Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697725080382.pdf (Canada)
3204 COMMONS The BfHlycl-J/r.

RltOdc.~ eipalit.r, it he-oMits in the pnd by not having 10 C:1rry that person on.

direct for a lon<gcf' period than $200 would cO\·er.

relief :KEILL: But where there is no muni Mr. cip:11ity.

Mr. CORDO~: I lIo not propose, at t-his I-ime at least, the prov~ inN'S and municipalities subscribe to placing people \\'ho are all'c:ldy out in the open spaces of this cOllDlry upon the land.

to recommend that Mr. NEILL: The dominion nnd the prov inees?
Mr. GORDO?l: I suppose the hon.

mem ber menns thnt the dominion and the prov ince shall share equally in the establishment of some person who is now out in an unorgnn- .

ized p:lrt of Canada?

Mr. NEILL: Yes.

-Mr. GORDON: I would not care to embark time upon a policy of that the present at kind.

Progress reporled.

At eleven o'clock the house without question.

put, pursuant order.

adjourned, to standing Tue,da)', March 21, 1933 The house met at three o'clock.
PRIVILEGE-MR. POULIOT Mr. JEAN FRANCOIS POULIOT (Tem;, couata): Rising to a matter of privilege, Mr. (Mr. Gor Speaker, the Minister of Labour don) slated yesterday, as reported at page 3203 of lfansard: If my recollection serves me correctly, and for the "he hon.

member my hrori.ng is 'J.'em·iscoua.kl.

directed his barrage agaill6t pl'ovince of Quebec.

f1ight, The hearing of the hon.


gentleman may be correct and his recollection may serve him correctly, but his understanding was very poor because I did not direct any barrage against love as much as my own province, which I my country and for which I am always fight ing.

THE BUDGET ANNUAL FINANCUL STATEMENT OF THE MINISTER OF FINANCE Hon.

EDGAR N. RHODES (Minister of Finance) moved: That Mr. Speal,er do now lea\'e the chair for the house to go into commibbee of ways and means.
He said: Mr. Speaker, in moving that you do now leave the chair to enable the house [Mr.

Gordon.]

to rcsoh'e it.5:elf into committee of ways and meaDs to enable supply to be granted to His Majesty for the fiscal year ending March 31 the year'; is proposed to discuss 1934, financial operations under the five headings followed in the last budget, namely: it 1.

A short review of world economic condi tions; 2.


Can:l.da's trade and commerce and finan cial conditions in Canada; 3, The financial operations and accounts of the dominion for the year ending March 31, the fiscal year has not yet 1933, and, to take place closed, have been estimated as closely as possible; the transactions still a.s 4.

The estimated revenue and expenditure for the year 1933~34; 5.

Ways and means to secure the revenue the estimated expenditure.
required to meet World Ecooomic Conditions When the budget was presented one year ago, a world financial StOllffi of unprecedented severity was still'in progress.

It had started, in Austria in the spring of you will recall, 1931 and had passed from one country to.

another.

crippling financial institutions and, generally dislocating the machinery of finance and trade.
Before the end of September, England had been forced off the gold standard' and her example was soon fr)l1owed by a score or more of other countries.

With few ex.

it necessary to· ccptions, all countries felt institute exchange controls or impose addi tional restrictions on trade, in order to pro· teet the value of their currencies and' to safe guard them.iielves against unfair competition.

arising out of depreciated exchanges.


As u result of these conditions, the inter nat.ional exchange of goods tended' to become the world level more nnd more restricted; of prices, particularly the prices of primary products and the staple exports of debtor countries, became subject to intolerable prea sure; and the forces making for declining busi· ness activity and .increasing unemployment were reinforced.
The United States was perhaps the lasi important country to feel the full force of the financial storm.

During the winter of 1931 32, its banking system was subject to a double· foreign individuals and institutions strain; with balances in the .New York money market repatriated these balances or earmarked gold' them, while domestic depositors, dis· against their banking trustful of institutions, withdrew deposits.
The inevit able result was the failure of thousands of small unit banks, heavy depreciation in the value of securities thrown upon the invest ment market, falling commodity prices a.nd .. the solvency of M.\RC'H 21.

1933 Th.c Bm/ycl-.\/j', Rhodes 3205 vicious spired of deflation.

To counteract this movement, a program designed to create an involving expansion of credit.
was instituted, chiefly the fOl'IIlation of the Reconstruction Fin~l.ncc Corporation, liberalization of banking Icgi~latioD and extensive open market purch::lscs of government securities by the Feder:!l Reserve b.:lOks.

Dy midsummer the procc~~s of disintcgrntion appeared to have been efTccti\'cly checked.

the .

the world, the agreement conditional l7p to this period.

world commodity prices h:1I1 heen [ailing and business activity steadily .

;:hrinkin:.:.
;:hrinkin:.:.

Even in England, departure from 1he p;old st:lod:nd had brought only temporary infblion :md the Ic\'cl of wholesale prices had hreD del·lining since November.

In June or .July, however, prices tumed upw~rd in both Er:glnnd and the United States, and industrial In June, production showed :l similar upswing.

the I.o.US:lnne conference, somewhat to t.he reached & provisional surprise of sdllemcnt of the rep:lralions problem.
While Ihc Em·opron nations made their acceptance of upon similar action being tnken by the United States with this conference had all N'spe('l lhe promise of m~rking a real beginning of through which the international co-operation, hopcless lnngle of tariffs, arm:J.mcnts and unst:'lble currencies might be by .

!

'oh·cd In July· Aujt"ust, the Ottawa conference.


to the accom pli~hments of which further rcferenee will be made a lillie later, succeeded in Effecting a 1'2sh:ictions trade mcaslll'ahle l'cbxation within the hllge tr:lding area of tlte British Empire.

and pointed the way to similar action on n. brO:l.der scale.

These developmen.ts in Ihe international ~phere created an almosphere favourable to business recovery.

rep:ml tions, debts, to w:'Ir deblil, international aclion.
of Durinp; the summer also Greal; Britain carried throu~h fl highly successful conversion operation, reducing the rate of inte:est from 5 1.0 31 per cent on over .two billion lJOunds of calbble public debt.

This was made possible hy a conclition of extraordinary ease in the money mnrket, symbolized by successive re lil\('lions of the Bank of England rate from 6 to 2 per ccnt :'\nd by the sale of Treasury bills at the rcc'ord low rat.e of i of one per cent.
Somewha.t similar conditions prevailed in- otbet' 1C':tdin~ money mnrkets of t·he world.

In the rapidly, par !O('curity markets, prices ticularly for hi~h-grade bonds.

Low money r.tte3 are traclition:ally rfgarded as the chief prerequisite to and as the forerunner of busi therefore ne.!

's rccon~ry.

th:tt confidence began to return.

Indeed, the third quarter of 1932 was a period of noticeable impro"ement in world industry and in busi ne:lS sentiment.

~11!J--2(I3~ It wns not.


unnatural rose the But the sole.

f;tct.or.

During the last the improvement wns not maintained, and since last October world trnde, industrial production and wholesale prices have once In the renewal of more tended downward!.
the war debt t.he declinc, of failure though negotiat:ons h:H'; been nn important, not few weeks, t!tere h:l.s been a recurrence of banking trouble3 in the grr:\-l country to the south of us, and new c10nds ha\"e 3ppeared on l·he· political horizon in Europe.

On the sig-nifi this b:mking crisis :and these new c:lnce of politi!

':ll di.i!turb:lllCCS.

it is not necessary for me 10 comment.

But I do wish to warn ll~:linst.

t.co gloomy an interpretation of current happenings.
E\"Cnt3 that may seem weU-nigh c1i.i!

:lstro1l5 in themsch'es rna)" ne,'ertheless be neC('s;:.

'lry to effect some of the r3dical changes in public at.litud.es and national policies which will mnke possible a fundamental nnd perm ::ment solution of the difficulties which beset the world.

There are those who decry the possibility of an ·international soluAon and who insist toot we should seek remedies at.

home for I do not wish to minimize present condit.ions.
the difficulties and delays which are involved in :my -program based on international agree ment, or to overlook the plain duty which rests upon every nntion to keep oits own house -in order nnd to slrive to the utmost by domestic action to accelerate the processes of bl15incss recovery.

However, one cnnnot f:lil the present crisis is inter national, both in its cal\'Ses and its eft'eets.

and that in in·ternational underst.

:lnding and co-opem·tion.


the world is Slowly, but nevertheless surely, approach-jng iull that the fact realization of t.he dny 'Of na.tional self-sufficiency is past, that an inlern:ltional disease can only be cured by an intemationnl remedy.

remedy must.

be sought to.

observe thnt the Therefore, I look forward hopefully to the World Economic nnd Monetary conference which is expected to meet in London in the ncar future, and to which we propose l,() give our whole-hellJ'ted support.
Members of this house have already had an opportunity of studying the :lgenda of that.

conre-renee pre pnred by an able commiltee of ex.perts.

I am hopeful that on the basis of this agenda a program can be wOl'ked out for the relaxation of exchange conLrols :lnd other excessi"e re the striction!!

international stabilization of currenciC6, and Cor the stimu Intion of a rise in the world level or whole sale prices.

The succ~ of this conference assumes a prior or simultaneous settlement of the war debt.
qucstion and some appense ment of poJoit.ical :'Ind rivalries as a fears rcsu"lt. of progrCS!l in disarm:lment discu3Sions l·r.tde, for on 3206 The Budget-Mr. Rhode& COMMONS If these prerequisite condiuoDi or otherwise.

it should be possible to ean be achieved, reach.

agreement upon a program wh-ich would be effective in restori!lg world confidence and initiating aD eanly recovery of business activ.

Hy.
Hy.

The world has this solution within its grasp and in my opinion there is no other- short of prolonged and painful liquidation, if this indeed can be called & aolutJon.

Eventa are moving -rapidly, driven by the urge of economic necessity.

On this fad may rest the basis for a greater degree of optimism cation of import restrictions.

than has obtained in many months.

development could be of more importance in stimula~ing business recovery and revivioC a spirit of confidence.
Trade of Canada Reference has been.

made to the racton which have contributed to a further decline in world trade, induding lower commodity prices, reduction in purchasilllg power of many of our .principal markel:6 due to unfavourable exchange conditions and the widespread a-pp».

It is a matter of sati!faction that relati,-ely the position of trading natioDII hu Canada among the great beeD so well maintained.

In 1932, Canada again ranked firth, after having been seventh in 1931.
An examination of the statistics _leo reveals that the 1058 in dollar value of total t-rade in 1932 was proportionally not 80 great for Canada as for other important trading COWl... tries_ The sou~dne3S of our financial policy, aDd the benefiCial effect of trade agreement., empire partieularly countries; have contributed to this result.

concluded with those The following is a statement of Canada'.

foreign trade for the fim eleven monthl of this fiscal year, as compared with the sam.
period in 1931·32: As foreign trade plays a dominant role in Ca-nada's eoonomy, it follows that t.he world conditions which have just been outlined, have ~nevita.bly been reBeeted in busineBll conditions within this eountry.

The course industrial production and the physical of '-olume of busineS!

in Caneda has followed very closely that of the other leading coun· t.ries.
Fortunately, since the first of the year, in there has been a moderate improvement wheat prices Ind those who are wuIUy well- that "this improvement infol"JIled are hopeful -will be sustained.

I do not need to em-phuize that if this rise in wheat prices can be sus-- tained and carried farther, no other single Trade of Canada tOOO omitted) Imports •••••.••••••.

Exporta- Canadian produce.- Foreigon produce.. _. Ele1'eJl month.

ended Feb. 29-·1932 ••••••••••.•.. , 521,056 Eleven month.
ended Feb. 2&-1933 $373,<21 .. _. .

_ .. _ .. _.

•.

536.

'195 9,952 437,329 &,332 Total.

.

.

.

.

_ ... __ .. _ .. _.. _ .... '1,1)67,603 $817,082 Deere.... '1'7,035 99,21l& 3,&20 '250,m trade.

the balance of the value of the It will be observed that In the firet elevea exports of Canadian produce h&9 declined to months of this fiscal year, ended February 28. a lesser ex~nt than the value of the imports.
,,&1 $70,240,000 which is a remarkable showinl u Indeed, when the lower prices of the leading ol compared with Canadian export commodities are taken into 125,490,000 in the corresponding period of the there will be found to have consideration, pre,-ious year, and a complete reveraJ 01 been very lilLIe reduction in the actual volume eleven months ended the p06ition in the or exports.

February 28, 1931, when our trade showed an unfavourable balance of 170,524,000.
Com.. parative figures are as fonows: It is also noteworthy that, despite the un- favourable conditions which have prevailed, there has been & progre811ive improvement in exports: over favourable excess of balance imports a Eleven month.

ended February 28,1931 .• February 29, 1932_ • • • .

_ February 28, 1933_.

.. •.

Tude of Canada (000 omitted) " Im])Orla $831,232 521,056 373,t21 Export.
'760,708 M6,54:7 it3.661 Bal...e _) "o,m 1 +) ,,",tel +l 70,2(0 Although the tariff &grftUlenll arising out of the Imperial Economic Conference have been in force only a few months and their advantages are not yet fuUy reflected in the (Mr.

Rhod-.)

" trade statistics, the utmost empire countries are indicated.

significant development.

of trade with importance to our M.\nCH 21, 1933 3207 ,[:df' rot" In till: tr'll month.~ l'lldE'd ,bnllnry, 1933, (the l)~' lr:,Je \\"hidl .~:;di":li(·,.
: hlf':,t tOIIll!l'ics.

fire [l\"'lilnl,!c), Cann,!

:l',-: (-"port,.

: to ;:\ip:htly the \·:H"lO\l.~ part;: of :,::Trntcr than in the same period in 1932, and 10 the rniled 1\ingdom had iIH'l'cn~('d hy ~onH~ rmpire w('re In addition, In cmplTC imports scn~n million dolbrs.

the de cllnc Je~~, relati\"(~l.r.

th:m in rc.~i)('ct of non·cmpil'c im pol'ls:.


inter (,llIpire mO\"Clllcnl of good_~ nrc ns follo\\"s; \H15 much reflecting Trade totnls the Inter-Empire Tnlll,' of Callada Imports from United Kingdom .

.

.

.

.

.

.

.

• .

.

.

Exports to unitell Kingdom J!I1pm·t~ frolll Rriti;th Empire .. Exports to llriti.~h Empire .. , .

.

.

, .

.

.

, .

.

.

.

"'hrn cxpre"i;"cd as pen·{'I\\:1.gcs of tot;.!

II"!ldc.
II"!ldc.

tllcse figures dC'urly indicate the trend !oll"al'd.~ increased tmde with empire {'ountrie~.

In th~ ten mOllths ended January 31, 1933, import,:; from tIle Rriti!Oh Empire WNe 29·13 n,~ compared with trade.

pt'1' (,'cnt of totnl linitcl] Kingdom British Empire .

.

.

.

.

.

.

.

.

• .

.

llnited St,1tCS .

Otll('l' conntries .

.

In import5 fmm the United J\:inw1om, the (·!Lifo( p::tins have been in textiles, coal, manu So far as iron find chemicals.
LII'turC5 of ('xporls con ('('I"np.d, important incr{':lse;; are being l"c~i"t{'l'ed :llltl in m:w." f,(dory.

to the United Kingdom are ,the farm, mine )lr()(hu'h of An increase has occurred!

in- both imports from and exports to Australia, the latter rising fmm 84,207,000 to 86,047,000.

This improve Ill{'ot is csp('cially gratifyinJ!

; to those 'intcr f,,~t{'d ill tmde from the Pacific coast.

A feature of the import.

t.rade hns been the ll:l'owing importance of the West Indies as 9.
"01ll'f'e of sllpply of semi-tropical fruits nnd \'f'g('tables.

Con~idcrcd in the light of world conditions, rallfllb's {'xlernal trude has ~hown a rea~suring "Iahilit.y which reflects not only the Ilnder 1.\·inJZ prodlloth'e capacity of the country, bllt Hl:<o the cocrgy and capacity of those engaged III prorillclion nnd trade.
Financial Conditions In Canada It will be recalled that after Great Britain dpparted from the ,gold standard, the e;"pol't of gold from Callilda was prohibited except Illldf"l' lir('nsc and t.he gold production of the mines was purchased by the governmen.t at the world price.

This policy has been 1'00- Ten montllS en(\Nt Jtllluary 31, Hl32 $ 81,509,816 ]53,776,204 122,448.561 H!2$24.9H TC'1l months ('w!cfl Jalluary 31, 1933 :$ ;3.629.042 lliO,610,678 lOUl39,909 193,115,066 25·23 pel' CCIlt.
for the previous COITl'sponding period.

Expor/'s to empire ('ountriC5 in the 5:lmC pcriod wel'(' 46·34 per cent of total trade, a~ eompnl'ed with 37·84 per ccnt formel·ly.

The pcrr.<.

'nt!l~e distribntion of Canada's lI"ade i" shown in the following statement.
: Imports Trn months endrd January 31 Exports Ten months ended Janunry 31 1932 % lS.O:i 2!i.2~ 60.77 14.00 1933 % 21.04 2fU3 57.22 13.65 W32 % 30.02 37.8t 41.54 20.62 1933 % 38.54 46.34 30.89 22.77 to contributed tioued, aod the receipt of the New York premium, which would, of course, have been obtainable by producers 'had they been per their gold freely, has un mitted to export doubtedly substantial the expansion which has occurred in gold produc tion.
Next to South Africa, Canada is now !having expanded her the largest producer, output from 116,000,000 in 1913 to 163,000,000 in 1932, succeeding the United States as tlle second largest producer.

It is estimated that for the present.


calendar rear our production will amount to 867,000,000. thi~ incr(l:l~ing impol'l:lOl'£' of in thl' illllu"ll'y lies not Thl' it has ('lllploYlllcnt :l1on(' given to labour, the profits which have been disburscd in div,idcnds and the impetus given 10 domestic perhaps primarily at this time in the support.

which it has given to our exchanges and the national credit.

gener,ally, trade but.


taken This j~creased gold supply, u\'ailable for gold export without weakening monetury rcserves, the conjunction with in elimination in t.he past two years of a large trade aof!

unfavourable balance of the sub stitution therefore of a favourable balance exceeding 870,000,000, has been most.

signifi cant in rclation to Canada's ability to meet, the burden of interest without undue i;"tmin, 3208 The Budget-Mr, Rhode!

COMMONS to offset.

annual and principal payable abroad.


Without mak ing a detailed presentation of the various it.ems entering into Canada's balance shee~ of international paymenla, it may be Doted that current estimates of the position indicate that exporla of goods, gold, and services, are sufficient charges payable abroad and to leave a substantial balance for principal payments on accoutrt of exteroal debts, This has been a most important factor in main,taininc the high credit po6ition of Canada in world markets.
During the past the only foreign country year Canada Wa!

that wu able to borrow in the public markets of the United States.

other This enviable poaition haa been and can be held only by the maintenance of sound finan· cial and monetary policies.

Much hy been heard in recent months about inflation.

Some of the advantages claimed for in8ation may seem alluring to industries harassed by fall· ing prices and declining tllnlover.
But let the that apart sponsors of inDation never forget from .tlhe and· dangers involved in their program, one inevi-table result would be a flight from our dollar, a withdrawal on a Jarge acale of the capital invested by foreigners in this country- in the form of securities and bank deposits, There are abo to be considered internal .reactions to any steps which might impair confidence in IL country's currencY'.
Against policies' which might this gov les.d to such dangers, ernment has resolutely set its faee.

difficulties in terms of trade, has 'been maintained The external value of the Canadian dollar, though showing grea-ter 8uctuations than ·are desirable for the normal conduct of interna· tional a at moderate discount the United In.

October last, the rate rose States dollar.

to 6i per cent discount, and at no time during the past year was it depre3esd to the level of December, 1931.
There are some who advocate that our dollar should be tied to sterling at the old parity and still othens who criticize wb&'t they mistakenly believe to be IL policy of pegging our dollar in terma of the time to enter New York.

This is not into a discussion of this broad and complicated qu.estion.

Suffice it for me to say that our dollar has been allowed to find it!
own level and thaL as a result it has been 8uctuat- the United ing .about In so States dollar and the English pound, doing it may be working: out a noL unsati,.

factory compromise between those of our io.tereste which would be benefited national by close and stable relations with sterling, and those on the other hand which would be seriously harmed by & heavy and 8uctuatinl discount in terms oC New York.

half-way between [Mr. RhodNJ The financial and.


monetary policies which have been followed 'have al30 contributed to the effioient working of our internal crtdit In general the nee~ and investment facilities.

of industry, of crop-marketing agencies ana.

of public bodiet!l harused by faUing revenues have heen taken care of with admirable efficiency, particularly in view of emerpnq conditions and in (he lipjht of the eituatiOD.

in many other countries.


Canada is one oC the few countries that bas been able to retaiD.

a market for new long.term finaneing, and the volume of loog-term capital issues which were 80ated in the domestic market last year it.

I submit, a splendid tribute, not only to the efficiency of our investment and bankina institutions, but also to the thrift of til.

Canadian people and the underlying strength of our economio position.
Excluding short,.. term and refunding loans, a total of 1267,000,· In passing, it is int.ere!iJting to 000 waa raised.

note that over 115,000,000 wu !ecured by Canadian borrowers from the London market.

three provinces and two municipalities EellinE their first sterHug -issues sinee 1914.
The dead hand of past lavish expenditure and borrowing still weigh9 heavity upon all public bodies, While public revenues keep faJIing, debt charges persist and increase, con· suming an ever-growing proportion of total current receipts.

This ",·hole problem of in terest chargea is now receiving the attention of the banking and commerce committee of this house.
Without touching upon their field, may I 88.y that >the policy of this gov ernment is to keep the interest charges upon the public debt as low as possible by main taining such financial policies as will enable us to raise new funda and convert ma.tur1nc loans on.'

the most economical basis.

When the opportune moment arrives, we propose ,to offer a conveT8ion loan to the public oC this country.
But it wm be on a basis that will keep faith with investors and will no~ in any sense involve repudiation of existinl contracts.

Under the issue can be made, it ia believed, at a ra.te which will saving to the involve public treasury.
troch conditione, a substantial the bonks and other financial May I refer also, at thi9 time, to a matter received some attention in the which has public press, nomely, the movement on the insti· part of tutioIUI to reduce the interest rate on u.vinge In my judgment this reduction bank deposits, is a necessary step if we are to reduce the interest rate on bank loans, on mortgages and on Jong-tenn bonds to a level where busine-J recovery will be most effectively stimulated.
to which I need not dwell upon the extent MARCH 21, 1933 3209 The Blu/gel-Mr. Rhodl'S fin:mcin,:; it will {,:'I.

"C the hurdl'n of for all pcblic hodies by enabling funds to be mised In this maller, therefore.

the It lower rafc~.

i3 pIT'parcd to cooperate by fC !c\'crnmcnt intcrc.sl paid aD postal jucing the r:lte of 53.l"ings deposits.

financial the SC\"crcst Fin:\lIr, I wish to refer to the contribution of the chartered b:inks to the orderly finan cing of our economic life.
Under the impact of storm that history Teconl.".

OllT banking: system h:\s fully main l:tined its cn"bhle reputation, meeting Hery dcmnncl I1pon it :llld rct:lining the fullest ('on fidcnc,~ of the pllbli(~.

The annu:\l b:mk state ments which' han been i.ssued recently indi liquid nn ('ale \\·hile t.he chid concern of our banks position.

would :lppC:lr finding to be ·the difficlllt.V of &'\lii<faC'!ory QlltkLi for the inn'stmC'nt of their slll"plll..: f':\('('pt;onall~' rCSCI'\·es.

stron!
stron!

; nod of Ollr therefore, A bill h:l<; nlrC':Hly heen introduccd in this housc prodding fur the cxtension of exi~tinp; h3nk chartcrs until .luly 1, 1934.

Beforc th3t the B:mk Act date tbe pt'riodic re\'i~ion of will 113\'e t:lken placc.

Sp('uking in this hou,;c more th:m a year a~o, the ri~ht hon.

the Prime )"lini~ter, rai::cd the question as to whelh('r or not a ccntral bank should be In recent months the cslah\j;:hecl in O\Oada.
qllestion has hcen widely discus.~d, but it must be recognized that it is a highly technical m:ltlC'r.
upon which conclusions should be reach(·J onl,Y in the Jight of the fullest en the problem, The Quiry into all a.~pects of go\"ernment proposes, to appoint n royal CO!1Jlnission to study the ol'(::lniz;ltion hanking :"Ind w01'1;:ing: and monct:ll'Y systcm, the arguments for and ;l~:lin:lt a central banking ini:ltitution to make recommendations for re"ising or anti ~upplem(,lItillg our existing and I need sc:ucely say that monel:II'~' Ic::dslntion.
the endeavour wiJI be made to sccure :l. i)Otly ui cXl'prli!.

wh€'rc\"Cr they mar be fOllnll who:'C eompclcnce nnd whose freedom from bi:ls will comm:md the respect of e\"cry section of the Can3di::m public.
The intention is th:lt the commission should begin its iO\"cstig:ltion at 3n early date, should adjourn, jf nece~nry, in order to considcr its findings in the light of any recommendations that may be made by the World Monetary llnd should submit a report which would become the basis {or 9ludy by the banking and com merce committee at the next session of par liament.

cntil'c to considcr conference, banking The brief reference which I have made to the financial !
!itU:ltion in this country mtly well be a source of S3.t.isfaction to Canadians, I do not ha\'ing f'eJl::\rd to world conditions.

overlook the darker elemen-ts in the picture the low le\'el of business activity, the shrink age of trade, the pressure o{ low prices aod of existing debts, the increase of unemployment :lnd the varions soc.ial costs which it involves.

~re\'ertheJess, it merlR8 much for the proopect of future teeO\'ery that as a DatiOD Canada.
is ahle to take ('rlre of her foreign commitmenl.s without \1Ddue strain; ·that our financial struc ture eon-tinncs intact find our cl'Cdit remaiDS unimpaired in the markets of.

the world, T:\xntion Re\"('nues HI32-33 in The continuance of the decline in business aeti\"ity and in commodity prices had t'he in Canada as in other coun" inC\'itahle effect.

tries, of a continuing fall in public revenues.


Thi3 W:"lS particularly m:lI'ked t..uation revcntle {rom which the dominion derives over SO per cent of its tobl receipts.

t-hc mrljor sourccs of laxation re,"enue, t-he income t.ax rllone will yield the sum esti mated.

When ,the fiscal yenr ends on March 31st, income tax receipts.

as now estim:1ted.

will npproximale SG2.000.

()()(i rlS eomp:tred with :m c-'it.im:lte of !6O,OOO.OOO :lnd :\ yield during the pre\'ious fiscal year of $61,255,000.
Of The Cllstoms britT still r:mks first.

as a con tribut.or to the dominion treasury, but its yield of ~i2,OOO,OOO for 1932-33 is subst:l.ntially below the cl1stoms re,'enllcs of Inst.

year.

This de in commodity cline rofllY.-ls, of course, the fall prices nnd the A:r:tdual inter to cxchange rc nation-:ll !

"Iriotions and chaotic monetnry condition.,.

The f:ll1 in cxci::-e ,duties, whie:l :He estimated to producc !3S.594.000, was sli~h.tly leas t:lpid th::m that in customs duties.
tr:1.de due in p:"Irt shrinkage of Because of t.he increase in the rale from 4 per cent to 6 per ceDt, the sales tax again rose to t-hird place in the list of re"enue producCTS.

Though the higher rate was not fully effective during the entire year, the return will exceed $58,000,000 and closely approach that of the If to sales income I.:lX and the customs ,tariff.
tax receipts we add the }'ield of the various other excise and miscellaneous taxc.s impoeed by the Special War Revenue Act, we have a tobl estimated return of $85,432,000 or over 33 per ccnt of Ollr total laxation revenue.

The following table gives a compa.rative sl:lt.cment of the estimated receipts from taxes for the fiscnl year nolV closing and the previous {our yeaTS: 3210 The Budget-Mr. Rhode!

COMMONS Taxation Revenue.

(000 omitted) Customs import duties .............•.....•.
E:lcise dutiell............... : ............... War Tu Reveuuea--- Banks...........................•..... Trust and Loan Companiel........... , .

InSllraDoo companies...................

Delayed buBinesa profit•............... Income tax •.••••••....• , .••.•...•.....

Sales tax ...............................

stamP.


'l Manufacturers', transportation well, etc .... _•...... importation, 1028-29 1929-30 1930-31 1931-32 Estimated 1932-33 • • • • • 187,206 63,685 104,133 48,656 131,209 67,741 17g,430 65,036 1,408 1,2f3 72.081 38.... 1,3SC 8 ............ ............ ·........... ........... . "
895 BOO I' .55 3 ............ " 69,422 62.000 63,646 58,767 173 69,021 ".SS9 61,255 41,734 71,048 20,784 " 1.... 1,390 19,361 18,.550 13,9.51 17,872 24,520 258,It;: Total receipts rrom tasation ................ 39.5,921 378,551 296,276 275,054 the various branches of The chief source under this head is the Public Service Revenues The sum of 152,709,932 will, it is estimated, be collected by way of revenues from the various public services.
This is slightly larger than the corresponding figure for the previous year.

the mail of the public service free of charge, nor does the department's expenditure take into account disbursements made by Public Works and other departments on account of Post Office.

item of public service ;:::i~~e~n;~re~~~:s;d;:nc~~v:~t't::~~~~r~~:: Post Office Department, the revenue of which missions, provinces, etc., and including the regular payments by Roumania on its Joan, is estimated at $31,129,243.
This is slightly The total less than the estimate and less than the total this year will exceed Sll,500,OOOj as compared with 19,330,125 last year..

In for 1931-32.

On the other hand, post office cluded in the total is the payment of $807,000 expenditures have been' reduced more rapidly by the chartered banks for interest upon ad with the result that a deficit of $2,214,000 in vances under the Finance Act.

The correa 1931-32 has been turned into an expected net ponding payment la8t year was S360,247.
revenue of approximately 1567,000 during the current year.

The figures for post offi<:e re- ceipts do not include any credit for handling A five-year comparison of non-tax revenuee The second largest follows: No Tax Rev ~ enue a - 1928-29 • ....... ....... 2,992,MO 80,214 1,230,333 4,CK1,095 18,224 4,070.339 Canada Grain Act.••........••.... , .....•.

Canada Gazette ........................... Canalll.......................••....•.....•.

CallUal .......................••... , ...... , .


Chinese Revenue............ " ............. Dominion Lande............. , ••........... Electrioity ................... , •...........•.

Finee and forfeiturell ....................... 109,300 Fisberiell ................•................. 92,398 Gall in.pe~tion ...: ......................... 131,626 Insurance mspectlon ............•.........•.
Intereet on investmentS.................... 12-,227,562 182,810 Marine..................................... 236,808 Marinera' Fund .......... , ...............•.

Military college ......................•..... 20.204 155,830 Miltary peneiona revenue ...................

Ordnance lande..................•......... 530,239 Pa~nt &!1d .oopyright (eee.................. 178,449 PenltentlBnee......•.....................•.
Poet Office.....•........................... 30,61J,964 501,592 Premium, dieoount IUId exobance ........... 4!f,OS5 Public worke............•.•.....•..•...... RC.M.P.
officere' pensione•..•............. 6,373 81 Superannuation fund ........................ 399,247 Weights and me&llUrell ...................... ".83<) 1929-30 2,047,207 • ".800 1,043,647 4,300,710 14,34.5 4,I39,1CK 546,957 H8,343 110,724 100,763 138,780 13,518,205 184,~7 209,322 19,820 158,881 30,217 574,1H8 181,024 33,M5,385 4fS,390 408,151 8,411 407,248 1930-31 1931--32 • 2,179,CK1 11,197 1,026,611 3,678,487 21,9Q6 1,855,401 632,151 433,716 73,937 94.255 148,942 IO,f21,224 199,000 201,168 19,882 159,000 29,384 559,MB 183,288 30,212,326 • 1,484,826 73,5QO 976,M5 4,286,145 10,069 485,364 402,189 233,512 40,519 81,359 149,002 9,330,125 191,905 184.485 20,CK5 163,229 14,250 52&,248 166,111 32,234,948 Estimated 1932... • 1,431,493 74,000 806.200 4,360,454 ..800 453,6QO.
299,791 208,888 37,723 81,62r 159,918 l1,508,6N 178,551 185,8'0 2O,1UI 156,618 15,000 ....882 501,610 ·....... .. .

.

• ............ ·........... .. .......... 280,591 14,787 362,391 6,357 419,750 406,529 101,838' 31,129,243 301,108 21.,781 9,700 402.288 Total non-tas revenuell............. 59,476,592 62,787,204 53,291,428 51,757,161 52,709,V32 (Mr.

Rhodee.]
Rhodee.]

MARCH 21, 1933 3211 The BW/(Jd-.I1 f. I(hodc·~ Included in casual revenue in the ahove l:,blc is 81,400,000 received from the sale of l":Jdio licences.

This l:ompares with $514,177 l"l.'ccivcrl during the previous year when the fee was 81 compared with the present 52.

Special Receipts Special receipts were not as large as during ('it her of the previous two years, primarily because nothing has been received on account of German the Hoover moratorium.
From the Custodian of Enemy Property, however, there has been received S4,000,000, which has been takeD into the reparations siDee accounts in part as an offsct to the .disburse· "ments from the consolidated revenue fund in respect of compensation pilid to civilians for c1:unages sustained in the war.

Summary of Revenues Adding special receipts to the returns from taxation nnd public servicc re"cnue3, we reacb a grand total revenue of 5315,290,000, which i3 $18,549,000 less the prcyious year.
than the figure for A compari.son of revenues for the last five fuca I yenrs is given in the following table: Summary of All Revenues (000 omitted) - neccipts from taxation ..................... :-ion-tAX re\·enues.

.... .

..... .

... .

... .


.... Consolidated fund receipts.......•......... Special receipts............................ 1928·20 19:20030 1930-31 llJ31032 I 395,0:!1 59,476 4S5,391 5,476 • 378,551 62,787 441,335 4,771 I 206,276 53,:291 349,567 6,622 • 275,054 51,IS1 326,811 7,0:28 Grand total.
.................. 460,873 446, 109 356.189 333,839 Estimated 1932-33 • 258,107 52,710 310,817 4,473 315,290 Ordinary Expenditures 1932-33 The ordinary expenditures for the year are estimated at 5364,425,000, which is $8,080,000 this than the figure for 1931-32.

Whilst les:; expenditure is S130,OOO more than was esti mated, con sidered in the light of that after the budget estimate was made, supplementary estimates were passed, amounting to $7,644,000.
By means of rigid control over expenditures, increase must be the (act slight this it was possible to effect a total saving of up wards of $12,000,000 from the total amounts voted by parliament.

In previous budgets it has been customary to gi\'c a statement of ordinary cxpenditures by services.

The following five-year summary i3 given on the basis of expenditures by de partments (with sub-heads for the more im· pOl'lant services), in the belief that this classi fication will be .more serviceable.
Statement by Departments of Expenditure for the Last Five Fiscal Years (000 omitted) Ordinary Account 1928-29 1929-30 193o-Jl Agriculture ............... ..... ..........

Auditor General's Office .... Chief Electoral Officer, including Elec- tions ........ ........................... Civil Service lommission .............
External ~e:airs including Office oJ the Prime l\hmster............................ Finance- • 8,128 400 75 268 749 • 10,245 402 " 368 897 • 10,119 416 2,256 343 928 1931·32 • 10,212 436 145 306 99.

Estima.ted 1932-33 • 8,601 390 64 243 875 Interest on Public Debt........

Premium Discount and Exchange (Net).

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

...... Subsidies to Provinces ................... Rpccial Gronts to Maritime Provinces ... Other Crants and Contributions.......... Imperial Economic Conrerence ........... ...... Civil Pensions and Superannuations....... General E:a:penditure ..................... 12,554 1,600 2,687 1.648 2.369 124,990 12,497 1,600 637 13,695 1,600 536 ....... .... .

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

...... ...... ..... 1,40.5 1,845 1.476 1,794 1,545 2,006 121,151 134,971 728 .. .. ........ 13,677 1,600 681 268 1,330 2,018 121,2!lO .

.... 17,436 1,600 778 121,566 ..... 3212 The Budget-Mr. Rhodes COMMONS Statement by Departments of Elpenditure for the Last Five Fiscal Yeara-Coneluded (000 omitted) Ordinary account 192;8..29 1929.30 1930-31 1931~2 Fisheries .

Governor General's Secretary'.

Office ...•.. .

Immigration and Colonization .

Indian Affairs Insurance .

.

Interior JulltiC4?

.•.


; .• ; ...................••........ ' PcDltentlanell Labour .. ".......•................•......... Tef'hnical Education ... _.......•...... ··· Old Af!

:ll Pensiona ..............•......... LegislatIOn- House of Commons Library of Parliament Senate }'farine Canadian Radio Broadcasting Commis- .

sion Mines and Geological Survey .

Movements of coal and Dominion Fuel .

Act .

.

· .

.

.

.

.


National Defence- Militia service Naval service Air service - Sundry gervices _ N.at.ional Revenue (including Inoome Tax).

Pensions and National Health- Treatment aod aftel-e&re of returned 8OIdieJ'll................................ Pension, war and military.. .

Healthdivision.......................... .. Post Office............

Privy Council............ .

Public Archives........... Public Printing and Stationer;y.... .

.

.

.

.

.

.

.

.


Publio Works..... Railwaysand Canals....................... MaritimeFreUzht Rates Act............. Royal CanadianMounted Police.. .. .. ..... Secretary of State..........................

Soldier Settlement Board....... Trade and Commerce- De~artment............... Mail subsidies aod steamship subventioll8 Canada Grain Act Total ordinary elpenditure......... S S S 1,974.

155 2,956 4,7891"7,787 2,640 1,808 611 1,152 833 1,652 74 53' 7,514 2,426 17.

3....

5,3.
)3 159 8,490 2,591 2,561 697 m 1,537 1,690 74 '29 8.9« 2,435 142 2.588 6,069 178 8,104 2,538 3,237 797 391 '.658 1,786 76 '68 8,030 .................................. 1,250 1,358 23 11,044 1,836 5,041 1,753 13,542 7,902 41,095 1,215 34,950 59 189 291 18,686 3,870 7,178 2,800 426 1,442 " 11,033 3,013 5,921 1; Estimated 1932-33 s 1,883 146 1,769 4,507 166 3,570 2,480 3.03<1 628 300 11,500 2,261 66 698 6.443 250 1,071 1,271 8,808 2,422 1,750 1,085 11,148 10,811 44,500 965 32,073 51 175 248 13,983 4,028 10,650 6,246 460- 851 S 2,046 148 2.200 ~.081 18.
4,647 2,560 2,737 633 283 10,032 2,061 81 650 7,262 .. .... 1,264 721 9,700 3,043 4,040 1,341 13,920 11,154.

48,249 1,246 36,052 53 212 289 17,548 3,997 9,187 3,488 483 1,036 3,245 1,026 4,9M 1,323 ·1_....",,',:-.8':..,.:-I__::2.~'JfI::'+_.....

:2::.3::'::6i 389,539 3,252 1,083 350,886 357,707 3,ass 6.417 2.199 2,083 2::.::3.:.

:6+_-:-:2::.~13,:6 372,505 364,425 ·is the above account Premium, 'Discount and Exchange, It will be noted that only the net ba.lance of included in ·the figures.
During this fiscal year, the expendi~ ture for this purpose' will, it is estimated, total $8,000,000.

Of this amount, $7,962,000 repre sents premium paid on gold purchased by the mint, the balance.

representing exchange on sundry items.


This expenditure was more than offset on the revenue side by credi.... totalling $8,301,000, resulting from the sale of New York funds acquired by the shipment of the discount on sterling purchased to gold, meet London requirements, and the discount on sterling securities purchased below par for sinking fund purposes.

This makes a net the year of $301,000.


The in revenue for clusion of the net balance only in the accounts avoids the undue inflation of revenue and expenditure arising primarily from the govern mental policy of centralizing and controlling the purchase and expol't of gold.

[Mr.

Rhodes.]

MARCH 21.

1933 3213 Th{~ Budyel-Mr. RhfJdt'.~ Capital E.'"pcnditures The amount voted for capital expenditure was 59,678,100, of which 89,123,000 will be spent.
Last year the expenditures on capital account amounted to 516,980,000 anu for the )'CRr 1930-31 the expenditure was 528,222,000. three-fold ba5is, capital expenditures for the lnEt five years are presented in the following table: Clnssified on the usual Capital E::o:penditurcs (000 omitted) W2S-29 $13,164 6,302 3,3-13 1029·30 $ O.32-t 11.6,,3 6..'>74 1930-31 $ 9,842 6.371 12,009 1031·32 $ 3.299 6.242 7,439 Estimated.

1932·33 $3,129 1,582 4,412 .• •.

,_ .. .

.

.. Canals.. Railwa.v~ Public Works .. _. .


, .. .. .. TMal capital expenditures.. .. $22,809 $22.5Ul $28,222 $16,980 $9,123 Special Expenditures it The two chief Special expenditmes, i3 c.stimated, will to $42,483,000.

This represC'nts a re amount duction of 812,993,000 from the predous year.

items in this cbssillcation are whent bonns nnd unemployment relief.

The C':tl'!

'y-over of wheat bonus paid during the current fiscal year is 81,826,200, makinl; a total out!
::ly on this account of 512,734,689 considerably larger con tcmplat.eu due to the unexpectedly brge crop of than W::IS at.

lD31.

first.

Unemployment Relief On unemployment relief, the lotal e:-.

:pcndi ture during the yl.

'ar will he $35,603,000.

which t.h:lll the l'uncnt annual iii larger amotmt :l that.

cost of relief dlle to the fuct.

there was carried O\'cr fl'om the previou5 )'ear a brge cxpcnditmc in respect.

of the Dominion gov relief works, f'rnrncnt's share of.
the cost of the account.,> for which reached us for pay ment some time after the aotll:::d c:-.

:penditures were incurred by the province.,> and muni cipnlitie,'l.

the tl1'ising out of The totul amount paid in respect of com 1931 act was milmenl:; 817.300,000, of which 512,400,000 was for the .

puhlic works jll3t m('lltioncd.

The amount paid in rcspect of commitments carried for w:lrJ from the 1930 legis!

::ltion was $553,400, :lOd tlte payments under the Relid Aet of 1932 are estimated at $17,749,000.
The whole expenditure m:\y be summarized as follows: Public wol'la .

.

.

.

.

• .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

. "

.

• .

.

.

.

.

• .

.

.

.

Direct relief .

(includill~ Sal'lkatclll'.wan R~lj('f Commission, $1.600,000) .. Qlihl;!f expel1tlltul'es, lllalOly DOlllllllOll proJf'ctl1 .
$12,531,100 1!J.G30.280 3,441,G20 $3~,603,000 A f:ompar:l.tive statement showing special expenditures during the last five fiscal years follow5 : Spcci:l.1 Expenditures (000 omitted) - 19Z8-2!J 1929-30 1930-31 1931-32 ... ....

Adjustment of War Claims, .....

Cost of LOlln Flotations ....... ............ Miscellaneous Charges .. .... .... .. ... Reparation~ I 120 11 2,056 I 95 17 3,027 $ 110 193 2,955 Claims for Compensation: ......... Unemployment Relief.

1930... Unemployment Relief, 1931.. ... ....


Relief Act.

1932.......

Wheat Bonus.

Reduction 01 Loa" to Soldier Settlers... Total Specia.l Expenditures........ .. .. .. ....... ...... ..... .

..... ... .. .

... .. ..... , , ... .. ... .. .... .. ... .... .. 2,187 .

500 4,432 ... .. .

..... 6,700 .. .......... ... .. ... ... , ....... .

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

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

..... ............ 10,908 8,599 .


... ....... 9,839 16,789 55,476 $ 0' 1,350 3,500 1,33l 13,190 25,106 Estimated 1932-33- - $ 72 1,551 3,165 206 553 17,300 17,750 1,826 ..... ....... 42,483 3214 The Budget-.ll,-, HhodclJ COMMONS Loans to Provinces L03DS by the Dominion government to prcr the ,·jncisl J!o\'ernmen~ under aut.hority of Relief Act, after laking current repayments into areount, 3molloted to 117,489,725.

The lo:ms carried forward from the previous fiscal year totalled.
$22,544,422, on account of which $:2,000,000 was repaid during 1932-33.

The total presently outstanding is therefore 138, 034.147.

Two British Columbia-were given temporary 3ssistance in meeting maturities in New York, undertakings having been Ki,oen 'that the loans by the do minion would be repaid from refunding issues in Canada.

A portion of such loans has been repaid, as well as 52,000,000 by British Colum.
bia on 3ccoun,t of a similar loan made in the the result being that the loans previous year, to assist provinces to meet.

their New York obligations increased during the year by a net.

amOllnt of $506,716.

provinces-Manitoba and The prairie provinces, in the spring of 1932, -gmnted 8Siistance in the form of loans for s('ed grain and seeding opera-t.ions to farmer!

in areas that had suffe-red from drought, and t.he Dominion government.
co-operated in this emergenry measure by lending the pro\'inces lhe required amounts, aggregating 16,740,000, on :account of which S630,000 has been repaid, leaving 16,110,000 presently outstanding.
The JOlln9 for other provinci:al purposes, m:ainly for the financing of public works and direct relief expenditures, totalled 58,873,009, of which amount 16,500,000 was assigned to the financing of provincial and municipal share of the cost of public works under t.he 1931 relief program, provision for which ext~ded It will be o\'er into t.he present fiscal year.
remembered j:hat in view of conditions exist· the dominion ing in the western provinces, then undertook not only ,to pay the agreed share of the cost, but also to assist the prov inces in the financing of the balance.

In all these cases, the dominion made the loans only after the most pressing rcpresenta· tions by the governments of the provinces concerned, and as a temporary measure until these provinces.
admittedly subjected to far reaching read'justments in their budgets, were afforded the time necessary to arrange t.he financing of their own obligations.

.

'\.

summ:lty statement showing amounts of loans and the purposes for which they were authorized, (ollows: l.oa.ns, 1932-33 net outstanding Loan.

covering obligations maturing in New York J.oans ro a8!1lstAnee to fanners, including purchase of seed grain Loans for provincial pu"""",.
including public 'Works and direct relief Total $ $ $ $ Manitoba ..................... ............. ..... 1,944,130 Saskatchewan ................ ... ...., ......... ............. Alberta ............. ....... .. .

...........' ..... British Columbia.......... .

.., ................. 380,000 5,590,000 140,000 562,586 .

........ ... ....... 2,632,580 2,134,338 1,700,000 2,406,091 Loan!
'!, H131-32 net outstanding ............ , ..... 2,506,716 9,637,189 ..... ....... 6,110,000 8,873,009 10,907,233 04,956,710 7,724,338 1,840,000 2,968,677 17 ,489, 725 20,544,422 Total outstanding ...................... 12,143,005 6,110,000 19,780,242 38,034,1'1 Loans and Advances, :Kon-Active The final classification of expenditure con sists of those advances to corporations which are non-interest-bearing and are regarded as non-active.
They are charged as expenditures treated as assets for in establishing the net debt of .the Dominion.

the year and nre not Steamship Companies Under the head If Canadian National Steam.

ships," provision is made for the operations of the West Indies service and the Canadian Government Merchant Marine.

There was an improvement -in the.

operating results of {Mr.

Rhodes.]

the West Indies service In 1932.

The cash the outlay from the dominipn treasury for year's operations was 1753,716; the correspond.
ing figure (or 1931 being 1916,568.

Hov,'ever, as S161,448 of the 1931 Joss was not voted the commencement of the current fiscal until year, our accounts for 1932-33 will show total loans of $915,164 to the Canadian National (West Indies) Steamships.

The operat~ons of the Canadian Govern ment Merchant Marine fleet have been sub.
ject to some curtailment and 13 vessels not in service were disposed of during the past year, The dominion treasury furnished $326,613 for MARCH 21, 1933 3215 1'/11' BlIdrlcf-Jfr, RIt(Jde.~ prices released as a result of and diminished 1932 operating loss but, on the other hand, recejved back from the company $2,624,000 as a credit to previous years' advances.
Of the latter amount, $600,000 represented working capital lower com~ modity and fleet $2,000,000, a surplus transferred from the com pany's insurance fund.

This fund accumulated by reason of the fact that the annual charges for the cost of in~urance were greater -than the losses realized, and as the government has the financed directly the whole merchant marine, the surplus so accumulated should, particularly in view of the reduction which has been effected in the operations of the company.
be now returned as a credit against the loans of is appropriate that cost it in previouil yearil.

made by the government Taking into consideration these refunds, the accounts for the year will show a credit under the classification" Canadian National Steam ships" of $1,383,000.
The advances other non-acthoe include 5500,000 to the Quebec harbour commission, $2,447,000 to the Canadian Pacific Ra·ilway Company to enable the company to keep it3 for shops open and provide labour and $395,000 for Mootreal harbour bridge deficit.
The net requirements for loaD.3 and advances non-active will thererore be 11,959,000, as shown in the following state ment which gives comparisons also for the previous four years: err.ployment Loan9 and Advances, Non-Active (000 omitted) - 1928-29 1929-30 19J()-..31 1931-32 Estimawd 1932-33 • • • • • .

...... Loans to Canadian National Railway9 ..... ......... Loans to Canadian National Steamships ... 1,199 Loans to Quebec Harbour Commissioners.

1,379 Miscellaneou9 non·active accounts ...... ,.,.
534 Canadian Pacific Railway (relief acts) ..... .

... .

... .

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

... ............ Accounts carried 3S active assets transferred to non·active ......................... : 2,933 .

..... 2,49l 2,821 17 758 2,888 .

.... ....... 1,827 3,491 170 10,000 .

..... ... ... ......... ... ..... ....... ............ 1,383 (cr) 500 395 2,447 .
.. 13,646 8,262 5,488 3,112 1,959 Swnmary of Expenditures Grouping the 1932-.33 expenditures together as in the following comparative table, it will the total of government be observed that expenditures for the year amounted to S417,· 990,000 as compared with $448,073,000 in 1931-32, a reduction of $30,000,000, Summary 01 Expenditures (000 omitted) - I Ordinary expenditures..• ,., •............... Capital ~xpenditures...................... Special expenditures ........................ Loans and advances non-nctive ............. 1928-29 1929--30 I9JO.31 1931--32 • 350,886 22,809 2,187 13,646 • 357,707 22,561 9,839 8,262 • 389,539 28,222 16,789 5,488 Estimated 1932--33 • 364,425 9,123 42,483 1,959 • 372,50.5 16,980 55,i76 3,112 389,528 398,369 «0,038 448,073 417,990 Canadian National Railways All of the money required for the Canadian National RailwaY3 in 1932 was provided from the dominion treasury.
It is well-known that as regards the volume '.

)f l':lih\',\y lr:tffie.

the yC':u' wa.~ H'ry di_~,\ppoint_ ing.

Taking the system as a whole gross operating revenues suffered a decline of 19 per cent or over $39,000,000 as compared with the previous year.
N otwitbstanding that the management paralleled this decreaile of S39,· 000,000 in gross earnings by a reduction of 3216 The Budget-Mr. Rhodes COMMONS the net $44,000,000 in operating expenses, financial result for the year, after absorbing fixed charges due the public and exchange premium, was only slightly more favourable than in 1931.

The dominion was required to provide in cash $60,058,506 for deficits, U compared with $60,968,438 in the previous year.
These figures are for the whole system, in· eluding eastern lines, and take no account of interest amounting to $35,500,000 accrued in the accounts of the railways, but Dot paid, on loans by the government to the company.

expenditures.

The In addition to prOVJSJon for defioits, cash must also be furnished for debt retirement and are, of capital course, fixed and uncontrollable.

Capital ez penditufeil, however.
have heen draaticaUy curtailed, the net in 1932, after crediting equip ment retirements, amount~ng to 1799,158, u compared with a corresponding figure of $34,373,262 in 1931. former The following statement gives a comparison of the financial requirements of the system for 1932, as compared with the budget e!l'timatel, and actual requirements in 1931: Actual 1931 I 52,255,676 8.712,762 6O,'iI68,m 34,373,262 10,041,691 4,228,030 109,609,420 633,156 Canadian National Railwaylt-Financial requirements - Deficit- System (ex.
eastern lines) .... , ... , ..................... , .. Eastern lines ......................•...............•....... Actual 1932 I Budget 1932 I 53,422,661 6,635,845 42,784,610 6,217,400 Total.

............................................ 60,0.58, 506 49,002,010 Capital expendituree ..........·..........•...•...•...•...•...... 7,033,738 D~bt retirement.

:.

: .. : .............

'.'

.•....•.......•......... 11,681,652 D1900unt on securltll~8 lSSUed ......•.....•....•...•............. .. ............ .. .
.......... .

72,367,842 67,717.400 4,231,997 .............. Lees working capital available.................................

Amount required .............. ................... 799.158 11,510,178 68,135.845 67,717.400 108.
'il76, 266 , the company; Of the total of $72,367,842 required by the railways in 1932, $4,231,977, it will be seen, was secured from the working capital funds the balance of $68,135,845 of was furnished by the government--S6,635,845 by payment of the deficit on the eastern lines as a charge on the consolidated revenue fund, and S61,500,OOO by loan to the company under authority of the Canadian National Railways Financing and Guarantee Acts, passed at the 1932 $essioD'.
The whole of the amount auth orized .

was paid.

To annually.


implement the government has One of the recommendations of the Royal Commission on Railways and ~ransportation, to which effect is being given in the legislation now before parliament, is that SUll18 which are required to meet deficits should be voted by this parliament recommendation, sub mitted an estimate' of 853,422,661 in respr.ct of the income deficit of the system in 1932, (ex cluding the loss on eastern lines already pro vided for by vote).
This amount will be r.redited against -the loans of $61,500,000, above referred to, leaving a balance owing the gov· ernment of $8,077,339, which will remain repre- standing as an interest-bearing loan, [Mr. Rhodell.l flenting as it does outlay for capital accoUD' and debt reduction.
At the same time, loans of 141,121,216 made by the government -to the Canadian National Railway Company in the fiscal year 1931-32 in respect of railway operations in 1931, will be transferred from the category of aative to non-active assets, as these also represent loam for deficits.

They will be added to the $614,000,000 of non-active assets shown in the public accounts for loans to railway companiea and for the purchase of capital stock.
In so far as the accounts of the railway company are concerned, the ultimate treat: ment of government advances, prior to the year 1932, representing partly losses and partly' capital expenditures, will be governed by the action of the proposed board of tru9tees to the whom the control and management of raiiways will be entrusted.

Th~ royal COlJ1~ mission has recommended that the question of the capital structure of the system have the early a·ttention of the board of trustees.
It should be understood, however, that so far as the government's accounts are concerned, the effect of treating these railway advances MARCH 21, 1933 3217 The Bl/llycf-J/r.

Rhodes ~s non·ncti,"e assets, has already been to absorb them fully info the government debt.

As at M:nch 31, 1933, the funded debt of the the C:m3dian Kational Railway;; due public will amount to about 51,263,000,000.. hen"ing: been reducerl by 511,000,000 in the outstanding,_ year.

[)3;;:1 the 8D05,000,000 dominion.

gU3l'illltCC.


of Of beal's amount the the The company has al~o been able to retire a temporary debt of 89,008,250, by the utilization of \\'ol'king cOlpi:nl released through reductions in stores :lnt!

ffi:l.terial accounts.

This debt l'cprc,.

:cntcu the conslrnl'tion tast of <the Mani- loba t\'orthcrn railway, a branch line lmder t:lken in 1927 nnd financed under authority of order in council by temporary bank loans.
Harbour Commissions Advances to harbour commi;<sions 101.\lIcd S6,657,000, n considerable reduction from the p]'cvious year when upwarJs of 814.000,000 WnS loaned.

sun: represenls capital cost of port dC\'c!opmcnls inaugurated some years ago.

A statement of in ]932~33 and four prcyiotls the ad\'anccs y{':"Il'S, flnd the tot[ll i~ as :Hh'anccs to d[ltc, .

follows: the most.

part, For this Advances to Harbour CommissiollS (000 omitted) - - 1928-29 1929-30 193()..31 1931-32 Chicoutimi.

_.. ......... .

.
_.. ......... .

.

.

.

.

.

...... ...... Halifax .................. .... ..... ........ Mon tre~Jt-C onstru ction ..... .. ........ .. ... .. ... .

Montreal-nrid~e ........ New Westminster.

.. .... .. .. ... .... Quej)ee ........... · .. ....... .

... ...... Saint John ........ · .

.

.

..... .

.

.

...... .

.

Three Rivets ..... · ... ....... .

.

.

.

..... Vnncouver ......... .... ...... .

.

.

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

$ $ 500 30 1,370 815 1,272 4,336 ............ .


........... ...... 2,821 I,711 136 345 .

....... 2,888 602 1,596 ... .

$ 846 3,539 2,291 17.

3,491 1,094 1.544 2.802 .. ... S 465 2,752 1,412 534 18• 1,379 5,7G1 747 809 6,986 11,436 15,777 14,051 Est.imnted 1932-33 $ 324 1,023 614 395 56 500 2,581 255 90' 6,657 Advances to date Chicoutimi .................•...............................•... Halifax....... .

.. .

.

.

..•.... .

.

.

.

.


Montte3.1- Harbour ..................•............ , .....•.................•... 1.10ntreal-Bridge............... .•...•.. ..•.. .

•....•.. New \Vestminster....................•...................................... Quebec....... .

.

.

..... Saint John-Harbour.. .

.

.

..•....•.

.

.•... .. Three Rivers........ Vancouver.... .........•...•....•.............•........ .

•...•..... .

.•........•....•...•... .

...•.............•........•....•........•.... .


•...•... .•.. .•... .

•....•.

.

.

.

$ 2950 8:616 58,003 1,099 245 26,309 11,752 2.682 22,326 133,982 those for It has been the pmctice to Ca.l'ry these the loans, with the exception of Quebec commission and the Montreal harbour bridge deficit, as active assets, on the assump tion that they represented capital works that ,them.
would sustain the debt Clearly, that has not been the situation with .respect to the Chicoutimi, Three Rivers, Hali fax and Saint John commissions, JntNcst caD be paid only because it is added to the con It is proposed to .transfer the struction cost.

advances to these commissions totalling $26, 000,000, to the non-active category at once, as the financial position of these commissions incurred for satisfactory.
It may be \s anything but recom observed that Sir Alexander Gibb's mendations for the control and operation of national ports would, if put into effect, involve furlher adjustments in the manner of record ing the e:-o:penditures which the governmell't has made for their development.

Canadian Farm Loan Board· The dominion continued to purchase at par Ihe bO:lrd's 5 per cent bonds ·to ,the extent that loaning operations required.
Bonds pur chased amounted ,t.o S850,OOO and a subscrip· tion of $70,650 was made to capit-al stOck 3211 The BlfdfJel-Mr. Rhodl'8 COMMO:;S The cnpit::tl furnished from the dominion treasury for the operations of the board now aggregate.!
18,137,115, divided as follows: Initi:tl capital.. .. Purchase of bonds.. Purchase of capital stock.. .. $5,050,000 2,650,000 437,115 .. .. .. .. .. .. $8,137,115 Hal'ing presented the revenues and expendi hues under the appropriate classifica.tions, we nre now in a. position to indicate the noet re.

;mlt,s of the dominion's accounts for the year.

Minor il.djustments have yet to be made be fore the nccounts are closed, but the figur~ given are believed to approximate the final balances for the year.
With ordinary expenditures totalling 5364, 425,000 find re\'enues of $3'10,817,000 it will be observed tha.t the resulting deficit on ordinary account i!

853,608,000. th:Lt it was expected that then submitted would When the budget was brought down last the taxation pro year, increase the pOi'l.

'\ls there would receipts to such an extent the budget OD least a balancing of be :1.1. ordin9ry account.

The actual expenditure, as h:\s been indicated has closely approximated the estimate.
The explanation for the de ficiency on ordinary account is therefore found in the failure of the revenues to attain the expected yield due to falling prices and shrjnk~ age in business activity.

Special expenditures, including 137,400,000 relief and wheat bonus, for nnemployment nmounted to S42,483,OOO.

If against too.!

sum there is applied S4,473,OOO received in special there remains a balance of special revenues, expenditul'es not provided f.rom income, or In addition .there ar(!
the capital S38,010,000.

expenditures of 19,123,000 and n(!t loans and advances non-active of $1,959,000.
The result ing increase of debt on government operations for the year is therefore SI02,700,OOO, as com~ pared with a corresponding figure the previous year of 5114,234,000. in' To give effect to the assimilation in our accounts of the deficit of the Canadian Na tlional R.'\ilwa)'9, tile increase in debt of Sl02, 700,000 on government operations will be augmented, as previously referred to, by the addition of a special charge of $53,422.,000, resulting in a total addition to the debt, nIter taking into consideration the year's opera· tions both for government and the railways.
of $156,122,000.

In the balance sheet, effect will be given also to the transfer from active to I1'On~active assets of Ul,OOO.

()()() of advances to the Canadian National Railways in 1931-32, and of 126,000, 000 of as already referred to.

commissions, to harbour loans [Mr.

Rhodes.)

Loan Flot'\ol ion5 The dominion has been able to arrange" (or the orderly finnncing of all requirements dur ing the year, including provision for maturing securities and the financing of the Canadian National Railways.
External borrowings in 1932-33 were (or the purpose of meeting maturing obligations in New York.

An issue of one~ye:J.r 4 per cent treasury notes dated October I, 1932, fOr the amount of S60,OOO,OOO, Was sold to a New York banking group at 99·28 nnd accrued interest.

From the proceeds of this issue a 5 per cent then standing at $13,.

temporary bank loan, 000,000 but originally negotiated in 1931 for $19,000,000, almost entirely for railway pur poses.
was paid off and the cash balances of the dominion held in New York were restored that {,hey had been utilized in to the extent making periodic payments on account of this indebtedness.

'rhe other maturing JObliga tion paid from the proceeds of this sale was the issuc of S40,OOO,OOO two-year 4 pee cent notC3 which fell due December 1, 1932.

In Canada $85,000,000 was raised by the S1le of treasury notc'!

to the chartered banks.

i:!Sue dated Augnst 1, 1932, v.'D8 (or The first one year at 4!
per cent and w.:as sold at par nnd accrued interest.

The other issue of two year notes, dated November I, 1932, was (or $35,000,000 at 4 per cent and was sold at par In addition, for tempor and accrued interest.

ary financing, SI2,OOO,OOO of 9O-day 4 per cent treasury bills datcd October 15, 1932, were sold to the banks at.

par.

These were called for redemption on November 3.

A public issue of securities was made in Canada at the end of October.
The offering was f'Or S80,OOO,OOO 4 per cent bonds dated October 15, 1932, divided iDito ,two matur ities:---$25,OOO,OOO of three-year bonds and $55,000,000 of twenty-year bonds.

The three year bonds were sold at 99·20 and interest., yielding 4·28 per cent; and the twenty-year boncle at 93·45 and interest, yielding 4; per cen,t.

The .three-year maturity was immedi ately over-subscribed about three times, and all SUbscriptions in excess of 125,000 were aBotted on a percentage basis.
The twenty year maturity moved more slowly but the boob were closed shortly before the da.te set toW with a slight amount of the issue being $56,191,000.

TIle whole issue is paya.ble in Canada only, and the ·twenty-year bonds are subject to redemp tion a.t par after fifteen years.

over-subscription, the The sale of the 4 per cent loan of 1932 was .
in charge of a committee ,representing banks and investment hou9C6, under t.he chairman~ ship of Sir Charles Gordon, president of the MAROH 21, 1933 The Budget-Mr. Rhodes 3219 to that employed ill' n~nk of Montreal, and operated along lines national .the simil3r service and conversion 108115 of 1931.

The expense of raising the loan, including commissions, 3dvertising, printing, and delivery of securit.ies, was about three-quarters of one per cent.
The proceeds of the issue were used for the purpose of paying off 534,449,950 of 51 per cent renewal loan bonds which remained out standing after '"he conversion loaD' of 1931, and the balance of the proceeds was devoted to the general purposes of the government.

It is well to record that with this issue Dew ground was broken :lad for the first time .there was offered for public subscription in Canada, a dominion· security bearing a 4 per cent COUpOD.

While this betor produced some sales re sist.


:lnce, notwithstanding that the yield to the investor on the twenty-year maturity Wa!

.actually 4} per cent, it speaks well Dot only for the organizat.ion which conducted the sale or the loan, but a[so for the responsiveness or im'estors to the prime security or Canada tha.t the iSStle met with succeS3.
The direct -obligations of the dominion in the form of UDlI"!3t.urro funded debt are listed in the following statement: Unmatured Funded Debt as of March 31, 1933. and Annual Interest Ch:uJl:e!I Date or maturity Rate Where payable Amount of loan 1933-Aug. O('t.

Nov. 1...................

I ...................

I (a) ................ 1934-"une July Nov. Nov. 1. .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

1...................

I ...................

I.

.................. 1935-Aug. 0".


1936-Feb. 1 (a) •.......••.•.... 15 ...........•....... 1. .

.

.

.

.

.

.

.

.

.

• .

.

.

.

• .

.

Nov. 15 ................... 1 (a) ........••...••.

I (11.)

•••••••••••••••• 1937-Mar.

D",.

1938-July July July July I ...................

I ...................

I ................... 1................... 194D-Sept.

I ................... 1941-Nov. 15 .......•........ , .. 15 ................... 1943-0ct.. IS .......•........... 1944-0<:t. 1946-Feh.

I .

.
I .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

1947-0et.

1.

.... : ............. 195O-July 1.

.................. 1952-M:l.)" I ................... Oct. I.~ ................... 1956-Nov.

I .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

1957-Nov. 1................... 1958-Nov. 1 (b) ...•..•......... 1959-r-;"ov.

1 (c) ................ WOO-Oct. Oct.
I ................... 1 .....•............. % 41 4 51 31 5 4 51 5 4 41 5 5 51 3 3 3 31 41 5 5 :1 21 31 5 4 41 41 41 41 4 4 ClI.nada ................... New york ................ Canada ................... London ................... Canada ................... Cannda ................... Canada ................... Canada llnd New York ... Canada................... New york................ Canada ................... Canada and New York ... Canada................... London ................... London ................... London .........••........ London ................... Canada ................... ClInada ..........•........ Canada ..........•........ Canada ..........•........ Canada ..........••....... London ..........•........ London ...........•....... New york ................ Canada...........•....... Canada ................... Canada ...........••...... Canada ...........•....... Canada ................... , ,to.
50.000,000 00 60,000,000 00 169,971,850 00 Annual interest charges ., "'.

2,250,000 00 2,400.000 00 9,348.451 75 23,467.206 27 33,293,47085 35.000,000 00 226.138,350 00 874.000 00 25,000,000 00 40.000.000 00 79,535.200 00 00.166,900 00 236.299,800 00 8.071.230 l' 18.250,000 00 10.950.000 00 ]5,056,006 56 75,000 000 00 141,li63.000 00 147,000,100 00 50,000.000 00 45.000.000 00 4,888,185.. 137.058.841 00 100.000,000 00 56.191.000 00 43.125,700 00 37,523.200 00 276.688.
100 00 285,771.800 00 821,352 22 1.664,673 54 1.400,000 00 12,437,009 25 43.700 00 1.000.000 00 1.800.000 00 3.976,760 00 4,508,345 00 12,996.489 00 242,136 90 547,500 00 3"..8,500 00 526,960 23 3,375,000 00 7,083,150 00 7,350,00500 2,250,000 00 2,025.000 00 122,204.. 4,797.059 43 5.000,000 00 2.247.64000 1,940,656 00 I, G88.
544 00 12.450.964 50 12,859,731 00 London ...........••...... New york ................ 93.926.666 56 100,000,000 00 3.757,066 67 4,000,000 00 2.715,910,007 24 127,239,409 13 Payable In Canada Payable in Canada and New york Payable in New york Payable in London ,........... ,... :... $ 2,013,201,570 85 91.040,90000 300,000,000 00 311,668.13639 Less bonds and stocks of the above loans held as sinking funds................................................. (a) Tal rree in Can::l.da.

(b) Tu free to Nov.

I.


1933.51% to Nov. 1.

1933 (e) 51% to Nov.

I, 1934.

53119-:ll){ U\'liUl DlITl-):o' $ 2,715.910,60724.

66,001,72451 ':?&l9,908,88273 74·13% 3·35 11·05 11·47 HMHIO% 3220 rhe Blldarl-.l/r.
Rhodcs Indirect Liabilities COMMO:-;:S A statement is su.bmitted presenting in de bil the \':lrious bond issues guaranteed by the dominion outstanding in the hands of the public 3S of March 31, 1933, of 'a total par "alue of 5996,148,354, or $4,300,000 under the figure of a year ago, There are, in addition, contingent JiabiliHes of a special character assumed under the several relief acts.

These include guarantees in connection with wheat marketing, the Province of Manitoba Savings Office.
the Beallharnois Light, Heat.

and Power Company and Newroundland.

In the budget =,peech of last session, mention was made or the guarantee given by the gov ernment to charLered banks in respect of their advances to Can:Hlian Co--operative Wheat Pro ducers Limited, nri.!

;ing out of operations in connection with the 1930 crop, and also with respect to the banking accommodation guar· IlnLeed to the wheat pools' in the three in connection with the western pro'vinces the 1931 crop.
marketing of In connection wit-h the latter operations, the advances IDlllde by the banks and guaranteed by the govern ment were repaid with the eXC1lption of small balances lranaferred to the present crop year, and no liabi}ity htls accrued against the gov ernment the marketing or the 1931 crop.

its guarantee for in r~pect of In response to urgent requests of the gov ernments of the three western provinces.
similar arrangements were effected for financing the 1932 crop and consequently, under authority of order in council of September 20, 1932, P.C.

2077, passed pursuant to the Relief Act, 1932, a guarantee was authorized, subject to certain safeguarding provisions.

of advances to the three provincial pools arising out of the marketing of last year's crop.
In the case of the Mnnitoba organization, the limit of credit was eSbblished at 51,395,000; for Saskatche wan, at $15,000,000; nnd for Alberta, at 19000, 000.

Within the last few dnys, arrange~ents were made by which a guarantee was given to enable the pools to distribute an additional 5 cents per bushel to farmers whose grain of the 1932 crop is being marketed on the pool plan.

This action was taken so that an increased percentage of the value of their grain might be available at seeding time.
Under these the government.

guarantees, the Jiltbility of accrues been has crop marketed.

and there is no ground for antici pating any le53 favourable outcome than in connection with the financing of the crop of the previous year.
after only the {Mr. Rhodee.l The .gllsrantee of advances to Canadian Co opcr~t1\'e .Wheat Producers Limited in con nectl~n WIth the 1930 crop remains in elIect, and 1t was necessary during the past season for the company to increase its liability as a result of stabilizing transactions which it was considered expedient in the public interest to support.
To these operations the government gave i13 guarantee, The steadiness which has developed in the wheat market has un doubtedly vindicated the action then take:!

Clnd the que:ition or ultimate liability will de pend entirely upon the future course or wheat pnces.

.liabilities of By order in COt.lOcil of April 28, 1932.

P.C.

o 972, effect was gwen to an undertaking by which.


in the month of February or that year the dominion guaranteed the chartered bank~ doing bminess in Winnipeg from loss in re the assumption by these hanka of spect of all the Province of Manitoba ·SavlOgs Office.
The banks received from the the provina: of Manitoba as assumption of such liabilities, $12.442.400 one year S; per cent treasury bills, maturing February 27, 1933. and on the maturity of these bills the banks were wilJing to accept less the sum of 5334,098 paid on a renewal, principal account.

provided the guars.ntee was continued.

This council authorized under minute of February 22, 1933, P.C.
318. the governor sccurity for in In connection with the Beauharnois power project, the government has guaranteed ad vances of a principal amount of 115,539,000 mnde by several of the banks to finance con struction work.

These advances are secured in practically double this sum by the deposit the Beauharnois of first mortgage bonds of in Light, Heat and Power Company which, the opinion of the government affords ample security.

The orders in council relating to this guamntee are dated July 11, 1932 (P .C.
1577) a.nd February 6, 1933, (P.C.

213).

Finally, mention may be made of the a~istnnce rendered jointly with the govern ment or the United Kingdom.

which enabled .

•ewfoundland to meet interest obligations due January 1 13.::t. The commitment of Canada relates to the guarantee of & bank loan of $625,000, bearing interest at the fate of 5 per cent.
The indjrect obligations represented by guarnnteed securities outstanding in the hands of in the .statement which follows: the public are set out ~IARCH 21, 1933 The Bt/(l(lcl-.llr.

Rhodes 3221 Bonds Guaranteed by Dominion Government as at March 31,1933 Date of maturity Issue Interest ..." Amount outstanding ,.

.

.

.

.. ,....

I, 1934 Sept. Cllnadi:l.n Northern .................• _ Feb. 15, 1935 ...........•........ Canadian Northern ...........•.....• _ .

I, 1936...........•........ Grand Trunk Bept.


.

Grand Tntnk 1, 19-10, .........•.. ,_, Oct. .

Canadian Northern 1, 1940...... .

• .

Dec. " Canadian Northern 1, 19-16 July .

New Westminster Harbour Conllni;;~ion J.

1948 April .

('aniulian National.. 1, 1951........... Sept. .

Saint John Harbour Commission Aug. 1.

1952 .

Canadian Northern .July 10.

1953 .

Canadi;\n National.

Feb. 1.

195-1 Canadian NationaL Sept. 15. .

I(J54 Canadian National (West Indies) Steamships )lar.

1.

1955 .
1.

1955 .

June 15, 1955..........•......... Canadian Nationn.I.. .

1, 1956 ..........•......... Canadian NationaL Feb. .

I, 1957..........•......... ennadian National.. July .

CfLIladian Northern July 20.

1958 .

Canadian Northern Albertn May 4, 19GO .

Cnnadial1 Northern Ontario )[ay 19, J9G1.

.

1, 1962 ..........•......... Grand Trunk Pacific Jan. Jan. .

Grand Trunk Pacific 1, 1962 1.

19fi8 .........••......... Canadian National.. ................•....... Dec. .

July 1.

19119 .

Oct. 1.


19119 .

Nov. 1.

19119 .

Feb. 1.

1970 By tcndcn; or drawings Various dates 1933-5,1 Canadian National.

Canadian National.. HarbourComm.o!Montreal.

Canadian National.

Canadian National.

.

City o!

Saint John debentures assumed by .

Saint John Harbour Commissioners .

.. .

.

Serial-Feb. 1 and Aug. 1.

1933-38.

Canadian National EQui~.

G l>erpetuul.. Grand Trunk Guaranteed Stock Grand Trunk De'bcnture Stock Great Western Debenture Stock Grand Trunk Debenture Stock .

.
.

...............•......... Northern Railway of Camma Debenture .

Stock " .. ..

., % 4 4!

6 7 7 :1 4!

5 3 5 4!

5 41 4!

4!

3!

31 3!

3 4 4!

5 5 5 5 2 $ cts.

17,060.333 33 17,000,00000 24.220,000 00 23,989.000 00 23,779.000 00 201,238.000 00 700.000 00 SO,OOO.ooo 00 667.953 04 9,359.996 72 50.000.00000 26.000,000 00 9,,100.000 00 50.

000, 000 00 70.
000, 000 00 70.

000, 000 00 65,000.000 00 7,896.561 63 3,149.99866 34,229,99687 34,092.000 00 8,440.84800 35,000,000 00 00.000,000 00 60,000.000 00 19,000.000 00 18,000.000 00 28.268.50540 Various 5 4 5 5 4 1.299,01880 8,250,000 00 60,833.33333 20,782.49167 13.252,32267 119.839.01433 4 1.499.97967 996.148.354 12 The sta~istical presentation of the domin· ion's financial position is completed with the the ba.lancc sheet enumerating submission of .estimnted as of the assets March 31, 1933.
Total liabilities are shown at 52,990,315,000.

Aiter deducting from this and liabilities, amOllnt -active assets made up of cash bal ·income-producing and ances, specie reserve, current assets, the re is shown at $2,599,089,000.

sulting net debt The statement is as follows: totalling 5391,226,000, Active A9Sets, March 31, 1933 (Estimated) Cash, working capi~al advancGS and other current IlSset.6 .• ., ,.

.. •.

Specie reserve.. .. Advances to banks under Finance Act .... , .

• .

.

.

.

.

.

.


Loans to provinces for housing .. Loans to pro\'inces, Helief Act, 1931. , .

.

.

.

.

• .

.

.

. "

.. .. .. ..

., .. .. .. .

Loons to foreign governments-- - Gree<:e .

.

.

.

.

.

• .

.

.

• .

.

.

.

.

.

.

.

.

.

• .

.

, •.••.

Roumania .

.

.

• • .

.

.

.

.

.

.

.

.

.

.

• .

.

• • .

• .

• • Loans to harbour commissioner&- ..

., },Iontreal.. .. •.

Vanoouver.. New Westminster .. .... .. •.

.. .

.

.

.

.

.

.

. '

.• .. .

•.•.


, ., ••• , .

.. .. .....••••••.•••• Canadian Na.tional Railways .. " .. .. Canadian Farm Loan Boa rd.. .. •.

.. S{I!tjier anu general' land se.ttlement.. .. .. .

... .. ..

Seed grain and relief advances .. Canadian ~overDmeDt railways open and stores accounts ..

Deferred debi:ts- .. .. .. .. .. .. .. .. .. .. .. .. Unamortized discount and commission on loaDs., ,.
~71n--204~ $10,382,000 38,034,000 6,525,000 23,969,000 58,003,000 22,326,000 245,000 • 10,461,000 72,600,000 42,400,000 48,416,000 30,494,000 80,574,000 16,340,000 8,137,000 47,755,000 2,397,000 15,749,000 15,903,000 $391,226,000 3222 The Budget-Mr. Rhodes COMMONS Liabilities.

March 31, 1933 (Estimated) Dominion Dotes outstanding .

• .

• .

.

.

.

• • .

• • .

Bank circula.tion redemption fund.. .. .. InsurnDce and superannuation fund&- .. •• QQvernml.
"l)t annuities.. Insurance fund, ci,'il.scrvice .

Insurance fund, returned eoldiers .

.

.

.

• .

• .

• .

.

.

Retirement fund .

Superannuation funds .

.

.

.

.

.

.

.

.

.

.

.

• .

.

.

• • .. •.

•• .. .• •.

•• .. Trust funds- Indian funds .

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

• • .

• • Common school funds.. •.

.• ..

Contractors' se<:uritiea deposits .. Other trust funds.. .. .. .. .. •• .. .. .. .. •.

.
.

.. .. Conting~nt and special funde.. .. Post office money orders, po9taJ notes, etc., outstanding .• Province accounts.. .. •• .. Post Office Savings Bank dep<wlits..

Funded debt- Unmatured :Matured but not presented for paymeDt .. .. .

.•.

.. .

.. .. .. .. .. •.


•• .. .. .. .. .. .. .. .. $ 28,425,000 7,700,000 11,242,000 7,205,000 42,880,000 13,500,000 2,672,000 350,000 2,120,000 2,649,908,000 1,960,000 Interest coupons matured but not presented for payment .. Non-active Aesets, March 31, 1933 (Estimated) Canadian National Railways .

• .

.

.

.

• • .

.

.

• • • Canadian National Steamships .• Harbour commissioners-- Quebec...•..•.. Chicoutimi .•.. Halif'3X.. •.
•• .. Saint John .................•.•.•.•.•.•••.• Three Rivers.. .. ?t'lontreal 90uth shore bridge .. ; .

• • • .

.

• • • .. •• •.

.. .. .. .. .. .. • 26,309,000 2,950,000 8,616,000 11.752,000 2,762,000 1,099,000 Seed grain and relief advances..

Soldier and general •.

Miseellnneous advances .

.

.

.

.

.

.

• .

.

.

.

• • .

• • • .

• .

.

Capital account&- .

.

.

.

.

.

.• •.

•.

land se-t>tlement.. .• .. .. .. Canals.

• .

.

.

.

.

.

.

.

.

.

• .

• • .

• • .

.

• .

.

.


• .

.

Railways .

.

.

.

.

.

.

.

• .

.

.

• .

.

• .

.

.

.

.

.

.

.

• .

.

.

Public buildings, harbour and river impro\"t'ments.. Military property and stores •.

Tt'rritorial accounts .. Railway accounts .. Consolidated fund balance as at debit, Mar('b 31, 1933 .. (old) Net debt, March 31, 1933 .

.

.

.

• .

.

• .
• .. .. 240,206,000 413,516,000 247,749,000 12.035,000 9,896,000 $ 176,200,000 6,585,000 97,542,000 18,642,000 1,975,000 3,080,000 9,623,000 22,700,000 2,651,868,000 2,100,000 $2,990,315,000 $ 655,527,000 15,367,000 53,488,000 487,000 16.513,000 3,445,000 053,402,000 88,399,000 812,461,000 $2,599,089,000 Estimated Revenues and Expenditures 1933-34 B:\sed upon curr('nt rates of taxat.ion the revenues for the next fiscal )'ear are estimated a.t 5287,230,000 made up as follows: Taxation re,-cnue: Customs duties Excise duties Income tax Sales tax Manufacturers', stamp, , .. •.
.. .. .. importation and other &pflcial U:13:eli .• .. .. .. .. .. .. .. .. .. .. .. Non-tax rev€nue: Post office.. .. Interest on investments .....••.•• .. •.

•.

.. Other sources.. .. •.

.• •• .. .. .. .. .. .. .• .• .• •.

Total.

.

.. .. .. .. .. .. .. .. (Mr.

Rhodl'$.!

.

.$72,000,000 38,000,000 40,000,000 .

59,000,000 26,655,000 $235,655,000 .. 30,100,000 11,400.000 10.075,000 51,575,000 $287,230,000 MARCH 21, 1933 The Budget-Mr. Rhode.
3223 10 in at and takinc reduced, Witb revenues the preaeni yield in interest on public debt it becomee incumbent OD the IOverDmen~ not.

only to propose meuure.

which will add rubatantially to lobe present income,.

bui aJso to put.

into every reaao~le economy effect the adm.iniatrative coM of the public eervice.

The .eetimate.

for the.

ordi.D.ary services of govern ment in the fiacal year 1933-3f total S3M1,429.
000, • figure which closely eonespond8 to the actual expencliture in the present fiacal year the utimated into account.

after inereue and pemona.

The gap therefore betwem the revenues the estimated ordinary expenditures ia 182,000,000.

LUi year, attention wall directed to the eztent to which the government had, en· deavoured to .meet existing condition.

by reductioD!

in the expenditure!

within ite con trol.

For the purpo&e of making compari· 8008, special upendituru for unemployment.
and farm relief and the railway deficit, are eet uide, but on capital aa well U ordinvy account, are taken into· comiderabion.

Theee ex·pendituret, con trollable and uncontroJ.1&ble tOlether, have fallen f.... 1427,000,000 in 19:n.31 Ix> 1381, OOO,lXlO in the cul1'eoi fiscal year, a reduction of aligbUy over ten per cent.

Opportunities for the reduction of expenaes, howe-vet', are necesarily confiDed to the upe.nditUJU that are controllable.
as opposed to .thoae which are bed fLnd generally uncontl'ollable, of which the main items are debt charges, peUODl, subllidietl con· trollable expenditurea in the present year .

luwe been $145,000,000 &8 compared wi,th 1208,000,000 in 1930-31, 8 deareue of 183,000, 000 or thirty per cent.

The ertimltee for ned year ·indicate a furtner saving of about at millioIll in this claM of upenditure.

and ex~ldiers' care.


The &11 other upendituree the Under the urgen,t preeatire of ten per cent of declining revenues, it i, considered neoeeeary that Cur· tIrer subdantial economies should be made.

It u proposed therefore that original allot.m.ente to departmentl!l of the vote!

for controllable eervices should, when supply ill releued in the new fiscal yeM, be 80 modified total, or approx· that ·imately $14,000,000.

will be withheld-.
will be withheld-.

ThiI sving caDDOt be achieve~ by a '\ID.ifo.rm deduction from all aervices.

The percentap may be I!lll&ller in lOme and larger in othen, but the object in view will be to 50 adjust expenditure.

that thi!

further economy will be eft'eeted with the minimum diaturbance to peflllODDeJ and to essential public I5erv-icel.

the.
the.

It iI perhape hardly neoeeB6f'Y to say that 8Uch a measure wiJJ entail not only the earnest cooper-tion of employees of the civil service, but a11110 a measure of foroearance on the part the «enerally.

of Recently, iJlublic the Treuury Board appointed a committee of officiahl to nvie" and report upon the coli of government printing e.nd l!ltationery with -a m" to the formul.tion of recuJatioa.
and procedure which would, with an eft'ective cOQPeration from the civil service, u well u the public, ruuIt in 8Ubstantial a.vinp: in thai direction.

There a.re other avenues for im· proved and economical admini.stration 1tflich it will be necetll&ry to explore.

, In ,this coDDettion, tnay say tilat with I rupeo&.

to penaiODel'l who are in the employ the coveromeot and who a.re paid the of salary of the position, action will be taken.

whereby the payment oC pen.sion will be eu.


pended during the period of such employ· ment.

Where the full ~Jary of the pOlitiOll ,the pension payment may not is not paid, exceed the amount of the dilI'e-rence between.

salary nceive-d and the eetabliJhed eaJary of.

If the pension is greater than the position.

the employee 811811 elect either io the salary, be paid the pension and relinquiah the pom· tiOD, or ~ retain the position and have the pell!ion withheld during the period of such employment.
This will be made applicable not only to the government service but alao to boarda or eommiasioD.lJ whoee activities are financed Crom the dominion treuu.ry.

the exigencies of Not only in the government aervieea.

but the railway) and a1lo in.

die budgetl of other bodies 'financed by the dominion, are we endeavouring to meet the day.

Eeonomies imtituted· by the Canad.ian the couree of the yea: Na.tional RailwaY" in.

1932 will be fully reflected in the 1933 opera Laat week thie houee gave second.

mona.
mona.

reading to the· legislation to make effective the- recommendatioI18 of the Royal Commie sion 00 RailwaY' a.nd TraDl!lportation, under the provisioIll of ·which addition.aI large sav· inp ahould, time, be aottained.

Mention may also be made of th.

propOled legislatoion relating to the administration and.

control of our national porta, based upon the report of Sir Ale-under Gibb.

The meUllrs for coordination.


of adminim-ation and more capital eft'eot.ive control and 8Uperviaion of to afford expenditures, may be further relief to the dominion tl'euury.

in courae of expected After making allowance for thiI estimated reduction of 114,000,000, ordinary expendi· tures will.

be approximately $68,000,000 in excess of revenues estimated on present raUl ia proposed to and yield.
Accordingly it recommend meaaurea which will, it is antici· pated, produce at least rro,ooo,ooo on the ba.ail of present businel!ll conditione, leaving a 1Ur- plua of 12,000,000.

Even a slight improve ment in price Ieveb and the general volume oC busineee would inereue aubstantially the to be applied agairst capital and surplus 3224 COMMOXS 'fhf' nlHl!I(·l-.lfl'.

Rhnd('.~ 'expenditures.


Capital special expenditure.3 for the coming year are estimated at $7,166, 000. n is difficult at this time to make a precise estimute of special expenditures, but in view of the practical completion of public works projects for which commitments had beea made under the 1930 and 1931 relief it is clear that the totnl should be sub acts, stantially le~ than during the prescnt fiscal year.

Special expenditures and non-active ad V:lnCCS will probably not exceed 535,000,000.
If business conditions do not improve, esti· mated revenues will not cover these special expenditures for unemployment relief nor the Canadian National Railways deficit, esti It is nevertheless the mated at $47,941,000.
considered view of the government that the reduction in expenditures for the ordinary public services outlined above, and the pro posed increases in taxation represent as drastic a fiscal program as should be contemplated at the moment although further proposals with respect to the railway deficit are subject to review before the close of the session.

Income Tax It is proposed to raise the rate of taxation on incomes of corporation and joint stock companies to 12!
per cent, and to remove the exemption of $2,000 in respect of such incomes.

Where a corporation files a consolidated re· turn of it.s own income and the income of the rate of tax is to be 13, ita subsidiaries, per cent.

The surcharge of 5 per cent of the 3.mount of tax otherwise payable in respect of corporation incomes in excess of 55,000 is to be absorbed into the new rate.
In respect of the tux on personal incomes, the statutory exemption, where heretofore $2,400 will be reduced to 12,000, and where heretofore $1,200 will be reduced to $1',000.

The exemption for dependent children is to be lowered from $500 to $400.

The exemption for parents, grandparents, brothers and siaters, is to be the actual amount expended up to a maximum of $400.

The surcharge of 5 per cent in respect of personal incomes in exceSJ of 55,000 will be continued.
A new schedule of rates will be inserted in the act applicable to all incomes in excess of the exemptions and allowances.

The cbangea in the exemptions and in the rates of tax will apply to incomes of 1932.

The following statement indicates .the proposed increase in taxation in the case of a married person with.

out dependents at vllrious 'amounts of income: (Mr.

Rhodes.]

Schedule Showing Tru:es Payable on Certain In comes under the present rates and under the pro.
posed rates with un Exemption of 52.000 for Married Persons and $1.000 for Sinde Persons and com_ mencing the first $1.000 of Taxable Income at 3%.

Married Person.

No Dependent - Increase Income Prl'sent Tax Proposed To< '.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.. .

2,000 2,100 .

2,200 2,300 2.400 2.500 2,600 2.700 2.800 2.900 3,000 4,000 5,000 6,000 .. .

1.000 .. 8,000 .

9,000 .

10,000 .. 11.000 12,000 .

13,000 .. 14,000 15,000 .. 16,000 17,000 18.000 19,000 20.000 .. .. 25,000 .

30.000 .
30.000 .

35.000 .

40.000 .

45.000 .

5O.lX)() .

55,000 .

60,000 .

65,000 .

70,000 .. 15.000 .. 80,000 .

85.000 .

90.000 .

95.000 .

100.000 .

110.000 .

120.000 .. 130.000 .

140.000 .. 150.000 .. 175.000 .

200.000 .

225.000 .

250.000 .. 215.000 .

300.000 .. 325.000 .

350.000 .

315,000 .

400.000 .

450,000 .. 500.000 .

600.000 .

700.000 .

800.000 .

900.000 .

1.000.000 / $ ctg.

$ chi.

$ cts.
...... '3'00 000 900 12 00 1500 1800 21 00 2400 2700 3000 70 00 120 00 189 00 26250 34650 441 00· 54' 84.2-41 50 96.558 00 109.137 '00 121.97850 135.08250 148.44900 162,07800 175.96950 204.298 50 233.152 50 291.931 50 350,731 50 409.531 50 468,331 50 521.13150 200 400 '00 800 1000 1200 3200 5800 9870 14700 20580 275 10 354 90 445 20 54'00 657 30 779 10 911 40 1.054 20 1,207 50 1.371 30 1.54560 1.130 40 2,788 80 3.918 60 5.100 90 6,33570 7.62300 8.962 80 10.355 10 JI.799 90 13,291 20 14,841 00 16.449 30 18.104 10 19,811 40 21.571 20 23.383 50 25.24830 29.108 10 33.072 90 37.14210 41,31750 45.597 30 .56.597 '00 900 1200 1300 1400 1500 1600 1100 1800 3800 62 GO 9030 115 50 140 70 1M 90 191 10 21630 24150 26670 29190 311 10 342 30 36750 39270 411 90 443 10 5<1070 66990 179 10 88830 99750 1.10670 1.21590 1.325 10 1,434 3a 1,54350 1,65270 1.161 90 1.871 10 1,1IS030 31.57350
12.660 90 15.815 10 18.969 30 25.213 50 31.57350 37.87350 4&,17350 50,47350 MARCH 21, 1933 3225 It is felt that higher rates of taxation could noL reasonably be imposed, bearing in mind not only the depleted incomes out of which the tax must be paid but aoo the fact that in some provinces the same incomes will be sub levies for provincial and!
to further jectctl or municip:t.1 purposes.

In order to ensure that income from bearer coupons does not escape taxation, it is pro posed that all bearer COUPOtliJ must have at.tlu~hed thereto a duly completed owner.iliip certificate disclosing cerbin necessary informa.

such to tion with coupon.s.

The ownership certifiC3tes attached tl) the coupons will be for .....arded by the pay· ing agents to the debtor corporatiore which will be required to segregate them and to file income tal: them with the commis.
::ioner of uD.der a co,-ering form.

the owner of respect Ii credit A tax of 5 per cent is to be imposed at the 50urce on all interest or dividends paid by Canadi:lD debtor3 to non·residents of Canada.
In this connect.ion I may remind you that the DORlinion Income Tax Act contains Ii section providing for to Canadian residents ill respect of taxes paid abroad, pro vided that other countries grant reciprocal allowances_ S~milar provision is contained in the tax legislation of those countries in which there reside any considerable number of per eoDS who would be affected by this new impost.
A tax of 5 per cent is also to be imposed at the source on all interest or dividecds received by way of bearer coupons or cheques by Canadian residents where such coupons or cheques arc payable, by Canadian debtors, optionally or otherwise in foreign currencies, and such coupons or cheques are cashed in a currency which is at a premium over par of Canadian funds_ to The Income War Tax Act will also be sub ject a minor amendments ch3racter, designed primarily to strengthen it~ administrative provisions.
other of Sales Tax The sales t3X will remain at 6 per cent as at present.

Additional revenu~ will be derived from a limited adjuslroent of the exempt and putially exempt list, in the case of a number of articles not primary products which it is believed should, under present conditions, carry s. proportionate shnre of the tax burden.
The chief items to be t.a.ken from the exempt list are materials and non-permanent equipment entering into the manufacture of goods sub to the sales 1.1:1, fuel oil, molasses, corn ject synlp and sugar cane syrup, cleaned rice, sago and tapioca, certain other processed food stuffs, and certain types of machinery and appliances_ All the items inCluded in schedule IV of Special War Rc'·enue Act, now t:uable at 3 per cent, will be subject to tax at the full rate of 6 per cent, with the exception of articles maDllf;lctured or produced by the labour of the blind in institutions in Canada established for their care or under the control or direc tion of such institutions.
Excise Taxes Special excise taxe$ will be Ic\-ied on the following products at the rates specified; cos metiC3 and toilet prepar.ations, 10 per cent aD the dut}' paid "alue, when imported, or the manuf::acturer'$ s::ale price, when manufactured in Canada; ::aut9mobile tires nnd tubes, 5 per the manu cent on the duty paid value or facturer's s:l.!e price; cigarette pa.pers, in sheets, pack:l.ged or not, imported into or manufac tured in C::anada, 2 cenu per hundred leaves; and cigarette tubes, imported into or manu factured in C3nada, 5 cents pCr fifty tubes.
In the two last-n.amed C3Se.3 thc tax will be collected by requiring the importer or manu facturer to affix stamps to the p::ackages of p3pcr or tubes.

or iuto A special excise tax of 2 cents per pound refined sugar im will also be levied aD all ported In in Canada.

refined .announcing this t:l.X, however, I call attention to the fact that the government has refrained from imposing any special excise tax on tea, coffee or other similar commodity of general consumption.
It is also proposed to levy 3n excise ta:c: of 25 cents per gallon on unfel1mented wort and an excise tax of 50 cents per pound on malt syrup or malt syrup powder, extracts of malt, in fluid or not, or any other malt product tended for the brewing of beer.

The provisions of the Special W3r Revenue Act exempting Irom the stamp -tax, cheques, travellers'.
to banks, money orders, re-ceipts cheques and post office money orders where such instruments are for an amount not ex ceeding $5 will be repealed, except in the case of creamery tickets or cheques.

The stamp tax on postal notes will be raised from 1 to 3 cent3.

When matches are put up in books or twenty-one pack.ages matches, excise tax will be payable at the rate of 3/20th3 of one cent per package.
containing than le53 Other amend-menu to the Special War include a provision eX4 Revenue Act will empting from the note circulation taz the notes of a Canadian chartered.

bank specially issued to circulate in any British colony or possession other than Cllnada, to the extent that they are subject to tax by or under the Iaw3 of such colony or possession.
3226 The Budget-Mr. Rhodes COMMONS Exc'ise Duties The excise duty on distilled spirits used in the manufa.cture of proprietary medicines, el:· tract!, essences, perfumed spirits, and phar maceu tical preparatioM will he raised to $2.50 per proof gallon.

An excise duty of $1 per proof ll:allon will also be imposed on spirits distilled from the juices of native fruits for use by registered wine manufacturers in fortifying native wines.
Customs Tariff In the early stages of this session, in order to' implement agreements entered into at the Imperial ·Economic conference, amendment!

were effected involving 260 items of our tariff schedules.

In Recently, a tariff board was established.

these circumstances, it is deemed undesirable to propose, either in whole or in part, any major revision.

Certain a.mendments of a minor character, some 57 in number, are submitted..
These may be sulrdivided as follows: tent that the pound sterling falls belowr l4.eG the difference will be made good from thia fund. '

and it This will to producers.

apply to the following com.

modities: animals, meats (including bacon and hams), poultry, fresh fish, canned fish, tobacco, cheese, milk products, canned fruits; canned vegetables, maple products.

eggs and honey.

The direct result of this policy will mean is increased returns believed that the indirect returns will be even greater.
To-day the exporter has to insure himself against losses arising from fluctuations.

in currency, and this insurance can only be secured at the expense of the producer through the payment the lowest possible price.

With an assured fixed and certain cash return the exporter can afford, to pay the pro.

the full value of his product.

There ducer • remains the additional advantage that as ex follow ports improved prices in the home market.

Appro.
Appro.

priate measures will be· taken to give effect to this policy.

there would to him of stimulated are .. .. .. tariff..
ReductIons CJ.ari6cations of wording.. .. ReductioDB under all tariffs.. ReduotioDS under British preferential .. aIld' .. .... and: .. .. .. IrJCreases under British preferential .. .. .. under general tariffs.. under general briffe.. .. .. .. iutermedoiate intermediate .. .. tariff.. .. .• .. Increa8es .. .. .. .. .. .. .. .. 21 15 3 12 5 1 it was necessary to value it The rates in our tariff schedules were made having in ,mind parity of exchange.

Con.,se.
Con.,se.

quently when the pound sterling became de preciated, for purposes of special or dumping duty at $4.40, in order: to offset in part the advantage which the British exporter obtained in our marketa as a result of the depreciated pound.

After careful examination, it is believed that under this valuation .present can be I a.m therefore pleased lowered with safety.

to announce that, effective to-morrow, the value of the pound sterling for this purpose will be $4.25.
conditions The government has given most careful con· sideration to the problems with which our agri~ cultural and fishing interests are confronted in selling their products in countries with depre.

ciated and fluctuating currencies.

As a result it is proposed to establish a fund to be known as the agricultural stabilization fund.

From it there will be paid to exporters to the British market the difference between the price actually received and the pound sterling to the el:- valued at $4.60.

(Mr.
(Mr.

Rhodes.]

In other words, the and taxation will It is fully recognized that involve assumption of the additional measures of further sacrifices further burdens by individuals.

commerce and industry.

Four years of streS3 and strain resulting from a world depression of unparalleled magnitude cannot but make these burdens more difficult.

to bear.

Nevertheless, is of paramount.

importance that as to current expenditures at Jel1St we should live within our income.
We cannot do leS3 and preserve our national credit.

Should that be impairf!d it would be found the ultimate sacrifice involved in the that to restore it would be many times.

effort greater.

it It has been urged in many quarters that we should balance our budget to the extent of providing currently for the additional el::' penditures we must make to provide for deficits of the Canadian National Railwayit' and for unemployment relief.

Beyond quea tion this would be the ideal course.


But t<> at.tempt to pursue it under existing conditioD!l would-in my judgment-not only' place an unbearable taxpayer of burden upon the to-day I but would as well retard that recovery· of business and industry which is essential to, our future well-being.

With a slight 'improvement in busine513 our present taxation will produce an expanding revenue sufficient to provide a margin beyond' our current needs.
Furthermore as conditions' improve the drain upon the treasury for the national relief will, at the same time, automatically diminish.

With expanding revenue upon the one bancft railways and unemployment MAUCH 21, 1933 3227 The BwliJrf-.\Ir.

Hhodo :mu Icsscnin~ demands upon the other, we cnn npprD:lch grndll:llly flod in orderly manner that J:!,:oal which we must determine to attain at the rarliest po~siblc moment, namely, to pay our .

way yenr hy year.
way yenr hy year.

and contcmpl:ttc fI reduction r:ilhcr tli:ln nn intrc:lsc in our n:11ion:\1 debt.

:\lcnntime it is not unrcn.

'SonnIJle to sprc3d O\'cr a period of years the exceptional burden impo$~d upon us by the unllsual sc\"crity of c:-.

:i,::ting world conclition~.

tbe firm belief Th:lt conditions thl'ougllout the world fIfC j!

;rarc it woulJ be idle to Jeny.

That we hnxe our own serious problems to solyc is bc:rond (juC'stion.
At the snme time we hnxe no oC<-:l"ion to dcspnir for the future, on the con .Irary I nm of thnt we cnn look fOl'w:lnl with complete confidence to better :~nd h:lppier days, We still retnin the snme ridl :lnd varied resources, we urI" still blessed with tho~e qualities of resourcefulness which arc 3. heritage from our sturdy pioneer forbeurs, A'l we have O\TI'COmC all obstacles which in the past h:we bcstrewn Ollr nntionnl puth, so will we continue to QI'crcome those which lie ahend, l\-Ir, Spenker, I heg to give nolke that when we arc in committee of ways and means I shall move the following resolutions: 'fhat fort.v·fOllr of Rl'solutions to Amend the Customs Tariff 1.
Resolved, the Customs Tariff, being l:haptcr the Revised Statutes of thi!

"t)· CalJada, 1!l27, as l\lllel1(lt'd hy chapter thirteen of lIine of (lin;t Ilcssion), chapter threc the Acts of uf and (,WCOIIU session), chaptcr thirty of the Acts nf 1!131, he further amcndcd hy adding to Section six· thcreof the fe,llowiug subsectioll:- the Acts of l!J30, tIl\!

Acts of W30 l!)20.

chapter in Council law, the Govl'rnor (tl) Notwithstanding the pl'ovisions of any Illay from ,·.·.her tilllC to time allt!
as occasion requires oruer ~11l\1 dircct.
subjcct to such e:>;eeptions as llIay lie maue, what sllaH bc the rate of exchange jix~d for any currency in computing the value for duty of goolls imported into Canaua from ~lIY place or conntry tlle Cllrrency of which is in Canadian dl'preciatell, anll (:urrency lcs:,j the ~"olls in the Cllt'l'l'IlCY of the place or country the rate of exchange of CXJlort, computed at so orllercl!, be paid for the actual the goods, ~ellinB' price of the J:oods to the importer I!hall hc rcgardecl ns Jess than tlle fair market value of the goods when sold for home consumption, tlle provisions of this Scction shall apply ~illll ;lnd t;pccial or dumping duty sllall apply (,llllal than the invoice value of in casc a ~lllll find direct: nnd the Go\"ernor to the dilrerel1ce between the \'aluc of t11C in ,"oice computed at the eurrcnt rnte of exchange or at the average current rate from time to time fix('d by onlcr of the GO\"Cfuor in Counl'il.
and the \'a1ue of sueh in\"oicc, computed nt the rate of exclHlnj::e for duty 110 orllercd ns nfore !

'aid, or may be less than sllch difference as in Council may from time to tlll" .

Gun·rnor time order ill Cnullcil mny ol"ucr nnd direct that in all cases of !1-nlcs or consignments of I::oods imported into Canada, whl'rc the importer owns, controls or the e:>;porter.

in the bllsiness of is il\tercsteel or the exportcr OWIII;.

controls Of is intcrC'stctl in the businc!.


's of the importer, or the importer and exporter operate under a controllinl:: or holding company, notwithstanlling the expressed terms of the trans the sale or consignment, action shall bp.
regarded as a sale an,1 the actual selling price to the purchaser in Canalla shall be takt'n to be the vnlue of the l--:ooll~ in the cmrency of the place or country of (·xport converted into Cnlladian currcncy at the the a"CI'nge (;Ul'nmt currt'nt rate from time to time fixed by order in Council, ami shall he rC' of I!

:lrded as ICj;s than the fair market value of the goods whrll !
'old for home consumption and the J!l"ovisions of this Section shall npply :lnd special 01" dUlllping duty shall be deemed to appl,Y equal to tJu~ \Iiffercnce between thc \'alue l'ate of of rate from time to time fixcd bv order of the Gov· ernor in Council.

nnd the ,'allle of sueh ill\"oice computer!


nt (Iuty flO m·tlcrCll as .aforesaid, Ot may be less than such diffcrellce as the GO"ernor in Council may from til!le to time orller and direct, the cllrrent the averagc current thC' ('xchangc or at rate of exchange, or nt the rate of exchangc for invoice computed nt tIll' GOVernOl· ~\IlY order in oouncil made hereunder may revoked at nny time he varied.

extcndell or bv the Govcnlor in Council.

.


This subsection shn1l be deemed to have J\ad ('ff('cl from and after th.e first day of Septcmber, 1!)31.

as 1027, amended thirty of the j\("t8 of 11130 the Ads of 2, Re!

'oh'eel, That Scheclule A to the Customs Tarilf, beill~ chapter forty-four of the Revised Statult's of Callada, by dHlpter sC\"l'utecn of the Ads of Ill28, chapter thlrty·uine of the Acts of 1!12ll.
chapter thirteen (first SeS9ion), chapter of (second Session), l!J30 thn'e of the Acts of 11l31, chapter dlllptcr iort"-one of the Acta of 1113'2, anel chapter six of tile .

'\c:ts of 11l32-:J:t be further amc.nded by I!triking therpollt ta'l"iff items 711, DOc, 101, 123a, 157a, 2081", 2030, 20n, 210e, 2iS, 315, 3~5n.

316, 327, 353. :1fi6b, :1853, 40llj, 40llq.

417.

438b, 438l1.

445c, .lit.

475, 476a.

485, 520c, 508, 571, 082a, 756, is;~.


ami 7!l1l, the se\"eral enumerations of goods respectively and scycrH.J rates of duties of tU~tOtllS, if any, sct ormos.ite each of said items, nnt!

by inserting the following items, enumera tions anll rnt£'6 of duty in said Schedule A:- 1!14, 203a, 203h.

206a.

208.

17;1,