Mr. C. WALLACE STEWART (Humboldt) :
Mr. Speaker, on rising to continue this debate I cannot refrain from expressing regret that the proposed amendment offered by the leader of this Progressive group is not before the House at this time. Not, Sir, that I would cast the least aspersion on the ruling handed down to us by the Chair or suggest in the, least any doubt as to its fairness or wisdom. In fact, if I have followed the reasoning aright upon which that ruling was founded, I think that no criticism can be made with respect to it; but that rather we are suffering here as the result of the ' sins of our forefathers descending upon the third and fourth generation. However,
I say that I regret that that amendment is not properly before the House, for this reason. That amendment states concisely, and emphasizes, the point of criticism of the budget that I would wish to make. And I think this other reason too might appeal to hon. members generally, and not alone to this group in which I sit-that if that amendment were properly before the House perhaps I would not feel it incumbent upon me to take up time in presenting arguments to the end so well expressed in the amendment, but that I might have been satisfied to have supported the amendment with my vote and thought I had done my duty But I do
The Budget-Mr. C. W. Stewart
feel, Sir, that we in this group represent a distinct school of thought, that we are urging a policy that is not stated either in the remarks of the Finance Minister or in the amendment to his motion. I feel too that at this time, in view of the serious conditions that confront us in this country, all the suggestions for improvement that can be made should be taken into consideration. Therefore I make so bold as to occupy some of the time of the House in offering some further criticisms and suggestions.
First of all, I want to state, and if possible to make clear, why I am not satisfied with the amendment to the motion. I thought, Sir, when the ex-Minister of Finance (Sir Henry Drayton) first started to propose the amendment that it was going to be one that would appeal to me; I thought that he was making statements which sounded worth while-I refer to that part of the amendment which, perhaps, to a greater or lesser degree camouflages the real point, where he recited those pledges as expressed in the Liberal platform which, he declares, have not been carried into effect. I say, Sir, that I thought perhaps I was going to be able to agree with him because that point did appear to me to be worth while. But later, as my hon. friend concluded his amendment, I realized that he did not express my views as I would wish to express them; and if I had any doubts-for I must admit, Sir, I did not hear very clearly back here where I am seated and was not very sure just what the actual nature of the amendment was -if I had any doubts the hon. member for Fort William and Rainy River (Mr. Manion) cleared up those doubts when he made it plain in the concluding remarks of his speech in this debate as to just what the intent of the amendment was. My hon. friend said, " It is not an amendment requiring hon. gentlemen opposite to carry out their pledges, but an amendment condemning the practice of making promises it was not intended to fulfil ", and so on. Now, in so far as it goes, that statement appeals to me. If pledges have been made and not beeh fulfilled, then I would like to join in condemning the practice. But that is not the point in respect to the budget proposals before us that I want to emphasize; and, as the amendment does not go further than I have stated, it does not completely,-does not by any means completely-express the criticism that I would like to make of the bud-
get. I want to state, Sir, that I was not sent here as a guardian or keeper of the Liberal party though it happened to be in power; at least my conception of the reasons for sending me do not include that responsibility. I was sent here, I think, to state as clearly as possible, and to keep before this House, certain definite principles and certain proposals, and I shall endeavour to do so. I do not think that criticizing the party that is in power carries out, under any circumstances, the obligations which were placed upon me. I have also noted that members of the group sitting immediately to my right have not only pointed out that the amendment is capable of expressing their opinion and their criticism, but that some of them have gone to considerable trouble to point out that the amendment is also capable of expressing the criticism and viewpoint of the Progressives. I take exception to that ambiguous feature of the amendment, and I wish to say that when this group has the privilege and the opportunity of expressing its views it will attempt to do so without ambiguity. Personally I do not feel that I can join in an expression that is capable of two interpretations. I do not think that it was a fair criticism to level at us in this corner of the House to say that when the resolution which did express our sentiments was offered it was offered as a means of safety to the government. I would point out, Sir, that the result of the two amendments would be practically the same. That is, both constitute a censure of the government; and I cannot see that in taking the stand that I do
although I cannot admit that the amendment now before us satisfies me-I am in any way coming to the relief of the Government.
Now, I want to make a few comments on the budget proposals. In the first place I would like to join in the congratulations that have been offered to the Minister of Finance on the service that he has given for so long, and is still giving, to the country. I would like, in particular to congratulate him on a point that I think has not been stressed, and which I believe is important. That is, that the phraseology in which he has clothed his proposals is so clear and intelligible that it was not difficult for any hon. member to grasp the points which the minister wished to place before us. That is commendable but that is not the whole point that I have in mind. It is the fact that my hon. friend's phrase-
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ology is so understandable that the average citizen throughout Canada can realize the present situation fairly accurately, and that, I think, is something desirable. It should be possible for the people of the country to understand the condition of the Dominion at the present time. I believe that the average citizen is now getting a better grasp of the conditions than he had, perhaps, at any time in the past, and that he is realizing that we have a very heavy burden of debt to sustain. It is not possible, perhaps, for the average citizen to think in the terms of billions or millions of dollars; but the people as a whole are now realizing that a very heavy debt is placed upon us. They realize that the interest charges on that debt, and the other fixed charges, together with the legitimate charges of carrying on the administration, amount to a very large sum. They realize this requires a heavy taxation, and if I might diverge again, I would congratulate the Minister of Finance (Mr. Fielding) on having presented tax proposals which are intended to bring in a large revenue. I believe that we all realize, both in this House and throughout the whole country, that a large revenue is necessary to carry on the government at this time. I do not wish to be misunderstood in that respect. I do not mean to say that, because a large revenue is necessary, we should encourage the Government in making the expenditures and charges over which they have direct control greater than are absolutely necessary at this time. I am wholly in sympathy with the statements regarding the necessity for economy, which have been made by my hon. colleagues in this coi'ner of the House. I believe it is possible that reductions can be made in the expenses of the various departments of this government. As a new member of the House, I would not try for one moment to place my finger on the weak spots. I would not attempt to criticize; in fact I think most of us who have been in our seats during the passing of the various estimates have felt that it would be almost futile to touch those estimates with the knowledge we have of them. It is the business of the Government and of the heads of the departments to find out where there are encroachments on the revenue which can be stopped, and where items can be cut oif, without seriously injuring the ability of the Government to carry on. My whole idea in commending the Minister of Finance for having introduced proposals that would
bring in a large revenue is that a large portion of that revenue might be diverted from the ordinary expenses of government to reduce our national debt.
There are other features of the budget I would like to comment upon. The first is one which has been touched upon many times here, and that is the statement of the Finance Minister as to his attitude-and I presume the attitude of the Government for whom he speaks-with regard to reciprocity with United States. I commend that attitude, and personally I am prepared to stand behind him wholly and unreservedly in that matter. I also commend certain features of the budget where the minister makes proposals for more direct taxation. I believe, Sir, that the people of this country, if they are not now wholly in a position to accept direct taxation, are making long strides towards that position. They are demanding that the taxes shall be placed upon them directly, so that they can trace them to their source, and know exactly how much they are paying, and through what channel it is reaching the treasury of the Government. I refer to the taxes on bank notes circulation, cheques,, money orders and the like. Those taxes are commendable in another sense, in that they do not bear unjustly upon the man of small means and with very little income. Those are proposals which meet with favour. I might also mention taxes which are included there, which might be termed luxury taxes, such as the taxes
5 p.m. on automobiles, tobacco, confectionery, and taxes of that nature. If I have a criticism to offer on those taxes, it is that there should be greater attention given to the graduation of the taxes. The greater the value of the article, the more right it is to term it a luxury, and in my estimation the greater the tax it should bear.
I commend all measures in the budget tending towards freer trade. In this, my first attempt to address the House, I will not state that I am a free trader, either in theory or every day practice at this time, but I believe in much freer trade than we have at the present time. I am commending these measures because they point towards freer trade. I will mention some of them. We have the alteration in the Marking and Valuations Act, the change in the regulations regarding the arbitary value of foreign money, and the direct reduction of tariff where those occur in the proposals before us. These are all tendencies toward freer trade, and I commend
The Budget-Mr. C. W. Stewart
them in that respect. Although supporting the thought expressed in the resolution to amend the amendment, as submitted by the hon. leader of this group, (Mr. Crerar) I do not in any sense wish it to be understood that I am advocating radical changes in the fiscal policy over night. I do not think that any person in this House wishes to do that, and if there were such, I would, least of all, wish to be connected with them. In my most optimistic moods I never supposed the Government which in power would do anything radical in that respect, and in my more pessimistic moods, viewing it in the light of history of the past, I did not expect anything more radical than we have at the present time-and I submit we have no radical changes at the present time. The hon. Minister of Agriculture (Mr. Motherwell) last evening, I believe, characterized it as a step. I think he was going beyond bounds when he characterized this as a step, either in the right or the wrong direction. I believe the hon. member from Southeast Grey (Miss Macphail) also said it was a step forward and a step backward. I submit this is not a step. I think the hon. member from Brome (Mr. McMaster) characterized it properly. I admire very much all his logical reasoning and argument, and was particularly delighted to find that he was logical with regard to statements he had made as much as two years ago. I think I remember reading about two years ago a criticism he had made of the budget proposals of that time. At that time there were proposed reductions of from 5 to 7i per cent, and, in criticizing them, from his standpoint, he stated that it might be termed a step in the right direction, but certainly not a stride. The other day, in following to a logical conclusion, he stated that the change at the present time was probably a shuffle. I think that is a truthful statement of the situation, and meets wholly with my approval. However, I want to be absolutely fair, and to give full credit to the Minister ' of Finance for the results which may follow the slight changes made, particularly with regard to agricultural implements, where he has altered some of the customs taxes by 2i per cent. My chief objection to the customs tariff, as a means of raising revenue, is that it takes so much out of the pockets of the consumer to place $1 in the treasury. I have heard it stated -and I have not heard it successfully refuted-that for every dollar which, through that means, finds its way to the treasury, $8 is taken from the consumers' pockets.
If that is a fact, let us consider fairly what even 2| per cent might mean to the consumer of this country. I am not sure, Sir, that this 2J per cent reduction is worthy of the commendation I am giving it, or that it would work out in practice as it does in theory, because it is such a slight reduction that, possibly, advantages will be taken of the situation which will not permit it to work out as it should. Theoretically, the 2h per cent reduction will mean a saving in taxation to the agriculturists of this country of as much as $250,000, which is not a very enormous sum. But if $250,000 is deducted from the treasury, then it means not $250,000 saved to the agriculturists but at least a million dollars, taking into consideration the indirect taxation placed on them. It was suggested by the Minister of Finance (Mr. Fielding) that this reduction might mean a loss to his treasury of possibly $500,000. That is so much taxation taken off the people of the country. If therefore my theory is correct there is saved to the people not $500,000 but $2,000,000. And while these are compartively low figures as compared with the whole budget, yet I am willing to give the minister the full credit that is due him in that respect.
Next I want to say a word or two with regard to the sales tax. To me it is one degree less objectionable than the customs tariff as a means of raising revenue, but only one degree less objectionable, in that it is perhaps a more direct method of taxation than the customs tariff. But when I find that there is a difference in the sales tax as between home manufactured goods and imported goods, in favour of the home product the effect, it seems to me, is practically the same, and in reality there is little difference between the two forms of taxation. My objection to this taxis that it is an undue burden on those people who have small incomes. It is not equitably distributed. It is a tax on the necessities of life, a tax on a man's consuming power and not on his ability to pay taxes. It is a drain upon the real source of our wealth, and the Government would have been well advised to have taken that fact into account before increasing this tax by 50 per cent. I know that certain claims have been put forward to justify the present proposals of the budget, among others the contention that the exigencies of the present critical situation demand the increase. I am willing to admit all these things; and I should be most patient, Mr. Speaker, with the pres-
The Budget-Mr. C. W. Stewart
ent administration if I could see any sign that they were heading in the right direction. But, as I view the matter, I take the position stated in the second amendment, which was refused consideration, that the whole budget is based upon protectionist principles. I therefore cannot give it my endorsation.
The speech of the Minister of Finance does not suggest, either directly by its context, or by inference, that the Government intend to implement their promises towards freer trade either immediately or in the distant future. And I was very much interested last night when the Minister of Agriculture (Mr. Motherwell) refrained from committing himself on that point although he committed himself on almost every other point that suggested itself to him. If I thought that a readjustment were contemplated and we were given a serious undertaking towards that end by the Government, matters would be different. And by the way, Mr. Speaker, may I say at this juncture that I am becoming very dubious indeed of all pledges, when we find that what we supposed to have been the pledges of members of the Government were only pledges made by their supporters, not, apparently, with their authority and approval. I say I am becoming quite dubious of pledges of any sort. If, however, we had a solemn pledge on the part of the Government at this time that they intended to implement in full their pre-election promises and to put them into legislation, I should be more patient than I am at this time.
Now, I wish to offer a few constructive criticisms, because I am in sympathy only with criticisms of that character. We in this corner have been criticised for not placing on record more constructive material in our criticisms of the budget. In our platform we have some very definite proposals, and I will recommend some of them to the serious consideration of the Government. I believe that the most equitable tax we have ever had in Canada is the income tax. It is my opinion, further, that this tax should be readjusted. There should be a gradation in the scale, following the British system, not only increasing it very much as it ascends, but also recognizing a difference between earned and unearned income. In the same category with that I place the business profits tax which has been discarded by the Government. I would also recommend the inheritance tax which has been suggested already. Another
tax which I favour very much, and which I believe should receive the earnest consideration of the Government, is what is known as the tax on unimproved land values. I was much pleased to hear the hon. member for Gloucester, (Mr. Turgeon), the first member on the Government side to do so, suggest that this tax should be considered. Up to the time he made the suggestion it had not been mentioned, and the hon. member expressed his disappointment that some member of the Progressive group had not advocated the tax. Since then several hon. members have advocated the tax on unimproved land values, and I believe that the hon. member for Brant (Mr. Good) outlined it at considerable length. I have criticised the sales tax severely, and now as a practical suggestion I would urge the Minister of Finance to consider the matter of taxing these unimproved land values. I would suggest that there should be placed on all lands throughout the country, both urban and rural, a tax of 2i mills on the dollar with assesment based on unimproved values. If the Minister of Finance did this he would secure at least as much as he will get through the 50 per cent increase in the sales tax, and it would be a more equitable distribution of taxation throughout the country. This tax, I can assure him, would not bear very heavily on those who would pay, and it should be given a fair trial. In many instances people are afraid of the proposal, because they do not know how the tax would operate; and if the experiment were tried it would satisfy these people. Certainly it would be meeting the demand which is being made for a movement towards more direct taxation. Of all the taxes that can be levied, perhaps the income tax and the tax on land values are the most direct methods that could be adopted. I have done some figuring on this question. The figures I have been able to obtain are from the Chief Statistician and they show that the assessable (values of unimproved lands and property throughout the Dominion would probably amount to $16,000,000,000. That is why I suggest 2i mills on the dollar; it would produce the revenue which the Minister of Finance finds it necessary to secure by means of the increase in the sales tax.
Subtopic: THE BUDGET