Mr. W. A. HALL (South Bruce):
Mr. Speaker, at the outsed, I wish to congratulate the Minister of Finance (Mr. Robb) on the sound condition of the finances of this country as shown by the budget, as well as upon his courage and good sense in taking advantage of the circumstances that made this condition possible, notwithstanding the fact that the hon. member for South Wellington (Mr. Guthrie1) accused him of lacking courage. The same hon. member accused him of deceiving the country by his method of dealing with the amounts guaranteed by the govern-
The Budget-Mr. Hall
ment to the Canadian National Railways, which makes it appear that the debt of the country has -been reduced when it has actually been increased by over twenty million dollars. He further said that all finance ministers prior to the present minister had added these guaranteed amounts to the national debt, instead of charging them to the particular railway company. But the Ontario government, he said, had five or six years ago evolved a plan to pay off the provincial debt in about thirty years, and so far had found no inconvenience in carrying it out.
Now, Mr. Speaker, I may say that none of these statements is in accordance with the facts. What are the facts? First, I need only say that this house as well as the -country knows that the Minister of Finance not only has courage, but he also possesses honesty and modesty in a marked degree, characteristics possessed by few so-called politicians. His financial statement disproves the second accusation as to the increase of the national debt. If the hon. member for South Wellington will look up the records he will find that the 8124,000,000 guaranteed by the Laurier government from 1896 to 1911 was not charged to the national debt; he will also find that the $170,000,000 guaranteed by the governments between 1911 and 1921 similarly was not added to the public debt. As to the Ontario government's scheme for retiring the provincial debt, the hon. member is wrong in saying that it was evolved five or six years ago. The Ferguson government was not then in power. He is also in error in stating that the scheme is to extend over thirty years; forty years is the term. As to his statement that the Ferguson government -have found no difficulty in putting the scheme into practice, I may tell him and this house that the provincial treasurer has had to acknowledge a deficit every year since Premier Ferguson assumed office. The first year it was fifteen million dollars, the second year eight million dollars, and the third year five million dollars. This year for the first time the provincial treasurer finds himself able to balance his budget and announce a surplus, due principally to the profits from the government liquor stores. Presumably from now on the debt retirement scheme will be put in operation.
Turning to the budget, Mr. Speaker, this presents reductions and increases-reductions in taxation and the national debt; increase in trade and revenue, with a substantial surplus. The Minister of Finance is able to announce reductions in direct taxation as well as in indirect taxation, the sales tax, income tax and corporation tax being reduced. The reductions in indirect taxation, that is the customs 56103-48
tariff, are largely in the duties on textiles- cottons, woollens and linens. As these belong to the necessaries of life, the reduced tariff will lower the cost of living, and thus lessen the burdens of the working classes. The national debt has been reduced by $41,896,729, leaving it at the net figure of $2,306,000,000. During the five years the Liberal party has been in power the national debt has been reduced to the extent of $144,700,000.
The trade of Canada has been increasing by leaps and bounds. Canada ranks second among the exporting countries of the world, and fourth among the world traders. Our total trade, both exports and imports, for the nine months ending December 31 last, amounted to $1,793,209,092, leaving a favourable balance of trade of $147,100,904, as compared with an unfavourable balance of trade of $29,000,000 during the last year of the Meighen administration. But the most unfavourable balance of trade in the history of Canada was $222,000,000, or $29.61 per capita, in 1913 under Tory rule and a protective tariff which did not protect; while in 1926 Canada had a favourable balance of trade of $29.34 per capita under Liberal rule with a tariff for revenue only. During the year there has been a large increase in the revenue and a corresponding increase in the surplus. The revenue exceeded the expenditure by $54,815,000. After deducting the nonactive assets, there is still left a net surplus of $41,896,729 which was applied to reduce the national debt.
According to the press of both political parties, Mr. Speaker, the fifth Robb budget is being well received by the major portion of the people. But it must be confessed that this budget, in relation to the customs tariff, is not comprehensive and far-reaching enough to satisfy a minority of the agricultural class of this country. They must remember, however, that this is the beginning of reductions, not the end; among the first, not the last. Reductions shall continue until the primary or basic manufacturing industries are free to compete with the world, having no tax, no tariff, or no protection. In bygone days agriculturists were looked upon as inferior to other classes. They were dominated by other interests because they knew not their needs, they knew not their strength, and they were not organized. To-day all that is changed. Agriculture is conceded by almost everyone to be the basis of Canadian prosperity. The agriculturists have organized. They have expressed their needs in clear-cut terms. They have made their demands with no uncertain sound. They are cooperating in buying as well as in selling, thinking that cooperation
The Budget-Mr. Hall
is the keynote of agricultural prosperity, as it was thought to be in Denmark, whose people now boast that they enjoy a fair share in the distribution of wealth and prosperity of that country. But, Sir, I say that unless agriculture can be put on a paying basis the rural population cannot be satisfied, happy and contented.
Let me mention some of the reasons why agriculture does not pay:
1. Lack of science in tilling the soil, and in breeding, feeding and caring for live stock. Education along these lines is fast becoming more general.
2. Lack of discretion, or, shall I say, lack of sense, in decrying or condemning-or damning-their own occupation by branding it as drudgery or slavery, and by everlasting complaints. Doubtless this has driven, and is still driving, the young people from the farms to the urban centres more than any other cause-the net result being the concentration of industry and population in these centres at the expense of the rural districts.
3. Lack of labour. This is a natural consequence of the preceding cause.
4. Lack of working capital. This may be the natural outcome of preceding causes.
5. Lack of credit. This comes from a lack of capital. This has been partially overcome by the rural credit bill of last session.
6. Lack of business methods in doing business. Doubtless many farmers are like medical doctors who think that they are too busy to attend to business properly outside of their daily routine of work.
7. Lack of moderately-priced implements or manufactured articles. This arises from taaxtion, which I shall refer to later.
8. Lack of cheap transportation and distribution of products. This is partially overcome by cooperation.
9. Being reckless and profligate in buying luxuries. This is the last but not the least, cause for farming not paying. Luxuries may be coveted and may be desirable, but they reduce the profits of the farmer enormously.
As agriculture is the recognized source of greatest wealth, we have to depend chiefly upon it to meet our national liabilities, assisted by the products of forest, mines and fisheries. These are the main sources of real wealth we have to rely upon to restore our country to a healthy and sound financial condition. Of these, agriculture is the greatest; it produces annually more than the other three combined. The Financial Post gives the production of agriculture for the year 1927 as $1,660,387,100 and the production of the other three as $811,446,000, or less than half that of agriculture. Hence the important part
the farmer plays in the economic welfare of the country. From his soil is furnished the food which is the foundation of labour for all classes. 'Without him the other classes could not exist. As consequently the prosperity of all classes depends upon the prosperity of the farmer, we should, as far as possible, remove every obstacle in his way so as to enable him to secure for himself a fair share of material wealth and happiness. I need not say that the chief obstacle which prevents the farmer from making a fair profit from his investment is the high cost of living, and this is due to the customs tariff, principally on the necessaries of life and on the implements of production.
But it will be asked, what about the manufacturer? He says he must have protection or must close his factory and so throw a lot of men out of their jobs; if this should happen just imagine the multitudes of unemployed! Well, recall the story of the closing of General Motors at Oshawa two years ago when the duty was lowered on automobiles and their accessories. We all know what the result was. Others say that the country must have revenue to meet its liabilities and pay off its immense debt. Let us apply this to the farmer. If you tax- his implements of production-his binder, mower, horse-rake, plough, harrow, threshing machine, wagon and so forth, you take away from him the money that he has earned by the toil of his hands and the sweat of his brow and transfer it to the bank account of the manufacturer who has already millions which have been taken from his fellow farmers by means of the tariff. Thus you see that this money does not go into the revenue of the country and so does not contribute one penny towards meeting the liabilities and debt of the country. Manifestly this answers the Tory cry for revenue raised in this way.
The farmers of this country have always been anxious for reciprocity with the United States in natural products since the termination of the first reciprocity treaty in 1866, as they have a large export surplus of agricultural products and so must find a market for them. Take wheat for instance: only about one-sixth of the production is required for home consumption, notwithstanding the assertion of the Right Hon. Arthur Meighen during the election campaign of 1925. He went all over Canada telling the people that $500 was lost to the home market in respect of farm products for each person that crossed the border. That being the case. 9-} millions of people would consume 9i millions times $500 or 4| billions of dollars of farm products each year. But Canada produced less than
1J billions of dollars of farm products last year; therefore, we must import over twice as much as we produce to feed our population-some exaggeration! But the truth is that we need only a small fraction of many of our farm products for home consumption.
This led the Laurier government in 1911 to make a reciprocity pact with the United States which would have been an immense benefit to the farmers of Canada. If the then government had put it into effect so as to show the benefit of it, instead of taking a referendum of the people, it would have meant millions of dollars each year to the farmers; and in the end it would have been a great boom to the manufacturer, as every additional dollar got by the farmer from the Americans meant an additional dollar of purchasing power from the business concerns of the Dominion. However, the government said that the people should be consulted. What happened? The manufacturers, organized to defeat the reciprocity agreement. It is said that they, with the rest of the Tory party, raised an immense campaign fund. It is said this was the only time in history that there was any money left after a political campaign in Canada, although it is said large sums were paid to the press, vast sums paid the constituencies, and every means used to create a public opinion hostile to that policy. However, all this would have been of no avail, but for a so-called political strategist, said to be Hon. Bob Rogers, who coined the slogan, "No truck or trade with the Yankees." This, coupled with the waving of the old flag, defeated reciprocity and won the election for the Tories, to the everlasting disgrace of the Canadian people.
In passing, I may say that the manufacturers although not injured by this pact but rather helped, were desirous of perpetuating the system of protection so that the money, equivalent to the duty, would continue to flow into their bank accounts as automatically as the rivers flow into the ocean. Since then, seventeen years have passed, and Canada has not been able to secure reciprocity in natural products with the United States, although the Borden government, shortly after it took office, sent a delegation to Washington to try to revive the reciprocity agreement in whole or in part. But they failed in their mission as the Americans could not trust them. This pact they had strenuously opposed a few months before. Their opposition was to win the election, and not for the good of the country.
Topic: THE BUDGET
Subtopic: DEBATE ON ANNUAL FINANCIAL STATEMENT OF MINISTER OF FINANCE