March 10, 1948

LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Perhaps the hon. gentleman would allow me to finish. Therefore, if we are to continue our exports to these countries, as I have said we must reduce our own consumption. One way of doing that is to use the fiscal method. Hon. members may differ as to that method, but it is a method which is generally recognized by economists and others of repute to be a proper and sound method of accomplishing that objective; and that is one of the weapons which the government has decided to use in this situation. That is one of the reasons this tax is being imposed. The list of articles selected, as I have said, includes articles which, speaking generally, are not the most essential. But, as I haive said on other occasions, in the world as it is today we in this country are living beyond our means, not beyond what we can produce ourselves but beyond the means of our customers, and the purpose of this measure is as I have stated.

It is very easy to rise in one's place and criticize a tax measure. I know that. I know taxes are not popular. When these measures were brought in I was under no illusion that they would be popular, or that I would become a national hero because I brought them in. But I came to the conclusion, and the government came to the conclusion, that they were necessary if we are to continue to play cur part. And that, I think, needs to be said.

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Subtopic:   EXCISE TAX ACT AMENDMENT
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PC

John Ritchie MacNicol

Progressive Conservative

Mr. MacNICOL:

Now may I ask the minister a question?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Certainly.

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PC

John Ritchie MacNicol

Progressive Conservative

Mr. MacNICOL:

I have not wasted much time in this house, nor do I usually ask foolish questions, but I should like the minister to answer this. As a means of cutting down our exchange difficulties, has the government considered the production of our own coal requirements, for example? We have the coal here; we have one-fifth of the coal in the world. Why was some move not made to produce Canadian coal to meet, the Canadian need, and cease importing the $125 million to $150 million worth of coal we bring in each year from the United States?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

That does not come within my particular field; it is more in the field of my colleague the Minister of Mines and Resources or the Minister of Trade and Commerce. I understand, however, that constant attention is being given the possibility of increasing the utilization of Canadian coal. On another question raised last night by my hon. friend in connection with our petroleum

resources, I think we are all tremendously encouraged by the success of the new field in western Canada, which bears all the earmarks of becoming a very large producer and which, I am told, will soon likely be able to produce enough to supply all the needs of western Canada. That will be a great thing; it will save millions of dollars in United States exchange and make us just that much more independent.

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CCF

Wilbert Ross Thatcher

Co-operative Commonwealth Federation (C.C.F.)

Mr. THATCHER:

I should like to ask a question bearing on what the minister said a minute ago. He said this measure is intended to save United States dollars, and I think we can all agree with that. But he said the imposition of this excise tax was one way of doing it. Could we not have accomplished the same purpose by utilizing Bill No. 3, which we adopted two weeks ago, by putting all these things under a quota; that is, these parts for washing machines, refrigerators and so on?

'Mr. ABBOTT: I am afraid perhaps my hon. friend did not follow what I meant by my reduction of consumption argument. I did say in previous speeches, in my radio address and others, that the end purpose we are trying to achieve would be defeated if we prohibited the importation of certain articles from the United States, such as motorcars, refrigerators and the like, and then allowed our domestic production to expand to fill the gap. I repeat, because it is the crux of this whole exchange difficulty we are in, that what we have to try to do is to re-create that over-all current account surplus as between exports, imports and consumption.

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CCF

Wilbert Ross Thatcher

Co-operative Commonwealth Federation (C.C.F.)

Mr. THATCHER:

I am afraid the minister did not follow me. Could we not have rationed the parts imported from the United States? In other words, could we not have allowed in only so many parts for refrigerators, washing machines and so on? Would that not have accomplished the same end?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

But there is a substantial metal content in articles like refrigerators, such as copper and aluminum, which we can sell in export markets for United States dollars. I come back to this fundamental principle I am trying to explain. It may sound a little theoretical, but actually it is not. We must create again this surplus of exports over wliat we consume, a surplus of what we produce over what we consume. Otherwise we simply cannot continue to do our job. '

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

I have listened with considerable interest to the Minister of Finance, and I find myself in agreement with much of what he has said. I think we are all fully or at least

Excise Tax Act Amendment

partly aware of the terrible world situation. We realize that conditions overseas are critical, and perhaps in a general way we can agree with what the minister says is his objective. I was also interested in the question asked by the hon. member for Moose Jaw, and I find myself in agreement with his suggestion. If our only purpose was to keep United States goods out of Canada, why not put them under quota, or, for that matter, prohibit them as you have prohibited many other articles? But why the excise tax? It is recognized that the government does not need more revenue. It almost boasts of the surplus of five or six or seven hundred million dollars it anticipates, so that surely we do not need more revenue. I agree with the minister when he says that when these conditions arise we must adopt fiscal methods to correct them, but I do not find myself in agreement with the statement of the hon. member for Halton that this emergency came up very quickly. As the hon. member for Muskoka-Ontario has said, it certainly was not that type of emergency, unless there are two dictionary meanings of what an emergency is. As hon. members have already said today, several on this side pointed to the critical situation which was developing and repeatedly told the Minister of Finance and the government that it would continue to develop if they persisted in their fiscal policy. The hon. member for Halton harked back to the days when a leader of this party, a former prime minister, said he would blast his way into the markets of the world. Perhaps that was not the best way to put it, but I submit that it was much more graceful than to make no statement at all and then blast your way out of the markets of the world, as this government is doing.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Our trade has never been greater. Some blasting!

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

I have been surprised at that myself. This must be a strong country to be able to withstand the weaknesses of this administration.

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LIB
PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

You were not here when Mr. Bennett was here.

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LIB

Maurice Hartt

Liberal

Mr. HARTT:

No, but I know all about him, and I know all about you, too.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

And I know all about you. I can only say, Mr. Chairman, that if we are to deal with fiscal matters I am sure no one on this side needs to offer any apology for the fiscal policies enunciated by ourselves or our predecessors. If I were a new member like

the hon. gentleman who has interrupted me, and had lived with the Liberal party in this house for only a short time, and if I knew as much about it as he pretends to know, I would be almost ashamed to mention fiscal matters. These are the great champions of free trade. These are the people who, away back years ago, were going to have commercial union with the United States of America. These are the people who, for half a century, have heralded free markets of the world.

I can well recall hearing speeches along that line when I first came to this house in 1925. Many who spoke at that time have now passed on to their great reward. Some of them were fine gentlemen, on the other side of the house -and there are a few left in that category. I know that even one of the worthy predecessors of the present light-hearted Minister of Finance, the Hon. Mr. Robb at that time, and many others, spoke along that line. I listened to the Hon. Mr. Fielding, although at that time I did not hold a seat in the house. But I did have the opportunity to listen to him speak and I have heard many others talk about the free trade policy of the Liberal party, and tell how they would open the markets of the world.

I sat in parliament while the party opposite came to parliament with one trade agreement after another, between 1925 and 1929. Never did any party in so short a time negotiate more trade agreements with other countries of the world than did the Liberal party of that day. And never did a party in such a few years almost close our world markets; because in 1930 we found ourselves in a terrible condition.

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?

An hon. MEMBER:

A Tory government.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

Yes; it was so bad that the country called in a Tory government to take over.

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LIB

George Alexander Cruickshank

Liberal

Mr. CRUICKSHANK:

It must have been bad.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

And it is coming to that again, very rapidly.

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LIB

March 10, 1948