Mr. G. A. BRETHEN (East Peterborough):
Mr. Speaker, yesterday I referred to' the lack of team work'and' the need of better understanding among the many elements in Canada. When the House rose I was dealing with the argument advanced by some hon. members thus: The United States has high protective duties, the United States is prosperous, therefore high protective duties bring prosperity. In this connection I referred to the situation during the past winter in the highly industrialized city of Detroit, where the Ford motor plant was running but three days a week, and thousands of unemployed were almost on the bread line.
Referring to conditions in the United States and Canada I drew the conclusion from personal interviews with residents of the United States that the happy conditions there that we so often hear about were due not so much to a highly protective tariff as to certain other factor's, namely: the tremendous financial
advantage gained by the United States by her late entry into the World War; the commendable reduction of some five million dollars in taxation; the immense building boom suspended during the war period and running up to some five or six billions of dollars; also to their system of financing, the very reverse of that practised in Canada, whereby credit instead of cash sales is encouraged. Fully ninety per cent, I believe, of the sales in real estate as well as business contracts, indeed almost-every commercial transaction is performed on the basis of a small cash payment down- ten, fifteen or twenty per cent-and the balance on paper. Further, there is the fact that apparently everybody in the big cities, doctors, lawyers, workers in the factories, and even nurses in the hospitals, subscribed to this financial practice.
The nature of practically every commercial transaction in the big industrial cities in the United States is well illustrated by this familiar example. A purchaser in the city of Detroit can go into the shop of a Ford dealer, -pay $12.50 down and promise to pay $5 a week, and drive out a fully equipped Ford car. Such a system in the final analysis is costly, wasteful, and vicious to the country at large. As the inevitable result we find the big industrial cities of the United States in the very midst of an inflated condition, with the rural districts experiencing a corresponding depression, due to the inflated values of everything -the farmer has to buy and to world market prices for everything he has to sell. In other 167i
words, the big industrial districts of the United States, which have attracted so many of the best of our young manhood during the past few years, are experiencing a situation very similar to that experienced in western Canada some years ago-unbounded optimism, easy credit, inflated land values, immigration pouring into the coun.ry, and men and women in every walk of life leaving the beaten paths of stable industry in an effort to get rich quick and at any cost-all the earmarks of seeming prosperity.
I will not attempt to refresh the minds of hon. gentlemen of this House with what ultimately followed such a financial practice, the results are too vividly in the minds of our people to be easily forgotten. Is such a system of finance sound? Is this the system ihat we are asked to strive to emulate? Given the same or similar premises, similar results are certain to follow, and with mathematical precision. If the industrial centres of the United States do not soon take stock, cease their fictitious trading with one another, and build on the more permanent basis of the stable prosperity of the country as a whole, then should any serious deflation occur, and it has occurred in the United States, the same unfortunate results, as we experienced in western Canada some years ago will follow. A house divided against itself cannot stand. Great Britain, the United States of America, the Dominion of Canada, France or any other country cannot go forward to permanent prosperity unless as a united people-united we stand, divided we fall. Developing this thought further, the Farmer's Advocate editorially says:
A movement is on foot in the United States to oring about a better understanding between industry nnd agriculture and conferences with this end in view ore held from time to time. The organizers look at it in this light: "Better results mean better times for manufacturers; better markets for farmers, better times for farmers; better markets for manufactured goods, better employment for labour." It is realized on every hand that the first step in the right direction is a "better understanding."
And that applies as well to Canada as it does to the United States. It goes on:
There is too much meaningless criticism offered in place of constructive suggestion, while both industry and agriculture are often the victims of demagogic attacks that are sometimes not even correct in theory. Considering the lack of understanding between classes and industries, between rural and urban people, and between labour and employer, it is remarkable that so much progress has actually been made.
Is it not t;me that the various organizations representing agriculture, manufacturing, finance and labour held fewer meetings by themselves and took a little time off to get acquainted with the other fellow's viewpoint ar.d the other fellow's conditions?
The Budget-Mr. Brethcn
As showing the need of a better working understanding among this great family, the Canadian people, I am reminded of the story of a young man whose trousers were too long. He went to mother and requested her to shorten them, but mother was too busy. He went to sister. Sister was too busy. Thrown upon his own resources, he decided to do the job himself. He took a generous slice off each leg, and hung the pants away for Sunday. Later mother regretted that she had not acceded to his request, and she also took a slice off the already diminished trousers. Sister's conscience bothered her and she repeated the operation, and when the young man on Sunday glanced ruefully at the abbreviated pants he remarked, "What this family needs is less operation, and more cooperation."
The politicians of France and the United States are putting everything they have in the way of indications of prosperity in the front shop window. Great Britain is plugging away in the background, but still going down to the sea in ships. Canada is divided. Some of us are working earnestly to bring about permanent prosperity on the basis of "equal opportunities to all and special privileges to none," while others are just busying themselves flashing 4.4 beer in the window or sulking in the cellar of pessimism. Is it any wonder that our Canadian boys turn from this drab picture of steady Canadian progress to the flashy picture of American boom and bustle and seeming prosperity?
But why should we be downhearted? The pound sterling is crowding the top perch with the American eagle. The Canadian dollar is at par, and John Bull and Jack Canuck, with the earnest patriotic support of every Canadian citizen, will some how paddle through.
How can we help to bring about happier conditions in Canada? By taking a few leaves from the book of our friends to the south. Put some of Canada's real assets to the fore. In this connection I should like to pay a compliment to the hon. member for Muskoka (Mr. Hammell) who refusing the other night, to be led aside into mere partisan debate, proceeded to put before this House and the world the revenue producing possibilities of the tourist traffic of Canada. We are all acquainted with the importance of the Swiss watch industry-everybody has heard of the Swiss watch-a great industry. But when compared to the tourist traffic of Switzerland the relation is $15,000,000 for the watch industry to $300,000,000 for the tourist.
traffic. Of course the Swiss people are a sane, frugal, efficient people. A story is told by a traveller of Swiss efficiency. When up among the mountains in that country one day, he came to a herdsman's cottage. Through the open door be saw the mother in the home with a book from which she was singing, in one hand, the other hand working a chum, and her foot rocking the cradie; and as the traveller looked into that window he soliloquized "What an illustration of efficiency; mind, eye, voice, hands and feet all working." But to his amazement when the woman in reply to his summons left her chair he saw she also had been pressing a Swiss cheese. I repeat, let us put the assets, the real assets, of Canada to the fore; put them in the front shop window. Let us tell our wealthy American friends, who annually spend hundreds of millions of dollars in sightseeing the world about this wonderful country at their very doors; about our sparkling lakes and rivers filled with the gamest, sportiest fish in all the world; its ease of access by railroad, by motor, and launch through scenery unsurpassed; about her snow-capped mountains, crystal streams, and hidden lakes which I have heard world travelled Americans describe as unsurpassed even by the Alps themselves. Here is a source of revenue whose fringe has scarcely been touched. I will support a largely increased expenditure for development here. Let us tell the world about our fertile fields, an empire in extent; our No. 1 northern that commands a premium on any market; about the wealth of our forests, our fisheries and minerals. Let us tell them about our wonderful water powers developed and undeveloped, and how they operate the wheels of industry; about our sturdy, reliable Canadian workers; our stable system of financing and sound economic practices in commercial transactions. We have been knocking Canada before the world long enough: let us boost some.
Let us take another leaf from the book of our American neighbour: Reduction of federal taxation. By a system of economies in small things as well as by eliminating expensive duplications in the service the United States has been able to reduce her federal tax from $54 to $27 annually. Since the war the United States has reduced her debt by over five billions.
How has this been accomplished? By old fashioned thrift, actually saving the pennies rather than talking about saving the millions: by co-ordination in the public service. To illustrate what can be accomplished here I should like to refer to the situation when President Coolidge became governor of the
The Budget-Mr. Brethen
state of Massachusetts. When he entered that office he found departments which aggregated 118 in number. He was successful in getting a bill through the legislature which allowed a reduction to not more than 20, and was given three years to do it in. The number was reduced to 18, and the thing seemingly impossible was actually accomplished in less than one year. Friends and enemies alike, said, "This is the death knell of your political future. These disgruntled partisans that have been turned out of office will spell your defeat." He came into office as governor of Massachusetts with the majority of 17,000, and was returned with a majority of 125,000, proving that the great mass of the people will support any government that has the moral courage to attack and correct this duplication and wasteful expenditure in the public service. Reduction of taxation by avoiding every unnecessary expenditure. How this may be brought about is well illustrated by the inaugural ceremony that has recently taken place at Washington. Formerly the outlay upon such occasions amounted to about
8100,000. This year it cost but 85,000. This saving may not have pleased the elite at Washington, but looked good to the people who pay the taxes. President Coolidge has this to say:
I am interested in this policy of economy not because I want to save money but because I want to save people.
Another saving was effected through the creation of the bureau of the budget, This was referred to yesterday by the hon. member for West Lambton (Mr. LeSueur) in detail, and I take this opportunity of again congratulating that hon. gentleman upon his contribution to the debate. General Lord, who succeeded General Dawes as the director of the budget at Washington, has this to say: "Little or no saving was achieved in the public service prior to the budget." Since its inception the government has been enabled to reduce taxation some two billion dollars annually according to President Coolidge's statement in Washington, on January 26.
Reduction in taxation, federal, provincial and municipal, can only be accomplished when the government receives the whole-hearted support of the individual elector. The people can no longer reasonably expect to continue to receive lavish expenditures for public services from the government, and at the same time enjoy any drastic reduction in taxation. It can't be done I I know of no surer way of bringing this home to the people than by the practice of refusing every request for the expenditure of public money that cannot be
ear-marked "solely in the public interest." "Resolve every dloubt in favor of the taxpayer." New post offices such as the one referred to by the hon. member for Yale (Mr. Stirling) at Penticton, or the building of a wharf similar to the one at Belle River, whose existence was dependent solely on the return of a government supporter, would not be considered legitimate under this policy.
I have no personal grievance with anyone in the civ-1 service, and any words I have to say concerning that service will be directed against the policy and not against the individuals. I would suggest, in order to reduce taxation, a vigorous cutting-down of the civil service. This would not be a popular movement right here in Ottawaj but the government that had the moral backbone to effect such an economy would have the lasting gratitude of the people of Canada. The most effective way to accomplish such a reduction would be to remove the " haven of rest " idea with which the service is enveloped and place the service on a business basis. Lengthen the hours in the inside service from an average of less than six hours a day to a commercial eight-hour day. I believe by this means a real saving of possibly 810,000,060 annually can be made. The departments would not suffer any in efficiency, and such economy in the public service would be appreciated by the over-burdened tax-payer who works eight, ten, twelve or fourteen hours a day. If such action interferes with any section ci the Civil Service Act I would scrap or amend that section. The Civil Service Act was made for man and not man for the act.
Another suggestion would be the co-ordination of the departments. Will any hon. member offer any serious objection to the uniting, say, of the office of Solicitor General with that of the Minister of Justice? In a little by-play ui the debate the other day we learned that one of the best arguments for retaining the office of Solicitor General was that the now right hon. leader of the opposition (Mr. Meighen) at one time filled the office very ably. After the practical demonstration given by the sixty-seven-year-young Minister of Railways (Mr. Graham) in administering three departments, and acting as prime minister simultaneously, why should we be nervous if a 814,000 per year minister were entrusted with the combined offices of say Secretary of State and National Defence or Trade and Commerce? Great savings were accomplished in the United States along these
The Budget-Mr. Bret hen
lines. The people of Canada will appreciate a saving here.
I have never been very critical of the Senate, believing that with some minor reforms the upper house could well serve a very useful purpose. After a larger acquaintance with the working of parliament, with all due respect to the hon. gentlemen of that august body I am frank to admit, however, I am a convert to the idea of abolition. At present the good services that might be performed by the Senate in initiating good legislation and checking ill-advised legislation are largely offset by the practice of the elected representatives of the people in the House of Commons using the upper house as a smoke screen behind which they may hide in dealing with questions that may be of peculiarly lively interest to certain sections of our people. I believe every hon. gentleman now adorning the Red Chamber whose ability and physical condition would permit could serve his country better as an elected representative of the people in the House of Commons, and I have no doubt he would be welcomed as such. The British North America Act is evidently not perfect and an amendment to permit of such action would I believe meet the hearty approval of the people of Canada.
I doubt if much saving can be accomplished under the present practice of administering the departments of the government. The system savours too much of the cost-plus species of remuneration, with the inevitable result, gradually growing departments with higher administration costs. To me the only feasible method of reducing the ever-growing cost of departmental government is by way of a reduced allotment for each department by a body independent of government heads of the departments. I have no doubt that under such a system the head of each department would accommodate his work to the reduced expenditure, without any serious loss in efficiency, the same as the farmer and others have had to do under falling revenue.
Now I come to the consideration of this House itselfeconomy like charity should begin at home. I am heartily in favour of -he suggestion of many hon. gentlemen that i;he membership in this House should be materially reduced. This would seem an opportune time to give this matter serious consideration, in view of the expressed intention of considering at a near conference amendments to the British North America Act that would enable such changes to be made. Another change that is quite within the powers of
parliament and which I seriously recommend to members of this House is a reasonable reduction of the indemnity. While many good arguments can be advanced against such action, the truth remains that no drastic economies can be effected without the members of this House demonstrating their willingness to give a lead. Some say that with any reduction there would be no inducement for good men to enter public life. Answering this I should like to say "the lure of .the dollar can never attract; (the best men in Canada like the call of service." and I am sure no hon. member would suffer any permanent inconvenience when the good effects of such action are measured. The indemnity is not a salary but is supposed to be given to secure hon. members against financial loss. I recognize that members coming from the extremes of Canada, on account of their inability to give personal supervision to their business, suffer a greater financial loss than the member within a stone's throw of Ottawa, and therefore I would favour as fair and reasonable the payment of indemnity under a graduated scale or a zone system. Coming from Ontario I can suggest such a change with more freedom than could an hon. member from those parts of Canada who would be favourably affected by such an arrangement.
I do not purpose referring to our uncontrollable expenditures such as interest on national debt, pensions, and so on, further than to say that while some hon. members of the late government might be seriously criticized for their lack of vision in failing to reduce the capital expenditure during the period of good times following the war, the fact remains that these debts are with us, we must bend every energy to prevent them expanding and devise some means for their substantial reduction.
I have suggested some practical economies in the public expenditure that can and will be appreciated by every taxpayer in Canada. I would now like to refer for a few minutes to methods that might be employed to raise the necessary revenue with the least hardship to the people at large. What then should be our sources of taxation?
First: Death duties carefully and stiffly
graded. This is the fairest of all taxes. When a man has had a life use of the money which the country has helped him to make, the country has a right to a share of it at his death. Of course, the interests of the widows and orphans must be safeguarded to a reasonable extent.
The Budget-Mr. Meightn
Second: A graded income tax, beginning
well down and after a certain sum-say $10,000 a year-is reached, rising very sharply on large incomes. This is getting the money from where it exists. But I would make a distinction favourable to incomes reinvested in industrial enterprises over the latent or dormant income. Such a tax on a man's income is easily collectible and it is preferable to the tariff which is a tax on the poor man's needs.
Third: A sales tax which might be largely excuse in its character, bearing most heavily on luxuries and on such Canadian manufactories as enjoy the highest protection. Automobiles, for instance, would be considered as in such class.
Fourth: A tariff for revenue. This, of
necessity, must be flexible and levied as far as possible on the non-necessities of life and luxuries. Tariffs are usually costly taxes, troublesome to collect and, in my opinion, an implement of taxation warranted only by dire necessity. When levied as protective, tariffs are unjust and ruinous taxes; they are a privilege granted to the few to bleed the many; they drain the country without filling the exchequer; they are heaviest on the best citizens, the men who are rearing worthily families whose needs have to be supplied; they are harsh on the poor. These are taxed out of all proportions to their means with every purchase. It is the purchasing power of the mass of the people that makes trade prosperous. It is the worker's needs supplied that makes work for workers.
I have been rather surprised during this debate to hear our friends to the right advocating almost with one accord reciprocity with the United States-reciprocity of tariffs, not of freer trade. Our Liberal-Conservative friends are not always protectionists; sometimes they are more Liberal than Conservative, and a few nights ago they w'ere almost Progressive in their leanings. A certain private bill was proposed by the member for St. Lawrence-St. George (Mr. Marler) which was to extend for six years a certain patent enjoyed by a manufacturing concern in Montreal. When it was strenuously opposed by the hon. member for Norfolk (Mr. Wallace) and others in this part of the House, to our surprise the only apparent support that came from anywhere in this House for the company seeking this particular protection came from that doughty protectionist, the sponsor of the bill. He was like " a voice crying in the wilderness." I am opposed to protective tariffs. They have been given a fair, reasonable trial in Canada for well-nigh fifty years. Successive
governments, as was showm by the hon. member for South Winnipeg (Mr. Hudson) have made insignificant, downward changes; yet when we point to the impoverished farmers throughout the country, when we point to the strikes of labouring men for higher wages, to seasonable unemployment and to the suspension of protected industries, our protectionist friends in this House say this is all due to a reduction or threatened reduction of the tariff. Such a charge I defy my protectionist friends to sustain. On the contrary they but discredit themselves by advancing such a baseless argument and by seeking to avoid responsibility for conditions, for which they are clearly and undeniably responsible.
In conclusion, Mr. Speaker, I would say that if the>e is any man in Canada who really believes that, under a democratic form of government where the people rule, where laws should be made for the good of all, any party has the right to impose taxes or to put burdens on one class in order to benefit another class, then that man is unworthy of a place in the free country in which he lives.
I have tried honestly to answer the question: What is wrong with Canada? and to offer some humble suggestions by' way of remedy. In so doing, I have endeavoured to avoid unduly hard or destructive criticism, believing that Canada needs at this time, as in the war-lime crisis, the united, unbiased, whole-hearted, patriotic efforts of every member of this House to bring Canada through.
Subtopic: THE BUDGET