Mr. M. N. CAMPBELL (Mackenzie):
Mr. Speaker, it is not my purpose to enter into what some hon. members have been pleased to term a political inquest; but I feel that I would be failing in my duty to my constituents if I did not at this time draw to the attention of the House some of the definite promises and pledges made by the Liberal party prior to the last election. I have in my hand a copy of the platform drawn up at the 1919 liberal convention, and while this has already been frequently referred to, I think it is of sufficient importance for further reference. Under the heading of tariff, the second resolution reads:
Reducing the cost of the instruments of production in the industries based on the natural resources of the Dominion, the vigorous development of which is essential to the progress and prosperity of our country.
That to these ends, wheat, wheat flour and all products of wheat; the principal articles of food; farm implements and machinery; farm tractors; mining, flour and saw mill machinery and repair parts thereof; rough and partly dressed lumber; gasoline, illuminating, lubricating and fuel oils; nets, net twines, and fishermen's equipments ; cements, and fertilizers, should be free from customs duties, as well as the raw material entering into the same.
That a revision downwards of the tariff should be made whereby substantial reductions should be effected in the cost of wearing apparel, footwear and other articles of general consumption, other than luxuries, as well as on the raw materials entering into the manufacture of the same.
That the British preference be increased to 50 per cent of the general tariff.
And I wish hon. gentlemen to pay particular attention to the next clause:
And the Liberal party hereby pledges itself to implement by legislation the provisions of this resolution, when returned to power.
Under the heading of "Finance and Taxation" I find the following resolution:
Whereas, national disaster will overtake this country should the present method of financing the country's affairs be continued; and,
Whereas, both Great Britain and the United States at present raise more than 80 per cent of their revenue by direct taxation, while Canada raises not more than 20 per cent;
Be it and it is hereby resolved:
1. That the serious nature of the country's financial situation calls for the profoundes consideration of all patriotic citizens, and tht exercise of the severest economy by the Government ;
The Budget-Mr. Campbell
2. That increase of revenue must be sought from an equitable and effective im-position and collection of graduated taxes, on business profits and income, applicable to all incomes above reasonable exemptions;
3. Taxes on luxuries.
The Prime Minister, speaking in my constituency, in the town hall at Yorkton, Saskatchewan, on November 8, 1920, is quoted by the Enterprise as speaking as follows:
The tariff is too high and must be revised downward. The cost of living must be reduced. Why put a tax on the necessities of life, on food, clothing, boots and shoes and building material? Duties should be reduced. They were nothing but a tax put on the people. The sales tax is a tariff-a visible tariff.
He advocated the doing away with these taxes.
There is no doubt where the Liberal party stands on the question of tariff. Taxes have to be raised, but it is not necessary to do it all by direct taxation. I would tax incomes, business profits and luxuries. All could be raised in this way. A tariff should exist for revenue, and only to supplement those taxes. I think there are certain classes that should be exempt
the large body of consumers and the large body of producers in regard to instruments of production. All agricultural implements should be placed absolutely on the free list. Gasoline, fuel, oils, cement and fertilizers were some of the commodities that he would also exempt.
Further on, he said:
Our platform is the same as the farmers, with one or two differences.
It seems to me that the budget before the House to-day constitutes a very serious repudiation of those promises and pledges. It is not my purpose to enter into a criticism of the action of the Prime Minister; in fact, I believe he deserves more sympathy than censure at our hands. Let me say that, in my opinion, if the Prime Minister were surrounded by men as advanced thinkers and as liberal-minded as himself, we would to-day be considering a budget of an entirely different nature. Some hon. members opposite have reminded us that the budget is a step in the right direction, and that the platform cannot be put into effect immediately. I should like to ask them how long, at the present rate, it will take to have it in effect. This reminds me of the mathematical problem of the frog that fell into the thirty-foot well and tried to climb out. The first day he made four feet, but after that he got tired and lazy and crawled up twelve inches each day and slid back eighteen inches each night. How long would it take him to get to the top? The Minister of Finance (Mr. Fielding),
in presenting his budget, drew attention to the serious financial condition of the country and to the necessity of producing a revenue to meet those conditions. But, Sir, I submit that the budget before the House to-day is not one based on the principles of producing a revenue, but rather on the principle of protecting oui manufacturers. We are not complaining particularly of the duty in so far as it produces a revenue; hut when we are obliged to pay that duty not into the Dominion treasury, but into the pockets of Canadian manufacturers, we have a legitimate cause for complaint.
I wish to deal very briefly with some items of the tariff and like the last hon. gentleman who spoke, I find it necessary to cut out a good deal of what I intended to say on account of the lateness of the hour and the length of time that this debate has dragged out. I will deal first with the automobile industry. Automobiles and automobile parts are protected by a tariff duty of 35 per cent. In fact, with the alteration in the sales tax, the duty is a little more than that. There is a sales tax of 6 per cent on imported goods and 4i per cent on home made goods, which gives the manufacturer an additional protection of li per cent. So that the actual protection enjoyed by the automobile manufacturer is 371 per cent. Now, I do not wish to take an extreme stand in this matter, but I suggest to the minister that if his budget is really based on the principle of producing revenue he should reduce the protection on automobiles at least to the very reasonable figure of 20 per cent. Surely there is no hon.'gentleman in this House who will contend that 20 per cent is not a good and sufficient protection for the automobile industry. I would suggest further to the minister that he increase the present excise tax by 15 per cent. That system would have this virtue: it would still leave the manufacturers a very substantial protection; it would turn in a very considerable revenue to the Dominion treasury; and it would not increase the price of the product to the purchaser. I find that in the year 1920 there were manufactured in Canada automobiles and automobile parts tc the value of $137,420,531. Wages paid in the manufacture of these goods amounted to $19,368,009. Of these automobiles there were exported $20,911,262 worth. So that the amount sold at home totalled $116,509,089. On this basis the wages chargeable to the goods sold at home would he
The Budget-Mr. Campbell
$16,376,852. These automobiles, on the import basis,-that is, taking the prices that would he paid for them in the United States, apart from the duty-would amount to $101,792,852.
Had these goods been manufactured in a foreign country and been imported into Canada and the duty paid, it would have turned into the treasury that year the substantial sum of $35,627,498, or nearly enough to have retired the deficit on the Canadian National Railways for that particular year. Hon. gentlemen will say, however, that if they were imported, while there would no doubt have been a substantial increase in the revenue, the workmen would not have had employment.
Hon. gentlemen will probably ask, what about the wages and the employment of the men? Well, I will go a little further. The Dominion treasury could very well have afforded to pay all the wages of these men, allowing them to do nothing, and would still have had left the substantial balance of $19,250,648. Had the excise tax I have suggested been in effect that year, it would have brought in, to enrich the budget of that .time, the sum of $17,924,393, which otherwise went into the pockets of the Canadian automobile manufacturers. We imported in the year 1920 goods of this nature to the value of $25,548,348, on which there was collected duty amounting to $8,059,895. Taking these figures, the actual amount of duty paid by the people of Canada-because it is a duty regardless of whether it is paid to the manufacturer here or to the customs collecter-was $43,787,393; but of that amount only a little over $8,000,000, or less than 25 per cent, went into the Dominion treasury. So that on this basis it took over a dollar of taxation to turn 25 cents into the treasury. I would draw attention again to the fact that there was nearly $21,000,000 worth of these manufactured goods exported in the year in question. That shows that our Canadian manufacturers were able to ship goods out of this country and compete [DOT] in foreign markets with the manufacturers of the world, proving thereby most conclusively that they did not need protection.
When Sir John Macdonald introduced his National Policy in the House in March, 1878, he stated at the time that it was only a temporary measure, intended merely to give the manufacturers a leg-up, so to speak, and in that time, as they got on their feet, it would be abandoned. He was asked rather ironically from the Opposition benches as to just when he would regard the manufacturers as being no longer in a position that called for protection. Sir John was equal to the occasion and his answer was both sensible and logical. He replied that just so soon as these protected manufacturers began to ship goods out of the country in competition with foreign manufacturers in the world's markets, they would thereby prove beyond question that they no longer needed protection. That was the basis on which the National Policy was instituted in Canada. But let me come tc a period somewhat nearer our own time;
I will quote a more recent authority. On January 18, 1911, the right hon. the present leader of the Opposition (Mr. Meighen) moved, in the House of Commons, the following resolution:
That in the opinion of this House a substantial reduction in the import duties on agricultural implements is now due the agriculturists of Canada, and is in just a.ccord with the true ends of a protective tariff.
I observe that in his speech he quotes Sir John Macdonald and quite a number of the other leaders of the Conservative party, citing these very facts to prove that the policy of that party was to retain this duty only until such time as it was clearly demonstrated to them that the manufacturers were no longer under the necessity of protection. Let me quote briefly from one section of his speech. I should like very much to place the whole of the right hon. gentleman's remarks on record in Hansard, Mr. Speaker, because they are interesting. Howe/er, I do not wish to weary the House and fo I shall quote just one part of his speech.
But the charge I have to make, and which I hope to bring home to the Government this afternoon, is not that one, though it is the most serious;
He was referring at that time to the question of broken pledges, as he is doing at the present time.
-it as this, that in their attempts to continue the National Policy which had obtained for years before, they have overlooked, they have neglected one essential feature of that policy, they have quite forgotten its guiding principle-
I want the House to note what the right hon. gentleman here refers to as the guiding principle of the National Policy.
-namely, the principle that as our industrial institutions advanced in strength and as they were able with every advance to acquire a hold on the home market, the import duties were to be diminished and adjusted in order to meet the evolving and changing conditions. It is that restraining, guiding principle, which I claim this government has entirely overlooked, and as a consequence they have allowed, in the respect which I am discussing this afternoon, protection to run rampant.
The Budget-Mr. Campbell
Now, I am not one of those who take an extreme stand. I do not advocate that we should do away with the industries we have and import all our goods, even though that might increase the revenue. There is no one who is more anxious than I am to see industries in this country and to see them prosperous and flourish-10 p.m. ing. I submit, however, that the contention that the automobile industry requires a protection of 35 per cent in order to carry on is not only a fallacy, but an absolute absurdity. I note that the Minister of Finance (Mr. Fielding) has allowed farm tractors to remain on the free list, and I am not complaining in that respect, for I would not suggest that a nuty be placed on these tractors. But at the same time I would call his attention to the fact that the farm tractor is not the most essential requisite; the important things are binders, mowers, rakes, drills, ploughs and waggons; and if the minister feels that he must retain a certain amount of duty on agricultural implements, then 1 would ask him, in all fairness to the poor farmer, and particularly to the new settler whom we are trying to induce to come to Canada, and who will not have sufficient funds to purchase tractors, to place a small duty on farm tractors and reduce by a corresponding amount the duties on the essential implements.
Now, I pass on to something else, which is perhaps even more important, namely, the matter of cotton and woollen clothing. I would just like to say here that while farming implements are used by only one section of the people, cotton and woollen clothing are required by people of all vocations, regardless of their station in life. I suggest still further to the hon. Minister of Finance that if he must retain a certain amount of duty, we would prefer that he apply it to the farm tractor rather than to cotton and woollen clothing. There were manufactured in Canada in 1920 cotton and woollen clothing to the value of $186,711,174. The wages paid in the manufacture of those goods amounted to $31,267,601. Of the amount manufactured $13,809,576 worth were exported, so that the total amount sold at home was valued at $172,901,598. I find that the average duty paid on dutiable cotton and woollen clothing amounted to 30.7 per cent. I mention dutiable cotton and woollen clothing, because a large amount of woollen goods come in free-what are known in the customs tariff as worsted tops, very largely the coarsely spun yarn used by the wool factories. Goods
of this nature to the value of $11,913,824 were allowed in free. I may say incidentally that while wool and hides are allowed in free, wool blankets and clothing are protected to the extent of 35 per cent, so that you will see just how this protective tariff protects the farmer. Reducing these figures again to import value, as I did in the case of automobiles, we get the sum of $142,854,762. On the basis of the average duty, had these goods been manufactured in a foreign country and imported in the year 1920 they would have turned into the national treasury the very substantial sum of $43,856,411. Again with this item I do not wish to take an extreme stand, but I would suggest to the minister that he at least make a reduction of 10 per cent, thus saving the working people, the poorer people of Canada, the large sum of $18,000,000.
Let me deal just briefly with the protection that is afforded to the farmer. Cheap corn comes in in competition with his oats; raw hides, wool-all these things are imported free, but when the farmer comes to buy manufactured goods he has to pay this very substantial duty. The farmer is not particularly seeking protection; the farmer considers that a protective tariff is vicious in principle and destructive in its application. The farmer has never asked for protection and he is not asking for it now. But I submit that the men who framed this customs tariff, had they themselves firmly and honestly believed in the principle of protection, would have protected all industries alike, and would have imposed duties on these articles the same as on manufactured goods. And, Sir, what is the reason for this? Is it because the farmer has not done the usual amount of lobbying? He has not done any lobbying, but I do not think that is the reason; there is a deeper and more vital reason than that. It is simply that all these years the highly protected manufacturing concerns have been contributing very liberally to the campaign funds of both the old political parties. All down the ages, from the day of Judas Iscariot, men have been ready to sell their principles, their honour-yes, their country and their countrymen-for financial gain and for political power. Judas, when he took the thirty pieces of silver for the betrayal of his Master, committed no greater crime than scores of men who, during the course of our political history, have betrayed the confidence reposed in them by the people of Canada and have sold their own countrymen into the bondage
Canada Temperance Act
of a group of manufacturers and financiers in exchange for the campaign funds with which to win their election.
I would carry you hack to a red letter day in the history of Canada, a day to which the hon. member for Brome (Mr. McMas-ter) in his speech a few days ago, so ably and eloquently-yes, I wild say almost
pleading and tearfully-referred, that of 1893, when those great Liberal principles were laid down as the Magna Charta of liberty and progress and as the guiding star of Liberalism in Canada. But I will pass on for four years to what Porrit calls the great betrayal of 1897, and I will pass further on for nearly a quarter of a century until we come to another red letter day in the history of Canada, to what we at that time hoped was a brighter and happier day, that of 1919, when the same old platform and the same old principles were once more laid down as the foundation rock of the grand old Liberal party of Canada. But to-day we are in another period, a period that marks another milestone, a period to which the future Canadian historian may well and rightfully refer as the greater betrayal of 1922.
On motion of Mr. McKay, the debate was adjourned.
Subtopic: CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE