In view of the hon. gentleman's remarks, I think perhaps it might be just as well for me to cite some facts regarding my own home town, Sherbrooke, the queen city of the eastern townships, one of the most beautiful and prosperous cities in Canada, ideally located, even if it is small. I want to call the attention of the house to the fact that during the calendar year, 1927, the figures of exports to the United States alone, apart from supplies to our home market in that little section of the country known as the eastern townships of Quebec, amounted to $19,251,000. This quantity of products, through the only consular district, Sherbrooke, was sold and shipped to the country to the south of us. This mirrors the prosperity of our people. Last night I received a local newspaper in which I find that the surplus of Sherbrooke for the past year amounts to nearly $2,000,000, while the operating surplus in the electrical department, which is run under municipal ownership, is $245,000. Furthermore, the municipal tax rate in the city of Sherbrooke for the next twelve months has been reduced from 12^ to 10i mills on the dollar. All I can say to the hon. member for Fort William is this: If next summer the hon. gentleman finds things in Canada so bad I shall be glad to have him come down through our section of the country where I promise that we will demonstrate to him that Canada is still prosperous. That the people throughout the country are patriotic has been fully shown by the wonderful celebrations which took place on July 1 last. In my own town we had on that day a celebration which was second to none in Canada.
Our farmers are coming back to their own, and I say this advisedly. I want to congratulate the Minister of Agriculture (Mr. Motherwell) on his decision to extend during the next two years the restricted area as far east as St. Francis river. We in that part of the country are affecting the markets of the United States by our exports to such an extent that I find, in another item in the newspaper, the statement that in Washington the other day a delegation of farmers insisted that the United States government should raise their tariff in order to keep out our products which are being shipped from this section of Canada. As regards unemployment, I can only say that it is practically non-existent in my town. Every member of parliament knows, from his position, how quickly men call upon him when they are out of employment; so when I say that during the last six months only two persons have interviewed me looking for jobs, the house will realize that unemployment is insignificant in Sherbrooke-that in fact it does not exist.
Now I want to say a few words regarding the tariff. And first of all I want to congratulate the tariff board on the splendid work it has done in the investigation of cases brought before it. I make this statement after careful consideration, and not as a member of parliament. On several occasions the manufacturers of my town asked me to come to Ottawa with them and sit in at the hearings of the board. I did so and was surprised to see the manufacturers putting up their case on one side and the Consumers' League, on ' the other side, advancing its arguments in the interest of the taxpayer. The result is that there has been worked out a scheme which is reflected in the budget and with which we are satisfied in the city of Sherbrooke, even if two of our industries had their raw material slightly increased and one of the others, in the woollen line, had yarns put on the free list. I trust however the time will come when the tariff will be taken out of politics entirely. When I look at the tariff I cannot see why we should disagree with the western members of the Liberal party or even with some of the broad-minded members in the far corner. In the city of Sherbrooke we have two silk industries manufacturing silk stockings and garments which have a protection of 25 per cent against other countries shipping similar materials into Canada. Yet the prices of their products as sold to the consumers of Canada are exactly the same as the prices for which the American manufacturer sells to the United States consumer, so our manufacturers do not take advantage of that tariff of 25 per cent. That is what I call playing the game fairly.
I would also call attention to another industry which is carried on in the city of Sherbrooke; I refer to the manufacture of tire fabrics. This industry sells practically all its output to one concern in Toronto, to which the hon. member for North Simcoe (Mr. Boys) referred the other day. He congratulated the rubber people on their extraordinary showing, and demonstrated that the small tire used on the Ford car was actually selling for less in Canada than in the United States. But I may tell the house, Mr. Speaker, that that is made possible only because an industry in Sherbrooke, employing
The Budget-Mr. Howard
one thousand hands, is shipping its raw fabrics to Toronto, and in spite of a 25 per cent tariff protection the average price last year on its total output was only 6 per cent over the price in the United States. That is the policy of this party, in contrast to the policy outlined in two extraordinary speeches coming from the opposite side of the house to which 1 listened.
In this section of the country we use a great deal of coal; our labouring classes and our poor people all use coal, and I am foing to take home a good many copies of the speeches of hon. gentlemen opposite in which they advocate a duty of $1.50 on. coal coming from the United States. I want to tell the people in my constituency that the Conservative party want the people to pay $1.50 a ton more than they paid this year for their supply of coal next winter. As a matter of fact, while I am deeply interested in the. working classes and the poorer people, who need the government most, I am also frank enough to say that the people in the constituency of Sherbrooke do not expect the government to feed them every morning; they are willing to work for what they get.
Now I come to the reduction in the income tax. I do not know that my ideas in this regard will coincide with the ideas of other hon. members of the house, but first I want to congratulate the Minister of Finance for the reduction he has made this year. At the same time, I want to give my opinion of what I think should be done eventually in this regard. I believe the reduction should be oomtinued until the rate is about one-half the present rate, which I believe is too high. I should also like to see the tax on corporations reduced to 5 per cent, which is quite reasonable. Then I should like to see the exemption raised by $2,000 next year, $2,000 the year following and $2,000 the year following that, until no person in Canada with an income of less than $9,000 will be called upon to pay income tax.
In this connection there is another point which I should like to bring to the attention of the house. A number of people were fortunate enough to buy tax exempt victory bonds, but I am sure if you look around this house, you will find no one, with the exception of my deskmate and the leader of the opposition, who owns any of those bonds. However, in 1931 bonds will come due to the value of $52,000,000 from which the treasury' of this country has not received a cent in taxes in the past ten yeans; in 1933 tax exempt bonds totalling $446,000,000 will come due, while in 1937 we shall have to
redeem bonds of this class to the value of $326,000,000. making a total of $824,000,000 irom which the treasury of this country has not received a cent in the past ten years.
The one thing to-day which saves Canada from bolshevism, communism and socialism, is the fact that we have never adopted the principle that everyone should pay alike; that principle is not followed by any profession in Canada. Consider the medical profession; if the leader of the opposition were taken to the hospital and operated on for appendicitis I am sure his bill would be $1,500, and rightly so. If another member of this house should undergo an operation for appendicitis he might be charged $250 by the same doctor. But if Jimmy Jones, in my town, were taken ill and rushed to the hospital and operated on, if there were any charge at all I will bet the same doctor -would not charge him over $35. So I say I am glad that in Canada we have recognized the principle that those who have the most should pay the most, and therefore I am not in favour of the further reduction in the income tax. As one hon. member in the far corner said, we could relieve one hundred thousand of the income tax payers, by raising the exemption, and anyone whose income is over $9,000 deserves to pay something into the coffers of this country.
Then there is the question of prosperity in Canada. In the Financial Times of this week, which represents public opinion in the financial centres of Montreal, I find this statement with regard to Canadian stocks:
Net gain in capital value of $743,302,691.
That means there was an increase of almost a billion dollars in the value of Canadian stocks last year. I am pleased with that state of affairs, because it denotes the general prosperity of Canada, but I have just a word or two of warning to add. I have every respect for the Department of Finance, and the value of that department was demonstrated last year when a certain trust company tried to put something over on the people of this country and were not allowed to do so, because1 the Department of Finance said, "No, you cannot go ahead doing business unless you put more capital into your concern." I say this advisedly, that we do not want to load Canada with the burden of over-capitalization, because when stocks are split, when values are increased and water is put into the stocks there are only two possible results in a general way; either the cost of their product to the consumer is increased or the wages of the employees are lessened, and I do not want to see either of these things happen. So I hope that this government will be able in
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the neaT future to place on the statutes of Canada a law which will provide that any corporation increasing its capital must first secure the consent of the Minister of Finance.
Now, Mr. Speaker, I will ask you to call it six o'clock.
At six o'clock the house took recess.
The house resumed at eight o'clock.
Subtopic: DEBATE ON ANNUAL FINANCIAL STATEMENT OF MINISTER OF FINANCE