Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697720071520.pdf (Canada)
2142 The lJ-udget-Mr. Bennett OOMMONS Countries Pounds $ Manufactured tobacco to Denmark .. , .. .. .. .. .. France .. Hong Kong .. .. J3maica .. .. .. .. Ja.pan.

.. .. .. .. Newfoundland.

.. New Zealand .. Panama .. .. .. .. 81.

Pierre & Miquelon.

Switzerland.

.. United Kingdom.

Unit.ed States.. .. .. 4 4 5 1,041 2,525 25,480 649 12 245 356 206 5,320 9 7 9 707 1;l77 17,506 905 15 263 488 363 7.499 Total exports.. 254,986 62,671 THE BUDGET AN~UAL FINANCIAL STATEMENT OF RIGHT HON.
R. B. BENNE1T, MINISTER OF FINANCE Right Hon.

R. B. BENNETT (Minister of Finance) moved: That Mr. Speaker do now leave the chair for the house to go into oommittee of V,"ltY8 and meaJUl.
He said: Mr. Speaker, in moving that you do now leave the chair for lobe purpose of enabling the house to resolve itself into a committee of ways and means to make good the supply to be gronted to His Majesty for the twelve months ending March 31, 1932, I will follow the traditional practice of mak ing a general survey of the financial and business operations of the Dominion during the last I will also indicate the ways and means which the government pro prose to utilize in providing the necessary the appropriations made revenues to meet I shall discuss these matters by Parliament.
under five heads: fi.scal year.

1.

The financial operations of the Domin to the fiscal year, April 1, 1930, ion for March 31, 1931. .

2.

The balance sheet of the Dominion on March 31 last showing assets active and non active and liablities direct and indirect.

3.

Trade and commerce.

,4.

The estimated revenue and expenditures the twelve months ending March 31, for 1932.

5.
5.

The ways and means which will be adopted for the purpose of providing the necessary revenues to meet the proposed ex penditures.

[Mr.

c..haD.]

FlNANCI.... L OPERATIONS DURJNO FISCAL YE.\Jl 1930-31 The period of national financing under re view is the twelve months from April 1 1930, to March 31, 1931.

This WllS a period of sluggish commercijll activity, with com modity prices steadily declining throughout the world.
The consequences are shown in the Dominion's balance sheet, for eighty-three per cent of the consolidated fund receipts the in 1930-31 was deri\'ed from taxation, major portion being obtained by od valorem assessments on the monetary value of busi ness transacted.

Therefore, the re\'enue col lections from every tax, with one exception were substantially less than in tl!.e precedin~ year.

The exception was the income tax, where the assessment was on earnings and profits made in the calendar year 19'19.
To to the revenues in the past find 8. parallel fiscal year, is necessary to turn back ten it years to the fiscal year 1921-22, aod in th..t the revenues were 826,000,000 greater year than the collections in the past fiscal year.

On the expenditure side, comparatively litHe advantage could be taken of declining commodity prices.

This is due to the fad that fixed and uncontrollable charges consti tute so large a proportion of the expenditures.
The interest on the national debt was over 121 millions; war pensions amounted to 46 millions, and other uncontrollable expendi tures absorbed an additional $36,895,000.

To these may be added· the cost of civil govern ment and other services where a somewhat lengthy time lag exists before declining com modity prices are reflected in reduced costs.

These services involved nn expenditure of In other words, 282 millions 78 millions.
were expended during the year without the government gaining any offsetting advantages from the causes which brought about such substantial decreases in revenues.

Taxation Revenues The major source of Canadian revenue is the customs tariff which bst year produced 131 millions of dollars.

This was 48 millionJ less than in the pl'eceding year.

A study of the imports of Canada during the period in dicates that there was a substantial decline in the importations of nearly all commodities.
One of the chief sources of customs revenue is the duty collected.

on alcoholic beverages, and in the year under review the revenue thu9 derived was 20 millions, as compared with 25 miNions in the preceding year.
Recently our customs receipts have shown less 8uctuation and the daily decreases are not JUNE \, \93\ The Budget-Mr. Btmnett 2\43 80 substantial as in the last fiscal year, when the monthly eteerease3, as compared with the previous year were: M.Dd> April, 1930 .. May .• June July.. .. Aug:uet: •.••••• Septeulber .. Decre688 •• ~.591,OOO 5,300,000 2,884,000 4,356,000 4,919.000 3,115,000 .• •• .• .

.. 124,166,000 .. .

.

.

.

Oatober.. November .••••• DeceDlber ..•.•••.

J&Du.a.ry.

1931.

.•.•' Febi'uary.


.

.

.

.

• • .

MaToo period.. .• .. ~.

6,408,000 4,117,000 3,424,000 2,687,000 3,766,000 3,653,000 24,055,000 $48,220,000 .

one in respect It sum haa been exceeded only once since its imposition and that was in the fiscal year 1921·22.

is a ease of history repeating it.seH.


The fiscal year 1922 was also a dark to total revenues, but income tax assessments were' on the earnings and the peak xear of the P93t profits of 1920, In the past year total revenues war boom.

income ta'X asseas were again reduced, but ments,.,were levied on the' earninp flIld pro"fits the &tock market.

that of of a) peak year, boom.

Of the S71,0t8,OOO o( incoQ)'!.


tu.,co.l;" tJV individuall lected, 126,600,000 was paid, In the f1acal and $44,400,000 by cO!!pOratioD.ll.

year 1921-22, when S~ wu received, individuals paid S39,820,(ll)O' and' corporations S~,863,09O.

It will be recalled' that .The decrease during the fim.

m month!

of the fiscal year was 124,165,000: during the l&8t six montha of the fiscal year it was S24,OM,OOO., the tariff ·change.
made at the special session came into effect during September although in certain casee, where uDcomplet.ed contracts were outstand levied until ing, the' new ratea were Dot several weeks later.

A comparison of the' two m-mondls' for cU8toms revenue peiioda baa: this signifieance,.

that the changes did not make any material reduction in the; receipta during the two Bix-months' perioda of the year.

the Excise Duties.
the Excise Duties.

The excise duties are largely aBBe8Bmenti on alcoholic beverages and tobaccos manufal> tined in Canada.

The total collected during the year was 157,700,000.

During the' year ezcise eollectiona on tobacco remained practi cally stationary at about 42 milliona.

Of the amount, duties on cigarettes produced' 130, 500,000.

There W&l!l a decline of over S7,OOO,,:, 000 in excise duty colleotiona on alcoholio beverages produced in CaD6da.
On and after the 1st of July, 1930, <llearances were denied to veseels ·having on board any intozicating Iiquonll destined for delivery in any country into which the· importation of such liquor wu ·prohibited.

The enforcement of this law to .'

great extent explains the decline in the excise, revenuei.

Income Tu The income tax ranka first in productivity amongst the war taxes and produced 71 mil liona' in the year.

M & matter of fact, this Sales Tax to 1':Per cent.


No tax more quickly reDected the de<?1in.:.

ing commodity prices than '~id' the sales tss; of busineSS' The shrinkage in the volume transacted, coupled with decrease th'il in, values; made it apparent at the peginning of the calendar year 1930 that with' business the salea IOU' shrinking arid sales contracting, could not be depended' upon to produ~' revenue to the sa.me degree: ai in the previous' instesd _of bema compen-: year.
Thia loss, sated by' an inereaae 'in the 'mte when'- the' budget was brought down 'on May 1st; 1930,' was aggravated by, th~ rate being ieducelf ,.The result: from 2 per cent was a decline of over )4: millions in salea' tax revenues during tne year under review; the collections being somewh&t over 30 mil lion!, as compared with 44. millions in the is perhaps desirable to previous year.

that &" change ·has been made in poiDt out the accounting· methods thia year in respect.

of sale!

': tax.
of sale!

': tax.

Commeooing i,n the fiecal year in' April by 1924-25 the payments made' licensees on sales made iII.

the old year were credited to the fiscal year then last ended.

This practice was not in harmony with that.

followed in respect of otiJler public revenues and has been discontinued.

Had it been fol the revenues from salea tax credited lowed, to 1930-31 would be approximately SI,7~,OOO greater.

It Tax Summary Tht!
It Tax Summary Tht!

other taxes repreaent small amounts, infrequently, paid by' the use of being, not to allocate.

exeise stamps, and are difficult A statement of the revenue received from taxation for' the Jut five yeal'l follows: 1144 The Budgct-Mr. Bennett CXJMMONS Customs .

.

.

.

_. .

.

.

, Excise.. .. .. .. 'Var tax re\'enue-- .. .

Danks Trust and loan cOlJ1panics .. Insurance companies nU8lness profits Income tax Sales tax Tax on cheques, tax, etc .

.. .

, transportation .. : .


1926·27 1927·28 1928-29 (000 omitted) $141,969 48,513 $156,98fl 57,401 $157,206 63,685 1929·30 $179,430 G!i,036 1930·31 $131,209 57,747 1.175 33' 048 710 47,386 82,306 23,307 1.225 345 99.
950 56,571 72,100 18,123 1,243 8 8" 455 59,422 63,646 19,3iH 1,408 74 173 69,021 4:1,859 18,550 1,429 74 34 71,048 20,785 13,950 T(,tal rE'ccipts from taxation .. $346,649 $364,706 $3~5,921 $378,551 $296,276 Public Sen'ice Revenues The sum of 803,000,000 was collected by way of revenues from public services main tained by the government.

The main con tributor W:'lS the Post Office Department.

The gross collections for postal services were revenues 130,200,000.
S37,500,OOO :lnd the net Compared with the previous year, there was a decrease of $3,100,000 in the net revenues.

On the expenditure side the postal service costs were 536,300,000, an increase of 51,300, 000. the fiscal year ended with a the deficiency of $6,100,000.

To achieve an abs..> the department's oper3.

lute tions, the sum, expenditures of Dep.

:irt~ ment for equipment, buildings, maintenance, etc., nccessary for of mails the throughout Canada, would have to be added.
is en~ On the other hund, Therefore, Post Office Department calculation of a substantial the Public Works the departmcnt representing handling showing titled to a substantial credit ling o( go"crnmen~ mail.

for the hand.

<>ther commissions, Interest on investments realized 510,400,000. or this, 52,000,000 was on sinking funds and S1.299,OOO on loans to ROllmania '3nd Greece which wcre made during the war period.

Th~ harbour than Quebec.


paid $3,492,000 in interest on the $88,600,000 loaned by the dominion to them.

The major reduction in re\'eDlles under this group head.

iog was in thp interest paid by the charter('d banks for advances under the Finance Ar.t, although the amount collected was 115,000 in In 1929-'30 excess of l.he collections in 1928. the banks paid $2,234,(0), while in 1930-31 the payments were $539,000.
The ·transfer of the natural te-!~urces to the western provinces materially reduced revenue from dominion land, there being a decrease from $4,139,000 to.

$1,655,000 in the year under revIew.

A division of the 43 millions of revenues from the public services, by sources, is:- Revenue - 1926-27 1927-28 Non-Tux Revenue- Cllnada Grain Act ..................... Canada Gatette ..............•......... Canuls.............., ................... CASUAl.
............................. ; .. Chinrse Revenue ....................... Dominion LAndll ....................... Eleetrit; Lid\t Inspection ...............

Fines 3nd Forfciturt'S..................

Fisheries .............................. Gas Ins~tion......................... Insurance Inspection .................... Interest on Invcstment.'l................

Marine............................. .... Mf\tincrs' Fund ...................... 1\1 ilitnry Collt>gc................ _.
..... Military Pension Revenue ..............

Ordnance Lnnds ........................ .Patcnt and Copyright Fcc!

............ Penitf'ntinrics.......................... Post Offi('e....... ........

Premium, Discount and E~~ha~.

::::: Public \York!'!

.......................... Royal Can.

M.P.

Offic:ers' Pension ..... Buperannulltion Fund ...................
Weights and Measurell .................. Total Non-Tal Revenue ........... [Mr. Bo-nnttt.1 - • 2,582,!l84 68,312 001,694 3,310,633 13,2'>...8 3,327,273 538.917 504,31 17~:~ 76, 120,334 8,559,401 264,083 195,080 18,239 J28,387 29,703 517,930 170,338 20,069,169 6-19,33 422,864 8.769 392 333,034 • 2.677,877 81,243 l.aM,67i 3,626,23 14,179 3,6MI,.~9S 563,913 ,...i" 119,144 85,~~ 123,7 lO,g37,822 191,564 222,048 20,232 128,Oli 14,206 495,7112 177,933 3],·'}62,580 594,211 395.281 6,IH 172 361,690 1928-29 1929-30 , Estimated 1930-31 • • 2,992,540 80,214 1,230,333 4,041,OO.
'i 18,224 4,070,339 ·'>63,964 (l.').

'},485 109,300 92,398 , 131.G26 J2, 227 ':162 ]82,8\0 2.16,808 2Q,204 ]55,830 24,830 S30,239 178,449 30, 61 l.!164 568,846 (14,085 .

6,373 8' 399,2017 2,047,207 !I3,890 1,043,647 4,300,71 14,34:'i 4,130,104 5016,9.

')7 748,343 110,724 1(".It' 138,7 13,5IS,2()'') 184,637 209,322 19,820 1.
"18,881 30,277 574,918 J81,024 33,345,~~ h3t.3 408,I·~1 6,471 2,179,047 71, 197 1,026,671 3,685,000 21, D91'1 I,MS,401 632,151 433.712 73,937: 04,255 148,942 10,421,225 186,892 201,768 19,882 158,872 29,384 559,646 183,288 30,212,326 521,078 374,500 6,357 .')

............ 419,75(1.

407,248 52,046 504 58,012, IS( 59,542,846 62,860, ISO 53,317,277 JU~E 1, 1931 2145 The BlIdgcf.-Mr. Bennett The consolidated fund receipts may now be' summarized.
In the fiscal year just ended these amounted to $319,593,000, as compared In other words, with 1441,411,000 in 1929-30. there was a decrease of 591,818,000.. Special Receipts re\'enues for certain special During the yea.r receipts came into the treasury which must be added the year are before t.he total given.

The most important of these were the payments recei\'ed on reparations, a.ffiouo.ting to 86,500,000.
This was a larger sum than had been recei\'ed in the preceding year, due to the success of the German international loan 1930 making it -possible for 5!

per ccnt a the creditor countries to receive a ca&h pay ment on future reparations account.

Can ada's share thus acquired was $2,173,000.

The the plan involved the estab acceptance of of lishment by Canada credit, small amounting to $272,000, in the Bank of In ternational Settlements.

This has been done.
This has been done.

The amount received on ordinary reparation account was $4,395,000.

Add'ing these special receipts to the con solidated fund, revenues for .the year make a grand total of 5356,215,000, as compared withS446,182,OOO in the preceding year, a decrease of 590,000,000.

A comparison of revenues for the past five fiscal years is: 1926-27 1927-28 1928-29 (000 omitted) 1929·30 1930-31 Heceipts ("rom taxation Non-tax revenue .

.
.

Consolidated fund receipts .. $346,649 52,046 398,695 $364,706 58,012 $395,921 59,543 422,718 455,464 Special receipts.. .. .. 1,934 7,129 Grand total revenues .. $400,629 $429,847 5,476 - - - $460,940 $378,551 62,860 441.411 4,771 $296,276 53..317 349,593 6,622 $-146,182 $356,215 EXPENDITURES The post fiscal year was marked by sub increases in the expenditures for the stantial public service.
Some of these increases were to provide for new services or undertakings, others were a consequence of statutory enact ments causing greater demands to be made upon the treaSllTY.

Apart from certain ex penditures in connection with unemployment those incurred on authority of gover~ relief, nor items approved by parliament on the closing days the fiscal year, all expenditures were in of CllTred on the the previous authority of administration.

Ordinary Expenditures general's warrants some and .. .. .. ..
Ordinary expenditures fot the year were 1394,000,000, as compared with $357,780,000 in the fiscal year 19-29~30.

This was an increase of $36,220,000, the more important items which show increases being: $4,900,000 Subsidie8 to provinces 700.000 Indian Affair8.. Department of 4,100,000 Old a~e pension.. .. 500.000 Li~hthollse and coastal services.. 1.225.000 .-\ ir sen-ices.. .. 'Val' pensions.

5,550.000 TrcatlJ1('nt and after-care of veterans.


1,280.000 1,265,000 Post Office 5,640.000 Public Works 2,925,000 ~1.aritimc Dcpartment of Tr:ule and Commerce.

1.690.000 .. 4,432,000 tfnemploymE'nt ..

There was an increase in the subsidy paid to Manitoba of $4,970,027.62, as provided by legislation in connection with the transfer 01 The natural FrE:'i!=:"ht Rate8 Act.

proY·ince.

resources relief.. .. .. the to ., .. .. .. ..


., the natural transfer of resources made no change in the annual subsidy payments to the provinces of Alberta and· Saskatchewan, al though the dates of payments have been changed from March 1 and September 1 to January 1 and July 1.

The increase of expenditures, amounting to £700,000, in connection with the Depart ment of Indian AffaiI:s, falls under two heads.
in the During the year 12,7'50,000 was spent construction of schools, which is S424,000 more than in the preceding year.

For the the providing of relief of destoitute Indians, hospitals and medical services, an additional $220,000 was expended.

The major increase in expenditures on account of old age pensions was due to larger payments being made in the province of Ontario.
The ad, during the fiscal year, in addition, applied to five provinces, and, small expenditures were made in the North West Territories.

A statement oLthe expendi tures, by provinces, is: .. .. .. .. Ontario.. .

Manitoba .
Manitoba .

Snska tc11ewan.. Alberta.. .. .. Bl'itish Columbia ..... .. .. .. .. North 'West Territories--:-:-::= $1,537,173 1929-30 $ 355,829 427,143 333,287 62,555 357,801 558 1930-31 $3,516,806 652,804 585,941 320,225 580,804 1,562 .$5,658,142 2146 The Bud(}et-Mr. Bennett OOMMONS expenditures on that river channel.

account, together with the purchase and erec tion of new lights, amounted to S480,000.
The for civil air The increase of over SI,200,OOO in air ser In connec vices falls under three headings.

tion with air services generally there was an increase of 1394,000: services S387,000, and for air mail routes 5494,000.

The sum of $180,000 was expended in connection with the airport at Trenton, Ontario, and the establishment of new air mail Toules made it necessary to establish and maintain new landing fields at various points throughout to in Canada.
creased use being made of the services of the air division, involved greater expenditures for supplies and equipment and also made it necessary to increase the personnel.

expenditures, due Other There is a unanimous sentiment that Can ada shall those who 'provide adequately for served and suffered during the war, and an nually the amount expended on account of pensions and after·care of veterans increases.
In the year under review pension payments increased '5.558,000, and after-care accounts by SI,28O,000, thus making a toLaI expendi ture on these two accounts of over 55 minions in the year under review.

Since the outbreak of hostilit-ies the dominion has paid $460, 000,000 on account of European war pensions, and 182 millions for treatment and after-care In addition, sundry ex of returned soldiers.
penditures on account of soldier land settle· ment adminstration, battlefield memorials, the Imperial War Graves Commission, etc .. to S29,OOO,OOO.

These items of ex amount penditure reached a grand total of 1671,000, 000 to the close of the fiscal year.

groups.

The increase of expenditures amounting to be 11,265,000 on post office account may divided into three Approximately 1322,000 wa!

expended in settling overdue account!

with the printing bureau.


These overdue s.ccounts had accumulated over a series of years, and at the close of the fiseal year a supplementary estimate was authorized by parliament into balance.

An increase of SSiO,OOO in expendi tures Wll!

due to.

the extension of air mail services, and '375,000 was spent in salary in cre:J.ses, mainly to those in the outside ser vice.
the accounts to bring The expenditures on ordinary account by the Public Works department were $5,600,000 in excess of the expenditures in the previous the additional expenditures in year.

Of this, connection with the erection and improve ment of public buildings amounted to $3,425, 000.

On harbour and river works expendi showed an increase of $2,100,000 as tures compared with the previous year.
[Mr. Bennelt.1 The expenditures in respect to the Mari_ in 1929-30 were time Freight Rates Act $7,400,000, and in the year under review they were '10,32',000.

The increase divides itseU two beads: S627,ooo was an account under carried forward (rom the previous fiscal year having been received too late to be included in the accounts for that year, and the balance 12,300,000, represented the additional amount payable as provided b)' the act for reductions in tolls and deficits on eastern lines.
penitentiary population.

The expenditures in respect to penitenti aries increased by 1676,000.

During the year increased 5Z1, the thereby requiring larger staffs and supplies.

'125,000 represents expendi_ Of the incresse, tures in connection with the erection of a new institution which was established during the year.
The Department of Trade and Commerce administers the Canada Grain Act, and dur ing the year there was an increase of SI,086, the 000 in its expenditures over previolls year in connection with the provid.

ing of C!levators at Lethbridge, Moose Jaw '100,000 was and Saskatoon.

An additional in spent on national connection with the Canadian display at the exhibition at Buenos Aires.
research and 1126,OIX) those of the end The special session of September last pro tobe expenditure of $20,000,000 to vided for relieve unemployment.

As a result, at the close of the fiscal year, the contracts initiated in consequence of this legislation amounted to $69,690,948, o.nd at of March, 248,000 persons were employed.

However, at the close of the fiscal year only a small por tion of the total expenditures authorized had In all, S4,431,000 been presented (or payment.
was actually paid, the money being disbursed as follows: Alberta.. Briti9h Columbia.. .. Manirooba.. New Brul18wick.

.. Nova Scoti:1.. .. ODtano Prince Edward Island.. QtI~.. .. Sallk..1.tchewlan ... , .. Yukon.. .., 186,600 17 259,040 82 305,638 53 250,233 67 62,066 05 1,219,433 18 21.529 88 319,452 87 535.698 95 20,000 00 .. .. .. .. .. .. .. -:c-:-=--=$3.179••94 12 Cnn<ldinn Nationnl Ry.

Canadian }l.noific Ry.. Grntle Cr088in~ Fund.


P03rks Bronch, Interior 352,961 82 345.420 00 500.000 00 36,996 81 Admin-i9l;l\,1.,tion.

.. .. 1,235.378 83 18,582 32 $4.431,655 07 May I add the records show that at the end of April empioyment had been given to 25,000 additional persons as compared with those employed on March 31.

A Itatemf;Il~ of the expenditures.

five fiecAl yeal'll DOW folio",,: JUNE 1.

1931 The Budget-Mr. Bennett 2147 by services, on ordinary account (or the Jut Item. '
....27 1027-28 121,2&O,8U 17,W,736 920,136 111,417 4112,101 J4.,41' 56,84& 140,161 12,628,682 11,143,1177 2,261,817 2,2M,249 &,868,219 t,g&7,5&O 817,053 ~,e06" 201,4~1 2.214,288 3.236,816 391,301 6,668.143 6Ot,t80 " I ...... aim_ted Ill.».ll • • ,...... • 023.'"

124,.,1l5O 12,553,725 07.... &17,861 17.

671,611 • 770,tn· 128,902,945 1~,li16,7-tO • ....... ".233 1l2.!. ""

10.
10.

723,82,5 itiel) ......•.........••............ : .......•... C~lid..ted Fund Expenditure-- F"iiaaDc.-- 1Jltereat on debt.•..................... Sublidiee to provincel......•....•.... Charps of Manapme.Df....•........•.

Premium.

Diacouot lUId E1'cbanp•... SuperaDDuation No.1 (Act of 1870) ... Superannuation No.3 n'rintinitBUI'MU) BupetallDUlI.tion No.
4, (Act 0(1920)... SuperaDl1uatiou No.8 (Wide,...· A.mu~ Civil 'Government..................... ;.................... A~culture FI8herie............................... ImmptioD .. T •••••••••••••••••••••• Indian Affaire......................... I.Jterio~ .

Dominion Landi and Parb Scientific lnltitution•..•....... " GovernmeDt of N.W;"Territorietl Government of Yukon Territory .

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.

.

AdministratiOD•..................... Penitentiaries...................••... Julti~ Laboou- Teehnical Education I,Of1,M Old Ap Peneion•.•.............................. 4Of.819 AdmiDilItratioD.

etc .••.•... ·....~..... ww.tio S"eoate.

BOOM of CommoDs.

etc ...•.• .

ElectioDs ',M,2U" l,844,53e '" .

.

.

MariDe- Ocean aDd River Service ....••....... Lif.bt~Ran~ C~ Service......•. "

Scientific InstltutlOn!


~tecunboa, In.pecti9JI.~ " Mme•...................•.... , National DefeDee-- Militia Services Naval Service Air Services General Services Government of N.W.

Territories .

, .......•.•...... .

.

.

National Revenue ............•......... PensioM, War.
ete •.....•.........•.... PensiOlll and National Health Treatmellt and after care of returned IOldien .................•..•.•..... Health ..........•••.....••••.•...... Post Office...••.....•.....•............ PubUcWor~ Charaa to Income Ch&rie- to CoUeetioD of Revenue .. .

Raih,.aY8 aDd Canal&- 2,5M, 2.483,MB .... 233 J21,951 5.58.695 11.141,220 1,597,f07 2,l97,Mli 149,779 137,7711 10,130,430 37,902,11 6,1176,762 695,219 31, rxn.
61il8 11,178, 918, Maritime Freicht Rat.ee Ad•.........•.•....••.. Other C~ to Income...... l,Ml,lS88 ~:~:lli R?~Tp~lice.~~.~.~~~~·:::: Soldier and General Land Settlemeot Administration .........•........~.

1,250,787 Tnwle and Commerce- CllDada Grain Act, Exhibitiolll, etc.• Bountie., Copper Ban, etc.......•..• Mail Sub!lidiell and.
Steamship Su~ /.............. yClntiou I,008,m ()tber~Ddjtures.................... 4.803,7VV Unemployment Relief 10,8M,7 6,838,941 1.437.179 2,338,992 3.8lW,394 ' 130,lM6 11,5'16,1 6,487,7 1,761,147 2,7Of,698 4,lOV,M1 4,082,752 733;919 2tIJ,M2 178,511 2,190.81 1,755,163 140,510 11,8111,981 7,201,666 1,974.118 2,631.Q67 4,598.292 4,tl86,962 793,5M 317, '125 1M,I81 2,203,2011 1,807, l,Ili2,J 832.087 3M,8111 lU,7 12,2M, 9,28&,148 2,274,29' 2,767,SSl 6,134,643 5,4711,836 816.615 434,7sg 186,374 m. 1,531,113 t16,a 2,2lK.OO8 82,tM 2,292,833 26,292 2,m,781 2,2U,?~ 3,883,2.5& 2,812,110O 287.""
141,485 6711,119 10,151,975 1,702,225 3,8Q1.861 116,198 1'2,736 11,801,331 311,778,1 l1,0i4,334 1,836,488 5,040,605 102,736 J38,71& 12.876,760 41,48?,323 5,138,332 2,874,523 316.706 140,2M BM,148 11,032,749 3.013.396 5,920,67 226.9~ 140,161 13,130,611 4O,4Oe,555 3,638,011 3,3Q1,876 3rT,820 Jt3,7G1 789,m 10.1179,551 3,597,6Q1 1,161.183 ; , 103,682 217,621 13,206,4t~ f.tIi,H4, 808 7,901,1167 924,003 33,483,069 8,494,%77 1,021,371 35,036,62iI 9,776,228 ....... 36,m,eot 17,003,254 V39,lJ85 18,134,39 924,11 23,763,284 1136,020 6,968,811 171.436 31,782,1MB 14,037,3&6 ....... 3,t71,401 2,aBe,7" ',635,381 2,300.4.311 1.33t,008 7,177,538 1,120,31 2,405, 2,000, 4,188.047 164,791 4,015,886 82.807 844.5111 &,386,211 I,02e.37& 7,104,311 10,327,'57 1,II1I1,6GO 2,1111,228 2.967.081 1,300,148 6,485,968 92.181 1,314..161 &,344.730 4,431,&66 4,894,1... 1.083.W &,054,073 .
2J.IS The Budget-Mr, Bennett OOMMONS Expenditures on Capital Account for the year fiscal Parliament, 1930-31, appropriated the sum of S33,484,000 for capi In the year S28,222,000 was tal expenditures.

ac~.ount.

These actually expended on that expenditures, for the purpose of convenience, may be classified under the following heads: (1) Railways, (2) Canals, (3) Public Works, and (4) Marine.
Taking first the railways: On this account o....er 16,000,000 was disbursed, and of this amount 12,500,000 was spent on the Prince Edward bland ferry and 54,137,000 on the Hudson Bay railway and in the Hudson terminals.

The investment B:l.:"- railway :md t.erminals at the end of the fiscal year amounted to $43,880,000.

terminals, and The expenditures on canals amounted to S9,8OO,000, of which expenditures on the WeI land ship canal represented 59,600,000.
The expenditures in connection 'with Public those Works capital account were largely The laboratories.
in .connection with shipping, although at Ottawa 12,500,000 was spent on the new Con federation building and the National Research expenditure in Council conne~tion with the Burlington channel, lake Ontano, amounted to SI,151,000, while over $3,000,000 was disbursed in connection with the lower Ex_ penditures of approximately $400,000 in each case were also made in connection with har bour improvements at the head of the great lakes and at Sorel.

lake terminals at Prescott.


In connection with the capital expendi_ tures of the Marine department, it may be said that practically all were in connection with the St. Lawrence for 53,464,000 was spent· on dredging the channel etc., and 1400,000 in the of in the St. regulating and retaining dams Lawrence river below Montreal.

construction chalilnel, ship A summary of the capital expenditures for the past five fiscal years is: Canals .. Railwa.\'ii .. ·.

·.

· .

·.

·.

· .

·.

·.

· .

·.


Public \,",orks .. .. .

.

·.

·.

Tota.l.

.

·.

·.

· .

·.

· .

1926-27 1927-28 $13,846 2,792 2,921 $19,559 $13,763 3,592 3,281 $20,636 1928·29 (000 omitted) $13,164 6,302 3,343.

$22,809 1929-30 1930·31 $ 9,324 6,663 6,574 $22,561 , 9,846 ' 6,367 12,009 $28,222 The amounLed important expenditures Special Expenditures special to item was $12,358,000.
The most 88,599,000 which represents 30 per cent reduc tion in soldiers' indebtedness to the Soldier Settlement Board as authorized by chapter 42, Acts 1930: 12,067,000 represents the govern ment's contribution to the civil service super annuation on $639,000 was spent fund: account of railway grade crossings, and 1105, 000 was the amortized discount on the loan flotation made in New York in October last.
The other important item was the payment of 1500,000 for civilian war claims-in the previous fiscal year $6,700,000 was disbursed on this accoun t. A summary of these expenditures compared with previous years is: ..

Adjustment of Co:ot of loan flota.tions .. ...... Misccllrllleolls chargcs .

.

.

.

.

.

.

.

Reparations, claims for compen- claims .. war sation.. .. ·.

·.

·.

·.

.. .

.

.. .. .. Total.

.

1921}-27 1927-28 $ 242 3,278 4,537 $1,861 13 1,602 1928-29 (000 omitted) $ 120 II 2,056 .

.
.

$8,057 $3,566 - - - $2,187 1929-30 $ 95 17 3,027 6,700 $9,839 1930-31 $ III 1.3 11,554 5" $12,358 Loans and Advances Non-actil'e The final group of expenditures are those which are treated as loans and advances, but, being non-interest producing, are treated as non-active, charged as expenditures of the treated as assets in establish year, and not ing the net debt of the dominion.

In the IMr.

Bt'nnett.]

year under review the amount advanced was SS,500,OOO.
Of this 13,491,000 consisted of loans to the Quebec harbour commissioners, and $1,826,000 to the Canadian Government Merchant Mar'ine and the Canadian National (West this being the amount required to meet Indies) Steamships, their deficits.
A comparison of the loans and advances non-active for the past fiv~ years is: JUliE I, 1931 The Bl.tdget-Mr. Bennett 2149 1926-27 1927-28 ]928·29 (000 omi tted) }V29-30 1930-31 National Loans Canadian to RailwaYIl .. to Loans Loans missioners .. l\t iscellal1€olls Canadian National Steamships .

.

.

.

.

.

.

.

.

.

.

.
.

.

.

.

to Quebec Harbour Com- .. non·active accounts Accounts carried " active nssets tl"nnsfcrl'cd to non·active .. .. .. .. Total .. .. .. .. .. $10,000 427 680 26 436 $ ],000 $ 758 1,458 2,8SB 16,03.,) 10,000 $2,033 2,491 2,821 17 $1,827 3,491 170 $11,569 $18,4!l3 $13,6,16 $8,262 $5,488 Summary responsible, with to these expenditures, Grouping the 1930-31 expenditures together, it will be observed that total expenditures amounted to $440,060,657, as compared with 1398,442,247 in the previolls year.
With re it may be said spect that for none of them is the present govern ment of the 54,431,000 for unemployment relief, 5681,000 under governor general's W:UTants (mainly for ex-soldiers' relieD, 52,000,000 for the Weiland ship canal, 5288,000 for Port Arthur and Fort William" harbour improvements, and a num ber of smaller items included in the supple the end mentary estimates brought down at of March, than SIOO,ooO.
amounting exception to less these land settlement It will be noted that ordinary revenues were 544,398,879 less than ordinary expendi tures, and that total revenues.

were 583,844, It should 358 less than total expenditures.

perhaps be noted that $8,599,385 of this deficit is brought about by the writing down of in soldier previous years, so the balance, namely.

57'5, 244,973, is really the amount of the deficiency for the fiscal year period.
Minor adjust before ments ha\'c yet the to be made the forego accounts are officially closed, but ing is anticipated to be within a few thou sands of the final balances for the fiscal year 1930-31. advanced loans C.4.PITAL BORROWINGS The fiscal year under review was :mark0d by a change' in circumstances in respect or the n:ttional debt.

For several years there had been a surplus of revenues oyer expenditures which could be applied to maturing obliga tions.

S',lch was not the case in the past ye:lr.


the Canadian Nation:ll Railways were in need of money for .capital requirements and, as will be recalled, interest charges were then at abnormal heights.

The government, therefore, between that date and May, 1930, adv.

:mced to the railways 133,000,- In Janll'ary, 1929, On July leaving security.
$5,000,000 Sll,S39,458, the dominion taking demand notes as In 000, the Canadian Na'tional Railways June, 1930, carried out a borrowing operation and re paid a balance of 121,160,542 payable to the domin ion.

thus 1st, with the government repurchased SS,OOO,· received, 000 at par of treasury notes the 4 per cent which were to mature on December 1st, 1930.

This transadion represell'ted a. net saving of $83,000 in interest.
Last autumn, railway securities was unrecepti\'e, deficits the New York money market but, for with the company reporting each month and with large capital undertakings the railway proceeding, provision had to of be made for the -company's financial require ments.
The dominion decided it was in the rmblic interest to continue the providing of funds in the Canadion National October sold ·to a syndicate, headed by the Chase Securities· Corporation and the Banc america-Blair Corporation of New York, an issue of 5100,000,000, 4 per cent, thil'ty year twent.y bonds, but callable (l,t years.

The amount realized was $93,646,000, or a cost of approximately, 4·38 per cent.
This rate is the best which has been secured br the dominion for any long-term financinp; sinre the outbreak of the war.

The sum of SIO,OOO,OOO was immedillotely ad\'anced to the railways and before the end of December a further $15,500,000 was loaned to the company.
the end of and for that Due to the fact than had been planned, t,he requirements of the railways had made it necessary for the go\·ernment to make a large public offering the domin rarlier ion did not require to refinnnce immediately nil or treasury notes which matured on the 1st of December.

It was fOllnd practicable to retire, perma nrnUy, the S5,000,000 which had heen pur ehase'd on the previous fi'rst of July, and a nc·w loan was arranged with a group of Cana two- dian banks.
An issue of four per cent the $-15,000,000 of three-year 2150 The Budget-Mr. Bennett COMMONS year treasury notes for 140,000,000 was au· thorized; SI3,3OO,000 was sold on DecembfT the end 1st, SI0,OOO,OOO on January 1st" balance, SI6,700,000, on February 15th.

governments.
governments.

The transfer of the natural resources to the three prairie provincee during the past fiscal year vested the responsibility for the admini.. land funds in the "three tration of the school provincial The Dominion Lands Act provides that sections eleven and twenty-nine in every surveyed township in Manitoba, Saskatchewan and Alberta, shoji be set aside as an endowment for purposes of education in those province!.
The aet also provides that aU moneys, from time to time, realized from the sale of such school lands shall be invested in securities of Canad'a and the interest arising therefrom, after deduct ing costs of management, shall be paid to the schools provinces the organized and carried on in accordance with the laws of such province.

support of towards The agreements with the provinces; as rati.

fied at the last general session of parliament, the transfer of these moneys provided that securities.
The might be either by cash of amount involved was over $33,000,000.

Until 1917, the fund moneys were carried in the cash wo'rking accounts of the domin.

interest was paid.

The ion and 3 per cent war had grea tty altered money values, and the provinces submitted a request for a higher interest.
This was granted by the rate of ~overnment of the day, on the authority of an order in couneil dated June 7th directing that the moneys, then in the fund, be invested in 5 per cent debenture issue whieh had been created in 1916 and which would mature on the 1st of October, 1919. '

In 1919 the govemment, by order in council dated Mareh 12, directed that the moneys which had accumulated in the interval be in vested in the 1916-1919 debenture issue.

On December 1, 1919, an executive direction WI!L!


the fund be in· given that the moneY' of vested in debenture stock on October I, 1922.

The rate was again 5 per cent.

to mature On September 25, 1922, an order in council was paseed which, after reciting the Decem~ ber in council, continued: I, 1919, order In view of the approoohing maturity of the the minister recommends IIlliid debenture trtock.

.authority be given to ootrbinue the pe.y.


thait intere8t at ,the rate of five per cent mem of per" annum on echool I"and funde hl!

'ld from time to time by the Minister of FiIlllnce in tr,ullt the provincea of MaD1toba, Saskatchewan for and Alberta.

No further taken and the aetion was records do "not disclose the reason.

Whatever ia that may have 'Jeen the cause, the fact [Mr.

Bennett.]

when the present administration took office the fund: was in the same state 8.8 in 1922.
The amount wa.s entered annually in the publie accounts as a liability of the dominion' interest wu being paid and five per cent there was no dispute as to ~e amount which there were no certifi..

WI.!

cates which could be transferred to the prov.. inces.

to be paid, bu t The provinces were consulted to ucertain whether they" desired settlement in cash, or the transfer of the fund by securities of Can It was agreed that, until an arrange ada.
the dominion would ment could be made, the rate of 5 continue to pay interest at per cent.

Early in April last, representativel the provinces met witlh the dominion of and it was arranged that a new debenture issue would be created- for the amount of the capital account of the fund, on the dates "of the transfer of the resources to eaeh of the provinces.

This has been done, and the provinces receive certificates for the follow ing amounts: Manitoba ...• Sask.aJtchew.an.

AlbeMla.. .

.

.

.


• 5,919,862 60: li,809,039 00 9,564,569 20 $33.293,470 80: The maturity date is July I, 1934, and the interest is at the rate of 5 per cent, payable balf-yearly on the first of July and January.

125,000,000 MATUBITT While the actual settling of the 125,000,000 loan which had been obtained in New York in 1916 took place on the first day of the present fiscaJ year, might it be pointed out the financial operation of last fall PJ'~ that vided the money for that purpose.
The loan was a five per cent issue, while the eost of the re-financing was at the rate of 4·38 per cent.

This means a saving in the annual interen charges of S155,OOO.

1931 CONVasION LOAN The only funded debt fiscal year to be refinanced in the 162,929,600 is the present falling due on October 1, and the succellll of the conversiC'u loan recently completed leaves less than 15 millions to be refinanced.
At the present moment it would appear that this can most profitably be done by the uti of treasury bills.

The debt conversion operation, which com 'menced on May 11 last, does not properly belong to ti.

review of the financial operatiODl of the last fiscal year, but it ia a matter of general time.
The basis was: in exchange for bonda maturinl in 1931, 1932, 1933 and 1934, "new securitiel the prescnt interest at JUNE 1, 1931 The Budget-Mr. Bcnllctt 2151 the rate of were given, bearing interest at 4~ per cent per annum.

and· maturing twenty five years arter the due date of the bonds surrendered for conversion.

the dominion hav to redeem after fifteen years.

ing the right The holder was, naturally.


guaranteed all the benefits, including difference in interest rate, associated with hi3 old bond to the date of its maturity.

The first offer to the public was for 8250,000,000.

The success of the operation was assured at the close of business on the first day.

and it became necess3ry to increaSE: the the government W3S prep3red to amount subscription for 3ccept the advertised books ]t was a closing date, Saturday.
May 23. est-imated being success, remnrkable approximately 640 millions were converted.

311 adjustments are 1U:l.db 3nd the Until overseas subscriptions actually delivered to the department, a final statement cannot be the report is: presented, but at .

'\mount Surrendered r" Canl'ersion $ 38.762,500 37.011,400 :!i~.!

)fl9,lOO 278,;03,500 Tot:al .-\1l101lIlL of Loon 52.!J2!J.6OO 73.3~3,150 ·H6.65!J.950 511,91O,650 Year of .\1:aLUI·i_L)· 1!t31 .. 1!132.

: 1!J33 .• l!l3·1.

.


remained open until conversion.

The the moment it Kat )'('It dis· tributE'd AS to mQ,turit.y.

$1.084,823.350 $627,466,500 12,350.000 $630,816,500 the The dominion conversion sponsored oper3tion and paid a commission of one-half of one per cent, except on conversions of 1931.

No bonds maturing on October 1st.

commission was paid to Rny one for the $38, 000,000 of bonds of issue which werE' this surrC'ndcred for conversion.
1I.-\!LW,\yS, STEAMSHIPS, AND HARBOua COM~ MISSIONS The financial provision which it was neces to m.'lke in the fiscal year for the CaDa &'IT)' di:tn N:ttional R:tilways and Steamships.

and the "ariotls harbour commissions, reached im ex porl:t.nt dimensions.

penditure3 are concerned.

the the extensive programs of carryinK Ollt of constructIOn in previous sessions, and where payments have So far as capital they 'represent parliament appro\'ed by been required amount.s ll:\turally reflect situation.
for operating the the deficits, unfavourable C:madian N3tional Railways The accounts of the Canadian National Railways for 1930 hal'e been presented to the house.

The company failed to e3TD its fixed charges to the public by S29,219,738.

This t.he figure is exclush'e of eastern lines of the accnling interest on the cash ad\'nnces of $604..000.000 which the gOl' ernmcnt has made to the company in previous years.

the operations of The deficit on the system, cxclush'e of cast NO Iincs.
w:ts financed by the comp3ny nnd is not rcflcctC'd in the government accounts for thi.~ year.

The j!c"O('ra!

budll:et of the railways for 1930, which includC'd pro\'ision for deficit, general additioo.~ and hetterments and miscellaneous deht retirements.

amounted to 863.010,400.85, the of whit'h 551,600.000 was ~uthorized at 1930 sC'$!lion and the bahmce.

SIl,410,-IOO.85 W:15 pa&.


""d at thr present session ns a supple mC'ntary provision to cover over-cxpenditnre in fallinp;-off unanticip:l.ted due 1.0 rC'ceipts.

requirements, J!1larantced bonds to the amonnt of S51,600.

000 were is....ued rind the Slim of $11,410.000.85 has been financed temporarily by a bank loan.

the In respect of these The expenditures just referred to do not include those incurred on branch lines and terminals authorized by special statutes.
For these purposes the actual expenditures in 1930 financed from the amounted to $21,112,073, procreds of guaranteed bonds.

The tot;) I amount of bonds issued in the past fiscal ycar these purposes was S32,577,779, a sub for stantial amount having been provided for ex· penditures on these accounts in 1931.
For the purposes mentioned above and to refund certain maturing and temporary loan!, the company issued 1120,000,000 of securities in the period of our fiscal year to which the in accordance gnarantee of the g·overnment.

\Vas with the lluthorization of parliament, given.

An issue of $50,000.000 41 per cent ~year bonds was sold in June, 1930. and an issue of 170,000,000 4!

per cent Z5-year bonds was sold in February, 1931.


The following statement the purposes for whieh these issues v,'ere made and the t-ot.1J amount of securities issued in each case: snmmarize!

2152 COMMO!\S Thc Budgct-Afr.

Bennett Canadian National Ra"ilway Company Guaranteed Bond Is.sues, 1930-31 Authority .• R"l.ihnl~· 10.1n appropriation, 1930 budget.. Apeda!
Projeots- llranch lil.l.e6 cofl.iCtruction: Special aot~, 1927·30 progTam .. Special aeUl, 1929·32 program .. 'J'<lronto Tet'minalH RailwR)' Act .. Gnn.

Kabional Montreal Terminala Act,.

Nortlwrn Alberta RailwaY6 Act .. St. John &.

Quebec ra:ilway acquiBi.tion .. Refunding- Temporary 10.1n, Hl29 budget c.11.1.. Natiotl..11 ra.ilwltY l<oan appr<op.riation, , (CClltral Vermont) Financing Act.

1030, .

.

.

.

, ., ('~IJl.

National Refunding Act, 1930., .•.

, , .

.

, ..

., ,.


.. As in form("r years the company financed thc purcha~c of ncw equipment to thc extent of scventy-fiyc per cent of the cost thereof, by the sale of equipment trust certificates Dot guaranteed by the Dominion government.

An issue, authorized in June, 1930, of $15.750,000 4~ per ('cnt certificates was made this purpose.

for Canadiall National Steamships.


The opernting 1055 on the G.'1nadian GO\-· ernment l\terehant l\.brine, Ltd., 1930, in\'oh'cd tl cash paymcnt by the government of 1834, ZIO.S9.
We were also called upon to advance $992,730.62 to the Canadian National (West Indies) Steamships, Ltd" this amollnt being the cash deficit resulting from the 1930 oper· ation~ of the company alter ahsorbing the contributions made by the colonies under the the Wcst cost of the service, The sum advanced does not, howc\'er, (If this depreciation, amounted to $1,362,655 in 1930, The operation of th('se tl\'O organizations in 1'000 rcsulted in a charge of $1,826,941.51 on the government accounts for the year.
the whole cost service which, Indie5 trade agreement including represent towards H.ubour Commissions.

Adl·;l.Il('es to harbour commissions on capib.1 the de\'elopment of port anJ totalled SI5,606,600.

The th(' amount ad th(' commis for facilities, sl'3.temcn!

in 1930-31 t.o each of show,;; account terminal followinll; vancer!

sions: [:\Ir.

n,·,mr\t.]

~ 220.166 83 13,524.i4!J 04 3.65H,000 00 12..100.000 00 J.,'i81l.904 62 1.280,959 00 $ 7.171,181 6i 8.009.000 00 20,042,038 84 Chicoutillli.
, Halifax .. " Montreal .. Ouebec .... 81.

John .

.

.

• " Th,rec Rin'rs .. " Vancouver" ,.

Sccuritil's IAAUN $ 51,600.uou 00 35.822.:!20 51 $120,000,000 00 AdvanOCfl,19aO-Sl $ 846.000 00 3.;;3!

'l.OOO 00 2.2!1I.000 0() 3.491.000 00 1,0!14 .000 00 1.1)4:1.000 00 2,802,000 00 .. $15.600,00[1 00 In July, 1930, the $.
'1.1(' was made of a furtbrr $500.000 5 per c('nl guaranleed bonds of thc harhol.1f commissionrrs of MontrC'nl for pur poses of the Montreal harbour bridl!c, bring to this project ing the out.standing debt for the bridge in $19.000,000.
The revenues of 1930 were not adequate to mf'd th(' interest charges :md, consequently, on :KO\'ember 1, ('ailed upon «J 1930. to the extent of implement providing $170,000, the go\-ernment was its ,l!l.lnrantce CA:SADUX FAR~[ LO.~:S Ro_~nn t1H' ~,OOO,OOCl During the year, the go\"Crnm~nt ndnlnced S2.600000 to the Canadian Farm Loan Board.

be'ing' the balance of initial thc go\' capit:l.!

which the act prodded tll:l.t ernment should supply for thr operation!

of the board.
of the board.

Subscription;; s:!-ock of th£' board under the term~ of the srheme, in Yoh'ert n furt.her payment of !199.839.

Apart from the capital Rlb.

'>(·rihed by the dominion j!on,lrnment and capital stock 1Uh srript.ions made by thC' dominion and pro I!overnments and the borrowers, re· \'inrial the b03rd is to bC' fin:mc£'d by tht' specth'C'h' issue of 'f~rm lonn bond~ to 1)(' sold either to to t':lpilal initial JUNE 1, 1931 The Budget-Mr. Bennett 2153 the public or to the Minister of Fio0Dce.
In view of the difficulties at the moment of secur~ iog & favourable market reception for fa,rm loan securities, the government has under taken to purchase 01) a 5 per cent basis farm loan bonds to finance the 1931 operations of the board.

The amount of bonds purchased prior to the end of the fiscal year was 1300, 000, bringing the total capital furnished by.

the government· to the board in the year, to 13,099,839.
The transactioDs involved in the yoor's operations are now summarized in the can· densed _cash statement which follows: Receipbt- Cash ba'laDceEI in banks, March 31, 1930 ...• Lc:mns and advances repaid: temporary :s wtional Oanadian loan Raoi!w<Uys .

Provincial Housing l..:;)ans .. Government of Greece.

.

.

, Soldier Settlement Loons ..

Lo.


'lD Aooount8 ReceiptB: 4 per cent 1930·60 New York Loan pro- .. .. .. School Lands debenture Stock.. ceed9.. .. .. .. .. .. .. .. .. .. .. .. Insura'llce AnnuitieEl, and Fund&-ne1; neareWon .

.

.

.

Miscel1anooue Acco.untl>... ..


Revenues f'Or yoor 1930·31 .. Superannuation Paymenta-- Reduction in UabiHltiee: Poet Office Savings Bank withdmwals .. Pollt Office ~roney Orders, etc., redeemed .. 4 per cent T,roosury Notes redeemed .... sinking Bcmds and Stooks acquired fc>r .

funds Overdue bonds and 900cks redeemed ..

Overdue co.upc>ns redeemed .

Payments on Aabive A89et Acco.unts: Bonds acqui.red and held.. .. Loans to Harbour CommiSl:1ioners ..
Lo..·me tc> Canadian Fa:rm Loan Board.. .. Bullion and Specie, increase in surplus held.

Otta:'o\'';'I.

Mint Bunion adyance account .... .. .. ExpendtiturCfl 1930·31, exolU8ive of $8,599,385 Sc>!d.ier Settlement Loane written off;.
Cash ba,lances in bankJl, March 31, 1931.. .. $21,060,541 78 639,515 00 225,000 00 285,9Q.4 06 93,646,000 00 509,000 00 $ 1,335,809 06' 956,419 94 5,000,000 00 3,673,666 19 203,874 50 425,395 16 1,034,805 56 12,115,600 00 3,099,839 00 5,090,776 58 1,947,206 82 $ 27,991,597 06 22,210,960 84 94,155,000 00 9,835,077 39 533,639 93 356,216,299 00 $510,942,574 22 $11,595,164 85 23,288,227 96 431,461.272 00 44,597,909 41 $510,942,574 22 B.\L.\NCE SHEET The assets and liabilities of the Dominion are set out in the balance sheet published in t·he public accounts: active 8ssets compris ing cash balances and specie accounts; loans and advance:;; that are .realizable or income producing, and other misccJJ.aneouBaccounts.
These assets are taken as an offset against the gross liabilities of the dominion in ar.rh-· ing at the net debt.

The balance sheet also realizable .nor sets out non-active assets that are not con sidered as an offset against the gross liabili.

ties, as they represent loans and advances that are neither income-produ.cing and the large capital expenditures made on Taking first government-owned properties.
the active assets, is, and I the statement think the house will be somewhat interested in this statement of our asset-s that a·re re.

garded as having value: The Budget-Mr. Bennett COMMONS Active Aaseta on March 31, 1931 Dash balaDC1l8 in banks .

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.. Specie Reaerve.. Adva'DCe8 to Banka uDder Flinance Act •• .. .. .. .. .. .. .. Loans to Provineee for Housing .. Loans ,to Foreign Governmente: Greece Itoumanla .

.

.. .. Loane to Hoarbour Cornmi8&ioners: .. .


Chicoutimi.. HIllLifoaI .. .. Montreal.. St. John .............•.••.

v~anoouver.. .. Three Itivers .. ',' .. .. .. .. .. .. .. .. .. .. .. .. .

Oana.dian Farm Loan Board.. ..

Soldier and General La'Ild Settlement.. ..

Seed .Grain and Relief Advances ... , .. .. , 81,457,889 05 6,500,000' 00 6,640,000 00 .
23,969,720 00 2,161,000 00 4,841,000 00 55,977,000 00 3,407,000 00 20,607,900 00 1,679,600 00 .. '44,597,909 41 87,957,889 05 10,671,687 72 30,609,720 00 88,673,500 00 5,608,862 00 48,150,885 4f 2,426,508 29 For seed grain and relief advances this amount only is being: earried &I an active asset.

Advance.

for working oapital and MisceHaneoue- AdVlMlCes rbo Royal M~nt.. .. .. Canradi.an Government Railways, Open and .• Stores Accounts.. Miseellaneoua Advanees, etc .
Unamotltized di8COunt on 4 pel' cent loan; '.. 1930/60 .. .. .. .. .. .. .. .. , 4,221,401 34 15,748,921 60 4,265,215 87 6,248,100 00 $30,483,638 81 '349,180,600 72 I shall now make, as I think it is desirable, to each of a short statement with respect these items in the statement of active asseti I have just pla'Ced on He.nsard.

that Cash balance in banks.

Cash balance in banks, 144,500,000 i8 the amount of cash at t'be credit of the Receiver in the several banks at the.
close of General the fiscal year.

Of the' amount 125,000,000 was paid out on April I, 1931, to retire the 5 per cent Public Ser-vice Loan which matured in New York on tha-t date.

Specie Reserve.

Specie R~erve i8 the gold held by the Departmen,t of Finance as security for Domin ion Notes in' circulation and Post Office Sav ings Bank deposits.

At'the end of the year there was $81,000,000, an increase of 116,000,000 for the Yea.r.

Loans to Provinces Cor et'e-ction of houae•.


of governments dwelling to encourage housea Under 'authority of appropriat~ns granted in 1919 and 1000 advances were made to the the provincial erection throUChou&: Csnada.

The loans were repayable withill twenty years and carried interest at the rate five per cent per annum.

AdvanceJ to of the amount of m,liOO,OOO were made.

Re to payments $10,600,000 on ·March 31, 11001, made up &I (allows: Britisb Columbia ..•.

Manitoba.. .. .. New Brunswick .

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Nova Scotia Ontario.. .. ..

Prince Edward bland .. Quebec.. ..f l,701.Mt 1,4715,000 1,0157,000 1,017,000 received have 3.,500 5,384,688 reduced thiI ...... .. .. .. .. .. " .

fl0,071,088 Advances to banb under the Finance Act.

Loans to Foreign Governments.

Advauces to -banb under the Finance Act., amounting to 16,500,000, are- ma<h!

by jseue of Dominion Note!


apinst approved securi ties deposited by the banb with the dep&rt men-t 88 collateral.

Following the termination of the Great war, the Dominion government made av&ilable to certain foreign governments credits for the purchase of Cenadian producte.

A number of the countriee that took advantage of thue [Mr.

BennfILt.]

JUNE i, 1931 The Budget-Mr. Bennett 2155 credits have already repaid the amounts ad~ vanced.
There is still $6,600,000 owing by the government of Greece, and $23,900,000 by the government of Roumania.

Arrange· meets were made with the government of Greece semi· in 1924 which provided for annual payments on accou"nt of principal so Interest that the debt will be retired by I.948.

at 5 per cent and redemption payments ba\'c been made when due.

The Roumanian debt was funded in 1922 on a 4 per cent basis, and since then interest has been paid regularly.
These bonds mature on April I, 1008, and a provision is made for a sinking fund to redeem them on or before the due date.

Loans to Harbour CommissioD'eTS.

Prior to 1921 the policy had been to provide for necessary harbour improvements by direct government expenditures, except at the port.s of Montreal and Quebec to which the funds required were loaned by the government.

In 1921 the harbour commission of Vancouver was added to those receiving aid by way of loans.
Harbour commissions a,t Ohicoutimi, Halifax, St. John and Three Rivers have since been added to the list.

The amount which had been so loaned is carried as an active asset, and reached the figure of $88,600,000 on March 3'1, 193'1.

This is exclusive of advance to the Quebec Harhour Commission which is carried as a non-active asset.

Canadian Fa'Tm Loan Board, The financial requirements of the Canadian Farm Loan Board have been met from the treasury and the board has, so far.
federal received of $5,050,000 of initial capital and advances; S250,OOO in subscriptions to capital stock, and SJOO,OOO in pUTchase of f-arm loan bonds.

$5,600,000.

This is made up Soldier and general land Settlement.

The Soldier Land Settlement Act of 1919 provided for the granting of financial assist ance by way of loans to returned soldiers who were desirous of settling on the land.

Up Iml, toans to the 31o$t of March, to the amount of SLI6,500,OOO were granted, against.
which 132,800,000 ha.3 been realized.

As the major portion of the advances was made at a period of inflated values it became necessary to afford measures of relief.

Accordingly in 192.5, 1927 and 1930 the Soldier Land Settle to provide for r~ ment Act was amended' duction in the amounts of loans outstanding to settlers.

As a result of these amendments SI8,900,000 has been written off to Oon soJidated Fund.
Substantial losses ha\'e been experienced in resale of stock and equipment that reverted to the board.

To provide for these losses $16,600,000 has been transferred to non~ active assets.

There is left $48,200,000 as an active asset out <If a net capital investment of $83,700,000.

farms, Seed Grain and Relief Advances.

for Advances seed grain and relief have been made from time to time t.o ne'edy settlers in western Canada.
These advances are re payable with interest, and, on March 31, 1931, $2,400,000 wag carried !U realizable.

account the in Ad\'ances for Working Capital and Mis cellaneous.

this chief items under The remaining assets carried as active total the general heading of ad· S30,400,OOO under vances for working capital and miscel1aneou~1.

category ar!.!
category ar!.!

The amounts advanced to the Ottawa Mint for the stores anti purchase of precious metals, open accounts of the Canadian Government (now entrusted to the Canad-ian Railways National Railways and the for operation) unamortized <iiscoun·t on the 4 per cent 1930 60 loan sold at a substantial discount, which will be absorbed over t.he life of the loan by annual charges to income.
LIABILITIES J'h-e liabilities of the Dominion as of March 31, 1931, may be summarized as follows: Liabilities of Dominion on March 31, 1931 .. .. ..$ 141,066,256 69 6,788,162 46 Dominion Note8 Outstanding.. .. Bank Cireulation Redemption Fund.. In8urance and Superaunuation Funds: .. Government .

'\nuuities Insurance Fund.

Ci\"i1 Service.. .. Insurance Fund, Returned Soldiers.. .. Retirement Fund.. .. Superannuation Funds .. .. , .

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, .. .. .. , ., .. $23.306,!l54 65 6,373,6,17 19 9.249,236 ll} 6,271,610 87 35,056,489 12 ,', 80,257,937 93 2156 COMMONS The Bwlyd-Mr. Benne'tt Liabilities of Dominion on March 31, 1931-Concludt!d.

Trust Fllnds: .

Indian Funds Comlllon School Funds.. ..

Contractors' Securities Deposits., Other Trust Funds .. " .... .. .. .

.$13.764,581 06 2.668,449 17 1.712.817 35 2.473,324 90 Conting:ent and Special Funds Post Office Money Orders, Postal Note.

;!, etc., outstanding ....


Province Accounts Post Office Savings Bank deposits,.

FUlllled Debt-Unmatured , .. , ., .. .. ..

., .

.

.

l\Iatmed but not present.ed for payment.

$2,319,279,007 20 555,882 {l4 Intel'cst cOllpons matured .but not presented for payment.

20,619.172 48 1,285,406 40 4,135,347 92 9.623,816 77 24,750,226 97 2,3iO.834,889 24 2,427,700 58 Total' liabilities .. ,.

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,.

..$2,610,788,S17 44 in t·he financial the country.


Therefore I 1t may be ·well to make a brief explanation I mny say, Mr. Speaker, that of these items.

part of this labour is taken because t.his is a new parliament and there are a la'rge number of young members who seem to take con structure siderable interest it dc~ of sirable th-at they might have this record of the position as it existed on the 31st March, in'Volved a very 1931-.
Although tpis has considerable amount of labour, I t.hink they regard the information thus afforded as will 'being of value to them when they are con· sidering.

the public questions of the country.

thought Dominion Notes Outstanding the year.

the banks for notes under At the close of the fiscal year, dominion in circulation amounted to 1141,000, notes 000.
This is a reduction of $33,000,000 in the amount of notes outstanding at the com The decrease is mencement of reduced more than accounted for by the demands of the Finance Act, which dropped from 550,200,000 the commencement of the year to 56,500,. at 000 on March 31, 1931.
During: the same the gold held as security for the re pcl'iod, demption of the notes increased from 163, 000,000 to SSO,OOO,OOO, so that, while on March jrold reserves represented 36·30 per 31, 1930, this the total notes in circulation, ccnt of percentage was increased to 56·90 per cent on March 31, 1931.

Trust and Special Funds Each year the Dominion ~overnment derives a subst:lntial amount of receipts from trust and special hmds.
These funds are not ear marked in any way, but are deposited in the general cash fund and are used to meet.

the clll'rcnt financial requirements of the govern ment.

These deposits create a liability which the government will be required to meet by [Mr.

nmneU.]

future disbursements.

During the past year the treasury' received a net amount of 1,10 The amounts 000,000 from these sources.
standing at these accounts on March 31, 1931, were: Bank Circulation Redemption Fund $ 6,788000 Governmellt Annuities, the credit of ' Insurance .. and Superannuation.

Funds.. .. Trust Funds ,.

..

Contingent and Special funds.. Post Office, Money Orders, Postal .. Notes, etc., outstanding.. 80.257.000 20,ilI9.000 1,285,000 4,135,000 $113,084,000 Province Accounl..a In the dominion books, a. liability of 1,9,.
623,000 is carried representing the capital debt assumed by the dominion when the provinces entered confederation in respect of the assets taken ()\'er, The obligation is discharged by annual interest payments forming part oC the subsidies.

Post Office Savings Bank Deposits Deposits in the post office savings banks ha\'e continued to decrease.

The reduction leaving the year amounted to 11,300,000, for deposits of $24,750,000 on March 31, 1931.

Matured Funded.
Matured Funded.

Debt and Interest Un·paid As ilt March 31st, our accounts carried as a liability $555,000 for unpresented matured bonds and $2,400,000 fot' matured coupons Oll tstanding.

Unmatured Funded Debt The unmatured funded debt on March 31, 1931, was 1,2,319,000,000.

This shows an in crease of 592,000,000 compared with the debt on March 31, 1930, but in the issue that was floated in New York last October, provision the retirement of the S25,OOO,~ loan which .
was made for {)()(j, 5 per cent' public service JUNE I, 1931 Ths Budget-Mr. B....tt 2157 matured on April I, 1931, after the end of the fiscal year.

When allowance is made (or the increase is reduced to this retirement, $6'1,000,000.

Sinking Fund Provision is made for .. sinking fund con tribution of one-half of 1 per cent per annum on PM,ooo,OOO of sterling debt payable in London.

The annual contributian of 11,272,263.57, together with the interest derived from t.he bonda and stocb held.
invested each year by the Bank of Mantre..), London, the government.

acting a8 fiscal agent There is no sinking fund provision for the remaining 157,215,000 of sterling debt out- are for standing.

The total investments on account of sinking fundi on March 31, 1931, was S09, 700.000. of which 13,670.000 _ purobued during last year.

After the three Ii per ceDt domutio war loans were issued iD.

lb.
lb.

,.ears 1915 to 1917, & sinking fund of one-half of 1 per cent peT annum was authorized by the governor in council.

Certain investments were made on acCOUllt of this ainking fund but purchasel were di9COD.tinued when the bonda aold above par.

No sinking fund provision has been made for the remaining domestic issues nor for the issues made in New York.

A statement showing the unmatured funded thereon interest chargel debt and the a.nnual follows.
: nato of Maturity Name 01 Loe_ Rato Whe.. Panble % <Jet.

.\ New york...... ,.

London", ••.

, ... , Canad., .... " .. ,.

Canada... , , ••.... .\ CaDad........ , ,., Dec. 1933-Nov. 1.

.. 19a4--June '.30-A~.

1936-Fe .

I037-Mar.

D~o.

1931--July July July July 103t-April 1... Public Service Loan 191&•.

n New york, .. ,.... • Canad•..•.•.. , •.. tn Canada.......... ' ,.

Canada and N.Y. ,.

Canada and N.Y. ,.\ Canada.......

,., • 1., , I!

"U Loan 191&-31.

..... , , , 19D-Nov. 1., .


Renewal Loan 1922... , .••.

1.

.. ~jO YeAl' Notee, ..•.• , , ' , ict.ory Loan 1918....... " 1.

.. Loan or 1884.............. Nov. 1.

.. Victo~oan 1919......... 1.

..

Bond Jl, 191.5-35........ 1.

.. Lo3n ol 1928-36...•.. "".

1.

.. War Loan 1917-37, .•...... 1...

Victory J.<O<IJI 1917.•.... , , .

1.

.. Loan of 18M....... " .. ", 1.

.. Loan or 18U., ............ 1.

.. Loan ol 1894, ............. 1., .

C.P.R.


Loan ... , .......... 1946-Sept. 1... Refundina Loan 19U., .

.

, , I9-I3-Ot:t. 15...

Refunding Loan 1923... , .• 1~.

111 ...

Refunding Loan 1924, ..... 19*-Feb. 1... Relunding l.oan 1926...•.. lo.t7-Oct. 1... Loan of 1897. "

.. " ....... I95O-July 1.

.. Loan of 1930-50........... 1.

.. Loan of 19f2-.52.•.....••.• 196~May 1960-0et.

1.

.. Lou of 1940-60.......•... 1.

.. Loa.

of 19BO-eO........... Oct. Demand•••• ,.".


DabentUJ1l Btoek School Land., ...••.. " •••..•.. 3 London .... , .

.,., .

3 Londen........ , ,.

3 London.. , ........ ~l London.

", .• , •.

,.

Canada .... ,.

,., ,.

• Canada ........ , '.

~I Canada ........ , ,.

• New york........ • London•....•.

".

, • NewYork.•...... • Canada........... Canada ..•...•....

London.,."

•..... London ....•.•.


, .• Amoun' 01 Loaa • .... 25.000,000 00 52.929.600 00 73.323,150 00 '0,000.000 00 f4lJ.6S9,950 00 23,487,206 27 511,910,6.

'Wl 00 874,000 00 fO,OOO 000 00 90,186.900 00 236,299,800 00 8,071,230 18 18,250,000 00 10,950,000 00 16,056,006 66 75,000,000 00 147,000,100 00 50,000,000 00 4.5,000,000 00 4,888,188 6f 137,0.58,841 00 100,000,000 00 93.920.686 66 100,000,000.
00 AmoUllt Into.... Cha.raee • .... 1,250,000 00 2,848,.80 00 .,032,773 26 1,600,000 00 24,666.297 II 821,852 22 28,IM,086 76 .

:J.700 00 1.800,000 00 4.508,3'5 00 12.968,489 00 2U,18890 647.&00 00 328.... 00 528,960 28 3,376.000 00 7.

a.

'Wl, 00& 00 2.2'0.000 00 2,026,000 00 122.2<K M 4.

7ff!, 05~ 43 6.000,000 00 8,767,OM 87 4,000,000 00 33.129,000 OD 1,6&6,'50 00 2,378,961,286 39 118,398,406 36 Pay.ble in Canada P.yable in Canada 6Jld New york"""................................
Payable in New york..••. ""

.•..• ,., .•• ,............................. " ..

,., ••••• , .•••••••.•..••••.

,... PayableinLondon , ...••• ,.

", ••• , ••••••• , •• , .•••..••.. " ••..•.• 1,711,252,250 00 91.040,900 00 281i,OOO,OOO 00 311.668,136 99 ""."

Le.. Bonde and Stocke of the above Loau held .. Sinkina:: Fund.,.

tTu Free.
tTu Free.

2211~137 • 2,378,961,2118 39 59,764,439 00 • 2,319,198.847 30 2158 The Budqet-Mr. Bennett COMMONS Of the funded debt 13.10 .per cen·t is pay able in London; lU.l·4 per cent in New York; 3.83 per cent in either New York or Canada, and 71.93 per cent in Canada.

The rollowing summary sets out the amount or debt out· standing at the different interest rates: $ 4.888.18.

'5 64 at 2!% 37,271.230 16 at 3 % 175.582.05393 at 3~% 233.926.666 66 at 4 % 210:000.000 00 at 4!
% 449,099.600 00 at 5 % 1,268,193,550 00 at 5~% $2,378.961,286 39 .. $ 122.204 64 1,118,136 90 6.145.371 89 9,357.066 66 9,450.000 00 22.454 980 00 69,750,645 25 $118,398,405 34 NON-ACTIVE ASSETS The gross liabilities or the Dominion on March 311, lrel, were $2,610,700,000 as -against which there were active assets or $349,180,000, to which reference has been made.
The differ ence $2,261,600,000, commonly referred to a.i the net debt, but which is really the net debit is briefly accounted balance in the accounts, for under three heads.

First there are loans and advances made va~jous cnt~rprises which arc not pre for sently realizuble, yield no direct return to the -presentation ~f and in the The second division is comprised of treasury, the accounts are treated as losses.
These total the chief of which are 1614,000,_ 1673,000,000, 000 to the Canadian National Railways, S15, 500,000 to the C.anadian National Steamships, $24,400,000 to the Quebec harbour commission loans.

and $16,600,000 soldier land settlement the aggregate of capital expenditures made on canals, railways, public buildings and harbour improvements, which total S927,.

and river 300,000.
and river 300,000.

Another item of $88,000,000 is shown as "Railway Accounts Wid)", which refers to railway Capital expenditures made in the early history of the fruits of which trallsferred to certain rail were by legisiatioll way companies, hon.

members will recall the transaction with respect to them during the Gmnd Trunk arbitration.

the country, Then there is the balance of $572,500,000 at consolidated ,fund on 'MaTch 3~, debit of 1931.
This is the accumulated deficits since the commencement of the accounts, or since confederation.

AU ex.penditures arising out of the world.

war have ·been absorbed in thil!l balance.

A tabulration of the non-active aMell!l follows: Non_Active Assets on March 31, 1931 Canndian National Railways Ca\J(ulinn -N ational Steamships Harhour Commissioners: Quebec )[ontrc!fl.1 and Three Rivers .

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Seed Grain and ReHer Advances ....


Soldier and General Land Settlement .. Miscellaneous Advances, etc Capital Accounts: .

Canals Railways .

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$ 614,406,239 42 15,550,748 55 $24,429,995 68 251,760' 97 .. 24.681.756 65 1,128,829 50 16,648.951 95 995.678 82 Public Buildinl;S. Harbour and River Improvements .. :.\Hlitnry Property and Stores Territorial Accounts .

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, Railway Acconnts (old) .

Consolidated Fund, balance at debit of, March , 31, 1931. .
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• .. $233.782,788 90 435.687,262 93 235,898,706 71 12.035.420 50 9,895,947 68 927,300,126 72 88.398,826 78 572,497,150 33 Net Debt March 31, 1931. .

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.. $2,261,608,316 72 INDIRECT ODLIG....TION8 OF THE DOMINION Hon.

members will recall I spoke of obE.

gat ions diircct and indirect.

Ha\'ing dealt with the balance-sheet position of the domin~ liabilities and the liquid and ion, income-producing :J.ssets off.setting these in there remain for consideration the con part, liabilities.
As at March tingent or its direct indirect (Mr.

Bennett.)

the hands of 31, 1001, these indirect liabilities, as re,presented by securities guaranteed by the dominion public, the outstanding in amounted to $954,892,779.
If to this figure there be added th:lt part of the funded debt of the Oinadian National Railways which dOfS not bear a dominion government guarantee, a total of SI,268,748,433 is reached, accounted for as iollows:- JUNE I, 1931 2159 The Bl/dOd-Mr. BCIJIIC!tt Securities Guaranteed by the Dominion Government: Harho\ll' Commissioll!'!

.

,ront"f'al Harhour Bridj,te XC\\' \Vl,,,ttllin~tcr Elcvntor.

Rt.

John Ha,.hollr Illlpron~llIcnts.. .

.


("'anfHlinll Xationnl C'nnilliiall Xatiolwl Railway,; (\Vcst Jnclies) .

Stl.

'am~hips .. .

.$19.0110.000 700.000 2.135.11S - - - -$ 21.83.1.118 lIA(;().OOO !l:!3.65i .661 Totnl Re(·urities J:::un"nlltc(>(1 h.\' Dominion.. .. .. .. .. .. ..$ D.H.8!

)2.i'D Canndian Xational'Railwar Debt not guaranteetl by Dominioll:- but for wllich the propcrt)' would tea.-;c to fUllC Jiahlc-othcl'\l"ise arc l'()UI'S(' WI.'
of tion- (;1I;\I·alltf·(,(1 hr prodnce's CllguHI'Hlltl'(·t1 (le1>t- .

(1...J)(·lltllt"l· stm·k .

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1,011\1'" I'cl']wtual :111(1 :\Inl"t:;a:;(' llli.~c(·ll:l1H'oll~ ilHh'btetlllezis Other Etpliplll~'llt tl'lI,;t notl':; & certificates.. (It-bcntlll"c stock .

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72.184..188 6::1.240.5,1 88.<':08.3,,1 7ASO.6:n S2.3-l1.600 Total of whith $1,237,513,315 is Canadian National Debt to the public .. $1,268,748.433 that year, took plnce.
]n J::muary of The operation of the Canl3dian National Railways as an amalgamated unit dates from the former 1923. administration, by order in council, declared the prefNence and common stock of the Grand Trunk Railw:"!.y Company of Canad3 to be the property of the Mini"ter of Finance for His Majesty and thereupon the in trllst the GlUnd Trunk with the am3.lgamation of It may be Canadian Xational well for liS to examine briefly the result.s of these eight years of operation, having regard particularly to their association with and re financial position.
flex upon the dominion's The pcriod has been one in which a large sum of moncy has been made available to the inn'stment, and there ~as system for capital becn a corresponding increase in the debt In eight years some 400 of millions of dollars have been added to the Canadian National investment account for the const·ruction and acquisition of lines, terminals, hotels, new equipment, etc.
This increase .in debt has resulted in an addition to the annual interest charges on the system of almost 20 millions of dollar" or ebout 55 per cent, so that when we consider the re'sult of operations over the period, we must have in mind, on the one hand, the advant:1ges from the assumption of a heavy additional obligation and, as {In offsetting factor, the annual carry ing charges resulting therefrom.

the 'company.

to accrue Railways expected for The balance .sheet of.
the Cnnndinn National Railways, through the profit and loss account indicat,es a loss in the eight-year period of 346 millions of dol hI's.

The first and largest item rmking up this consists of 253 millions of dollars charged in the railway loss has accounts-but not paid-as interest on the.

sum of 604 millions of dollars of direct assist-,' 3ncc by way of cash loans which the gov..;.

emment company.

As to between the government and the system, this.

is only a bookkeeping item.


The actual burden of this liability was taken over by the domin~ ion and has been can-ied by the t3.x..,payers: of the country.

given the the lines ca.stern The balance of the Joss, totalling $93,000,000,' is made up or 586,000,000, being the actual deficiency of earnings in the eight-year period after charging interest due the public, but" leaving aside the interest due the govern",.
ment, and 57,000,000 representing the net debit of adjustments through profit and loss account.
These figures lea\"e out of consideration the': operations of since -the the Maritime Freight Rates Act pagging of in July, 1927, from which date the government has contributed directly to operating losses on these lines, apart fTom the 20 per cent re duction in tolls, The situation, the sum or 117,500,000. is that since 1923 therefore, an additional capital li~lbility of 400 millioD$ of dollars has been assumed in respect of the railways, involving an increase in the annual interest charge of 20 millions of dollars.
The system has failed to earn its interest charges during the period by a round sum of 86 millions, and the government has itself borDe the carrying charge's in respect of 604 millions of dollars contributed direct to the system, as well 'as, since 1927, operating losses of $17,500,000 on eastern lines.

It is well known and fully reali:red that the difficulties of transportation systems are nOl: unique to Canada or to the Canadian-ownprl 2160 The Budget-Mr. Bennett COMMONS system.
To realize that in 1000 the gross revcnues of the system were less than in the year 1923, notwithstanding the addition oi 400 millions of dollars to the investment in the .property, seriou.

;:neS5 of serves only the problem.

to impress the The is indire('t obligations: following a statement of !-hese Bonds Guaranteed by Dominion Government ll.!

at March 31, 1931 Date of Maturit.y Issue Interest Hate % .

.

.

t. 1934 Sept. Feb. 15, 1935 Sept.

I, 1936 Oct.

I, 1940 Dee.


I, 1940 July I, 1946 April 1, 1948 Aug. 1, 1952 July 10, 1953 Feb.

I, 19.

'>4 Sept. 15, 1954 Mar.

I, 1955 June 15, 1955 Feb.

I, 1956 July I, 1957 July 20, 1958 May 4, 1960 :May 19, 1961.

Jan.

I, 1962 Jan. 1, 1962 .

Dec.

I, 1968 .

July I, 1969 .

Oct.

I, 1969 .

Nov.

I, 1969 .

Feb.

I, 1970 By tenders or drawings .

Various dates, 1932--54 ..•.. City of Saint John Debs.

assumed by Saint John Har· .


bour CommiS:lioners Canadian Northern .......•......................... .

Canadian Northern Grand Trunk .

Grand Trunk Canadian Northern Canadian Northern New Westminster Harbour Comm ........•......... St. John Harbour Comm .

Canadian Northern Canadian Nation!l!..

Canadian National.. Cnnll.dian National (West Indies) Stps Canadian National.. Canadian Nationa1.

Canadian National.. Canadian Northern Can.

Nor.

Alberta Can.

Nor.


Ontario Grand Trunk Pacific Grand Trunk Pacific Canadian National.

Canadian National.. Canadian Nationa!..

Harbour Comm.

of MontreaL Canadian Natio.la!..

Canadian Nationa!..

.

.

.

.

.

.

.

.

.

.

_ - .

.

Serial- Feb. and Aug.

I, 1931~ 38 ............•..... Canadian National.Equipment "0" Perpetual.. .

.. .

.. .

.. .

.....•......... Northern Ry.


of Canada Deoonture Stock .. Grand Trunk Guaranteed Stock Orand Trunl{ Debenturo Stock Great Western Debenture Stock Gmnd Trunk Debenture Stock • ,u.

17,060.0:13 33 17,000,000 00 25,000,000 00 2-1,743,000 00 24,793,000 00 25,000,000 00 700,000 00 661,953 04 9,359,996 72 50,000,000 00 26,000,000 00 9,-400,000 00 50,000,000 00 70,000,000 00 65.
()()(), 000 00 7,896,564 81 3,149,998 66 34,229,99687 34,992,000 00 8,_440,848 00 35,000,000 00 60,000,000 00 60,000,000 00 19,000,000 00 18,000, ()()() 00 30,534,700 67 4 4!

6 7 7 ~l 5 3 5 41 5 41 :1 31 31 31 3 4 4!

5 S S 5 2 various 1,467,164 96 .

.

.

.

.

.

5 4 5 5 4 4 11 , 250, ()()() 00 60,833,333 33 20,782,491 67 13,252,322 67 lHl,839,01433 1,499,97967 954,892, 778 73 that Now, Mr. Speaker.

at this point I should like to point out there is a tendency on the part of the press supporting hon.
gentle mcn opposite to allep:e that the government is oppo;;cd to the Canadian National Rail to declare that no ways.

May I venture take man is a Il:ood Canadian who does not the time to study and realize the extent of this obligations which are being laid upon <=ollotry by this parliament.

The Canadian cannot be National Railways' management charged wit.h this.
The for responsibility Canadian National Railways Act provides that the ~overnor in council takes the position the Railway Act, of shareholders under and \~hen I point out the sums that have been expended and the obligations that have been 1M r. B,·nncH.l that in mind.

is now the created during the last eight years, I do so because it has been done at the initiation of offici::tI the government which opposition.
ilear I do think the Cana there is a failure on the part of dian people to understand and appreciate the extent and character of the obligations which have thus been placed upon them.

There in intere!

;it you h:l\'e 586,000,000 of a deficit earning power in addition lo which the people of this country paid interest on S604,~,OOO advance for the running of the enterprise.

in the last eight years, in Now, I submit, sir, I would be derelict my duty, and I believe {lny han.
member would be derelict if he did not analyze and ponder these matters.

And the in his duty, JUNE I, 1931 The Budget-Mr. Bennett 2161 on for single· capital requisitions made blame must rest with the government of the day for the management of railway companif's requesta are always prone for to· submit to get.

Yet larger WIllI" than they expect 80 far a.s I have been able to ascertain, not one request made by the management of the Canadian" National Rail.
ways during the last" eight yean was refused by the late 8ovemmebt-not· one./h thAt flO in any privately owned road"?

bo through the the Canadian Pacific Railway or on the Union Pacific.

the the Santa F6, and you Southem Paci6c or find that state of a.ffaira e:riatins.

will Dot the late government, rea9QD8 best Yet known to themselvel!l, have put the tonutry in tlie position that I have just pointed out.

there i.3 no business that And I do suggest of the nation which should 80 concern hOD.
the shareholders in memben---wbo represent.

& larger way in the goveqlor than to which counciJ-u that resulting in figure!

I have just directed their attention.

I cer tainly think, and thi;a government certainly thinks, it is mon unfair and unjust, and, what is more, the ~enterpri.se itself, to eay that because you direct attention to those ngures and the effect of them that therefore you are an enemy of the enterprise.
The best friend, any buainese enterprise has is that shareholder who carefully expenditures made by thP.

scrutinizes the directors during the year.

to the well-being of inimical doea Canadll at the clo!9P.

of the year 1930 again ranked fifth Ilmong the nations in the volume of internatiOttal trade.

There were substantial trade, as decrea5eS in the dollar value of compared with the year before, but were a graph made by use of Quantities it would present a jagged picture.
The fi!Cal year 1929-30 closed with fln unfavourable balance of visible trade amounting to 103 millions.

In unfavourable the year review the under .

balance Wa9 89 milliona.

The United States was the principal Ctl& taking tamer of Canada during the year, 441% of our erport.

!J and in turn Canada purchased over 64% or ita imports from the United States.

imports Cram the United States amounted to 584 n::.H1ioD!

', and the exports 3M miollioDB.


This l~ft an un favourable ba1aIl'ce in the trade with ~e In dollars, United States of 220 millions.

ceding year In the pre-' imports had amounted to s,r · milliq~s .~nd exporte· to 536 millions.

: rnide' with British Empire Trade 'with the British Empire ~as unevenly : alIect'ed during the year.
On the import side, · while there 'waa a decreue from 252 m~l1ions tJii!l deere'Me' 'WAS largely in · to 204" millions; ·lbe' importS from t~o couni.ries..:·'the United Kingdom and New Zealand.

There was ~ 40 -million dollar decrea3e in imports rrom the United Kingdom, $3,000,000 being in iron producta, 8 million.s in.

alcoholic beverages and 19 millions in textiles.

The ba'lance was spread throughou~ a wide lis~ of article-'.
From New Zealand the decline wu in imports or butter which ·decreased sg,700,OOO.

Th~ .exports.

"tO .

"the Biitish Empire amounte~ , to.. 295 .millions,.

a decrease of S6 millions from the year before.

The coun!.ries to which exports fell.

off tl1e most were: United King- · dom (62 millions), Australia (9.6 milEon.s), New -Zealand (6.4 m.ilJio~,·Wes!.

Indies (3 millions), and' Newfouhdland (1.3 miUion.s.>.
the greatest falling of[ in exportJ, Naturally, to the United Kingdom consisu·d of food stuffs.

The decrease in exports of grains in meats to S3~ amounted to 41 mitlions, to $4,400,000, in in milk products 900,000, paper to' $2,300,000, nnd in' iron: :loud its prol ducts to $2,800,000.

The principsl decre-asel!l in export!

to other parts of the British Empire were in rood commodities such as flour, paper and wood products, automobiles, farm.

imple ments, etc.
imple ments, etc.

The trade of Canada in the fiscal year, when cllIwulated by means of percentage•.

wae divided as follows: .

With- British Empire.

.

United State,.

Treaty countrie.. Other countries.

.

.

.

.

Im~rti Export.

$ .

22.6 • 64.4 9.2 3.8 % 36.1 4.4.5 16.1 5.3 100.

100.

Imports or Commodities Ten product groups make up in value the major part or the importa into Canada, AIld a five year period the lut comparison over emphasizes the material redUctiOD!

which took place.
which took place.

The Budgct--Mr. Bennett COMMONS Group Sugar and products .

.

.

.

• .

Alcoholic beverages .

Cotton and prodllcts .

.

.

.

.

.

.

• "Vool products Textile products, other.. Iron products Non·ferrous metal products Coal and products .

.

.

.

.

.

.

.

.

.

.

.

.

• .

.

Petroleum .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

• • .

.

.

.

Chemicals .


.. , , .. .. 1927 40.4 29.3 54.1 50.5 78.9 229.4 52.7 68.6 54.4 3l.8 1928 1929 (in millions) 38.8 45.9 58.2 48.8 79.8 259.5 60.1 64.8 53.5 33.5 31.
Exports of Commodities A study of the exports shows every activity to have been touched by the decline in values the ~the products of the mine, the farm, forest, summarizing under ten groups, the past five years !

;hows: the fishery and the factory.

Again the record of Group Grains ..

Milk and products .

.

.

.

.

.

.

.

.

.

.

.

.

.

.


.. .. .. .. .. .. .. .. , Flour .. .. .. .. .. .. .. .. .. .. .. Lumber, logs, etc .

.

.

.

.

.

.

• • .

.

.

• • .. .. .. .. .. .. .. .. .. .. · Rnbber products .

.

.

.

.

.

.

• .

.

.

.

Non-ferrous metal products .... Iron protluctR .. Wood pulp .. · Paper .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

• .

.

.. .. .. .. ..

Fish .. 1927 394.4 68.7 41.6 107.8 123.2 34.5 26.6 80.6 74.2 49.9 1fJ28 1929 (in millions) 1930 1931 391.
6 59.8 34.0 99.3 ]34.9 33.5 28.6 90.8 62.7 47.3 476.1 65.1 35.7 91.6 148.3 34.9 30.5 ll2.7 82.2 44.9 232.7 45.4 27.4 89.7 151.5 34.7 32.2 154.3 78.5 44.7 180.8 ' 32.8 18.7 60.7 131.9 27.8 21.0 95.6 38.9 35.1 ~mports of.

Certain Goods In the month of September, changes were made in the ra:tes of over one hundred tariff items.

A comparative statement is difficult because some divisions were previously in .corporatcd into general items.
With this the imports under the 129 items reservation, amounted to $112,271,000 in the period from October 1st, 1929, to March 31st, 1930, and in the same.

period commencing Octooer 1st, 1930, an4 ending March 31st, 1931, the im ports were $61,920,000.
Summary of the Trade A statement of the .world trade of Canada in the past five years follows: .. · Year I 1927 .. · HI28 .• 1929 .. , 1930 .. B131 .. New Industries Established in Canada Since August, 1930. there has been 11 marked influx of new coneems frOIll outside countries It will be some time be into the dominion.

fore full details in mgard to capital invested, number employed, etc., can be secured since in process of orl!
:nnization, but :some are still oP,ighty·scyell sllch concerns have already been listed by the dominion bureau of sta~stics And the number continues to grow.

Of the eighty-seven, seventy-four.

are United States manufactul'ing concerns, ('Ic\'en' are British seven m:mufarturing and iour non-manufac turinJ;-and two ure French.

These firms represent considerable di\'ersi fiCfltion in industry.
United States firms in {Mr. B..mi.ett.1 Total Exports Imports $ $ 1,267,573,142 1,030,892,505 1,250,598,034 1,108,956,466 1,265.679,091 1,388,896,075 1,248,273.582 .
1,144,938.070 817,003,048 906,612,681 Balance $ +236,680,637 +141.641,568 + 123,216,984 -103,335,512 89,609,633 - twenty :ron and steel, elude eight in the vegetable produots groups such as foods and rubher-two animal pro tE:xtile, eight wood and paper ducts, eight twelve non products, three non-metallic minerals, ferrous metals, nine chemicals and allied products, two min· iog and two miscellaneous.

British firms in clude three textile, six iron and ·steel, one The two chemical and one miscellaneous.
Fl'(~nch firms are textile manufacturers.

List ()f New Concerns EstablishinR in Canada since August, 1930 United States A. Vegeta.ble Products: 1. campbell Soup.

Co.• Ltd., New Toronto, Onto (Minnesota 2.

Fine Food6 of Canada, Ltd. Canning), Windsor, Onto JUNE I, 1931 The Budget-Mr. IJennett 2163 A. VeA'etable Produet9'-Conc.

3.

Hill Nut Co., Ltd;J, Toronto, Onto 4.

Liberty Cherry vo.

of Canada, Ltd., Toronto, Onto 5.

Newton Prothu:ts, Toronto, Oot.

6.

Stcdfast Rubber Co.. Granby, Que.

7.


Stedman Flooring Co., Farnham.

Que.

8.

Tenuury Chewing Gum Co., Sherbrooke.

Que.

B.

Animal Products (E:xc~t Textiles): 1.

Cnntile\'cr Shoe Co. of Canada, Ltd., Tor onto, Onto 2.

&hwegler's Hatchery, Dridgeburg, Onto C. Textiles: I.

.~<:ro Corp. of Canada, Kitchener, Onto 2. n. Edmund David, Hawkesbury, Onto 3.

Dnminion Webbing Co., Ltd., Kingston, Onto of Canada, Ltd., St. 4.

Donahue Corp. Hyacinthe.

Que.

5.

Hem,\' Hamer &.


Sons, Ltd., St. George de Beance.

P .Q.

6.

F,$illlond :\liIls.

Ltd. of Can3da, Granby.

Que.

i. Herbert Hosiery Mills, Ltd., Toronto.

Ont.. 8.

'Vl'lItminster Hosiery Ltd., Mount.

Denis, ant.

D. Wood and Paper Products: I.

fielle\·ille·S.

:l.fgcnt &.

Co., Ltd., Belleville, Onto 2.

Brown & BiA:eJow Ltd., Toronto, ant.

3.

Dixon Pencil Co., ·Newm.arket, Onto 4.

Eagle Pencil Co. of Canada, Ltd., Drum mondville.

Que.

5.

Hafllw:'lre.

Co"ticook, Que.


'Voodenware and Toys, Ltd., 6.

Schaeffer Ross Co. of Canada, Ltd., Toronto, Onto 7.

Schlt'1;l'l Co. of CU::ldA.

Ltd., Toronto, Onto 8.

Venns Pencil Co. of Canada, Ltd., Toronto, Onto E. lTon and its Products: l. _'\.

B. C. Wuher Co., Granby, Que.

2.

Durr, Pattef90n & Auld Co., Walker ville, ant.

3.

Castings of Canada, Ltd., Smiths Falh, Onto 4.

CrOll; Coal'()-Mo.tic Co. of Can., Ltd., Montreal, P.Q.

5.

Dominion Hoist &.

Shovel Co. 6.


Dominion Motou Ltd., Toronto, ant.

7.

Fedder Mfg.

Co., Toronto, ant.

8.

HeOtters of Canada.

Oakville, Onto 9.

Hump Hairpin Co., St. Hyacinthe, Que.

10.

HlIpp Motor Car Corp., Windsor, ant.

11.

Jolmson (S. T.) Oil Bll1'"ners of Canada, Ltd., Montreal, P.Q.

12.

Lodge :Motor Co., Ltd., Walkerville, 13.

Lynn Canadian Products, Ltd., Brock· Onto Tille, ant.

Toronto, Onto Ont.

Que.

.

14.

Metal Textile Corp.. Hamilton, Onto 15.


Radiator Specality Co. of Canada, Onto 16.

Reo MotGr Co. o-f Canada, Toronto, Onto 17.

Taco Heater Ltd. of Canada, Toronto, 18.

D. D. Terrill Saw Co., PC'mbroke, Ont.

10.

Tower 011 Burner Co. Ltd., Montreal, B.C.

20.

Ste\\'al't Tr-uck Corp. of Canada (Assem bling), Fort Erie, Onto F. Mnnubcturers of Non-Ferrous Metal.

: 1.

Curtis Lighting Co. of Canada, Ltd., Toronto, Onto 2.

Denniwn Electric Co" Toronto, Onto onto, Onto Onto Onto Ont.

3.
3.

Dietogrnph of (.

!ssembling), Toronto, Ont.

Co. Canada, Ltd., 4.

Eastern Power Devices, Ltd. (Formerl1 Sales Office), Toronto, Onto 5.

Hammond Co. of Canada, Ltd., Toronto, 6. International Resistance Co. Ltd., Tor 7.

Leland Electric of Canada, Ltd., Toronto.

8.

NGma Electric Co. of Cannda Toronto , 9.

General Ra·i1wa)" Signal Co. of Canada ' Ltd., 'foronto, Onto TorontG, Onto 10.

PrH:knrd Cable Co. of Canada, Ltd .• 11.

J. P. SeebuTg Corp., Toronto, Onto 12.


Wheeler Reflector Co., Toronto, Onto G. )Ianufncturer or N'on-lIehllic Minerals: l. ::\leesrs.

Bundy Insulntors Co., Oshawa, Onto 2.

~Iaster Builders, Ltd .• Toronto, Onto 3.

'l'ranco Mnnufacturillg Co. (Canada) Ltd (for'lllerly snles office), Leaside.

Onto H. Chemicals nnd _\lIied Products: I. Canntliall llitumels Co., Ltd., New Tor .. 2.

Everett &.

Barroll of Canad'a, Ltd., Tor· 3.

Fyr-Fyter Co. Gf Canada, Ltd., Hnmilton, 4.

The A. W. Higgins Co., St. Jahn.


N.B.

S. Mallinckrodt Chemiaal Works of Can., (.formerly snies office), Toronto, Onto :Mfg.

Co. Inc., WindSGr, Onto Ltd. 6.

7.0ber Fertilizer Co., Weiland, Onto 8.

Sheffield Bronze Powder Co., Ltd., (for.

:MUIIl merly sales office), Toronto, Ont.. 9.

Summen Fertilizer Co. Inc., St. Stephen, N.B.

I. Miscellaneous Industries: l. L. O. Balfour Co., Sherbrooke, P.Q.

2.

Film Laboratories of Canada, Ltd.• Tor onto.

Onto J.

·Mining and Metallurgical: 1.


Nortllwest Stellarene Co., Coutts, Alta.

2.

PUI'CG Oil Co., Ltd., Calgary, Alta.

onto, ant.

onto, Onto Onto List of New Concerns Establishing in Cnnada since August, 1930 Great Britain C. Textilps: 1.

HieId Bros., Kingston, Onto 2.

O. H. Hirst &; Co., Carleton Place, Onto 3.

Hiram Leaoo &; Co., Bruntingdon.

Que.

(Canada), Ltd .• E. Iron and Steel Prodtlcta: l. Imperial Typewriter Co.

(Non.Mfg.

), Toronto, Onto 2.


Quasi-Arc Co., Ltd., , Instrument Co. of Canada, Ltd., (Non-Mfg.)

Toronto ' 3.

TAylor (Non-Mf~.

), Toronto.

Onto 4.

Warwick Time Stamp Co., Toronto Onto 5.

Wright's Canadinn Ropee.

Ltd., Va~couver.

6.

ZaMgcn Steel Co. of Canada, Ltd., Tor onto, Onto H. Ohemicnls and Allied Products: I. British Dr.ug HouSt's (Non·Mfg.

), Toronto, Onto I. Miscellaneous: (Canada) Ltd.. 1.

BO\'il 4; Hood (Canada), Ltd., Montreal.

P.Q.

The Bud(}et-MT.


Bennett "COMMONS C. TutU",: ·France .

'.

: 1, C.naidian.

'I'''s.R.·of Iqotw, Ltd., Cap deJa Madeleine, Qu e .

· · .

2.

Hen1'1 Potes of Canada, Ltd., Cap li.

Ja Ma~eleine.

Que.

. '

resources and .for Mr:" MA'CKENZIE KING: They "'" pracUcaUy' aU in Ontario and Quebec.

are' they Dot?

Mr. ,BENNETT:· With the E:xceptioa.

of two, r think: J Now", ma.y.I just meet a few .words .of criticism in .advance, although.

per· haps.

it is unnecessary..

The exUl.nt of invest ment.


in Canadian' indu:;try br United S~tes, ether' foreign countries and GrE:at Britain iI a .subject of far-reaching imp{l~tance.

All ~U1ig- or' undeveloped .D.

:l.tiOM have been investments by dependent on large capital outside countries for the devplopment of their ft..~istance natural in the establishment uf the diversified industry ne c~erY to' 'all-round national de~elopment.

Without.
Without.

such assistance indUblrial progrees would he slow and desperately difficult.

The hardshij)s being endured by the Russian J>C:ople to:-day exemplify .. the sacrifice wbi'Ch an.

un develo~d nation would be caJ!ed upon.

to mate, not fot five but many time.

'5 five yean, if 'tha\' nation were to strive to become' in· duslrfalized through its own $l\vinp of capital.

received large Canada has ·fot many yeat!

investments from' other countries.


Fear has sometimes been expressed that these outaide natioD3 by starting industne, in this country or"inyesting their capital in various Canadian enterprises, comm.er<;ial, ,gl,)vern.m£:ntal, finan cial or other, are obtaining a ineil~ing posi tion in our economic life, The facta 'of the case 'reveal these fears to be entirely' un· founded.
A recent· bulletin of the bu'reau 'of statistics shows that there were located in Canada 1,199 British, United States and other foreign branch, $t:bsidiary and affiliated firms concerned with manufacturing these, 1.023 were from 'or pr09uction.

Of United States, 162 from Grut Britain and 14 from .other countrieSl.

The capital employed in these concerns amounted to '1,818.000,000, 'ownership of which in individual firms ranged from le!8 than 50 per cent to 100 per cent..
In all, 68 per tent or 11,239,000.000 was owned in the United States, 17 per Ci!nt Ot 1317,000,000 Wu owned in Canada,l4 per cent or S257/X», 000 in -Great 'Britain and $6,OOlI,OOO or lese than 1 per cent in other countries.'

.

Even in such branch or subsidiary firms interest.

Cti.-nadians held nearly 20 pt!r .cent and it is a well kno'WtJ.

fact tbt the 'Canadian proporti-pn: J.end8 to incr~..

There have been many instances ot firms established: in in January, 1930, OM.

Bennet,.]
Bennet,.]

, It the amount Canada by oulsid'en e.ventually pusing into Canadian hands.

, To see such facts in their proper perspective', however, it iI necessary to compare the figurea with thO@e of the geographical distribution of 9woerahip of .all capital emplo)'ed in Canada.

is '17,soo,~ It is estimated that ia· 000,000, .

This sum includes the bonded.

debtedness.


of Dominion, provincial and mUlli~ investments in· r&ilwaya, cipal governments, ma:nuf&cturing concern!, mines and m~tal trading eatabli.e:b industries, public utilitiea, insurance, etc.

menu, in.cludee finance, private capital in domestic enterprises sucb this as iJ estimated that 65 per cent or $11,500,000;008 is owned in Canada, 20 per cent or 13,500.
000,000 in the United State~, 13 per cent or '$2,200,000,000 in Great Britain and 2 per cent 'or 1300,000,000 in other countrie~, It· is obvioUi the control of our enterprises is very that predominantly in our own hand-...

If the buia of comparison be our total r.ational wealth, foreign and BritiSh investments are 8til1 I .

ai~cant.

OUr nation&!

wealth is now prob- 'ably in the neighbourhood.

of 130,OOO,OOO,oOQ.

; British and foreign investment'!!


of capital in Canada are 16,000,000,000 or just 20 per em" farms and homee.

Of Even of this 20 pet cent m"ny millions ol dol1J.n are represented by bonds which do ·n.ot ordinarily cany with them direction or control of industry.

sum it I believe, sir, that 'any member of thia: boUR reading these figures must be impresaed lrith the ,resource and courage a.nd enterprise of the Canadian people in industrial, agricultural· and manufacturing fields of endeavour.
Of lRKIW 80 vast, I do not believe there i, any recOJ'd on the part of any other population equa1i, email and 8C&ttered over an area 80 ereai.

May I ,point out now that Canada.

camel .on its bU8inese a~ home and abroad by the a~ plication 04. principles tha.t vary with the .d.

minist~tiona of the day.

/ So far lUI thiI party is concerned, it directe, and will continue to direct ita operation.
; from three angles: ~ we believe the.t we have been entrusted with great lelK>urCe8 w>bicb it is our duty to develop t.O the grea~ poSsible extent; .secondly, thai Canadiane are entitled to carry on tha\ de velopment, .enjoyinc an equal opportunity with the other peoptes of the world enpcecl in the development of their respective coun triesj and, thirdly, that Canadians are entitled ·to .fair competition in carrying forw&rd that develoPment.
We' meet the lut requitetnellt by dumping legislation; we meet the aecoud requirement by tari!!

legislation; and we meet; .the first requirement by the couraee and enter ·prise 'of ,our people.

JUNE 1, 1931 The Btlllyct-Mr. Bennett 2165 for I point out somewhat different !\ow it has been custom:lty.

in bhe course of "ery m::my centuries, trading peoples to negotiate 3grecments or treaties with others who arc engaged in commerce; ::md in this re~Ard the Canadian people ha\'e not been unlike others.
Dut ma.... this: that Canada, by renson of being II part of the British Empire, has lrc:ltiC'$ ::applying to our trnding enterprises from those that exist in other parts of the world.

For instance, Can::ada h:ts treaties which wel'e made direct by this dominion.

Th:lt is (::act No.1.


We have a treaty with France made on December 15, 1922; one with ]uly made on January 4, 1923; ooc with Belgium made on July 3, 1924; one with the Kethcrlands made on July 11, 1924; one with Czechosla vakia made on March and one, modus vi"endi, made with Cuba, NO"cmber 1929.

15, 19"...8; Then Canada has a. second kind of treaty -a treaty mnde by Great Britain on behalf of the Briti;;h Empire but which provides that this part of the empire is bound by it only when we accede thereto.
or this kind of treaty we had two, one with Japan, m:lde on April 3, 1911, to which we :lcceded on May 1, 1913, and one with Spain, made on April to which wc acceded on August 1, 5, 1927, 1928.

Again, we have another, a third form of treaty, namely, that which contains II clause providing that the most.-f&voured~nationterms sh:lll be acconled to Canada if similar treat ment is given by this dominion to the coun try with which the treaty is made.
Such trea ties we have with Finland, Esthonia,' Hun gary, Jugoslavi!l, Latvia, Lithuania, Portugal and Roumania.

before we confederation.

or own behaLf-treaties Lastly, we have that Class of treaty which W:lS made by Great Britain before we became n. negotiated treaties on our that bound every part of the British Empire when long yellnl they were made by Great Britain, before we became a dominion.

The list is interesting.


Of such treaties, there is one with Argentina, made on the 2nd day of February ]825; one with Colombia, made on the 16th day of February 1866; one with Denmark, mnde on February 13, 1660; one with Norway, made on March 18, 1826; one with Sweden -the oldest of all-made on April 11, 1654; one with Switzerl:lnd, made on September 6.

1855; and one with Venel;uela, made on April 18, 1825.
These trade treaties exist for the purpose of extending trade and commerce on mutually For instance, advantageous terms.

the late government made treaty with Australia a which was extended to New Zealand by order in council on October I, 1925. drawn by order 1930, after over five years.

It was wit-b in council on October 12, a little it had been in force the that Now, rising of difference between my bon.
friends opposite and ourseh'es is thi3: we be lieve in trade treaties are mutually to the parties to the treaty.

advantageous And· we believe th:\t the only method by which you can undcr3ta.nd and appreciate the effect of treaties will be is to just ""hat have a clear conception of their p03Sible im for nothing could be more ruin plications; ous than what has transpired during the last few months in connection with the treaties with Australia and New Zealand.
We negoti 1 may say for ated a treaty with Australia.

the information of the house that that treaty was ncver signed.

That probably was merely an accident or an oversight.

The treaty consisted of so m3ny pieces of paper-some twenty-five in all, 1 believe.

Difficulties were experienced; differences arose, parliament was in 5es!ion, and it became neccssary to com plete the matter before the the hOllse.
And 50 we p:lsscd the statute that ratified that Australian treaty, and made pro "ision therein whereby, by order in council, it might be extended to other countries.

On it was extended to New October 1, 1925, Zealand.

The right han.
The right han.

member opposite who leads the opposition to-d3.Y (Mr. Mac kenzie ]\:ing), shortly before that, in Wood stock, Ontario, declared th3.t he could no~ conceive it possible-and be honestly so be tbe treaty to Iie'ved-that the extension of 'New Zealand could be inimical to the trad ing interests of Canada.

But let us see what time New Zealand had bappened.

At no channel of trade with Canada for butter.


Now, a channel of trade is like any other channel that may be created: it is something rule be which once as injury.

That channel not cbanged witbout having been established in 1925, they began just as an individual would do, to widen and deepen such a channel by sending forward treaty at 1 cent per their butter' under that pound.

By that means they began to create a channel of trade.
That channel grew in size until the imports into this country year by year expanded, reaching at last so colossal to several millions of a figure as to amount dollars for butter alone.

created cannot that a There you have a well-defined, well-estab lished channel of trade between the sisler dominion of New Zealand and Canada, with the result this trade was injurious (0 the Canadian producer.

And the govern· ment of the right bon.


gentleman opposite this government-gave notice terminat- not that 2100 The Budget-Mr. Bennett COMMONS Eithet' vivendi, exceUent the treaty, the terma of treaty.

They gave notice in April ing that of last year while this house wu in ae.wion, because the right hon.

gentleman.·was him sel£ convinced that the treaty showd be denounced, and he gave six montha' notice termin.tina under that arrangement with New Zealand(' With what remit?
With thia reault-th.i"'when· we came into office New Zealand bitterly com plained of the situation; they said that they could not entertain the idea that their butter should not continue to come into this coun try as it had done before./We endeavoured to explain to them tha( Canadlll.

believed this dominion should also be on an eJ: that port bam for buter.
We pointed out that we were a dairy country and that they must they could displace Canadian not th-ink that for produce though their own, it to them, Having pointed that out is.

we continued in our efforts to make some a·rrangement, by some modus trade.

which we could carry on reciprocal But for some reason, best known to ita gov ernment, New Zealand believed that Canada must-I use the word advisedly-buy butter to-day or t~ from New Zealand.
morrow the parliament of New Zealand will refuse the British preference to Canada and they will do so because we are not in.

a p03i tion to let their butter come into this r.ountry ):;ractically free to supplant our own product.

Who is to blame for that?

/Who is to blame the unfortunate difficulties which exist for betwee'n the two great dominiona7 The gov foresee the implica vernment.

tiona of the treaty it made, and the govern treaty thereby ment creating the condition to which I have referred.
Let there be no shaking of head&-did or did not terminate that.

then it must accept ree trea.ty?

is that New Zealand ponsibility.

The result say~very properly 80, I suppose, from.

their fl.lone standpQint, that they are not going to permit Canada to have a British preference in their marketa unless we allow their butter to come in here.
I cite that for the simple and obvious rea son .that it becomes necessary to realize that when treaties are made there should be a clear understanding and appreciation of their implications.

That is one of the reasons why we endeavoured while in England and since, to arrive at some alT&ngement with our great sister dominion, Australia, which would not make it necessary to destroy channels of trade and bring about the hard.
feelings which DO doubt would prevail and have prevailed· in connection with New Zealand.

During· the 11st few months, while he has been in health, the former government that did not thinking of themselves terminated.

If it did, that that [Mr. Bmnet.t.l to the Minister of.

Trade and Commerce (Mr. Stevens) has been erigaged constantly in en dea.vouring to in.sure that a reasonable treaty may be made between.

Australia and Canada..

I trust that in furtherance.


of the unanimoua view &pressed by the overseaa dominions at the Imperial economic conference last year we may be able to negotia.te an agreement which both will be mutually advantageous countries.
It is my earnest hope and my confi_ dent belief that before this house risee we will submit such a treaty or agreement for the COD- sideration of cannot permit statin, this that we are really under an obligation to the the manner in government of Australia for which they have treated us during the last year in 1::onnection with butter and ita pro ducts.

They have made it possible for the channels of :trade not to be destroyed in ·.uch a way as to ·bdng about that condition.
of mind' on the part of their country which now prevails in New Zealand.

We are.

under a great obligation to them for what they have done in that regard.

I to pass without opportunity this house.

that t.reaty, treaty.

to which the great I mention also another treaty whieb stands the in a somewhat Similar position, namely, treaty negotiated, with France.

The French treaty provides that a fixed and definite taLe must prevail and that we cannot grant to any other country a different rate without violat.
In the ing the provisions of budget presented io this house in May 1ut there was an interference with the provisionl' republic of that .very properly directed our attention.

A treaty.

containing provisions such as that cannot, 1 submit, ever be a sound treaty beC&.use it disregards the fundamental rule which must.

always obtain in connection with trade treaties and which we propose to continue 80 cal as we are concerned.
That rule is this,: Treaties must be mutually advantageous; if they are not they fail, and unless there is a clear ap- '.'

preciatioD of that fact there cannot be other than failure.

This rule 'was stated very clearly the other day by the president.

of the United Speaking to the States Steel Corporation.
National Foreign Trade Convention on May It is a sound economic prin 28, he said: ciple to sell in markets where the prod~ct is needed for consumption and where there is , no surplus of the same commodity May I point out to the house that all the domestic trade of this country which rep~ sente import8 is foreign trade to some otbe~ If han.

gentlemen opposite win,· country.

only get fundamenW in their minds that thought they will rea.lize.
that this.governD).ent., on .the one hand, desires to maintaill' the JUNE I, 1931 'J'he Budget-Mr. Bennett 2167 economic principle to which Mr. Farrell re to realize to ferred and on the second hand, into this that e\'ery import brought the full coun-Lty from abroad represents foreign trade tn some other country.

Our business is to see th"t we do not expand the foreign trade of aoy other country when we ourseh'es are pro ducinK or ean prooute the goods so imported.
Mr. :MACKENZIE I{li\C: How doe;s my rip:ht.

han.

fl'iend propose to exp.md the foreign trade of Canada.

under rules of that kind?

That Mr. BENNETI: It is very simple.

Does the right hon.

gentleman for a moment mean to say that there nre not countries whieh do not prodllce the commodities which Canada produ\'cs and which they.

require?

is what he is tryin~ to say.


and I can tell him that the whole theory upon which tmde within the British Empire will ultimn.tcly be built up is upon the proper apprcciation and realiza tion that the requirements of each part can be filled by requisitioning the production of such commodities from other parts of the empire.
The foreign trade of Canada can be just IlS Mr. Farrell Sllid, by making built up, our an-:a,n::temcnls with countries wldch have to have wh3t we produce 3nd which do not come ~n competition with the surplus they themselves produce in their own countries.

Hon.

gentlemen oVposite seem to find some difficulty in workin/!

tha't out.
tha't out.

Of course they will find difficulty, for the simple and obvious reason that for nine years the colossal failures they made themselvC'i; indicat·e their inability to do so, and tha.t is why we are here to-dllY.

Mr. MACKENZIE KING: trade was not a· colossal failure.

The colossal Mr. BENNETT: The loss of trade was exactly the sarne-- Mr. MACKENZIE KING: I s3id colossal .trade.
the world, and we are still Mr. BENNETT: -in Can:l.da :lS in other the countries of In other fifth tmding collr:.try of tile world.

words.

the len millions of people inhabiting this vast.

territory are the fifth trading people the right I will admit.

in the world.

han.

Jtentleman aTid his friends opposite would like th3t not to be.

They would rejoice if it were not so beousc it would be of some politic31 ad\"anbge to them.
Their' constant fear seems to be that by the application of bu~iness principles to these mn.ltcrs we will insure success, nnd they hn\·c.

made cvery effort they could to bring about failure with to t.he Imperial economic conference.

respect th3t Their every effort has been directed In .lin endeavour to bring about.

if possible a failure in order that.

they may derive some political credit.

What is more, that is well understood in the various parts of this empire.

Mr. MACKE.
Mr. MACKE.

TZIE KING: Could my right hon.

friend ha\"e asked for more in the way of a free hand than what he had at the 1l'L.,,;t Imperial conference?

Mr. BENNETT: The right hon.

genUe man has failed to appreciate what I !

'lay-the former Mjnistcr of the Tnterior (Mr. Stewart) ne\'er could undcrst3nd it-hon.

gentlemen op I am referring to posite must their efforts to belittle and if possible dC6troy the adjourned conference at Ottawa.

That fact is birly wcll understood.


realize that Mr. MACI(ENZIE KING: .

a conference this f31l?

Is there to be Mr. DENNETT: hon.

gentleman I C:lnnot be diverted by thst The knows from this budget.

Let me proceed.

that Mr. POWER: Tbe bon.

gentleman is giv.

ing us considerable diversion.

Mr. DENNETT: The hon.

gentleman's wit is greater than ·bis understanding.
and destructi\'c the world and the result of May I now, having reverted to the Ques the position whicb tion of trade, point out the nations this country occupies amongst.

the efforts of which were made in September last t.o ensure there should be less of other people's that into competition, on term!!

product$ come to.

our t.hat are injurious own industrial well-being, with the produd.s we ourselves produce.
Having done that, I shall now speak of two matters further and then I shall ha"e done in that regard.

A few months ago I pointed out republic of France, realizing the weakness t.o which attention was directed with respect to the treaty, had under.

t:lken to increase their purchases of wheat from thig country during the current wheat they season, and prior to the end of April had bought six times as much wheat from Canada as during the preceding year.
More o\-er, notwithstanding that have been made as to the difficulties under which we tbe statement made by the former Minister of Trade and Commerce this country could do nothing to sell that wheat-selling wheat is something he could not d~ll I can say is this: The net result of the situation to-day is that we have sold st:ltemenls labom, that the the 2168 The Budget-Mr. Bennett COMMONS· least.

one-t.hird more wheat at.

than we did for the same period the year before.


That is the lowest estimate, and it is increasing very rapidly.

han, MEMBER: What about the An price?

Mr. BENNETT: The price is just as low this year as it was last with respect to the other countries of the world, but we have endeavoured as best we could, although op posed by han.

gentlemen opposite, to secure the markets, and as a matter of fact, as is shown by the increased exports of wheat, we have to some extent secured them.
WAYS AND MEANS FISCAL YEAR 1931-32 I now come to what probably to £ome ie the most interesting part of our discussion, namely, to what ways and means we shall resort for the purpose of providing the money to carry I sha:ll come first of all on the public busineas.

to a statement of.

anticipated revenues and I win admit that this is the first expenditures.

time for many years that thiS country has had a budget.

Some han.

MEMBERS: Oh, oh.

Mr. BENNETT: Wm any han.


member on the other side of the house -'>3y that last year there was any estimate given of expected revenues?

Was there any estimate given of expected expenditures?

Was there any word given of a $75,000,000 deficit?

What did they do?

What the then government did Wall merely to bring down estimates for moneys to be raised by taxation without any estimate of what was to be realized.
I said frequently in this house in those days, and I now repeat, that not in this in any municipa'l council counttr would the people tolerate their mayor nnd counci'lror~ conducting business without giving an ~stimate of expected expenditures It i.s the and revenues for the current year.
basis' of responsible government, it is the baais tlpon which representative institutions have been established, and that responsibilty can only attach when there is some estimate 9.8 to is being received by the country from what the taxation imposed and as to what expend.

iture~ are to be made.

So I propoee under the heading which I have given to draw attention I sha'tl ask hon, gentlemen to these matters.
to go through the record of my predecessora in that regard during the last seven or eight years and see if they can find any such record I could have ~asily escaped doing 80. there.

All I would have had.

to do woul'.!

have been to fallow the example of my predecessotl during the past eight years, and I woU'ld have escaped all responsibi'lity for giving any figure.

of what the proposed income and expenditure \viII be during the present year.

On the basis of existing taxation ra~.


the anticipated revenues in the present 'fiscal year will be $325.120,000.

A division of the amount by sources is:- Customs Excise dutie8.. Income tax,.

Excise taxes.. Post Office.. Interest on investmente .. MiscellaneoU8 revenues $117,000,000 59.500,000 54.000.000 38,000.000 30,500.000 8,800.000 13,276,000 .

.. .. .. .. .. .. .

.

.

.

.

.

.. .. .. .. .. .


German reparation payments and .. miscellaneous recelpte.. .. 321,076,000 4,04',000 $326,120,000 The expenditures for the year, including _atl statutory charges, are estimated at $430,457,828.

A division of these, and a comparison with the actual expenditu-res last year.

are: .. •.

Ordinary expenditures.. .

Unemployment relief.

.

Capital expenditures Special expenditures .

Loans and advances non-active.. •• .. •.


.. .. .. Actual 1930-31 $389,560.722 4,431,655 28,222,342 12,357,674 5,488,264 Estimated 1931-32 $391,552,085 13,000,000 18,484,249 4.378,000 3,043.500 .

$440,060,657 $430,457,828 .

It will, ·take under therefore.

be noted that with esti mated revenues of $325,120,000 and with esti mated expenditures of S430,457,828; parliament consideration ways and ,must meaDS to secure added revenues if the ac counts are to be balanced.
The sum of Sl05,· 337,828 will be required il all.

expenditltt'es are treated as charges a:gainst the year's revenues.

o. the other hand, if the $18.484,243 on {Mr.

Bl'!UIett.)

capital account.

plus the SI,700.000 estimated to be required by the Quebec harbour com mission, which in the foregoing table is in cluded in Loans and Advances non~active .... treated as permanent improvements, and paid from borrowings, re.. quired is $85,153,585.
The new imposts to be to be authorized by the resolutions about tabled will, it is hoped.

produce an additio~ the additional amount JUNE 1, 1931 £'stimated amount of S78,175,OOO and for the purpose of showing the increases by sources, a summarized list is now gh'en: / Customs duties .

.

.

.

Excise ta :(es Sales t3:( .

Tax on imports .. Stamps Income tax Pn~t Oflice .. _.

Other taxes., .

.

.

, .

.


$ 5,000,000 52,500.000 j ,500,000 1.000,000 9,500,000 2,175.000 500,000 $78,175,000 On the b:1sis of the ,present volume of busi ness, it is cstimnted th:1t these additional taxes will yield 594,000,000 in a twelve months' period.

To gi\',:o :1 comparison of the estimnted total revenues for the present year, with the actu:11 re\'enIlCS of I;lSL rear, the following is sub mitted: Cu9tom~ ,Juties., Excise dUWCll r~xcise t..U:t'6 I nt'olllc tax.. Po;o.t Offit-e, , 11I(erl'!
"t on llI('lIfll .• .

, ., .. Inn'6t· .

:\liscdlaliOOUS Re\'e nue .. German tl'paration flOl.nncnt and Mis t,,,,11.1nootls r("Cc~pts.

Actual 1930-31 $1:11.209.000 57.Hi.OOO 34:735.000 jl.O~S.OOO 30.212.000 Estimated J931-32 $122,000,000 59,500,000 99,000.000 tl3.500.000 32,675,000 10.

'121.000 8,800,000 H,22J,Ooo 13,776,000 $349,593,000 $399,'151,000 .

6,622,000 4,044,000 $356,215,000 $403.295,000 With estimated expenditure:'!
oi $410,273,000 cxclush'e of expenditures on ctq,it.al account and advances to Quebec harbC'ur commission, .

including· the balance :)f $13,000,000 of but 1he unemployment.

appropriation of relief 1930 and estimated revenues o~ $403,295,000, t.he deficiency in revenues under expenditures, oased llpon the estimates made, will be Borne 57.000.000. system of book-keeplnp".
The S13,000,OOO for unemploymEnt relief is a commitment actually made in 1930-31, and would more properly be considered in 'the .\'ear, but \lndE'r the govern accounts of last the actual ment's dishursements not being ffi3.de until this year due to the t.ime DeceSS:lfY for the usual ac to add to ('ollntinl; the e"penditures of the prescnt.

)'ear.

Taking this into ('on",ideration, the fi<:utes presented indicate a balancing of the bud~-et by a sub st3ntinl m3rJ!
;in in respect- of expenditures properly applicable to 1931-32, aiter excluding capital.

they sen'p.

formalities, While on the subject of OUI commitments let me say that contractual the :rcnr, fot 2169 The Bl!dget-Mr. Bennett- - - im'estiJ;ntion and fl'!lOrt.

but obligations entered into by the harbour com missions of Hnlifax ond St..John under the former administrntion inVOlving millions of dollars of expenditure for which no parlia.

mentary s.'lnction was in cxi!


"hmcE' will add matcriaily to our financial n:qilirem~nts.

It will be neces"arr for the gonrnment to ask: to m:1ke pro\'ision for the imple: parliament menting of these contl'3cts.

The \\hole matter is under it is possible to say that the amounts invoh·ed.

in these contracts and in :l.Dcillary expenditures which :He recommended to render the main projects of commercial value will be over between ~6.000,OOO dh'ided 3bout thei:e ports, Also, the elevat.or in respect.
(If in 1927 at New Westmin!i'tcr but.

not built in addition yet to 5700,900 alrendy pro\'idcd by way of gU:l.r:mlee of !

'ecurities, this nd mini"tration to meet eommitm~nt.

!l made but not pro\'ided for.

in operation, some S3OO.000, is :tl'kel!

of eqlln!ly lnduded in tbe expenditures to which I h:l\'(!

rcrel'f(~rl, contemplated for this :rear, :Ire tho:,c pro\'id::-d by the mnil1 cslimq.tes, and Ihe additionlll sumii which w~ ha\'e provided for supplcmcntaries, bc!
'ides n Slll:l for old age increasing our contributions to the pen!

'ion;;, thi5 pro\'inces from 50 to 75 per the totni sums that year only in respect of are paid.

We propose the promise made by the Con.~r\'nl.h'e party at the con\'cntion which wns held at Winnipeg and at which during the suc~ec:!

:ng election I became the mouthpiece of thl\t I':lfty and its policies by providing 3. further ~\Im of $1,800, 000 for coal subsidies.

to illJplement ('cnt for ALln;nT.~ ,\:.


'1) t;,\STERN IlIllTISH COLUMBIA :'\fO'it:MENT On coal movements hom Alberta and the the ea~tern ~Irea of Uritish Columbia Manitoba market some 100,000 tons ha.ve been moved since June of last year.

to We now propose to grant Q. higher rate of assistance on Canadi::m coal shipped to this market and :vt the same time extend the area as far east :lS Fort FI",.mces and Sioux Lookout.
The increased assistance now provided should do much to extend the market for Canadian coals.

The assistance provided in this (:sse is by the payment of } of one cent per ton per ton per mile on coal to Manit.oba.

and i of one cent per ton per mile on movements eastward as far as Fort Fronces and Sioux Lookout.

Maximum S2 per ton into Ontario.

Maximum $1.50 per ton into Manit.oba.


2170 Ti,e Rw/grf-Mr. Brnnell CO)IMOXS Sasb.tchcwan !\f'w Bntn;;:wirk ~hipl1lClll;; of lifl"llitf' from thf' S:\SkatdH'W;lll ~ vi ficlrl will be n~;;istcd h~' u pn~'ment of onf' cl'111 pf'r tall per mile all movemell·tf> to Manitoba fllld ihat p:lrl of Ontario jmt men ~ranted tioned.

nmollnted to n strni!

!ht 1:J01111.~ of 5(ll'.

per tOil nppl.\·in~ onl.v to lhe ~bnitoba market.

This is now extended as far cast as Fort Frances and Sioux Lookout.
nssif>I:\Ore pre\'ious The Maximum 81 per ton.

Dl·itj,;·h Columbia tllll.t wi!

It It nppc:u-;; fOI' cxpol"l tOil on sale;; of co:tl fueL for ships' 8101'es or r0aSOll:lble u5.

'iislancc the coal induslry of fkiti;:.h Columbia C;\O he impro\'eu lind with Ihis end in "jew the gov ernment, has decided to n<'sis.t hy p:ranting the sold sum of 25c.

per to for This ns.~istanee will not fOl"l'iltll coulllril·S.

nppl.v 011 eXl'orl.s to the United Sbltcs of Ameri<'lI.
Th('l"f' lIg:1in OllC i;; ronfronted \\'ith n l';itl1a fi(>Il of !

!l'('ilt.

~f'riOllSIlf")"'-~.

The people of the Pacific .

'sl0l'f'.

w!wn the~' suhslituted oil for I"e:llize the extrnt of conl, proloahl.\· did not the injurious elTect the eo:11 ind\lstr~·.

IIPOIl Tllcrefore, along the coast of ilriti~h Columbia oil burl1CI"S ha\"e b,~ell sub!>tilll1cd for coal grates, and chnllp;cs calillot be made without c:lll~inp: trelllendous lO~;:l's III a jlNiod of p:reat depre.~sion.
The same thin~ Hpplies to other the 11e\\' hotel m::lttcl'8, was ouill at.

\':mrOll'"c·r, the pl"es.<;urc to bum tllC prCl!lSUI'c to ha\'c cOld oil SUl:<,('(·t!pr!

O\·CI" friend the Minister of u;;pd until lbilwil~'~ rCHrSl"'r!

till"' dl"'cisioll nnd pro\'ided tlwt.

('oal SllOllld be burned.

TIl('re are p:r('at lllcrit<; 1.0 the \)!

'e or oil is imported illtl) :llld when the p::l~o]jnc is bkpll it 'the rrmlc oil be IrOlil lndustrir:s <,omc:; :l\'ailabll"' for fuel ]lIll'PO';;0S.
hn\'c u0('n e.~tab'i~lwu lind fll('l, thnt u!<inc: to chnngc back to I'o:d would in\'oh'c tre mendous losse~ at this time.

!

"o much so tll:!t wh(,1l :.l~ a fuel, hut ('ounlr\" this.

hOll.

lll~' it ::;::...:ts.nn:tl ::\fow'llwnh to ,Tll]~' 15 Til:!,,: API'i) l!i .Jan.

15 to ,lllt.l" 31 ]f):?!!

: l~l:?

!I-J(I: n('c.

I W:W·ln:U: Od.

:?i tn ,Jul.\· 31 .. (u .tlll,l· 31 .. .

.

Provi~ions ha\"e been mnde f.or a continu to from August 1931, 1, 0\\5 movement MaI'Ch 15, 1932.
Findings of Cost by Railway Board In respect of the 1928 mO\'ement the Board of lbilway Commissioners reported that pay (Mr. n,·rm'·lt.J ::\'ew Bruns.wick Thc a.

'i5is.tance pre\"iously granted to the industry did not extrnd the eastern coal m::lrkets for Th(' assistance now authorized is hy a payment of t of one cent per ton per milp 011 1Il0\·elllC'nt.'!

to points in the pro\'inces of Q\I('L("C and Onlario.

ro:d. I\laximuID 51.50 per ton.


K O\'a Scotia pro\"ince from thr: CO:J.l movements of No\'a Scotia to points in till' prol·inc('.o of Quebec and Ontario arc fmtller enl'oma{:cd by n payment of ton per mile to Quebec and ~ of olle ('cnt per ton per mile to Ontario from S\.. Lnwren('r is also ports.

An all provided by the payment of +of one ccnt pC'r ton per mile.

rail winter mO\'emcnt of one rcnl jl('r i Maximum 75 cents on thr irate; maxi mum $2 OD the + rate; maximum $l1iO on the irate.
Summary If, under this assistance, the tolal potential coal markets are secured it should pro\'id(' a mo\'cment of nearly 1,800,000 tons of Cana dian coal at a cost of approximalrly S2,OOO.. 000.

That extend~ unt.il the year 1933. as ,,;jll be indicated further as we progrcss.

Shipment of Albcrta coal to Ontario at SCi.i5 freight rate Order in council P.C.
43!l, approw'd 16th for 1lE'8 co:1.1 from Allx-rta to than tlH('e months in I\brch, 1928, authorizin::; 10.75 ralC' sonal mO\'emenls of less Ont:1.rio for not ea('h year during a period of three :rears.

Provisions were extended for another year by P.C.

1268 of 5th June, H130.

TOllnall'C Shil'pl'll :l2.101 :1'•.

11;; 2(i.l,",fi 1~.lG7 eMI to (;0\·,·rnnlrlJt ~~'j.
;wn !i{\ :O::?.1% [,;'\ :;\" I'd.\·llJ<'llt~ n~ :\'('I ;\,) 1"1~'lIll':llo ~S.f('1 ments were to be mad{' b.\" the GO\'cmmenl on the cost basis of $8.23 pN Ion.

mllkin, 11.48 per to be pllid by the government With r('51'('('!

thl' railway board'" finding W:lS on the ro;;t h~!i~ to the r:lih\":\~·~.

to tIl(' ton as the amount llHWeJl\ent JO::!

!1 JU;\/E 1, 1931 The BlIdyct-.lfr.

Beunell 2171 of 18.97 per ton, making 1222 per too as the amount to be paid by the government.
No decisioD has been handed down for the 1930 movement.

the crop.

]n some parts of The third matter t6 which attention might touching the mo\'cment be directed is that of wheat.

T·here hus been a succession of bad harvests in some parts of western Cso3da.

and during the last few weeks lack of mois· ture-I speak ~ubject to correction, I hope this year's prospective has caused a loss of crop in a great deal of that area.
My advices by telephone were that vcry few days would determine the fate of a considerable the portion of country this is the third crop failure and the rescn'cs of the people are entirely exhausted.

Two things must.

happen: First, provision should be made to assi.st those who have a crop, because they h.:1\"c considerable obli gations, taxes, etc_, which mllst be discharged.
Other methods will be taken to deal with the situation of the pl'Odnees which are not in a position to assist those who with their reserves exhausted and their crops a failure the third time are practically ruined.

for We therefore propose to pro\-ide that.

the freight rates shall be ndjusted by this coun try absorbing five cenls per bushel on all this wheat year_ That provision is effeetivc this year.
is taken into consideration in That amount the estimates I have given of the expendi tures for the year.

is exported of the crop of that We propose therefore to indicate DOW to the house thc methods to be adopted for the purpose of raising neCessary revenue to meet f>spenditur('s.
We believe that if the revenues show any arrreciable expansion the budget will be bal:wC'cd at the end of the year_ At the most howe\-er the expenditures which will be c:llI('d upon to be met by 'Short date tr3.nsactions will amount to less trc3.Sury hill than SIO,OOO,OOO_ thus come to the way!

and mf>3.ns by which we propose to make good the supply.
I Two principlcs have to be borne in mind: is the field that howe\'er tc.mptin,l; the first may be, in a period of great depression de p:lrtnre from known practised methods of In t:n:ation should be as slight as possible.

olher words there should be as little disloca tion of business as possible <lnd the taxes imroscd should be those with which the people arr.

familiar.

The second is that, Lues ~hollld be as light, as possible h:n'ing regard to the conditions which preYail.
One of the pamdo:\:es of a situation such as the present one is that when money is required, most, the ]>f>ople are least capable of p3ying it, in the form of taxation.

That is the condition found in periods of universal depression.

at this impos.~ible the condition o( Applyin,l; these rules first of nil we take up C\1.~toms duties, or the tariff.
By this gov ('mment the tariff is used for the purposes I I should have liked to have h:I\-e indit'atcd_ a ('omplete re\"ision of the t-ariff, as I indi l":lted at.

the short.

session would take pla.cc.

Howe\'er circllmst..mces and condit,ions o\-er whkh we had no control made such a re the present moment.

yi.~ion '''ilb that in mind/we have undertaken re \-i.

"ion of only wc-h items as it was necessary to de:ll with to ensure the m:l.ximllm o( the operation o( rellson of f'mployment b)' rhc new mtes.
A simil::tr result was obl.3.ined by our al'tion durinf,!

the !

:lsi.

ses;:ion_ I p:lUse this time to ask hon.

memb<'rs opposite 3t country would what ha~e been had there.

been no short sessiOly' I Just put that fI\lestlOu to my hon.

friends.

it('ms with ~-hich we have The number of dealt 3.nd which deal with mt.e-making in two cluded in the resolutions number .1bout hundred.
A feature of the amendments is 3 provision (or the collection of duty by which we lollow the modem prnctice adopted in other countries whereby (or duty purposes containers That tl'eated as pro\'ision applies to cheese, powdered milk, In ma'caroni, dried fruits, sonp and the like.

:lImos!

every Cllse, with only two or three rates a.re confined to rxeept.ions, chllnges of the intermediate in and general the British preference has bt't!n other words, left untouched.
In connection with agricul tural and other food products there are in or general f'reases under ttlriff, or both, to numerous com modities.

The more noticeable items in this class are live hogs, fresh meats, bacons, hams hop.

;;, and powdered milk; peas.

Indian corn, hay; field.

root.

and garden seeds; and vegetables, raisins, oranges.

the intermediate in respect shoulders; contents.


canned cheese, tariffs; eggs, shell fruit are recall Anolher item whkh h:ls iO\'olved much cfiscussion is that concerning the aut.omobile indllstry.

Hon.

members will that a few weeks ago certain changes were made in the automobile schedule under an order' in council which provided that to dealer-s should not exceed 20· per cent lor duLy purposes.

As is known, automobiles subject to duty at.


the present time are di\'ided into those v.'llued I1p to Sl,2<Xl and two classes.

those rf'lnging from that figure upward.

We propose for duty purposes to di\'ide automo those '..alued up biles into three classes: first the discount 2172 COMMONS The Budoef.-Mr. Bennett to $1,200, sccond, from $1,201 to $2,100, and In connection with the third, above $2,100.

there are na chnnges in first named cbs:!

dutieil.
dutieil.

In connection with Ihe second group t:Iriff is increased from Z1; per I-he gener:t) to 30 per cent.

On the third group the cent rates are increased intermcdi:tte and gC'ner:t!

to 30 and 40 per cent respectively, The in thi" laUer group 3re what automobiles my hon.

friC'nd's rcfer to a-s luxury cars.

XOI\' I come to the question of drawbacks_ It will be rccalled that on more than one occasion the hon.
member for 1\1:\cleod (Mr. the dra.wback of 25 Coole) pointed Ollt th3t per imported commodities the tCllt on :111 which went.

into the product.ion of an automo if at all, unfairly on Canadiao bile operntcu, induslry.

What.

we propose to do is this: in 3ny e\'eot first, the drawback shall not exceed 60 per cent., and second, the drawback sh311 not.

3pply to commodities which I shaU hereafter cnumer:\te.
As indics.ting the ex tent to which this country has made progresl in the W:I)' of developing its I should like the house to consider the items upon whiC'h duwbacks will not be granted_ The nrticles to which I have referred are 83 follows: indust.ries joints; propeller tire carriers; front and rear Rubber tires; wheel rims; wheels, including tire coveT8; hubs nnd dnlms; wheel carriers; brake3, service llnd emergency; brake linings; brake pedals and operating chassis springs, bet.ween (rnme and le\'eT8; front axlcs; shock absorbers, chassis (rames; forged type only; clutch and clutch axles, pedals; universal shafts; levers; transmissions; gear shift rear valves, radiator cores; ex.
except banjo honsings; haust pipes; mufflers; gasoline tanks; running fenders; boards and covers; bumpers and steering gears; bumpereUes; head and taillights, not including lenses; dome lamps; electric light globes; electric· wiring spark plugs; batteries, starting and cable; motors; electric generators; drng links; motor f:lns; motor (an belts; thrust be:t.rings, ball or plain; motor hoods, sheet metal; motor hood clamps; anti-squeak braids and strips; moulded rubber parts; lubrication fittings; wheel hub C3pS; sand cnstings; drop rolled or tacb pressed forgings; bolts, nut.3, and studs; head pins and clevis; cotter pins; plain washers; coil springs and seat springs; wood (rames for bodies; rubber and pyroxilin covered or doubled top fabrics and curtains; windshields complete; upholstering fabrics and materials other than printed fabrics; rubber tubing :lnd wind laces ; floor bosrds; carpets; screws, [Mr.
Bl'nnctl.)

shades; paints and varnishes and window· solder; stampings of all kinds other than radiator shells, :lnd cowls and body stampingso tool kit equipment, rob; curta.in and carpet :md foot ra-ils fasteners; re.1r ,-iew mirrors; gear shift lever knobs; felt p:1rts; clocks, stem winding; win.

dow finishing strips.


including jacks; rests; The list I haxe given C'ompri.scs items made in Canada and which it is proposed shall here- after be used in manufacturing automobiles if duty agreements are not to be made.

Canadian manufactured cars using those parts receive any dra,,~back, with respect wil!

not to the other it.ems which have to be used to produce cars in this count.ry the drawback will be GO per cent.

instead of 25 per cent.


Closely ::moeiated with the automobile que~ tion is that of Ilsed automobiles.

'Endeavoun to dump !Wch caTS into this country have few bcen very noticeable during the last months.

We propose to place used automo- hiles on the prohibited Jist, hereafter no used :wtomobiles will be imported into Canads except :1S settlers' effects or travellers' vehicle3.

We come now to anolher item which wi-ll I am surr-that :;:Teatly interest It is propo~Ed to impoSf> a dUly of is coal.
40 cents per ton on anthracite COllI and !l on the gcneral tariff-free under coke undcr It is proposed that British preferential tariff.

the rate on bituminous coal and coal SC'reen~ inp;s shall be raised to 75 cents per ton, and tariff rate on charcoal be thAt 87.50 per ton.
the general the house, The leather schcdulil secures increa.sed rates under aM tariffs, the alterations affecting kid, upP?r leathers, sole l('a.~hers, East India kips, bellml; leather -and ibeltmg, glove leathers and leather garments.

We come ,now to another mat1.l:lr whieh has been given much attention.

by Jegi~lators during the iast twenty-fh'e years name'lv the importation of mag~zines ~nd ~e:jodie~l~.
I was told the other dllY that at olle newsstand there were 350 different magazines and news pnpeT8 on $lIe.

As to a very lanre number of them, certainly some people wo~!d be better -off if t~ey did not read them.

An hon.

MEMBER: AU people, Mr. BENNEIT: Yes, all people.

We there fore propose that magazines and period:ca.

'1s to a specific duly oC shaH be made subject tariff, 15 cents per pound, under the gene.ral except in the case of such as may be placed on an exempted list by order in council.
At the present time the censor undertakes to exercIse these matters-a control some control over JUNE 1, 1931 2173 The Budget-Mr. Bennett ih3t at times has beEn more or less difficult.

That provision of the tariff as to prohibition the importation of such publications will of remain as at present.

Under the direction of the for educational and scientific and religious pur poses will be allowed to enter lr~e.

go\'ernor mag:azine~ council in and Iron s:tfes T!Iriff changes steel affectin.'!
: include incre3ses on steel plate, wire netting, maehinery, and miscellaneous manu factured of iron and steel, with decreases on gTf'en "aw steel.

hot rolled strip sleel for cold rollin.!

;, \'arious kinds of steel wirr.s and hesse Iller stl,el billets, I mzntioned in the item~ that One of Septemher \:I,~t about which th<'!re ha,.
been much discussion in this eOllntry is furniture, I had an opportunity to see La"t summer lU:lny of the furniture Cactories of ,his country I fOHnd that thcy were working a yery limited time per day but making quite as good iurniture as i" made in any part of the world, if not better- Some hon.

MEMBERS: Hear, hear.


Mr. BENNETT: -but they \"ere subject to dumping competition that certainly was interfering with their trade, We propose to make re~ard, particularly with respect to furnitur~, including metal \'cneers, ply wood, dothea pins, golf clubs, tennis rackets, and so on.
furniture, f'hanp;e slight some that in The textile schedules are limited, and the the significan!, one oeing {'h::l,Oges very few, increases on linen fabrics and articles, except ing damasks, all of which are made in Canada, Damasks,-a tariff on which might affect the trade of northern Ireland-haV(~ not been \re propose to see that there shall touched.
be no increase in price, but that the Canadian iudu;;tries "haH ha\'e nn opportunity to com pde fairly with their competitors, The changes al.so inmh'c increased tariffs on fabrics of purc .,;ilk, wit.h dcerea"ei> on mohair yarns.

With respect to pure ~ilk, we dc~ire to protcct our l'UIII[lI'titillO with dlllllpcd Ill:LnlLiactlll'('r" r!

"Ulll from alJrO;ld Whll:h i~ ~cnt in here at ~ilk ,:;ilks :Ire the ('flua!

of :dlllO.4 ;lily price.


in fact a branch ally made in the world; factory in this eouuiry i.~ a i'llbi'irliary oi l~ l'Ulllpany th,,-t cmploy" !

;omc 50,UOIJ people in ;he (;nitcd :;1:It0".

01,1' l'rep;ll'p,1 rootinl;.~.

w:lllbo:ll'lls, lilatcriais.

anI!

so Oil, arc incl"ca'icu in rates, ;Jrc wallp:Llwr.j :11\l1 COlLt:Lincrs.

imuhlinJ( :\;; Buildin:; "(olle ,Ji all killd.~, hoth rough :LIll!

lil:lgnc.·ilc r:ltcs ljni.~hed, :Lfld ;.


:rollnd ldd"p:tr, will bf'ar hiJ,;her Ih:lll :1" building brick, fOl'1LLl'l'I.\·.

:IS well ~~lll1-I:lS No changes are made in respect of (arm implements.

although the item covering repair parts i!

'l extended in point of time.

That is, increased the duty last year on when we agricultuml implements, we found there were certain repair parts made by companies that had no (actory in Canada.
I am happy to say they are likely to open one at no distaot date, In the meantime parts to repair their machine5 will continue to come in under the old tariff for another year.
• increases on window glass The tea schedule is radically revised, free entry of bulk teas under The tariff on clocks and watches is revised, the rate being increased, and provision is made and for I should think there would laminated glass, now be a noise on the other side of the house, the the (onner British preferential tariff being cancelled and rcplaced by rates of 4 cents, 8 cents, and 8 cents per pound on teas imported direct from pbce of growth or imported from the United Kingdom, and rates of 10 cents, 10 cents, and 10 ccnts per pound on teas otherwise imported.
the It will probably be remembered that at last general session one item only in the tea schedule was touched, and that tea unless it came in in packages of a certain weight was still subject to a high tariff; it was made free in respect to other packages, It is now proposed to re\'ise that schedule by placing a duty of 4 cents and leadng the rates for other tea items just as they stood, except as to mak ing the tariff applicable to all packages regard less o( their weight.
is, the The rates on the so-called "basket" item, that rates covering everything not specified, has been increased to 25 per cent.

That i" only in keeping with the conditions now obtaining throughout the world.

I ha\'e given the principles which gO\'crn the application of the briff to protect Canadians.

this question to e\'ery member of this I put hOllse: Can Canada in a protected world be other than a protected countr)'?

Mr, YOUXG: Yes, Then if :\11'.


UEN:\~ETT: t.hat we arc iO\'iting :t1l that be so it the merely means protect.ed pOlltltri('s of the wol'1d to dc"trov 0111' own.

There i.~ no It:lin.~:lyinJ; that.

Jt i" is true :10 unfortullate thioL.


( perhaps, hilt the conntri('s of thc world arc now lll:.t all I'rote('t('d I·Olllltl'i('.~, prOrlllCt.~ lJlark~ls only by HI:IY find :lC(:e",~ C:LD lhi" COlLntn' pa)'in~ IInprotectcrl cOL1ntl'.v :I~aill~t alford to 1m :1ll the rnll1pctitinn of the l'rotcdcd c\l\LDtl"ics of :hl!

world?

\'('1".\' high tolk ~1Dd C:tn:ldi:lll to their it 21.4 COMMOXS TIll /Jurly' I-Mr. RClltlctl gome hon.

ME?\rBERS: Ko.

ill ?\Jr.


BEJ'\!\ETT: Wc h:wc answered thai tJlI~ wa:-' I h:tn~ indicatC!d.

:md by CjlH'stioll thai an.~wer w(' stand or filiI.

By thc applica tiolJ of thi.~ tariff we pre of the opinion t.haL re we shall \'Com's as 1 h:l\'c indic:'ItccJ in the tnule 1 h:wc ju:<t ~i\'cn r('l'eive subsl:tntially incrcasccJ to the hou!'C.

1 next p:l.s.~ to the income tax.

We pmpos,· re\'clluc by increa,c;ing the to rni:<e arlrlitionnl ralc Oil corporations from 8 to 10 per ccnj~ inrrca!

"C of 2 per cent.
"C of 2 per cent.

The United Stale::" all r'J.le ot timf' i~ 12 pcr rcnt.

Th·'lt adclitionnl 2 per C('llt we will make p:l:-'ohlr interc51, hetwf'('o now and Det'emhcr, frec oi on thc presellt tax retum.i.

Thnt, we belieH.

will yil'hl Uli nn additional SS,ooo,OOO.

tllc prc:&'nt in order t.han 2 PCf {'ellt; but if We :tl!

"o prOl"1OEf' th:.t thl'rc sh:tll be n modi income tax by provid fico lion of thf' present in~ that a 2 per «,nt rntc shall be levied on the rrturni' of all investmcnt!
made b)' non rl'i'idents in thi.~ country.

All other countries of which I am aware have such a tax.

usually to hip:ht·r it be oel'Cs;;:.lry.

additional capital attnH:t, to this counlry for S:lfe invedment, we arc a~ing that ~be ralc be only 2 per cent.

In other word~, thme from abroad who ha"e their moneys formed companies here or put in\'estment will con· in trust comp::lOie~ for tribute to our renllue 2 per cent of such in come dNiycd from their Canadian in\'(~st­ is not an unreason menl.5.
We belie\'e tll:'lt, able ralr to eharg{' under existing conditions, beiD}::.

as 1 hlH'C said, somewhat less than th:!t oblainin~ in other countries.

1 am reminded fl·irlld the Mini.~l('r of :K:!tion!tl Rel'e by 01."

th05e who ]ll.l\' Oil Ilue (Mr. Ry<:klll:l.n) that their Cnnadian incomc 2 per cent will ,recej\'e credit in their own ccuntr)', wherever it may be.
BO far as wc nrc able to ascertain, cer tainly in Creat Britain, Franre nnd the United Slales-for the tax thus paid in this country upon produt'tion of 5.

'ltisfactory e\'idenre that it has been principle adopted hy othrr conntries; on investmcnt.s made in Great 13ritain by Canadians the tax in this p'J.id is credited against country when they come to prt)' their income tax.

their tax bill paid.

That t.he is it it 1 m:l.." 3dd Ih:Lt is proposed also during til{' pre.scnt.
liession cntirel:-' to amend the In Family corporations will be ('ornr T:lX Act.

i~ aholisilrd; In :uluition to :Ihout th:1\ Wl' propo.~e tn present a new schedule of r:lIC5 ba.

'i("d upon th(' exp('ricnce of the com mi;;.<iollcr of taxation.

Mr. Waltcrs was asked the aid of his officiaL~, what to prepare, witll 11(' conceinu to be a proper tax rate for this tilllf'.

(Mr.

n.1IueU.]

I,f' increased, bUI.

liulJl('what thllt country, ha\'ing reJ!


:ard to known conditiOIl.~ He has dOIl(, .0;0. and the government propOSt·".

to adopt hi!'

rccommencblion~.

Till" ('xemj' lion- will i~ thou~ht.

desirable the rate should .

!'!

:Irt at olle prr cent.

wilh another olle JX'I' cenl :\dded with E'ach additional $1.000 of int'OIllI' until l'e In other word., on thc IaT"J!

:U 2.')

per ePDL.

lx, ineomt'5 2') ('enl" out of each' dollar wili paid to the state.

the maximum i!!

T('a('hed.


which will it :1 includint;" It m:\y !lIHllle the houSC" to learn-:lnd pcr it will he inter('stiog to hon.

members, h:I.J':' :!"

it, W:li' to nH.-that the :\lOoulII of incOlllL I;lX collected in tid:; country since til[' l:ix fir.

'l thr· was JlU!

ou the sLa.lute books, bli.~ne:;':i profit.

;; war tax, has reached the hu!!.

sum of 100'2.000,000 ('ollecwd at co.~t oi S14.000,OOO.
The rate 1 have mentioned ic; " little, but not much, greater t.han the r:Jtc the pfCvailing in the United States.

Thrrt, ('xl'mption is SI,500 for unmarried prr.!

!ons and $3MJO for married persons.

On til(' fir.

';t 84,000 of inrolllc the rate is 1~ Il{'r ('ent; on the next $-1.000 the rate is 3 per cent, and on the bulance the rate is S per CCllt, with a sur t;},x to a maximum of 20 per cent on illcome,;; jn excesa of 110,000.
In addition it is propo.~ed tllllt di\'idend~ from Canadian corporation!, up to 510,000, sh:l.1I be exempt from taxation, to the extenl III of one-half otber word,;;, if a man illlS fln int-olll£, of S20,OOO jJer annum, of whidl S1O,OOO is dcri\"Cd II.!'

di\"idpods from Canadian corporalioll.~, hI:' will.

not pay a second tux 011 hi... di\'idelJd~, bccau~1' it has already been p:l.id throl4;h til(' tax paid the compan.\·.

That was the Iilw :'It Olll' U)' in mo.~t countric,c;, time and still The limit.
howewr, is 810.000, and l'ill~ exemp t.ion granted shall not in any ru,,;;c exre('u onr If half of the ·total a LaxfHlyer has an income of 830,000 h(' will be ahle to obtain credit only for 810,000 of Canadian di\'idends.

in rome of the tllxpll.\·er.

the income oi the laXp!l)·er.

is the lal\' Mr. POWEH: :Mar changes will come inlo I Mk effect?

when these Mr. ImXXETT: On thc lst d:1.\· of July; I was just coming to.th:!!.
The fir;tl itrm 1 ml:'ntioned, that is, thc tl\'O 'l'er eenl addition:al whidl corporations mllst pa)', will he bctwf'en now and Dl'eembN 31. with intere~t.

and the other items will bc('ome effc('lh'r on thl' ht introduced da:-' of July.

The n('w act will h(' for )·car·,.

taxes.

There will be no change in the present indi\'idual the rurrent.

)·e:Jr. t-he pnrpo!

'r of dClllin~ with n('xt rate~; they will relll!lin for JUNE I, 1931 2175 The lJu.flyel-Jlr.

Be/welt for 'he rcc311rd thnt I pointed out.


:l. moment.

:l.go that the Post h33 :l very substaDtial Office Dep3rtmenl to meet that deficit first deficit.. We propos<: of all by :1dding one cent to the ,postage rnte.

i3, the tax is one cent, rlS it was and is That.

fate being two cents, on drop letters:.

the full tax.

for post:l.,t!e and one cent une cent We propose to make that of lIniYcrS.

'l1 applica lax where it.

lion Rnd put bnck the onc cent W:lS he fore it w:\s 13kcn ofT 1\ few years 3g0.
the l!

:on~rnmcnt of It will Grc:ll nrit~dn dc<'lincd [0 reduce the po;:I,11 r;llc in th3t ("Ollnlr:r from three cents bcc:lllse th", rC\'cnuc W:l.S I'cqnircd.

The Prime Min ister of AUEIrnli3 told me this ratc W:'IS rc· quircu :11';0 in Au,slr:lli:l ~n orcin 10 b:i!

;tnc:c their I'o.~l;ll hud;!C'I.

So wc propo;>£!

to obtain thc :Hlditiollal r("-cnur by arldin~ the one ccnt ,l"Ili('h is no\,- applic:lhlc only 10 drop I:loX.
letlNs in the cit.... , m:tking the rate three ('cnIS in the o~e casco allli two cenls jn the other.

We nlw Pl'OPOse lh:!t the Po~'l, Omce Depart lllpnt, whil:h ('VNy yenr hns lost millions of nollars in the tmn$portation of llewspapers !lnd lllagnincs, now shall be l'cimbllr:>cd :Ul far a~ is possible to do so, by the payment first it of all of ~ cent and So half per pound instead of onp.
cent pC'r pound 'on :lll newspapers and pt"riodiC3ls h:\\'iog a nel, circubtioo in excess of t('o thollS..'lnd_ The first- .ten thous:lOd will rarry the present rate of one cent.

and ~he weckly newsps.

'Pcrs will continue to be carrled the ratc in force at.

Ihi."

time.

The ncw :'It rate ,,",ill he one :md a h:'llf cents.

1;libjct't to thc f'xception of reli~iolls, aRricultllr:tl, 6Cienlific :lnd l'durational papers ond mngazines, By thf'sc methods we !b('lic,'e wc will nuke nearly a ha!
:lnc('d hmlgf't of the Post Office Depart ment.

Imports Wc h~l\'l'!

then :Hldcd :m .

'1dditional one pcr l:ent ~e('ial ex{'isc tax on all th:tt jl:tS3 through the cusloms of the country, fr('f' or otherwise.

That is a special excise tax of one per cent on the invoice price pasMld by t.hc clistoms_ We have' also provided for three per ccnt in the inl'rr:lSoe of :'In additional Mlc$ lax_ it back whcre il -membC'rs will wa!

some ye:trs :tgo, 3S hon.

rc(':1I1.


Last "ear it was l"C'duced one per cenl, :lOd one per 'cent redll('wons have he('n made in other years, We :'Ire "putting it b:t('k 1.0 to the fom per ('ent, adding .three per cent prescnt rale.

This will pill We helie"e ihnl, wiih one more addit.ion, Ihe!

:'c ('.han~es will provide a YCI'y substanlial refer to lhe stnmp increase in Ollr r('v~nlle.

t<lX on cheqlle~.
t<lX on cheqlle~.

You will recall that the law now pro,-ides that cheques for an nmount of Icss than 810 p:IY no tax, while r1l<'QlICS for I :r.llo-·I3lf~ o,'er SIG pay two cents, Many people who rceci,'e their embos.."Cd cheque books have hem in the habit oi not differentiating be than $10 and cheque:i tw('Cn cheques for les.'!

It ,is now pro for more than th:tt amount.

pQ.

"t'd that nil chequf~ !


'lhall p..'1y two cents, :ts it i~ in En;dand, Pl'Obably the cmbos,;ed chcCjue will enable e\-eryone supplied with cheque books by tlIC kInks 10 canyon theil' inconvenience, b:lnking thi:l will add !

;!l'p.atly 10 the rcn'lHle of :tntl the country, Hdcl"l"ing back to the fiales tax ror :.I t:lX is subject to ('x('llIptions.

whit·h arc somewhat circum .~cribed :10 ('ollll';lT('d to IhO$C now pro,·ided.
ItlOllwnt, oi ('oun;e til:tt o]J('f;.llions without time like :llld it becomes til" !l('rfonll:uH:e of in bllildin~ up a great nalion; Sir, I think it will he :1l:reM that the record the C:tnadi:lO peoplc or is I$tI('h dlll'in~ the h~t fifly or sixty years, a5 to ('omlll:tntl the prille (.If e'-ery Canadian, and lhe admil~llion of l1l0:0it pcople through.

Dill.

the wodd_ We n.)w f:tcc a period of wodd wide d('pl1.'!
'l,;:ioll, important fl)]' Il.~ 10 f:u'e what lies hefote tiS wiHl COllr:lgc, with d('l~l'Jllinatil,n nud with faith_ l:'lm Ihcro is no Carlildi:lll who has 1l0t suffi S1\l'(' cient faith in his ('OllnII'Y to belie,-e thnt we I Cannot f:lil ant sure thl'1'C!

is 110 Canadian who docs not reali7.c that to do so we must haye not only fail h I.mt eourJl!

:e, persistencc and uetermin:l tion_ ALo\'c all we mu.st h:t\'e that unity of tholl~ht :Ind \lnrpcse which is so e=scotial at :\ political Ibis.
DifTcr"O(-cs opinion we e:tn rl~adily IIndersl.and, bllt therc is a side to the lives of nil of liS which is not pnrcly political.

We :Ire citizens of n !.p-cal.

Dominion.

nllIl I think we can with f<lir Il('..,;.~alld I lrw;t with 11 grell.t deal of l1SSlll':111('C to nil C:tnudians !

"C':.

;aI'JIC$$ of lheir -appeal t.o unite in t.he common !lllT polit,i(':t1 views, pose of in the this cOllntl)', :';l~atl':"t tri:_11 it has ever had in peace time, I H must not docs lIot l-C:ld a few wor..!
:i whi('h I h:n-e cxtracted from thc Chronick'S of the PilgnUl Falhcrs, writtcn think the O\-Cl' :l,e:rce wit·1t me Ihat they tntly in housc will dicate the aililt.de of mind which wc Can :uli:m:i should all lake to the problems that liS_ With these words I will con confront c1l1d~ Whllt I ha\'C 10 say: I hn..-'C hunJretl ye:.lTli ago, iUl'iUl'ing that fail; and if f:lil.

of I in :ICC the til,,)' IJUl"thcn \\-Ill'1I I'llt wlH'lI Jt wnllllel"fl1IJy ellc(lurru;cth mcn tlleir equally ,Itltic~.
;;Ollle witlull'aw themselves.

horuc; <llllll'din' to tllt~il' 0\\"11 particular casc, pleasure.

Ul' ])l"tltit.

wlillt IWlII"t can mcn have to ::::0 on ill their llll,..illc,.."'?

"-h"ll mcn arc come togethcr b lift !

'\(llllC \\"l'iJ;:ht," pi('Ce of timber, or vessel, the it onc l!t~n\1 !JtiH ,lIlll do lIot lift.

shall not r'.

:':!lt be wcakcncd nlld diJlh('artenet1?

'ViII not the whole stock of a f('w illle drones spoil 2176 The Budget-Mr. Bennett COMMONS So one idle bees?
belly, laborious one mUf!nurer, olle complainer, one self.lover, will weaken and Iii shear ten a whole colony, Great n~atters have been brollKht to pass, where men have cheerfully, as with one heart, hand and shoulder, gone about it, both in wan, buildings and plantations; but where every man seeks himself, all cometh to nothing.

some These word!'!
,verc written three hundred and ten rears ago at II time of great strnin and stress in the new colony that had been founded by the efforts and labours of those who, coming out from the old country, landed a.t or near Plymouth, They are ap plicable to-day; and if many of the observa tions ] han made are highly disputatious, liS they may be, 1 feel quite certain that in this great crisis ths.t DOW faces us, men will not for a single moment be .t!overned and guided entirely by political consideraHons but rather that they will ha'·c an enduring faith in their country, a courage and determination that it shall not fail task in which we are engaged, and that all Cans.dians, men and women of good will, will unite for the com mon purpose of advancing the common in terest of all our citizens.
in the great I beg to gi\'e notice that when the house shall mo"e inl.o committee, I resolves itself the following resolutions; The Miniater of Finance, in Committee ot: 'Vays and Means: Resolved, That it ia upedient to amend the ]ncome \Var Tax Act and to provide:- 1.

That t.he rate of income tax applicable to the income of corporations and joint stock companies thousand nine hundred and thirty and thereafter, be increased from eight per centum to ten per centum.
J'ear one the for RCllOlved, That it to nmend and consolidate the Income War Tax: Act and to r,l"ovide:- 1, That the Consolidated Act be known as is expedient the Income Tax Act (l031) Consolillated; 2.

That the exemption for persons presently ..-ntitled to three thousand dollars be raised to three thou/mnd fh'e hundred an exemption of l(ol1ars; 3. provigions the relating to family be corporations and peuonnl 'that corporations l't'pealed; 4.
That in respect of fiscal periods not coin the return of cident with the calewlar year the tax: may be made im'ome anl!

payment of within four months from the close of the fiscal p,·"jod ;11111 if not so llutle and paid interest on the tax Jlllyahle then·from Rhnll be paid to the thirtil·th day of :\pril in the.ncll:t succeed· in.. calellilar year :It the rate of SIX per centum p..-~ annum; or to the timl'!

of the fi1in~ of thl'!


tax, should such filiDl1: return anli parlllt'nt of :md pnYllIent be mnde hdore the said thirtieth April hut in nny caf:(!

thl'!

return must be made fill or lx-fofe thl'!

thirtieth day of .o\pril in the lIe-xt ~lIccl'clling calendar year; .i.

That income by wny of dividends, rentals, income not ropltips 01' otlier :\[t("r('"t. like 1.\lr.

n. """~l,l disclosed by the taxpayer in his return of in cOllie shnll be added to the other income of the ta.
:qmyer in double the amount and the whole tued lmder the pro,'isioDs of the act; shaJl be exempt 6, Thnt net dividendll thereof, provided that from Canadian com.
panies liable to corporation tax to tbe extent the taxnble income of a tn of one,half of from tax up to ten pa)·er, thousand dollnrs the exemption shall be allocnted, in calculating the tnx pnyable, five hundred dollan to each sueees si,'e t:lx rate all in the first scbedule to the act provided, commencing with the lowellt rale and bi·arket of income of one per centum until like the di"idend income, sUl'Ccssive al1ocntiona of or fraction thereof.
shall hnve exhausted the di,'idend exemption pro,'ided for; deduction shareholdera, i.

That a tax of two per centum be collected ' the source 011 dh'idends parable to Don at to be I"esidpnt such effected by the companies paying the dividend or truatees receiving the dividend for and on behalf of non-reaideut persons.
The tax shall bt" deducted at the time of the paying of the di"idend by the compnny or on rece~pt of the di,-idend by the trustee and within thirty daya thereaft('r paid to the Receiver General of ('nnada.
the t&:l: deduclecl IlIJall render the company or trustee personally liable to interest thereon from the dale when it ahould lin"e been paid to the date of pay· ment at the rate of aix per centum per annum, Failure to dt"duct the tax shall render the com pany or receiving trustee personally liable for been deducted, the together with per centum per annum until paid.

tax: which should have Failure to remit thereon at interest six 8.
That when the assets or sharell of a com pany, having on hand undistributed income at thousand nine hundred and the end of one twenty-nine, are aold directly or through an company.

which company intermediary to a i8l!ues sharea.

bonds, notea or other like docu· menta 1\8 fully paid up by capitalizing the laid undistributed income, tllen ('In the redemption of such documents the company redet'ming shall paJ' n talC of four per centum on the amount of llllCh documents redeemed.
fl, That in reflpect of the income for the year one thousand nine hundred nnd thirty-one and E'llch ~·ear thereafter the mtes of tax at present impo~ed on indi,'idunl" be repenl..-d and the fol, lO\1"in:; Ilubstitllted in lien thereof:- "On the firKt $1,000 or nny portion thereof, 1 per centnm; On the nmonnt i~ excess of $1.000 but not in excl;"SS of $2,000, 2 per centum;" and 80 forth to- "On the amount in e~cesa of $24,000, 25 per c..-ntum."

(See stntement attnched), 10.


Th':'l!e rt'Solutions shall be npplicable to thE' income of the taxation pcrtod one thousand nine hllndr..-d and thirty-one, ,vitb the excep, tioll of ·r..-ltOllltion nunllwrt'd Ilt"·en.

which shall l"Ome into force (Ill the first, <IllS of July, one thOIl5:ln<l nine hundred and thirt)'-olle.

First ScIu~dule Ratt'S of Ta~ Applicahll'!


to Per!lOllill other than ('orpor:ttions nnli .Toint StlX'k Companies I On the fil"llt $1.000 Of any portion thereof; l)("r Cl'ntum; 011 the amount in ucua of $1,000 but not in (":'\"eelOS of $2,000, 2 per centum;