May 2, 1939

LIB

John Angus MacMillan

Liberal

Mr. MacMILLAN:

Again you agree with me.

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CON

David Spence

Conservative (1867-1942)

Mr. SPENCE:

You are working pretty hard.

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LIB

John Angus MacMillan

Liberal

Mr. MacMILLAN:

That is the only way you can accomplish anything.

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CON

David Spence

Conservative (1867-1942)

Mr. SPENCE:

It is giving you a great deal of trouble.

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LIB

John Angus MacMillan

Liberal

Mr. MacMILLAN:

If the Conservative party had worked harder when they were in office, they might have accomplished a great deal more. I think it was Carlyle who said- "Genius is an immense capacity for taking pains."

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order. I am sorry to have to interrupt the hon. member but his time is exhausted.

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LIB

John Angus MacMillan

Liberal

Mr. MacMILLAN:

I should just like to conclude, Mr. Speaker, by giving a summary of what this government has done.

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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The only way the hon. member can proceed is by unanimous consent. Do I understand that he has unanimous consent?

The Budget-Mr. MacMillan

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CON

David Spence

Conservative (1867-1942)

Mr. SPENCE:

He does not speak often.

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?

Some hon. MEMBERS:

Agreed.

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LIB

John Angus MacMillan

Liberal

Mr. MacMILLAN:

Carried. Thank you. Here is a summary of some of the things the government has done in less than four years. I am sorry I cannot give it all because my time has lapsed. But among its accomplishments are:

Removal of the special excise tax of 3 per cent on all imports into Canada under any tariff more favourable than the general tariff.

Nationalization of the Bank of Canada.

The hon. member for Parkdale (Mr. Spence) said that I was working hard. If his party had worked as hard when they were in office from 1930 to 1935 they might have accomplished more. The nationalization of the Bank of Canada took place last year. The government might have brought down that measure in its first year of office. I must give my own party a crack in that regard. Sometimes I think that in giving us a nationalized bank last year the government, were, like Leonidas in his last attempt in the pass of Thermopylae, moved by desperation rather than true courage.

Among other things the government has accomplished these:

Direct assistance; assuming the entire cost of material aid for those without means of subsistence in 1937-38. Expenditure of

820,000,000 in various measures of material aid, feed and fodder for stock in western Canada, and so forth.

Rehabilitation of Western Canada. Over twelve thousand acres of land has been irrigated by individual water development, assisting thereby over fifteen thousand farmers.

About thirty thousand acres have been sown for grass under the direction of the experimental farms. Grass seed has been furnished sufficient for over ninety thousand acres.

Radio administration equivalent to the best in the world.

Pensions for ex-service men have been increased and many important changes made in the table of disabilities. The War Veterans' Allowance Act has been widened and greater power given to the board.

Reduction of expenditures: For example, this government reduced the cabinet from twenty-one to sixteen, and I should like to see them reduce it by ten more.

Reduction of taxation on 192 items in the 1936 budget and on 354 items in the 1937 budget. All these reductions were on the necessities of life.

Duty on wheat reduced from 30 cents to 12 cents.

Duty on wheat flour reduced from $1.35 to

50 cents.

More than $600,000,000 of the public debt has been refunded during the last three years. More than $150,000,000 of debt is being carried in treasury bills at a cost of approximately two-thirds of one per cent.

The annual saving to the taxpayer in the charges on the public debt by the government's policy of refunding is in excess of $10,200,000.

On Canadian National Railway issues there has been saved another $3,000,000 annually, or a total saving to the taxpayers on the last two items of $13,000,000.

The average rate of interest on the public debt in 1931 was 4-98 compared with 3-53 to-day, a reduction of 29-1 per cent.

The government has negotiated several trade agreements on a reciprocal basis with the result that Canada's total trade to-day is greater by 50 per cent than in 1935 and double the low point in 1933. Canada's total trade with all countries was as follows:

Imports $562,719,063

Domestic exports 849,030,417

Increase in total trade, $457,549,047 or 32 per cent.

1937-38 $ 799,069,918 1,070,228,609

Increase

I shall not say anything about the youth training movement because that would take considerable time. It is miraculous what the government has done in that regard.

Then our tourist trade has been greatly increased. That is a very important item.

The full sessional indemnity of members of parliament has been restored and cheerfully accepted by every member in all quarters of the house.

We are living. Mr. Speaker, in the most democratic country under the sun. The principles of democracy are exercised to a greater extent in the Dominion of Canada than in any other country. We have a wonderful country, and if the present Prime Minister is successful in the next election I am confident that prosperity will be restored. That is my sincere and candid wish, and I believe it is going to happen.

The Budget-Mr. Marsh

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CON

John Allmond Marsh

Conservative (1867-1942)

Mr. J. A. MARSH (Hamilton West):

Mr. Speaker, I am not going to invite the hon. member for Mackenzie (Mr. MacMillan) over to this side of the house, because he might not be very much at home, and neither might we. But may I invite him to speak again very soon in this house, because his kindly native Scotch humour, augmented by the atmosphere of Nova Scotia-a province from which many good men come-where he was born, and the sunny smiling Saskatchewan skies, have made him a pleasant speaker to listen to.

There are two ways to balance the budget. The first is to raise revenue by direct or indirect taxation or by customs duties in order to have enough money with which to run the government. There is another way, and that is to decrease expenditure to the point that we do not spend more than is ours to spend. In other words, to balance the budget we must of necessity cut our coat according to our cloth; but in order to do this we must first of all have the will to do it; and I have questioned, as I look over the financial statements brought in during the last ten years, whether governments present and past have not lost the desire, the will to do, the urge to bring in balanced budgets. I submit that this is one of the old-fashioned but primarily necessary points of business; it is a precept of business to pay as we go, to spend only what is ours to spend, to keep out of debt. Have these things vanished from us, the sons and the daughters of thrifty English, Irish and Scottish pioneers? Can we look with untroubled eyes on mounting deficits? If we can, if that is our philosophy of financial government, there is, I think, little hope for Canada. How can any one of us say to our boy or to our girl, "Here is a dollar bill. If you must spend it, spend only ninety cents, put ten cents in the bank. If you feel you must spend it all do not spend more than the dollar bill, do not go out and borrow, because when the time comes to pay it back you may not have the money to pay it with." The boy will come back to me and say, "Our government has done that for ten years. You fellows down there who are running the government are supposed to be the brains of the country. So what?" What is my answer to be if I am to be truthful? I might try to put him off by saying that the natural resources of Canada are behind the borrowings of the government. But if he pursues the question, who is going to pay back loans made through deficits? I must say to him, "The Lord only knows. Probably you will have to do so, or your son after you."

I believe that in Canada to-day we are in danger of accepting with something akin to complacency the philosophy of defeat. I think the people are tax-conscious-certainly the people in my city are-and they are looking to this government for leadership but they are not getting it. Is it competent for us to boast that we are the fourth trading nation of the world? Is it competent for the Prime Minister (Mr. Mackenzie King), the Minister of Labour (Mr. Rogers), the Minister of Trade and Commerce (Mr. Euler), the Minister of Finance (Mr. Dunning) to say that in 1938 we collected in revenue more money than has been collected by any government since confederation? Is it competent for them to say that this year we have collected more, with the exception of 1938, than any government has ever collected for the purpose of paying government debt and government services, so long as we have to admit a deficit of $17,000,000 last year and a deficit this year of at least $55,000,000 but which may run quite easily up to seventy or eighty million dollars? What sort of psychology. what kind of business precepts are we selling to the people of Canada? It is my conviction that the method of paying as we go in government is very necessary. It is essential to the life and the security of the people. There are two kinds of security. There is social security, which is something that the state does to the individual in the way of money and services. There is another kind of security, personal security, which is something the individual does for himself. The two overlap a bit but they are separate and distinct. Both of them are inseparable from finance, whether it is personal finance or finance by government. For this reason I emphasize the dangerous trend which is established when we as a government are complacent about mounting deficits and thereby give the lead to provinces, to municipalities, to industries and to personal financing of homes. It is a bad psychology; it is fundamentally unsound.

In 1900 the gross debt of Canada was $346,000,000. The interest on that was $2.03 a head, including every man, woman and child in Canada. I am speaking of the dominion debt alone. In 1913 the gross debt was $544,000,000 and the interest, because of several factors, including refunding and increased immigration, was slightly less, namely $1.90 a head. Twenty-four years later, in 1937, we find that the gross debt has gone out of the million dollar class and is $3,432,000,000, and the interest per capita is no less than

The Budget-Mr. Marsh

SI 1.50. In 1938, as near as I am able to figure it, the gross debt is 83,540,237,615, and the interest per capita is $11.79.

In talking of deficits I am not unmindful of the fact that from 1930 to 1935 we in this country, as in others, suffered the greatest depression in the history of the world. I am not unmindful of the fact that we are still paying in dollars and cents for the great war. We are paying indeed in many other ways, humanitarian ways, but I am talking now in terms of money. I submit that governments did not take the necessary steps which industriri concerns take to survive depressions, to overcome outside trends. Of that I am convinced. It is not my wish to boast of either my experience or my wisdom; I have very little of either. But I do say this:

I have punched a time clock, I have carried a dinner-pail, I have bought and sold as an industrial executive, and when in the depression 'firms were faced with the almost certainty of going out of business, they did what I mentioned a little while ago; they cut their coat according to their cloth; they cut salaries and wages; they bought from hand to mouth, they reduced overhead; they took the steps which were necessary and imperative to enable them to ride the storm of the depression, and were successful in doing it, while the firms which did not do these things went by the board, they were sunk in the ruin of business. The firms which survived took drastic measures. Governments in this country seem not to do that, and it is my conviction that the depressions we have experienced in Canada have lasted longer because governments have not taken the initiative and put themselves on a business budget.

During last year's debate the hon. member for Mount Royal (Mr. Walsh) pointed out that in 1937 our dominion debt was $4,163.000,000; our provincial debt. $1,415,000,000. and our municipal debt, $1,386,000,000, a total of approximately $7,000,000,000. This, divided among eleven million people, amounts to $636 per man, woman and child. Last night I took the Parliamentary Guide and found much pleasure in checking up the married men of the House of Commons, and I found that they averaged four and a quarter children per family. Using these figures I was startled to find that the family of the hon. member for Hamilton West have on their shoulders a debt of $4,452.16. In going through some files this morning I realized that I had made an understatement. I find here that my family owes $5,201, their share of the national debt. I am glad the Minister of Finance is not in his seat, because I do not want him to collect from me for this year. I find further

that our debt is twice our income. It has been growing at the rate of $272,000,000 a year. It amounts to $743.49 per capita as against $385 in the United States. Over three-quarters of this debt is held in Canada. For the dominion government's borrowings of two and a half billions in the last sixteen years we have practically no corresponding assets. The national debt has increased in the last eighteen years by $4,900,000,000. or 149 per cent, approximately two and a half times what it was in 1919. I am giving these facts from a pamphlet issued by the Tax-Payers Association of Canada, entitled "Government Debts," a careful, informative pamphlet, No. 1.

Pursuing that argument, the hon. member for Mount Royal (Mr. Walsh) took his case further and showed that 46 per cent of the dominion revenue for 1937 went to pay interest. Of the provincial revenue 37 per cent went in interest and 24 per cent of the municipal revenue wrent to pay interest on debt. It would seem from the speech of the Minister of Finance that contingencies of world trade and outside conditions were responsible for this $55,000,000 deficit. As I listened to his speech and later digested the figures, I failed to recognize the usual courage, the usual desire to meet the problems of the country which we have found displayed by the minister in bringing in other budget speeches in other years. All through the speech there is full recognition of various contingencies that, might affect Canada and that are upsetting governments. At page 3140 of Hansard I read:

. . . "the best laid plans" of government

and business may be suddenly upset by dramatic events elsewhere, or incalculable shifts in world trends.

Certainly, that is true. It is also true that from the Garden of Eden up to the present time there have been contingencies. There has been fluctuation in world trade, and there have been outside conditions affecting individual countries. Contingencies occur often in any man's lifetime, often enough for us to say that it is the normal state of man in a normal world. And the same is true of governments. He says:

Our fiscal year opened last April with a recession in business under way in most of the larger countries.

Neither is this new. We have had peaks and valleys in business indices ever since the Babylonian-Assyrian civilization, up to the present day, and we shall have them tomorrow and the next day and next year and the year after that. Then referring to war clouds he says:

Inevitably this reversion to political and economic barbarism has cast a dark shadow over

The Budget-Mr. Marsh

economic life which has impeded recovery not only in Europe but on 'this continent as well. Recovery has on several occasions raised its head only to be buried again in a new wave of fear and uncertainty.

Yes, and there have been wars and rumours of wars ever since the time when Joshua walked round the city of Jericho and blew his trumpet. But in the meantime the people of Canada must eat, they must be clothed, and our workers must be employed. At page 3140 of Hansard the minister says:

We entered the past fiscal year still burdened with the effects of our disastrous crop failure of 1937 and depressed both by the drastic recession in the United States and the uncertainty following the annexation of Austria.

Yes, and I am afraid that drought and grasshoppers and sand-storms and crop failures will always intersperse periods of plenty. We have had them throughout history and we shall have them again. There are contingencies; there are problems, and we shall always have them, problems which we shall have to solve nationally and personally. We must arrange and plan and budget for them, because they will certainly arise. Then there was the repeated reference to world trade. At page 3141 the minister says:

The changing trends in the prosperity of our various industries mainly reflect not internal conditions but lowered demand and falling prices in external markets due to the world recession. This is a price we must inevitably pay for our dependence on world trade.

Let me point out to the government that here we have the altar on which they have worshipped for the last four years-world trade. This fetish of world trade has resulted in the loss of home markets and in lack of protection for those markets. It has resulted in flooding Canada with foreign goods that should have been made by Canadian workmen who would have carried dinner-pails to factories and pay envelopes home from these factories. Speaking of secondary industries the minister says:

Have we fully explored the possibilities of processing our raw materials before exporting them? Have we sought out all the opportunities for the profitable investment of capital in new industries, particularly small industries.

How can the Minister of Finance, following the recent signing of the United States-Canada trade agreement, talk to us about secondary industries? I say to the government: You have removed the 3 per cent excise tax from foreign goods; you have reduced the duty on foreign goods coming into Canada; you have forced many Canadian industries in many Canadian cities to be jobbers for articles where formerly they were industrialists making those articles. On January 19 at page 165 of

FMr. Marsh.]

Hansard I pointed out to the Minister of Labour (Mr. Rogers) in this chamber what I thought of this situation. I will read what I said:

The minister knows as well as I do that the primary industries in this country employ only 100,000 people, while the secondary industries employ 900,000 people, or almost one million. It is the secondary industries that are going to suffer from this trade agreement. Take iron and steel, for instance. The national employment commission reported that manufacturers of iron and steel products, who should normally employ 100.000 people, had dropped 35,000 from their payrolls since 1929. The trade agreement hits at the secondary iron and steel industries. The imports in this group from the United States amounted in 1937 to $22,000,000, subject to the old rate of duty wihich was thirty per cent.

In view of the damage done to many of our secondary industries by lowered tariff I .submit that the plea of the Minister of Finance to secondary industry will fall upon deaf ears. I know of six paper-box companies that are threatened with being put out of business because of the removal of the 3 per cent excise tax. It is my information that our pulpwood industry is threatened by Scandinavian pulp, on account of the recent changes. I know that washing machine manufacturers are having great difficulty in surviving, that manufacturers of screws and bolts and nuts and stampings of steel and iron are in real danger of losing that manufacture; they have bridged the gap by taking out agencies for United States fij-ms as jobbers for United States products. I understand that the metal industries in Hamilton lost a big steel order recently to a United States supplier, as a result of the removal of the 3 per cent excise tax and the recent changes in the trade treaty.

I do not think it is right that any private member should rise in this house and engage in destructive criticism without also offering constructive ideas. I know that our pensions must be paid; I know that the Canadian people must have services from the dominion government. I know that the government must have money and must raise money by taxation. But is it necessary that this year we spend from SSO.OOO.OOO to $100,000,000 on public works that may or may not be needed? Or if there is a question as to whether they are needed or not, certainly they can be done without in times of stress. And we must be in a time of stress, otherwise with our revenues touching the peak we would not have a deficit of $55,000,000. Is it necessary to spend millions and millions on public buildings of one kind and another, a $50,000 post office in a ten dollar town

and I am not casting any reflection on ten dollar towns; I was brought

The Budget-Mr. Marsh

up in a five dollar village; they are the salt of the earth, and the most consistent, even-tempered, thrifty people, hard to stampede in times of depression, that we have in Canada to-day. But many post offices and public buildings are being built in villages that need no such expensive buildings. The trouble is that our sons and grandsons and our daughters and granddaughters will have to pay back in the future with interest the dollar which we borrow now because we have not the courage to face up to the present. All honour should be given to at least three ridings represented in this house which were offered a post office or other public building and said, "Maybe we need it and maybe we do not, but being thrifty people we think we can get on without it; the government must need money for other things, our turn will come in the future." That is the voice of a new Canada speaking-or I wonder, perhaps if it is the voice of old Canada, of our pioneer forefathers, whose lives were built on thrift, who built the country that you and I enjoy now with our electric lights and automobiles and social services of one kind and another.

Let me now say a wTord about government by commission. Must we have government by commission, with high salaries, lawyers at S200 a day and expenses at $35 or $40 a day? Why sixteen different commissions to do work that members of parliament are sent here to do? I have protested against this on various occasions, but evidently I, like some others, am simply a voice crying in the wilderness. Have we too many members of parliament? Have we a top-heavy civil service? I say we should be proud of our civil service in Canada. I would not fire one of them, but I would consider seriously doing what our industrial houses, our mercantile establishments, our business houses, do when a man is pensioned off, do not fill his place, and the business goes on just the same. As a rule it works, and in a time of depression it works very well. I can think of no better way if we are over-governed, and I am sure we are. What better way could be taken to relieve the home owner who is trying to keep his home, the young fellow aged twenty or twenty-five or thirty who loves a young woman and wants to marry her and put her in a home and raise up good Canadian children-and heaven knows we need them in this country, because we are barely half British now? I wonder if we have tried seriously to relieve the taxpayer of the burden of over-government. Every hon. member who has come up through municipal government, who knows something about the structure of provincial government and has

sat in this House of Commons, knows that we are a very much over-governed state. Why shut our eyes to facts? Why hide our heads in the sand? This government could cut its coat according to its cloth in a financial way and bring in a balanced budget if it wished to do so.

Now just a word regarding the industrialists. "Page the industrialist"; the Minister of Finance paged him the other day, the Minister of Labour paged him a month ago and several times since; the industrialist is told that he must bestir himself and take on his shoulders this burden of unemployment. They said: " Private industry must have confidence." I say to the government, if you had established a consistent and settled tariff policy the industrialists would have the courage to go ahead and plan. But what happened last year? January, February, March, April, May; in June the budget came down. But through those first five months of the year I got telegrams, letters, telephone messages, asking, "When is the budget coming down? We hear there is a trade treaty about to be negotiated1; we do not know how it will affect our business, how can we budget our sales; how can we buy?" The result was that there was very little smoke coming out of the factory chimneys in my city, very few wage envelopes that were full; firms that should have been employing their workmen five days a week had their employees working two days a week and subsidized by the municipality on the relief roll. This year it has been a little better so far as the advent of the budget is concerned. We had the budget six weeks earlier. But we have had this uncertainty about the tariff, this juggling of tariffs, always down. It has brought grey hairs to the employer and grief and "relief" to the workers, instead of work and wages.

Finally, I cannot accept the theory that in this young country we should have half a million employable people unemployed. I cannot accept the theory that we should have a million on relief. I will not accept the theory that we can borrow our way into prosperity; it will not work. I cannot accept the theory that two plus two make five or six or nine or eleven or twenty-seven. Neither can I believe that a country so amply blessed with material resources as we are in Canada need have the problems that we have to-day. Defeatism is foreign to our Anglo-Saxon blood; it should have no place in our national life; it should have no place in our national thinking.

I close with the minister's own brave words, as reported at page 3153 of Hansard:

... Is it not time for us Canadians "to see ourselves as others see us," to adopt a constructive rather than a negative attitude, and

The Budget-Mr. Marsh

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COMMON'


to concentrate with courage and vigour on a united effort to solve our own problems and continue the work of building a greater and better country? But may I add that faith without works is dead, and wishful thinking will not take the place of workful doing. This government has not given to Canada the leadership that Canadians expect. This government has not done a good job in its financial operations. This government has not functioned to keep men and women employed in my city. Neither has it created a market for the farmer. Before sitting down I should just like to say to the members from western Canada that I have never heard eastern members or city members grumbling because they had to vote money to the west. We must get out of our minds the provincial and municipal selfishness that is so rampant in this country. The fisherman in Nova Scotia, he is Canada; the western grain farmer in Saskatchewan, he is Canada; the man that carries the dinner pail in my city street to his work to-morrow morning is Canada; the gold miner in the Yukon is Canada and the dairy farmer in Quebec is Canada. All are Canada. We must forget our local selfishness. Let them realize in the west that we cannot sell our products unless the west is prosperous, and may we in the east realize that prosperity with us is impossible without prosperity in the west. But may I appeal to the west and tell them this, that when they accept a bonus on wheat and a bonus on cattle, and a bonus on this and a bonus on that, they are asking for the same thing-and we are giving it to them- that we ask from them when we say we in the east want a protective and stable tariff for our industries. Mr. LIGUORI LACOMBB (Laval-Two Mountains) (Translation): Mr. Speaker, I shall express myself in my mother tongue, although I could, as so many others have done, use the language of the majority. However, I have noticed that the French language has been ostracized in this house since Wednesday last. In fact, I asked the chief whip to put me down for that day, but it is only to-night that a French voice can make itself heard, bringing up the tail of the debate. Can this be wondered at, after the remarks which we have just heard, especially from a minister of the crown and on a subject such as the Lacroix bill? The British North America Act has sanctioned the official use of both languages in the Canadian parliament. This use we shall never forego. The budget, which is usually the chief event of the session, generally gives rise to a highly important debate. Its presentation affords hon. members an opportunity of laying before [Mr. Marsh.1 parliament the claims of their respective counties and also permits them to expound general ideas which, as has been frequently noted, may prove most valuable to the administration of the country. As to the needs of my constituency, I have frequently expounded them during the nearly fifteen years that I have been sitting in the house. I have asked on behalf of the market-gardeners for the seasonal tariff now provided in the commercial agreement which Canada has concluded with the United States of America. I fervently hope that this tariff will produce the good results which the market-gardeners are entitled to expect from it. I have noted with satisfaction that the Minister of Agriculture (Mr. Gardiner) has introduced measures intended to provide as much assistance as possible to the dairy industry. His department will pay to the cheese producers a much-needed bonus. By thus encouraging the production of cheese, the government will free the markets from a considerable quantity of butter. Butter producers will themselves Obtain a better price for this nationally important product. The value of the constant assistance which the government is rendering to agriculture cannot be over-emphasized. Should farming and dairying ever cease, even partly, we would be faced with famine. Let us generously assist the farmer in his noble work. Is there a more useful and more admirable mission than his? Through his hard toil he provides the products indispensable to the life and progress of the nation. He is the most powerful factor in the country's prosperity. Let us not fear to give the farmer all the help required for the development of his property. Let us subscribe generously to the draining of farm lands. It has been demonstrated in many parts of the country that a good deal of drainage work can be carried on without the aid of mechanical excavators. In the constituency of Laval-Two Mountains the Minister of Public Works (Mr. Cardin) has authorized the draining of a few brooks with shovels. This undertaking has given work to many heads of families who were in dire need and at the same time has improved the yield of many farms. I have reason to believe that the minister will give favourable consideration to the other requests for drainage works which I have submitted to him. To relieve unemployment by improving lands under cultivation is doubly to achieve the ends of sound administration. These considerations naturally lead me to say a word about public works. The federal government, in such distressful times, should carry out a vast program of public works. The Budget-Mr. Lacombe People are asking for work. Public authorities, which are in a position to find the necessary funds at extremely low rates of interest, should take advantage of exceptionally favourable circumstances. During previous sessions of this parliament, I have often called the attention of the Post Office Department to the representations of rural mail carriers. Once again, I claim for them a just and reasonable remuneration. I suggest to the Postmaster General (Mr. McLarty) the advisability of amending the regulations in connection with the calling of public tenders, in order to do away with the awarding of contracts at ridiculously low rates. There is another matter of national concern which I cannot pass under silence. I have in mind the enormous appropriations which the Minister of National Defence (Mr. Mackenzie) has submitted to the approval of the house. The appalling increase in the military votes compels me to sound the alarm once more and to oppose armaments. I will do it without delusion, without passion and without hatred. I will do it solely through love of my country, in the interests of its survival and of national unity already so seriously endangered by an imperialistic doctrine which has done us and is still doing us so much harm. In the discussion of this vital and momentous question, we must have regard to the reason and the heart of the nation. Our truly national duty resides exclusively in the safeguard of the nation and the salvation of the country. And, until the Militia Act is changed, military appropriations may be used for our participation in external wars. Sufficient proof for that statement may be found in the following sections of that act. We find in chapter 132, vol. Ill of the Revised Statutes of Canada, section 64, page 2789: The governor in council may place the militia, or any part thereof, on active service anywhere in Canada, and also beyond Canada, for the defence thereof, at any time when it appears advisable so to do by reason of emergency. R.S., c. 41. s. 69. Then, in section 69 of the same act, page 2790: The Army Act for the time being in force in Great Britain, the King's Regulations, and all other laws applicable to his majesty's troops in Canada and not inconsistent with this act or the regulations made hereunder, shall have force and effect as if they had been enacted by the parliament of Canada for the government of the militia, etc. I fail to see anything in the amendments to the Militia Act which have been introduced since 1927, that repeals the sections to which I have been referring. There is, to be sure, Chapter 21 of the Statutes of Canada, 193233, 23-24 Geo. V, page 97, assented to on the 12th April, 1933. But that act only applies to His Majesty's forces from other parts of the British commonwealth or from a colony when visiting the Dominion of Canada. On the other hand, section 6 of that act grants a very wide discretionary power to the governor in council, especially subsection 2, page 102, which reads as follows: The governor in council (i) may attach temporarily to a home force any member of another force to which this section applies who is placed at his disposal for the purpose by the service authorities of that part of the commonwealth to which the other force belongs; (ii) subject to anything to the contrary in the conditions applicable to his service, may place any member of a home force at the disposal of the service authorities of another part of the commonwealth for the purpose of being attached temporarily by those authorities to a force to which this section applies belonging .to that part of the commonwealth. Again, section 8, page 103, provides as follows: So far as regards any naval force and the members of any such force, the provisions of this act shall be deemed to be in addition to and not in derogation of such of the provisions of any aot of the parliament of the United Kingdom or of the parliament of any other part of the commonwealth as are for the time being applicable to that force and the members thereof. Mr. Speaker, considering the very spirit of the Canadian Militia Act, can we reasonably conclude that Canada cannot be called upon to participate in wars waged by the British commonwealth or in external wars? On the basis of that act, and especially of section 8 of the Revised Statutes of 1927, page 2778 in which liability to military service is set forth in the following terms: All the male inhabitants of Canada, of the age of eighteen years and upwards, and under sixty, not exempt or disqualified by law and being British subjects, shall be liable to service in the militia: provided that the governor general may require all the male inhabitants of Canada, capable of bearing arms, to serve in the case of a levee en masse. I do not hesitate to assert that in the event of a war in which the Empire would be involved, and this, even outside the territory of the British commonwealth, whether we like it or not, we will inevitably be drawn into some other reckless venture which will spell the downfall and ruin of Canada. Section 8 of the Militia and Defence Act to which I have just referred, does not mention in any way that such compulsory military service is restricted to the defence of Canada and of Canada alone. The Budget-Mr. Lacombe



Mr. Speaker, notwithstanding any previous assertion to the contrary, the conscription act is far from being a dead letter as is fully evidenced by section 8 of the Militia Act. This Act, which was the cause of so many misunderstandings and disappointments as well as of an orgy of spending from which Canada will never entirely recover, still appears in our statute books, and not only in view of Canada's defence alone. That is why I say to the skeptical: Read over carefully the provisions of the Militia and Defence Act which, for some reason I cannot fathom, it appears impossible to amend, and you will realize that I am not dealing in vain and empty words. You will understand that our uncompromising refusal to approve the increase in the defence estimates is not based on illusion, but rather on the doctrine of peace, autonomy, liberty and sovereignty which must prevail in Canada. Furthermore, does it rest on the prerogatives recently granted to us by the statute of Westminster. It is founded, lastly, on true canadianism, the unalterable principle of which has no other source save" an exclusively Canadian patriotism. And who could take us to task for this deep attachment to our only true national duty? In the face of the existing Militia and Defence Act, who would dare condemn the attitude we adopt? Therefore, shall I take good care not to overlook this act, seemingly inserted in our statutes for the sole purpose of nullifying the code of our liberties as set forth in the statute of Westminster, nor to censure the justifiable anxiety of our youth and of the entire right-minded population of this country. To protect the territorial integrity of Canada against any foreign aggression; to shield our population against the powers of anarchy and the secret influences which endeavour, by every means, to spur the people on to carnage and war; lastly, to safeguard our national existence and our political independence; this I shall always be willing to do. But to sacrifice our sons on a foreign soil; to spend staggering sums in order to participate in foreign wars; to incur expenditures that will bring about the moral and financial ruin of my country, merely to take part in conflicts which do not involve our interests in the least: this, I claim, is a criminal aberration. Rather than to mobilize troops in view of participation in external conflicts, it is Canada's duty to mobilize conscience, logic and the hearts of her sons for the salvation of the motherland. That is our true national duty, and therein alone is embodied the safeguard of this nation. When one stops to think that the spirit of domination, anarchy and the selfish inter- ests of all nations have succeeded in establishing the most formidable doctrine of carnage ever expounded; when one realizes that Russia has 18.000,000 men under arms or in reserve, that France has 6,250,000, Italy 6,300,000, Germany, 2,200,000, without taking into account the British forces; when one considers the no less startling figure of 8,000,000 men mobilized by the second rate powers, is it possible to view the future without the gravest apprehensions? Is it human to contemplate the possibility of a dreadful war without thinking at the same time of the immense slaughter it would engender? How can the world be made to believe that the only object of this infamous armament race is peace? Since when has veritable peace been synonymous with intimidation, violence and brute force? Since when has peace, true peace, been confused with odious dismemberment, unjust invasion and the enslavement and destruction of weaker nations? Since when is it that peace must needs exclude men of good will and the principles of charity and justice? The only peace which must prevail and save the world is that which belongs to the honest and just, the kind and the charitable. There is no other peace which can put an end to the armament race, to territorial violations and to the criminal greed of war profiteers. Should the nations not heed the moving appeal made by the highest spiritual authority in the world, His Holiness Pope Pius XII; should they continue to scoff at the solemn warnings and at the peace proposals, based on the strictest logic, of the great apostles of civilization and peace, they shall perish, annihilated by the diabolic instruments to which their own cruelty gave birth. In the following remark which our Lord made to Peter, his disciple, is set forth an eternal and unalterable principle: "Whomsoever lives by the sword, shall perish by the sword." Should war break out, whose who are well informed will not be slow in ascertaining where it originated. It is moreover a well known fact that the selfish interests of some nations have always impeded the freedom of economic intercourse among nations. There are small-minded nations who sacrifice the fundamental principles of international justice to the spirit of domination and to military and financial imperialism. Such nations refuse to others free access to those material things which are essential not only to their development but to their very existence. Let no one be mistaken about that. In the criminal injustice of such nations lies the worst threat to international peace and order. With a view to avoiding the most frightful and horrible of all wars, will such nations refuse The Budget-Mr. Lacombe to make those sacrifices which the maintenance of peace calls for? Should such be their attitude, I do not hesitate to say that they are not worthy of existing. May God preserve us from such a dreadful catastrophe 1 But if it must unescapably occur, I do say that the responsibility for such a great calamity will lie not only upon those people who ask but also upon those who refuse. Love of peace goes beyond contractual and juridical obligations. True love of peace goes very much farther. It is synonymous with charity and justice. The salvation of humanity, in these troubled times, lies unmistakably in those two virtues, the only ones which can dispel the anxiety which is now distracting the world. Sir, Canada should absolutely refrain from any participation in external wars. Not only should it reject conscription, but also oppose all form and means of participation, be it even voluntary. Canada should condemn any military action which is not intended solely for the defence of Canadian territory. Our country should change its Militia and Defence Act and its Naval Service Act in accordance with the intention of the Statute of Westminster. It should without delay declare its absolute neutrality. Otherwise, we are doomed to down-fall, ruin and destruction. Do we realize how odious and unjust on the part of our country would be another participation, even voluntary, in foreign wars? Do we realize that our national debt is more than eight billions, or nearly $750 per capita? Have we forgotten that it is gradually increasing, at the annual rate of approximately 275 millions? How could we ignore the heavy burden of taxation which has to be borne by the Canadian taxpayer because our country took part in the last war? History can not properly condemn that participation. And the Canadian people should unanimously condemn any participation in foreign wars, if they wish to live. In conclusion, I wish again to protest with all my strength against any increase in the military estimates, when such appropriations are not exclusively intended for the defence of Canada. I want our country to proclaim its absolute and permanent neutrality. To those who claim that we do not possess that power, I would say: Stop boasting on public platforms of the liberties and the sovereignty which are guaranteed to us by the Statute of Westminster. You would do better to proclaim its unquestionable advantages on the floor of this house. Render to Canada what belongs to Canada by virtue of that statute: its liberty, its autonomy, its sovereignty, its neutrality. Do not try to conceal our sovereign rights under the cloak of militaristic and financial imperialism. Past experiences and sacrifices having opened their eyes, our people demand the truth. No one has the right to deny it to them, even under pretence of constitutional reasoning or legal discussions. Before resuming my seat, may I again ask the government to declare our neutrality. Canada possesses the right to do so, in spite of what may be thought or said by men for whose ability and experience I have every respect. To maintain the contrary would be to move backwards, to revert to colonial status. To delay further would be deliberately to await the crisis and perhaps the physical and moral impossibility of acting in the best interest of the country. The clauses of the statute of Westminster should be fully adhered to. Our national pride, our survival, our most precious liberties command us to tolerate no violation of our autonomy or our sovereignty. I therefore adjure Parliament to replace our obsolete Militia and Naval Service Acts by a formal enactment absolutely prohibiting the dispatch of Canadian troops beyond the boundaries of Canada. I therefore beseech this house firmly to repel any encroachment on our autonomy or our sovereignty, from whatever quarter. Participation in an external war would plunge this country into ruin and permanent bankruptcy. I therefore say that no government, however powerful, or no parliament has the right to decree the suicide of the nation. Let us order a plebiscite. Let us grant the right to vote to all those who would be called to the colours in the event of war. Indeed, why should the right to vote be restricted to those who know themselves to be safe from the call to arms? It is the privilege of our youth more than that of any other class of citizens to determine our armament policy. Our young men could thus decide their fate without the eager cooperation of dastardly war profiteers, ever willing to vote the death of others. A conscript of 1917, I shall never forget the hours of agony that my generation went through. The painful recollection of that unhappy period naturally makes me think of our youth of to-day. No one understands better than I their anxiety, their apprehension in these troubled times. No one wishes more than I to continue to protect them against the hypocrisy and greed of military and financial imperialism. No one is more anxious than I to protect the lives of our young people against the disgraceful and despicable trade carried on by cannon merchants who left nothing undone in order to prolong the bloody conflict of 1914. No one is more than I in favour of absolute neutrality for our distressed, bruised, and exhausted country, still The Budget-Mr. Lacombe



suffering after a lapse of twenty years, from the consequences of her participation in the war. Let there be a referendum not only upon conscription but also upon any participation, even voluntary, in external wars. At a time when England is resorting to compulsory military service, our duty is to ascertain at once the views of the electors. We are in duty bound to respect the popular will, which is the very basis of democracy. It is up to the Canadian people alone to decide upon such momentous events. Parliament has no mandate to choose 'between the survival of our country and the risk of annihilation. Increased defense estimates, Canada's participation in external wars and conscription were not referred to the electors in the last general election. To deny them the right to express their views would be to disregard democracy, whose merits are so much extolled and whose survival is so persistently advocated. In the event of such a plebiscite, the most elementary justice bids the authorities in this country to grant the right of suffrage to young men who, although they are not yet 21, are nevertheless liable to be called to the colours. Those who are apt to pay with their lives the supreme folly of another intervention in foreign wars, should be the first entitled to exercise this right. Confronted with this tragic dilemma, will the voters decide that Canada must fall or rise to greater heights, that she must survive or die? The future shall supply us with an answer as to whether our people have in mind the sole defence of their immediate interests and territorial integrity, or whether they will be satisfied to forego their very existence as a sovereign nation.


?

Robert McKenzie

Mr. H. A. McKENZIE (Lambton-Kent):

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Thomas Langton Church

Conservative (1867-1942)

Mr. T. L. CHURCH (Broadview):

I had

not intended to speak in this debate at all: I am going on to fill in only; in ffict, I am in favour of closing parliament so that for the first time, and maybe the last time, a ruling sovereign may be here in person to close parliament. Would it not make history? We have been here since January 12, and should close. I do not speak for the opposition; I speak for myself. To be a member of parliament now a man needs to be a millionaire, when he has to stay round here for several months of the year. That is one of the reasons why a great many people do not run for this parliament and we should change our system of doing business for the purpose of efficiency.

As far as the budget is concerned, I sympathize with the very able and popular Minister of Finance (Mr. Dunning) in the task that is before him, and he should be given a veto power over all expenditures. He is estimating a deficit of $55,000,000 in his own figures for the coming year. And that is only part of it, because you have to add to that the repeal of the 3 per cent excise tax, another loss of 18 million dollars, which is a very small protection to a great many small industries; in fact, all they have left. I am at a loss to discover in the ways and means resolutions what the policy of the government is.

Various members of the government party rise in their places and take different stands and oppose the budget, but say they will vote for it.

The central provinces of Canada, Ontario and Quebec, are the goat of confederation for taxation purposes. I have said that on several occasions. The central provinces pay 80 per cent of the cash taxes of Canada. Just yesterday I watched thousands of people going to the office of the Department of National Revenue in Toronto, lined up at the wicket, paying their income tax; poor people many of them, yet paying, and finding it hard to do so, millions in income tax. And Toronto is paying the largest income tax by millions of any city in Canada.

Where is the money to come from for all these expenditures mounting up higher every year? We have only the sales tax, and the income tax left. I thought the minister would bp able to announce some drastic reductions in the expenditures of the country. When Sir Wilfrid Laurier became Prime Minister of Canada in 1896, the annual expenditure was $36,000,000; now it is between $500,000,000 and $600,000,000 and there seems to be no end. For example, in Ottawa $8,000,000 is being spent this year in new buildings, including $3,360,000 for the supreme court. What do they want with a building of that size and cost? This building cost $18,000,000. There is room enough in this building for a supreme court, for the senate which sometimes sits only forty days in the year. There is also the Victoria museum building. A supreme court building costing $250,000 would be enough. In Toronto they built an addition to the law society building for about $200,000. In Vancouver they have a very fine court of appeal building which is adequate for the business and is comfortable, and it cost only a very small sum. We have no money for slum clearance or housing yet. When their majesties come here and lay the cornerstone of the new supreme court building they can just look across the river and see some of the slums of Canada, and the need of housing. Right here in the capital and in all our cities they can see where money could be better spent to house the people. The same situation exists near the capitol in Washington. It seems to me some of these expenditures are unjustified in view of the very heavy deficit of $55,000,000 which the country is facing, with the over-government and taxation we have at present.

In addition, $1,300,000 is being spent on a war memorial, necessary of course, but at less cost. Would it not be better to do something as well for Christie street hospital where

The Budget-Mr. Church

some unfortunate soldiers have been sentenced to life imprisonment away up on the roof? War memorials are no doubt necessary, but the wealth of this country does not altogether consist in material things; a more valuable treasure is the character of our people, and that is being destroyed by unemployment. One of the main causes of unemployment is over-government and over-taxation in this country. In addition, we spent $5,000,000 of the taxpayers' money on the League of Nations, and what value this country got out of it I do not know. And although the league is dead and buried they propose to send another deputation, to cost thousands, over there this summer.

Coming to the visit of their majesties, no one will object to the proper expenditure for that. True it is that we have to pay for a visit of a committee of one hundred, I call them the "P.C." A gentleman asked me on the street what "P.C." means. He thought it meant police constable, that one hundred police constables were going to Quebec to meet the train. I told him it was the privy council of Canada that was going.

Anyone looking over the expenditures of this country must conclude that our system is all wrong. I propose that we sit round a table and adopt the practice of the municipalities. The time has come that the Minister of Finance should have a power of veto over all these expenditures; that is what he should have absolutely. If we adopted the municipal system we could sit round a table, notwithstanding the constitution; the constitution is not going to be hurt by having the business of the country administered in a businesslike way from the commercial aspect. You could easily then, under the municipal system, strike $250,000,000 off the maintenance charges of this country and cut in half capital expenditures. In addition, the minister said in his budget speech the other day that he would like hon. members to keep sharpening their pencils and add up the deficit. I say the system is all wrong and should be changed, and doing so would not interfere with the constitution, which would not be hurt by an agreement between all parties in this house to reduce all the expenditures of this country, to do which is so urgently needed to aid business and employment which heavy taxes retard.

We have heard a great deal about the railway situation. Some people who were paying their income tax the other day asked me

why the government does not do something about this railway situation. All the income tax paid from 1917 to 1938 amounts to less than the sum of the railway deficit. Some concerted plan should be adopted, not only coordination, although there is no coordination. We had several railway commissions appointed which recommended that the railway commission, now the board of transport commissioners, should be given power to supervise and regulate the railway expenditures and extensions, such as the Montreal terminal, but they are not allowed to do so. The government railway is going on with the station in Montreal in face of the Duff report and the Drayton report and against the opinion of the railway commission and cooperation and coordination of services. I believe the day is not far distant when we shall have to face this railway problem; the Minister of Finance cannot continue forever bringing down deficits. Does he propose to continue deficits and place further barriers and burdens and restraints of trade on the taxpayers of this country? Those who pay the income tax have some rights and they look to parliament to protect them. I asked this government to appoint a committee of both houses to go into this question. It should be gone into. I do not favour a merger, but no one would lose his job, if they had a system of unemployment insurance which would take care of all the employees; a few would be eliminated by coordination but I believe they could be taken care of by a national insurance scheme without their losing a dollar. This country expects this parliament in the coming recess to do something along those lines. How does it come when this government has $8,000,000 to spend on new buildings in Ottawa that the unemployed transients are out on the streets? In Toronto 286 of them were turned out of the Coliseum; in Ottawa 200 have been turned out of the Union mission and there is no place for them to go. Surely a government with the money to spend that this government have should be able to take care of these poor transients all over Canada, and no one should be out of work in this country. The time has come when we should have no further favoured nation treaty with Germany.

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Thomas Langton Church

Conservative (1867-1942)

Mr. CHURCH:

It is now one o'clock. I

move the adjournment of the debate.

Motion agreed to and debate adjourned.

On motion of Mr. Crerar the house adjourned at one a.m.

Questions

Wednesday, May 3, 1939

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May 2, 1939