March 10, 1948

PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

And it was not only a pound of butter. I can well recall what happened in those years. All one has to do is to go back and search the records to find out how much trade we had in agricultural products with the United States, and compare the figure with our trade in 1930. The fiscal policy in those years was of a most haphazard and uncertain type.

We find that between 1921 and 1930 not only was the balance of trade unfavourable to Canada, but there were more people leaving this country and going to the United States

Excise Tax Act Amendment

than were being bom here or coming to Canada. And today we have a similar situation.

But those who have been maintaining almost every tariff enacted by the Liberal party have always worn the mantle of free trade, have always worshipped at the shrine of laissez faire in trade, and have said, "Sell where you can sell the highest, and buy where you can buy the cheapest." They have talked free trade in western Canada and maintained protection in eastern Canada during all those years. They have twitted our party for having a brick-for-brick policy in tariffs. But never before have we seen such prohibitory measures against international trade as those we have now been forced to adopt.

I am not going to review the exchange situation. But surely even the Minister of Finance, in some of his quiet moments in private-when he is not disturbed by having to watch those of us on this side of the house -must have had some doubts as to the wisdom of the fundamental reasoning of these developments in 1947.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

The inability of our customers to pay us.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

None of us is infallible, not even the minister. But he must have had some doubts. There are many who have had more experience in business than either the minister or I, who express grave doubts. And I would ask him to consider carefully how we got into this mess. Whjr have we now austerity in the midst of prosperity?

I agree with the Minister of Finance when he says that if you are to have more to send out of the country you must either eat less or produce more. That is axiomatic; we can all agree with that. But I cannot agree that the minister can encourage production by the people if he proceeds to build up a huge surplus in revenue, and increase taxation.

Is there anyone who, by the widest stretch of the imagination, would say that the imposition of a 25 per cent excise tax, at a time when we are boasting about having a half a billion dollars in revenue as a surplus, will help production?

If the minister wishes to increase production in Canada, then I suggest several things that should be done. I would say, first, that, instead of putting on more taxes, he should remove the sales tax. It is a tax which multiplies and pyramids all along the line, until it becomes an enormous tax. Even the hon. member from Montreal would agree with that. No, I see he would not agree. There are none so blind as those who will not see. I know, and you know,

Mr. Chairman, that we are carrying a burden of taxation in Canada which is almost crippling industry, stifling enterprise, killing initiative and dampening genius in our people who would embark upon new ventures in other lines.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Profits are higher this year than ever before.

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. KNOWLES:

Do you admit that?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Last year, I should have said.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

And you are taking more of them, too, than any government has ever taken before.

But that is not good enough. It is not enough merely to say that, in a time like this, when the world is starving, in a time like this when there is a shortage of consumer goods, profits are good. Certainly profits are good in many industries today. But do not let us fool ourselves. If we want more production in this country-which we do want-and if we want more United States dollars, then I say there are many things we can do. If the government intends to consider fiscal changes, then may I suggest that it lift the embargo on beef cattle going into the United States, and get a few dollars in that way. May I suggest, further, that you lift the embargo on malting barley going into the United States. May I suggest that you remove the sales tax, and do not proceed further with this excise bill.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

How would that reduce consumption?

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

How would it reduce consumption?

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

Yes.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

It would increase production.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

I doubt it. I think we are pretty well at full employment now.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

There is plenty of employment down around the civil service branch. You have more civil servants than you ever had in the history of Canada.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

No; about 25,000 less.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

When one control is removed you have to put another on to cover up the errors in it. May I suggest that if the government wishes to increase production-and I agree with the Minister of Finance that we should-instead of putting more controls on, he should take more off and let the people know where they are going. Let the people find their own level. Let industry be governed

Excise Tax Act Amendment

more by the law of supply and demand. If there ever was any virtue in the old free trade doctrines of the Liberal party, then surely today that party is the farthest away from its free trade policy it has ever been since confederation. If there ever was any virtue in it, then surely there might be some virtue in it today, when the whole world is clamouring for foodstuffs. This is a time when we need international trade, and when we should not allow ourselves to get into a position where we have to prohibit goods from that great customer, the United States of America.

We can well recall hearing the present Prime Minister state in the house that we must not provoke the United States. We could scarcely raise a tariff. But today we have the greatest number of changes, and have observed the greatest number of changes in the fiscal policy of the Liberal party that we have seen in the last twenty-five years.

I can remember when that party was going to have a policy of free trade. They said, "Buy your implements where you can buy them the cheapest; sell your products where you can sell them for the most"-total free trade. The Liberal party in western Canada called for free trade.

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LIB

Ernest Bertrand (Postmaster General)

Liberal

Mr. BERTRAND (Laurier):

That was a

time when you could exchange money; but today you cannot do that.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

And Liberals, like my hon. friend from the province of Quebec, wanted reasonable protection for that province, and the city of Montreal, as many of us did for the industrial sections of Ontario. But the result was that in 1930 the fiscal policy of that party which has been everlasting in its condemnation of any degree of protection was such that a minister of finance, who preceded the one now in office, came in with countervailing duties. He chided us on this side of the house for having a brick-for-brick policy. He said, "We will not call it brick for brick; we will count it a countervailing tariff. If the United States puts on a tariff of ten per cent, we will put on the same tariff here". In other words, we have changed so often in Ottawa that we now leave it to Washington to decide what type of tariff we shall have. It is now said that in order to get more United States dollars and prohibit the importation of United States goods we shall put on a 25 per cent excise tax; we shall provide a long list of goods which will not be allowed into Canada.

I do not intend to go into any legal argument as to the unconstitutional part of it, because I have mentioned before what I

thought of it. This is the first time in my experience of a quarter of a century in this house that I have known of taxes to be imposed over the radio and have them collected long before they were passed by parliament. I listened to the hon. member for Hal ton and, being a farmer, I imagine it was difficult for me to follow him. However, as a farmer I could tell that, while he was trying to give a legal interpretation, it was simply a skilful legal circumvention of the real issue when he was saying that the minister was not in any way bound or was not acting unconstitutionally when he asked parliament for certain rights. Even the minister laughed at that and I am sure that would not need much argument. The people of this country know that this is another example of the usurpation of parliamentary rights such as we have not before experienced in the life of this house, all under the cloak of emergency of war, a war which ended two or three years ago. You will always have emergencies when there is this uncertainty in our fiscal policy which we have experienced in the last few years, especially of late years. The more emergencies we have, the greater the tangle will be.

I am not going to labour it any more than to say I regret that the government now finds itself in an economic tangle. Nobody is just sure how they got into it, and heaven knows nobody knows how they will get out of it.

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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. ABBOTT:

They explained how they got into it a few minutes ago.

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PC

William Earl Rowe

Progressive Conservative

Mr. ROWE:

I urge upon those who have the great responsibility of fixing the fiscal policies of this country, such as the Minister of Finance or the minister who has control of our rapidly growing industrial expansion; I urge them when they are thinking over these fiscal matters to ask themselves whether they can get more production by putting on more taxes or whether they can get more industry by having more governmental controls. I urge them to ask themselves that in the quiet confines of the east block.

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CCF

Wilbert Ross Thatcher

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

Mr. THATCHER:

Can the minister tell us how much has actually been collected in the almost four months this tax has been on?

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March 10, 1948