May 16, 1923 (14th Parliament, 2nd Session)

CON

Thomas Langton Church

Conservative (1867-1942)

Mr. CHURCH:

As I say, I am not an expert on the question of potatoes, nor am I an expert on small potatoes either. I may say, however, that in the city from which I come it is impossible at the present time to
get good potatoes at the prices quoted by the hon. gentleman. All the potatoes we can get are old potatoes, and. the farmers in the Toronto district have not been growing them to any great extent. They have to import their potatoes mainly from New Brunswick, and I am glad to see them come from that province and as well from Alberta and the West; I prefer to see them come from these provinces rather than from the United States. So that it is absurd to talk about free trade in potatoes; the fact of the matter is that there is no market available in the United States for the potatoes grown in that country, to sty nothing of our own. I repeat, the farmers of this country will agree with the minister in his tariff in so far as it seeks to protect this particular commodity. Now, of all our national purchases during the past year we obtained 69 per cent from the United States, selling them in return only 39 per cent of our own products. In view of that great discrepancy, I think that it is only the part of wisdom that the national policy of Canada should be maintained. Why should the United States be allowed, absolutely free and unchecked, to supply 69 per cent of the purchases of Canada when we can sell them only 39 per cent of our own goods? Why do we give them our market? We should preserve our own markets for the Canadian people. The same thing relates to butter. The farmers of the West, in Alberta and other places, require a home market for their butter. Alberta butter sells at 31 cents in the East. The price of New Zealand butter is 27 cents, and there is a duty imposed upon it of 4 cents. In my opinion the government should try to hold this market for the western farmers by increasing the duty from 4 to 8 or 10 cents.
I sympathize with a great deal that has been said about the West, and no one, I assure the House, would be more pleased than myself to see that great land succeed. I do not agree with the gloomy tone of some of the speeches regarding farming conditions in the West which were delivered in the course of the debate on the immigration policy of the government. No country in the world has such a magnificent record for wheat production as western Canada-the granary of the Empire. The fertility of its soil and the industry of its people are responsible for this great record. Every year hundreds of men go out west to help in the harvesting operations, which extend over a period of about three months. The majority of these harvesters then return eastward. Many of them have suggested to me that it would be a national benefit if either the federal or provincial au-
The Budget-Mr. Church

and the money sacrificed by the exchequer would go straight into the pockets of producers and dealers. He goes on to say:
When it became obvious that the Cuban sugar crop was going to be far below the estimate, prices began to move up strongly week by week until on Tuesday last the price was 30s. 3d. per cwt. or three times more than in January, 1922. This rise was caused entirely because so far as could be seen there was actually going to be a shortage of sugar this year, and the slightest increase in demand might easily cause a panic and send up prices far beyond that.
That was the position, and it was well known in commercial circles. He had information that the increase of sowing in the continental countries of Eufope stimulated by higher prices was as much as from 25 to 40 per cent so that as far as they coaid see by the turn of next year there should be cheaper world sugar and when that came it would be the time to reduce the duty. (Ministerial cheers). But if he were to reduce the duty in this budget the whole of that reduction would go straight to New York, and he was not going to do it. (Ministerial cheers). It would be a very easy thing for him to have proposed this reduction, and said in public that sugar was cheaper by the amount of the reduction of the duty. Let those members who might believe that to be true say it! but he did not believe it to be true, and therefore he was not going .to say it. (Ministerial cheers).
Excise duties on tea and sugar put $200,000,000 per annum into the Old Country treasury. Every half-cent per pound taken off the Old Country sugar duties reduces the revenue by aproximately $25,000,000 per annum. The Old Country sugar duty is four and three-quarter cents per pound. The British Chancellor of the Exchequer refused to take the fraction of a cent per pound off the English sugar duties because Mr. Baldwin said: "The whole of that reduction will go straight to New York."
So when the Minister of Finance takes $2,5O0,0GO or a half a cent a pound off the Canadian duty on sugar the whole of that reduction will go straight to New York and Stanley Baldwin says so.
The excise duties on tea and sugar in the Old Country amounted to $200,000,060 and if the Chancellor of the Exchequer had made a reduction of half a cent a pound in the duty on sugar it would have taken off twenty-five millions from the breakfast table of the sugar consumers of that country. But the British Chancellor refused to make that reduction because he said the whole of it would go straight to New York. I believe the whole of the reduction of 2J millions on the sugar duties which has been made under our budget will go straight to New York also.
Another matter which is much discussed id the cities and towns of the country, especially among the retail merchants, is the tax on receipts. The Finance Minister said that the British Chancellor has retained this tax and that he is going to retain it also. Some labour organizations in this country have characterized this tax as an imposition on the people. Owing to the development of the banking system in this country there are branch banks
in every city and town. Conditions have changed from what they were twenty-five years ago. Formerly working people received their wages in bills; to-day they are paid by cheque. Most of the workers have a bank account in the district in which they live. They pay all their bills, their rent, their groceries, their food, and so on, by cheque. To-day if you go to a retail man and ask him to send you a receipt he will not do it. He will explain to you the reason for that and then you will not ask him to do it. The result is that this tax is being evaded and the government are losing in each case two cents on the postage. There was no loss under the old way of doing things because receipts were forwarded by mail and required a postage of two cents. To-day you can forward a cheque which requires a stamp of two cents on it up to $50 and by the Bills of Exchange Act in this country a cheque is the equivalent of a receipt. The dealer will explain to you now that your cheque is a receipt and he will not give you a written receipt in payment of your account because it will cost him two cents, and as many of jhese men have several thousand customers it would represent a very heavy tax on them. I am sorry an amendment has not been made in this regard because I consider that the stamp tax should operate on the same principle as the income tax. In the case of the latter the bigger the income the bigger the tax, but the receipt tax is not graduated in the same way. It should be on the same basis as the income tax if you desire to have a receipt tax of an equitable character. In my opinion in the case of both the receipt tax and the cheque tax exemption from these taxes should be given until an amount of $500 is reached. This would give the man of small salary a chance. At present he is taxed to death by the federal, provincial and municipal authorities. He and his. family cannot go to a moving picture show without having to pay a provincial tax, an amusement tax under the guise of a war tax. I contend that the provincial amusement tax is illegal because by section 91 of the British North America Act, Militia and Defence matters are under the jurisdiction of the Dominion. If the legality of this tax were contested I think it would be found that the tax is ultra vires of the provincial legislature. I am sorry that the Minister of Finance has not contested that particular point. As I say, the men of moderate income are taxed to death and I am sorry that some relief has not been given to them in the budget through a modification of the tax on cheques and receipts.

The Budget-Mr. Church
I am glad to see the government giving direct tariff aid to such products as copper bars, hemp, wool and artificial silk in the manner in which they are, but I think the bounty insufficient in some cases especially in the case of hemp. It will be very difficult indeed to get the hemp industry on its feet unless the period of time is extended and the amount made a little larger. The hemp industry needs to be nursed very carefully in order to make a success. The farmers of the district where it is grown will have to be instructed in the best ways of cultivation, and it is going to take a long time to develop that industry. No doubt the reason for this action on the part of Canada is the failure of Russia as a source of supply. But the hemp industry is a peculiar one. It is affected by all classes of weather, and it is a problematic investment for the farmer. The same is not true of the copper bar industry because it is already well established. It is organized and is already functioning and there is likely to be a great deal of work to be done by the smelters. The copper bar industry does not depend upon weather conditions like the hemp industry. I commend the government for the good work they are doing with respect to these industries but I am sorry they did not extend the same measure of protection to wool. If the government wish to establish aid to a good basic industry-there is a combing mill at Trenton which could use a lot of raw material. The result would be we would have another addition to our basic industries and the allied industries which would grow up in connection with it would attract capital, provide employment for labour and give a market to the farmer. I would not advocate sending milk out of Canada to be made into butter and then brought back to the Dominion for home consumption. Yet this is what the government are compelling the farmer to do in the case of wool. That commodity is shipped out of Canada to be combed and then brought back into the Dominion for consumption because our legislation has not been framed with such wisdom as to look after the development of our natural resources. I hope some relief will be given in this direction when we go into committee.
I am sorry that no provision has been made in the budget for old age pensions. Unfortunately the war debt and the railway debt have made it impossible for many years to come to extend aid towards the improvement of the public health and the advancement of humanitarian work. In addition our soldiers and their dependents also have to be provided
for. I think the matter of old age pensions should be taken up by the provinces and the municipalities and an agreement arrived at between them to afford relief in the shape of old age pensions similar to the relief now given in the province of Ontario in the form of mothers' pensions. In the case of mothers' pensions one-half the cost is borne by the municipality and one-half by the province, and it is one of the finest humanitarian works that I know of.
The railway situation in this country, Mr. Speaker, has been responsible for the great deficits in our finances. Were it not for the railway situation in Canada to-day we would have a good surplus and we would be facing an era of unparalleled prosperity. After granting $900,000,000 in direct and indirect aid to railways we are now met by an overdraft of $74,000,000. How this is arrived at I am unable to say. It is pretty nearly time parliament re-asserted itself with respect to our railways. If we are to have responsible government in this country we cannot allow the National Railway system to go on spending money in a capital way in the manner they are doing. There must be some control over the National Railway Board in respect to their capital commitments. The deficit in 1920 amounted to nearly $36,000,000. In 1921 the deficits on those railways was $16,000,000. In 1922 there was an operating surplus of $4,000,000 as against a deficit of $16,000,000 the year before. For this year the deficit is set down at $74,000,000. Wait until you see the deficit for next year. I am afraid it will greatly exceed $74,000,000. I hope the House will not pass the votes for railway expenditure without, at least, asking for details in connection with them.
It is time responsible government was restored in Canada, so far as the administration of the Canadian National Railways is concerned. The board should have a free hand in the actual administration of the road, but they should not spend money in a haphazard manner and should not be permitted to run up an overdraft of $74,000,000. In my opinion it was not necessary to go outside of Canada and appoint a president. We could have had a Canadian appointed to that position. President Beatty of the Canadian Pacific Railway is a Canadian and the chief engineer of that road is also a Canadian. The greatest engineers in the world constructed the Chip-pawa-Niagara plant. They are Canadians, they are graduates of Canadian universities, and I think there are a great many Canadians engaged in the management of the
The Budget-Mr. Church

other gigantic power works of Canada. I think we might have found a good Canadian to take hold of the Canadian National Railways. However, not satisfied with appointing an outsider as president we find that they have brought out Colonel N. H. Balfour, as shown in the following despatch:
Montreal, May 15.-Colonel N. H. Balfour, formerly assistant to Sir Henry Thornton in the work of the Great Eastern Railway in England, arrived here to-day to join Sir Henry as one of his assistants in the management of the Ganadian National Railways here. He is accompanied by A. J. Thomas, son of the well-known English parliamentarian, and also a former assistant of Sir Henry on the Great Eastern Railway.
I think it is pretty nearly time that we should find Canadinas to take such positions. If we are going to have any efficiency in the railway system of this country we have got to adopt the principle of promotion. In the management of the New York Central, in the administration of the Great Pennsylvania lines and the Baltimore and Ohio road, the presidents have announced that promotion will be the method in administering these railways. Furthermore in the United States, I may remind hon. members that brakemen have worked their way up to be railway presidents. We find that condition of affairs in the administration of .the United States roads, and the system adopted in that country should be good enough for a road which went behind sixty or seventy millions last year. We should adopt the principle of promotion in the administration of our railways and should not have to go to other countries when so many of our own people are out of work and being laid off by the Nationals.
I believe in Canada for the Canadians. I believe in a national policy for coal and for food, and I believe in a national policy in the administration of our railway system as well as in the administration of our merchant marine, and I cannot understand why we should have to go to England to appoint a president of our railway. Of course, I speak with every respect for Sir Henry Thornton because he has had so far no criticism in Canada, and we hope there will be very little criticism and that he will be given a fair chance. But I am surprised at his recommending the sale of the twenty-seven smaller ships of the merchant marine. I believe that with the deepening of the Welland canal these ships will be necessary for our commerce, and in view of the inquiry which has been held into the rates on lake shipping, we should have held the smaller ships, so as to bring them into competition with the shipping combine on the Great Lakes and regulate this mono-

poly. I believe it is a mistake to put them up for sale at the present time. They have not had a fair trial or chance.
There was a combine in regard to lake rates, and the shipping interests fixed rates for themselves and for others. The merchant marine also sat in when the Atlantic combine was at work. I am sorry these ships are to be sold, because I believe many of them could be used to bring coal from Wales and from the Maritime provinces to the head of the lakes and also to carry grain down the St. Lawrence to the seaboard. At the present time a few of them are not of the proper draught, but with the deepening of the' Welland canal, they will have the proper draught. I am sorry to see the head of the railway system of Canada make the recommendation which he did without proper inquiry or giving a fair trial to the merchant marine.
I believe in the principle enunciated by the Right Hon. Stanley Baldwin that he should seek new sources of revenue from those not already taxed to make up the deficit. What about a tax on pulpwood exported from Canada? We exported to the United States in the year 1921 newsprint to the value of $62,820,000. A duty of 10 per cent ad valorem would produce the sum of $6,282,000. Then with reference to water powers, we exported 158,000 hprse-power to the United States, to the value of $8,000,000. It was pointed out by the hon. member for Nipissing (Mr. Lapierre) and the hon. member for St. Marys (Mr. Deslauriers) that that would be a source of revenue. Referring to the question of coal, the bituminous and anthracite coal brought into Canada amounted to $56,000,000.
I believe if we had a rate for Alberta coal and Nova Scotia coal a large part of that $56,000,000 would remain in Canada, and be paid as wages to our Canadian people. The National Railways of Canada quoted a price of $9 per ton, train load, for transporting coal from Alberta. They evidently would rather charge the $9 prohibitive rate and do no business than quote a $6 rate and get the cream of the business. If the Canadian Pacific Railway had adopted such a principle in business and had never taken a chance they never would have been as successful as they are to-day. They took chances and they made experiments with the rates with the result that they captured the trade and made a success of private ownership. They also made sucessful investments in ocean, hotel, land and oil services. If the National Railways will only have the courage to bring down the products of Alberta to the central provinces

The Budget-Mr. Church
and use the merchant marine for that purpose,
I believe a large volume of business will come and the deficit will be wiped out. I do not agree with the gloomy view taken by some hon. members in the speeches which have been made. Agricultural depression is not a local matter; it is a problem which exists all over the world.
Thomas Bradshaw, the veteran head of the Massey-Harris Company, Toronto, and formerly the ablest and best city treasurer Toronto ever had, gave evidence before the Agricultural committee in Ottawa. I believe there is an Agricultural committee in the United States investigating conditions of the farming industry. We have an Agricultural committee in England and we have a similar committee in Canada holding inquiries with a view to improving the condition of the farmers. I agree with Mr. Bradshaw, and I will quote from his evidence. He says before the House of Commons special committee on Agriculture:
This committee has been investigating agricultural conditions in Canada with a view to discovering what, if any, steps can be taken to improve the position of the farmer, and in concluding this evidence, it may perhaps* not be out of order to express just a few thoughts along these lines.
Now, I returned from Europe not very long ago, and was over there for quite a little time, and therefore had an opportunity of finding out what the people were saying about Canada, how they were feeling.
In the first place, it appears to me that it is most unfortunate that so much emphasis has been laid upon, and publicity given to the so-called agricultural depression in Canada. It seems to me that it has had a bad effect upon our own people, in putting them in a state of mind where pity rather than self-help occupies their attention; and it has greatly weakened Canada's position abroad. She does not now appear a desirable home to emigrants, as compared with Australia and South Africa which have been painting their own charms in no uncomplimentary way; her credit has been undermined, for who cares to deal with a nation apparently thought to be approaching bankruptcy; and her future jeopardized, since the seed of doubt once sown grows vigorously.
I know this from actual experience, because while I have not been in the agricultural machinery business very long, I have been connected with the business of loaning money to the farmer since 1897, and I have been up and down the provinces of Manitoba, Saskatchewan, and Alberta, on the actual farms, talking to the farmers and making loans to them, and I am still associated with two or three companies making loans to western farmers, and I have had an opportunity of knowing just exactly how they are situated.
As a matter of fact, agriculture at the present period is no more depressed than it ha9 been at other times in the past, and, moreover, it is far from being a local condition. It is as widespread in the East as in the West; it affects the United States as well as Canada; it is a feature of agriculture in the eastern hemisphere as in the western. An "Agricultural Tribunal of Investigation" has been sitting in England and has just brought in its report upon agricultural conditions in Great Britain. In passing, it may be noted that it is evident from its report that artificial restoratives are few.
By Mr. Caldwell:
Q. What was their report, was it rosy?-A. No, it was not rosy, it was not good, but at the same time it was believed that the only way conditions could be improved was by what I think we have all got to do, and that is, we have to work hard, have patience, and have courage.
I find that the report of the Agricultural committee is backed up in a report along similar lines brought down in the United States by the Anderson committee of the senate and congress, a joint committee that had been investigating agricultural conditions in the United States. They have gone into the question thoroughly, having made a most extensive inquiry at Washington, through a joint agricultural committee of congress and senate, under the chairmanship of the Hon. Sidney Anderson, the member for Minnesota. They investigated the problem of rural credits, the question of rural depopulation, the matter of high prices, and so forth, and submitted an exhaustive report. In that report they reached the conclusion that there is not a single factor in the complex modern price structure which can be said to be primarily responsible for the spread between producers' and consumers' prices. The report goes on to state:
The growth of cities is another factor in higher costs to their inhabitants. The congestion of traffic and physical difficulties that attach to city delivery are increased as population grows.
They find practically along the lines of the British committee that agricultural depression is world wide and can bo little helped by legislation.
In conclusion, Mr. Speaker, I want to express my regret that in the budget which the minister has submitted to the House on this occasion he has deemed it fit to make reference to the question of reciprocity. After all is said and done, I do not believe that the people of this country believe in reciprocity. A vote was taken upon this question in the year 1911 when the public of Canada expressed its opinion in no uncertain voice, and if the Minister of Finance had left that reccmmendatic n out of his budget I think that the statemtnt which he has given to the House and ',o the country on this occasion would have commended itself better to the people. The amendment moved by the Progressive party also refers to reciprocity with the United States as outlined in the Reciprocity Agreement of 1911 Reciprocity with the United States is impossible. The Harding administration are going to the country next year, and with the farmer bloc in the United States they nave decided that free trade and reciprocity would be impos-
The Budget-Mr. Reed

sible. I do not believe that it would commend itself to the judgment of the American people. We know what happened to the Taft administration. Reciprocity would carry just as many .American states as President Taft carried at the election of 1912. Vermont and Utah were the only two states that voted for the author of the reciprocity offer. The presidential election resu'ts that defeated Taft were associated with congressional election results that would hive destroyed reciprocity. There has been no mandate from the Canadian people, Mr. Speaker, for any overtures in the direction, of reciprocity, and I do not believe that this reference in the budget will meet with tbp approval of the Canadian people.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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