Mr. RAYMOND (Beauharnois) (Translation) :
Mr. Speaker, at six o'clock, I was discussing immigration as a means of increasing our population. What population do we wish to increase? Urban or rural population?
Our immigration policy should be the one which the interests of the country demands. Now, Canada's interest requires that our immigration policy should develop agriculture.
Is it a question of supplying labour for industry? No. Modem machinery tends to do away more and more with manual labour, yet greatly increasing the output. It is the soil which requires workers. Let our efforts tend in that direction. Let us bear in mind that agriculture is at the basis of the economic life of a country. It is the soil which feeds us. Agricultural nations are, for their existence, independent of men and events, while industrial nations are entirely dependent on both. For instance, look at England, a country seventy-five per cent industrial, with its unemployment crisis. Moreover, prosperity of trade depends upon the purchasing power of farmers. So much said for the economic side of the question.
Turning now to the social and national viewpoint, we still have an interest in drawing to our shores a rural immigration, which is more assimilable and more stable. Those who come to cultivate the land remain on it permanently, it enchains them. The same cannot be said of the workman who roams from one country to another. The foreigner, in the city, is always an unsettled workman. Things are very different with the farmer who builds a home, invests his capital and founds a family. "Farmers", said Bonald, "are rooted to the soil; the others are but placed there."
Since the interests of the country demand a farming immigration; let us seek it where it is to be found. Many would prefer bringing over British subjects. Quite right. But subject to their being of the class of immigrants which we need. I am in no way opposed to British immigration, but let us be logical. When you look for farmers, you do not especially seek them from the most industrialized nation, the one that is the least given to farming. England, far from being able to send over farmers, needs them herself. She has not enough. It is not race that should guide us in such matters, but the personal worth of the immigrants. France, since the war, has become a country for immigrants so as to fill up the voids left and therefore has little to offer in that respect; but we could find excellent farmers in Belgium, Slovakia, an essentially farming country, in Norway whose people have already brought wealth to Minnesota and Dakota. What we need are genuine farmers and not camouflaged ones, and I would suggest that each immigrant entering Canada, should have an identification card, showing his trade, professional or farming occupation, so to keep track of him.
Let our immigration policy be essentially Canadian, founded only on the needs and interests of Canada, and not based on that of other countries. Let us not take the risk of our country becoming the dumping grounds of the globe by opening too wide our doors; let this policy be one of welcome, but at the same time strict, selective of individuals but not of races. To give our country strength and prosperity, we must have industrious, healthy and orderly people, citizens desirous of making Canada their only country, and who, blending with the mass, will help us to make a great, united and free country both internally and externally, composed of various races who, without denying their origin, will give us the advantage of their genius and of their best traditions, so as to form "the Canadian nation" whose English, French,
The Budget-Mr. Raymond
Scotch, Irish and all other names will but be their Christian name, "Canadian" will be their family one.
Mr. Speaker, I now wish to draw the attention of the hon. Minister of Defence (Mr. Ralston,), to the proposed increase in the estimates of his department. That is a subject which does not seem to trouble the members of the opposition. I am not aware that we are threatened with war. Quite the contrary, nations are talking of peace, disarmament and are even signing treaties to that purpose. Our geographical situation is an additional guarantee of our security. Why then increase the expenditures of the (Department of Defence? Economy is advocated. Quite so. Let us first apply it to the expenditures which are not productive. Let us bear in mind that we have numerous needs, and that we must see to those that are most urgent.
We have voted large sums to develop the west, to help the maritime provinces and to accommodate Ontario. The province of Quebec, I think, has been most reasonable in her requests, notwithstanding the useful, if not urgent work, which the development of her territory necessitates. For instance, the construction of a railway in the Gaspe peninsula is strongly urged, it is needed to open up that part of the country which is rich in farming lands, forests, mines, fisheries and water-falls. It would be unfair to put off the carrying out of these works for unnecessary expenditures.
I am not prejudging the question. When the time comes to discuss in detail the estimates, the Minister of Defence will. I trust, furnish us with satisfactory explanations. For the present I am just calling attention.
The hon. member for East Lambton (Mr. Fansher), by a subamendment, has protested against the cutting down of the income tax. Although I am in favour of the income tax, I believe that gradually, as our revenues and finances will permit, there must also be tax reduction on that score.
However, if the Minister of Finance is willing to relieve every one a little from the burden of taxation, it must have been noticed that he was not disposed to acquiesce to every claim.
Some time ago, a delegation headed by Sir Herbert Holt, president of the Montreal Light, Heat and Power Co., came before the Minister of Finance to request an exemption from the federal tax, in favour of this company, which sells electricity, gas and a number of other things. Many, among those who are not in touch with the affairs of the company, must have been favourably impressed to see
Sir Herbert Holt, great financier, director of at least one hundred and thirty five companies, [DOT]-we are informed by the hon. member for Winnipeg North Centre (Mr. Woodsworth)- leaving his business to come and plead, not in his own behalf or that of the company of which he is the principal shareholder, but in favour of the poor consumer of the city of Montreal, who may be a victim of an injustice. He even pledged himself to have the consumer benefit from the exemption of this tax. What a laudable act! In his annual address, at the general meeting of the shareholders of the company, on the first February last, he also requested the federal members to use their influence to have this injustice cease.
The hon. Minister of Finance, after giving the matter due consideration, did not think proper to agree to their request and the day following the budget, Mr. Norris, vice-president of the company, proclaimed1 again that it was an injustice and appealed to all the citizens to protest. Let us examine, with your permission, the grievances invoked, and let us judge if there is an injustice done and if so, by whom was it committed.
The injustice would appear to come from the fact that the Ontario Hydro-Electric Company, which sells electricity in Ontario, pays no income tax. That is a fact, it pays no taxes, for the very good reason that it makes no profit. If the Montreal, Light and Power Company will do likewise and sell its electricity at cost price, it will not pay any tax. That is my first point!
There are in Ontario other private companies, for instance, the Ottawa Electric Co., which sell electricity and pay an income tax. Why should the Montreal Light, Heat and Power Co., not pay its income tax then, and where is the injustice? That is my second point!
The Montreal Light, Heat and Power Co., does not only sell electricity to the citizens of Montreal, but it also sells some to the United States, through the intermediary of the Cedar Rapids Co., of which it holds the capital stock, and it thus realizes profits. Why should it not pay taxes on this revenue? And where is the injustice? That is my third point!
The Montreal Light, Heat and Power Co., does not only sell electricity, but it also sells gas, and if I am not mistaken, it sells to the poor Montreal consumer, four or five times more gas than electricity. The Hydro-Electric does not sell gas. All companies that sell gas in Ontario are privately owned and pay income tax. Why should the Montreal, Light,
The Budget-Mr. Raymond
Heat and Power Co., not pay the income tax then? And where is the injustice? That is my fourth point!
The Montreal Light, Heat and Power Co. does not only sell electricity and gas, but it also carries on other business. It sells coal, stoves, lamps, toasters and other goods. It has even a number of stores in Montreal and elsewhere. All commercial houses in similar business pay income tax. Why should the Montreal Light, Heat and Power Co. not pay also her income tax and where is the injustice? That is my fifth point!
Not only that: Look up its financial statement for 1927, you will find that it has in its assets nearly $15,000,000 in investments, on which it draws revenues. Why should the Montreal Light, Heat and Power Co. not pay income tax on those revenues like all others, and where is the injustice? That is my sixth point!
If we were to exempt the Montreal Light, Heat and Power Co. from the income tax, to be fair, we would have to exempt the private owned companies of Ontario and elsewhere which sell electricity; to exempt all companies which sell gas; to exempt all merchants who sell coal, stoves, lamps and other articles that the Montreal Light, Heat and Power Co. sell -why not then all merchants-to exempt all those whose revenues are the outcome of investments. In other words, we would have to wipe out the income tax.
The president and vice-president mentioned a very high figure, representing the income tax paid by the company, and the impression gathered from this statement, was that the tax was collected on the sole profit realized on the sale of electricity in the city of Montreal, which is not so. Deduct all the profits which it realizes on the sale of electricity to the United States, on the sale of gas, on the business of the various articles which it sells, on its investments for an amount of over $15,000,000, and you will see that the amount of income tax which it really pays, in regard to the electricity which it sells to the Montreal consumer, is not very high.
I do not doubt the sincerity of those who accompanied Sir Herbert Holt when they interviewed the Minister of Finance, to request the exemption from' the income tax, but when we are aware of the manipulation carried on by this company for the last twenty-five years: increased capital, splitting of shares, change in name and juggling with figures, we have a right to question the motives of Sir Herbert Holt and his company and not put it down to philanthrophy.
If the consumer pays too high a price for electricity in the city of Montreal, and in fact he does, it is not on account of the federal
tax paid by the company, but to the exorbitant profits made at the consumer's expense; and when, under the plea that an Ontario company, the Hydro Electric Company, is not taxed, for among others, the good reason that it makes no profits, it asks, for an exemption of taxes on the profits realized, not only on the electricity sold to the citizens of Montreal, but on that sold to the United States, on the sale of gas and other articles in the various branches of commerce, also on its investments, it simply wants to ward off the public's suspicions who rightly claim lower rates for electricity.
Are you aware of what profits were distributed among its shareholders within the last twenty-five years? It is the direct successor of the Royal Electric Co., which was doing business ,in 1901, with a capital of $3,000,000; the latter's stock with the help of a good deal of "water" was diluted to the amount of $63,000,000. Through transactions carried on by Sir Herbert Holt, and share splittings, any person holding in 1901, a hnudred shares in the Royal Electric Co., for which he is supposed to have paid $10,000, now without having disbursed an additional cent, is holder of 2,250 ordinary shares, which on the stock exchange are quoted at $90 per share, and are worth $202,500, without mentioning a bonus of 750 preferred shares distributed in 1926, and which the company repurchased at $50 per share, that is $37,500, beside all the dividends paid to that shareholder since 1901, at a rate varying between 8 per cent and 60 per cent, on his initial investment. The profits of that company are so large, that it is obliged1 to conceal them under the guise of contingent funds: $500,000, insurance funds; $1,000,000, depreciation funds, indefinite amounts; investments and call loans about $15,000,000. Its current assets for 1927, exceed by $6,000,000 that of the year 1926.
If you now look up the financial statements of the company, you will note that each year, the president, Sir Herbert Holt, never forgets to state in his yearly address, "that the practice of the company is to share the profits with its consumers and to sell its products at a minimum rate, and he always hopes that, if business continues good, the consumers will, in the near future, be given lower rates." As you can readily see, the sharing is not with the consumer, but to his detriment. I think that the consumer has a better guarantee of getting his share of the tax paid on the sale of electricity in Montreal by the company, when the money is safely in the hands of the government.
That is how the company deals with the citizens of Montreal in regard to profits. Now. let us examine rates and see how it expresses its sympathy to the Montreal citizens.
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Its sympathy consists in selling to the citizens of Montreal, electricity at the rate of 3J cents per k.w.h.; while it sells it to the citizens of Westmount, at the rate of 2 cents per k.w.h., that is to say 75 per cent dearer to the Montreal people. The Ottawa Electric Co. of Ontario, which pays the income tax, sells its electricity to the consumer at the average rate of cent.
Its sympathy for the Montreal people further consists in offering electricity, for industrial purposes, at the rate of $15 per h.p., to the Ontario Hydro Electric Co., which resells it at $22, while the former sells the same electricity to Montreal people at the rate of $35 per h.p.
Its sympathy also consists in exporting to the United States, through the intermediary of the Cedar Rapids Co., of which it is the sole stockholder, electricity at a lower rate, that is $12 per h.p.
Its sympathy is still further expressed by forcing the consumer to lend it money, which amounts, at present, to $800,000. Are you aware that a Montreal citizen can neither purchase gas nor electricity without first depositing $5 or $10.
That is its sympathy for the poor consumer. This deposit remains there until the discontinuation of the service, that is to say until his death. And what interest is he paid? Three per cent not yearly, but only when the deposit is withdrawn. Instead of borrowing money at the rate of 5 per cent, it forces the consumer to lend it the money at 3 per cent, and if you figure out what $800,000 represents m interest, you may judge what amount it holds without interest at the expense of the poor consumer.
I think you will admit that Sir Herbert Holt and his company, the Montreal Light, Heat and Power, are not entitled to pass as benefactors to the consumer, and you will not be astonished that the Minister of Finance did not seriously consider their request. When the government collect in the way of taxes, a small part of the profits which the company makes, they remedy, in a slight measure, the injustice that the company does every day to the Montreal consumer.
Subtopic: DEBATE ON ANNUAL FINANCIAL STATEMENT OF MINISTER OF FINANCE