Canadian said some time ago that what Canada needed was a fiscal policy, relief frcm burdensome taxation and immigration. I believe that the reduction of $25,000,000 in these troublesome and burdensome taxes will make Canada a more attractive place to live in and will be a great step towards the realization of these three aims.
A good deal has been said since I came into this House as to the desirability of establishing industries. The hon. member for East Algoma (Mr. Nicholson) pointed out that St. Paul and Minneapolis had increased their population, providing a market for the farmers, to a much greater extent than had Regina, Swift Current, Moose Jaw and Prince Albert. Another hon. member argued that we should first build up the cities, and the rural communities would develop later. We tried that in the west, and if you go to any of the Canadian cities mentioned you will find a number of deserted, shut down and neglected factories. Medicine Hat is perhaps better endowed by nature as a manufacturing centre than any of these cities, but a number of industries have started and failed there. It was not a question of protection; it was not because of lack of capital; they failed because there was no market to absorb their product. These industries will be built up and will prosper some time, but not until the general development of the country provides a market for their products. You cannot build a tower without a foundation, and you cannot build an industrial city without a market.
Having in mind conditions as they actually exist, I believe we should trade with other countries in order to get a market for the products of our farms and factories. As a person uses six bushels of wheat a year, it would take about seventy million people to consume our surplus wheat production, and as a person uses sixty pounds of beef a year, it would be necessary to have thirty additional cities the size of Hamilton, Ontario, to consume the cattle exported last year.
It has been asked in this House why Canada should have a low tariff when every other country in the world has a high tariff. I do not believe all the people in the world are in favour of a high tariff. I have here a resolution which was passed unanimously by the Congress of International Chambers of Commerce at Brussels last year. At this congress were represented thirty-five nations, by their leading bankers and commercial magnates. The resolution is as follows:
The chamber has directed attention to interferences with the return of normal trade conditions and employment caused by artificial barriers, obstructive to intercourse between the nations, such as extreme tariffs, unreasonable customs regulations and ,
restriction on transportation. All of these have the effect of increasing the delivered cost of goods and preventing the widest possible distribution and use of the world's products, which are the basis of better living standards and progress. The chamber appeals to the business men of all countries to study these questions, and to exert their influence for the removal, as promptly as possible, of all unnatural and uneconomic restrictions of this kind.
I believe, Mr. Speaker, that agriculture is an industry which must be carried on with a very small margin of profit, and in the past the farmers have had to pay too much for the things they have had to buy. It has been stated in this House that prices may be low even though the tariff is high, but experience teaches us that the opposite is usually the case. There is not sufficient competition to assure us that the prices will be right if the tariff is very high, and although the last speaker referred to the possibility of fixing prices, no one has suggested any practical way by which the prices of the dozens of varieties, of the hundreds of articles used in this country could be fixed. It would therefore seem that the tariff is the best method of keeping prices low and preventing exploitation. A few articles may occasionally be sold at a low price if the tariff is high, but all articles must always be sold at the right price if the tariff is low because outside competition will force them to be sold at that price. Therefore, the first casualty resulting from putting on a high tariff would be the exhausting of the purchasing power of the people of the country and the stifling of the basic industries, and the second casualty would be the destruction of the market which the manufacturer had enjoyed for his goods.1* I have listened with a pretty open mind to the discussion which has taken place in this House, and I have heard it argued repeatedly that we are exporting raw materials and bringing back the finished products. I have looked up the records for 1914, 1922 and 1925, and this is what I find: Take our dealings with the Argentine republic, for instance. We exported manufactured goods as follows to the Argentine republic:
Exports to Argentine Republic
$ 293,900 Rubber goods $1,234,0481,104,156 Agricultural implements 4,125,943470,291 Sewing machines 1,110,315558,389 Automobiles and parts 2,242,906
Our total exports to the Argentine for 1922 amounted to $3,233,423, and for 1925 to $10,322,373, an increase in the three years of about $7,000,000. There were also other manufactured articles such as razors, iron pipe and tubing, nails, copper and structural steel that we exported.
The Budget-Mr. Gershaw
Now let us test it in another way. Take Italy, for example. We export a lot of flour to Italy. In 1925 we exported $514,660 of flour to Italy, or more than our total exports of all commodities to Italy in the year 1914, when hon. gentlemen opposite were shaping the destinies of this country. Our exports of fish, canned and dried, to Italy in 1925, amounted to $1,568,419, or three times the amount of our total exports of all commodities to Italy in 1914. Now I submit that if we found a market in Italy for fish to that extent, our fishermen were that much better off, because their purchasing power was increased, and as far as the manufacturer was concerned, it was better for him that we shipped this fish to Italy because thus the Canadian market for manufactured goods was enlarged, and the manufacturer found a larger market for the sale of his products.
We might follow this record of our increased trade through the entire list of countries with which we do business, and we will find exactly the same condition existing. Everywhere we are extending our markets for manufactured goods. The increase in the export of a few manufactured goods between the years 1922 and 1925 is shown as follows:
Manufactured Goods Exported
$4.061.S09 Rubber goods $11,458,4585.345,308 Agricultural implements 11,342,712
If you take sewing machines, vehicles, including automobiles, razors, pig iron, and machinery other than agricultural implements- in all these cases you will find that our export of manufactured goods is rapidly and progressively increasing. This is good business for us because it helps to increase the purchasing power of the people of this country, just as the lowering of the tariff, which makes prices lower, helps to increase the purchasing power of the people.
During the election campaign last October our Conservative friends said that the Liberal policy was all wrong. They said that we
were sending our raw products to the United States to be manufactured, and importing manufactured goods from that country. Since I have come to Ottawa I have taken the trouble to look up the United States Statistical Abstract and I find that the United States are shipping out a great deal of stuff in the raw or unmanufactured state, as follows: 1922 1925
Raw materials.... $1,445,000,000 $1,876,000,000
Partly imanufactured.. .. 1,035,000,000 1,223,000,000Manufactured
You will note from these figures that the United States is sending out quite a bit of stuff in the form of raw material. You will
note also that she made a marked increase in the export of raw materials in 1925. Why do they do this? Every country in the world exports raw material, and they do it because it pays them to do it. Britain exports coal, and buys cotton; Canada exports wheat, and buys crude oil; the United States exports cotton, and buys wood and oil. Nations, protected or otherwise, no matter what their
tariffs are, must trade with one another. Let us see what Canada is doing in this regard. The following table shows our exports to the United States for the years 1922 and 1925, in round figures:
Raw materials $108,000,000 $140,000,000Partly manufactured .. .. 72,000,000 115,000,000Manufactured
You will notice that in the three years our exports to the United States increased by $125,000,000, and of this $32,000,000 was accounted for by raw materials, and $93,000,000 by the increase made in the export of manufactured, or partly manufactured, goods.
Some hon. gentleman opposite have said that they can see very few signs of prosperity in Canada. One hon. gentleman a short time ago mentioned the fact that prices of Canadian stocks and securities had risen very greatly since 1921, and some hon. gentleman opposite pointed out that that did not necessarily mean prosperity, that it might mean capital was very timid and that people wished to invest in these seasoned securities. I think there is very little to justify that view. In the Financial Times of May 7, 1926, I find this:
The gross earnings of 65 Canadian companies reveal an increase of $25,000,000 over those for 1924.
From a shareholder's point of view, the extent of the improvement is more exactly reflected by the improvement in average earnings on the common stocks of the companies under review. A gain of over 21 per cent on the average outstanding common capitalization is shown with earnings equivalent to an average of 11.5 per cent as compared with earnings equivalent to 8.9 per cent during the year 1924.
Surely if the stock of these companies is advancing so rapidly in price, and if they are able to show earnings of 11.5 per cent in 1925 as compared with 8.9 per cent in 1924, these large industrial concerns are doing fairly well and do not need the help which hon. gentlemen opposite would have us believe.
I believe that the budget will meet with the approval of the Canadian people because it is helping those who have the best right to that help, and I believe that it will not interfere with the prosperity of the large industrial concerns. I think that the policy behind this budget is one which is bringing about a fair share of prosperity, is bringing about national well-being, and above all, what
The Budget- Sir Henry Drayton
we all most earnestly desire, national unity. I believe it would 'be fatal for the people of Canada to execute a right-about face in the tariff policy at the present time and embark upon a policy which is more likely to act as a wedge and separate the various parts of this Dominion.
Subtopic: THE BUDGET