Perhaps not, but there is many a manufacturer who would be very thankful if he were assured that amount, and during this year there will be very few that will enjoy any such profit.
The member for Qu'Appelle in his figures overlooked several very important facts. *First, he overlooked the duty on the equipment; next, the duty on the materials, or parts, that enter into the finished article; third, the tax on the companies' profits; fourth, the tax on the dividends. In his computation he also overlooked the fact that the price is not fixed by the United States price plus the duty. In last year's customs returns I find that the importation of machines for manufacturers amounted to over $33,000,000 on which a duty of $8,336,000 was paid; and in looking through the many items in the report of the Customs Department it will be found that probably the largest amount of duties are drawn direct from the manufacturers for their partly finished goods or raw materials. For example on the item of steel the duties paid amounted to $5,623,650; including on angles and parts $1,216,000; on rolled iron for making milling cutters $706,000; also tubing for boilers and beds $578,000; wire $430,000; and fuel $4,865,000. It will therefore be seen how absurd it is for a man to charge a manufacturer with having put in his pocket all the amount of the duty that the schedule calls for on his goods. As a matter of fact he has not that protection. In a great many instances he has not one-half of it, because you must make due allowance for the duty he has bo pay on his imported material. Now not only is that a fact, but the manufacturer also reduces the price to a point where internal competition compels him to go; and in all the experience that I have had in any businesses that I am connected with-and I
am interested in several companies and know the existing conditions-I do not know of any case in twenty years where the price of the article sold in Canada was regulated by the price in the United States plus the duty. Protection does not make a contribution to a manufacturer any more than it makes a contribution to the employees who work for that industry. It simply makes it possible for the employees to secure work at fair wages, and for the capitalist to employ his capital at a reasonable rate, or otherwise competition will soon bring it down to the point where it is reasonable. There may be isolated instances of abuse, and it is to reach them that we should have a board of inquiry functioning. It has been my opinion that if this House had appointed a board to deal with the tariff and see that it was not abused, instead of appointing the Board of Commerce, we would have made much better progress.
Another thing overlooked was the tax upon profits. In fact, the hon. member for Qu'Appelle (Mr. Thomson) evidently forgot that whilst the business profits tax has been repealed the income tax on corporation profits has not, and that if a company makes, a profit of only one per cent on its capital it has to pay ten per cent of that to the Government, less an exemption of $2,000. If the company makes a profit of 10 per cent or 20 per cent the rate is the same. This I think should be amended and a graduated scale should be adopted. There are many companies to-day that will feel that tax very severely, but no complaints have been heard from them.
We will suppose that one man owns a company on the operations of which he makes $50,000 profit. His exemption of $2,000 leaves $48,000 subject to the ten per cent tax, which, plus five per cent supertax, represents a total taxation of $5,040. If he takes that profit out of his business he is taxed again to the extent of $5,050 by the supertax, or $10,090 altogether. And in speaking of the profits we must always remember that it is not the gross profits, it is the actual amount that in the end is left with the owner of the business. The manufacturer is also used as the medium for the collection of this sales tax to a very large extent. He has to pay one and a half per cent on his materials, and if he has sold his goods ahead he has to take another half a cent off his margin in that respect. He has also to collect the sales tax of one and a half per cent on goods sold to jobbers and
of three per cent if sold to retailers. When we look over the list of taxes collected from our industries, does it not appear that one should not be too hasty in getting up in this House and saying: We. have adopted a platform of free trade in the implements of production? I think it is a mistake for any political party to put itself on record to do anything whatever to this tariff until that party has had an opportunity of investigating its operation and giving the people concerned an opportunity of defending themselves. That is one serious objection I have to the platform of the official Opposition.
Another statement made by the hon. [DOT] member for Mackenzie was as follows:
I find that our customs tariff taxation per capita last year was $22.55, whereas the United States tariff taxation per capita was $3.15.
Then he works it out and continues:
It should also be remembered that to that taxation we are adding a sales tax which will represent a total payment in the case of the average Canadian family of $147.75.
That seems to me a most illogical position to take, because they have claimed no matter whether they can prove it or not, that the rate of duty on goods made in Canada is the amount taken out of the consumer in Canada, even though a manufacturer may sell his goods here as cheap as on the other side; but in the statement referred to they take the amount paid at the frontier as the basis for taxation. It is the high tariff in the United States that keeps out imports and therefore the comparative figures are not such as to permit us to arrive at any conclusion. Then the "average family" illustration is not a fair way of arriving at the expenses of an ordinary family. Why, all one has to do is to read over the list of taxes that were collected through the customs to find that the average family is interested in very little of the articles mentioned in the returns. Our legislation has been directed towards taking the burden off the average family. Take only three items-automobiles, engines, and boilers, and machines, on which customs tax was paid to the extent of $22,500,000. How ridiculous it is to assert that a workingman's family is paying $147 a year in tariff taxation. Any one could take the articles they buy and easily prove that the tariff tax paid is a very small amount indeed.
My good friend from Mackenzie also made this further statement:
We, on the other hand, claim that while the Government receives $1 from the customs revenue tax, our good friends, the manufacturers,
receive $3. If this is not correct, I am sure my good friends sitting opposite will show me that it is not so.
The arguments I have already advanced should make it clear to every hon. member-that that could not possibly be so. He -would say that we are presenting the manufacturers with $495,000,000; but it is questionable if after their taxation is taken off they have a third of that in profits. These are very unfortunate statements, and I would ask my good friends to investigate a little more closely before they make such comments. What we want is not to throw dust in the eyes of the people; we want to try and take it out. And it does not seem to me that Parliament is the place where statements Should be made that have not been very carefully weighed.
Now, Mr. Speaker, we have been told that in 1898 certain articles were put on the free list, and that the various industries concerned had been able to succeed notwithstanding the loss of protection. I have had a special opportunity of being in touch with some of those industries and I am going to deal with the binder twine situation. In 1898 we imported 2,405,000 pounds; in 1917, 66,000,000 pounds, or more than twenty-five times as much; but that is not an average year. However, I have a statement before me compiled a year ago from the latest returns I could get from the customs and the statistical branch, which shows that the amount of twine made in Canada for the years 1917 and 1918 was
59.000. 000 pounds; we imported 115,000,-
000 pounds and deduct exported 19,000,000 pounds; and the total we used was 155,000,000 pounds. [DOT]
Deducting from the amount of binder twine made in Canada during those years
59.000. 000 pounds, the amount of exports,
19.000. 000 pounds, we find that the amount of Canadian-made binder twine used in Canada was 40,000,000 pounds, or only 26 per cent of tne total. Now, the member for Qu'Appe'ie suggested that industries should be encouraged that could work on a 10 per cent protection. Well, all that is asked by the company referred to to-day, the Brantford Cordage Company, is 5 per cent, and they say that the benefits that would accrue to the country would be very great. The extra freight resulting in shipments to the West would amount to over $700,000, and that would go to the benefit of our railways. The importation of the raw material ly the west coast from the Philippine Islands would yield freights
amounting to $212,500, or a total of $912,500. I give tnese figures also in order to show the extent to which the protection of the industries of this country has a bearing upon the railway situation. I would place myself on record as saying that we would be wise in affording a small protection to binder twine and believe that if a board or commission would make careful inquiry i' to the matter and examine the subject in all its bearings, they would recommend that that be done. Here is an item which I clipped out of a western paper last year; it is from Kelwood:
There is a continued scarcity along the line of gasoline. Binder twine supplies seem hazardous at the present time and old stocks have been depleted by farmers buying in advance. There is a serious shortage of barbed wire.
Then it say-.:
The district convention of the Grain Growers' Association will be held at Kelwood on July 10.
I hope that on that occasion this question was taken into serious consideration and that the grain growers there assembled considered whether it is advantageous that Canada's supply of binder twine should come almost entirely from the United States. They take their crop off first and if the necessary provision is not always made to supply Canada we are likely to go seriously short some day. The farmers' organization should take this matter up and try to help the binder twine interests to get reasonable protection, because thereby the interests of the farmers themselves will be protected.
With regard to barbed wire, in 1897, before the duty was taken off, we imported that commodity to the value of $80,467 while in 1920 we imported $2,056,000 worth. In 1918 we manufactured barbed wire only to he value of $300,000 for war purposes. Th? t does not look as if the industry had been a success under free trade. With regard to cream separators, I should like to point out that the situation in this regard was a somewhat peculiar one, due to the fact than many of these cream separators were patented articles and thus had a market in Canada assured to them by agreements with the patentees. Many of the most prominent makes of cream separators have an exclusive sale in Canada, and there is no competition from the same machine on the part of any other country.
In conclusion, I should like to give some reasons why we desire that our industries shall be continued in a vigorous and
healthy state. We believe that the industries are essential to our welfare because of the diversified employment they give to our people, the large home market they create for our products and natural resources, and' the extent to which they contribute to the strength and development of our railways. Our railways are the arteries, the veins and the capillaries which carry the life blood of commerce back and forth to every part of our Dominion-to the farm, the forest and the mine; and the industries keep alive and add increasing power to our banks and financial institutions. They also indirectly help the professional men and the merchants and affect directly or indirectly practically all other interests and activities of the country. The Government stands by this policy not with any desire to further special interests of the manufacturers, but with the laudable object of attaining the largest measure of unity, prosperity and national upbuilding.
Topic: REVISED EDITION. COMMONS