1922-06-01

[Stage Direction]
(Questions answered orally are indicated by an asterisk).

Mr. SEGUIN:: What person or persons made recommendations to the minister as to the appointment and dismissals of all excise employees in the Counties of l'Assomption and Montcalm, from the 21st of September, 1911, to the present time?


Hon. Mr. LAPOINTE (For the Minister of Customs) :: There is no information on the files of the department respecting the person or persons who made recommendations to the minister for the appointment and dismissal of excise employees in the counties of l'Assomption and Montcalm from 21st September, 1911, to the present time, with the exception of officer J. A. Bonin, who was dismissed on account of inattention to duty on the recommendation of the District Inspector of Inland Revenue, Mr. J. A. Tou-pin.


MR. MEDARD FOREST
Mr. SEGUIN:: 1.	Was Mr. Medard Forest in the employ of the Excise Department at l'Epipihanie, Quebec, in September, 1911?
2.	By whom was he replaced?
3.	(a) What was the cause of his dismissal, (b) who recommended same and (c) who recommended the appointment of his successor?


Hon. Mr. LAPOINTE (For the Minister of Customs) :: 1.	Yes.
2.	J. B. T. Richard.
3.	(a) Active political partizanship; (b) no information; (c) no information.

Questions


DRAWBACKS
Mr. FANSHER:: 1.	What amount of money collected in Customs duties was refunded under the Drawback Act, during the fiscal year ending March 31st 1922 ; (a) on goods imported and used in the manufacture of articles for export; (b) on goods imported and used in the manufacture of articles for home consumption?
2.	What are the names of the twenty-five manufacturing firms which received the largest amounts, and what amount was received in each case?


Hon. Mr. LAPOINTE (For the Minister of Customs) :: 1.	(a) $9,496,107.27; (b) $1,391,459.15; total, $10,887,566.42.
2.	Atlantic Sugar Refinery, $1,572,846.81; Ford Automobile Co., $755,185.03; Harris Abattoir Co., $384,111.09; Canadian Kodak Co., $335,823.72; Davies, Wm. Co. Ltd., $335,757.30; Massey Harris Man'f'g. Co., $293,628.91; St. Lawrence Sugar Co., $273,632.70; Spanish River Pulp & Paper Co., $192,397.66; Algoma Steel Corporation $187,488.42; Fort Frances Pulp & Paper Co., $167,114.85; Steel Company of Canada, $159,050.36; International Harvester Co., $158,903.80; Quaker Oats Co., $155,745.34; Canadian Car & Foundary Co., $152,691.91; Canadian Consolidated Rubber Co., $152,286.73; Canadian Packing Co., $133,510.62; Goodyear Rubber Co., $121,516.14; Dominion Corset Co., $120,152.82; Brompton Pulp & Paper Co., $117,341.88; Montreal Locomotive Co., $113,890.83; International Plow Co., $111,673.28; Laing Produce Co., $111,183.87; Singer Sewing Machine Co., $108,174.86; Page Hersey Co. Ltd., $107,234.64; Maple Leaf Condensed Milk Co., $101,688.07.


ANTHRACITE COAL IMPORTATIONS
Mr. HANSON:: 1.	How many tons of anthracite coal were imported into (a) New Brunswick; (b) Nova Scotia; (c) Quebec, during' the last fiscal year?
2.	What was the average cost per ton of such coal (a) at point of shipment; and (b) delivered?


Ernest Lapointe: 1 and 2.
Anthracite-grate, egg, stove, nut and pea
Average
Province	Tons Value Price
Nova Scotia ..	55,943	$ 562,532	$10	05New Brunswick	77,846	747,920	9	61Quebec	
1,154,825	9,281,267	8	04

Anthracite, n.o.p., buckwheat, rice and barley
Average
Province	Tons	Value	PriceNova Scotia ..	42	$	63	$1 50New Brunswick	Quebec	
142,075	307,895	2 17
The price shown is the price at point of shipment including United States exchange. The cost, delivered, is not available from Customs statistical records.


CANADA-WEST INDIES SERVICE
Mr. DESLAURIERS:: 1.	What are the names of the persons who submitted tenders in connection with the contract given out by the Dominion Government on November 17, 1921, establishing a passenger, postal and freight service between Canada, the West Indies and British Guiana?
2.	For what period has the above contract been given?
3.	What are the conditions governing same?
4.	Why was the Canadian Merchant Marine not given the said contract?
5.	Is the Government in a position to cancel said contract?


Hon. Mr. ROBB:: 
AIR BOARD ACT AMENDMENT
[Stage Direction]
Hon. GEORGE P. GRAHAM (Minister of Militia and Defence) moved that the House do to-morrow go into Committee of the Whole to consider the following proposed resolution:
Resolved, That it is expedient to amend The Air Board Act, chapter 11 of the statutes of 1919 (1st Session), to provide that the Governor in Council may make regulations prescribing the compensation to be paid, the persons to whom, and the manner in which, such compensation shall be payable, for the death or injury resulting directly from a flight undertaken in the course of duty in the public service of Canada of any person employed in the public service of Canada, or employed under the direction of any department of the public service of Canada: Provided, however, that such regulations shall not extend to the payment of compensation for any death, or injury in respect of which provision for the payment of compensation, or a gratuity or pension is made by any other Act.
He said: His Excellency has been apprized of the subject matter of this resolution and has given his assent thereto.
Motion agreed to.

[Stage Direction]
On the Orders of the Day:
Mr. T. L. CHURCH (North Toronto) :: May I he permitted to ask the Prime Minister one or two questions in regard to the St. Lawrence Waterways project? A great many applications are coming in for copies of the report of the International Joint Commission relating to the inquiry which has cost Canada a million and a half. That report has been printed in the United States and I have received telegrams from a number of public bodies in my district asking for copies of it. I think it is in the public interest that this report should be circulated, as the facts speak for themselves. I think the report should also be printed in Canada, and sufficient copies distributed to inform the public who are so interested in this scheme affecting the Great Lakes. I would also like to ask if it is the intention of the Government to have printed the correspondence which has been laid on the table at the request of the hon. member for West York (Sir Henry Drayton). I refer to the correspondence between the government of the United States and the Canadian government on this question; and further, whether opportunity will be
150J
afforded the House, before Parliament prorogues, of discussing the policy involved in the report referred to and the action taken by the government.
Hon. W, L. MACKENZIE KING (Prime Minister): In regard to the report 'itself, copies were laid on the table at an early stage of the session, as my hon. friend knows. It was then intimated that the government had a supply of printed copies, copies printed in the United States and supplied in large numbers to our government. I think it 'is probable that all the requests thus far made for copies have been met from this supply. If the government should find that it is not possible to meet all the requests for copies of the reports from its available supply I think the report should be printed in Canada as well; but it is an expensive report to reprint and if without embarrassment that amount of expense can be saved I believe the government would be justified in saving it. However, let ,me make it clear that if requests are made to the government for copies of the report in printed form beyond the supply available the government will consider the advisability of printing further copies.
As to the second question, concerning the printing of the papers that were laid on the table a day or two ago, it will be a pleasure to have them printed.
As to fixing a time to discuss this matter further, I think the House has already debated it for three or four days of the present session. I would not like to promise my hon. friend an opportunity to speak again on that subject, but we will take the matter into consideration.


Thomas Langton Church: Do I understand rightly, in view of the reply given to the government of the United States, that no further action on the findings of this report is contemplated by the Canadian government?


Mr. MACKENZIE KING:: I think my hon. friend is as well able to read the reply already given as I am to interpret it. That reply stated that the government did not think it advisable to take up the m'atter at this time; it did not go beyond that.


CROWSNEST PASS AGREEMENT
[Stage Direction]
On the Orders of the Oay:
Mr. JOHN EVANS (Saskatoon) :: I would like to call the attention of the Government to the reply received by the Calgary Board of Trade on May 18 from the Minister of
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Agriculture in regard to the Crowsnest Pass agreement. The minister said:
Tour wire of May 18 duly to hand and note the position taken by your board in connection with the Crowsnest pass agreement. Let me assure you that the intention of the government is to try and get something better to meet present conditions than the Crowsnest pass agreement would do.
If such was the intention of the government at that time, why was the special committee appointed to consider railway transportation costs?


William Lyon Mackenzie King: As I understand the passage which my hon. friend has quoted it is equivalent to saying the government was moving in a particular direction with a hope of securing something better than obtains under existing conditions. Tf that is true

and I think it is perfectly true

the action of the government is to be interpreted in that way.


Mr. CRERAR:: Just in respect to that, I would ask if it is the intention of the government to do something better than exists under the Crowsnest pass agreement?


William Lyon Mackenzie King: I presume that the committee that is enquiring into the matter at the present time will report to the House what it thinks best to do. If the committee suggests something better than the Crowsnest pass agreement, certainly the House will have an opportunity to consider the better course.


THE BUDGET
[Stage Direction]
The House resumed from Wednesday, May 31, the debate on the motion of Hon. W. S. Fielding (Minister of Finance) that Mr. Speaker do now leave the Chair for the House to go into Committee of Ways and Means, and the proposed amendment thereto of Hon. Sir Henry Drayton.
Mr. G. W. KYTE (Cape Breton South and Richmond) :: Mr. Speaker, I desire at the outset to join in the felicitations that have been extended to the Finance Minister upon the presentation of his sixteenth budget to the House of Commons. In a few days he will mark another mile stone in his long and useful political career. On June 13 he will see the fortieth anniversary of his entry into public life. Upon that date in the year 1882 he was first elected to the House of Assembly in the province of Nova Scotia to represent the

metropolitan city of Halifax. After two years he was called to the premiership, the duties of which office, in addition to the office of provincial treasurer, he discharged continuously from that date up to 1896, when he was called to the government of this Dominion as the Finance Minister of that day. His record since that time is well known to every man in public life in Canada, and appreciation of it was abundantly testified to in this debate by hon. members representing all shades of political thought in this country. We down in Nova Scotia have a very great and natural admiration for the Minister of Finance. We regard him as one of the very best of our public men, a man who has rendered services most unselfishly to this country for a long period, and who will forever stand in the very front rank of the large number of public men which the province of Nova Scotia has contributed to this Dominion.
With respect to the particular subject that is now being discussed by the House I have, perhaps, not very much to say, and I want to state frankly at the beginning that I fear I shall not bring very much enlightenment to that question in which we are all so much interested. I think, however, it is proper that every shade of public thought should find voice in this debate. It is the foundation upon which the financial structure of this Government will rest from time to time, at all events during the period the present Government is in office; and as the Liberal party is a liberal party it no doubt contains within its ranks many men of different shades of thought but all prepared and willing to adjust and adapt themselves to the will of the majority. That, Mr. Speaker, I conceive to be real liberalism and from that point of view I desire to occupy the time of the House for a few moments this afternoon. The Finance Minister is extremely happy in the position in which he finds himself to-day. Although during the recent election campaign we were told that it was the avowed purpose and object of the Liberal party if they came into office to destroy the tariff, to bring down our manufacturing industries to a position of bankruptcy, and to further increase the unhappiness and uneasiness existing throughout the industrial world, the Finance Minister has had the satisfaction of having men sitting in the Opposition testify, since this debate opened, to the wisdom of the budget as he has brought it down. Yesterday evening the hon. mem-

The Budget-Mr. Kyte
her from St. John and Albert (Mr. Baxter) spoke in the debate, and I will quote his words:
I believe the hon. gentleman is putting forward proposals which by no means go to the length he would like to have them go; they by no means meet his ideal of economic conditions ; in fact I may also venture the suggestion that the proposals which he does make on this occasion approach much nearer to the economic ideas of the group of which I am a member than they do those of a large number of the group of which he is one of the exponents.
Again he said:
I think it is entirely a matter of congratulation to the country that the tariff has not been seriously disturbed.
What are we to think of the predictions that were made during the election campaign? We, on this side of the House, the great Liberal party of Canada, who support the Minister of Finance (Mr. Fielding) and the party in office of which he was such an outstanding member for eleven years, knew he would be no party to the destruction of any policy that would bring about the conditions which were anticipated by our friends. Then we have the statement of the hon. member for South Vancouver (Mr. Ladner), who said:
There is no substantial reduction at all, and I am glad no important changes have been made.
Therefore, the tariff is no longer an issue, so far as the Conservative Opposition is concerned. A few months ago the right hon. member who leads the Opposi-fifteen years, knew he would be no party who are associated with him, endeavoured to make the tariff an issue in this country^ but when it became known that the hon. Minister of Finance was a candidate of the Liberal party in that election, and when they appreciated the very probable fact that he would again be Finance Minister of this country in the new Liberal government, they were content to accept that as a guarantee that the tariff need not be an issue in this country, because he would see to it that no disaster would come to this Dominion by reason of any improper or drastic changes. Considerable fault has been found, and I am one of those who agree that it is rather disappointing, that the Finance Minister has not been able to go further in the matter of reducing the burden of taxation. So long as I have had any views upon political matters, I have not subscribed to the platform of that political party that thinks we should have a system of free trade in this country. I
have been unable to find any country in the world that has a fiscal policy approaching to free trade. My idea of a policy for this country is one designed to bring a revenue to the government sufficient to carry on the affairs of the country, but that no further tariff ought to be imposed on the people than that which is necessary to encourage our industries. The budget has been criticsed in respect of the increase in the sales tax, but it has not been pointed out, up to the present time, so far as I am aware, that the sales tax does not apply to a large portion of the articles which enter into the daily consumption of the working man. One hon. member after another regretted that the Finance Minister has increased the burden of taxation in respect of the cost of living to those that are less able to bear it, and particular reference was made to the sales tax. I desire to make it perfectly clear that, as regards the sales tax, there is a list of items, numbering almost one hundred, that do not pay the sales tax, so that the burden of taxation on the common people, and those least able to bear it, is not affected by the increase of the sales tax by 50 per cent, as provided for in the budget. The people of this country, Mr. Speaker, are to be congratulated on the fact that, for the immediate future at least the interpretation of our customs law will be in the hands of a Finance Minister who will always give the benefit of the doubt to the consumer and to those least able to bear the burden of taxation, and who will not use his influence to give further protection to the protected interests by giving fanciful interpretations to the customs law. Let me make perfectly plain what I mean. Up to 1911, among the articles upon the free list were certain articles that are used by the fishermen in the maritime provinces. Section 682 of the customs law is as follows :-
That ropes twine, barked marline, net norsels of cotton, hemp, or flax, when used exclusively for the fisheries, shall he admitted free of duty.
These articles were admitted free of duty from 1897 until 1911, and the fishermen of the Maritime provinces had the benefit of being free to import the articles used for their purposes. But not more than two or three weeks has elapsed after the change of government in 1911 before the then Minister of Customs, gave an interpretation to that section of the law which immediately, and without any change in the tariff, removed barked marline from the
The Budget-Mr. Kyte

free list and subjected it to a duty of 25 per cent. The lobster fishermen of the Maritime provinces, who had enjoyed the advantage of importing all their twine necessary for the prosecution of the lobster fishing, found themselves, without a moment's notice, obliged to pay a duty of 25 per cent upon that twine. What was the explanation? The explanation was, as given by the Minister of Customs of 1911, that the customs officers who were performing their duties during the time the Liberals were in office were too generous in the interpretation of the customs law, and that, while unbarked marline, most frequently used by lobster fishermen, was admitted free of duty under the Liberal government, it should not be imported free of duty, but was subject to a customs duty of 25 per cent. But that is not the only instance. I referred to a case that applies to the Maritime provinces, but there is another case equally well known, and that is in respect to the duty upon rough lumber, which previous to 1911 came into western Canada free of duty. Article 504 of the customs tariff provides as follows:
Planks, boards and lumber or wood, sawn, split or cut, and dressed on one side only but not further manufactured, free.
Then article 505:
Sawn boards, planks, deals planed or dressed on one side or both sides when the edges thereof are jointed or tongued and grooved 25 per cent.
Well, Mr. Speaker, from 1907 to 1911 all rough lumber was imported into western Canada free of duty; and immediately after the change of government a ruling was obtained by the lumber combine of western Canada which immediately, and without any change of the customs law at all, imposed a duty of $2 per thousand upon rough lumber. The change was brought about in this way: The regulations provided that, whereas lumber planed only on one side came in free of duty, lumber planed on two sides or edged was liable to duty. They interpreted that to mean that rough lumber, the edges of which were sawed with a fine saw, became finished lumber and automatically lost its place in the free list, becoming subject to a duty of $2 .per thousand feet. That was objected to by the settlers of western Canada, and they went so far as to test the legality of that new ruling by the customs authorities. The matter got into the courts, and I am not quite sure what the decision of the courts was; but suffice it to say that while the Liberal party was in office and while our customs

laws were being interpreted by a Liberal Minister of Finance and a Liberal Minister of Customs, no such question arose, but in every instance of doubt the consumer got the benefit of it and the manufacturers' combine was obliged to submit to that ruling for the benefit of the people generally.
I repeat that, apart altogether from any reduction in the tariff which the Minister of Finance (Mr. Fielding) has brought down to this House, it is a subject for congratulation that, whatever freedom we have at the present time, whatever privilege we enjoy in respect to freedom from customs duties, will be preserved to us while ever a Liberal government is in power and will not be lost upon 'a technical ruling by officials in sympathy, not with the consuming public, but with the manufacturers of this country. I stated a moment ago that personally I stood for a policy of tariff for revenue.


Mr. LEWIS:: Will the hon. gentleman say that the present tariff is a tariff for revenue only?


George William Kyte: Most certainly not. A tariff for revenue is the ideal condition, in my mind, as a free trade tariff appears to be the ideal condition in the minds of some of my hon. friends sitting in the Progressive quarter. But if my hon. friends sitting in the Progressive group were called upon at the present time to formulate a policy having regard to the necessities of this country for revenue and to meet our increasing obligations, I doubt very much if they would give full effect to the doctrine of free trade; I believe they would rather wait until a more favourable time for its full fruition.


John Evans: In regard to what the hon. member said a moment ago, I should like to ask if, under the present arrangement, implements of agriculture and other things can be imported on the invoice price of the manufacturer?


George William Kyte: I must confess that I am not an expert with respect to the importation of goods. I did not expect that I would be asked that question; but the tariff speaks for itself, and I assume that agricultural implements will be imported subject to the duties specified in the tariff.


John Evans: Would that be on the invoice price, or will a dumping duty be added as well? The hon. member said that the consumer was to get the advantage. What is it?

23G1
The Budget-Mr. Kyte


George William Kyte: This is a matter of interpreting the customs laws; and in view of the wide difference of opinion as to interpretation between the two cases I refer to, between a Conservative Minister of Customs and a Liberal Minister of Customs, I decline to give any interpretation at this moment.


John Evans: Might I ask another question?


Mr. SPEAKER:: The hon. gentleman
must be allowed to proceed with his speech without interruption.


George William Kyte: I have no objection to the hon. gentleman putting the question.


John Evans: I understood that it was altogether a matter of interpretation, and as the hon. member said that we were to get the benefit of the change now, will the invoice price be accepted as the valuation for customs purposes, or not?


George William Kyte: tion supplies. They had to buy guns, shells and fuses, harness and all the other-necessary equipment for the conduct of the war; and the manufacturers, who before had been content with a reasonable profit, suddenly found that there was a splendid opportunity accorded them to make great wealth. The profits that were made in the United States during that war were far greater than the profits that were made in peace time. And the United States is not the only country in the world that has had that experience. After the war was over these manufacturers came together to count up their profits, and they decided that war was a good thing for manufacturers because it increased their profits. And then they got to devising a scheme by which they could, in times of peace, extract from the pockets of the people the same profits, or profits similar to those which they had made during the war. The result of that conference on the part of the manufacturers in the United States was to evolve the protective system of government. They said: "We ought to maintain the home market for the home producer. During the war many men invested capital in the manufacture of munitions and they are prepared to continue investing in the manufacture of goods for the carrying on of the peaceful avocations of the country and in order to do that successfully it is necessary that we should have a monopoly of the home markets." They saw at once that if they could succeed in inducing the government at Washington to give them a protection upon their goods they would be able to preserve the home market and incidentally reap profits almost comparable to those which they had enjoyed during the war. That, Mr. Speaker, is the origin of protection in the United States. Up to that time the United States tariff had been practically a tariff for revenue.
Well, time has passed, and we have gone through a tremendous war ourselves. Canada participated in the late war with great glory, and the names of her men are enrolled in history's pages with those of the heroes of other nations who fought side by side with them on the European fields of battle. Now, we have had war profiteers in Canada. Perhaps I should not say profiteers; at all events we have had munition makers in Canada who secured large profits during the war. The fact will not be disputed by any hon. gentleman. But just as happened in the United States, since the close of the war there has been car-

ried on in this country a tremendous propaganda by the manufacturing interests for more protection. For the last two years, beginning, in fact, almost before the ink in the signatures of the Peace Treaty of Versailles was dry, pamphlets have been issued from the city of Toronto and other manufacturing cities, signed by an alleged "reconstruction committee," pointing out what the people of this country ought to do in the matter of reconstruction with a view to promoting the prosperity of Canada. And the only suggestion with regard to "reconstruction" that was contained in those documents was the suggestion that there should be a higher tariff. What else could you expect from the gentlemen whose names were appended to these pamphlets-gentlemen well known in financial circles and prominently connected with the Canadian Manufacturers' Association. Following the example of the manufacturers in the United States after the civil war there, the manufacturers of Canada made a drive upon the government and upon the public men of this country in order to have the tariff increased. And this in the name of reconstruction! I say that, quite apart altogether from the merits or demerits of the budget brought down by the Minister of Finance (Mr. Fielding) a few days ago, Canada is to be congratulated upon the fact that, while this Government is in office, that particular element who tried to "reconstruct" Canada on the high protective basis will be out of a job. They will remain unemployed in that direction until our friends opposite may happen to come back to power.
These, Sir, are things that occur to the ordinary man who takes only a cursory view of the matters that appertain to government and social questions in Canada. In my opinion the Minister of Finance has gone as far as he could possibly have gone in the direction of reducing taxation. No man in this House would have been more rejoiced than I if he had been able further to reduce the burden of taxation as it applies to the great consuming population of the country. But on this question I am at one with the hon. member for Marquette (Mr. Crerar), who leads the Progressive group in this House. Speaking a few days ago, the hon. gentleman said:
My hon. friend the Minister or Finance is coming down to-morrow to deliver to this House his annual budget. I may be mistaken-I hope I am-but I venture the prediction that the Minister of Finance, if he discharges his duty

The Budget-Mr. Kyte
to Canada, will not take the way of reducing the taxation, but must find additional taxation; there is no way out of It if this country is to meet its obligations.
I subscribe to that view, and it was the recollection of it that reconciled me to the modest reductions in the tariff which are set forth in the budget introduced by the Minister of Finance. We cannot get away from our obligations. It is all very well for us to talk about free trade and about tariff for revenue. But we are facing a condition in our financial history which is more serious than we have ever had to cope with. But, Mr. Speaker, the present Government is not in office only for a day or a year. The signs point overwhelmingly to the fact that, so far as our friends immediately opposite are concerned, the Liberal Government will be in office just so long as they want to be, at all events, so long as they fairly meet the reasonable expectations of the people.
Well, the Liberal party came into office in 1896, and we had the same propaganda during that campaign as we had in the campaign of 1921. It was stated that the Liberal party if they came into power would surely wreck and ruin every enterprise in the country. It was declared that capital would be unsafe and that bankruptcy would ensue where theretofore industry had been the order of the hour. The Liberal party, however, came into office and remained in office for fifteen years; and they went out, not on the cry that they not given good government to Canada, not on the cry that they had injured in the slightest degree any interests in Canada, but on the cry that they had governed the country so well for fifteen years that it was folly to try to improve upon their administration.
Now, Mr. Speaker, the question of reciprocity has arisen from time to time in this debate, and I desire to say to any hon. member who has any interest at all in any views that I may have upon the question, that I am wholly in favour of reciprocity with the United States. I was entirely in favour of it in 1911, and I would be equally in favour of it at the present time if we could only secure it on the same terms. The question of reciprocity did not arise in Canada only in 1911. Why, we had it discussed in every general election for forty years before that, and the gentlemen who were most in favour of reciprocity in those days were the predecessors of the hon. gentlemen sitting opposite to me to-day in this chamber. But the United States were not interested in reciprocity in those days.
Why? Because we had falling revenues, we had deficits from year to year, and our pouluation was fleeing to the United States as though this country was stricken with everything other than that which invites people to dwell in a new land. Notwithstanding that large sums of money were spent from year to year to encourage immigration, our population was at a standstill. The fact is that the great republic to the south of us was not interested in cultivating trade relations with a country whose fiscal policy resulted in constantly recurring deficits and whose population was decreasing.
But, Mr. Speaker, after 1896 a great change took place. Instead of our people migrating to the United States the improved conditions encouraged them to remain land also attracted newcomers. In case I may be challenged upon this point, let me give figures: From 1891 to 1901 the increase in population was 11.13 per cent -and, bear in mind, Sir, that the last half of that decade the people enjoyed the advantages of a Liberal government. From 1901 to 1911, the first full ten-year period, during which the Liberal party was in office, our population increased 34.17 per cent. In the last decade, 1911 to 1921, the increase diminished and amounted to only 21.94 per cent. In other words, the population during the first ten years that the Liberals were in office increased 34.17 per cent, while in the decade preceding, under a Conservative government, the increase was only 11.13 per cent, and in the decade following, also under a Conservative government, the increase was only 21.94 per cent. During the period from 1911 to 1921 the Immigration Department brought in 1,728,876 people, and the excess of births over deaths was 1,103,630, or altogether an increase of 2,832,506. But, Sir, when the census figures were published a few weeks ago we were disappointed to discover that instead of that rfate of increase having continued it had greatly fallen off.


Mr. CHAPLIN:: Will the hon. member give the figures for the decade ending 1891?


George William Kyte: The only figures I have are in relation to the total population, which amounted to 4,833,239-after a period of more than thirteen years during which our friends opposite were in power. I was proceeding to say that our American friends were never very much interested in establishing reciprocal trade relations
The Budget-Mr. Kyte

with us until after the change in government in 1896. From then on to 1911 the statesmen of the United States discovered that conditions here had changed very considerably, that our revenues were increasing; that large sums of money were being spent for the purpose of developing our resources; and above all, that a large and steady stream of immigrants was flowing into Canada. They noticed these changed conditions and they said to themselves: While we did not regard Canada as of very much consequence commercially during the regime of the old Conservative party, but now we think it would he worth while .to talk business with her. So the government of that country made a proposal for reciprocity with us; and that is how it was brought about. I remarked a few minutes ago what we might hope for in the way of further tariff reductions if the present Liberal government remains in office long enough, as no doubt it will.
But, Sir, in addition to that,
4 p.m. who knows what effect it might have upon the desire of our American neighbours for reciprocal relations if the present Minister of Finance and his colleagues bring about a recurrence of the condition of affairs that obtained from 1896 to 1911? There is not much doubt that there will be 'another offer from the United States for reciprocity.
Now, Mr. Speaker, I desire to put myself upon record as to where I stand upon this question. I repeat that, while I approve of the wisdom displayed by the Minister of Finance, I, in common with other hon. members sitting on this side 'as well as hon. members in the Progressive group, jregret the tircumstances were such as not to justify his making further reductions in the tariff. But I have confidence that in the next few years there will be such large increases in our revenues through increased prosperity and a large volume of immigration, that the Finance Minister of the day may be able to lop off here and there 'any objectionable features of the tariff so that in the near future it will approximate much more closely to a tariff for revenue only.


Mr. R. K. ANDERSON (HaLton) :: Mr. Speaker, the budget debate so far has been interesting from several points of view: because it is the first budget of this fourteenth parliament; because we have heard the views of three distinct political parties; and also because we have a large number

of new members who for the first time are looking upon national questions from the point of view of the legislator. It is also interesting because the budget has been presented by a minister who has had a distinguished political 1 career. Although I do not agree with the Minister of Finance (Mr. Fielding) in politics, I have no hesitation in expressing my great personal regard for him as a statesman of no mean calibre. I desire to compliment him, not for the subject matter of his budget, nor for the reductions in duties announced, but for the manner in which he presented it to the House and for his ability in disguising its real character.
This budget pretends to reduce the duties on imported articles and at the same time lower the cost of living. But to my mind it would appear that the cost of living to the average consumer will be increased. , The hon. gentleman has not blazed any new trail in the way of taxation, but has contented himself with following the well-beaten path laid out for him by his predecessors in office, the Right Hon. Sir Thomas White and the hon. member for West York (Sir Henry Drayton). They are the true pioneers in introducing new methods of taxation to enable the Dominion to meet her increased expenditure resulting from the war. These were the men who bore the burden of finding increased revenue during the years of war conditions, and, although I have no desire to minimize the difficulties of their successor-for I know those difficulties are great, our national obligations being burdensome and likely to remain so for a number of years- yet I think his responsibilities are light compared with those of his predecessors.
I have listened with a good deal of interest to the previous speaker (Mr. Kyte). Some of his remarks were interesting from more than one point of view. He made statements which to my mind are directly contradictory. Of course, he made mention of the different shades of thought on the Liberal side of the House. The difference has been quite apparent during this session of Parliament when we have seen hon. gentlemen opposite disagreeing with one another on the questions which have been presented to the House for discussion. He also stated that the tariff was no longer an issue. That was also said during the political campaign which ended on the 6th of December last, that

23G5
The Budget-Mr. Anderson
the tariff was not an issue so far as the Liberal viewpoint was concerned. He followed that up by saying he was no free trader, and then he said he was in favour of a tariff for revenue purposes only. To my mind, there is no difference between those two statements. A tariff for revenue purposes only, if carried to its logical conclusion, is essentially a free trade policy. I do not think any man in this House, no matter how clever he may be, could stand up here and convince any intelligent member that there is any essential difference between those two statements regarding the tariff. The hon. gentleman gave an example of how he would change the tariff duties and get the revenue which would be lost if the protective duties were repealed. He would place on articles which we produce in Canada an excise tax, instead of the tariff duty we now have, and he would put a tariff duty, I presume, on articles that we cannot produce in Canada. That is a free trade policy, because if you place a duty of 20 per cent on the articles manufactured in Canada, and put a sales tax of 20 per cent on articles imported into Canada which are also made in this country, you only increase the price of the article 20 per cent to the consumer, and give no protection at all to the Canadian manufacturer. The consequence is that the foreign manufacturer competes in our home market on an equality with the Canadian manufacturer, and that is essentially a free trade policy. It can have no other effect on the industries of this country than to bring them into ruinous competition with the manufacturing concerns in other countries. Nor would it in any way reduce the cost of living, which would remain just as high as it was before. In effect, it would be still higher, I imagine, because there are times when the customs duty collected on an imported article migh; possibly be paid, part by the consumer and part by the producer, but so far as a sales tax and an excise tax is concerned there is no doubt they will be paid by the consumer. There is no one else to pay it.
I was also interested in what the hon. member said with regard to the American system of taxation. He said they had no protective system of taxation in the United States previous to the Civil War. If I remember aright, Henry Clay, one of the most eminent American statesmen, was a great protectionist and advocated protection. He was dead before the Civil War.
The United States, as appears from the World's Almanac, has had a protective policy for one hundred and thirty-one years, and I am quite satisfied that the Civil War did not take place that long ago. So the hon. gentleman was entirely wrong in1 his statement.
He also made mention of the small increase in population in this country in the last decade, as shown by the census of 1921. There were reasons for the small increase in population during t'he last ten years. The hon. gentleman has evidently forgotten that we had a war, which interfered very much with immigration to this country, and will probably interfere with it for a few years to come.
So far as the tariff reductions proposed by this budget are concerned, they are so small that they will not affect to any great extent the cost of living. We might designate this as a two and a half per cent budget, and so far it does not appear to be having any intoxicating effect upon hon. gentlemen to my left. They have not shown themselves very much in favour of it, and so far they have been keeping very much to themselves in regard to these proposals. I do not exactly know how it appeals to them, but taking it altogether a 21 per cent redaction on the articles affected amounts to 21 per cent on $40,000,000, or to about $1,000,000 a year. That is, the reduction in the tariff duties proposed by this budget amounts to about $1,000,000 a year. In 1919 the late government reduced the tariff duties of this country to the extent of about $17,000,000 a year, and at that time the reductions were not considered sufficient by the predecessors of the Progressive party in this House, and1 they crossed1 the floor in opposition to those proposals. I am very much interested in seeing how the members of the Progressive party to-day will view this small reduction of $1,000,000. This 21 per cent reduction is offset by the fifty per cent sales tax increase, which practically kills the reduction altogether. Both the sales tax and the duties which are reduced by 21 per cent are a tax to a certain extent. The effect of the changes that have been made is that the farmer receives no particular benefit in purchasing the implements of agriculture which he requires. The increase in sales tax will increase the taxes of this country something like $30,000,000. I think I am correct in saying that $60,000,000 was collected1 from the sales tax last year, and as it is now being increased 50 per Cent, that will mean an additional $30,000,000. So we get a reduction of $1,000,000, and an increase of

The Budget-Mr. Anderson
United States customs collections amounted to $308,564,000, or $2.88 per capita. That means $2.88 per capita collected from the citizens of the United States in customs duty, in comparison with $16.20 collected by Great Britain, Great Britain being a free trade country, and the United States an exclusion country. Canada adopted the middle course by taking a policy of adequate protection, using the duty for revenue and protection as well. In 1921 Canada collected in customs duty $105,500,000, a per capita tax of $16.40, as compared with $2.88 of the United States. That goes to show to what extent the United States is practising an exclusion policy. May we not expect that they will continue that for a number of years? It is not to be expected that the Secretary of the Treasury in Washington would favour any reciprocity treaty at the present time. It is scarcely to be hoped for, and I question very much whether such a policy, if it were submitted to the Canadian people, would not receive just as high an adverse vote as it did in 1911. The people of Canada, at the present time, are not in favour of reciprocity with the United States. In 1921 the exports of the Dominion of Canada amounted to $1,210,488,119 and her imports to $1,240,158,882, a balance against Canada of 130 million. The dutiable imports were $847,561,406 and the free imports $392,597,476. That shows that the free imports of the Dominion are about 48 per cent of her dutiable imports. That is not the very high rate of protective duty, when almost half the imports of this country are free of duty.
There is another feature of the matter which, I think, members of this House and the people of the country should very seriously consider. My opinion is that the present Government is starting on a downward trend in tariff duties, that they intend to do away with them, and gradually place in their stead a sales or excise tax to prevent any advantage to our Canadian manufacturers from the duty which is collected. The thin end of the wedge has been introduced, and it would appear to me that during the years of their term of office they will continue their present policy, until they have done away with the protective principle. During the late campaign, noting the remarks made throughout the country, I could not help thinking that the Liberals were sincere, and if they were sincere, I see nothing for it but that they will continue on the road

on which they have started and do away with protective duties. What influence will this have on manufacturing industries proposing to come into this country? Looking over the amount of investments in Canada, I find British capital is invested in Canada to the extent of two and a half billions of dollars. That means that two and a half billions of British money is invested in Canada, and' it is invested largely in stocks and bonds. Money invested in stocks and bonds helps to .build up the country. The money is invested in our industry, although the British investor does not run those industries. He lives in England, gets the interest, which is sent over to him, and spends it over there. But the money invested here helps to develop this country and to run our industries, builds up the cities, and gives employment to the labouring men. This was the policy of the British investor in past years, but there is a decided change coming over the British investors. During the last few years they are coming into this country more and more, and investing their money, and taking part in the industrial development of the country. During the last two years British firms have come to Canada and established their plants here in various cities throughout the Dominion- Quebec, Montreal, Toronto, Hamilton and other centres of population. They are coming here to manufacture articles which will compete in our home market, with the Canadian made article, and, by their competition, they will reduce the cost, and at the same time give employment to our people and furnish a market for the farm produce of the country. The number of American firms in this country is quite large. In 1921 there was invested $1,800,000,000 of American money in Canada, and, unlike the British investor, they placed their money in the industrial concerns and went directly into the business in the country. They employed our labour, built their plants in our cities, and helped, like the British investor, to build up the country. In 1914 there were something like 350 American concerns doing business in Canada; in 1921 there were 700 American concerns, an increase of one hundred per cent, showing the benefit of protection. Without that protection none of these firms would be in Canada. They would have their plants in the United States, and would do the manufacturing

The Budget-Mr. Anderson
there. The United States would have the money, we would buy the goods, and we would be building up the plants in their country. Instead, under protection they are building up our Canadian cities, furnishing a market for the produce of our farms, and helping to develop the natural resources of the Dominion.
Now taking them altogether, these people come here for the direct purpose, in the first place, of avoiding the tariff. Without that tariff they would not be here at all. They come here because of our stable form of government. We have a thrifty people, and varied natural resources from which they can draw the raw material. We have the market they want, and they can cater to that market better in Canada than from the home plant in the United States or in England. The consequence is that they are continuing to come. But if we interfere with the protective principle in our tariff, they will cease coming, because they will wait for the day when free trade will be in effect, and they can supply this market from their home plants. Hon. members to my left, and hon. members anywhere in this House, can readily understand that it is much better for this country to have the articles which we need manufactured in Canada. Canada is a large country, and it is well able to supply its own needs, and we should become, as far as possible, a self-sustaining country. There is no reason in the world why a people so verile, active and energetic as the people of Canada, with such a large tract of country, such great natural resources, able to furnish the raw materials for every kind of industry, should not develop the natural resources by its own people and make the country self-sustaining. During the war we found out that there were large numbers of articles which we did not manufacture at home and which we were buying abroad. We had to do without them until we were able to manufacture them for ourselves.
In the Dominion of Canada in 1920 34,000 manufacturing concerns were making in all 8,445 different articles of manufacture. In 1917, we produced 6,257 different articles, so that there was an increase of 25 per cent in those three years, directly resulting from increased activities due to the war as well as to the desire on the part of outside people to get into our markets. In 1917, 6,500 different firms were doing business in Canada, whereas in 1920 there were 8,500, an increase of 2,000, or 25 per
cent. Each of these firms controlled about four different manufacturing establishments, showing the tendency on the part of various firms to branch out on account of the great extent of this country.
I wish to draw the attention of the House for a few moments to a comparison between these countries, Great Britain, the United States and Canada, as regards trade. In 1919-I am taking the year 1919, because it was the last year for which I could find any adequate returns-the total British trade amounted to $12,600,000,000, or a per capita trade of $380 for a population of about 46,000,000. Her imports for that year were $7,912,000,000, or $175 per capita, large, comparatively speaking; but when we examine her exports for the same year. In 1919, she exported $4,687,000,000 worth of goods, equal to about $93 per capita of her population, as compared with per capita imports of $175, or 59.25 per cent of imports. During the same year, the customs collections were approximately $720,000,000, or $16 per capita. In 191920, Great Britain imported $100 worth of goods for every $59.25 worth of goods that she exported; the balance of trade being so strongly against her in the world's market, she must pay the difference in gold, or her money will be below par. I do not know how any country can continue to do business on the basis on which England does it, always buying more than she sells. There is an explanation for that with regard to England; but I doubt very much if Canada can do the same thing and remain solvent. No private individual, no industrial concern could do business on the same basis, and remain solvent.
In the same year Canada had a total production of $4,993,000,000, or a per capita production of $587.50 for our people. This was made up of the two great branches of production, agriculture and industry, the amount as regards agriculture being $2,251,000,000, and as regards industry, $2,742,000,000, the two sources of production breaking almost even in the race. The greater part of this huge production was consumed in the country. According to trade returns, our total exports for 1919 amounted to $1,268,000,000, that is, the exports were almost exactly 25 per cent of the total production of the entire country. This leaves about 75 per cent of the production of this Dominion, in relation to agriculture and to our manufacturing industries, consumed in this country. This certainly is a good argument in favour of the home market and of our pro-

The Budget-Mr. Anderson
tecting that home market, not only for the agricultural producer, but for the industrial producer as well. Our exports amounted to $149 per capita, and our imports to $108 per capita. The total external trade was $257 per capita of the population. While we exported 25 per cent of our total production, we imported 181 per cent of our total production, so that in reality the Canadian market could consume over 90 per cent of the total production of this Dominion if we catered to it in every way. This shows again that the home market is the best market which the people of this country can have.
In the United States, I took the year 1921, as that was the only year for which I could find complete returns. The United States in 1921 produced, on the farm, supplies of all kinds amounting to $8,420,000,000. This, I found from a statement by the Department of Commerce quoted in the World Almanac for the year 1922, at page 693. I was disposed to question that. I thought the agricultural production of the United States would probably be larger. I looked this up very carefully, and those are the exact figures stated. It was stated that they were taken from the Department of Commerce of the United States. The estimated population of the United States is 107,000,000 people. The industrial production of that country in the same year amounted to $24,624,000,000. That, added to the agricultural production, gives a grand total of $32,500,000,000 which is, roughly speaking, a production of $303.75 per capita, as compared with $587.50, the per capita production of Canada. Out of this total production of $32,500,000,000, $7,250,000,000 was exported, or approximately 221 per cent of their total production. Thus, roughly speaking, 771 per cent of the total production of farm and factory of the United States was consumed in that country. No other argument, I should say, was needed to show the people of this country and of the United States the necessity of protecting the home market. That is the market which is nearest to them, most accessible, and they know how best to cater to it. The same thing applies to the Dominion of Canada. The total imports of the United States for 1921 amounted to $3,090,000,000, or a little less than 50 per cent of their exports. But when you compare that with their total production, it amopnts to 9i per cent, so that 107,000,000 people purchase only 9i per cent of their total needs from the outside world. You can easily see from this
[Mr. Anderson. 1
how very much self-contained they are. They can live almost within themselves and feel that they do not need to take any particular part in the disputes of Europe. They stand alone, and it will be very interesting for the people of this country to watch our neighbouring republic and see how they can get along with a total exclusion policy. The total external trade of the United States amounted in 1920 to $111 per capita while their exports amounted to $73 per capita, and their imports to $28 per capita.
For the sake of comparison, we will look at the trade of these three Englishspeaking countries that are doing business on a different basis: England as a free trade country, using the tariff for revenue purposes only; the United States as a highly protected country, and Canada as a country of moderate protection. The comparison shows that England leads in the general volume of trade and does much more business with the outside world than either of the other two in proportion to population. But she buys $100 worth of goods, while she sells only $59 worth in the world's market, having a reverse balance of $41 against her. The United States reverses this order very heavily. She buys only $42.83 worth of goods, while she sells $100 worth, thus having a surplus balance in her favour of $57.17. Canada has a medium position, selling $100 worth of goods, while buying $72.50 worth, thus having a surplus balance of $27.50 in the world's market. These figures with regard to Canada and Great Britain are for 1919, but with regard to the United States, they are for 1921. Canada, then, has a per capita production of $587.50, the United States $303.75. The per capita trade in the world's market is as follows: The United States, $96.40; Canada $257; and England $302.20. That shows the varying bases on which these three different countries compete in the world's markets. England maintains her position largely because she is a world carrier and is able to make up her deficits by the moneys earned in carrying exports from and imports into the country.
I do not think it is too sweeping a statement to say that the difficulties facing the Minister of Finance (Mr. Fielding) are largely due to the war. If you could eliminate our war debt and the deficits resulting from the operation of the Canadian National railways, the Minister of Finance would have a very easy task to perform in connection with our financial

The Budget-Mr. Anderson
situation. The hon. gentleman, when speaking on the budget last year, said in this House:
In all that is necessary, as arising from the war, we desire to share with hon. gentlemen opposite the honour and responsibility of the occasion.
In these generous words he exonerated the late government from any blame in connection with the great war debt we have to-day. I do not think he could have done otherwise, since the late government had a record that has not been excelled by any other government in this country. They had to hew out for themselves a new path and follow an unknown course; they were compelled to face difficulties that were never before contemplated; and they showed great ability in meeting those difficulties and making revenue and expenditure meet. It was a very strenuous time and the government succeeded in discharging their obligations in a way no other government had done before. '
There is only one way we can meet our debt, and that is by proper economy, making annual revenue meet expenditure. We must not go further into debt. I do not think there is any class of people in this country who object to paying our war debt. The only person I heard suggesting a repudiation of the debt was the hon. member for Winnipeg Centre ( Mr. Woods-worth), who sits to the extreme left. I believe he made some remark to that effect the other day. But that view is not shared in by very many people of this country. Canada is a very wealthy country and we ought to be able to meet our obligations. It would be very much better if the same attitude were taken by Germany, and they went to work to meet their reparation payments instead of trying to evade their responsibility in this regard. I have sympathy with France in the position she takes in demanding these payments. The French people will not forget the treatment that was meted out to them in 1870 by Germany, when France was compelled to pay to the last cent. That fact will rankle in the mind of every Frenchman, and I sympathize with the French people in their demand that Germany shall pay on this occasion.
In relation to our debt and annual expenditure the Government has three definite duties to perform. First, they must practice economy in the annual expenditures. I think that economies could well be practised particularly in connection with the Civil Service, and I am not 'advocating that the civil servants shall be paid less. I believe, with the member for Sherbrooke (Mr. McCrea), that the Civil Service is very much over-manned. We could do with fewer civil servants, and those that are employed could work longer hours each day. In that way we should have more efficiency. It would be better for the civil servants to pay them more and make it worth their while to stay in the service. They could then be required to work longer hours, thus making their effort to help the government economise. I think that certain savings could have been effected in the estimates brought down this year in other directions than those in which the Government has economised. I do not think it is wise to pare down the estimates to the lowest possible figure, because that can very easily be false economy. The best economy is to get the utmost that is possible for the money you spend. I was not in favour of the reduction of $700,000 in the militia estimates, and I was sorry to see that the Minister of Militia (Mr. Graham) was compelled to submit to the importunities of hon. members on his own side. I compliment him on his ability to about-face at the command of his subaltern from Quebec South. It was certainly a manoeuvre that the hon. gentleman did not learn in any British army, to turn his back so adroitly in the face of the enemy. I regret also that the naval estimates were cut down a million dollars. They were small as they were, and it was a great mistake to reduce them, because we ought to have a small navy in Canada. In 1908 or 1909, when the naval debate was in progress in this House, under the leadership of Sir Wilfrid Laurier, the Toronto Star sent out telegrams to all the leaders of the municipalities in Ontario 'asking their opinion on the naval issue. Replies were received, the great majority of which were to the effect that the Dominion of Canada should have a small fleet as the nucleus of a navy that could in future be sent to the relief of England in time of emergency. That was the proper policy to follow, and it is regrettable that the government has now receded therefrom and practically scrapped the navy. The naval cadets in Canada are very much displeased and disappointed as a result of the reduction in the estimates, because they will have to change the plans they had made for the present year. .It was scarcely fair to them to bring the matter

The Budget-Mr. Anderson

down at the last moment and now compel them to alter the arrangements which they have made.
There is another way in which the Government can help matters, and that is hy assisting to give an equality of opportunity to all. In the matter of taxation no preference should be shown, and every man should share the responsibility of the national debt. Every individual citizen gets the benefit of the protection that is afforded by our laws, and he has a corresponding duty to the state which he should discharge. The Government can do much in seeing that every citizen has an equality of opportunity to obtain the means whereby he may provide himself with the necessaries of life and pay his fair share towards the revenues of the country. Another duty which devolves upon the Government and which the Minister of Finance takes cognizance of in the budget, is to extract from the pockets of the people, in the most equitable manner and to the fullest extent possible, the money that is required to meet our annual expenditures. This is a matter of some difficulty, and I believe that the minister has approached the question with considerable care.
The railway question has been referred to by various hon. members in the course of the debate, and I may say at once that I am in favour of the national ownership of railways. Those railways were taken over by the government, not because the government wished to, hut because they were compelled to by the circumstances. I believe it is possible to conduct our National Railways as efficiently under public ownership as under private ownership, and I think it would be a national calamity if all our railroads were under one private company. Such a monopoly would not be in the interests of the country generally. I have a great respect and admiration for the management of the Canadian Pacific Railway, which is one of the most efficient transportation companies in the world, but I think it is absolutely essential that our National railway system should remain under public ownership. The Canadian Pacific Railway will [ be a stimulus to the management of our National system to get their fair share of traffic, and it is gratifying to know that last year they secured 54 per cent. After listening to hon. members of the Government and their supporters, it would not appear to me

that the National Railways will receive a fair and just trial at their hands. When hon. members opposite are so outspoken in their opposition to public ownership in principle, it is not likely that they will make any very enthusiastic efforts to insure the successful operation of our National railway system.
With respect to immigration, I am of opinion that as far as possible we should seek immigrants from the British Isles, northern Europe, Holland and France. But I should like to see a very strict medical examination enforced either at the port of entry or the port of embarkation, for it is absolutely essential that newcomers should be medically and physically sound. From the discussion on the estimates of the Departments of Immigration and Health, I formed the conclusion that there is not a sufficiently strict inspection of immigrants from the United States. Undesirables may seek entry from the United States, and we should have a better system of medical examination. The United States authorities are ahead of us in this respect and frequently 'Canadians crossing the border are held up under slight pretexts, not so much in regard to their physical qualifications as their financial position.
The abolition of the dumping clause will prejudicially affect a large number of fruit and vegetable growers in Ontario extending along the shores of lake Ontario from Belleville to Niagara Falls, as well as those along the shores of lake Erie, who in the aggregate have a very large amount of capital invested in the enterprise. The American fruit-I am speaking particularly of the small fruits-is shipped in here two or three weeks ahead bf our domestic fruit and secures the cream of the prices, and by the time our fruit is coming on the market the American growers will have a large surplus on their hands, which they are ready to dispose of at any price, thereby depressing the domestic market for our local growers. The same conditions apply to vegetables. In the county of Halton alone there are five or six thousand people interested in fruit and vegetable growing, and altogether we have about forty thousand people in the province who are interested in this industry. It is scarcely fair to leave them open to the bad results following from the dumping of American fruit and vegetables on our market at a time when the domestic production is being offered for sale. As stated by the hon. member for Yale (Mr. MacKelvie), the fruit

The Budget-Mr. Raymond
and vegetable growers of British Columbia will also be adversely affected. In view of these facts, I think the Government would be wise to consider this matter further, and I trust it will result in their deciding not to repeal the dumping clause.
The excise tax of 49 cents per 100 pounds on beet sugar will affect a large number of our farmers who are engaged in growing sugar beets,
5 p.m. and in this case also I think the Government would be well advised not to place our farmers at such a disadvantage. I presume the matter was very carefully considered, but I hope it will receive further consideration.
With regard to the amendment, Mr. Speaker, it seems to me that honesty and sincerity should characterize the undertakings of political parties. This is essential if our public life is to be kept at a high standard. The Liberal party has not been too particular in this regard either during the last campaign or in preceding campaigns. Candidates of that party made promises prior to the election which they knew there was absolutely no possibility of their redeeming. For instance, they promised that if their party was returned to power they would reduce the cost of living by reducing the duties on imported articles. But what has the Government done? While slight tariff reductions have been made, the increase in the sales tax will result in the cost of living being more burdensome than before. In a word, the Liberal party have secured office under what amounts practically to false pretences. This is not a desirable condition in our public life, and for that reason I shall support the amendment.
Mr. WILLIAM G. RAYMOND (Brantford) : Mr. Speaker, as representing a constituency which perhaps is more affected by the tariff than almost any other constituency, I thought it desirable that I should say a few words upon the tariff as it appears to the workers in the industries at Brantford.
There are, of course, many views upon the tariff. Any one who has listened to the debate, so far must have noticed that all kinds of opinions are held by hon. members. In fact, one hon. member, I think from Fort William (Mr. Manion), did me the honour to allude to me in what I thought was intended to be the language of compliment-it might have been called flattery-when he said that I was a Liberal Protectionist. Now, I have no objection to
the term if translated in the way that I would translate it. I do not know exactly what the hon. gentleman meant, but I would remind him that a countryman of his own once said "There is many a true word spoken in jest." I think from the point of view from which we regard protection, that is to say, of a tariff for revenue with incidental protection, not by any means a tariff for revenue only-


Some hon. MEMBERS:: Oh, oh.


Mr. RAYMOND:: What is the objection? A tariff for revenue with incidental protection-


Some hon. MEMBERS:: Oh, oh.


William Gawtress Raymond: I should think that was easily understood.


An hon. MEMBER:: Very easily.


William Gawtress Raymond: I am glad that some hon. gentlemen are so easily amused, Mr. Speaker. While we may differ on the tariff, while there are points, I think, upon which we can all agree. Every man who was elected to this House, I fancy would claim to be, and I think his constituents must have thought he was, at least a good Canadian, one who loved Canada; and those who love Canada must certainly honour those who serve Canada well and unselfishly, and do her good service. In that sense I believe it is the general opinion of this House that there is no better example among men of Canada, and we have many who have done great service to our country through a term of many years, than we have in the hon. the Minister of Finance (Mr. Fielding). I believe that on that the members of this House can all unite and be unanimous in congratulating him, and I believe they will agree that this budget that he has presented to the House is one that was produced under the most difficult circumstances. I believe that the people of this country look upon the hon. Minister of Finance as a wise administrator, as a true patriot, as an honest man, and an honest man, the poet has told us, is the noblest work of God. The hon. Minister of Finance is a man who has "talked with crowds and kept his virtue" and "walked with kings, nor lost the common touch". He is one whose name will be handed down with satisfaction and pride. I believe that his last achievement is one of which the country generally will feel that it is probably the very best that could be done under difficult circumstances.
The Budget-Mr. Raymond

There is one disappointment that I have, however, in this debate and it is this, that the amendment in the form in which it was moved, instead of expressing some sound or unsound economic principle, does not express any at all. It simply derogates the whole debate and draws it down to the field of mere party politics. Anyone who read the amendment introduced by the hon. member for West York (Sir Henry Drayton) will see at once that that is the object of it, the aim and the end of it-to open up a discussion that will go back to the last election; and I notice that the speeches of many members who have followed it are purely what might be called political speeches, instead of being on the broader field of patriotism, upon our national difficulties, upon our national aims and aspirations. I cannot believe that a man with the great wisdom of the ex-Minister of Finance (Sir Henry Drayton) and one who was concerned so intimately as he was with this country's financial affairs, could by himself have framed such an amendment. I believe it was thrust upon him,
I do not think it was voluntary on his part.
I think in the amendment we can see another form; we can see it has been suggested, it has been dictated, it has probably been written for him and placed in his hand to move, and he has moved it because he is under the discipline of his masterful leader the right hon. member for Grenville ( Mr Meighen).
While I regret that the debate, as I say, has been drawn down to the field of party politics by the moving of this amendment,
I do not think it is necessary to follow the amendment, because in doing that we are only going back to the argument, backwards and forwards, that were used during the last election. We have other issues before us. We have to consider how the budget proposals will affect, first, our constituencies, and then in a broader sense, how they will affect the country. That is, we should look at this budget both as representing our ridings, and in a general sense as Canadians. I endeavour, for my part, to regard it in that way, and I endeavour to represent the constituency that elected me. The members of this House are not automatons, nor are we delegates, but representatives, and we have to the best of our ability to speak opinions, not always our personal ones, but those of ourselves and our constituents. The very derivation of the name of this assembly is by many etymologists thought to be from the words "Parler le ment"-to speak the 
mind-and if we openly and plainly speak our minds, I think we shall produce better results than if we sail under any false colours or resort to any camouflage.
This House was told by an hon. member that I had out-priested the high priest of protection. That may b-' true. The returning officer said it was. While it is a fantastic and paradoxical phrase. I presume possibly it is meant for a reproof. If so, we can recall instances of where even priests and prophets were reproved. Balaam was reproved; we all remember that, and I believe in this case the reprover out-brayed the rebuker of Balaam. When I am called a Liberal protectionist, if that is what I understand it to mean, namely to desire a reasonable, rational revenue tariff on industrial products, the manufacturers of this country, I must acknowledge to being a protectionist, whatever odium the word may bear in some men's minds. But I claim that that has always been the policy of the Liberal party- always. If you go back to Confederation when the tariff was made by a coalition government, the first tariff we had was a matter of some (15 per cent, and the first time that tariff was raised, it was raised by the Alexander Mackenzie government, who were accused of being protectionist by the Conservatives of that time. The Liberals did not reduce the tariff when they came (into power; they raised it because of the necessities of the country. Then, when they came back in 1896 the same thing happened. They maintained a certain amount of protection, but the present Minister of Finance so skilfully readjusted the taxes on raw material that the commerce of this country grew by leaps and bounds, and our population increased, as was proved to the House this afternoon. So free trade has never been a part of the Liberal party, neither in theory nor in practice, and I do not think any one expected that it would be. It is well known in the older settled parts of Canada that the factories existing there are dependent on a certain amount of reasonable protection that is afforded by a revenue tariff for their existence, and while that is felt it is not likely that the Liberal party would ever announce that it was going to renounce that policy which has so long been the accepted policy of Canada. Hon. gentlemen opposite are always endeavouring to say that the aim of the Liberal party is free trade, or, as they put it sometimes,

The Budget-Mr. Raymond.
free trade as they have it in England. If they could ever prove that that was the object of the Liberal party, they know then that the policy of the Liberal party would not be popular with the people of Canada, and that is why they wish to foist upon them a policy which is not theirs, which does not belong to them, and which, when in power, they never put into practice.
Now I am not going into the details of the present tariff, there will be plenty of time for that when the House is in committee, if it is desirable; but on its general principles I will just say this. What affects my constituency is the removal of the two and a half per cent from agricultural implements-from ploughs, binders, cultivators and the various implements that are used upon the farm. Why should I feel so keenly when, perhaps, it appears to some gentleman hut a small matter? The reason is this:	our city is dependent upon the
agricultural industry, upon the manufacturing of agricultural implements. When there are no agricultural implements making, our people are idle and the families are starving. At least, one-half of the employees in the city of Brantford are employed in factories that make these goods, and that half contains among it by far the larger number of the heads of families and householders in the community. When there is no manufacturing of agricultural implements, those people have no work, actually it creates a situation of starvation. The city has had to spend thousands and thousands of dollars during the last year or year and a half when this employment has been very precarious; now it has ceased in many of the factories altogether. In view of these facts when these implement manufacturers


Mr. GARLAND (Bow River) :: May I
ask a question?


William Gawtress Raymond: Certainly.


Some hon. MEMBERS:: Louder.


William Gawtress Raymond: It isn't private, is it?


Edward Joseph Garland: The hon. gentleman made a statement that'in several of the agricultural implement factories the work had ceased altogether.


William Gawtress Raymond: Yes, sir.


Edward Joseph Garland: Would
the hon. gentleman have any objection to telling us reasons why that work has ceased?


William Gawtress Raymond: The reason the work
has ceased is because the goods are manufactured, all the warehouses are filled, and until those goods are disposed of the factories naturally will make no more.


Mr. BRETHEN:: May I ask a question?


William Gawtress Raymond: Certainly.


George Arthur Brethen: My hon. friend has
just made the statement that the prosperity of his constituency depended upon the implement manufacturers. Does it not depend upon the ability of the farmer to buy those goods in the manufacturers' warehouses?


William Gawtress Raymond: That is just what I
said. You and I agree, evidently, very well.


Mr. SALES:: May I ask a question?


William Gawtress Raymond: Certainly.


Thomas Sales: Have all your factories been closed?


William Gawtress Raymond: I believe so. I believe every one of them has been with this exception: I do not think the Windmill has actually shut right down.


Thomas Sales: The twine factory has not closed down?


William Gawtress Raymond: Not the twine factory.


Thomas Sales: I believe the twine factory operates under free trade?


William Gawtress Raymond: Yes, it does.


Thomas Sales: Thank you.


William Gawtress Raymond: Naturally, the twine
factory operates under free trade, hut I doubt whether the hon. gentleman understands the situation, although it was explained in the House a few weeks ago. There were twenty- four hinder twine factories working against one another and keeping down the price of binder twine for the farmers in Canada; they were all in competition. However, when the duty was taken off these were all put out of business but three, so there was no competition amongst our Canadian factories, -that ceased. The industry was then in the hands of the American combine, and when they got these factories out of the business they raised the price to the farmers and you have to pay more for your binder twine than you would have if the factories alluded to had stayed in the country. That is the actual fact, and every

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Mr. Raymond
farmer knows it just as well as I know it. There are no other binder twine factories except, I think, this one in Brantford, and one in Welland. The farmers also know that the price of binder twine is fixed by the combine in the United States; and if ever it happens that they have a surplus of binder twine they could possibly put these factories, too, out of business. But the danger the farmers are in is this: if they have a shortage of binder twine in the United States and there is a shortage of binder twine also in Canada the farmers here will not be able to get it because there are not enough factories in this country to meet the demand.


Thomas Sales: What about Ireland?


William Gawtress Raymond: You might get some from Ireland. Now, although I am delighted to answer questions-


Mr. STEWART (Leeds) :: May I ask a question?


William Gawtress Raymond: Certainly.


Hugh Alexander Stewart: Does the factory in Brantford which makes binder twine confine its activities to that product?


William Gawtress Raymond: Well, it makes some kind of rough rope too. I think it is also engaged in the manufacture of something like clothesline but binder twine is the article principally manufactured. It is a very successful factory; it makes twine of the finest quality, but it does not help to make more than, I think, about two-fifths of the needed supply. Hon. gentlemen opposite will correct me if I am wrong, but I think all the factories in Canada make about two-fifths of what we need; and you can see in a moment that if they have a shortage in the United States, through a good crop, and if we are likely to have a shortage from the same cause, the combine over there will not send their binder twine to us-they will use it in their own country. Now had we had the establishments which existed before, we would have had our own binder twine factories; they would have kept the price down, because, Sir, they would have been working against one another. I mention this industry of binder twine at the present time because, I say, the industries that supply the basic industries of the country are the most important that we have, consequently, they should be nursed
{Mr. Raymond.]
and kept in Canada to develop and supply what we are pleased to call the more basic industries.


Mr. WARNER:: May I ask a question?


William Gawtress Raymond: Certainly.


Daniel Webster Warner: Do you know of any of the United States companies that came over to Canada and manufactured on this side in order to dodge the tariff?


William Gawtress Raymond: No, I do not. Do you? As I was about to say-I will make another attempt at it-the binder twine industry brings us close to the argument I will present in a little while on basic industries. Now, two and a half per cent off these ploughs, cultivators, and implements of that kind, may seem to be a very small amount, it does not seem to some to be an appreciable figure; but when you remember that, for instance, on a binder the duty on which was originally only twelve and a half per cent, that two and a half per cent off is 20 per cent of the protection it had, you will see that it forms a considerable amount. Remember too, that these implements made to supply the Canadian m'arket are made at the closest possible cost, but they were exported from Canada to certain countries in competition with the world. That trade has now been cut off; we have now nothing but the Canadian trade to depend upon. The condition of the money market in some countries, and the unsettled conditions in others, such as .Russia, have made exports almost impossible-I think absolutely impossible. Take another cause of difficulty. There was one factory in our city, twenty-five per cent of whose output, I believe, went to Australia. That country has seen fit to put a prohibitory duty on implements and the factory in question, which employed 1,500 hands in Brantford, is to-day absolutely closed. Moreover, that firm is considering the advisability, instead of reopening their Brantford plant, of removing to Australia and establishing a branch factory there. Now, these are things that are serious, I take it, not only to Brantford, not only to the constituency that I represent, tout very serious to Canada. If you 'are going to drive manufacturers out of Canada, or going to have them reduced to the lowest possible minimum, it would depreciate the value of farm lands and the value of farm produce in all these vicinities, and it would bring us down to where we should be only work-

The Budget-Mr. Raymond
ing to the one end, and that one end would be the development of agriculture. I doubt if this is advisable. I do not know if hon. members of the Progressive party really consider it advisable. From their arguments in this House, you would think sometimes they did but sometimes you would think they took a little broader view.	Hon. members may think I
am	talking	for the interests of
Brantford and Brantford alone, but our business takes us over the whole of Canada from the Atlantic to the Pacific. The farmers are the customers for our manufactures. They esteem us as their friend, and we are all working for the one end, namely the success and prosperity of Canada.
On the other hand, some of the agriculturists who live upon the prairies seem to think that whatever they want to use should come in absolutely free of duty, because agriculture is represented as a basic industry. I would ask those hon. members to consider the situation a little more carefully. What would have become of this country if the early farmers had taken that ground ? What would become of any country devoted only to agriculture? We are told that there are four basic industries, agriculture, lumbering, mining and fishing, and that what applies to one applies to another. What country on the face of the earth to-day that is dependent upon one of these four basic industries has amounted to anything? We are told that they produce the wealth, and that the wealth must come from the ground. What country in the world that amounts to anything has prospered from those industries alone? I do not think it is possible. I have ransacked my brain, and I cannot find it. I do not believe there is a country on the face of the earth to-day that dependent on those industries or other industries of a like nature that has taken a forward place in the march of civilization. Why is it? It is because the whole statement is a fallacy. It is said that all the wealth comes from the ground. That was true, perhaps, in the days of Adam and Eve picking fruit in the Garden of Eden, and might have been true of other generations after. But, take the case of a ton of iron ore produced in a mine. When it is converted into steel, it becomes much more valuable, and when it is converted into other branches of technical industry it is much more valuable. When it is made into razor blades, watch springs or needles, it is further enhanced in value. What has made it valuable?
Human skill and jabour has increased the value of that article. It is a mistake to tell us that all the wealth comes from the ground. Of course, we are willing to acknowledge that some wealth comes from the ground. I have referred to iron and steel, but you can take anything you like and you will find the principle is the same, but when speaking to men of the intelligence of the hon. member opposite, it is not necessary to multiply examples.
In the countries in the world of wealth, progress and intellectual development, which have gone forward in the march of civilization, you will find that while such industries may exist, to a certain extent, they have been able to take the raw material from the ground, or from the mine, and to manufacture that raw material into something better, and by increasing its value have increased their wealth. There is a little country in Europe where there cannot be much agriculture: Switzerland has its share of agriculture, of course, but it is certain that if they had to live upon the agriculture and agricultural products, they would have to deport more than half of their population to-day. Then, why is it that Switzerland is such a wealthy country and that the people live there in such comfort? It is because they are applying human skill and labour to the raw material that is produced in other countries. The same thing is true of little Belgium, of Holland, and of our own Mother Country. It is not what Britain grows or produces out of her soil that makes her prosperous, but it is the skill and labour that she puts upon it. She turns these products into the cutlery that holds the market of the world; she gets raw cotton from Egypt and from the southern states, and, after applying skill and labour to it, sends it all over the world. Would you compare the condition of those people in Manchester and similar districts with the condition of the negroes of the southern states, who produce the raw material? It would be absurd. And yet the logical thing according to the arguments of those members, is that this country should become a producer of raw materials, that we should look upon our basic industries, agriculture, mining, lumbering and fishing as the only thing, that the industries and energies of this country should be exclusively devoted to them, and that nothing more should be produced than is produced from them. It would reduce us to the position of Gideon-ites, and we would soon be hewers of wood and drawers of water.

The Budget-Mr. Raymond


An hon. MEMBER:: Oh, oh.


William Gawtress Raymond: I hope the hon. member for South Grey (Miss Macphail) does not have to hew very much wood. I thought I caught a gentle voice-


Mr. McMASTER:: Is the hon. member not aware that Switzerland, Belgium, Holland and Great Britain are free trade countries, or very low tariff countries?


William Gawtress Raymond: 
Andrew Ross McMaster: Are they not free trade countries, or countries in which a very low tariff is in force?


William Gawtress Raymond: None of them has a low tariff. Holland has a high tariff, and Belgium and Switzerland-well, of course, it depends on what you call a high tariff and what you call a low tariff.


Daniel Webster Warner: Can the hon. member tell us how the tariff will help the farmer to buy the implements that are piled up in his town of Brantford?


William Gawtress Raymond: How will it help the manufacturer who has those implements piled up there to sell them by taking 2i per cent off the duty?


Daniel Webster Warner: Is the hon. member asking me the question?


William Gawtress Raymond: How will it help him to sell what he has made up now by taking 21 per cent off the duty, when the United States' manufacturers have their establishments crowded from the cellar to the roof with these implements and are only waiting for a chance to send them to Canada where they can sell them for anything? The hon. member cannot get away from the fact. The hon. member is more clever at argument than I am, but it is the facts we want.


Daniel Webster Warner: I could not hear the hon. member, and I do not know whether he asked me the question or not. I do not think 21 per cent would make much difference one way or the other.


William Gawtress Raymond: 
Mr. BROWN:: Great Britain was trading with the world.


William Gawtress Raymond: She was trading with the world. She got the raw material from various countries in which it was produced, countries like Russia, Sweden, Norway and the like, and she manufactured that and exported it, because there was a market for it in the world. That was what made the trade of that country. Had the British people restricted themselves to farming-and the Old Country people take the lead to-day in agriculture; I believe, at all events, we import all our best breeds of horses, cattle and swine from that little island yet-had they restricted themselves to the production of agricultural products, to the production of coal, of 'ore and so forth, where would they have been? Instead of that, they have a trade that employs skilled labour, a trade by which that skil'led labour is of value to the world at large. The policy which we want in Canada is one that will protect the skilled labourer, one that will protect labour, because it is labour that makes those products valuable. It is plain enough to me, and I think it ought to be plain enough to any man, that it is the labour that is put into an article that makes it valuable. Allusion was made to the first tariff that was put on in the United States in 1864 or 1865, during the
Civil War. That tariff was established on the basis that there should be a slight minimum tariff on all articles coming into the country; that as labour was applied to each article, the tariff should increase by gradual steps, so that the more highly skilled the labour used on the article, the greater would be the protection upon it. That is how the United States were able to develop the manufactures that they have developed. That is why the United States afterwards became, to a great extent, an exporting country. I do not claim for one moment that we should put up, as they did, a Chinese wall that would keep everything out of the country. In many instances, they made importation almost impossible. I do not believe in that; but I maintain that we should have a reasonable revenue tariff that will be levied upon all goods coming into this country. I will not say for revenue only, because then some hon. gentlemen will say that they want an excise tax. But I say a reasonable revenue tariff that should be equal and fair, as far as possible, to all the different lines of manufacture, and that would give incidental protection to those who are engaged in industry. I do not think capital needs protection so much as it needs the safety of law, so that property should be absolutely safe. That is an essential to the success of any country, and it may be taken for granted. Capital is an elusive thing; it can generally take care of itself. The tariff is not, to my idea, for the protection so much of Capital as of labour, of our mechanics and the men who do the work in the factories. As regards the sensitiveness of capital, we were all told early in life that "The fear of the Lord is the beginning of wisdom"; but I believe the financiers translate that differently, and they say: "The fear of loss is the beginning of wisdom." Therefore, capital, with that end in view, the fear of loss, is always able to look after itself. If it finds that the laws of this country are ag'ainst it, that it is not beneficial to invest it in the industries of this country, but that it is beneficial to invest it in the industries of the United States, you may be sure that it will go to the United States. I am speaking, not for capital, but for the labourers, the working men, the skilled mechanics, who go to make up and build up a great country. If you look at the matter calmly, you will agree with me that the whole of Canada is not only the three prairie provinces any more than it is only the constituency which I represent. If we could get together and see these things
The Budget-Mr. Raymond

properly with the right idea of building up a nation, if we could build up a nation according to our own ideals and aspirations, every member of this House would join cheerfully in the work. But the thing for us to do is to get together on this idea, and then we must carry on with an open miind. When I am told that I am a Liberal Protectionist or a Protectionist Liberal, if you translate "protection" as I translate it, I may take it as a compliment, or flattery, or anything you like, but it, perhaps, does not carry all the sting that the hon. gentleman who used the expression intended it to convey. I am one who would like to see this country developed upon those lines that I have mentioned. I should like to see progress made, and I do not think the theory of protection is altogether unknown to hon. members of the Progressive party. If, for instance, they suggested a tariff on oleomargarine I would have voted for it. But they were not satisfied with that. They wanted to make it absolutely prohibitive; it was their view to prohibit its manufacture or importation, and I could not go that far. I would have voted for reasonable protection, but that was going too far.


Thomas Alexander Crerar: If the hon. member
throws his mind back to the evening on which that vote was taken he will find that the Progressives, practically unanimously, opposed the resolution.


William Gawtress Raymond: I am very glad to
hear it. I know that as I journeyed on the train west one man I heard arguing most strongly against it was a Progressive.


Thomas Alexander Crerar: One, yes.


William Gawtress Raymond: Those who voted in favour of the resolution were certainly arguing for the strongest kind of protection.


Mr. MARTELL:: I voted in this House to prohibit the importation, manufacture and sale of oleomargarine in Canada. I am not a protectionist.


William Gawtress Raymond: Are you not, sir?


Lewis Herbert Martell: So long as there is a tariff on anything that competes against the products of the dairymen, the dairymen have a right to be protected. If you are going to have free trade, then pull down the tariffs altogether and let everything be unprotected.


William Gawtress Raymond: Perhaps I may refer to another article that receives a certain amount of protection. I mention these little things merely to show that protection is something that may be found on either side of the garden wall. I fancy that the Wheat Board was not altogether a free trade measure, was it?


Some hon. MEMBERS:: Oh, oh.


Ernest Lapointe: He is right there.


William Gawtress Raymond: I listened to a most interesting argument that was delivered by one of the witnesses who testified before the Committee on Agriculture. He said that the Wheat Board would increase the purchasing power of the farmer of the West, and if the purchasing power of that farmer were increased it would benefit all the rest of the provinces. The farmer of the West would want more fruit, fish and lumber from British Columbia, more manufactured goods from (Ontario, and from the maritime provinces he would want, for instance, more steel from Nova Scotia. I daresay hon. gentlemen all recall the argument; it was a very interesting one and I listened quite attentively to it. The witness said that every man who farmed a half-section had from 12,000 to 15,000 pounds of steel and iron in use, the average life of the implements being twelve years. So that every man on every 320 acres in the West would be a consumer of no less than 1,000 pounds of iron and steel per annum; and that was cited as one reason why the Wheat Board would benefit Nova Scotia. Now, if that is the case, I should like to ask hon. gentlemen, if these goods were purchased in the United States, having been manufactured in Milwaukee, Chicago and other centres, how would Nova Scotia be benefited at all?
We should aim at producing a rounded out nation; and if hon. gentlemen think that the three prairie provinces constitute the whole of Canada, their ideas are just as erroneous as mine would be if I suggested that my constituency represented the Dominion. The best policy for Canada is to look to the future and build up a nation that will develop an attractive place for people to come to-a country that will not be devoted exclusively to any industry, or any particular line of business, and, especially, one that will not be merely a producer of raw material for shipment to other countries. We should have a country in which skilled labour

The Budget-Mr. Raymond
can produce the things that are needed by the people, thus adding to the wealth of the nation. In the little town of Paisley, in Scotland, there are 12,000 operatives employed in the manufacture of ordinary cotton yarn used by ladies in sewing. Think of the conditions that exist in those places from which the raw material is secured. Think of the conditions in the southern states and in Egypt, where the raw cotton is produced, and you will see that wherever there is wealth and advancement in civilization it is because of the existence of skilled labour and an economic system that protects that labour until it is fully developed and becomes an asset to the country, and becoming so produces such other things as a mercantile marine, and a great banking system by which capital is invested all over the world. We have been told that Great Britain has $2,500,000,000 invested in Canada. Well, that money did not originate in agriculture, or lumbering, or fisheries, or mining, but in the manufacturing industries. And if Canada is to prosper as she should, the Canadian people must, in their wisdom, adopt such a policy. If it is to be a protectionist to hold such a view*, I am one, whether the term is meant as one of compliment or of opprobrium. If it is a protectionist to hold the view that we should have a revenue tariff giving incidental protection to manufacturers, I am certainly a protectionist; and as to being a Liberal protectionist, sitting on this side of the House, holding such a view, and supporting the Government that has removed from the manufacturers 21 per cent of the protection they have enjoyed, there are strong reasons that are as deep as my very being why I could not be anything else.


Mr. NEILL:: How did the hon. member vote on the oleomargarine resolution?


William Gawtress Raymond: As I said just now, if it had been for a duty on oleomargarine as against the article made in Chicago I would have voted for it. But I would not make it a crime for a man to make oleomargarine in Canada or to import it, and as I told one gentleman who spoke to me on the question, there are mechanics in our town who, during their long period of unemployment in the past year, had all they could do to keep their families without seeking charity, and they were obliged to buy oleomargarine, because they could not afford butter. If I went back to one
of these men who told me that he could not afford butter at 50 cents and therefore had to buy oleomargarine at 25 cents, he would naturally say to me: " Why did you vote for a law that took that substitute from my children's bread so that they have now to eat dry bread? Why did you do it? What answer could I make to such a query? I know that the hon. member (Mr. Neill) is a reasonable and rational man, and I ask him, how could I answer such a question? I simply could not. I would have voted for a duty, but not for the total prohibition of an article, thousands of tons of which were used in Great Britain as food during the war.


Alan Webster Neill: Does not that apply to binders also?


William Gawtress Raymond: Yes, I think so. I would not vote for the total exclusion of binders. I never favoured the total exclusion of binders, and I never said it should be a crime in this country to make them. But I do say that a reasonable protection on binders is only rational and proper and right in order that we may have them made at our door and not be under the control of an American combine that could charge what price they choose, if those machines were not made in this country. Now, key industries are absolutely necessary, and hon. gentlemen must realize that they should be kept up. Not only for their own sake as well as for the sake of the country, but from their own selfish standpoint, they should cherish those industries.


Mr. BLACK (South Huron) :: Will the hon. gentleman allow a question?


William Gawtress Raymond: Certainly-delighted.


George Black: You said a moment ago that with the duty taken off binder twine the manufacturers were all put out of business except three. How is it that the manufacturers of binders have all been put out of existence although the duty has been retained?


William Gawtress Raymond: They have not all been put out of business.


George Black: Just as many as in the other case.


William Gawtress Raymond: There is a very large concern in Hamilton called the International Harvester Company.

The Budget-Mr. Raymond


George Black: Only two binders are manufactured in Canada today against nine or ten twenty-five years ago.


William Gawtress Raymond: If you will allow me a moment since you raise the question. The International Harvester Company was started as a branch of McCormick's and Deering's, and the reason was that those two companies thought they would rather start a branch factory in Canada than pay duty on binders from their American factories. So they started this factory at Hamilton, whence they distribute binders all over Canada. That is now a Canadian industry, and if there had not been a duty on binders you would not have got that factory established at Hamilton.


George Black: Binders
were manufactured in Canada before that.


William Gawtress Raymond: Certainly, but not by the International Harvester Company. Binders were manufactured in
6 p.m. Brantford by the Massey-Harris Company and at Smith's Falls by the Frost & Wood Company. There are several other companies that make binders in Canada.


George Black: Just two -to-day manufacturing binders against ten manufacturers twenty-five years ago.


William Gawtress Raymond: We not only make binders in Canada but we export them. The question brings back to my mind my first association with the International Harvester Company. When the company was coming here from Chicago an effort was made to get them to locate their factory in Brantford, and I saw their representative as I happened to be a member of the city council at that time. They were going to start this branch in Canada, and this gentleman, who came from the McCormick company, said they were going to start a branch in Canada rather than pay the Canadian duty on their American product.
Now, Sir, does not that prove, or at all events, strengthen my argument that it is to your interest to have these factories at your command, to have them developed close to you, so that if those industries are the four basic industries, the industries from which they derive supplies, tools and employment should be close to them and dependent on them, and that we should endeavour to foster such industries rather than exotic industries which are not so immediately necessary to our people.
At six o'clock the House took recess.

After Recess
The House resumed at eight o'clock.


William Gawtress Raymond: Mr. Speaker, when
the House rose at six o'clock I was endeavouring to make plain my attitude towards the tariff and my constituency in occupying the place I do on this side of the House, and being, as it is termed, a Liberal protectionist.
I endeavoured to show that the position I held was not at all incompatible with the principles of the Liberal party, and that if to believe that a revenue tariff adjusted in such a way as to provide an incidental protection to the manufacturing industries of our country was to be a protectionist, I must acknowledge that in' that sense I am a protectionist, because I believe that is the best tariff. As I stated before six o'clock, the consistent attitude of the Liberal party has always been, when it was in office, to carry out that policy. I am aware that at election times gentlemen on the other side of the House have endeavoured to state that the only policy of the Liberal party was free trade, or, as they loved to put it, free trade as they have it in England, but I think I was successful in showing that that had never been the policy of the party, was not now, and is very much less likely to be the policy of the party in the future. I think that we have in the present tariff one that is in the general interests of this country, and if the manufacturers of agricultural implements in my constituency have to lose 2J per cent of protection, if that is in the general interests of Canada, as it must have been thought to be by the Finance Minister, I oelieve they are men who will cheerfully acquiesce in that tariff, though realizing it would have been better for their own business, if the old policy had been maintained. Why there should be anything incompatible in one holding such views being on this side of the House, or in being a Liberai, it is impossible for me to understand. I can only say in defence of my being a Liberal and being on this side of the House, that as I read history, and as I always have read it from my youth up, I have always inclined to the Liberal side of politics and to the principles that that party have held and have carried out.
I was very much surprised when I heard an hon. member who has charmed this House with his eloquence and inform-

The Budget-Mr. Raymond
ed it with his erudition, the hon. member for Centre Winnipeg (Mr. Woodsworth), say that as he read history he could see no difference between the two old parties.
I hope that as he reads it with added years he will see a vast difference between the principles of the two old parties, for as I read history I find on every page the principles, wherever there is action, of the one side or the other always at work. Not to mention what is trite and obvious, and well known to hon. members of this House, who are, of course, all readers of history -it is not necessary for me to recapitulate the gradual growth and development and building up of our freedom, of our liberties, and of this very assembly of the people, as a product of the growth and development of Liberal principles. If you go back to the earliest days and take those measures which have been for the good of the people at large and in the direction of good government, in which power has been made to feel its responsibilities and obligations to those over whom, it exercises control, I say that there you will see the growth and development of what I consider and call Liberal principles. If you take the other side-you need not go further than Magna Charta. Everyone knows who was the Tory on that occasion; they do not need to be told it was King John. If you come down further in our parliamentary development you will find it was the people of Liberal principles who rose and fought for the liberty of Parliament against the Stuarts, and in that long and bloody war achieved an independent place for the Commons of England such as they have never lost to this day. If you want to find the opposite principles, the principles of true Toryism, you find it when the thirteen colonies of the United States were forced away from Great Britain by the exercise of tyrannical power by George III and his Tory advisers. One can hardly read a page of history from earliest times down to the present day without seeing these principles clearly and plainly at work.
I will not weary the House but if you come to the emancipation of the slaves, if you come to the Catholic Reform Bill if you come to the Great Reform Bill when the franchise was given to the people, and so on right up to the present day, you will find that those who resisted those movements were those that believed in the
practise and exercise of what I call the principles of Toryism. In fact you have it right down to modern times, right down to our own days. Those were the principles that so actuated the Government of this country that after ten years experience of it, from 1911 to 1921, the free independent spirit of the people of Canada rose against it and in one form or another the people said they had had enough of it. On the other hand, if you take those things of which we as Britons, as Englishmen, have most justly to be proud I maintain it is where Liberialism has won victories, where we have gained constitutional liberty, and where such a system was established,-in which Canada took the foremost place, resulting in the institution of representative government in this country,

that we now have the free governing nations that now form the British Empire held together- sometimes they say by the spirit of loyalty. But it is not loyalty alone, gentlemen, in the case of those men who were driven from England by Tories and helped to establish the thirteen colonies in the country to the south. They were loyal, just as loyal as anybody else; but they were driven out because there was not such a system in which they could exercise what they considered their just freedom and their just liberty.
It is because of these things that have been accomplished, because we have autonomous nations within the Empire-self-respecting, self-governing, but united in forming the great galaxy of nations that we call the Empire-that I see the great triumph of Liberal principles and hence, Mr. Speaker, I feel that I should have no occasion to defend myself against the charge of being a Liberal. If I have, then the crime charged is one of which I have always been guilty in the past, and I fear I cannot, at my time of life, so change as to be innocent of it in the future. For it seems to me that those things of which we are most justly proud, those things of which we have the most right to boast of in the achievements of our race-not merely what we have done in the way of commerce, of colonizing, of producing great money or wealth, although those are great things and have filled their purposes-those things that we have done in solving the problem of the proper government of the people, for the people and by the people, have been accomplished through the agency of Liberal principles.
I hope, Mr. Speaker, that the gentleman who referred to me as a Liberal protec-
The Budget-Miss Macphail

tionist will feel satisfied with iny answer, and that the hon. members of the House will think that I have so far made clear my position that at all events it will be worth the consideration of those who did not at first agree with me.
Miss AGNES C. MACPHAIL (Southeast Grey) : Mr. Speaker, I want at the outset of my remarks to assume full responsibility for what I am about to say; I do not want any one else to have to bear that responsibility with me except my constituency. Now almost all who have spoken in this debate have made pleasing and kind remarks about the Minister of Finance. I am glad that I also can say that personally, I do admire very much, as I am sure every one in this House does, the Minister of Finance. It would be too much, however, to go further and say that I was disappointed in the budget. I was not disappointed in the budget because I did not look for anything from it. I could not be after having studied the Liberal budget of 1896; knowing as I do that under the Liberal regime we got the rebate; knowing also that the British preference was not increased but decreased under Liberalism in 1907; knowing, or suspecting at least, that had there been a desire now to bring down a more generous tariff it could not have been brought down because of the high protection which to-day permeates the Liberal party and the Liberal Government. Of course, this is nothing startling that I am telling you, the country knows this and knows it very well. And so it would be going too far to say that I was disappointed in the budget. It has been said many times that the budget was a step in the right direction. If that he true then I think it was one step forward and one step back; because anything that was gained was pretty nearly lost in other directions and so the total, or the sum gained, did not amount to anything of any material value.
We have heard some interesting things this afternoon from the hon. member for Brantford (Mr. Raymond). It seemed to me as I heard him present his argument that he was building the roof of his house first, and I wondered all the time how he could support that roof while he was getting the walls built and then the foundation. I think he was going on the assumption that if it were not for protection, or other artificial stimulation, there never would be any manufacturing to supply the need of the four basic industries; that

those key industries he speaks of would never develop, unless under protection of an artificial character. That, I think, is a fallacy. I think, just so surely as there are four basic industries, just so surely will the secondary or key industries follow the development <jf those basic industries. Then one must wonder, too, what we are to do if we are to buy everything at home and not buy from any other nation in the world. We must sell-everybody admits that. Then, who is going to buy from us? Can we always sell but never buy? Such a thing, in neighbourhood terms, would mean always borrowing from your neighbour but never lending to him.
Now, possibly it would be a very good thing to test protection by seeing what has been the effect upon the greatest of the basic industries under the protection we have had for some time in Canada. I think it is true that rural depopulation has become so intensified a problem that it is a worry to every one, not only those who live upon the land but those who earn their living in these highly stimulated industries. Because, as we were told this afternoon, they want someone who is going to buy the product of the labourers in the factories ; they cannot keep factories going if the warehouses are full. And just here let me ask: Why has trade been very dull lately? Of course there are world conditions which tend to make it so, but surely every one in this House knows-I am sure hon. members know and I hope they will admit- that the lack of buying power of the four basic industries has had a great deal to do with the full warehouses that made trouble for the key or the secondary industries. We find that of the population of Canada in 1901 the rural percentage was 62.04, and the urban 37.06. In 1911 the rural population had fallen to 55.05, and the urban had gained until it reached 45.05. In Ontario, between 1901 and 1911, the rural loss in population was 52,184, without taking into account the increase in birth and immigration, which would have brought it to a total loss of 373,567, or 29 per cent. In obtaining the census they are not always strictly accurate. Take such ridings as East and South York; the city of Toronto has over-run into the surrounding country, and the people there live on very small holdings, which they do not work, because they go back and forth to their work in the city. These people are, in a great many cases, called rural people, when, in truth, they are not. I gave these figures before, but not completely, and I

The Budget-Miss Macphail
desire to repeat them, because I was startled when I saw them. My own riding of Southeast Grey, since 1911, has lost 14.22 per cent of its people. My riding, with the ridings that border on it, Dufferin, North Grey, including Owen Sound, South Bruce, North Simcoe, and North Wellington, have together lost 18,170 people. The township of Egremont, which is one of the best townships in Grey, and has splendid land, lost 15 per cent of its population between 1901 and 1911. The question is, can this go on longer, or how much longer is it to go on? Has protection, under which we have been living, been good for the basic industries of Canada? Can the manufacturing industries continue to flourish, if the very roots that nourish them die? I do not think they can.
I always take it for granted that we are all loyal Canadians, and I never question any one's loyalty. I believe that each member in this House hopes for the day when Canada will be even a greater nation than she is to-day. But when I look at it from a national viewpoint, I am alarmed when I see the artificial stimulating of the secondary industries at the expense of the basic industries. Those basic industries, of which the greatest is agriculture, are slowly-not so slowly either-and surely, dying in Canada. The history of the world proves that in civilization finally urban life dominates the rural, and then rural life dies, and then, finally, we have national decay. History teaches us that lesson. It is true that the people of Denmark and the people of the Scandinavian peninsula have gone one step further than we have, and they are trying by their own exertion to save rural life, and it seems that they have been successful. The odd thing is that when we try to do that here we are called very hard names, and you would think that we were trying to disrupt all the national life in Canada, though in reality we are trying to save that national life by saving the foundation on which it is built. In 1918, in Ontario out of 5,957 rural schools we find this result:
Schools	No. of pupils
5	 1
12	 2
33	 3
46	 4
79	 5
524	 6 to 9. average
1_400	 10	or less


Mr. DUFF:: Is that in the whole of Canada or one province?


Miss MACPHAIL:: In the province of Ontario.


Mr. ARCHAMBAULT:: You do not see that in the province of Quebec.


Agnes Campbell Macphail: Then they say that they can protect the farm. Well, if you ruin it first, you can try to protect it afterwards, but you must first ruin it, and we have not done that yet. The United States is further on in the same road of protection than we are. Their farmers are demanding protection for themselves, and there must soon come a reaction, and in the very thickly populated portions of the United States half or more of the population are going to be clamouring for no protection on food and will wage a similar fight to that which took place at the time of Cobden and Bright long years ago in England. So it is going to go on in a circle that gets nations nowhere.
I do not for a moment assume that protection alone is the cause of the deplorable rural condition. I do not even think that. I think there are many causes for rural conditions such as we find to-day and I think possibly it is not asking too much to take just a few minutes to tell you what I truly believe they are. I believe one of the basic things that makes life unsatisfactory today is our school system-a school system which is based on the idea of classic education, a system which has got into a rut. You go from public school to high school and from high school to the university, and once you have gone all the road you very rarely come badk to live by any of the basic industries. There is no rural system of education. It is true there is an urban education transplanted into the country.
Then, again, we have the lack of cheap credit, and of long time loans. It is very difficult for farmers to get credit, because the assets they have at their command are not accepted as security for loans. With regard to transportation, our railways having been built away ahead of the development of the country, the overhead cost that has resulted has led to heavy transportation charges. I hope it is not too much to say that I think our national ideal is not a true ideal, that we have in the last 25 years possibly allowed ourselves to think that money, dollars and cents, the successful gathering together of a large pile of capital, is success, when it is not really success. Everyone has tried to acquire capital by doing his fellowman, and if he could not do him well enough without legislation, he cleverly sought legislation to help him do the other fellow more successfully. Because of that we have had legislation
The Budget-Miss Macphail

which no one can deny has taxed all the people for the benefit of a few.
I want to give you what I consider three or four proofs that farming does not pay to-day. Of course, any one who farms does not need any proof, but, possibly, it is well for the people who do not farm to realize something about farm conditions at the present time. Not one per cent of the farmers pay an income tax. Only 45 in Ontario paid the tax last year. People do not run from a paying proposition, and they are running from the farms in Ontario at the rate I have quoted to the House. Not one farm between one ocean and the other will rent for enough to pay 6 per cent on the investment. Two or three generations ago the old pioneers came out to Canada and with great labour hewed down the forests and established homes. Gradually one generation after another improved the property, put buildings upon it, draining it, fencing it, and to-day their descendants find that they have not help of their own, and that their children will not stay with them because they cannot pay them as other industries can. When they cannot afford to hire help they give up the struggle and sell the property that their parents and grandparents have possibly hewed out of the bush. They find that they can sell the land and give away the buildings and improvements if they like, or they can sell the improvements and give away the land; but they cannot sell both because nobody will pay for both. Anybody who has tried to sell a farm knows that is true. When we went on to the farm that we are now on seventeen years ago this spring, the taxes were $16; this year they are $92, and yet what that farm produces to-day is no greater than it was then. One is, therefore, led to think that sometime, somewhere, an end must come to this thing. It cannot go on, because the basic industries cannot carry the overhead expenses that are thrust upon them; so people are trying to get out from under the load and are going into other industries that are artificially stimulated. No less eminent an authority than Sir Thomas White referred to this when he said:
The future of Canada rests with the development of its great resources, of which the greatest and most fundamental is agriculture.
I hope his followers will remember that. It is true, and it is something which Canada, a young nation, should learn now before it is too late. When we look at the trade reports of Canada, we find what a

prominent place farming and the other basic industries play in it, because, for the year ended March 31, 1921, the total export trade was $1,190,000,000, of which farming, lumbering, mining and fur-trading, with almost no manufacturing-with a little, I will grant you, the manufacturing of wheat into flour-provided 80 per cent. Of this total, manufacturing provided 20 per cent, and agriculture alone provided 47 per cent. That surely convinces one that we need to stimulate the basic industries if we are going to build up an export trade. I think-and I hope I am not wrong in thinking; I am willing to be convinced if I am wrong-that trade is what makes a nation great. That is what made Great Britain great, because she is the greatest trading nation on the face of the earth today. If trade is not a thing that nations should seek, why is it then that we do not find small nations with poor harbours and high mountains, nations that cannot trade much, the greatest nations in the world? One would almost think trade was fundamental because,' in spite of all the artificial restrictions that parliaments and men can throw up around it, trade persists, and the United States, one of the greatest of high protectionist nations, rejoiced some years ago when her foreign trade approximated that of Germany. One would wonder why they should do so if trade is something to be deplored. For many years many ^people thought, when you had high protection, you produced a revenue; but you cannot make them believe that to-day; the people know better. The fact of the matter is that we who sit in this corner of the House are the proof that the people know better. When you make protection so high that goods do not come into a country, you produce no revenue. Then the manufacturer who stands behind that wall of high protection gets the benefit of that protection, and he waxes rich and strong, so that now we, who live in the country, cannot keep our hedges or gardens looking well on account of the motors that pass them on the way out from our large, well filled cities.
Supposing that we did give protection and that this protection made the quality of Canadian goods greater than the quality of any other goods; or supposing that all the protection went into the revenue; or supposing all the protection went into the workingmen's wages, there might be some plea made for protection. But since none of those three things is true, one wonders

The Budget-Mr. Ward
why we have tolerated it so long. I am sure no one in Canada wants to cut off protection at one fell swoop, because if a person has never learned to walk, it will be difficult at first, so it will possibly take some careful teaching. I remember that, a long time ago, when people first wanted protection, the idea was to help infant industries. Those infants have now become so strong and heavy that we can scarcely carry them; but yet they want protection.
Cotton and woollen goods are two things that we use a great deal. The farmer is favoured no more than the person who lives in the town or city if we have cheaper cottons and woollens. They are two articles that are highly protected; and we find, if we look back over the history of the cotton and woollen trade, that they have waxed exceedingly strong and fat, and that capital invested in them receives very good returns, better than 6 per cent on the investment. We find that all down the tariff list there has been a discrimination against ordinary things that are used by everyday people, in favour of the luxuries that are used by the few, and which could be easily done without. What I, in this corner of the House, believe in -whether the rest do or do not is for them to say-is that as rapidly as possible we should get away from the idea of indirect taxation and should get back, or come, to direct taxation. Possibly Barnum really found out the trouble when he said that the people loved to be fooled. That may be true; it seems sometimes that people would rather pay $5 indirectly than $1 directly. Possibly it is like getting a tooth pulled. You could get one pulled painfully and the whole set out painlessly; and only afterward do you realize the awful damage. I often think that is the way with taxation. People would be much better off if they paid their taxes directly; and when they are educated up to the true idea of taxation, where the money goes and where it comes from, I think any one would be willing to have direct taxation. That would tend towards the careful expenditure of public money, because when people know that they have paid the money out of their own pockets, they are going to watch it more carefully than if they did not know that. The national expenditure has reached a most alarming figure, and it must be cut down. I know this is hard, and I very much sympathize with the Minister of Finance, because, no matter whom you tax, nobody wants to pay the tax; every 152
one wants the other fellow to pay it. That is true everywhere and at all times; but we have paid it so long, we think it would be very well for the other fellow to pay it for a while and see how he likes that. Therefore, we look with hope to a day, when the indirect method of collecting taxation will be abandoned and the direct method adopted. I do not believe we should be ashamed to say that; I believe we should take definite steps in that direction, and I am willing to say that a government that starts this is possibly going to take its life in its hands; but a government that is not willing at any time to take its life in its hands for what it deems best, is not perhaps the best kind of a government that a nation could have.


Mr. JAMES MALCOLM (North Bruce) :: Mr. Speaker, at the outset of my remarks, I should like to compliment the Minister of Finance (Mr. Fielding) on his very excellent presentation of a most excellent budget under most trying circumstances. I only hope that the budget which the minister has presented will be followed with the same degree of prosperity that followed his famous budget speech of 1897. The minister has pointed out, and the fact has been dwelt on to a large extent and in an able way by hon. members who have preceded me, that the obligations of the country are great; and were we not an optimistic and resourceful people I think the chances of meeting those obligations would be very slim indeed. I think, however, that as a young country, with the natural resources which we have and with that buoyant optimism which is inherent in all Canadians, we shall be able eventually to solve the problems with which we are now faced. The Minister of Finance in considering the proposals of the budget has, I believe, acted very wisely in providing for the payment of the national charges for this year. To discharge the obligations for interest on the national debt, for the expenses of government for the re-establishment of and the pensions to soldiers, and for the interest charges and probable deficits for some time at least on the National Railways, he has imposed all the taxation which he considers the country can bear at the present time. Had he made provision to meet capital payments he would have been imposing a degree of taxation which would have been a hindrance to the development of the national industries on which so much of our prosperity depends, and would have been placing upon the people a load which



The Budget-Mr. Malcolm
at present they are not able to bear. I think, therefore, that we should compliment the hon. gentleman for at least devising a system of taxation that will meet the obligations of the country for the year; and we must also compliment him on his wisdom in not burdening the country with taxation to meet capital payments during the present period of industrial and agrarian depression.
Knowing the West as I do, and having been associated with many of the western and Agrarian members, I believe there has been exhibited here a very much broader spirit of co-operation in legislation than the majority of hon. members might think. All hon. members of the House have evidently come, after a few weeks of parliamentary experience, to recognize the fact that Canada is not so easily governed. There is an East and a far East, there is a West and a far West; and there is a new North developing. And the Minister of Finance in preparing his budget has, I think, given a good deal of thought to the interests of each section of the country and has acceded, in so far as it is possible for him to accede, to the ideals and the hopes of the Dominion as a whole.
In order to meet the taxation which is inevitable this year, the Minister of Finance has increased certain existing kinds of taxation. He has also proposed entirely new methods, and has returned to some of the luxury taxes that were in existence during the war. I will refer to the increase which he has made in the existing method of taxation, and justify it, so far as it can be justified, because no tax such as the sales tax can be justified by anything save necessity. Some hon. members have pointed out that the sales tax falls equally heavily on those who have many dependents. The hon. member sitting beside me representing the constituency of Cape Breton South and Richmond (Mr. Kyte) pointed out this afternoon the exemptions that exist in connection with the sales tax. I need not therefore dwell on that point. I would point out, however, that while the sales tax undoubtedly falls more heavily on the man with a certain income and five dependents than it does on another man with the same income and two dependents, the tax does not really change the ratio; the only difference is in the amount. The sales tax is levied on what we buy, and it must be clear to every hon. member that a man spends money according to the wealth he has. It could be

said with equal truth that the man of means having a great many dependents would naturally pay a greater amount of sales tax than the man with fewer dependents. The tax is levied entirely on the amount spent, and inasmuch as the spending is heavier among the wealthier classes, in the long run the very large percentage of revenue from the tax comes from those that spend the most money. We had an investigating body in this country from Washington recently looking into the Cana dian sales tax. I was told that, in a jocular way, one of these men remarked when he went home that the only criticism which the American government had of the Canadian government's tax was that they could not suggest any improvement upon it.
The Minister of Finance has introduced a new piece of legislation in the stamp tax and also in the share tax on the transfer of stocks. Both these taxes will undoubtedly be subject to criticism by the bond dealers and the brokers, and possibly by the bankers. But I want to compliment the minister to-night on his courage in introducing this legislation, the first of its kind that extracts money from this particular class in the community. The average business man will not complain because he has not in the past complained of taxes administered by the late government for war purposes. The stamp tax and the transfer tax may possibly be subject to some modification, but they will produce a decided revenue and will not fall heavily on the shoulders of the average citizen. The minister has seen fit to revive a tax, put into force by the late government, on motor cars. I do not think that hon. gentlemen will disagree with the statement that there is possibly no industry in Canada that is in as good a financial condition as the motor car industry. An automobile is possibly a necessity, but it is mostly a luxury; and as regards tractors, the late government exempted them from customs duties while the present Minister of Finance proposes to make that exemption permanent by act of Parliament. The minister regards motor cars as to some extent a necessity, and as such he has exempted them up to $1,200. The tractor is free from duty while the commercial machine is exempted from the tax.
In dealing with the general tariff the Minister of Finance has pointed out the relations that exist between ourselves and

The Budget-Mr. Malcolm
our natural geographic customers, the United States. He has explained how that country, which has always maintained a high tariff on manufactured goods, has now turned to a tariff on the products of the farms and intends shortly to supplement that legislation by still higher protection for the farmers, which is the request of the agrarian bloc in the American Senate. He mentions with a good deal of justifiable pride his reciprocal bargain with the United States in 1911 and points out that as that bargain was agreed to by the American government and rejected by the people of Canada, it is natural to expect that in any reopening of negotiations with a view to entering into another bargain for reciprocal trade the initiative must be taken by this country. He has stated that such an advance was made by himself, but that in the meantime the American government knowing the mind of the Minister of Finance, naturally cannot expect him to make tariff reductions on American goods entering Canada that might influence a bargain for a reciprocal agreement which he will eventually make if he gets the opportunity. That is the point which he made clear,
9 p.m. and I think his logic is perfectly sound and acceptable to the majority of hon. members. The exceptions made on implements of industry are in line with the views he expressed last session, and taking into account the conditions I have referred to, I think that is as far as any reasonable member could expect the minister to go.
Regarding the British preference, I feel that as an integral part of the Empire hon. gentlemen will agree with me that everything should be done as far as possible to encourage trade with Great Britain. The minister has made a decided step in that direction by granting a greater preference on goods of British manufacture, and I heartily commend him for his action in this regard. I would, however, point out to the British manufacturer (if he were here) that he himself would do a very great deal towards capturing Canadian trade if he would be willing to make the style of merchandise that appeals to his overseas customers instead of following his more or less timeworn custom of trying to make us buy what he has to offer.
The hon. member for Halton (Mr. Anderson) expressed the opinion, with which I do not agree, that American branch industries are being established here because of our protective tariff. I do not
152J
think that is the principal reason for their locating here. I think the main reason at the present time is because of the better trade relations existing between Canada and the other parts of the British Empire, and the American manufacturer, who is now more or less in trouble with his export trade, sees a possible way of doing better business with the British Empire from a Canadian branch than he could from his headquarters in the United States, as on his goods exported from the United States he is probably not going to receive the same preferential treatment from the British dominions that he will receive on goods exported from his Canadian branch.
I am very heartily in accord with the establishment of American branch industries in Canada. Some people contend that the profits from those industries usually go to the States; but, Mr. Speaker, the past history of American branch industries has been that after one generation, if not before, they have a habit of passing into the hands of Canadians, or the principals of those branches in many cases become Canadianized and real citizens of our country.
The Marking Act and the Depreciated Currency Act have been abolished, I think very much to the satisfaction of the Canadian importer and consumer. In the case of the former act the minister stated w'hen introducing his budget:
We propose, in any particular case of an exceptional character, when there are reasons why articles imported from abroad should be marked, that we should have the right by Order in Council to deal with the matter; but we propose that, as a general law, this provision shall be repealed.
With respect to the Depreciated Currency Act, I would point out to the hon. minister that he has apparently overlooked making a similar provision. It must be admitted that the German mark has fallen in Germany compared with its trading value for merchandise; but it is not to be admitted that it has fallen to anything like the same extent as in relation to British, American or Canadian gold. If he is to consider his tariff for revenue alone, he will find that the revenue to be derived from the importation of German goods will be entirely wiped out in many cases by the depreciation, so that if be leaves the protective side of the argument out altogether and considers only the revenue side, he will do well to make provision also that in exceptional cases of a like nature,
The Budget-Mr. Malcolm

or for obvious reasons, it will be necessary to have some sort of legislation. The British government, which has been cited so often as being very much of a free trade government, has an act known as the Safeguarding of Industries Act, providing that where goods are to be dumped into England to the detriment of British workmen, the government may take cognizance of the fact and govern itself accordingly.
The minister has not informed the House what he proposes to do in regard to the income tax. I refer to this item only on account of a remark made during the course of the debate by the hon. member for Centre Winnipeg (Mr. Woods-worth) whose speeches we have enjoyed on several occasions. The hon. member refers to a capital tax to pay the national debt.
I would point out to the minister, in dealing with the income tax, that all countries such as Canada are more or less in competition for foreign capital, and that with the United States having a maximum income tax of 50 per cent and we having a 75 per cent maximum, we are not likely to share to any great extent in foreign capital which will be necessary to develop our natural resources, if we are going to maintain a 50 per cent higher maximum. The United States did not build itself up by a natural process of development, but by importing capital and workers from the Old Land to a great extent; and if the growth of this country is to be in any degree rapid, we will of necessity have to follow similar methods. Therefore I contend that as capital is very necessary to our development, we will do well under existing circumstances to hold the capital that we have here, and try to attract more, and I think the minister will have to consider that point very carefully when bringing down his income tax proposals.
There always seems to be in the remarks made by the hon. member for Centre Winnipeg a rather mistaken idea with regard to capital. His viewpoint has always appeared to me to be that capital is the property of a few individuals. In my opinion capital is largely the accumulated premiums held by the big insurance companies for their beneficiaries, -and the accumulated savings held by our banks and trust companies. These funds they lend to governments, municipalities and individuals, and when you start in on a plan to tax capital you are taxing not only the wealthy man but also the small man- the small investor and the small policy-
[Mr. Malcolm.!
holder, whose funds in the aggregate constitute these insurance companies, banks and trust companies, the greatest capitalistic institutions in the land, and that if you enforce any policy of confiscation, you must of necessity pretty well Iconfiscate )the capital of all together.
Another factor which to my mind must be very carefully considered by the Minister of Finance in dealing with income tax is not to discourage enterprise. We in Canada have as much enterprise as the people of any other country on the face of the globe, and enterprise is a very-necessary third factor along with capital and labour in developing our country. It does not make any difference how enterprising we are to-day, if we have not the capital and labour along with enterprise we will not get very far. Nor does it, in the second place, make very much difference how much money we have if we have not the enterprise and the labour to use that money, and in the third place, we may have much unemployment and much loose labour, as we have in Canada today, if we have not the enterprise and capital to make use of that labour. It seems to me that hope of reward is at the very foundation of all endeavour, and if you take away or discourage that hope of reward, you cannot expect enterprise to be exhibited. I rather like the thought that Providence has placed an abundance of wealth in the earth, but that it takes enterprise and labour to get it out.
I would like for a moment to deal with the problem of immigration as it pertains to industry. I most heartily agree with what has been said by practically all hon. gentlemen who have preceded me, that we must put immigrants on the land if we are to develop this country in a way that will be reflected in our national credit. I consider the development of our western prairies as probably the most important factor in our national growth. It is important from the standpoint that it will be practically impossible for the Minister of Railways (Mr. Kennedy) to meet with any degree of success the deficit on our national system unless we have a more thickly populated western territory, and I agree very much with some of my Progressive friends that industry in the East cannot flourish until we have people in the West to consume the products of those industries. I do not altogether agree with the ex-Minister of Interior, the Hon. Sir Clifford Sifton, that the reason why

The Budget-Mr. Malcolm
we lose our immigrants is because they go to a warmer climate; that they are not able to stand the rigours of our winter. I am rather inclined to agree with the remarks made by the ex-Minister of Trade and Commerce, the Hon. Sir George Poster, that what Canada is guilty of is importing muscle and exporting brain. We have in Canada a very highly developed educational system. The average Canadian wants his children to be educated, and it is only natural that a large percentage, or some percentage at least, of the students of our Canadian schools will turn to occupations more or less suitable to their individual tastes, and if they cannot find that occupation in professional, business or industrial life in this country, they will naturally migrate to the country where that opportunity can be found. I do not think you will find very much Canadian labour in the United States, but I believe the House will agree with me that one cannot but be impressed by the great number of very prominent and very clever men and women in the United States who were born in Canadian homes, and who for lack of opportunity in their chosen calling in their own country had to seek employment elsewhere.
Therefore, I think that the making of farm life more profitable and attractive will not altogether solve the problem that the Canadian farmer has to face, of keeping the people on the land and to which the hon. member for Southeast Grey (Miss Macphail) has referred. In so far as legislation can be passed making the condition of the farmer more prosperous, I am very willing to support it, because I feel that on the prosperity of the farmer depends to a very great extent the prosperity of the whole Dominion. But there is a fact which I want to point out to my Agrarian friends. The country which has the most diversified occupations, which has a highly developed industrial and business life working in conjunction with the fine agrarian life, is the country, that is the most independent. It is self-contained, able to absorb within itself practically all its sons and daughters, and for that reason I feel that to the Canadian farmer the industrial life is a very important factor from the standpoint of his home, and I would point out that not many hon. gentlemen in this House, in my opinion, are more than one or two generations at least removed from farm life.
Much has been said in the House as to the problems of the producer in the prairie
provinces. The hon. member for Last Mountain (Mr. Johnston) has referred to the one great need, the need of a better market. He says that better markets are essential if farming is to be successful. Is not that also the very need of eastern industry-a better market? We have heard a great deal about the deplorable condition of the western farmer, and I know that it is practically all true, and that half has not been said. We can use the same language practically in describing the position of the mechanic and of industry in the East during the past winter. Their problems are indentical in the sense that a broader market is the one thing they both need. Therefore, we can attack their problem with a feeling that what we do for the one will be of benefit to the other.
There is a matter before a special committee of this House, and I do not care to discuss it for that reason, and that is the question of lower transportation costs. I agree with the hon. members for Toronto that the greatest blessing that will ever befall the western provinces in the matter of transportation is when they are able to load ocean steamers at the head of lake Superior, but so far as our agrarian friends are concerned I think that probably the solution of the problem as presented by the hon. member for Last Mountain (Mr. Johnston) would give them the greatest amount of relief. The Minister of Finance (Mr. Fielding) has given to them that degree of relief which he feels they are entitled to and he has not hesitated to ask them to share their burdens along with other parts of the Dominion in paying direct taxation on sales, on cheques, and so forth, and if broader markets are as important a factor as our agrarian friends think, they could not possibly have any one in charge of the fiscal .policy of this country to whom a broad market is as much an ideal as the present Minister of Finance. So if that is their solution, I feel they are perfectly safe in leaving that matter in his hands.
In closing, I only want to repeat my remarks on rising, that Canada is an extremely difficult country to govern, and so far as her fiscal policy is concerned, no matter whether it be a Conservative, Liberal or Progressive government that is in power, it will have to formulate a policy which will be expedient unto the day. It will have to raise the revenue by direct and indirect taxation, and it behooves the individual members of this House, no matter what their particular calling or geographi-
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cal location may be, to expect something, and to expect to concede something. I think there has been a very fine spirit shown by the majority of the members of this House in dealing with the fiscal policy, and I want to congratulate the minister not only on his budget but on having such a considerate House behind him as will give him a fair chance to finance this Dominion in these trying times.


Thomas Langton Church: Mr. Speaker, judging by the attendance in the Chamber it seems to me that the races at Connaught Park are proving a greater attraction than the budget debate and yet there is somewhat of a resemblance between the two; like the budget the races take all the money that one has, leaving scarcely sufficient to buy cigarettes and soft drinks.
The tariff should not be a political question at all in my opinion. I agree with my hon. friend from Port William and Rainy River (Mr. Manion) that an authority should be set up that could act in an advisory capacity to the government in relation to this particular problem. The tariff should not be made a political football by one party or the other. It is not a political question; it is a business question, and a great economic question; it is a great national and patriotic question that concerns the welfare and the comfort of every man, woman and child in the community. As to my attitude on this question I have no apologies to make. I am a Tory, a Tory of the old school. I am proud of being a Tory because, after all is said and done, a Tory is a man of his word. A Tory is a protectionist, but all protectionists are not Tories. To-day political names do not mean what they meant twenty-five years ago. They called Sir Adam Beck and the late Sir James Whitney Tories in the province of Ontario, yet they were two of the greatest radicals the province ever produced; they are two men who did more for the province than any other men that I know of. I see some hon. members opposite me that probably would not like to be called Tories; but I brand a number of them as the biggest Tories that have ever been seen in this country. My hon. friends may not agree with me, but everybody is entitled to his opinion and I am giving mine; in expressing that opinion I speak for no one but myself.
I repeat that I am proud of the Tory party. They have always been consistent protectionists from the days of Sir John Macdonald down. Every Conservative gov-

ernment we have had since then has been protectionist; it has preached the same gospel down in the maritime provinces as in the West. In the late election the then leader of the government, the Right Hon. Arthur Meighen, preached the same gospel in Prince Edward Island that he did in Nova Scotia, that he did in Ontario and Quebec, and that he did in the western provinces. That gospel was the gospel of protection-moderate protection, adequate protection for the industries of this country. After all it was not any political party that made Canada a nation. The people themselves had something to do with making this Dominion a nation as well as the governments, but in my opinion it was the National Policy that made this country the nation it is to-day. You may criticise the National Policy as you like, you may criticise the principle *of protection, but we never had any-anything else but protection in this country so far as I know. I have placed the tariffs of the respective governments in Canada in parallel columns and compared them; and I doubt whether anybody could call the tariff that has been in operation from 1896 down until to-day anything but a protective tariff. I think that any economic writer would certainly consider that the tariffs for which my hon. friend the Minister of Finance is responsible were protective.
I was very much surprised to hear the remarks of some of the Progressives here to-night, as well as the remarks of some of the Government supporters. If there are two counties in the province of Ontario that owe something to protection they are the two counties of Huron and Grey. Eighty-five per cent of the crops produced in the county of Grey have a home market in the near cities and towns-at the highest price that can be got in open competition in the world to-day. That home market is a steady market. It is to be found in the cities and towns that surround both the two very fine agricultural counties that I have named. I have been in some election campaigns in those counties and I do not think the farmers there believe in free trade. If it were not for protection, in view of the hostile tariff in the United States these farmers would be one hundred per cent worse off than they are to-day, and I believe that remark applies to eastern Canada generally.
The late Hon. J. Israel Tarte once said- that platforms were made to get in on

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but not to stand on. We have also heard to-day a lot about political nomenclature. Hon. members to my left call themselves Progressives. I do not know who gave them the right to use that title; probably they adopted the name themselves. The fact that they call themselves progressive does not make them Progressives. The fact that I call myself a millionaire does not make me a millionaire. I have been sitting here for some weeks and I have yet to learn of one progressive measure which hon. members to my left have brought forward, by resolution or otherwise, to remedy the economic problems of this country or to improve the condition of the people of Canada.
Why do these hon. gentlemen not seek to carry out here the platform upon which they went to the country-the United Farmers' platform? When the amendment at present before the House has been disposed of, let my hon. friends the Progressives move another amendment, or take other steps, to give effect to the planks laid down in their platform. Liberal members should also follow that course. But no, the Liberal party go back on their policy of free trade as laid down in the platform of 1919. I heard the present leader of the Government preach this doctrine in the province of Ontario; but it would appear that he enunciated a different doctrine in every county that he went to. And the hon. member from Brantford (Mr. Raymond) who spoke this afternoon, during the election, preached high protection, and added protection, for the industries of this country especially those in his own city.
The industries there were built up under protection; and what is true of Brantford, is equally true of Toronto, Hamilton, Montreal and all our other large cities-they have been built up by the National Policy. Take the city of Toronto which I represent. In 1878 soup kitchens had to be established there to meet the wants of the large number of men who were out of employment. Vacant houses and stores were many; and there were evidences of distress on every hand. But the policy of protection was adopted and it stimulated the growth of our city in many ways. The trade and commerce of Toronto greatly increased; the population doubled almost every ten years; the receipts from customs, post office, to say nothing of the bank clearings grew prodigiously, and Toronto is only cine of the many cities of Canada that has made tremendous strides as the result of protection.
Now, geography has taught the people of Canada a lesson in more ways than one. It has taught them not to leave themselves at the mercy of a foreign country in regard to their fiscal affairs, especially when that country is one of the most wealthy, powerful, prosperous and ambitious in the world. I refer to the United States. Every country in the world including the United States is increasing its tariff. Not only the various countries in Europe and the United States but Australia, New Zealand, and the countries of South America are all increasing their protective tariffs. Is it to be argued that these countries are all wrong and that the Progressives of Canada are all right? I say no. I maintain that as a result of the Great War more protection will be required to meet the changing conditions that arise as the years go by.
I once heard Sir Richard Cartwright and Sir Oliver Mowat say that if the Liberals were returned to office in 1896 they would remove the last vestige of protection, but they did not do so. Examine the sixteen budgets of the present Finance Minister and what do we find? We find that each and every one is protection. What have we before the House to-night in this budget in the various resolutions? It is all protection. The hon. Prime Minister (Mr. Mackenzie King) said he would reduce the tariff. He took approximately from the tariff $1,000,000, and then increased the sales tax from $60,000,000 to $90,000,000. It will run up to $95,000,000 before they are through and I venture to predict it will go over a hundred million by the end of the fiscal year.
There will be thirty or forty million dollars added to the sales tax which the consumers of Canada will have to pay. The poor man, the middle man and the rich man will have to pay these taxes. The budget presented to us does not reduce but increases the taxes to the consumer.
Speaking about the group system of government the hon. member for Southeast Grey (Miss Macphail) spoke the other night in Montreal to the Women's Club of Notre Dame de Grace, and the report of her speech in the Ottawa Evening Journal of May 21st reads:
She declared that the farmers had been forced by combinations of other interests to get to getlher to protect their own requirements, and she remarked that if any of the Progressives in Parliament wished to say they were not there in the special interests of the farmers, she wondered what they were there for at all. The farmers had been driven to concrete political effort, and she hoped the movement would continue.
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Miss Macpfaa.il spoke strongly in favor of a general reduction in the tariff, especially as it would assist farmers in buying what they needed. She further criticized what she described as a combination of the transportation and hanking interests with the Canadian Manufacturers' Association, with a view to securing all the protection and benefits they needed.
Well, why do not the Progressives go after these hig interests, then? If there is such a combine and such restraint of trade, why do they not break these combines up instead of talk? The farmers are highly organized and it is about time also the consumers and the town and city man got organized to protect his interests and not be made the target for all kinds of taxation. The producer is highly organized; and it is about time for the consumer to do likewise.
You have here the big interests. Why do the Progressives not bring some measure before the House to protect the consumers and go after these big interests and the combines if they exist as they say? They [DOT] are a group organized in the farmers' interests, but they are not doing anything. Who pays most of the taxes? The bulk of the new taxes have now been put on the city and town man, and the town people and consumers are soaked all the time. The small wage earners are especially hit by the tariff. The man with a small income has to pay a municipal income tax and an income tax to this Government. I contend the federal authorities and the municipal authorities should get together and co-ordinate that income tax, so that the small man and the middle man would not have to pay double income taxes as they are doing to-day. They will be driven to the wall, if the present condition continues.
This remark applies to other forms of taxation such as those on cigarettes and tobacco. Eight years ago you could buy a package of Players cigarettes, which the soldiers smoke largely, for 10 cents a dozen. When the war came on the price was raised to 15 cents. Then the price was 17i cents, and now the price is 10 for 22 cents. So that they are going to make the smoking of cigarettes a luxury. It is not a luxury, but a modern necessity for the soldiers, the working classes and everybody else, and should not be taxed in this way. It is double the tax imposed in Great Britain. I think the tax in Canada is $10.50 a thousand. In the United States it is $3, and in England $5.20 per thousand. That is altogether too much. These other countries have larger war debts than Canada. It was said by the medical officers in the

war that cigarettes were a necessity, and it was so held by the army surgeons. The placing of a tax on cigarettes and soft drinks is going to cause more unrest among the working classes. We should do something to put it down, and, in that way, we would perhaps prevent unrest. We should not tax articles which are more or less of a necessity, and not a luxury. If they are a luxury, they are the only luxury the poorer classes enjoy to-day, about the only thing left to them, and they are taxed heavily-too heavily for them already. You will kill the consumption of cigarettes.
In view of the Fordney bill I do not see what the farmer is going to do. He is shut out of the United States, but he has a home market, the best market I know of, which will take care of 80 to 85 per cent of his crop-in the East. If the Government can solve the railway problem, and bring the railway rates down, a great step will have been taken. Mr. E. W. Beatty, K.C., was here a few days ago and was very polite, addressed everybody from Mr. Speaker and the members to the pages as " Sir." He is pretty smooth and is well liked by every one. The Canadian Pacific Railway boasts of half a million active and inactive surplus. The Canadian Pacific Railway Company should be told to carry out the Crows-nest pass agreement, and if they did the farmer would be benefitted. The Canadian Pacific Railway are just stalling and bluffing and should not be allowed to break their agreements as scraps of paper. The hon. members opposite are responsible for the Crowsnest pass agreement, which has cost the people of this country from $400,000 to $500,000. This House should insist on finding out who is the boss in this country. Is it this Parliament, or is it the Canadian Pacific Railway with headquarters in Montreal? I think the Government should stand by the Crowsnest pass agreeement and notify Mr. Beatty that it must be carried out to the letter and at once. If this House passes legislation to solve transportation questions, lessen freight and passenger rates, and get a live and up-to-date railway commission properly regulating railways in this country, I think it will be accomplishing more to relieve the farmer out West than could be accomplished in any other way.
I am opposed to the principle of opening up trade with Germany. It is too soon after the war. As the hon. member from Fort William (Mr. Manion) said, the budget means free trade with Germany. In

The Budget-Mr. Church
many cities and towns in this country the returned soldiers and their wives have started little toy and smallware stores and factories. They have opened up, without much capital or money, and have built up a trade in a small way in toys, small wares and fancy goods. Will Parliament take away from them the little protection they now have, simply for the benefit of Germany? I think trade should follow the flag and we should deal with our allies and only with those countries that were loyal to the Allies during the war, for a few years at least. It is too bad that we should take away from the small dealers, who are principally the returned soldiers, the small protection which they have in the sale of their toys.
In looking over the proposed resolutions, I am surprised to find that there is no mention of the trusts, combines and the war profiteers at all, but there is mention of the small man. I asked the question as to how many combines had been proceeded against in this country. We heard the Minister of Labour say what he was going to do to fight the combines and lower the cost of living if he was returned to power but he has done nothing. Many of these combines and companies are interlocked and do not pay much in taxes. We had an illustration of that in the case of a jobbing concern in Toronto, who made a return for a five thousand dollar income, and paid the business tax on $5,000, but they charged up about $280,000 in bonuses, and thus escaped a great deal of their federal taxes on a technicality. Then we have the war profiteeers and we have some corporations which, by means of technicalities in the law are able to evade the tax.
I should like the Finance Minister to look into the system of taxation by the government of the province of Ontario. A lot of revenue has been taken from this Government by acts which are ultra vires of the province. Take the Wartime Amusement Act which was passed. Under section 91 of the British North America Act militia and defence is a matter for the Parliament of Canada, but the Ontario legislature in my opinion illegally collect a wartime amusement tax-illegally tax both the municipalities and the individual. I contend their action is illegal and I hope the minister will look into some of these matters. The province of Ontario has a very extravagant and spendthrift government which receives a federal subsidy to maintain provincial institutions and spends the money otherwise, making up the deficiencies
by innumerable and questionable forms of direct taxation more or less illegal. That government is imposing additional taxes on the working classes of Ontario.
There are many other sources of revenue of which I might speak, and I want to refer briefly to-night to this additional tax on cheques. Let me refer to a letter written to the Minister of Finance by the commissioner of finance of the city of Toronto, acting for Toronto and other municipalities. In this letter he goes on to refer to the great loss that this tax is going to impose upon the city and municipality, including the board of education and other similar boards. During the last two weeks, they have taken in $15,000,000 worth of taxes, and the bank opens at 7.30 a.m. to take in the money which continues to come in all day. They will, on this $15,000,000, have to pay twice under this tax; they will have to pay when they deposit the money in one bank, an amount of $6,000; and if they transfer this money to other branches, for the school board, the hydro board, and the library board, they will have to pay an additional tax on the aliquot part of the cheques to the sub-boards, thereby paying a double tax. This commissioner of finance is acting as well for municipalities out West, because he has telegrams from them asking him to act for them. He gives the cost of education in Toronto this year as $8,000,000, and it will be his duty to pay this amount over to the board of education-This will call for stamps to the extent of $3,200, and the sub-board will have to pay an additional tax of $3,200. He refers also to $6,000,000 worth of sterling and New York exchange which was purchased, in 1921, and he says:
You will appreciate the fact in making such large purchases, considerable transferring of bank balances was necessary. Had your proposed stamp tax been in force, we would in many cases have had to pay the charge three times. As I understand it, we would have to pay the charge at least twice, that is for stamps on the bill of exchange and stamps on the cheque issued to pay for the bill of exchange.
Another illustration is in connection with $10,000,000 worth of bonds sold for the betterments of the Toronto Railway Company. The brokers in bidding for those bonds, could take into consideration the fact that they would have to pay this additional tax on the cheques. This figures out at one-twenty-fifth of one per cent which will undoubtedly be deducted from the amount to be paid to the city; so that the city and municipality will have
The Budget-Mr. Church

to pay the charges on this loan. On that, they would have to pay three-twenty-fifths of one per cent, or $12,000. Other municipalities are affected to a lesser extent; but this tax is going to cause a great deal of trouble in trade and commerce. Collections are going to be hard to get. Any mercantile agency will tell the minister that this tax is going to make collections more difficult, and collections are bad enough now, especially for the retail man.
I do not think this tax is in the interest of trade and commerce. It is not supported by any business concern. The business man is soaked in many ways for taxes, by this Parliament, by the provincial legislature, and by the municipalities, and he cannot stand this much longer. I do not know who advised this cheque tax proposition; I do not know why we should copy every piece of legislation passed by the United States in order to raise taxation, because our circumstances are different. This additional stamp tax is being opposed by municipalities, by business men, by boards of trade, and by bond dealers and brokers, who advise that it is going to tie things up more or less and to make business much more difficult. Dear knows, there are enough stumbling blocks in the way of trade and commerce and business men now without our adding any more to them.
In my opinion, posterity ought to pay some of these war bills and taxes, and altogether too much effort is made to make the men of to-day pay them. This generation has suffered in flesh and blood for the amount of debt added by this war, and we should not adopt a policy of pay as you go, and make them pay now for the war also. Posterity should be called upon to pay some of the national war debt. .
The farmers of this country are no more entitled to a wheat board than the people of the cities and towns are entitled to a coal board, or a rent board, or a food board, or an ice board, and so all the way along. It is contended that the wheat board is necessary, probably because agriculture is a basic industry. There may be some argument in that; but there is an argument on the other side, and I contend that all these commodities should be left as far as possible to supply and demand. I believe a wheat board will not do very much good, as the farmers may find out later on. If the producer is to have a board to protect him why should not the

consumer also have a board? Better leave things alone.
During the election we heard a great deal from the Minister of Labour (Mr Murdock) about the high cost of living What does the Government propose to do for the working classes of this country along that line? On several occasions, I have asked the Minister of Labour in regard to that; but he has not been able to tell me anything yet, nowithstanding the fact that he has a large department and a large staff. During the election, he went through many Ontario constituencies denouncing the late government as being the representative of the special interests and as having done nothing to lower the high cost of living. What is he doing to prosecute the special interests and combines in this country? How many prosecutions has he started? I asked him the question the other day, and there has not been one prosecution. Let him be up and doing to bring down the cost of living.
In conclusion, I want to refer to three or four other matters, which I think should be mentioned in this debate, because this is the only opportunity we have of doing so under the rules of the House. If there ever was in this country an act that needed overhauling, it is the much heralded Bank Act. Some newspapers are beginning to wonder whether there is to be one law for the rich and another for the poor in this country. I have read, in some very reputable newspapers, in Canada, articles referring to some people who stole $8,000 out of a bank, and some other poor fellow who took $1.25 out of a postal envelope. The people who stole $8,000 got a life sentence because they robbed the bank with violence; the poor postman, on a small salary without a bonus, who took $1.25 out of an envelope, was sent down. This matter of the Merchants Bank should not be left to any superior or high court judge of the province of Quebec; or the Appellate division either; there should be an independent enquiry by the High Court of Parliament and no whitewash. We should find out whether we have a Bank Act, whether it is a mere scrap of paper or not, and whether the monthly returns made by the bank to the minister are scraps of paper or not. I believe the losses will run to twelve or thirteen million dollars before they get through. What protection has (the investor, the stockholder? I know one man in my city who has started to sell out every dollar's worth of stock he has in

The Budget-Mr. Church
some small banks. When I asked him the reason, he said that he was very doubtful if, in some of the smaller banks, the shareholders have the protection which they should have. This Parliament should be big enough to go into the whole question of the Merchants Bank. The banks have been allowed to increase their note circulation; they have been given many special privileges, and a thorough enquiry should be made into the whole matter. The House and the country expect us to do our duty in this matter. Where do the Progressives stand upon it?
The other night, I referred to judges serving on political commissions, and I have had no opportunity of bringing this matter up before. I hope something will be done to stop this practice, because the public are utterly disgusted with the way in which some judges of the High Court in Ontario were allowed to leave their judicial duties for months in order to serve on these political commissions. I hope the Government, will see to it that this practice is abolished in the country, so that the public will have, for the judiciary, the respect which they have had in the past.
I am sorry that somethin*, is not being done by this Parliament in regard to prison reform. I see in this morning's paper, that there are 879 people in Kingston penitentiary; that the authorities have had to have double cells; that the place is crowded, and that they have no more accommodation. As I said in this House the other night, if there was one thing we learned in the war, it was from the Red Cross. The Red Cross restored to society about 79 per cent of those who were wounded in the war, and that was a great work. We should try to do something in this country to restore to good society that class of the people which I have mentioned. In the United States and other countries rapid headway has been made in this regard. Prison reform is absolutely necessary. It has been too long delayed in Canada and conditions in these places are deplorable. There is practically no inspection of them. The provincial reformatories are inspected by the grand jury, but there is no inspection of these prisons except by officials.
The minister (Sir Lomer Gouin) said the other day in answer to a question that the matter is being looked into, and I trust that proper steps will be taken to remedy the present state of affairs. There are about 120 children between the ages of 16 and 17 in these institutions, and these
are not circumstances under which the rising generation should be brought up. I referred the other day to the fact that a child had broken into one of the Canadian Pacific Railway box cars and stolen some fruit and is now in one of these institutions. I fancy that if the Grand Jury had an opportunity of going through some of these federal institutions I have named we should have some real reform. The people in charge of them know when the inspectors are due and the result is that there is practically no real inspection at all. Where does the public come in, anyhow? Are they not entitled to know what is going on in these places? And are we going to stand still while the same condition of things that existed 25 years ago is perpetuated? A royal commission was appointed a year ago and made certain recommendations, and I think that it would be a work not only of good government to check this economic waste but also one of religion if the Government would take such action as would restore the confidence of the people in this branch of the public service and stop this economic waste in our population.


Mr. BEAUBIEN:: The hon. member said a little while ago that the Farmers were not entitled to the Wheat Board. Why, then, did his party give them the Wheat Board in 1919 when the prices were going up?


Thomas Langton Church: Probably the former
ministers can tell you that better than I can.


Some hon. MEMBERS:: Oh, oh.


Thomas Langton Church: I do not believe in such a board. It would take me too long to go into an explanation of that to-night, and I know that the hon. member would like to go to the races to-morrow. Now, I was very much surprised to hear the remarks of the hon. member for Sherbrooke (Mr. McCrea) in regard to the Civil Service. I have the greatest respect for the Civil Service. We have, I believe, on the whole a highly courteous and capable body of employees. From deputy ministers right down they are all highly efficient, and very many of the civil servants receive a small salary that is inadequate to meet the cost of living. I doubt whether some of the better paid civil servants can meet expenses. I say that we have a high type of civil servants in this country and they are entitled to respect. From what I have seen of the Civil Service since coming to Ottawa I have come to the conclusion that
The Budget-Mr. Church

the civil servants attend to their duties thoroughly, and I know that they are polite and courteous. We have a very efficient public service and I hope that the Government will now come across with the bonus that is so badly needed. After all is said and done, I do not believe that the cost of living has declined very much for the small wage earner, for the two main items in the household budget, coal and rent, are still very high. Soft coal is produced at $1 a ton, and hard coal at about $5, at the Pennsylvania and Virginia mines, and by the time transportation is paid the latter costs over $15 a ton. Some people are of the opinion that it will be still higher this winter. The same thing applies to rent, which in Ottawa is a considerable item. I was reading recently that in Montreal, owing to the increase in rents, very many people were obliged to move on May 1st who did not know where to get houses within their means. I do not think the time has yet come when the Government should cut out the small bonus which the civil servants have been receiving. They earn it and are entitled to it, especially the men of the customs and post office services.
I was greatly surprised to learn of the attitude of the Government in regard to the St. Lawrence deep waterway. I hope that the reply they have made to the United States government is not definite and final. This is a big question, it should be discussed in a big way, and I hope that in the recess the Government will again take the matter up, because sooner or later the work will have to be done. There has been a lot of loose talk about the cost of this undertaking by people who do not know anything about the subject. The only basis upon which we can go in regard to the cost is the estimates of $250,000,000 made by the International Joint Commission, which made a thorough investigation into the question from the engineering, financial, business, water power, and traffic standpoints, and from all these various angles they found the project feasible and recommended	it.	An adverseopinion has been expressed by a senator and by	an	engineer of
Three Rivers who never made a survey of the St. Lawrence. But the report of the International Joint Commission, which is backed up by the Hydro Electric Commission of Ontario, is that sooner or later the work will have to be gone on with. It is true that at the present moment our financial condition is rather straightened, but in two or three years the work ought 
to be undertaken; when prices will have reduced and in the interval additional surveys should be made. In answer to one Progressive member who spoke the other day I would say that the work would amply pay for itself and cost the country hardly a cent. For these various reasons, Mr. Speaker, I shall support the amendment that has been moved, and which I know commends itself to the wisdom and judgment of the country.


Mr. H. E. LAVIGUEUR (Quebee County) :: I endorse all that has been said by my hon. friends on this side of the House complimentary of the hon. the Minister of Finance (Mr. Fielding) in regard to the admirable budget that he has submitted to the House. I am sure that the budget this year will meet with the approval of the great majority of the people. The minister had a hard task before him in preparing it, and he has certainly performed it well. When the Liberal party took over the reins of administration on December 6th last they realized the enormity of the burden they were assuming. The situation that faced them, was no doubt largely due to the war; but at the same time it was due in a great measure to the. bad administration of the late government. Since 1911 there has been great extravagance, and millions of dollars have been wasted in all parts of the country on all kinds of public works and war contracts. The debt of the country, which was $350,000,000 in 1911, is to-day $2,500,000,000, and the country is faced with an enormous deficit in connection with the National Railways. Although hundreds of millions of dollars have been expended since the Conservative party came into power in 1911, the province of Quebec, and especially the city of Quebec, to which I belong, has been refused the most urgent public works. The government was always very free with its promises, but when we called on the late Prime Minister the answer we invariably received was: There is no money available for public works. But there was always money to spare for public works in the other provinces.
The citizens of the city of Quebec and district have always borne their
10 p.m. share of the burden of taxation, and they are quite willing to shoulder their part of our national obligations to-day, but they deserve better treatment than they have received since

The Budget-Mr. Lavigueur
1911. I referred a few minutes ago to our railway deficits having very seriously added to our financial burden. I have not objected to the decision of the present Government to give public ownership and operation of our National Railways a fail-trial, hut I wish to state here that I think that trial should be of short duration, because, speaking for myself and for a great many citizens of our province, I must say that we have no confidence in public ownership and operation. And I think that any business man after investigating the administration of our National Railways in the province of Quebec, and especially in the city of Quebec, would share our opinion.
Before 1911 plans were agreed upon for the construction of a large station on Champlain Market in Quebec city to accommodate the business of the Transcontinental Railway, the city having entered into an agreement with the late government to transfer property worth over $2,000,000 on the specific condition that the government would spend $2,000,000 on a new railway station, and also provide a grain elevator and other public works. But after the election of 1911 everything was cancelled, and instead of building a $2,000,000 station the government erected on the Champlain Market site a building at a cost of about $30,000 which is a disgrace to those responsible for its erection and a disappointment to the city. The city never consented to the cancellation. The government also made an arrangement with the Canadian Pacific Railway Company for the joint use of the latter company's station at a very heavy rental. So now we have our Canadian National Railway using that station with its competitor,-the Canadian Pacific Railway ticket office on one side, and the Canadian National ticket office on the other side of the building.
But what prospect has our Canadian National Railway of securing a fair share of passenger traffic in competition with the Canadian Pacific Railway, when its competitor's train takes only five hours on the run to Montreal against six or seven hours required by its own trains to reach the same point. It may be asked why there is that great disparity in time between the two routes. It is simply because of the change made by the government in the plans which were prepared by the late hon. Mr. Parent, who was the first
chairman of the Transcontinental Railway Commission, who was for many years mayor of the city of Quebec and prime minister of his province-a man who knew exactly the requirements of the city and district of Quebec.
The contract that had been given for the construction of the Champlain Market station was cancelled and arrangements were made instead with the Canadian Pacific Railway. No citizen of Quebec can understand why the National railways should have chosen this way of coming into the city from the bridge. It is only four and a half miles from the bridge to the Champlain Market station, but instead of that the trains are going around eleven or twelve miles to get into the city. Furthermore, at the Canadian Pacific Railway station there is just a few thousand feet of yardage and the trains block the busiest street in the city of Quebec. No such difficulty would have arisen if the Champlain Market plans had been adhered to, for they would have given first-class accommodation and there would have been no congestion as there is now. The citizens of Quebec, the Board of Trade, and other public bodies in the city have called the attention of the Government and of the railway officials to this matter, but our demands were always met with the answer that there was no money on account of the war.
Plans were made for the construction of repair and construction shops for the railways to be erected in the city of Quebec. The most important shop in the East was to be built in Quebec city. It is only after three years of repeated endeavours that the citizens of Quebec have succeeded in getting these shops erected. In the meantime cars that should have been repaired in Quebec city have been hauled five or six or eight hundred miles, and sometimes as far as Winnipeg to be repaired. The St. Malo shops have been built at Quebec, but the main building which the government agreed to build for the construction of engines and cars has never been built. The shops that are there now have cost this country $2,000,000, and one would think after spending so much on them, these shops would be utilized. To-day there are employed in the St. Malo shops three or four hundred persons, where there should be three or four thousand, and that was the promise given. In the district of Quebec there are now five or six hundred disabled cars waiting to be repaired, and

The Budget-Mr. Lavigueur
these cars were lying there idle when the merchants and shippers were urging the Railway Commission to provide them with ears for the shipment of their goods, and they could not get a car. We have the proper equipment for repairing these cars at Quebec, but the cars lie there idle and no repairs are made.
Another very important enterprise was started by the government before 1911, and that was the St. Charles river improvements in Quebec. The government had proceeded with these works a certain way and had expended, if the figures given by the ex-Minister of Public Works are correct, over $1,600,000. During the war that work was stopped, and although the citizens of Quebec have repeatedly urged that it be continued, and have pointed out that the work already done will be completely wasted if it is not carried to completion, the answer has always been that there was no money available. That is the situation to-day generally in the city and district of Quebec with regard to any requests that are made. We have a great many urgent demands for public works and necessary improvements, and the maintenance of different works throughout the district of Quebec, but we are told there is no money available at the present time for public works.
I wish to put on record here a demand I have made of the hon. Minister of Public Works. I hope that the Minister of Public Works will see fit to put a reasonable amount in the Supplementary Estimates to provide for the expropriation of a wharf property at Ste. Petronille. There is another demand which I have made of the hon. Minister of Public Works for repairs to a wharf at St. Gregoire de Montmorency which was destroyed by the high tides in 1918. I hope the minister will provide an amount for this work in the Supplementary Estimates. There are lots of other improvements and works that are very necessary, but of which the city and district of Quebec is now being deprived. For many years now the citizens of Quebec have not enjoyed the favours of the government of the day, and it seems harder at this time that these works should not be gone on with. We are paying our share of the taxes and it is always hard for a citizen to pay taxes. Those in affluent circumstances find no difficulty in paying the taxation that is levied; it is far different with people of the lower classes. It is gratifying to the citizens of Canada to realize that the pres-
ent Government is taking adequate steps to meet the existing situation and to improve the conditions with which we are faced. One of the most effective means of doing that is by the exercise of economy. Already we have seen a great cutting down of expenditure in connection with the military and naval departments. The two ministers responsible for these reductions deserve well of the people for their courageous action. I hope that similar steps will be taken in other public departments so that ere long the public expenditure will be down to something like normal figures. From the budget speech of the Minister of Finance we have had the opportunity of learning the true situation of the country to-day. Every hon. member, and every citizen that desired enlightenment in this respect has had his wishes gratified. Measures of a practical nature will be adopted to meet the obligations of the country. Although from some of the budget proposals a diminution of revenue may result, on the other hand from other sources the receipts will be augmented. So that we have every reason to be satisfied that the affairs of the country are in such competent hands as they are to-day.


Mr. W. J. WARD (Dauphin) :: Mr. Speaker, I listened with a great deal of interest, some surprise, and considerable disappointment to the 1922 budget; but before commencing my remarks I would like to associate myself with those who have preceded me in congratulating the Minister of Finance upon his health and upon the vigour with which he introduced that budget to this House, because, I am sure it must have taken a good deal of nerve to present such a financial statement. I used to read with some pride the free trade and progressive speeches of the Finance Minister, and I had hoped that on returning to his old job as budgeteer he would implement some of those good old convictions into this year's budget. Alas, my disappointment, as I listened to him unravel that reactionary and mysterious budget! I use the term "reactionary" because I believe that any government that would introduce a fiscal policy imposing a tax upon thrift and industry and allowing the real wealth of the country to go practically scot free can only be termed reactionary. This budget represents the fiscal policy that will be applied to the commerce of Canada for the coming year. Immediately we mention the tariff we associate ourselves with taxation, and as I

The Budget-Mr. Ward
believe that taxation is the paramount question in the country to-day. I will therefore deal first with that phase of the budget. The budget we are now discussing is, in my judgment, the champion of high protection and of the indirect method of taxation. Personally I am opposed to the principle of protection and the indirect method of raising revenue. I believe that by the adoption of a more direct method of taxation we would at least exercise greater scrutiny as to where the public money was being spent. I believe that if we had raised all our taxes by a more direct method we would have at least seen that the late government did not spend $73,000,000 on a merchant marine that is practically tied up to-day and that is virtually worthless to Canada. I think we would have at least seen that the late government did not let a four or five million dollar contract to build a dry dock on Vancouver island in order to elect a minister of the Crown, when three months previously the last dry dock constructed on the Pacific coast went into the hands of a receiver.


Mr. LADNER:: Does my hon. friend suggest that a dry dock on the Pacific coast in the neighbourhood of Vancouver and Victoria is not required as an actual business necessity? Is he founding his remarks upon facts within his own knowledge?


Ernest Lapointe: Perhaps one, not two.


William John Ward: I am founding my remarks on this; that three months previous to the letting of that contract the dry dock at Prince Rupert went into the hands of a receiver.


Leon Johnson Ladner: That is 700 miles away.


William John Ward: Does the hon. member not know that the Vancouver dock was also in the hands of a receiver? I repeat that if we paid our taxes in a more direct way we would at least exercise greater scrutiny as to where the public money is being spent.
Now, let us examine for a moment, if you will, the purpose or the principle of protection. Is it not for the purpose of permitting the Canadian manufacturer to charge a higher price than he otherwise would? I am quite sure that when protection was introduced into the fiscal policy of Canada in 1878 it was not the intention of the government of that day that it should continue longer than was necessary to establish the Canadian manufacturer, so that he would be able to get on his feet,
so to speak. I am sure it was not the intention that it should be carried down to this date. With the immense natural resources of this country, and with the natural opportunities that exist for manufacturing, and after forty-five years of protection, if our Canadian manufacturers are not able to compete in the markets of the world, I say, for God's sake, let them get out of the way and make room for someone else who can.
The present Prime Minister (Mr. Mackenzie King) when leader of the Opposition, had a good deal to say, on his western trip, about the "invisible government" in Canada. He had a great deal to say about how that invisible government had fastened its fangs upon the late government, and with that I think his hearers all agreed. I do not think it takes a very far-sighted man to see the hand of that invisible government upon the budget that was introduced in this House a few days ago. The Canadian manufacturer is utterly Bourbon. He never forgets and never remembers anything, and his only conception of national prosperity is the gold he brings to his own chest. I think it was the hon. member for New Westminster (Mr. Mc-Quarrie) who asked what would happen to the Canadian manufacturer if we had free trade. In reply I would say that the Canadian manufacturer has always enjoyed a very large measure of free trade upon everything he had to buy, but he has constantly refused to extend that privilege to others, and I would like to remind the committee that the Canadian manufacturers have been able to very successfully compete in the markets of the world. Of that I am very proud, but I have noticed quite frequently that the Canadian manufacturer sells to the foreigners cheaper than he sells to the Canadian people. The Canadian manufacturer contends that he must be able to purchase his raw material in a free market, in order to carry on his business successfully.
I contend, Mr. Speaker, there is no such material as raw material. We go to mother earth, and take the ore from the mine, which is the finished product of the mine. It is the raw material of the smelter, and the pig iron is the finished product. The pig iron is the raw material of the steel refiner, and the steel is the finished product. The steel is the raw material of the manufacturer and the plough is his finished product. The plough is the raw material of the farmer, and wheat is his finished product. The wheat is the raw
The Budget-Mr. Ward

material of the miller and the flour is the finished product. The flour is the raw material of the baker and his bread is his finished product. The bread is the raw material of the working man who goes out to perform all these duties. The only raw materials we have are the earth, the water and the air we breathe, placed here by the Almighty for the use of mankind.
I contend that the moment we extend privileges to, or subsidize, one industry we must, of necessity, take that much from another industry. The business of Canada is what we might term one great universal, commercial intricacy, of which we are one large family. In looking over the Dominion, I do not see one single industry we do not need. I am proud of them all, I am proud to be a Canadian and proud of our Canadian institutions, but I think it is time that some of our Canadian industries got off the backs of the Canadian people, and stood on their own feet. If we ever expect this Canada of ours to be the prosperous country we would all like it to be, we must extend to others the privileges we would like to enjoy ourselves. We are all in a great family here on Canadian soil, and if we ever hope to make Canada that great country that we all look forward to, we must develop on Canadian soil a moral and a prosperous people, and we cannot develop that class of citizens in the presence of a privileged class, or with a fiscal policy that permits the massing of immense wealth on the one hand and dire need on the other.
I would like to point out the effect of the fiscal policy, or this indirect system of taxation. It is a sort of camouflage or a painless-extraction way of getting money. In looking over the budget I find that, according to the figures, we will extract by this painless extraction method in the year 1922 about $110 per family in Canada, while the average farmer will pay about $220. I shall deal with it in the broader sense, so that I will take $110 as the amount which the average family in Canada will have to pay under this budget. If that $110 were all they had to pay it would not seem so bad, hut the impost continues to grow and the farther it goes the bigger it gets. That $110, when it reaches the ultimate consumer, or in the final analysis in many cases, amounts to fully $200. The tariff is of a snowball nature; the further you roll it the bigger it gets.
I became somewhat curious and I thought I would like to learn the origin of this indirect method of taxation. I discovered 
that its origin was about the time of the Napoleonic wars. The people had been taxed so insistently through the direct method that they rebelled and refused to pay any longer, but along came some evil genius with this new idea of taxation and it worked so well that it has been carried on to the present day. However, going back to the snowball nature of this tariff, we will go across the border into the United States, or anywhere and we will purchase $100 worth of woollen goods. Those woollen goods are subject to a tariff of 35 per cent. When the goods reach the border the importer must pay the duty. I put the profit of the importer at 10 per cent, which I think reasonable.


Mr. BRISTOL:: I think you are giving an illustration of woollen goods and saying if you bought them in the United States for $100 you would pay 35 per cent duty. Are you aware, as a matter of fact, that all the woollen goods that come into this country come from England?


William John Ward: I will accept my hon. friend's statement that goods from England are bearing a tariff of 27J per cent under the new tariff proposals.


Edmund James Bristol: No, 17J per cent.


William John Ward: I looked this up only today and, according to the new schedule, I think the duty is 27i per cent. Possibly I did not read the figures aright. I am, however, merely using woollen goods as an illustration. I do not wish to infer that we buy all our woollen goods in the United States. I only wish to make a comparison, because I have a long list of goods, many of which come from the United States or other foreign countries and which bear, on an average, a duty of 30 per cent. The list is:
Glass, 25 per cent; leather goods, 30 per cent; furniture, 30 per cent; stoves, 25 per cent; electrical goods, 21 i per cent; coffins, 25 per cent; tombstones, 35 per cent; screen doors, 30 per cent.
You cannot avoid this tax; indeed, it follows one from the cradle to the grave.
Medical goods, 30 per cent; cottons, 32J per cent; woollens, 35 per cent; soap, laundry, 1 cent per pound; castile soap 2 cents per pound ; all other soaps, 32J per cent.
So that the average tariff is about 30 per cent. The point I wish to make is this: If we buy $100 worth of goods outside of this country, when they reach the borders of Canada, the importer must pay, say 30 per cent, which amounts to $30. He passes the goods on to the wholesaler,

The Budget-Mr. Ward
and I put his profit at 20 per cent, which, I think, is very reasonable. The goods have now cost $139.60. He passes those goods on the retailer, who is possibly your merchant in Ottawa, and the tariff charges which were $30 have now become $51.48. I have taken the shortest possible route. There are, however, many cases Where goods that the good housewife buys every day, pass through five or six middlemen's hands, and the tariff reaches, in some cases, 100 per cent before the goods arrive at the home., This is the evil of the present system of taxation, namely, that there is no end to it, and the ultimate consumers, who, in a large measure, are the agricultural people of this country, have their backs against the wall. When the tax reaches them, it can be passed on no further. This tax is the one that we are positively opposed to, and we must consider that the average family in Canada have, in addition to their $110 of federal indirect tax, other federal taxes and municipal and provincial taxes, the total amounting to tb's enormous sum of $507 per capita or $2,850 per family. I would like to ask the House and the people of Canada if they think that the families in our small towns and villages and in the rural districts of this country can bear a public burden of $2,850 in addition to their own financial burdens.
It has been my privilege in the last couple of years to visit many rural homes in western Canada, and as one hon. member remarked to-night, the story has not been half told of conditions in that part of the country. No one is more desirous than I am of seeing the whole of Canada go hand in hand and the whole country developing; but if agricultural conditions remain as they are, it is impossible for Canada to prosper. Agriculture to-day in western Canada is on the brink of a precipice; and I want to ask the business men of this country what they are going to do about it. Are they going to let it go over the precipice, or are they going to bring it back and place it on a -sound, satisfactory and remunerative basis? The debt of this country will never be paid, and it will be humanly impossible to meet our obligations unless agriculture is placed on a sounder and more satisfactory basis. It is from the top six inches of the tillable soil of this country that the large measure of our debts must be paid.
I have visited not one but almost thousands of homes in western Canada; I have slept in many of those homes, and I have seen where a mother has raised a family
of six, eight and even as many as ten children in a little log shack. The parents have been there in many cases for twenty years or longer, they have produced tens of thousands of dollars worth of wealth; but the system of taxation does not permit them to retain enough of that wealth to put in even the commonest kind of furniture into their homes. In many of these homes the mother is still scrubbing a rough board floor, home-made furniture, and there i's not even a blind on the window. When such is the case, how can we expect the boys and girls to remain on these farms or in such homes, of which we have thousands in western Canada?
In my district, that of Dauphin, which, without any boasting, is, I think, the richest municipality in Manitoba, let me take the farmers or the class in that municipality who have been there for twenty years or longer. I will not take the others, because they may have bought their farms at enhanced values and all that sort of thing, and they may have met difficulties that may be almost insurmountable. I will take the men who have been in the district for a longer time and who have secured their farms at a low figure or have homesteaded them. If you go to any of those farmers to-morrow morning and ask them to liquidate, 75 per cent of them cannot liquidate with enough to pay their debts. How much longer can this state of affairs continue?
A couple of weeks ago I made a visit into south Huron, and in driving along one line, I noticed five beautiful farms in succession, with brick houses, and nice barns, well fenced, but no one living on those farms. We counted, through that district, many farms with no one living on them. What is the reason? Out in Ottawa -South where I live, a new home has been born nearly every day since I moved out there last February. I noticed, in looking up the census records, that in 1870, 83 per cent of the population was engaged in the industry of agriculture in Canada. I see to-day that about 50 per cent is engaged in agriculture, 'and I think, if a close analysis were made, we would find that the percentage was nearer 45. I venture the prediction that, unless the fiscal policy of this country is changed so as to place the burden of taxation more equitably upon our people, the influx from the rural parts of this country to our cities will be very much greater in the next few years than it has been in the

The Budget-Mr. Ward

past. I do not attribute all these troubles to the fiscal policy of this country, although I think it has a great deal to do in creating these conditions. There are many other natural and unnatural problems surrounding agriculture that make farm life almost impossible in these times. I believe, if we took the $220 a year that the average farmer pays in tariff taxes' and placed that ulpon {the natural wealth of this country, it would go a long way in relieving the apprehension that now exists.
I should like to deal for a few minutes with the railway situation. We speak about the railway problem as being the great problem of this country. It is a great problem, but I think that problem could be solved very quickly if we set about it in a proper manner. Some twenty or twenty-one years ago I spent a summer in Saskatchewan in search of a homestead, and after spending some months travelling through part of Saskatchewan, I came back to Dauphin without a homestead. You might ask why. I travelled over what represented millions of acres of good arable land, but there was none of it to be homesteaded; it was all bought up by speculators. The government of that day had a flat rate of selling land at a dollar an acre, and they sold millions of acres at that price. I know one company who bought 3,000,000 acres, in what was then called the Northwest Territories at one dollar an acre. The average selling price of raw land in that province according to statistics, is about $21 an acre, so that those land speculators have taken out of the province of Saskatchewan, and other western provinces, an unearned increment of about $21 an acre. This is what happened. The legitimate settler when he came to settle was forced to go away back, 30, 40 and 60 miles from the railway in order to get cheaper land or a homestead. They developed settlement and then demanded railways, and the railway companies, or the government, as the case might be, eventually came to their relief. But in order to do so they had to build long stretches of railway over unproductive, speculative territory which in many cases is still lying idle waiting for a higher price. Now, if the Government really wants to usher in- prosperity let them be willing to give land free to all those who are willing to give time and energy to the production of wealth and give the set-

tier an outfit to work the land at 4 per cent interest.
It is humanly impossible for a man to buy a farm to-day, and pay 7 or 8 per cent interest on the farm and 7 or 8 per cent interest on the outfit to work it. I know this to be the case, because farmers in my own district, who have been there for 30 years, find themselves bankrupt aftei producing tens of thousands of dollars of wealth. I do not wish to be misunderstood when I refer to these matters. I dc not wish to be pessimistic. But I think the East should compromise with the West. I told my constituents before coming here that any representative coming from western Canada to this Parliament would have to bear in mind that it was necessary that he should show a spirit of compromise. I told them that so long as the seat of government was situated in Ottawa-and I hope it always will be here-we should always have to come here in that spirit. And I say so still. But I do not think that eastern Canada recognizes the conditions that exist in western Canada today. The hon. member for Brantford (Mr. Raymond) this afternoon complained of the assistance that this Government was giving to agriculture. Well, in the year 1920, according to our trade returns, we consumed in Canada some $600,000,000 worth of goods, three-quarters of which were manufactured within the borders of this country, the other quarter having been imported. We paid an average tariff of about 30 per cent on these goods. Now, the tariff is there for a purpose, and our experience shows that the Canadian manufacturers simply raise the selling price of their articles to the amount of the tariff. If that be true and we imported only one quarter of the goods consumed that year, on which the Canadian government collected $156,000,000 revenue, then we paid into the pockets of the Canadian manufacturers $450,000,000. And yet an hon. member can get up in this House and criticise the Government for spending $6,000,000 on agriculture, which furnishes from 45 to 65 per cent of the exports of this country. After all we must admit that the only source of wealth is in our exports, whether they be agricultural or manufactured products.


Edmund James Bristol: What is the hon. member's view as to gold, silver and iron mines? Are they sources of wealth?

The Budget-Mr. Ward


William John Ward: Absolutely. Professor Ely,
in his book on taxation in the states of the American Union, made a statement in regard to this question. He is one of the recognized authorities on this subject in the United States, and he says that taxes might be so levied by a skilful hand as to give free scope to every opportunity and promote industry to the highest degree. He referred to this as the taxation of natural resources. On the other hand, he says, taxes may be so levied by ignoramuses as to place a dead weight about the neck of the community. These are his words, not mine. Not long ago a piece of property, a waterfront, was sold at Fort William for $1,600,000. Now, to whom did that $1,600,000 really belong? Did it belong to some land speculator that happened to buy a piece of land up the river, and then sit tight until the people built railroads, and the grain producers caused elevators to be built, when he found the opportunity propitious for the sale of this land?
The national debt of the country is enormous, but it is a mere bagatelle compared to the vicious and inefficient system of taxation that has governed this country for the last thirty or forty years and which has permitted speculators to carry away, in the form of unearned increment, billions of dollars from this country. We are told by economists that there are over 200,000,000 acres of land held by the speculators between the Great Lakes and the Rocky mountains. Well, let us get some of the revenue that we ought to derive from these lands instead of taxing the children ef the country. It is little short of a crime that in a country where we have six or seven months of winter we should tax the food and clothing of the poor people. While the great natural wealth of this country is passed up. Every time a babe is born the first thing the mother gets is a slap in the face to the extent of 30 per cent when she goes to buy woollen goods to wrap that infant in. And the tariff follows us all the way to the grave. Professor Drummond makes this observation that in our big cities to-day we find that the families are all becoming triangles, pa ma and Mabel; the only place where we come across the old fashioned family is in the little town, and village or the rural district.


Mr. HANSON:: Is that due to the tariff?


William John Ward: I say that we are simply
penalizing every mother who brings forth
i53a
a child, arid it is a crime that the government of a country like this should have to resort to these forms of taxation, when the land which is affording the speculators such opportunities to make money could be so easily taxed. Of all the countries that Went into the war, Canada had the best opportunity to emerge without a debt. There was no other country that participated in the war that had the natural resources that we had. And what did Canada do? She paid on her war account, by direct taxation while the war was on, only 6 per cent, while Great Britain, with her resources all gone years ago, was able to pay 86 per cent, and the United States 82 per cent.


Mr. STEVENS:: Where did the hon.
member get the 6 per cent? Is he aware that Canada paid, out of revenue, war expenditures to the extent of $553,000,000? That is certainly more than 6 per cent of the total expenditure for war purposes.


William John Ward: I was referring to direct
taxation. All that Canada raised by direct taxation was 6 per cent.


Henry Herbert Stevens: There is no record
that the hon. member can quote to substantiate that statement. I have not the exact figures before me but they are certainly very much in excess of the figure my hon. friend has given. He is utterly unable to quote anything to substantiate his statement.


William John Ward: I have my figures from
the Grain Growers' Guide.


Some hon. MEMBERS:: Oh, oh.


William John Ward: Hon. gentlemen may smile, but the Grain Growers' Guide is a reputable journal, and if it or any other journal made a false statement hon. members to my right would be the first to call them to order.


Henry Herbert Stevens: I do not undertake to
call them to order, but I have pointed out on frequent occasions the absolute fallacy of their statements and have given the official figures to prove it. Unfortunately I have not those figures by me to-night.


William John Ward: I do not wish to pursue that point with the hon. member. However I should like to answer another statement that the hon. member for Brantford made this afternoon in dealing with the binder twine situation. I do not know whether he deliberately attempted to mislead the House, but he certainly left a wrong im-
The Budget-Mr. Ward

pression. He gave as the reason the binder twine industry was in its present unsatisfactory condition was because binder twine was on the free list. That is not the reason at all, and I am sure the hon. member must surely know the facts. Some years ago the International Harvester Company cornered practically all the land in Yucatan where sisal is grown, and they still retain control. Therefore it does not make any difference whether we have one or twenty binder twine factories in Canada the price of the product would go up.
In conclusion, Mr. Speaker, I would again appeal to this House to give favourable consideration to the industry upon which all our other industries must depend. I look upon our industries as one great tree, with agriculture representing the roots, and it seems to me that any fiscal policy based on protection endeavours to develop the branches without taking care of the roots. If we develop our basic industries there is no question about the position of our manufactures. In my judgment we need more manufactures in Canada to-day. If we have freer trade we shall have an expansion of all our industries. I am not a free trader in the sense that some hon. members have branded the Progressive party. I do not believe we should move one whit faster than it is possible for the manufacturer to adjust himself to changing conditions, but I do say that in view of the intricacies of our business we will never develop that sound economic stability so essential to our national progress unless our manufacturers are willing to compromise with our agriculturalists.
On motion of Mr. Bristol the debate was adjourned.
On the motion of Mr. Mackenzie King the House adjourned at 10.55 p.m.
Friday, June 2, 1922.