a question there? That is a very interesting suggestion. As a lawyer how would he regard that suggestion from the constitutional point of view?

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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

I should not think there would be any real difficulty, because the act was brought into force in different parts of Canada at different times. I should think legislation might be introduced that would terminate the operation of the act, we will say, in the provinces of Ontario and Quebec, when the applications now pending before the boards of review in those provinces have been dealt with, and allow it to go on in other parts of the country, if that is thought necessary.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Perhaps my hon. friend would be good enough to look into that phase of it.

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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

I shall be glad to do so, but it is not my responsibility to decide as to that. I am making these suggestions because a number of farmers have told me that they believe the operation of the act, while beneficial and useful, in the province of Ontario has practically reached the limit of its usefulness, and that in their opinion it is standing in the way of their securing new loans. Not only do they advocate its repeal for that reason; at the same time they suggest the repeal of provincial moratorium laws along the same lines. I admit that it is a complicated and difficult subject, that conditions are not the same in all the provinces, and I am asking the minister to take the matter into consideration in, the light of the circumstances. I know he must have a substantial body of representation asking for action along the lines I have indicated.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Every day since coming into office, on that question.

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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

And possibly some in the other direction also.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Yes, in both directions.

The Address-Mr. Ross (Moose Jaw)

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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

The statistics are interesting in some of the provinces, as to the total cost of the administration of the act.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

If my hon. friend will permit me, I was serious in asking him to consider the constitutional aspects of the suggestion he made, because I value his judgment. The act was sustained, I take it, on the ground that it fell within the federal power with respect to bankruptcy, and I am suggesting a careful examination of his suggestion in the light of that fact and of that judgment. I am not offering an opinion. I know my right hon. friend the leader of the opposition, will complain if I again state that I am not a lawyer. He will say that is perfectly obvious. Perhaps it is, 'but we are all anxious to do the best we can with this very difficult problem, and this is one of many suggestions that have been advanced.

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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

It is not obvious; it is apparent.

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CON

Hugh Alexander Stewart

Conservative (1867-1942)

Mr. STEWART:

I think the minister has been studying law recently, and perhaps in a few years he will be a fairly good lawyer.

The other matter to which I should like to refer is not dealt with in the speech from the throne. It is a matter not only of local concern to the constituency which I represent; it is of importance to the whole dominion. As many members of the house are aware there is in course of construction at Ivy Lea an international bridge-

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order. I am sorry, but the hon. gentleman has exhausted his time, unless he has the consent of the house to continue.

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?

Some hon. MEMBERS:

Go on.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

It would be too bad to

cut the hon. member off in the middle of Ivy Lea.

Mr. STEW'ART: There is in course of construction an international bridge crossing the St. Lawrence through the Thousand islands. This crossing is unique in that from one bridgehead to the other, including the connecting roadways, it traverses a distance of about six miles. In building the bridge they have crossed the channels where they are narrow and, where suitable, use of the islands, has been made. A request has developed for the establishment of a national park at the bridgehead in Canada and another at the bridgehead in the United States. If this matter is dealt with properly by the federal government it will work to the great advantage of the dominion. I am told that about

one-third of the population of Canada and about one-fourth that of the United States is within three hundred miles of the bridgeheads. I need not emphasize the value of the tourist trade, and I must point out that we have here an opportunity of attracting to Canada, over this unique route, a large volume of the tourist traffic from the densely populated areas I have indicated. I do not propose to develop the matter further than to ask the government to give it careful consideration. The idea involves the acquiring of a property known as Hill island. This property is used for farming purposes. It is not extensive or of great value, but if acquired it would prevent the establishment of cheap hot-dog stands, and would tend towards the preservation of the natural beauty of the scenery among the Thousand islands, which form one of the wonders of the world equal in attraction to the falls at Niagara. I have communicated with the Minister of Mines and Resources (Mr. Crerar) and shall not discuss the matter further at this time.

For the reasons given by my leader in the very able and interesting speech he delivered in this debate, I propose to vote for the amendment moved by him and which I seconded.

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LIB

John Gordon Ross

Liberal

Mr. J. G. ROSS (Moose Jaw):

Mr. Speaker, I wish first of all to congratulate the mover and seconder of the address in reply to the speech from the throne upon their able first presentations in this chamber.

May I take this opportunity to thank the government of Canada for the efficient manner in which they handled the distressed conditions in the drought area of western Canada. I want, too, to thank all the people of Canada for the great contribution they made to that part of the country at that distressing time. Had they known the exact situation of the people in the drought areas, and had they been able to see what I saw during the summer and fall, they would have realized the position in which those unfortunate people found themselves, and would feel amply repaid for what they have done. It is unfortunate that those who made the contribution were not privileged to hear the expressions of appreciation I have heard of the help given to the drought area by citizens of other parts of the dominion. I would hope that in any national calamity of the future, that which is now the drought area may be able to do a similar kindness for any other part of Canada wmch finds itself in a position as distressing as that of the people in the drought area during the past year.

136 COMMONS

The Address-Mr. Ross (Moose Jaw)

During the course of my observations I intend to touch upon only one subject, because I believe it is far more important than any other to the people of the three western provinces. I want it clearly understood however that I am not directing my remarks to any one section of Canada, but that I am criticizing the people in every section of the dominion who are taking advantage of a certain situation.

In the development of any country the purpose is generally to arrange matters so that the people within that country may have available to them all the advantages which they should enjoy, so that none will be oppressed and all may have a more abundant life. As I understand it, democracies are formed so that there may be majority rule, at the same time safeguarding minority rights, with the understanding that the government is to give equal opportunity to all and special privileges to none. Democracy abhors regimentation; it abhors privileges or special favours for the few as against the many. It glories in freedom of speech, freedom of religion, freedom for all the people to carry on their natural vocations and to have the fullest and freest life possible within that democracy.

Do we, who call ourselves a democracy, enjoy these privileges? Have we just laws, fairly administered, which carry out the spirit and the purpose of confederation, or has the greed of some, through the formation of pressure groups, by the use of propaganda, by the stirring up of racial and religious hatred and at times by the threat of loss of employment, forced upon many the rule of the few; has that greed given special privileges to some at the expense of the many? I contend that has been done in Canada, and the agency which more than any other has been responsible for bringing about this condi-dition, has been what is known as the protective tariff system.

When confederation was formed customs rights were turned over by the colonies to the dominion for the purpose of raising revenue. These rights have now become a trade control instrument, an instrument employed to regiment the people, to force them to purchase only in certain places and from certain people at prices set by those people for their benefit. The protective tariff is a tax upon the consumer of this country; it is a disguised form of subsidy to the industries of Canada. I believe it is against the spirit of constitutional government and parliamentary procedure.

When a tax is levied in this country, first of all it must be sponsored in the House

of Commons by a responsible minister of the crown. It must be introduced in open parliament where all the elected representatives of the people may have the right to know the amount and the extent of the tax before the executive is given authority to levy. Every tax imposed should have due regard to the amount of revenue that is necessary for his majesty's government. It should be levied in such a way as to provide the greatest amount of revenue at the least possible cost to the people. It should be levied in such a way as not to discriminate between the subjects of his majesty.

The customs tariff bills levying taxes upon imports invariably are brought down in accordance with parliamentary usage by a responsible minister of the crown. The direct effect of the protective tariff is to levy upon the people of Canada an altogether different tax from that levied by the customs tariff acts. Customs tariff acts levy a tax upon imports, but the effect of the protective tariff is to levy a tax upon goods manufactured and sold in Canada. This latter tax is not levied by parliament. It is not levied by means of a measure sponsored by a responsible minister; it is not levied having regard to the need of public revenue for the carrying on of government, it is levied by the executives of the manufacturing companies in this country who have no responsibility whatever to the consumers upon whom the -tax is levied.

In effect the protective tariff is a subsidy, and it is open to even more serious objection as being an evasion of the provisions of sections 53 and 54 of the British North America Act. If this tax in the form of increased prices to the consumer was properly levied and was to be paid over to the manufacturers as a subsidy, clearly it would fall within the provisions of section 54 of the British North America Act, and could not be levied without being first recommended to the house by message of the governor general and brought down by a responsible minister who would give all information with regard to the amount of the subsidy and its purpose.

Every year subsidies are approved by this parliament. We grant subsidies to Canadian steamship companies because we believe them to be necessary in order that a strong merchant marine may be built up for the benefit of national trade. Subsidies of this kind are brought down in the way I have mentioned. Contrast with that the procedure of granting subsidies under the protective tariff system. A customs bill is introduced in par-'liament by a responsible minister, the stated

The Address-Mr. Ross (Moose Jaw)

object of the bill being to levy a tax on imports, ostensibly to supply needed revenue for the public requirements. Although it is not so stated in the bill, it is understood that the main object is to grant a subsidy to private industry in Canada. This subsidy is to come not from the treasury of Canada, but from the consuming public. It is to be paid direct by them to the manufacturer of goods. These bills are passed every year without the members of the House of Commons or the public generally having any knowledge as to how great the subsidy is to be. I claim that the levying of taxes in this way is against the spirit of constitutional government and parliamentary practice as carried out in this house.

Many speeches have been made both in and out of this house to show the effect of this protective tariff tax upon the people. Reports have been made by experts to show the average tariff imposed, but it is hard to get the total cost of this tax to the people of Canada. We all know that the average rate of tariff is about 25 or 26 per cent, and that the sales tax is eight per cent. In 1936 the sales tax provided $122,000,000 in revenue, whereas the tariff, averaging 26 per cent, provided only $83,000,000.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

It is not 26 per cent.

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LIB

John Gordon Ross

Liberal

Mr. ROSS (Moose Jaw):

What is it, 25

per cent?

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February 3, 1938