1923-05-17

NEW MEMBER INTRODUCED

Mr. SPEAKER:: I have the honour to inform the House that the Clerk of the House has received from the Chief Electoral officer a certificate of the election and return of Joseph Felix Descoteaux, Esquire, for the Electoral District of Nicolet.
Joseph Felix Descoteaux, Esquire, member for the electoral district of Nicolet, introduced by Hon. Jacques Bureau and Hon. Ernest Lapointe.

Sixth report of the Committee on Miscellaneous Private Bills.-Mr. McGiverin.



JAPANESE IMMIGRATION

Mr. W. G. McQUARRIE (New Westminster) :: May I be permitted, Mr. Speaker, to present a petition, signed by W. J. Bartlett and 1,436 other residents of the lower mainland of British Columbia and Vancouver Island,. asking that no further naturalization certificates be granted to Japanese, and also that such changes be made in the immigration laws as will prevent a further influx of Japanese to Canada.



THE BUDGET


[Stage Direction]
The House resumed from Wednesday, May 16, 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 Mr. Robert Forke.
Mr. R. K. ANDERSON (Hal ton):: Mr. Speaker, I find the most difficult part of making a speech in this House is to get started; and I notice that some members find it equally difficult to stop. The budget speech may be described as the chief event of the session. A great deal of interest is always taken in it not only by hon. members but by the people generally, for it deals with taxation and debt. Once you touch the pockets of the people you instantly arouse a good deal of criticism and opposition, and I do not think that any man in this House or outside knows more about that feature of a budget than the hon. Minister of Finance (Mr. Fielding).
The present budget appears to me to be drafted not so much for the purpose of meeting the exigencies of the national situation as for its political effect. It is a colourless and featureless budget devoid of any outstanding characteristics. The hon. Minister of Finance last week presented his seventeenth budget, a record in our parliamentary history, and I compliment him on his long and useful service to the country. The hon. gentleman, previous to the election of 1896 was an
The Budget-Mr. Anderson

advocate of free trade or tariff for revenue, but during the following fifteen years while in power, he made no effort to implement his promises, and the people watched in vain for some signs that he remembered his promises. In 1911 he asked the approval of the country of a reciprocity pact with the United States, but the people would have none of it. That is a matter of history. But now, in 1923, after the country had spoken so emphatically on that question in 1911, he comes back with a resolution for the same purpose.
The hon. gentleman has been either a free trader or an advocate of a tariff for revenue all the time he was in opposition, but in power he has always been a protectionist. It would be interesting, Mr. Speaker, to know what are the reasons that cause this sudden change of front when he succeeds to office. What caused his change of front in 1896, and again in 1921? Are we to believe that the hon. Minister of Finance was not sincere in his demands for a tariff for revenue when he was in oppostiion? Was his change of front due to a fear on his part that such a policy would not be in the best interests of the country? Did he fear that such a policy would not be in the best interests of the party in which he occupies such a prominent position? During the Liberal regime of 1896 to 1911, a period of 15 years, the Liberal government reduced the average rate of tariff duties by the small amount of 79/100 of one per cent. That statement was made in this House a few years ago by the then member for Red Deer Dr. Clark. Dr. Clark evidently knew what he was talking about when he made that statement, because he was a member of the Liberal party. That was the full extent to which the Liberal party ventured into the charmed field of free trade. Evidently when they get into office it does not present a pleasing view to them; and it is less pleasing now, for since they came into office, instead of reducing the average tariff duties they increased them in the year 192223 by 74/100 of one per cent over what they were in 1921. This is a peculiar way to lower tariff duties, to get down to a tariff for revenue purposes only or to a free trade policy. I cannot say that I blame the Finance Minister for this. I believe in the principle of protection-a moderate protection, not a high protection-and believing in that I cannot blame the minister for not reducing the tariff duties. The figures upon which I base this statement are the following: In the first eleven months of 1921-22, ending February 28, 1922-I am taking the eleven months be-
IMt. Anderson.]
cause' at the time I made the calculation the figures for the whole year were not available -the amount of dutiable goods imported for home consumption was $422,309,490. The duty collected was $107,186,255, making an average rate of duty on all dutiable articles of 24-23 per cent. In the first eleven months of 1922-23, ending February 28, 1923, the amount of dutiable goods imported for home consumption was $475,583,587, on which the duty collected was $118,872,102, making an average duty of 24-97 per cent and showing an increase over 1921-22 of -74 per cent. The total merchandise dutiable and free imported in the same period-and I am making the calculation on the basis of all articles imported, whether there was duty collected on them or not-amounted to $668,425,606 on which was collected for duty purposes $107,186,255, the amount which I have already mentioned, showing an average rate of duty on all goods of 16 -34 per cent. For the eleven months period in 1922-23 there were imported $710,583,616 worth of goods dutiable and free, on which was collected $118,872,102, showing an average duty of 16-81 per cent, or *34 per cent higher than it was in 1921. I am just bringing these facts to the attention of the House to show how far the Minister of Finance and the Liberal party have kept their promises to the people to reduce the duties on imported goods. Instead of reducing them, on the average they have raised them. I could give the figures for the whole year, having received them subsequent to making these calculations, but I think it is unnecessary to do so.
I may say that the Minister of Finance is now firmly entrenched in the National Policy of Sir John A. Macdonald. After seventeen years during which the Finance Minister was pledged to a tariff for revenue he comes down this year with the statement that he believes in the principle of protection and that the tariff of Sir John A. Macdonald of 1878 is good enough for him. In making the statement that he could not further reduce the tariff duties he practically accepted the principle of pro tection. The principle of protection is the real essence of the National Policy of 1878. That National Policy was introduced not with the idea of its standing always as a moderate or a high protective policy; It was introduced a:' a protective policy, and when the hon. Minister of Finance accepts that policy to-day he accepts in his financial affairs the principle of protection. Having posed all these years as being in favour of a tariff for revenue, in 1923 he changes by one touch of his magic

The Budget-Mr. Anderson
hand the high protective policy of Sir John A. Macdonald into a moderate tariff policy a policy which hon. gentlemen now on the government benches designated as a high protective tariff while in opposition. A tariff "in favour of the big interests," a tariff that "imposed intolerable burdens on the people," a tariff which he pledged himself and his party to do away with when elected to office, has been changed over night by his magic touch into a tariff for revenue.
The hon. Minister of Finance is not the only convert to the principle of protection I must compliment the right hon. leader of the Opposition on the efficiency he has shown in making converts, because it is largely due to him that these conversions have been taking place. The hon. Minister of Agriculture (Mr. Motherwell) only a few days ago in his statement expressed the opinion that the protective principle was all right. I understood him to say that a tariff for revenue was impossible without a certain measure of protection, that is, that there is an incidental measure of protection, in any tariff for revenue purposes. The hon. Minister of Agriculture has not thoroughly studied the question or he would not have made such a statement. It is not in accordance with the facts and with experience. The British Government only a couple of years ago collected over 8600,000,000 in duties without giving any incidental protection. Those duties were placed upon articles which they did not produce at home.


Mr. MOTHERWELL:: That is understood always.


Robert King Anderson: The hon. minister did
not make that statement in his speech the other day.


William Richard Motherwell: Later in my remarks I did.


Robert King Anderson: There was nobody to
protect. Nobody was producing the article, consequently no measure of incidental protection was given to the English people. Perhaps what the minister meant when he made that statement was that he could get away from the protective principle by having an excise duty on the articles which we produce. He could offset the protective principle in the tariff by putting on an excise duty equal to the import duty on the article in question, but I cannot see where or in what way that would reduce the cost of living to any people. The Minister of Finance in his budget speech last year said that he intended to make such adjustments in the tariff itself as would so far as possible reduce the cost of living, and he did last year make an attempt at
that by reducing the protective duty on farm implements by two and one-half per cent. But in lieu of that he added a two per cent excise tax. The result was that the cost of the imported article remained practically the same and the home-made article was raised by two per cent. The farmer got absolutely no advantage from it. You cannot reduce the cost of living by an excise tax.
The hon. Minister of Immigration and Colonization (Mr. Stewart) would appear to me to be a convert to the principle of protection. He said in his speech yesterday:
I do not believe, and I have had nothing to convince me, that so heavy a rate of protection is required as is given to many of the industries existent in this country to-day.
The minister does not oppose the principle of protection; he is simply opposed to high protection, and thus protection is being kept in force apparently with the connivance of the Minister of Immigration and Colonization. The Minister of Finance in his want of confidence motion on the budget of 1921 made this statement:
The tariff is a tax, and the aim of legislation should be to make taxation as light as circumstances will permit.
I do not dispute that statement. I think it should be the object of legislation to make the cost of living as light as possible. The Minister of Finance implemented that by stating he would make an effort to reduce the cost of living. Now, Mr. Speaker, the tariff is certainly a tax, and a tax on somebody; there may be some dispute at times as to who pays the tariff tax, but certainly there can be no dispute as to who pays an excise tax. An excise tax is a home tax. It is placed on the commodities in the country itself. There is nobody but the Canadian people to pay it. But when an article is imported into this country there may be cases in which the exporter of the article, that is the producer in a foreign country may pay all or part of the duty. Who pays the tax on articles that are dumped into this country at prices lower than the cost of production in the country of origin? It may not be the consumer in this country. Possibly it is the manufacturer or producer of the article in the foreign country. There may be some question about that, but there can be no question about who pays an excise tax.
With regard to the sales tax, no matter what can be said in regard to its being a means of increasing the revenue, it directly and immediately is reflected in an increased cost to the Canadian people of the articles on which the duty is placed. It has an im-
The Budget-Mr. Anderson

mediate effect. It does increase the price of that article. A larger amount of revenue is collected from the people, and the manufacturer or the dealer passes on the tax to the consumer. If he has a narrow margin of profit he must do that or go out of business. The sales tax can have no other effect but to increase the cost of living to every Canadian. So long as the need of taxation exists, so long as a large revenue is necessary to earn- on the business of this country, a sales tax judiciously applied is a very efficient tax. I consider that it is a just tax because the average individual will pay the tax in proportion to his ability to purchase. The more wealthy he is the more he will purchase and the more taxation he will pay. I can have no objection to that tax.
There is, however, one feature about the present increase in the tax to six per cent to which I would refer. I would think that a tax at the fountain source is perhaps the best way of collecting it, and I commend the Minister of Finance for making the change. Last year instead of changing the application of the tax he increased it by fifty per cent. I want to show by some figures I have that that was immediately reflected in the returns of the Excise department, and in connection with these returns I want to emphasize the fact that as the tax was collected entirely from the Canadian people it must and did result in an increased cost of living. I remind the House that this tax came into force on the 23rd of May, 1922. The revenue from the sales tax for April, 1922, was $2,072,000. The average amount collected for the previous four months-I did not think it was fair to take only April, because it may have been smaller than the other months, so I took the average collections from the domestic sales tax for the months of January, February, March and April, 1922-was $3,-
126,000.	Hon. gentlemen will notice that in May-and remember, the tax only came into force on the 23rd of May-there was a decided increase, in sales tax collections. Here are the figures:
Sales Tax Collections,	Domestic Goods,	May-December,
	1922	Increase over
		average
Month-	Collections	Jan.-AprilMay	. *3,829.000	$ 700,000June	. 3.900.000	800.000July	. 5.072,000	1,900,000August	. 5,558,000	2,400,000September	. 6,314,000	3.200.000October	. 6.692.000	3,500.000November	. 6.213.000	3,100,000December	. 6,113,000	3,000,000Total	*18,700,000

During those eight months the Finance Minister by his increase in the sales tax took from the pockets of the Canadian people $18,700,000 more than would have been taken by the old rate of duties, that is, if the average rate of $3,126,000 for the first four months of the year had been maintained. That is only from the domestic tax. But the sales tax was also placed on imported articles. The average return from the sales tax on imported articles for the first four months of 1922 was $1,485,000. This tax also went into force on the 23rd of May, 1922, and the increase in the months following were:
Sales Tax Collections,	Imported Goods,	May-December,
	1922	Increase over
		average
Month-	Collections	Jan.-AprilMay	.. $1,771,000	$ 300.000June	.. 2,376,000	900,000July	.. 2,338,000	900.000August	.. 2,634.000	1,200,000September	.. 2.387,000	900.000October	
,	.. 2.533,000	1,100,000November	.. 2.663,000	1.200.000December	.. 2,471,000	1,000,000Total	*7,500.000
So we have increase of sales tax on domestic goods $18,700,000; increase of sales tax on imported goods $7,500,000, or a total of $26,-
200,000.	This amount was taken from the people in excess of what they might have paid. The revenue was necessary; I am in no way criticizing the Minister of Finance for having asked the people to contribute it.	I am only saying, that by increasing the sales tax in order to add to the revenue he was not adopting the most satisfactory way of reducing the cost of living. It had not the effect which he intended; as a matter of fact, the result was the opposite. The decision to levy the sales tax of 6 per cent at the source of production of the article is wise, I believe. There may be some difficulty in deciding just where is the fountain source of the finished articles, for what is the finished article to one manufacturer may be the raw material to another. I believe the Minister of Finance will experience considerable difficulty in coming to a conclusion as to where the tax should be levied. No doubt a committee will be appointed, or possibly the department will itself undertake to settle this matter, and I presume that regulations will be made to ensure that the tax shall not be collected more than once. That was the fault in connection with the previous tax of \\ per cent, for I believe that in many instances it was collected several times, probably three or four times

The Budget-Mr. Anderson
over; at any rate, in certain instances it was as high as 15 or 20 per cent of the cost of the article. I hope that the minister will devise some means of preventing this repetition of payment in connection with the present 0 per cent tax.	.
In regard to the question of deciding upon the origin of a finished article, in the manner of clothing or of a cloth, for example, I do not know how the minister will settle the point as to who is the manufacturer. Will it be the tailor, the retail man who makes the clothes, or will it be the manufacturer who produces the cloth? These are difficulties which I have no doubt can be overcome, but I have certain criticism of the question.
Many manufacturers as well as men of business have stated that a turnover tax would be more satisfactory than the sales tax. It is possible that a turnover tax might be more advantageous, because the man who had large profits would pay a greater proportion of it. He would not be so apt to pass it on to the consumer; he could absorb it into his business. I think that this suggestion in regard to a turnover tax might well receive the consideration of the Minister of Finance in the future.
There is one particular article on which the sales tax was placed last year in regard to w'hich some modification would be advisable. As I have previously stated, I am not a high protectionist, and I think there are some industries in this country which possibly are too highly protected. One of these, I think, is the automobile industry. This industry is making rapid strides in Canada and in the last year this country, a country of nine million people, exported half as many automobiles as did the United States, with a population of 110,000,000. This shows that the industry is flourishing in this country. There is a duty of 35 per cent on the imported car, and to that was added last year a sales tax of 10 per cent. I did not understand from the Minister of Finance whether he intended to abolish that tax or not; I think it has been reduced to 6 per cent; that at least is my understanding of the matter. When an automobile is introduced into this country a 5 per cent charge is made on it over the sales price in the United States; to that there is added 35 per cent of a duty collected in Canada; and on top of that was the 10 per cent sales tax, making something like 52 per cent of the cost price on the American side which was charged to the purchaser here. That is too great protection, and I think that the minister might have left off the 10
per cent sales tax on the imported car and brought the protection down to 25 per cent.
Now, the Minister of Finance has not only come over as a convert, to the protective principle in our policy, but he has repudiated the whole Liberal platform of 1919. In his speech in the by-election at Windsor on February 27, he made this statement, speaking on the subject of the Liberal platform of 1919:
That is not the policy on which I appealed to the country.
I only wish the Minister of Finance were in his place; I would ask him why he used the pronoun "I." I do not know whether he meant to imply that his personal policy was different from that of the Liberal party. However, he went on to say:
And that policy was never endorsed by the Liberal party after it got into power.
Well, we know that it was not; that was undoubtedly a truism. The Liberal party never endorsed their policy after they got into power; they used it mereW for the purpose of getting into power, and it was a dead letter after they assumed office. Now the Minister of Finance repudiates it altogether. He said that he never at any time promised to endorse it.
Now I come to the question of the finality of the minister's budget, regarding the tariff. There is some doubt as to whether the minister really intimated that we had reached bottom in the reductions in the tariff. Evidently the Minister of Agriculture (Mr. Motherwell) does not believe that we have, because in the course of his speech in this House the other day he made a very significant remark. I will quote his words:
Who said this was the last word?-
Meaning the statement of the Minister of Finance that he had reached the final decision with regard to the reductions in the tariff.
Who said this was the last word?. . . . Nobody said it was the last word. The Minister of Finance said distinctly there was no finality, that what parliament did to-day it might undo to-morrow.
Did the Minister of Finance leave a way for retreat from the position he has taken? Is the Minister of Agriculture right in his supposition that his colleague did not mean what he said? The words that the Minister of Finance used in his speech were these:
Speaking broadly, it is possible to give the country a reasonable assurance of stability of tariff.
Now, I believe that the country has a right to accept that statement from the Minister of Finance and to assume that the question of tariff reductions has been settled. It has gone
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out to the people of the country, particularly those encaged in industry, that the matter has been decided, and the effect of this assurance is to dispose these people to extend their plants and to go further into manufacturing industries.
Coming now to other phases of the budget, let us consider the statement of the Minister of Finance with reft-;trice to the necessity for economy. I think that economy in the government is absolutely necessary. The time has arrived, I think, when revenue might very easily meet expenditure. We should balance our budget and endeavour in addition to have a small surplus with which to start a sinking fund for the purpose of paying off the national debt. If we go on adding to the debt each year the interest charges will increase so that it will become an intolerable burden to the people. Why should we pass that burden on to future generations? We should stand up to our responsibilities and make every effort to meet them as we go along. But the Minister of Finance makes no effort to do this in the present budget ; in fact, he gives us a statement to the very opposite effect, that next year it is possible the revenue will not meet current expenditure and that there will consequently be a further addition to the national debt. I have looked up the national debt of Canada for some years back and I find that in 1867 it was $75,000,000; in 1914, $335,000,000; in 1918, $1,191,000,000; in 1922, $2,422,000,000; in 1923, $2,471,000,000. That is the net debt of the Dominion, and it is still increasing; last year the Minister of Finance added $49,000,000 to it. I had the curosity to look into the current expenditures of previous years; I mean the ordinary expenditures of government, not capital expenditure. I think it is reasonable to take from the expenditures of the present year the amount that is paid in interest on the national debt, increase due to the war. that is, the debt incurred by the war, and that includes the amount paid for pensions and other expenditures in connection with the war.
I have compiled the figures, putting the year 1923 on the same basis as 1913, when there was no war and had not been for some time. The war is now five years behind us. It is that far back in history, and it is time we were getting down to a pre-war level. Removing, as I have said, from the expenditure of 1923 the amount spent in pensions and the interest on the war debt, we find that the expenditures were as follows:
1913		 $112,059,000
1914		 127,384,000
1916	 $130,350,000
I Mr. Anderson.]
Hon. members will observe that these were pre-war years. Then take the following years:
1918	 $178,284,000
1920	 303,843,000
1923	 331,780,009
Taken on the basis which I have suggested -deduction pf interest on war debt and	pensions-hon.	members will find
that in 1913 the expenditure was $112,-
059,000.	Taking from the expenditure of 1922 the $158,928,000 paid in interest on the war debt, and pensions, we have left an expenditure of $76,000,000 in excess of the expenditures for 1913, for ordinary expenses of government; and over 1914 it was $61,669,000. While we spent in 1923, $61,089,000 more than in 1913-that is, the ordinary expenditures of government, without taking into consideration expenditure on capital account or for war, the expenditure of 1923 exceeds that of the war years by many millions. As follows:
Exceeding 1916 by $51,000,000.
Exceeding 1917 by $47,000,000.
Exceeding 1918 by $29,000,000.
We are not getting back to pre-war conditions as fast as we might. During the war there were many activities which are not in existence, now. There were many civil servants in the Militia department and other departments that are not needed now. Their services have been dispensed with, and if they had not been dispensed with there would have been a very much greater balance against the present day expenditure. It is all very well for the minister-and I commend him for it-to call upon the people to economize in their private affairs, to get down to practical business by producing more, but the trouble is that the Finance Minister is not setting a good example. He preaches a good doctrine but does not practice it. I think that economy is vitally necessary at the present time in the conduct of affairs by the government. We should endeavour to make ends meet, and establish a sinking fund in order to reduce our debt. We should make an effort to reduce the interest charges year by year. We do not desire large surpluses, Mr. Speaker, but we ought to make the budget balance and provide a few millions for a sinking fund. I think that leadership is needed in the matter of economy, and the present Finance Minister is not giving us that leadership.
The budget speech embodies a resolution offering reciprocity to the United States. Now, we had a reciprocity pact with the United States once before-from 1854 to 1864. Immediately at the end of that period the

The Budget-Mr. Anderson
United States gave notice that they would abrogate that treaty. The treaty was made for a period of ten years, renewable if the contracting parties were agreeable. They abrogated the treaty immediately after the United States Civil War, giving as their reason that they needed a greater revenue, that they needed to restrict imports in order to bring their dollar up to par value, and also that they desired to cultivate industries in their own country and give employment to their own people. At that time, Mr. Speaker, we had made arrangements by which our transportation companies were running north and south in order to take care of the trade which went in those directions. Transportation will follow commerce and possibly commerce will follow transportation, but at any rate we had placed ourselves in such a position that we imported from the United States most of our manufactured commodities, and we looked to the United States for a market for the produce of our farms. The result was that after the Civil war the United States put up a tariff duty against us. We had no tariff duty against the United States, and the consequence was that after 1865 we had the greatest and most serious depression in trade this country has ever experienced. In 1876 it was so serious that parliament appointed a commission to mquire into the problem. And, looking up the history of that time, it seemed peculiar to me that the committee inquiring into those conditions went over to. New York city, and sat there for a considerable time inquiring into the depression in trade conditions in the Dominion of Canada. At that time the treaty was abrogated, and a duty was placed against Canada largely at the instance of the agricultural interests of the United States. History is repeating itself. Although the United States was not interested in the Great War to the extent that we were, immediately after that war the agricultural interests of the United States demanded that, they should have an increased tariff against the imports from the Dominion of Canada. That was acceded to by the United States government, and we have to-day as a result the Fordney Bill which practically prohibits many articles from this country going into the United States. The same conditions prevail now as existed then. The United States, if they were willing to listen to us in 1911 with regard to reciprocity, are not likely to listen to us at the present time, because there is that restraint upon the government, and the agriculturists of that country do not desire reciprocity with Canada. Even if we had a reciprocity agreement at the present time, what would
be the result? Trade undoubtedly would begin to flow to the United States. Our transportation facilities might not be equal to the flow of that trade, and the consequence would be that we would have to change our present transportation system. For a number of years we have had no reciprocity treaty with the United States, and we have our transportation system travelling east and west. We have cultivated an interprovincial trade and also a world trade. I believe that the world market is the one to which we should look to-day, and that we should not confine ourselves entirely to the United States market. It is all right to trade with our neighbours. We are trading more with them than with any other part of the world. I wish to place on Hansard a few figures in connection with that matter. At the present time over 75 per cent of the trade of this country is done with the British Empire and the United States, and not quite 25 per cent of it done with the rest of the world. I have the figures of the imports for the years 1921, 1922, and 1923. They are as follows:
Percentage of Imports from
British Empire	United States	Other Countries	1921..	.. 21.45	1921..	.. 69.04	1921.. .. 9.51	1922..	.. 19.94	1922..	.. 68.6	1922..	.. 121923..	.. 22.3	1923..	.. 67.3	1923..	.. 10.4
This shows that of imports coming into Canada from these various sources, something over 60 per cent comes from the United States and only 10 per cent from foreign countries, exclusive of the British Empire, by which I mean England and her colonies. Of our total exports, our exports are as follows:
Percentage of export to
British Empire United States Other Countries
1921..	.. 32.77
1922..	.. 46.7
1923..	.. 47.2
1921..	.. 43.38
1922..	.. 39.1
1923..	.. 39.7
1921..	.. 24.35
1922..	.. 14.2
1923..	.. 14.1
If we take our total trade, that is imports and exports, the percentage is as follows: t
Percentage of total trade
British Empire United States Other Countries
1921..	.. 27.3
1922..	.. 33.2
1923..	.. 35.7
1921..	.. 57
1922..	.. 54.3
1923..	.. 51.9
1921..	.. 15.7
1922..	.. 12.5
1923..	.. 12.9
This shows that we have been gradually adjusting our trade conditions in an easterly and westerly direction, trading more with the British Empire and less with the United States. I think that is the way our trade should go. I cannot see why we should particularly demand trade with the Unitea States in the commodities produced by the western farmers. I cannot see the logic ol trading with a country that is a competito of ours in those commodities in the world's markets. They produce a surplus for export. If they want the wheat of the Canadian west
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-and Canadian wheat "s probably the besf wheat that is grown-they want it for blending purposes. They do not need it for their home market because they have plenty of their own. It does not seem to me a logical way to start to improve our trade by trading with people who produce the same artielse which we do and in a greater quantity than we do and who are our chief competitors particularly in the markets of the British Empire.
Just a word or two with regard to immigration, which is an important, subject at the present time. The other day I noticed an article by Sir Henry Thornton. Sir Henry Thornton speaks on many questions, and although possibly he may speak too often, yet his statements in this article are sound indeed. With regard to immigration he said:
Four salient points were emphasized with regard to the immigration problems of Canada by Sir Henry Thornton. . . . First, a capable Minister of Immigration who would co-ordinate all the efforts of the people, is needed.


Mr. GRAHAM:: Which we have.


Robert King Anderson: I think he is quite right in that. I am not saying that the present Acting Minister of Immigration (Mr. Stewart) is not capable. I do not know whether Sir Henry Thornton had that in mind or not, whether he was hitting at the present Minister of Immigration.


George Perry Graham: He was saying that he was good.


Sir HENRY DRAYTON:: In a funny way.


Robert King Anderson: 
Mr. GARDINER:: Which was the more ridiculous, the Progressive party or the Minister of Agriculture?


Robert King Anderson: I think the House
must decide that question; I do not care at the moment to give a decision. Like the hon. Minister of Agriculture, I am not the interpretation clause of the House. I hope my hon. friends to the left will not take it as being discourteous on my part, for it certainly is not so intended, when I attempt to show that the farmers of the prairie provinces financially are as well off as the farmers of the East. We are all suffering more or less from hard times and the people of Ontario are no exception, indeed it is a condition that prevails not only in the western provinces but in the eastern. I had the curiosity to look up a return showing the number of rural income taxpayers in Canada for 1922; these numbered 18,873. In the three prairie provinces, 11,656 rural citizens paid income tax, or 61-75 per cent of the total number, while the rest of Canada accounted for 7,217, or 38-25 per cent. The rural citizens of the three prairie provinces who were able to pay income tax were almost twice as many as those in the rest of Canada. Our western farmers are either better able to pay income tax, that is, they are enjoying larger incomes, or they may be more honest than their rural brothers in the other provinces. Of course, I cannot say as to that. I believe the government is making every possible effort to collect income tax from all who are liable, but I have no doubt many escape payment. Taking the rural income taxpayers in proportion to popu-
The Budget-Mr. Anderson

lation, I find the prairies provinces with a population of 1,252,753 show 1 in every 108 farmers; the rest of Canada with a rural population of 3,770,197 show 1 in every 523 farmers; Ontario with a rural population of 1,226,292 shows 1 in every 200 farmers. In other words in the three prairie provinces they had almost twice as many rural income taxpayers to the population as they had in the province of Ontario, and five times as many as in the rest of the Dominion. That surely is not an index of hard times; it shows that the farmers of the West have money. Taking the figures by provinces they are as follows:
In Saskatchewan, 6,560 in rural population of 538,522- 1 in every 82 farmers.
In Manitoba, 3,458 in rural population of 348,651-
1 in every 100 farmers.
In Alberta, 1,638 in rural population of 365,550-
1 in every 223 farmers.
In Quebec, 150 in rural population of 1,038,128-1 in every 6,920 farmers.
In British Columbia 640 in rural population of 272,020-1 in every 425 farmers.
Taking our bank shareholders I find on referring to Hansard that in the rural districts	the	prairie	provinces contain
1,794 out of a total of 3,887 for the whole Dominion, leaving for the rest of Canada 2.093. This means that among the rural population of 1,252,753 in the three prairie provinces one farmer in every 698 is a bank shareholder, while in the rest of Canada with a rural population of 3,770,397 one farmer in every 1,802 is in this happy position, Bhowing again that the rural people of the prairie provinces had more money than their rural friends in the other provinces for investment in bank shares.
Again, take the field crops. I will not go fully into this; it will suffice to say that Canada ranks second in production among the wheat producing countries of the world and third in area, the United States first in production and first in area; India third in production and second in area. The wheat production of the world amounted in 1922 to 3.012,293,000 bushels; the production of Canada was 391,425,000 bushels, and of the United. States 310,123,000 bushels. Here is a table showing the value of field crops in the various provinces, including grain, vegetables, hay and sugar beets, and covering the years 1921
and 1922:
1921	1922 Decrease
Quebec	$219,000,000	$167,000,000	$52,000,000Ontario	
239,000,000	233.000,000	6,000,000British Columbia.	20,000,000	18,000,000	2,000,000
Prince Edward
Island	
14,000,000	10,000,000	4,000,000Nova Scotia.. ..	29,000,000	24,000,000	5.000,000New Brunswick..	38,000,000	31,000,000	7,000,000

So that in those parts of Canada exclusive of the prairie provinces there was a decrease in the returns for 1922 from those of 1921, totalling $76,000,000. The following are the figures for the prairie provinces:
1921	1922	IncreaseManitoba	$ 72,000,000	$104,000,000 $32,000,000Saskatchewan.. .. 215,000,000	299,000,000	84,000,000Alberta	
82,000,000	94,000,000	12,000,000

So that there was an increase in the prairie provinces for those years of $128,000,000 as against a decrease in the rest of Canada of $76,000,000, as I have shown. That does not indicate that there are any harder times in the prairie provinces than there are in the rest of Canada, and I fail to see what basis the Progressives have for the statements they have made in this House, statements which are not in the best interests of the Dominion of Canada and are certainly very detrimental to the West. The rest of Canada has always been friendly to the West. Only a few days ago some of the members of the Progressive party suggested to' me that there was an unfriendly feeling between the East and the West. I cannot undertsand such a statement; there is nothing of the kind. It seems to me that the western members have thought so much on this question that they have failed to realize its significance.
There were other matters, Mr. Speaker, to which I might refer, but I shall not take occasion at this time to put any further figures on Hansard. I have only to say that I cannot vote for the amendment because it declares for free trade, neither can I vote for the budget on account of the reciprocity resolution which it contains. I am therefore under the necessity for voting against both.
Mr. R. J. \\ OODS (Dufferin): Mr. Speaker, in offering a few remarks in connection with the budget I do not propose to charge the government with responsibility for all the ills at present prevailing in the Dominion of Canada in connection with industrial or agricultural or labour conditions. I am confident that it would be impossible for any government to discover a panacea for all those ills, but I am convinced that the government are responsible for the fiscal policy of the country; therefore I feel quite free to offer some criticisms in connection with the present budget.
To my mind the government of the day have had-possibly still have-a dual policy.
I have had more or less to do with political contests on the back concessions and in the rural sections of Ontario for thirty years or

The Budget-Mr. Woods
more, so that I am not entirely a stranger to political contests, to what has been advocated on the hustings, or to the legislation that has been enacted in connection with our fiscal policy As I have viewed it during the last thirty years or more, the political parties have had a double policy, one for the time during which they sat on the opposition benches and the other while they sat on the government side. So that from that point of view in any case I am justified in offering some criticism of the minister's budget for the present year.
The Minister of the Interior (Mr. Stewart), in his address yesterday, told us that the government were moving in the direction of lower tariff. Well, in watching the history of the Liberal party for a considerable length of time I have been impressed by the fact that the motion has been very slow. According to the statements made, and according to what is put before the people in political campaigns, the party now in power have been moving in that direction for a great number of years. I have tried to view the situation honestly and fairly, but my observation is that the progress has been so slow that it has been almost impossible to detect a movement during the last thirty years so far as reduction of the customs tariff is concerned. So that if the government continues to move as slowly in the future as it has in the past, a lot of us boys who are sitting in the House at the present time will have passed out oi existence so far as this world is concerned before there is any considerable reduction in the customs tariff.
There is one thing I want to commend the government for, and that is the proposal of a reciprocity agreement with the great nation to the south of us. That proposal has been objected to by some hon. members of this House. I think it was the member for East York (Mr. Harris) who suggested yesterday that the people of Canada were not in favour of entering into an agreement with the United States on trade matters, were not in favour of our standing at the door of the United States begging for an opportunity to carry on our trade. So far as my experience and knowledge goes of the rural people at least they are very, very anxious that such an agreement be brought about, for those of us engaged in agriculture know the benefits that we received while we had an open door into the country to the south of us for our natural products. So I want to congratulate the government upon this step and I hope that negotiations will proceed and the agreement be brought about as speedily as possible.



REVISED

Mr. PUTNAM:: Does not the hon. member admit that this is a step towards lowei tariffs?


Mr. WOODS:: I will possibly answer that question before I get through, though perhaps not just as directly as the hon. member would wish, but if he follows me closely I think he will find something that will answer his question.
To prove to this House the benefits that the agriculturists of this country at least received while we had access to that open market in the United States I am going to quote from the report of the Department of Trade and Commerce. During the first ten months under the United States Emergency Tariff Canada's exports to the United States of the principal articles affected by the new duties fell, when compared with the corresponding period of the previous fiscal year, from $157,000,000 to 836,000,000. The principal items included in those totals are wheat and cattle. The value of wheat exports fell from $91,000,000 to $13,500,000, and the quantity from 42,000.000 bushels to 11,000,000 bushels. The value of cattle shipments for the same period fell from $21,000,000 to $3,000,000, or from 280,000 head to 143,000 head. So it is apparent that the agriculturists of this country received a wonderful advantage through that open door. It was a great benefit to them to have that open market, and it is our most natural market being right at our door to which to ship our cattle and other products free.
I want now to refer to the tax on cheques in respect to which legislation was brought down in this budget. Personally I am not favourable to that tax. When the Minister of Finance brought down his budget a year ago his first intimation was that cheques should be taxed two cents for each unit of fifty dollars to the full amount of the cheque, but later the tax was changed to a maximum of $2, so that on a cheque over $5,000 only the maximum of $2 was paid and the unit principle ceased. Personally I was not favourable to a maximum being set. The Finance Minister goes a step further in this budget and reduces the maximum from $2 to $1. In that respect this appears to me to be a rich man's budget. A great deal of the business done in our small towns and cities by small merchants, cattle dealers and so forth is done by cheque, and their cheques are usually small. Now they are compelled to pay two cents on every unit of $50 or less no matter how many cheques they issue, while the man doing a large volume of business and paying out hundreds of thousands of dollars pays



EDITION

[Stage Direction]
The Budget-Mr. Woods
[Stage Direction]
nothing on a cheque beyond a certain amount. His maximum tax on any cheque, no matter how large, is to be one dollar. I claim that that is very unfair, it works an injustice. I am not going to find fault with the two cent stamp on cheques, not by any means, I think that is a very nice way to raise revenue; but I say that in all fairness to the masses of the people who do business on a small scale and issue many cheques for comparatively small amounts, and who are taxed two cents on every unit of 850, the rich man who issues cheques for large sums of money should be taxed in exactly the same proportion and should pay two cents on every $50 no matter what the size of the cheque issued.
Now, I want to refer for a few moments to the tariff. We have heard occasionally about the high tariff on goods entering the United States. It is true that the United States has a very high tariff, and of course as a justification for keeping up the tariff here hon. gentlemen will sometimes point to the tariff wall on the other side of the line. But while that is true in the general, the United States government has taken cognizance of the needs of the agricultural interests of that country. They have looked well to the interests of the producer. The United States imposes no duty on farm implements of production entering that country, these implements go in there absolutely free. Wagons, threshing machines, cultivators, binders, mowers, reapers, ploughs, harrows, all farm implements enter the United States duty free. But on this side there is a duty of from 10 to 1-7J per cent on wagons, 15 per cent on ploughs, cultivators and so forth, ancT 10 per cent on binders and mowers. It appears to me that if the United States government are so interested in the agriculturists of that country that they can give this advantage to the farmers who cultivate the soil and produce the grain and food that the masses of the people in that country require, the government of this country ought to be as deeply interested in the agriculturists of Canada and give them the same advantage	in their work of	production.
I want to bring to my assistance in this debate, and just in this connection, a speech delivered by the present leader of the Opposition (Mr. Meighen) in the session of 1910-11. I expressed the opinion, when I first began to speak, that there was a dual policy on the part of this government, and it seems to me that in this respect the members of the present administration are not altogether alone; there are possibly some others who are practically in the same boat. If I remember rightly, at 
the time the right hon. gentleman delivered that speech a large deputation of farmers from the West had waited upon the government of that day and had insisted, I believe, practically on free trade in agricultural implements; at any rate, if they did not ask for absolute free trade in this line they demanded a great reduction. I am going to quote now some brief extracts from Hansard in which the right hon. gentleman's speech on that particular occasion is reported. You will find it at page 1915 of Hansard of 1910-11, volume 1. A resolution was introduced by the right hon. gentleman, and I quote it:
That in the opinion of this House a substantial reduction in the import duties on agricultural implements is now due the agriculturists of Canada, and is in just accord with the true ends of the protective tariff.
Of course, I must give my right hon. friend credit for this, that he upheld at that time the same idea of protection. However, let me quote another extract from the same speech; it will be found at page 1917 of the same volume.
They have allowed-
Referring to the government then, in power.
They have allowed, in the respect which I am discussing this afternoon, protection to mn rampant, and they have for reasons that are only too obvious, become the slaves of those who helped them into power and who now maintain them there behind ramparts of gold.
In the face of such a statement as that coming from the right hon. the present leader of the Opposition, I think that the group of gentlemen who surround me here and who all advocate a reduction in the customs tariff in connection with agricultural imnlements, will surely enlist the sympathy and support of the right hon. gentleman. But 1 cannot help remarking that if the government in 1910 were standing behind ramparts of gold they are to-day still standing behind the same fortress; for as we are all aware, while the duty has been reduced, I think, on binders, which at that time paid 174 per cent whereas to-day the duty is 10 per cent, the duty on ploughs is still 15 per cent, with similar rates on harrows and other necessaries of that description. So that there is not such a wonderful difference, after all, in that direction. But we must bear in mind this important fact, that implements in 1910 were slightly over half their present price, and in dollars and cents the protection which is afforded to-day on these implements is greater than it was at that time. The price is well nigh double what it was in 1910; and notwithstanding that there has been a slight reduction in the rate of duty, the actual amount in dollars and cents paid on these

The Budget-Mr. Woods
implements coming from the other side is considerably more than it was in 1910.
Take boots and shoes as another example. If agricultural implements are of great importance to the farmers of Canada, it will not be denied that boots and shoes are an absolute necessity to all of the people throughout the Dominion; and if it is desirable to reduce the duty on agricultural implements, in my opimon the duty on boots and shoes should undoubtedly also be reduced. Boots and shoes to-day are going to the United States free of duty, while we are taxed in this country from 25 to 30 per cent for them.
Mr. McMASTER:: Fifteen per cent British preference.


Robert John Woods: I am referring to the general tariff; the duty is 25 to 30 per cent. But the United States admits boots and shoes absolutely free. Yet we are told that if the customs tariff were reduced the manufacturers of the country would suffer. It strikes me that, seeing that labour, according to evidence given before the Agricultural Conditions committee, is practically about the same- this being also very largely true of material- if the manufacturers of the United States can turn out agricultural implements and boots and shoes and throw them upon the world's markets in open competition with all other countries including Canada, the Canadian manufacturers of these same goods should be able to compete in the same markets with the producers to the south of us.


Mr. STANSELL:: Would the hon. member say to what extent the boot and shoe manufacturers of Canada are exporting shoes to the United States at the present time?


Robert John Woods: According to the evidence given before the Agricultural Conditions committee a few days ago, if my memory serves me,-and I think I have the facts here -a shoe manufacturer in his testimony practically stated that there were no exports of boots and shoes from Canada to the United States. But let us not forget this, that the boot and shoe manufacturers of Canada hold a monopoly of this industry in this country. When these goods from the United States are debarred by a duty of from 25 to 30 per cent the practical effect is to give the manufacturers in this country an absolute monopoly of the home market.


Mr. HOEY:: While they have a larger market in the United States as well.


Robert John Woods: Yes; they have free access to the United States market, so that if they have any surplus in Canada they can place it there. I am going to bring the House back again to another quotation from the speech by the right hon. leader of the Opposition delivered in, 1910, to be found on page 1,931 of Hansard of that year. He said:
Now, sir, what are the manufacturers of agricultural implements enabled to do? They are able under this tariff to exact a higher price than they could exact if the tariff were lower.
And then a little further on, on page 1933, he said:
They have not only given the manufacturers a grip on the whole home market, but practically, given them a monopoly of it, and they have taxed the consumer in order to push the manufacturers and their industries successfully into the markets of the world.
Now I believe that statement of the right hon. member in 1910 is absolutely true, that the customs tariff of this country and the protection that the manufacturers have had for forty years have given the manufacturers a grip on the home markets of this country, and practically given them a monopoly of those markets and enabled them, as the right hon. gentleman has stated, to push their manufactured goods into the other markets of the world.
But what are the conditions in regard to agriculture? The farmers of this country have not a home market for the produce of the soil. True, there may be a few farmers living in close proximity to our large urban centres who will benefit by being in touch with the markets there because products can be brought to the city markets and sold to the consumers without passing through the hands of a middleman. In that regard the farmeis of this country are benefited, but how many? Very few of the farmers of the Dominion of Canada are in the happy position that they can bring their products to those markets in the urban centres and sell them directly to the consumer, without passing them through the hands of the middlemen. The home markets are practically worthless to the farmers, because we have to put our surplus products on the markets of the world. According to the figures in the report of the Department of Trade and Commerce last year, we exported, in vegetable and animal products, the products of the farm, 8233,892,749 worth more than we imported. In the animal and vegetable products of the farm this country has exported goods to that amount more than have been imported of the same quality of goods. The producers of these goods have
The Budget-Mr. Woods

no home market, speaking on broad lines for goods have to go to the open markets of the world. This boasted home market that the tariff has built up-and we have had many, public addresses along that line-has been built up for the manufacturers Then again we are referred to the revenue, and the fact is pointed out that we need a customs tariff for revenue. We know that considerable revenue is derived from the customs tariff, but it is quite possible that a lower tariff might bring equally as much revenue or possibly more. We see an example of that in the statement made by the Einance Minister (Mr. Fielding) in regard to cigarettes in his budget speech. The duty on cigarettes was practically a prohibitive duty and the reduction of that duty was made in the hope that it might bring in more revenue. What is true in [DOT] regard to that is certainly true in regard to other commodities. To my mind a revenue tariff works in the reverse way, because of the fact that it is too high, and we might possibly receive more revenue with a lower tariff, and it would impose less burden on the consuming public.
Now again I am going to refer to the speech of the right hon. member (Mr. Meighen) delivered in 1910, to verify the statement which I have made. At page 1,933 of the same Hansard he said:
I say that to my mind this tariff is designed to benefit the revenues of other countries rather than the revenues of our own countries. As at present constituted this is not so much a tariff for the revenue of Canada as a tariff for the revenue of Spain, as a tariff for the revenue of Austria. ... It is, Sir, a tariff for the revenue of Roumania, a tariff for the revenue of Russia, a tariff for the revenue of France rather than a tariff for the revenue of Canada.
That quotation verifies the statement I have just made in regard to the high tariff being to some extent prohibitive, and that a marked reduction in that tariff might be the means of bringing more revenue to this country than it does at the present time.
I wish to refer now to the tariff as being a means of centralizing the industries of the Dominion of Canada. I think the hon. member for North Waterloo, (Mr. Euler) in his speech some time ago, advised our friends from the West-if my memory serves me right, and I think it does-to start manufacturing industries all over the West.


Mr. EULER:: Hear, hear.


Robert John Woods: It would be a wonderful thing to start manufacturing industries all over the West and build up a home market. It has been proven conclusively, to my mind at least, that with our present population, and 
until it reaches to millions and millions more than we have at the present time, we have practically no home market for the agricultural products of this country.


William Daum Euler: I was also in favour of the policy of immigration-to let the peocile come in.


Robert John Woods: I also hope we will get immigration. What has this done for the small manufacturer? I refer chiefly to Ontario, because I am not so much acquainted with the other provinces of the Dominion, so far as industries are concerned, but I have known something about the conditions in the province of Ontario for the last forty or fifty years. I am sure that I am correct when I state that 30 or 40 years ago scattered throughout Ontario in almost every little village there were one or two manufacturing establishments which supplied the great bulk of the needs of the people in those commodities. They were small foundries where men got their ploughs, their cultivators, their farm implements to a great extent, outside possibly of binders. They got their mowers. Personally I might state that the first mower we ever got on our farm I bought for $40 from a home manufacturer right at my own door. I cut wood in the bush and paid for it. We never had a more substantial mowing machine on our farm from that day to this, and we have had quite a number of them. That, however, is a thing of the past, because those small industries have been either swamped or bought out, I do not know which. There is no question that they have disappeared. We are at a loss, to a large extent, even in getting our repairs which we formerly got from those little manufacturing establishments that we had in our communities. They built our threshing machines, our horse-power machines, many of our farm implements, such as ploughs and so forth. Those establishments have now disappeared. In those days we could take our grist to the mill, have our wheat ground and our flour returned to us along with the by-products, bran and shorts. Those mills have all disappeared. We could take our oats to the mill and get our oatmeal back with us. Those mills too have all disappeared. The reason is that the manufacturers of this country have been so protected that they have built up gigantic industries in the great urban centres, and from the rural communities they have drawn the labourers, the farmers, many of our people who should be on the farms to-day, operating and cultivating the soil. Those people have been drawD

The Budget-Mr. Woods
off to the great urban centres because of the centralization of the manufacturing industries of this country. I believe the protective tariff has a great deal to do with that condition in Ontario to-day.
But then we are told that where they have a greater volume of business, where they have larger machines, they can manufacture the implements so much more cheaply in those great factories than could be done in the small factories. I believe that is true; but who reaps the benefit of those cheap manufactured goods? Who are the beneficiaries? It is not the farmers back on the farm, but the manufacturers that receive the benefit by manufacturing more cheaply and at the same time holding up the price of their goods under the protective policy of this country. I am going to give an illustration of that. In the constituency which I have the honour to represent there is one small factory that has weathered the storm. It has not weathered the storm as regards manufacturing new implements to any extent; but it still carries on by manufacturing repairs for the implements in that community. I am going to give to the House figures that are absolutely correct. In 1921, that foundry in the constituency that I represent was selling ploughshares to the farmers at 50 cents apiece. It was sending them out over the community wherever people would send in an order for them, and while of course, there would be the freight, that would be a very small trifle for a ploughshare going a short distance by railway over the constituency. I asked that manufacturer what he was selling these ploughshares for, and he said: "I am selling them for 50 cents apiece and I am sending them out by the hundreds." At the very time that that small manufacturer was selling ploughshares at 50 cents apiece, our local dealers, who were agents for the large manufacturing companies of this country, were charging us from 90 cents to SI .20 for the same ploughshares. Who was receiving the benefit? If the small manufacturer could make ploughshares at 50 cents apiece, why could the manufacturers not make those ploughshares, send them out and sell them through their local agents for 65 or 70 cents apiece? It is the large manufacturers who have received the benefit of cheaper manufacture in the great centres, and this, I claim, is due to centralization largely brought about through the protection that is given to the manufacturers by the customs tariff.
I am going to refer to another matter that has been thrown in our face occasionally,
and that is that when the Reciprocity agreement .vas before the people of the Dominion of Canada, the farmers turned it down. In my opinion, to a large extent we are guilty; but so far as my knowledge goes in connection with that particular campaign as it was carried on in the locality in which I live-and I think that would be a fair sample of what went en i * the various localities in Ontario

I did not know of any Liberals in the past who were farmers turning against the Liberal party and going over and voting with the Conservatives. I knew of no Liberals who forsook the Liberal party because of the Reciprocity agreement.


Andrew Ross McMaster: Not real ones.


Robert John Woods: So in regard to that, the
farmers are not really guilty. If the farmers had turned over from the Conservative ranks and voted Liberal in strong numbers, we might have succeeded, and I am sorry that they did not. So far as I
5 p.m. know they did not do so to any great extent in the rural sections. What was the result in the urban centres? What was the attitude of the Liberals in the great urban centres, the industrial Liberals of the Dominion of Canada, in connection with the Reciprocity agreement?


Andrew Ross McMaster: The noble eighteen of
Toronto.


Robert John Woods: That was just what I was
going to refer to. Eighteen Liberals signed a manifesto to oppose that Reciprocity agreement, and if my memory serves me aright. I think amongst that number was Sir Thomas White who was honoured with the position of Minister of Finance of the Dominion of Canada.


Andrew Ross McMaster: By the Tories.


Robert John Woods: But he turned over from
Liberalism.


Andrew Ross McMaster: Yes.


Robert John Woods: That is to my mind conclusive evidence that the manufacturers of this country are behind the government that will protect them. They are behind the government for class legislation. Although the Progressive group has been charged with coming into existence to seek class legislation for the farmers, this group came into existence because we had to fight class legislation in the Dominion of Canada. Many of us would have been tilling our land to-day if it had not been for the very fact that the farmers of this country had been burdened through class legislation in the interest of the manufactur-
The Budffet-Mr. Euler

mg industries. That is the reason why tlr group is here to-day. We are on the job, we are going to stay on the job, and we are going to fight for equal rights to all and special privileges to none.


Henry Lumley Drayton: Will my hon. friend aid us in starting that campaign by moving the permanent suspension of the Crowsnest rates?


Robert John Woods: We will see how things are going to work out in the future. So far as my observation goes, our tariff legislation for the last thirty or forty years is the joint product of the Liberal and Conservative parties, and both parties are in the one boat as respects fiscal policy. In a word, which ever party happened to be in power never failed to receive support of the manufacturing interests, because quite naturally these interests always stand behind the party that stands for protection in this Dominion.


William Daum Euler: Mr. Speaker, before entering upon the observations which I intend to make on the budget proper, I should like to join in the congratulations which have been tendered by other members to the Minister of Finance (Mr. Fielding) on the presentation of his seventeenth budget. And I do this for two reasons; first, because he has established a record that is unique in the management of the Finance department of Canada and, secondly, because he is held to-day, after twenty-five years of office beginning in 1896, in just as great regard by the people of Canada as ever. I further congratulate him because of the budget which he has brought down at this time. I do not suppose that my hon. friends opposite will agree with me, but I think the Minister of Finance has presented a budget which ought to meet with the general approval of the people of Canada. I do not suppose that he himself would claim that his budget is entirely perfect. It may be capable of improvement. Indeed, there may be one or two features of it with which I would not agree myself. But in a country such as we have, with its diversified interests,
I realize, and I think all members should realize, that it is necessary to grant something to the spirit of compromise.
True, the budget has met with some criticism, but this criticism has not been very strong. I should like to approach the consideration of the budget in a broad way and from a national viewpoint. It has sometimes been said that Canada is a very difficult country to govern. I believe that to be true. We know the Maritime provinces came into 
confederation unwillingly; they felt they were losing their natural market in the United States, and for it they claimed they were not compensated by the market which they hoped to get in central Canada, in the provinces of Ontario and Quebec; and to-day many of their people find it difficult to make ends meet because of that disadvantage. Farther west we have the industrial provinces of Quebec and Ontario where, rightly or wrongly, the people feel that a moderate tariff is necessary for the preservation of their industries. Going still farther west we have the prairie provinces where again, rightly or wrongly, the people feel that no tariff at all or a very, very moderate tariff indeed is in their interests. And then across the Rocky mountains we have a mixed population whose ideas vary on the subject of the tariff. All of which, Mr. Speaker, merely goes to prove that if we are to have national unity we must each of us, though our interests vary, yield something for the common good. And that is why I support the budget.
I should like to deal for a moment with some of the criticism directed against the budget. So far as the criticisms of my hon. friend, the former Minister of Finance (Si-Henry Drayton) are concerned, in my opinion they require very little reply. He had a Yen-difficult duty to perform, and it is no reflection upon his ability to say that he found it extremely difficult to make an impression on this House favourable to his views. I believe that if he were perfectly frank he would say that the budget is a reasonably good one- not so good, of course, as a budget that he might present himself.
I presume that when the right hon. leader of the Opposition takes part in this debate he will as usual refer to breach of faith on the part of the Liberal party with respect to the tariff plank in the platform of 1919. That is usually his stock in trade, and I for one do not particularly blame him for taking any opportunity that may present itself in making out what I consider to be a poor case. Perhaps it may shock some members on this side of the House when I say that I have very little confidence in the making of platforms, anyway. I do not believe that a government or members elected to the responsibility of a seat in this House should necessarily be asked to accept what may be ill-digested planks in any platform imposed upon them by people who come from various parts of the country, and whose suggestions probably are as much dictated by political expediency as anything else; I do not believe that men who represent the public should be expected to carry out

The Budrjet-Mr. Euler
such ill-considered behests on the floor ci this House. So that speaking for myself, Sir,
I would say frankly that in the public interest the platform of 1919 should not be permitted to shackle the government responsible to all the people, whether it be a matter of tariif or anything else.


Mr. GOULD:: Would the hon. member inform me whether that expression of opinion was voiced by him in the hall where the platform of 1919 was framed?


William Daum Euler: I may tell my hon. friend that I was not present when the platform was framed and I never gave adherence to it afterward. Now, referring again to the criticisms of the hon. gentleman (Sir Henry Drayton) who leads the official Opposition to-day,
I listened to him very carefully, and the burden of his song when he particularized somewhat seemed to me to be this. The government was taking steps to promote the artificial silk industry. If you are going to help the artificial silk industry why not promote the interests of the natural silk industry, he asked. Then he claimed the government was not properly taxing luxuries, and answered his own qusetion by saying: Perhaps this government proposes to help the artificial silk industry because artificial silk is the only kind of silk that the common people can afford to buy.


Henry Lumley Drayton: Does not the hon. gentleman understand that, according to everything that has been said in certain quarters, protecting artificial silk would put a price on it, and therefore would add to the cost of what was at least an article of luxury?


William Daum Euler: I understood that he was saying that luxuries were not properly taxed, yet he was objecting to the process of making available to the common people an article that was just as good, perhaps, as the real silk but would not cost them quite so much.


Henry Lumley Drayton: And now coming in without that protective duty.


William Daum Euler: My hon. friend's solicitude for the lowly silk worm reminded me of a little rhyme I heard some years ago. Perhaps I may be permitted to paraphrase it-and I assure mv hon. friend that I do so without any intention whatever of giving offence. It ran something like this:
It wriggles in; it wriggles out,
Leaving the hunter still in doubt Whether the worm that made the track Was going out or coming back.
I would like to discuss for a few moments the criticisms of the leader of the Progressive
group. I felt when he was speaking that his objection to the budget was apologetic in its nature, and I was rather impressed by the fact-I think it is a fact-that the Progressive party itself did not really expect any very great change in the tariff at this session. They would have been very well satisfied, I believe -and I doubt whether any of them will contradict me now-if the hon. Finance Minister had not made what they considered an unfortunate statement with regard to the desirability of stability in the tariff. I am free to say, Mr. Speaker, that that statement of the Finance Minister' was especially pleasing to me and should receive the favourable consideration of the House. I do not think he intended to convey the impression that the tariff was as unchangeable as the laws of the Medes and Persians. Indeed, he stated very definitely that there was room for change as circumstances demanded. But surely, in the matter of the business interests of this country, whether you call them manufacturing interests or any other, it is advisable and for the general good that business men should know that there is reasonable likelihood that they may be allowed to carry on their affairs and extend their businesses without the constant apprehension that they are going to be interfered with by radical tariff changes. In fact-and I have no doubt that my Progressive friends are aware of this-no less a gentleman than Mr. Henry Wise Wood, of Alberta, a not inconsiderable figure in the party, has expressed his appreciation of the budget and stated that he is well satisfied with it.
We must not forget that a fiscal policy that is satisfactory to all Canadians cannot be framed without, perhaps, failing to give satisfaction to some of the diversified interests that we have in this Dominion.
I have a great deal of sympathy-and I hope my hon. friends will believe this-for the farmer of Canada, more particularly for the farmer of western Canada. I have that sympathy because I think every citizen ought to feel consideration for any other citizen or any other class of citizens who find it very hard to make both ends meet in these times. And I have a certain selfish consideration in the matter also, because I am free to admit that if the western farmer or any other farmer in Canada does not prosper, then the industries of the riding which I represent cannot prosper as they should. There are in my riding something like 150 to 165 manufacturing industries. Their market, or a great portion of it, is in western Canada, and they are very much interested in the progress and prosperity of the western farmers. The farmers themselves in
The Budcfet-Mr. Euler

the district in which I live have just as great a concern in the prosperity of the industries of the city from which I come, because that city is in itself a very considerable market for their produce. But while it has been difficult for the farmer to make his way-and we all freely admit that-I think sometimes there is a disposition on the part of our friends opposite to feel that the manufacturers and the business men of Ontario and Quebec are making huge profits at their expense. Now, I know whereof I speak, and I may say to my friends opposite that many of the manufacturers in the city from which I come, as well as in many of the other industrial centres in the province of Ontario, have found it very difficult to get along during the last few years. The point of my remarks is this, that in this country of varied interests there must be something of a compromise. We must get something of the other man's point of view so that we shall not take an extreme view in any one direction. We may be partly right, but the other man is perhaps also partly right; in order to get together each of us must yield a little his own viewpoint.
In theory most men are free traders; in actual practice we all know that at the present moment free trade is not possible. Liberals and Conservatives usually draw fine distinctions on tariff matters; the Liberal sometimes speaks of tariff for revenue and the Conservative frankly advocates a tariff for protection. The attitude I have always taken with regard to that-I have taken it before in this House and I take it again to-day-is this: That as a matter of fact a tariff, whatever name you may give it, is protectionist in its effect. It makes no real difference whether the tariff is primarily a means for the purpose of raising revenue;-it will have a protective result. If you impose a duty upon the foreign manufacturer who brings his goods into this country, just to that extent do you impose a handicap on the foreign manufacturer and to that extent favour the manufacturer of your own [DOT] country.


Andrew Ross McMaster: But you do not put the tax on the foreign manufacturer; you put it on your own consumer.


William Daum Euler: Well, it is just a question where you are going to draw the line as to what is the interest of the consumer. If you are going to make your tariff so low that your manufacturer cannot exist, or if you wipe it out altogether, I think you will soon find there is a corresponding effect upon the consumer as well-usually a workingman who is engaged in production and is also a consumer.

The leader of the Progressives complains that the government has not lived up to its 1919 platform, yet in his amendment he fails to state completely his own platform. Why does he not call for free trade with England as it was enunciated in his own platform some years ago-free trade with England within five years? I think the five years have elapsed; if he still believes in the principle as enunciated a few years ago he might just as well have called in his amendment for absolute free trade with England.
The budget calls for an increased preference to Britain, yet that does not meet with the approval of the hon. leader of the Progressives. The budget has a standing offer to the United States for reciprocity in farm products, yet he calls in his amendment for the old Reciprocity agreement of 1911, in face of the fact that many of his followers, many of the people of western Canada, especially in the province of Manitoba, failed to support the very reciprocity agreement that he asks for to-day.


Robert Alexander Hoey: They are all converted now.


Oliver Robert Gould: That applied to the urban centres, not to the farmers.


William Daum Euler: I have the highest regard for the hon. leader of the Progressives-and I am sorry he is not in his seat to-day. I believe he is sincere in what he advocates, but I do not think that in his criticisms he has been quite fair to the government. He said the other day that this budget and this government have done nothing for the farmer. I wonder if he has forgotten what took place last session when this government restored the Crowsnest rates on grain and saved the farmers of western Canada 820,000,000 in freight rates. ,


Mr. JOHNSTON (Last Mountain):: That is not in the budget.


William Daum Euler: My statement was that he
had said this government had done nothing for the farmers.


John Frederick Johnston: He was referring to the budget.


William Daum Euler: I think you will find on referring to Hansard that he said neither this government nor the budget had done anything for the farmers.
I would like to make a reference to the Crowsnest pass arrangement of last year. It is true, I believe, that the leader of the Progressive party himself as well as many of my Progressive friends, and I am not saying this with the intention of arousing any antag-

The Budget-Mr. Euler
onism but simply to show that they have not acted fairly in the matter-there are notable exceptions, I am willing to admit-did go west and claimed, and claimed in Ottawa, that they forced the Liberal government to restore the Crowsnest rates on grain. Mr. Speaker, nothing can be further from the truth, and I leave it to the members of that special committee on railway rates to say whether it was not the Liberals on that committee that gave them support and helped to restore the Crowsnest pass agreement.


Robert Alexander Hoey: The Liberals helped.


William Daum Euler: Yes, and if it had not been
for the help of the Liberals my hon. friends would never have received that agreement.
I will say this further: There were members on that committee, members from this side of the House, who in a sense worked against their own interests when they took that attitude on the Crowsnest agreement. If I may be pardoned a personal remark, I was a member of that committee. Among the commodities that were included in the old Crowsnest agreement was furniture. Now there are in the riding I represent something like twenty-five furniture manufacurers, and yet I was in favour of dropping the commodity of furniture from the agreement and restoring only the grain rates for the benefit of the western farmer. There was another member of that committee himself a manufacturer of furniture who very cheerfully sacrificed himself in that respect also.


Henry Lumley Drayton: Has the hon.
gentleman and his co-member yet been able to get a statement from the government as to whether they will give the manufacturers those low rates this year?


William Daum Euler: I have not made any inquiry with regard to that, but I will say this: Notwithstanding that the rates on furniture and other commodities were not restored as they were on wheat, I have had absolutely no complaint from the furniture manufacturers of my town. In fact, I discussed the matter with some of them and they were quite willing to say, "The western farmer needs the assistance, and we will give him all the help we can. We are perfectly willing to wait until he gets in a better position."


Henry Lumley Drayton: That will be
next year, won't it?


William Daum Euler: I cannot say. I am not entirely in the confidence of the government with regard to these matters. What I do say is this, that it showed that the attitude of the Liberal party and of those manufacturers was
an admirable one and contrary to what we sometimes hear of the selfishness of manufacturers and the dereliction of the government with regard to the interests of the western farmer.


Andrew Ross McMaster: And showed the manufacturers' confidence in their member.


William Daum Euler: It is true that it was simply the granting of a just demand. But I will add that a fair and just acknowledgment that the Progressives had received the assistance of Liberals and of the government would have been more in place than a denial or a suppression of the fact that they received the assistance of which I have spoken.


Mr. BIRD:: Can the hon. member give an instance of where any Progressive member made the statement he charges us with?


William Daum Euler: I could quote him the attitude and statement of a very prominent member of the party in that committee itself, who stated that the concession was forced from the Liberals.


Mr. HALBERT:: Is the hon. member sure that he is quoting a member of the Progressive party?


William Daum Euler: Yes, I am quoting the leader of the Progressive group.


John Frederick Johnston: I am sure the hon. member wishes to be fair. My ' leader is not here, but I think my hon. friend will admit that the statement to which he has made reference was not made in a spirit of criticism at all, but more as a joke and was not in any sense seriously meant.


Some hon. MEMBERS:: Oh, oh.


William Daum Euler: I really regret having had to make that statement. I had no intention of making it, but I was pressed for it by my hon. friends opposite.
Selfish tactics are usually attributed only to the two old parties. Well, Mr. Speaker, the two old parties have their faults, but I believe that the average of political morality and of real patriotism and the desire to serve their fellowmen is just as high in the two old parties as it is anywhere else. I for one, and I am saying this not with any malice at all, will say frankly that, to use an expression often used, I am just about tired of that "holier than thou" attitude taken by some members of this House. The Progressive member for Edmonton (Mr. Kellner) yesterday voiced the old stereotyped Shibboleth that both parties took orders from the big interests, and that is why I am making
The Budget-Mr. Euler

these remarks to-day. I resent that statement on the part of the hon. member. I do not believe it is true, and if I believed this government was taking orders from the big interests I would not support it.


Thomas William Bird: Does the hon. member make that statement on behalf of both parties?


William Daum Euler: I think I can make that
denial on behalf of both parties.


Thomas William Bird: Does the hon. gentleman remember certain statements made to my right last year in regard to the influences that had returned the Liberal party to power?


William Daum Euler: I do not recall any particular statement.


Thomas William Bird: I could give two instances.


William Daum Euler: I should be sorry to believe that either of the old parties is susceptible to these influences as indicated in such a wholesale way by the hon. member for East Edmonton (Mr. Kellner). Speaking for myself I would say this: I believe that I represent the farmers, the workingmen, the manufacturers, the business men, men of all classes, just as fairly according to my own poor ability as any member on either side of this House. I never asked nor received from any central fund any contribution, and there are no strings, financial or otherwise, attached to me. I wonder whether the same can be said of every member of the group opposite.
Coming back now to a more pleasant subject, we from Ontario are usually charged with being high protectionists.


Mr. MEIGHEN:: May I ask the hon. member a question? First of all I acknowledge the generous attitude he has taken, nor can I ever recall his taking any different attitude. But I ask him if he has any recollection of the speech of his own leader in the corresponding budget debate of 1921? I think the worst offender to receive his own castigation now is his leader of to-day.


William Daum Euler: I regret that the leader of the government is not here at the moment. I am quite sure he would be in a position to answer the hon. member's question. I am not.
I was going on to refer to the tariff. Those of us who come from the province of Ontario are very often charged with being high protectionists. I will say for myself, and I believe I can say this for almost every hon. member who comes from Ontario, most of whom come from industrial towns and cities, that we are not high protectionists. We are not elected as high protectionists. We believe, most of 
us, in a moderate tariff. Personally-I have said this frequently before-I believe in a tariff that is going to maintain our industries, not to maintain industries that are going to build up a monopoly and squeeze the last cent out of the consumer. But after all, I have a concern in the industries in the riding which I represent, and I for one could not vote for such a reduction of the tariff or an entire elimination of the tariff that to my knowledge might work certain injury not only to the manufacturers, but to the working men of the constituency I have the honour to represent. As a matter of fact, the farmers and the manufacturers have very much the same difficulty. They are brothers together; the difficulty of both alike is the lack of markets. The Canadian manufacturer would like a larger market, although to-day he is doing an export trade as great as that of all the products of the farm. But his difficulty is just what I have stated; he needs larger markets.


Oliver Robert Gould: In his statement about the manufacturers doing such a larger trade than the farmers, I think the hon. gentleman is saying something that is at least a bit strong.


William Daum Euler: I have the statement on good authority and if the hon. gentleman can give me figures to the contrary I am quite willing to accept them. But whether I am right or wrong in what I have just said, the fact remains, there is a common difficulty for the manufacturer and the farmer. They both want to extend their market; and I will say this for the manufacturers-and I can speak with some knowledge of the attitude of those in my own community, there being very many large industries in the city of Kitchener-that many of them are of this view, that if they were assured of a large market to the south, if they were assured of a reasonable permanency in demand in that market, they would be willing to compete with the United States manufacturers on a fair and even basis.


Robert Alexander Hoey: They have such a market in boots and shoes.


William Daum Euler: That is one article on the American free list, but there is no certainty of permanency about it. And men with large business interests are not going to extend their enterprise and do business in a market of 110 or 120 million people, incurring great expenditures, unless there is reasonable assurance of permanency in that market. I for one say that there is no justification for opening our markets entirely to our neighbours to the south of us when they

The Budget-Mr. Eider
persist in keeping up their high tariff against us; and I have no hesitation whatever in taking this position, that I will oppose serious reduction of the tariff just so long as the United States government maintains its tariff wall as it is doing now. I should think that this ought to appeal to the patriotism of some of my Progressive friends opposite.
I know that some of the Progressives would say to-day, if they gave expression to what they feel, that they are not in favour of raising the Canadian tariff or cutting it down while the United Sates retains its own tariff against Canada.
The Progressive amendment calls for lower tariff, and, I think, consequent lower revenue.1


Andrew Ross McMaster: Not necessarily.


William Daum Euler: I think so. The tariff we have now is a moderate one, and if you made it much lower the revenues would be very much smaller.


Oliver Robert Gould: What is the hon. gentleman's authority for his statement?


William Daum Euler: I say that the tariff is a moderate one.


Oliver Robert Gould: You believe that.


William Daum Euler: Yes, and it affords a reasonable protection from other countries; it is neither an exclusive nor a monopolistic tariff, and I do not believe that there are many of my Progressive friends who would argue that.	Consequently, to reduce the
tariff is to reduce to a great extent the revenues which we receive at present. We have to-day a deficit of almost 850,000,000 and if you reduced the tariff very much, I for one certainly believe that that deficit would be still larger. That is a serious situation to face. It is the duty of the Minister of Finance to adjust his finances in keeping with his expectations, and personally I do not blame him at the moment for declining to reduce the tariff at the risk of adding to the national debt. I also agree with the minister in not imposing new taxation in order to make the budget balance. Taxes are now high, and there are some forms of taxation I do not believe in. I believe that taxation is reasonably high now, and if it is true that the tremendous debt we are carrying to-day, and which entails such heavy taxation from year to year, was incurred for the preservation of our liberty and the liberty of the world, then I say it is fair that posterity should carry at least a portion of it.


Andrew Ross McMaster: Posterity can hardly
be charged with responsibility for the war.


William Daum Euler: No, but it will share in the good results that may have been secured.


George Perry Graham: "The sins of the fathers," you know.


William Daum Euler: Whatever may be the
general opinion about that, I believe that under present circumstances, and in view of the condition of depression that now prevails, the Minister of Finance is quite justified in not increasing taxation. I think he may look forward with reasonable hope to the restoration of better business conditions and an improvement in the railway situation, and this being the case I do not think that higher taxation will be necessary next year or in the years to follow. I think that the position taken by the Ontario man and possibly by the resident of Quebec would under similar circumstances be taken by my hon. friends the Progressives. Most of them represent farming constituencies. Now, I do not suppose there is much essential difference between the United States farmer and the Canadian farmer. The Canadian farmer believes in a very low tariff, or practically in absolute free trade, because he thinks it would benefit him. The American farmer to-day is an ardent protectionist, because he is of the opinion that protection is going to work to his advantage. In short it all depends on whose ox is gored. I believe that my hon. friends opposite are actuated by altruistic motives, if I may use that term, just as much as any of us, but not a very great deal more. Charity begins at home.


Mr. CAMPBELL:: What motives actuate
the manufacturers?


William Daum Euler: Let me ask the hon. gentleman this: What were the motives of the Westerners when they asked for an exclusive-wheat board, which was protection?


Milton Neil Campbell: They wanted to eliminate the speculator.


William Daum Euler: I was not going to refer
to this, but the hon. gentleman suggests the question. The leader of the Progressives (Mr. Forke), in an address the other day on the Combines Act, expressed the opinion that combines ought to be curbed when they entailed higher prices for the consumer. Well, I think that this would have been exactly the result that would have been attained by the Wheat Board. The Westerner would expect higher prices for his wheat and if he got higher prices someone would have to pay
t

The Budget-Mr. Euler


Milton Neil Campbell: Not at the expense of the consumer.


William Daum Euler: -unless we accept the pretext that there is some man who comes in between the producer and the consumer and takes the intermediate profit.


John Frederick Johnston: That is not a pretext.


William Daum Euler: The Westerner believes in free trade because he thinks it is to his advantage. He may be right or he may be wrong. The Easterner believes equally in protection, if you like to call it protection, or at least in a moderate tariff. He, too, may be right or wrong. It just comes back again to my old argument; it all goes to show that all of us, no matter what we may believe is good for ourselves or for the country, should, if we have divergent views, try to compromise and to reconcile those views as far as possible.


Mr. EVANS:: Is it not a fact that the Canadian manufacturer believes in free trade too when it comes to raw materials for his purposes?


William Daum Euler: I do not know what the attitude of the manufacturers may be, but I would say that so far as is possible, all along the line, the Canadian manufacturer ought to get his raw materials free.


John Evans: Would you not concede the same thing to the agriculturists?


William Daum Euler: Is the hon. member referring to raw materials?


John Evans: Yes.


Robert Alexander Hoey: He means instruments of pro-dution.


John Evans: Well, that is our raw material.


William Daum Euler: That is rather a novel way of putting it; I never thought of it in that way before.


Mr. PRITCHARD:: What about printing
presses?


William Daum Euler: They do not come free.


Milton Neil Campbell: What about fertilizer?


William Daum Euler: I protest; I cannot answer all these questions at once, and I must pray that I be allowed to proceed. I am convinced that the tariff question is magnified out of all proportion. As the member for Brantford (Mr. Raymond) stated the other day, there are other important matters that are worthy of the consideration of parliament and of the Progressive party.
I Mr. Euler.]


Thomas William Bird: Would the hon. gentleman enlarge upon his definition of a moderate tariff? Wherein does it differ from the tariff of my hon. friends to my right?


William Daum Euler: Again I must protest at the number of questions that are being flung at me; I really desire to conclude before six o'clock if my good friends will allow me to do so. If the hon. gentleman desires to discuss the tariff or any other question with me on any other occasion I should be glad to take it up with him. Now, the government has a duty to perform to all citizens of this Dominion, and it cannot heed the demands , of any particular occupational group at the expense of all the others. For that reason, and because I believe the budget is an honest attempt to afford affair average of justice to all classes of the community, while having regard to the financial necessities of the country, I am going to support it.
The leader of the Progressives (Mr. Forke) believes the loss of revenue should be made up from the taxing of unearned income and taxes on luxuries. I confess I have a good deal of sympathy with that suggestion, but I fear that, as a definite source of large revenue, a tax on unearned incomes would not be so successful as he imagines. I also agree with what the leader of the Progressives said with regard to economy, and I think what he said with regard to the Civil Service is worthy the consideration of the government. I believe all civil servants ought to be well paid, but I do not think we ought to have any larger number in the service than is absolutely necessary.
I was going to speak briefly on the subject of taxes, entirely apart from the tariff. I think that during the next generation governments in general throughout the civilized world, especially those who took part in the war, will meet defeat more frequently than in the past, for the simple reason that people resent taxation, all of which is a reason why the theory of taxation should be carefully studied and a logical, reasonable system of taxation worked out, in this country as well as in other countries. People never take kindly to taxes in any country, and that is another reason why, both politically and in other ways, it would be wise to make the imposition of taxation just as light and as little irritating as possible.
I take mild issue with the government in the matter of taxation. I never believed from the beginning, under the Union government, in the imposition of taxes such as the stamp tax, and, more recently, the tax on receipts, and many of the irritating excise

The Budget-Mr. Euler
taxes which we have had in the past. I believe we can develop something that is a good deal more simple and just as logical as the taxes that we have now. I see no real connection between the liability for a tax and the justice of placing a tax, on cheques for example. The mere fact that a man is paying out a sum of money by cheque is no reason why he should pay a tax. He may have had to borrow in order to pay the money and yet he is taxed. If there is any logic in it, I think the tax should be paid by the man who receives the money, rather than the man who pays it.
But I base my argument in that regard on the difficulties in connection with collecting the tax, and the unnecessary irritation that it causes to the public. I was going to make this suggestion-and I have made it before- that ultimately the government might very well confine the tax-raising operations to three chief sources. First, the tariff, and the amount of taxes to be gathered in that way is limited. Then we should have an income tax, and obtain as much as is fair and right from those who can afford to pay. That is also limited. There will still be a large balance which will be required, which ought to be and must be collected from the ordinary man of the country. That will be a general tax that will be averaged, and will be collected from all classes, because we already have provided for taking taxes from the man who has a large income through the income tax. As to that I believe-although I know there are a great many objections to it-that in the end governments will come to a simplified form of a turn-over or sales tax. I am quite sure some of my Progressive friends will find fault with that, but I believe that in the end it will be found the most equitable and certainly the cheapest form of taxation to collect. We should get down finally to the three basic methods of taxation, the tariff, the income tax, and the turn-over or sales tax.
I admit there is a great deal to be said against the sales or turn-over tax. But that is the case with all taxes. The tax that has just been imposed in the way of a sales tax is open to the objection that there will be pyramiding all the way down the line, and the consumer will pay more than the amount of the tax. I know that is the argument. Perhaps, with careful thought we can develop something that will meet the situation. And consideration should be given to the endeavour to prevent overlapping of the taxation that we have in this country to-day. As to the income tax, in Ontario a man must pay to the federal government and also to the
municipal government. In Manitoba I note that the government has imposed a provincial income tax. It seems to me it would be the part of wisdom for the federal, the municipal and the provincial authorities to get together and map out their spheres of taxation, so that they will not overlap.
In conclusion I wish to say a few words on a subject in which I am always very much interested. That is the matter of the National Railways and the public ownership of railways. There was a time-two or three years ago, perhaps longer-when I believed in public ownership, and I was one of the very few who were in favour of national ownership of railways on principle. The railways, it has been said by the right hon. leader of the Opposition and others, and quite rightly so, were taken over because they had to be taken over. They were bankrupt. But so far as I was concerned, I favoured that action on principle. Now we have lost very heavily on our railways in the past year. We have however, I am glad to say, improved our position by something like $12,000,000, and the improvement to-day is very rapid. At present the business of the National Railways is increasing by leaps and bounds, and I believe one of the reasons is that the people of the country are realizing that the railways are their own, and they are patronizing them, knowing that every dollar they put in the coffers of the national railways goes to help to decrease the deficits which otherwise they would have to help to pay in taxes. I venture to say that in a period of less than five years the National Railways will pay not only their operating charges but their fixed charges as well. In the meantime the people of Canada are getting a great benefit as a result of national ownership of railways. They are receiving a service such as they never received before, and that remark applies to the Canadian Pacific as well as the Canadian National Railway. Courtesy and efficiency have become the essential policy of the two great systems as a matter of necessity in the. struggle for business.
I would like to make one suggestion to the government in connection with the railways, and I make it with modesty, knowing also that the suggestion is not a new one. Among the charges standing against the National Railways are large sums which are the results of deficits and of advances made by the Dominion government and upon which involve heavy fixed charges, and increase the deficits from year to year. We may fairly say that the original roads comprising the National Railways were in a state of bankruptcy.
2S60
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We are now re-organizing these roads. In private business when re-organization of a bankrupt business is carried out the old losses and fictitious assets do not find a place in the new capitalization, but the business is capitalized at its real value and it starts off with a clean sheet as a new enterprise, free of the incubus of the old debts and losses. I think that is sound business. That practice might well be followed by the National Railways. A fair valuation of the whole system should be made, and I know this has been advocated by the former leader of the Progressives, with whom I agree in a good many ways. A fair valuation of the whole system should be made. I think the amount now standing against the National Railways in one way or another is something in excess of one billion eight hundred million dollars. I do not know that is exact. It is difficult to dig the figures out of the report. The railways should be expected to pay fixed charges upon securities representing only the total of the real value as would be done in any private business. The interest could not be evaded on securities held by the public as individuals, but the amount held by the latter is less than the actual value of the road. The balance of the indebtedness is in the form of advances made by the government of Canada or securities taken over with the old roads.


Arthur Meighen: What would be the basis of my hon. friend's re-valuation-replacement or earning power?


William Daum Euler: I was coming to that. I should say that the basis of re-valuation should not be the cost of replacement, because if the roads were to be rebuilt, they would not be rebuilt as they are now. There is too much duplication. But I would say, if it were possible, re-valuation should be arrived at on the basis of a thoroughly good system that would serve the same purpose as the system that we have now.	*


Arthur Meighen: Does the hon. member mean the replacement value of a' thoroughly good system?


William Daum Euler: Yes, w'hat it might cost to build a new system that would serve the purpose of the combination of systems that we now have. I would write off the difference between the actual value so ascertained and the amount of indebtedness which is now charged against the railroads, upon a large portion of which we require to pay fixed charges, although those fixed charges are based on fictitious assets. I take that position because the money was lost, we have

nothing to show for it, and we might as well write it off and not have the fictitious assets as a perpetual handicap upon the road. This action would not reduce our losses in actuality, of course; but it would reduce the enormous aggregate of fixed charges which the roads are expected to earn, and which figure so largely in the annual deficit. If this were done it would be an encouragement to the board of directors. Not only would it encourage the management who would not be continually confronted with the task of trying to make earnings on an over-capitalization, but it would put the National Railways on more of an equality with their great competitor, the Canadian Pacific Railway. I believe also if that were done, it would be only a short time until our National Railways would be on a sound financial basis. The profit and loss account would soon show a balance on the credit side, which could then be applied to a reduction of rates which is so much desired.
Some weeks ago the leader of the Opposition (Mr. Meighen) suggested that these losses and fictitious assets, as I have called them, should be carried along with the idea that, in future years as the roads became more prosperous, we would be able to draw dividends, if we want to call them such, on these amounts. I am not disposed to agree with that, because I do not believe it would be businesslike to carry on the books, assets which are not real assets. If after a time we find that the rates do show profits over and above operating costs and fixed charges, under the plan that I propose, it becomes merely a matter of policy whether these profits shall be applied to wipe out the old losses t>r whether they should be applied to a reduction of rates. Frankly, I think they should be applied to a reduction of rates because the real theory and purpose of public ownership is not the making of profits, but the giving of the best possible service at cost.


Arthur Meighen: Will the government lay on the Table to-morrow a statement of how the revenue for last year was made up? I find it is not in the budget speech. I should like a statement showing the ingredients of the revenue for the antecedent year. There were other particulars omitted from the speech which are usually included also, but I will not ask for them at present. I should like them also.
At six o'clock the House took recess.

The Budget-Mr. Tolmie
After Recess
The House resumed at eight o'clock.


Hon. S. F. TOLMIE (Victoria City):: Mr. Speaker, in rising to discuss the budget I wish to extend my hearty congratulations to the hon. Minister of Finance (Mr. Fielding), who on this occasion is delivering his seventeenth budget. He has rendered very valuable and faithful services to this country, services extending over very many years, and I can pay him no greater compliment than to say that to-day he possesses the esteem of the people from one end of Canada to the other.
It has been pleasing to us in this quarter of the House to note that our friends who now occupy the government benches are at last coming round to the view that we must have a certain amount of protection and that under present conditions, with other countries raisina high tariff walls, it would be unfair to Canada to cut down our tariff, particularly when i' would be so hard to obtain revenue from other sources to make up for any loss caused by a revision downwards.
We have to take into consideration, too, the competition that our manufacturers would have to meet in the event of our lowering the tariff on certain articles that we now manufacture. We have not only competition from the United States, where they manufacture in such large volume that they are able to,put their goods on the market at a cheaper rate than we can compete with, but we have another source of competition that has not had much attention paid to it in past years, although I think now we are beginning to wake up to the danger. I refer to competition from the hundreds of millions of people on the other side of the Pacific with cheap water transportation to our shores. We find Japan is branching out in many lines of manufacture, and in a very short time, in fact even to-day, with her splendid steamship service across the Pacific she is able to place her "merchandise on our markets at lower prices in some cases than we can quote ourselves.
I am very pleased indeed to note that the government proposes to give a bonus for the manufacture of certain lines of copper. This will beneficially affect one of the big smelters in British Columbia. I know that smelter very well. It lies at the foot of the hills from the well-known mines at Rossland, and below the smelter again lies the little town of Trail with a population of several hundred, dependent entirely on the copper works about. This little town would go out of existence were it not for the Trail smelter. Therefore, as I say, I am very pleased to note that the government has agreed to give some assistance to this smelter to enable it to meet outside competition.
I propose now, Mr. Speaker, to touch more particularly on certain points in relation to agriculture and shall only refer incidentally to the budget as I proceed. But before leaving the budget itself I must refer to the very interesting amendment brought down by our friends to the left. It is interesting from the fact that they have taken certain planks from the Liberal platform of 1919 and incorporated them in an amendment to a Liberal budget in 1923. Undoubtedly it is rather unique in that respect. They have also included certain clauses that they knew beforehand how the Conservatives would vote on, and in that wav they have brought in what might be termed a safety amendment. When we first heard that an amendment to the budget was to b< brought down we thought we could look forward to a little excitement when the vote was taken, but after hearing the terms of the amendment I have come to the conclusion that there will be just as much excitement when the division comes as there would be in waving a red flag at a dead bull. However, towards the end of this debate it will be very interesting to hear from the gover_ment benches, because we expect they will then pay a public farewell to their platform of 1919.


Mr. LAPOINTE:: Order.


Simon Fraser Tolmie: As we look over the agricultural situation in Canada and throughout the world we find that the markets on which we have been depending for a number of years and on which our agriculture was very largely built up, are very much disorganized. Some of them are entirely out of existence; others are much more limited than they were before. This condition, of course, has a serious effect upon agriculture in this country. Some of our farmers are meeting with reverses in regard to the disposal of their product; owing to climatic conditions, bad crops and so forth some of them are losing heart and, I think, leaving the country. But this is not the first depression we have had in Canada; we have had even worse depressions than this in former years and we have lived through them all. I feel quite satisfied that with the spirit of the Canadian people behind us we will survive the present one.
We must not, however, criticize the farmer too severely. In fact, no one is in a position to criticize the farmer unless he has himself experienced some of the ups and downs of agriculture. Those of us who were brought up in the country, particularly in the wooded
The Budget-Mr. Tohnie

sections, know what it is to rough it on the farm, to go out and do half a day's work on a plate of porridge-and I may say in that connection that my father came from Inverness, Scotland. At the same time I do not feel that we are going to get anywhere by blindly complaining of our condition. It appears to me that the most practical thing to do under the circumstances is to make a careful survey of the situation and then to select those lines of agriculture that will give to us the quickest and best promise of success. In doing this I think at the very beginning we can score rather severely that particular line of farming known as single crop farming. In fact, where it depends on the production of one line of grain in some sections of the country, it develops into very little more than a gamble with the weather. But the man who gambles on the single crop is rather at a disadvantage compared with the man who gambles in other lines, because he is limited to only one bet a year. If he wins that bet he probably winters in California; if he does not win it he stays at home and tells us that the country is no good. Now, it is admitted-and judging from the debate that has taken place already it is generally accepted in this country -that our most reliable line of agriculture is that of mixed farming with live stock as a basis. This is the safer plan even for the man who wishes to specialize in a particular line; if he at least keeps a certain amount of live stock for a nucleus he can radiate from this centre as far as he likes, and the chances are, if the live stock markets are in any sort of reasonable condition, that the results of his work in that direction will carry him through many of the hard places in connection with the single crop on which he has concentrated much of his attention.
There never was a time in Canada when it was so necessary to carry on a system of good farming as it is to-day. When prices are high we may practise hit and miss farming to a certain extent and meet with fair success, but under conditions like those which prevail at present, with prices low and costs high, it is necessary to apply the very best methods if we are to succeed.
There is another thing that is very important, too, and that is the plugging up of the leaks to the best of our ability. Produce all we can at home, make the farms selfsustaining, and at the same time send nothing to market but what is of the best quality possible, in the best condition, and marketed at the proper time. In that way we can make a very substantial saving. Let us glance for

a moment at the situation with regard to marketing and the quality and condition of the stock sold in the markets of this country, and then form an opinion whether the farmer is at the present time making the best of his opportunities. Last year we sold 600,000 head of cattle through our inspected abattoirs, and it is estimated that owing to poor quality, poor condition and small size the farmers of this country dropped $30,000,000. A comparison of the prices will be rather interesting. We find in the first place that instead of the marketing of these cattle being extended over the greater part of the year, most of them are rushed to the market during the fall and early winter months, with the result that the market is glutted and the packer is almost beside himself to know what to do with the stock. At one time a few yearn ago, during the war, when there was a great demand for bone meal on the other side of the water and the Argentine competition did not exist, we could sell this cheap trash to fairly good advantage. But just now that market is gone, owing largely to the Argentine competition. I will quote a few prices just to give you an idea of the spread. The average low and high prices in the Toronto market during the years from 1918 to 1922 inclusive, were as follows:
1918.
1919.
1920.
1921.
1922.
Low Average High Average
15	54	$15	125	02	15	353	93	15	801	63	9	831	22	8	67
This shows that there is a tremendou? spread between the price of the animal that is desired by the packer and the butcher and the animal that is sent to market in a low condition, of a scrubby nature, and lacking in size. You will readily see that in the last three years the men who handled that kind oi cattle never made any money at all.
There is another very striking feature of these figures. Even during the bad years the man who produced a steer of good quality received either a first class price or a very fair one. This clearly indicates that there is no advantage in breeding the scrub animal, so that the farmer who pursues that policy must come to the conclusion either to change his methods or to change his business. I would emphasize, then, the tremendous loss that has been occasioned to this country, first, in lack of weight in our stock, and then in lack of a good price-that is, the existence of a low price for the cattle, running, as I have indicated, into many millions of dollars-a dead loss to the farmer. Here is a situation

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2S63
where the farmer must absolutely help himself. While he can receive a certain amount of assistance from the government, the actual result depends very largely on whether or not the individual is going to change his methods.
Another branch of the live stock industry and one of the most reliable, I think, is that of dairying. Dairying is one of our most stable industries; even to-day, in those cases where cheapness of production is well taken care of and good breeding has been attended to so that the herds contain animals of fairly high quality, a very reasonable profit is returned to the farmer. But again the result depends very largely on the farmer himself. I will show you that we are losing every year an amount estimated at 1200,000,000 owing to the poor quality of the dairy cows in Canada. We have 3,500,000 dairy cows in this country that average about 3,500 pounds of milk each per year, while we have single cows in Canada that yield as high as 33,000 pounds in a year, or a little over eight times as much as the average yield. The farmer who maintains scrub cows has to keep a stable that will hold eight cows instead of one. He has to feed eight cows, clean out the places for eight cows, milk eight cows, and after he gets through with it all there is very little profit in it for him. The man who maintains a better herd- and some of our herds average as high as 14,000 pounds of milk per cow for the whole herd-does not talk about hard times, while the man who maintains a scrub herd is always doing so.
One of the greatest jokes in connection with the agricultural business, if there are any such-my experience is that it is always pretty hard work-is to hear a man complain about the failure to take the duty off agricultural implements while at the same time he is trying to make a living out of a 4,000 pound cow. It is an utter impossibility. If he would just take care of his herd, get the proper kind of cows and breed them up, improve their quality, I do not think the duty at present existing on agricultural implements would interfere with him very much. It has been found at some of our experiment stations that as the yield of the cow increases, the cost of production goes down up to a point, of 18,076 pounds per year, and in thole cases where the milk was of a fairly high quality the cost still kept lowering. But where the butter fat content is rather low we find that above that figure the cost of production is a little higher, but at the same time still quite profitable.
While the improvement of herds may be looked upon by some as something that cao only be accomplished by a rich man, I may say that at the Nappan experiment station down in the Maritime provinces an experiment was conducted of taking a number of scrub cows from neighbouring farmers and placing them on the farm, and just by good feeding alone the product was increased by fifty per cent Then by proper breeding methods the output of the offspring of these cows was increased fifty per cent again, showing that there is a proposition within easy reach of any farmer, and one where good results can be accomplished by a combination of proper breeding and feeding. The farmer who stili maintains a scrub herd and has not yet tried to improve its condition should not be downhearted. I know of my own personal knowledge many cases where farmers have commenced with scrub cows and after a few years have been able to reach over 12,000, 13,000 and 14,000 pounds of milk per cow, and in addition to that 550 pounds of butter fat per cow, showing that this is within easy reach of any farmer who has the energy and perseverance to try. Of course, this was not done by making speeches. It was done by being willing to work, to learn and improve. These men I particularly speak of took every possible opportunity to improve themselves, improve their knowledge of dairying by visiting experiment stations, exhibitions and the best herds in the country, and I am quite sure that anyone who will display the same intelligence and energy as they did will have very satisfactory results.
Our dairy industry last year was wortu about $240,000,000 to this country. Our export market is that of Great Britain. We send some dairy products to the United States, but Great Britain, I think, is the more important market of the two. We have been having rather bad results over there during the last year or two owing to the fact that, our butter is not coming up to the demands of the British market. As you may know, in that market we have to meet very strong competition from Denmark, Holland and also New Zealand. The Britisher complains that our butter is too heavily salted. Some people say that the salt is put in to meet the taste of the people in Canada, while others ex plain that salt sells for two cents a pound and butter for forty or fifty cents a pound. The Britisher also complains that our butter is uneven in colour, that its flavouring is not first-class, and that it is also defective in keeping qualities. To illustrate that I may say that our butter sells in Great Britain from

2S64
The Budget-Mr. Tolmie

ten to twenty shillings per hundredweight below the butter of Denmark and New Zealand. It is estimated that the loss on this alone in 1922 amounted to no less than half a million dollars. Last year a well known western creamery sent to Great Britain a consignment of butter of very good quality, with the result that it sold for over five shillings a hundredweight higher than other Canadian butter that was over on that market at that time. This is pointed to as a result of tne system of grading of dairy butter that some of the western provinces have carried on during the past few years. There is no reason why we should not get our goods on the British market in first-class condition. This will depend largely on the grading of our cream and butter, but we must also supply it in sufficient quantity to interest the people on the other side of the water. The Britisher quite naturally does not want a certain consignment this week, and then no butter of the same kind next week. There must be a continuous stream, even in quality, first-class in every way, and made with a view to meeting the demands of that particular market. Here is an opportunity for improving matters for the Canadian farmer and assisting him to a very great extent in connection with his outlet for dairy products, which must always be on the other side of the water or in some other country as we produce more than we absolutely require for our own needs. However, it must be remembered that nobody can make first-class butter out of poor cream or badly kept cream, and in that particular the farmer himself can render very valuable assistance.
Let us glance for a moment at the hog and export bacon industry. Perhaps no line of live stock has suffered so much from in-and-out farming, that is to say, the farmer has gone into the hog business when prices were high and dropped out of it when prices were low, and very often by that system he has missed the high prices and failed to get the advantages the other man has secured who has stayed steadily in the business. At the Central experimental farm at Ottawa it has been clearly demonstrated that on land valued at $125 an acre, where regular wages were paid, where they did not have the benefit of family help, hogs paid every year during the war and since that time. But during that very period there were men out in certain sections of Canada where grain was a little cheaper than here who were going out of the hog business because they said hogs did not pay.
Let us see whether the farmer has made the most of his opportunities in connection with the hog industry. Our markets to-day are

suffering very severely owing to the fact that the farmer fails to send to those markets hogs of the proper type and proper weight. This not only injures the farmer himself but the packer also. It very seriously interferes with his work, and particularly in his effort to secure a fair share of the British market. There are eight packing plants doing business in Ontario, and at these plants forty-five per cent of the hogs marketed are what are known as out-weights. The ideal weight for a hog to furnish a Wiltshire side for the British market will run from 160 to 210 pounds live weight. These hogs that are not of the right type seriously interfere with the sale of our goods on the other side of the water. To illustrate, let me say that recently at a sale of Canadian Wiltshire sides held in England the desirable weights brought from 101s. to 102s. per hundredweight of 112 pounds, while out-weights that did not conform with the requirements brought only 94s. And still the farmer continues to market these out-weights even in face of the fact that there is a difference of one or two cents a pound on the live hogs as they are taken into the abattoir.
There were 2,000,000 hogs slaughtered in our plants in the year 1922. Of these, 40 per cent, or 800,000 were required for export; and in the grading of these 800,000, only 13 per cent were classed as selected bacon type. If all the selects had been exported they would have supplied only about 32-5 per cent of the packers' requirements, with the result that the packer is now compelled to buy many of the out-weights and fat types to meet the market demands. What effect has this on him? This is simply one of the reasons why Danish bacon, with the uniform supply from that country, will sell in the British market at 117 shillings per hundredweight, while the best Canadian bacon sells at between 102 and 105 shillings and on the average only 96 shillings per hundredweight. It hag been clearly shown that our best hogs are equal in every way to the Danish product, and the cure given by our packers in this country is altogether on a par with that given to the product of the European packing houses. By way of illustration I might quote the following from a letter received from a gentleman a short time ago who spent some time in England. He says:
One day last week I tested Canadian bacon against Irish and Danish, without knowing the position of the three. By long odds everyone was in favour of one kind, which turned out to be Canadian; and yet we have to take many shillings a hundred-weight less for our product.
What is the reason for this? The explanation is simply that, as I have pointed out,

The Budget-Mr. Tolmie
our supply is uneven both in quality and in weight. There appears to be no excuse for our not being able to produce a good quality in Canada. We have a great variety of grains which I think are equal for these purposes to any grown in the world. In the United States they produce their hogs largely on a corn diet, with the result as shown in the figures which I will give to the House bearing on the question, comparing the prices received for American Wiltshire sides as against Canadian Wiltshires. The American Wiltshires brought 90 shillings per hundredweight, while the best Canadian product sold at 105 shillings; and the average American product brought 80 shillings as against the average Canadian 96 shillings. The American, in addition to feeding his hogs on com, raises what is known as the thick fat hog, which goes largely to lard. This is a type that the Englishman is not very fond of. He got a surfeit of it during the war and I am afraid it will take some time before he recovers from his experience with American pork.
A comparison of the prices at Chicago with those obtaining in Toronto during the year ending March 31,	1923, shows that the
smallest difference beween the Chicago and the Toronto price was in favour of the Toronto price to the extent of $1.45. That was during the month of October. The higher price in favour of Toronto in the month of July was $3.97 wThile the average for the twelve months was $3.16, showing that the Canadian farmer marketing his product in Toronto and the other markets that contribute thereto, obtains a higher price than if he had his hogs in Chicago when hogs are sold there. This is largely due to the demand for his particular type of hog, as I have shown; and with the feed at the disposal of the Canadian breeder and feeder, he is able to send pork to market in a firmer condition than can the man who has to depend entirely on corn.
Let me say however that while we are competing in the British market with the Dane, while we produce our own feeds at home, the Dane has to depend to a great extent on feeds exported from other countries. In view of this fact, surely we should be able to compete with him if we pay particular attention to the article we send abroad and see to it that it is uniform and of the kind demanded. While the type of hog produced in Canada, the price of which is controlled by the export market, fetches the prices I have quoted, there is to be taken into consideration this fact that the producers of hogs in Canada enjoy a certain form of protection. According to our health of animals regulations it is illegal to import hogs from the United States for slaughtering purposes, or indeed, for that matter, for any purpose at all, unless they are quarantined for thirty days at the boundary line. With such a regulation in force, it would not pay anyone to import hogs, unless for breeding purposes and of high value, and incur the expenses connected with this quarantine. This therefore is a form of protection. It was not intended as such, but in fact it is protection and that is one reason for the price the Canadian producer enjoys in the home market.
Another interesting point I might mention. We might compare the prices of grain grown in this country and used for hog feed, such as barley, eorn, bran and shorts, with the hog prices received during the war. Last year we find the. ratio between the prices of feed and of hogs more favourable than in 1914 or at any time during the war, which shows that the opportunities of the producer of pork at the present time are better than they have been for ten years. However, careful feeding is absolutely necessary. Recently out of a shipment of some 2,500 head of hogs sent to one of our abattoirs, 400 carcases were classed as "softs" owing to improper feeding. There is a great scarcity of hogs of the proper type of weight and finish. To obtain these hogs more attention must be paid to breeding and feeding operations. The market will increase and our product will equal the Danish product if we send the kind of material which is called for in London and at other points in Great Britain where our products are used. We need to exercise great care in the selection of breeding stock with a view to securing the proper type. We must also market our product at the right time. One of the failings of the Canadian breeder is that he sends mixed lots of hogs to the market, some of which conform with the requirements, securing the highest prices, others being too heavy, having been kept too long, and others, again, too light, not having been fed long enough. This is another instance in which the farmer must help himself. Neither the government nor anyone else can help him in this regard if he does not take the initiative. With regard to this Canadian market, I have no doubt of the possibility of our being able to secure our full share. There is no question about that. The conditions are favourable, but if the farmers show indifference
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with regard to the type of hog they produce, we may easily find ourselves among the tail-enders in the British market.
There is another line of live stock which I think should be doing very much better than it has done in the past in Canada. It is one in regard to which we are very much behind other agricultural countries, not only of the British Empire but in the world at large. I refer to the production of sheep and wool. The number of sheep in Canada to-day does not exceed three or three and a quarter million head as compared with twenty seven millions in Great Britain, forty millions in the United States and eighty millions in Australia. This has been due largely to the fact that while the market in Canada has been of an unstable nature, prices varying up and down, there has been no encouragement for men to go into this business. This particular industry, I think, should receive every assistance possible. We have been allowing Great Britain to ship her wool over to Italy and Germany, where it is combed and returned and then shipped into Canada free of duty. This product is known as "tops." We find also that the Japanese are now going into the wool combing business quite extensively, and their goods are coming here free and competing with ours, which is a very unfair competition indeed. I am informed however that there has been in existence for some time a tariff of 15 per cent on combed tops coming into Canada. This 15 per cent has never been enforced and I would urge upon the minister that it be put into effect at the earliest possible date so that our wool combers in this country may secure the protection that they require to build up their industry.
I would even go further than that and give bonuses for the handling of wool in this country until we get the industry on a proper footing. There is something certainly very seriously wrong with an industry when in a huge country like Canada, with vast areas of land, suitable for the raising of sheep, our sheep population amounts to only about three and a half million, particularly in view of the fact, as I pointed out, that you cannot blame it on protection, as far as combed wool is concerned. I would like to draw this matter to the attention of the Minister of Customs (Mr. Bureau) whom I had not noticed in his seat until this moment. I said that we were bringing wool combings into this country absolutely free at the present time, in spite of the fact that we have a tariff of 15 per cent against that class of goods, which has never [Mr. Tolmie.1
been enforced, and I am pressing on the House the necessity of enforcing that tariff at the earliest possible date so as to assist in placing our sheep industry on a proper and substantial footing. It is quite possible for us to produce the highest quality of wool in Canada, capable of manufacturing up to 64s. quality. From that up to 70s. and 80s. we have to import our wool, but it is possible for us to produce the higher grades necessary for the manufacture of that particular quality. We also have competition from Australia, which is sending combed wrool in here without any duty, while in that country the government bonuses wool combing to the extent of 5 or 6 cents per pound. Here the Canadian producer of sheep and the Canadian wool comber have to face during part of the summer, the competition of the bonused wool trade of the greatest sheep-growing country in the world. In addition to that the Australian wool comber is able to buy wool from the hide wool stock accumulated by the Australian government during the war, at cost price and this is another disadvantage which the Canadian wool comber has to contend with. I sincerely hope the government will give this question their closest attention.
There has also been a reduction in woollen cloth from Great Britain, and in this connection I may say that we should I think be able to build up a few of t these important industries the building up of which means assistance and help to our natural products, such as wool, and many other articles. Let us get our home manufacture of woollen goods at least securely on its feet, and let the wool market become a reliable one, and you will find the sheep population of Canada increasing in very great numbers. The sheep is a useful animal, useful on almost every farm, and one that will live largely on waste material in the summer months. It is a very good animal for keeping down weeds and it furnishes a supply of manure at almost any time of the year. Here is the farmer making the best of his opportunities in the production of lambs. The lamb is a side line of the sheep industry which is very important and one that is very remunerative where carried on in the proper way. We find in Canada that the farmer markets about 70 per cent of his male lamb flocks with the result that there is a great loss in the summer on that particular account. To give you an idea of the size of this market, in the first three months of the year over 28,000 ewes and lambs were marketed in the Toronto market. The lamb market has changed to a great extent. Within recent years lamb feeding has been taken up and the lambs are fed

The Budget-Mr. Tolmie
on the waste material of the wheat grower, known as screenings; and fed properly on that material. Large feeding plants have been established at Calgary, Fort William and other points. With the supply of winter lamb from the feeding plants, it has not been so necessary for the farmer to fill the cold storage plant during the fall of the year. He finds the fresh killed lamb during the winter months will not pay, and that the nursing lamb will not sell so well in the winter when there is fresh lamb to be obtained. Where lamb is produced under first class conditions, some of it is exported to the United States and first-class prices are procured, and in some cases even a premium is paid over the price which would be secured for an American lamb. Here again the farmer is suffering a severe loss by indifference. This is something which depends upon himself and which he can remedy with very little cost to himself and in that way secure a very much better market for his product. I have pointed out a few of the leaks in agriculture and I have attempted to show that a great deal of the success in the stoppage of the leaks will depend on the individual himself.


Mr. KNOX:: I have been listening very attentively to the hon. member and before he leaves the live stock end of it I would like him to go into a little more detail in regard to one point. He stated that the farmers lost some $30,000,000 last year through not keeping the proper class of stock. I would like to know how he arrived at that figure?


Simon Fraser Tolmie: It is estimated that the number of animals that went through our packing houses was 600.000 odd. It is based on a calculation made by some of the experts in the Department of Agriculture during the time I was minister in 1919. In 1919 and 1920 there had been exported through our inspected slaughter houses 1,126.000 head of cattle, and less than 10 per cent of these cattle were either good enough in condition or good enough in quality or heavy enough in weight to be exported to Great Britain to compete with the products of other countries. At that time the loss was estimated at some $40,000,000, and this is based on the same figures. I cannot give details, but it was all worked out in proportion. I pointed out that success depends very much on individual effort, that the farmer must be more selfdependent, that while the government can assist him in a general way he must help himself and be ready to co-operate. There is one line however, among others in which the government can render very valuable services
in my opinion, and that is the field of research, particularly in connection with our animal contagious diseases, those that are classed as contagious diseases under our act, and also those that are not classed or scheduled in the Animal Contagious Diseases Act. The two diseases which cause the most loss are tuberculosis and hog cholera. I pointed out some time ago a very marked increase in our inspected abattoirs in tuberculosis, both in cattle and in hogs, having reached the point of nearly 22 per cent on the inspected carcases, those carcases going through our inspected abattoirs where exact returns are kept.
Another disease causing tremendous loss in cattle is infective abortion, a disease affecting horses, sheep and swine. Then there is another disease called the "joint ill," in the foal, one of the most destructive diseases which affects animals. When they become infected with this disease, they die in a very short time.
There is another field for research and that is in regard to internal parasites, which according to the estimates in the United States, has cost that country hundreds of millions per year. In 1921-22 we paid in compensation for tuberculosis $639,530 and in 192223 the sum reached nearly $1,000,000. This does not include the losses on the abattoirs and also'on the farms from affected carcases, which losses would run into many more millions, in my opinion. In the face of this, we are spending only $30,000 a year on research work, and much of this expenditure is required for the manufacture of tuberculin and other such agents for the diagnosing of disease. It is quite possible for an animal to be quite healthy in appearance on the outside, and there is no physical way in which to make a diagnosis so as to decide effectively whether it is affected with tuberculosis or not. We use tuberculin which is applied in three ways:	To the eye, or into
the pores of the skin, or under the skin. By that means and by taking temperatures, watching swellings and so on, we are able to diagnose very effectively whether an animal is affected with tuberculosis or not. We have one serious obstacle in the way, and that is that we cannot separate an animal that is Dadly affected and that would be a spreader of disease amongst other live stock, from an animal that is only slightly affected and that probably, under ordinary conditions, will make a recovery. This is the point. At present we are compelled, when we get that reaction in our tests, to destroy all those animals. If we could discover in our research work a
The Budget-Mr. Tolmie

reagent that would differentiate between an animal that was slightly affected and one that was badly affected, we would make a very substantial saving to the country.
Another feature that offers us great promise is in immunization from tuberculosis. Certain experiments along those lines have been carried on which have given very fair promise, and by proper research work we should be able to discover some serum or bacillus or other biological product which would give us great assistance in that direction. My claim is this, that it does not seem practical to be paying out hundreds of thousands of dollars for compensation without spending much money on research work. We should follow out this research work to the very end of the road and spend any reasonable amount. I can well understand that the Minister of Agriculture (Mr. Motherwell) has a great deal of difficulty in securing sufficient money to carry on his work, and I speak feelingly o:t this subject, because I have been in that position myself. The country, however, will gradually improve and get on its feet, and as opportunity offers, this is a particular branch of our live stock work that should be carried out to the fullest possible extent so far as money will permit.
Another point in connection with research in the direction of bovine tuberculosis is the tremendous field of human tuberculosis which is closely allied to it. It is now generally accepted everywhere that the bovine bacillus is communicable to man, and the discovery of an immunizator, or a discovery in some other direction that would help to overcome this scourge in cattle, would prove of tremendous value to man. We are very fortunate in Canada in having in Doctor Watson, Chief Bacteriologist of the Health of Animals branch, a man of exceptional ability. As an illustration of that, let me point out that only a few years ago in southwestern Saskatchewan and Alberta, we had amongst horses a disease know as glanders. Dr. Watson was placed in charge of the outbreak there; a quarantine station was established at Lethbridge, Alberta, and he was able, while there carrying on his experiments, to discover a blood test by which he could diagnose the disease before any clinical symptoms were shown. When he discovered this test, the amount of compensation paid that year for horses destroyed amounted to $46,000, and I think not more than five or six years had elapsed when the compensation amounted to $75. The next year it was wiped out altogether in Canada. They have been carrying on some experimental work at the Pathological station in Hull in connection with the pro-
duction of a protective or immunizing serum against glanders. While the experiments -were being carried on, a fanner in Manitoba became infected with glanders from a glandered horse. Fortunately a doctor from that province was visiting Ottawa and heard about the immunizing serum discovered by Doctor Watson. He secured some of it, and by the time the serum reached Manitoba, the doctor attending the farmer was also infected with the disease. I know of no other case on record-some hon. members who are doctors will correct me if I am wrong-where glanders in the human body has ever been cured. By the use of this serum, however, I am informed, both the doctor and the farmer are now attending to their business in the usual way, and only a few weeks have elapsed. What I claim is this, that we should cultivate and encourage in every possible way a man of such exceptional ability along the line of research and an appropriation of only $50,000 to be given him would be quite sufficient and could be added to from time to time as the work developed. In that particular connection, it would be advisable under those conditions to have Doctor Watson devote the whole of his time to this special work.
Another line of the greatest importance and, perhaps, the greatest obstacle to the success of the agriculturist in this country is that of distribution, Giving largely to our tremendous distances in Canada and also to the high cost of transportation. It is pretty difficult to find a solution for the problem of what wa should aim to secure in that particular line; but a little investigation will bring us relief, and that is to secure cheaper trans-
9 p.m. portation for the farmer, an equalization of freight rates, and then to allow trade to flow in its natural channels regardless of our big cities trying to draw trade in their direction.
I might draw the attention of the House to the development of trade on the Pacific coast where I am fortunate enough to live. The trade from the Pacific coast across to the Atlantic is now something over a billion or two billion dollars a year. The Panama canal has certainly made a great difference as regards transportation from western to eastern Canada. We should take advantage of all those things because it is most important that the primary producer, the farmer, should secure as large a proportion of the profit from his output as he possibly can. In this par tieular connection, agriculture is of such great importance to the Dominion of Canada that if we could place this industry squarely on its feet and make it profitable to the farmet.

The Budget-Mr. Tolmie
almost everything else would take care of itself.
In the development of our markets, a great deal can be done. According to statistics, we market about 80 per cent of our goods at home, either for consumption or for remanufacture for export. Our principal export markets are those of the United States and Great Britain. The United States, as we all know, is quite close to our border; it is easy to reach at low cost; but it has the disadvantage of having a very high tariff. Somehow or another there are 110,000,000 people on the other side of the line who believe in protection, with the result that we find our goods going into that country are very much handicapped by a heavy tariff. Great Britain then is the market that is the most desirable one, although situated at some further distance from our shores. Still it is willing to pay excellent prices and it is one which should be cultivated with the greatest possible attention. During my visit to Great Britain in 1921, I went through a number of the markets. There I found the Britisher anxious to buy our goods, provided they were of good quality, uniform and of sufficient volume to interest him. He was quite willing to pay us just as much as he had to pay to anybody else, but absolutely no more, and you cannot blame him for taking that stand. Another great field is being opened up for us across the Pacific where hundreds of millions of people desire our goods, and this market should be developed to the greatest possible extent.
Another feature that might receive encouragement is that of co-operative selling amongst farmers. Co-operation would enable the farmer to get his goods to market in much better condition, and by being able to load in carload lots, he would secure lower freight rates and be able to market to better advantage.
Long time-credits might also receive attention. In fact this means of helping the farmer is receiving considerable attention now, from what I have heard in the Banking committee and in the committee investigating agricultural conditions. The ordinary banker, while quite satisfactory for the farmer who is on his feet, cannot be expected to make longterm loans. That is not his business. Some other organization must be developed for this particular purpose of making long term loans at the lowest possible rate. However, there is one thing to be pointed out in this connection, and that is that the farmer who has been unable to make ends meet owing to being on a poor farm or following bad method' cannot look for very much help from borrowed
money, whether he obtains it at a low or a high rate of interest. To succeed he must either change on to another farm or adopt proper farming methods.
There is another matter which is of the greatest importance agriculturally, and that is the education of our farmers as far as it is possible to go in the way of encouraging them to adopt better methods of farming. We are doing this now through our fairs, our agricultural press and the splendid system of experimental farms throughout the Dominion.
I think we have one of the best systems of experimental farms to be found anywhere in the world. When I was across the water I visited some institutions of this character in Great Britain, but they did not have anything over there superior to our Central experiments farm.
Immigration, too, must receive attention. I believe in bringing in immigrants of the right kind, but I would close the door against Asiatics. As I come from British Columbia no one will want me to give reasons for their exclusion. It is sufficient to say that the Asiatic cannot assimilate with us and has a standard of living which makes it impossible for us to compete with him. But in bringing in immigrants we must secure those who will give promise of making good in this country. And when they get here we should not leave them alone, we should give them every assist [DOT] ance and through various institutions see that they derive full benefit from our assistance. I am not one of those who believe in bringing in immigrants indiscriminately and dumping them on the land. I believe in a vigorous immigration policy, but before we attempt to place any large number of immigrants on the land we should begin to put our own house in order. We can hardly expect the immigrant to remain with us if his neighbours tell him they are not making a dollar out of their farming; such a doleful tale will make him anxious to cross the line into the United States. I think the farmer in many instances has just cause of complaint in large sections of our country owing to conditions that have prevailed during recent years. Therefore I think we should improve conditions and particularly develop his market, because there is no better method of helping a farmer than the assurance that after he has his goods produced he can sell them at a profit.
I think there is much to be done by the farmer and the city man getting closer together and having a better understanding of each other. We do not know enough of each other. We should join each other's organizations. The city man should take an interest in the local
2S70
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Mr. W. J. LOVIE (Macdonald):: has been my personal experience during the last two years that heavy cattle were at a discount in the local market in Manitoba. We were not able to keep steers until they were three years old; if we did there would be a cut of a cent a pound on them. In other words, the local market would not pay full price for anything over twelve hundred pounds, and you cannot raise steers up to three years old and stall-feed them without having them go up to fourteen or fifteen hundred pounds. But as I say, the Old Country market should be able to absorb our cattle no matter what their weight might be.
A good many of the Old Country men are kicking, not about the quality of the Canadian cattle that are going over, but about the fact that they are not stockers although they are shipped as such. Really finished cattle are being shipped as stockers, whereas these men wish to take stockers from two-and-a-half to three years old, finish them over there, and sell them as British beef. There is an unlimited amount of cattle in this western country and any number of them could be raised if there was an assurance of an available market. I have under my hand an editorial from the Winnipeg Free Press of a recent date which states that there are in Alberta to-day 1,653,000 head of cattle, in Manitoba, 740,740; in Saskatchewan, 1,602.000, and that hundreds, yes, thousands more could be raised, because pasture is good, cheap and plentiful; and that the British buyer could take an unlimited quantity of them. The western provinces have been hampered because of an insufficient market during the last couple of years for their live stock, but we are happy to say that there seems to be some sign of a better market for the future.
Now, I am not going to say very much about the budget; I am going to deal more particularly with agricultural conditions. The hon. member for Victoria City is opposed to oriental immigration because he comes from British Columbia, and one would naturally expect that. Well, I come from the prairie provinces, and naturally I am opposed to protection. Protection means that the farmer is working under a double standard, one standard to sell his goods by and another to purchase by. If the prairie provinces were not blessed with such fertile soil, such abundant sunshine and such favourable weather conditions, if it were not naturally a good country, the farmers could not possibly succeed under that condition of a double standard. We sell in competition with the world, our market is on the other side of the Atlantic. 
We grow the finest wheat grown anywhere in the world except in part of the United States and part of Russia. On the other hand, we purchase in what is known as the dearest country to live in. But an end must come to all things, and the farmers of the West are getting very hard up simply because they are not able to make a living under what is known as the double standard. So naturally a protectionist budget such as is now brought down is not going to get much support from the Progressive members. There is in Saskatchewan a Liberal government, and I have here a clipping from the Winnipeg Free Press giving what Premier Dunning of Saskatchewan says about the present tariff brought down in this parliament by the Minister of Finance. He says:
The 1919 national platform indicates the basis of tariff stability, which is the goal of Liberalism and no finance minister has the right to change at will the tariff policy enunciated by the most representative gathering of Liberals ever held in Canada. The previous budget and the present one, while not fulfilling our hopes of tariff reduction might, nevertheless, be acceptable under present conditions as a moderate step in the direction laid down by the National Convention, but I do not know a western Liberal who will consent to the government discarding for the future the tariff chart placed in the hands of the Liberal leader in 1919.
Mr. Dunning is very much opposed to this budget because it is not in line with the tariff plank of the Liberal platform of 1919. I have here an extract from a speech delivered by Sir Wilfrid Laurier, that great old Liberal chieftain, in Winnipeg just after the Liberal Convention of 1893. That is going back quite a little bit, but here is something that I can, absolutely subscribe to. Speaking of the Liberal party he declared that he stood for freedom. He said:
I denounce the policy of protection as bondage, yea, bondage. I refer to bondage in the same manner as American slavery was bondage, not in the same degree perhaps, but in the same manner. In the same manner the people of Canada, the inhabitants of Winnipeg particularly are toiling for a master who takes away not every cent of profit but a very large proportion of your earnings for which you sweat and toil.
That is Sir Wilfrid Laurier on protection.
We hear a good deal about a revenue tariff. A question was asked about it in this House this afternoon. Well, a revenue tariff seems very easy to explain. It is said that you cannot have a tariff without the protective feature in it. If you have a tariff on goods that are manufactured in the country, and there is also an excise duty on these goods collected by the Dominion government, there is no protection at all in such a tariff. A definition of a tariff for revenue will be

The Budget-Mr. Lovie
found at page 2361 of the 1922 Hansard. This was given by the hon. member for Cape Breton South and Richmond (Mr. Kyte), and is in my opinion about as good a definition of a tariff for revenue as it is possible to find.
I am happy to say that we in the western provinces are not alone in asking for a tariff for revenue, for we find members from the lower provinces who know the disadvantages of protection just as much as we do willing to assist us, I believe, in having the protective feature of the tariff wiped out. Of course, we know that the revenue has to be raised. We do not object to paying taxes; we do not object to paying heavy taxes; but we wish to see them go into the Dominion treasury. We do not want to pay taxes to any protected manufacturer. We want the manufacturer to stand absolutely on his own feet.
We heard a good deal during the immigration debate about the condition of agriculture in western Canada. We heard from Alberta and from Saskatchewan. I am going to tell you now what Mr. Samuel Larcombe said at the convention of the Agricultural societies held in Winnipeg in January, 1922. If you do not know who Mr. Larcombe is I may sav that he is an Englishman who has been farming in Birtle, Manitoba, a good many years. He has brought fame and renown to himself and Canada through the prizes he has taken for first-class grain of all kinds and garden products not only in Canada but in the United States. He is known wherever good grain is raised in America. He was president of the convention of Agricultural societies, and this is what he had to say of the wheat crop of 1921:
There were a few men made money in 1921 if they got their wheat on the market very early in the season, but if the crop of 1921 had been sold and the receipts pooled it would not have paid more than fifty per cent of the cost of production.
The depression was not felt that particular fall because you will remember that was following the year when the wheat board was in existence and there was about fifty cents on every bushel of the 1920 crop coming in in 1921, which helped make up for the deficiency. But what did we find in the fall of 1922? We had one of the biggest crops there had been in western Canada for a long time. Canada looks for a market for her wheat in the Old Country, and I have here an extract from the Financial Post giving figures for the different countries to which Canada has been in the habit of shipping wheat, showing the per capita consumption of wheat for the years 1909 to 1913 and from 1914 to 1918:
Per Capita
Country-	1909-13 1914-18	
Austria-Hungary		.. .. 4.41	
Belgium		.. .. 8.53	
France			 9.12	7.81
Germany			 3.35	
India (British)	
1.23	1.21Italy	.. .. 6.82	6.65Japan	57	.53Netherlands	.. .. 4.47	3.54United Kingdom	
6.14	6.08United States	
5.68	5.93You will see that the United Kingdom and the United States have stayed very much on	the same consumption	level, but these other	countries have fallen	off very much	in theamount of wheat they	are taking, and	consequently there is no market there.
I have here an account from the Financial
Post of how the farmer's profits have decreased on the products he has to sell. In 1914 what the farmer had to sell represented an amount of 140.9. There was an increase of 30.6 in the price of what he sells; animals and meats, 18; dairy products an increase of 52.4. In groceries we find an increase of 70.1; boots and shoes an increase of 52, and in implements an increase of 123.5. On the whole the farmer receives an average of only 10.5 more for his products than in 1914 and he has to pay for his essential commodities 112 per cent more, so you will see that what he is selling now is down to a pre-war basis and that what he has to buy is on an average 112.3 per cent higher. That is the reason why he is so very hard up at the present time. Here is a short extract from the Financial
Post on the farmer's profits:
Anyone in close touch with western farmers knows they feel they have been unjustly treated over this year's crop.
That is the crop of 1922.
It was the largest in volume ever harvested in western Canada and every one who touched it secured his usual profit, from the railway which hauled it from the country elevator, to the merchant who sold the flour-every one but the man who produced it. The most pressing need in this country is a method of making agriculture profitable. The vacant land can be settled, but it will be of little national value if it cannot be made to stay settled, and while the problem of the rural depletion is not entirely an economic one, it is partly that, perhaps very largely that, At least, rural life will not be satisfactory until it is profitable.
Farmer members have been trying to drive home that doctrine in this House, but it needs emphasis elsewhere, that the great necessity to-day is some method whereby agriculture can be made profitable. We are advised a good deal to go into mixed farming. That may be all right, but many hon. gentlemen who talk that way do not know what conditions are in the West. Hard wheat is a crop that can be raised in very few countries; it is
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native to western Canada. I have seen white fife brought from England and in two seasons if not in one it will become as hard as either marquis or red fife. You cannot grow any other variety of wheat in that part of this country; the grain becomes hard, and being hard it is very valuable. It is wanted in Great Britain for blending with other wheats, but of course the Britisher will not pay any more for his wheat than he has to, and consequently the question of keeping down the cost of production is what we have to study.
I would read another extract, taken from the Presbyterian Witness of May 10, 1923:
The economic factor is dividing East and West. The soil of the prairies this year yielded crops half a billion of dollars in value, a little more than the value of the field crops of the rest of Canada. The yield of the forests, the fisheries and the mines of all Canada is about 50 millions less than that of the soil of western Canada. And yet of this enormous wealth-an almost incredibly large percentage-has gone East to discharge obligations to railways, banks, loan companies, manufacturers and wholesalers of farm machinery and other commodities. Very little remains with the farmers of the West. They see this enormous stream of wheat and stock pouring to the East and they wonder why their own comfort and well-being are so little improved.
The hon. member for Brantford (Mr. Raymond) speaking two days ago said in the course of his able address that the farmers must work and save; they must practise economy. The hon. member did not say, but it is very often said, and the statement was made by the Minister of Agriculture (Mr. Motherwell) himself and has been repeated this evening, that the farmers must go into mixed farming. That point is stressed considerably. Well, I want to tell this House that in my district mixed farming has been practised for the last forty years, and last fall men were shipping all their cattle away because they considered it was no use keeping them any longer, for they made nothing out of them. If I might do so I might read a letter that appeared in the Winnipeg Free Press of April 17, signed by one J. Scott. He says:
What you say agrees with my experience of eleven years on a western farm, which I left because it was not a business proposition during the whole of that time. I put about $9,000 in it, and never made any interest on my investment or wages for myself, wife or three eldest children, who all worked. I had to compete with the local contractors for help during the brief periods I required it, and paid, including board, from $70 to $120 per month, which is more than the eastern manufacturer pays; and he does not have to be crowded out and eaten out of his house by his factory hands. I never bought a car and I sacrificed in shelter, food and clothing; I lived down to it like a peasant, in a determined effort to make it go, working 10 hours in winter and 12 to 17 hours a day at other t:mes. I found it all to no purpose. I merely did better than 90 per cent' of my neighbors, who have been on the verge of bankruptcy for the last two years. All I earned was being taken, and for the last fMr. Lovie.]
five years $500 each year more. I raised wheat, cattle, hogs and cream, the finest products for human consumption, and they were all being supplied to the world at large for less than I could raise them, without interest and without pay for myself and family.
I have a good farm, good soil. I like the life and can stand the climate :n winter. I made strenuous efforts to stay, but owing to man-made conditions, I had to sell out and came to this city to compete with the unemployed, and I do not fancy city life for myself or my children.
In a speech on the immigration problem delivered a month ago by the hon. member for North Winnipeg (Mr. McMurray), that hon. gentleman, as lawyers are well able to do, criticized the farmers to a considerable extent in regard to the number of cars owned by them throughout Manitoba, Saskatchewan, and Alberta. Judging by the way the hon. member spoke one would come to the conclusion that a car was something that a farmer absolutely should not own. While the hon. gentleman was speaking on this subject a certain circumstance came to my mind. A farmer and his wife who live not more than five miles from my farm were among the first in the district to get a car. Needless to say, it was a Ford; it was not a sedan such as we see running about in Ottawa. The reason this man got this car was simply that he could not afford to do without it. He and his wife, besides working the farm, milked ten cows, and they shipped a can of cream twice a week. They were ten miles from the station, and this man said that if he had to go to town with a horse and rig it would take him half a day twice a week, which would mean a whole day every week. His wife and he could go in at five o'clock, catch the train and get back in time for supper, thus saving a half day each trip. Now, a car was an absolute necessity to this man in his business; I do not think anyone would deny this. Farmers have been criticized also for having gone into debt for cars. Possibly it was not the wisest thing for them to do, and I am not going to defend them; nor am I going to say that they were always without justification. When you sow a crop you do not know whether you are going to have a bountiful harvest, or whether your crop will be struck by drouth, hail, frost, grasshoppers, or something else. You have no guarantee of anything.
But it is interesting, in reference to this question about automobiles, to consider the way in which a car can be purchased in Ottawa. We know that Ottawa is largely kept up by the Civil Service. Civil servants are paid by the government; therefore their money is absolutely sure notwithstanding hail, rust or anything else which is liable to strike the fanner's crop. A high-class car can be

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287o
purchased in Ottawa and if citizens can buy expensive cars, I cannot see why farmers should be criticized for purchasing a cheaper car in the same way. A $50 cash payment will secure a first class car, with $250 in promissory note or notes, the balance by way of mortgage on the car and also on the home if the purchaser has a home. The mortgage is handled by companies who specialize in this business, and fire insurance premiums, in some instances up to $125 per annum on the car, must be paid by the purchaser. Now, if a farmer went into a deal like that he would be considered crazy, and I do not think he would be able to throw off such a burden. Yet we are criticized for doing in a very moderate way what other people are doing in this regard.
I desire to refer to a certain question raised by the hon. member for South Oxford (Mr. Sutherland), and if I am out of order the Speaker will so inform me.' The other day that hon. gentleman asked the Minister of Agriculture (Mr. Motherwell) why he had not brought down a bill dealing with the question of mill feeds, which the minister had promised earlier in the session. I am sorry the minister is not in his seat to-night, but he will see this reference in Hansard. Now, this bill is very important. The minister, speaking from his place this session, said that the milling companies claimed the absolute right to put into mill feeds, that is bran and shorts, any seeds that were in the wheat when they purchased it and that such a thing as pure bran and shorts could not be got anyway, unless you paid a very high price. The bran and shorts from the milling companies have rather a bad name. Last fall, in conjunction with one or two others, I endeavoured to get a carload of bran from a milling company. We could have obtained it from the Ogilvie Milling Company -any milling company handles the same class of goods-but because we could not get bran that was anything like the bran we get from the country mills, the deal did not go through, and we did not make the purchase. We had an idea that the Pure Food Acts would prevent the adulteration of bran and shorts, and we wanted this particular carload for horse feed. The minister said the milling companies claimed the right to put back into the bran any rubbish that was in the wheat, but they should have no such right. They do not pay for rubbish because wherever grain is sold it is subject to dockage, and the farmer pays freight on the dockage to the head of the lakes. The milling companies have no right to put that rubbish into mill
feeds. I would be very glad if the minister would bring down a bill which would compel these milling companies to handle pure mill feeds, because the shorts they handle arc pretty nearly poison for young pigs and the young pigs do not care to eat them.
I am going to touch on freight rates. Do hon. members know that last year we had quite a reduction in freight rates, occasioned by the bringing into effect of the Crowsnest pass agreement as regards grain and flour? One hon. member to-day mentioned the fact of a furniture dealer who, when the Crowsnest pass committee was sitting, took the side of the Progressives so strongly that he, being a furniture dealer in Ontario, voted for the Crowsnest pass agreement going into effect.
I did not belong to that committee, but I can well remember being told that when this particular furniture dealer looked at the proposition he said: ''My sales of furniture are in western Canada, and unless the western farmer has money left after paying expenses he has no money to pay me for my furniture." Consequently, he would naturally take the stand that the Crowsnest pass agreement should be made effective. We know that the freight on all western products has been very high. It is one of the handicaps of the prairie provinces that there are 1.000 miles of rock and no man's land between Winnipeg and eastern Canada, and a long distance to the eastern seaboard. Sir William Van Horne, when he was president of the Canadian Pacific Railway, enunciated a proposition. I do not know whether he carried it into effect, but I am going to pass it on to the Minister of Railways (Mr. Graham) because he is really the head of the National Railways. Sir William Van Home's proposition was this: Carry the lumber for settlers' houses and stables, also fuel at cost, and the grain settlers produced at a little over cost. Then the people could expect in that case that a good freight figure could be placed upon merchandise.
In the West, both as regards settling on farms and stock raising, one of the greatest handicaps is the very high price of lumber. It is a long way to bring lumber from British Columbia, and certainly lqmber and coal should be carried at about cost. The trouble is that the policy for the last two years has been to charge all the traffic will bear, and in fact last year, before the reduction in the rates, it was more than the traffic would bear, because instances were put before the people where the railway company had refused to bill out carloads of Alberta oats unless the freight

The Budget-Mr. Lovie
was prepaid, for fear there would not be enough money from the sale of the oats in Fort William to pay the freight on the carload.
The hon. member for Brantford (Mr. Raymond) said that farmers, instead of stressing the tariff, should look after freight rates. There is something else besides freight rates to be considered. They should look after the classification of freight rates. To show hon. members how it works out, I am going to take them a little bit from home, and cite an instance which took place, not 100 miles from Los Angeles. There was a little village in which the only products were cattle, firewood and charcoal. Now on cattle the freight per carload for less than 100 miles was $8. This was explained in this way: The cattle could be driven into the city, consequently if the freight was put up too high, or higher than the amount which it cost them to drive in, the railway would not get the traffic. But upon firewood, for the same distance the rate was $24 per car. There was a man working there cutting firewood and loading it, and he figured that if he would make the wood into charcoal instead of shipping the wood he would be ahead, and so he tried to make it into charcoal and ship it. But while he had been planning that he would put it into charcoal the railway company were planning as well and they immediately advanced the rate to $42 for the charcoal. He made $1.60 a day cutting firewood and he could make $1.60 a day making charcoal. Now the freight is a matter which it is worth while looking after. I hope the minister will do something to relieve us from the difficulties in regard to transfer of cars of freight from one company to another. It is not many years ago you could ship freight on the Canadian National railway, and send it right through, whether it was going on the Canadian National or Canadian Pacific, by paying a transfer fee of $5 and getting a through rate. But since the freight rates have been advanced that privilege has been cut off. If you bill the freight on the Canadian National and ship it part way on that road and part way on the Canadian Pacific or vice versa, you have to pay two local freights, and it makes it absolutely prohibitive. This is something the Minister of Railways should certainly give his attention to, because if one railway will right this matter the other will have to follow suit and considering that the people of Canada own one of the large railways, it is right they should give the people a square deal.
Then express rates need looking after as well. I am sorry that I have to give you a

personal experience, but I want to explain to you what I mean when I speak of these express companies taking the money out of the people's pocket when carrying their goods. Last fall I had occasion to get a 2-inch coupling weighing about a pound. It was worth 30 cents in Winnipeg. However, I asked the merchant to send it C.O.L). because he would be sure to get his money. It had to be carried 85 miles on the railway, the express rate was 45 cents, and the C.O.D. for sending back the money was 25 cents. That made 70 cents for the carriage of this article worth 30 cents. Express rates are absolutely prohibitive.
Then labour costs are handicapping the western farmer very badly, not exactly the wages of the men engaged in agriculture, because they are not paid any too much, but the wages of the men engaged in manufacturing and the wag^s of the skilled artisans who are doing the work for the fanner. They are out of line absolutely with the price the farmer can get for his produce. If any one of us who are farming wanted to engage the services of a man with only a trowel, to pile up one brick on top of another, we would have to pay $10 a day and board. But take the other case. Suppose we went with a plough and four horses to work for him. He would allow us $3 a day for the man, $1 per day for each horse, and nothing for the plough, and consequently the labourer or artisan would receive $10 a day and the farmer would simply get $7 which is the rate of pay for man and team work.
This is taking away too much of the farmer's profits altogether. I will give an example of how this works out. I take this from the Breeders' Gazette, a paper that stands absolutely for the rights of the farmer in the United States. This matter was taken up only about six months ago by the editor of the Breeders' Gazette, Mr. Alvin Sanders. He mentioned the case of a brakeman who was working on a short run about 25 miles out of Chicago and back again, one train a day. This coloured brakeman was getting $250 a month. Close to this short line of railway were men working on the farms at $25 a. month. Why the difference? These men who were furnishing the freight to keep that railway alive were working for $25 a month, whereas the brakeman on the railway was drawing $250 a month. Such wages are absolutely out of line and they will have to be cut.
Another matter that we must take into consideration is that the labourer cannot work for small wages because the cost of living is

The Budget-Mr. Lovie
so high, and the reason for that high cost is the protective tariff. The tariff must be reduced in order to give the labouring man an opportunity to purchase the necessaries of life at something like the price at which the farmer sells his product, not the price which the workingman has to pay at present. The distribution system in this country is absolutely out of line somehow or another, and the men and women who are selling their labour have to pay absolutely too high prices for the necessaries of life. Last fall the price for choice beef on the hoof in southern Manitoba was something like 4 cents per pound.
I sold steers for something like that price. If I had kept my steers over winter, I would have been docked in price because they would have weighed nearly 1,500 pounds apiece, so I sold them in the fall. That beef was worth on the hoof 8 cents per pound, and the hide and the offal would pay for the killing. That beef should have been sold at about 10 cents per pound, but I am quite prepared to say that the labouring man in Winnipeg paid nearly 30 cents per pound for it and for other things accordingly. Such prices are altogether out of line. Let me cite a short quotation from the Breeders' Gazette, because that is a paper that stands up for the rights of the farmer in the United States. The article states:
We have kicked with all the power at our command against the freight rates that have eaten up farmers and stockmen of various communities. We have kicked time and again at the unwillingness of labour to accept its due share in the great deflation. We have kicked against the price the farmer has had to pay for nearly everything he has to buy, and at the low prices he has been forced to accept for many of his products. We have kicked against the price we have to pay for a baked potato in Chicago restaurants when the Idaho beauties are rotting by the acre in the ground in which they were grown. We have kicked against the Jew clothier being permitted to sell at profiteering prices half-cotton and shoddy goods as virgin wool, and we are not through kicking yet, by any manner of means-whenever and wherever we can see an opening to accomplish something for the common good.
That is what the Progressive party are trying to do in this House.
I should like to bring to the attention of the Minister of Finance (Mr. Fielding) a matter in connection with the stamp tax on cheques. WTe know a tax of 2 cents was put on cheques as a war measure a few years ago; but last year when the budget was first brought down, that tax was raised so that it was 2 cents for every $50, or 4 cents per $100, without any limit. Before the budget debate was over, the Minister of Finance announced that he was going to allow the stamp tax to be 2 cents for every $50 up to $5,000, but that then it was going to stop. That looked
to everyone very much as if the Minister of Finance were catering to the big interests, to those who do big business and pay money in large amounts. This year the stamp tax has been reduced. It is still 2 cents for every $50, but it stops at $2,500, and $1 is the maximum tax. That means simply that the tax on cheques is costing the common people .8 per cent. As a rule cheques issued by ordinary, common, everyday people would average about $25, so that they are paying .8 per cent for the privilege of issuing a cheque. On the other hand, cheques of corporations would average about $5,000, and in that case they are going to pay about .2 per cent. Thus in the one case, in the case of the wealthy corporation, .2 per cent is being paid, whereas in the case of the ordinary, everyday people, they are paying .8 per cent for the privilege of stamping their cheques. In other words, the business people are paying less than the working people. This stamp tax is rather a hardship from the fact that it was found by those who were dealing with large corporations in the city of Winnipeg last year, for instance, farmers selling cars of grain, that they always had to pay the price of that tax on cheques. This was brought to my notice even before the grain began to move, from the fact that live stock shippers ran up against that proposition in Winnipeg. One man especially who drew out $15,000 of his own money and went out to Alberta to buy cattle, found that he had to stamp his cheques before he drew out that $15,000 in Winnipeg. As he could not carry that money throughout Alberta around the different ranches, he had to put it into a bank in Alberta, and he issued cheques on that in payment of the stock he bought. That was twice he had to stamp his cheques. When he took his cattle to Winnipeg he was again charged for the stamps on the cheques by those to whom he sold the cattle. There was great dissatisfaction on account of this proposition, and I for one wrote to the Department of Finance to see if that could not be remedied. The Minister of Finance at that time was in Europe and the answer did not come from him; the answer from the department was to the effect that the law was fixed that all cheques had to be stamped, but the Finance Department did not care who stamped the cheques.
Protection has been in force for over forty years, and it is generally said that if you disturb protection, you are going to disturb existing conditions. I have no doubt that those who have benefited by protection are going to fight against the withdrawal of that privilege, because it certainly is a privilege. I can well remember a gentleman who came
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from Scotland a few years ago. He was a chartered accountant, and when he came to Canada and went into business, he found to his great surprise that such a thing as cost auditing was not known in Canada. Certainly it was not known. If you have a protective tariff, you do not need to care what the cost is. You cannot help getting sufficient money for your produce when you are behind a protective tariff, and those men who are assisted by the protective tariff are certainly going to fight to keep that in force. This reminds me of a gentleman I know who was giving an address in a schoolhouse, where you hear a good deal about economics, and gentlemen in schoolhouses throughout the prairies can talk just as good economics as one hears in this House at any time. This gentleman had been in the live stock industry quite a long time, and he said about protection what he had found from 10 p.m. his experience, namely, that the bigger a calf got, the more cows he could suck and the harder he was to wean, and that is the way protection works out.
About two nights ago when the hon. member for Lennox and Addington (Mr. Sex-smith) was speaking, a question came across the floor of the House. I do not know who put it; I think it was the hon. member for Cumberland (Mr. Logan); but it was a question about the Hudson Bay railway. I do not know whether this question was put in a sneering way or not. That, however, does not matter. I am going to say something about the Hudson Bay railway. If anyone looks at the map of Canada and views that great big inland sea that comes right into the heart of the continent of North America, if he can conscientiously say that that great ocean highway was placed there by the Creator for no reason at all, I differ with him entirely. The great Liberal chieftain, Sir Wilfrid Laurier, used to say that the nineteenth century was the United States' growing time, but the twentieth century was going to be the growing time for Canada.
It is reasonable to imagine that the population of the United States is going to grow during the next fifty years as much as it has grown during the past half a century, and therefore she will be looking for an outlet for her surplus population long before the expiration of another fifty years. Fifty years is quite a long time in the life of an individual, but it is veryr short in the life of a nation. If the United States has to find more room for her surplus population where is she going to turn her eyes but to Canada? I have vision enought to realize that before fifty years have

elapsed not only will there be twenty million people in Canada but fifty million, and every seaport, including Vancouver, Prince Rupert, Port Nelson, Montreal, Quebec, Halifax and St. John, will be used to their full capacity.
To those who doubt whether the Hudson Bay railway is going to be profitable-and I know there are a good many doubters, more especially from eastern Canada-I should like to put up this proposition: If you are doubtful about the Hudson Bay railway and the route through the Straits being a workable proposition, just get behind us in our efforts to have the British preference increased to 100 per cent of the general tariff, and so bring all commodities which would then come from England duty free into the western country through the Hudson Bay route. I venture to say that if you do that the route will be in use six months in every year as soon as the railway is completed. The ships engaged on this route would then be able to carry cargoes both ways. One of the objections now urged against the feasibility of this route is that ships cannot get return cargoes. But if the British preference was extended to 100 per cent, every ship would be loaded to capacity both ways.
Now, how can we improve world conditions? I have already mentioned, Mr. Speaker, that the nations of Europe on account of their poverty arising from after-war conditions were not able to purchase the products which we have to sell. There is no gainsaying this statement; it is a fact. I should like to put up a proposition in this connection. The government cannot deal with it, but I am going to put it before the country. It is something which those interested will have to take in hand. I refer to an all-round cancellation of war debts, beginning with the United States. Now, whether we are agreeable to this proposition or not, I honestly believe that time will come when it will have to be taken in hand. The United States has nearly all the money of the world to-day, and consequently the other nations cannot purchase her commodities from lack of money, and she as a nation does not want to take goods from other nations in exchange for fear of causing unemployment at home. Consequently she is handicapped.
If the other nations of the world had more money and the United States had less, why, certainly trade would be in a better condition all round. Failing the realization of that proposition, Mr. Speaker, there is still another

The Budget-Mr. Lome
proposition that I should like to put forward. It is not nearly as complicated and may therefore appeal to this House. In pursuance of my intention I shall place before the House an extract from The Times of February 23, 1923, being part of an address delivered by Sir George Lawson Johnston in the city of London on the preceding day.
I am not going to quote his address in full, but in order that hon. members may get the sense of what I am about to quote I shall have to read a greater portion of the address than I would otherwise do. Dealing with the burden of the American debt as it affects Great Britain he said:
Apparently the repayment of the war debt to America was to be an important factor in their taxation for the next sixty years.
When he saw them last February he had just returned from the States, and he mentioned to them how seriously our debt position had been worsened owing to Congress having by law fixed the period of repayment and the interest. Unfortunately, bankers, financiers, and others had talked so much about the capital and interest aspect of this debt, as if it were purely a business transaction, that a business atmosphere, instead of that associated with a debt of honour -on which nobody expects interest-had been created. As the business mind predominates on the other side of the Atlantic, once the matter had been fixed in the American mind as a business deal, it became impossible for our negotiators, no matttr how capable, to save the position. The most serious factor in the matter as now arranged is that we must pay capital and interest in United States dollars. It was generally admitted that the improvement in exchange from the British sovereign point of view duiing the last year was not so much on account of an improved trade balance as on account of American purchases of British securities. Such securities, if interest bearing, must eventually mean still further sums going from this country to the United States. There could be little doubt that efforts to pay America by direct remittance would turn exchange against us and seriously increase the number of pounds we should have to pay per annum, and, unfortunately, it would be just during our worst period of depression and bad trade that we should have to pay most pounds to buy the dollars.
A Dollar Reserve in Canada He would like to put forward a suggestion which might assist in this matter. It was that we should build up in Canada a reserve towards the payment of the American debt. The Canadian and United States dollars were not likely to vary seriously in value, therefore any fund we could build up in the Dominion would be comparatively free from exchange fluctuations. Canada was capable of being developed at a much more rapid pace than the present capital and man power at its lisposal could develop it. Our government could now borrow' at a lower rate than it had been able to do for a good many years. If it could obtain grants of land from Canada, it could utilize, say, one hundred million pounds in developing wheat areas, and probably certain industries in that Dominion; and this work, in conjunction with some considerable emigration scheme of selected unemployed, should develop in Canada a reproductive asset that would, after a while, annually supply dollars towards the payment to the States. Furthermore, every bushel of wheat bought from Canada instead of from the States would help to keep our exchange better with the latter.
We might thus accelerate the pace at which Canada was growing strong, and, at the same time, build up an asset that would much reduce the burden of the American debt, and probably, in the process, some of the money wre provided would purchase from our manufacturers agricultural implements and other machinery, etc.
I may say, Mr. Speaker, that the British nation always keeps in mind that it must sell as well as purchase. We need also to keep that in mind.
His own experience in Canada convinced him that any such scheme to be successful would have to be planned and brought forward bv Canadians to meet their own views as regards the directions in which development should take place. If it was put forward at present they could feel, at any rate, that Canadian conditions would be understood Dy a British Premier who was bom in Canada, and a Colonial Secretary who had recently served as Governor-General.
I am putting forward that proposition because I think there is a great deal in it. Canada certainly needs more capital and more people to develop her natural resources. And, Sir, although I am going to vote against the budget because it is a protectionist budget, at the same time I may say that, although I was not born in Canada, I am a Canadian at heart and wish the country well, for it has done well by me.


Mr. JOSEPH ARCHAMBAULT (Chambly and Vercheres):: Mr. Speaker, I rise for only one purpose. I do not intend to discuss the budget because I am afraid lhat if I were to advance some arguments in its favour they would probably be merely a repetition of those that have already been brought forward during this debate, and, besides, I shall have an opportunity of discussing the different aspects of the budget itself when the resolutions are dealt with in committee. My purpose in rising-and I shall crave the indulgence of the House for but a few moments-is to deal with the income tax. I may say, Mr. Speaker, that I feel I am perfectly in order in discussing this matter at this stage. The income tax is an important item of the budget bill because the state derives from it a part of its revenue, and it is a part of the burden of taxation asked by the Sovereign from the Commons.
The second reason why I believe I am in order is because the Minister of Finance in his speech made the following remark:
In the observations I have made to-day it will be noticed that I am not touching the income tax. If there be necessary changes in this respect, they will be dealt with later in a separate bill.
It is therefore with the intention of making suggestions in this regard that I am on my feel The income tax is a levy on profits arising from property, investments, professions,

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trades and offices. The cardinal principle of the income tax is that a man should be taxed only on the basis of his net income, but none should escape the tax, because if he does it is to the detriment of the other taxpayers. Having this principle in mind, may I be permitted to direct the attention of the House and of the minister to certain changes which I believe would be fair, just and equitable to all?
I have several times brought before the House the suggestion that a change be made in the matter of the exemption on account of children. When I spoke on this matter on the 21st of March last it was my intention to develop three points; first, the raising of the exemption on account of children; second, the unfairness of the ruling of the taxation department regarding those who had been married under the regime of community of property, and, third, the desirability of making a differentiation between earned and unearned income in the matter of taxation. The shore time at my disposal when I presented my resolution permitted me to discuss only the first point, namely, the increasing of the exemption on account of each child from $300 to $500 and the providing of total exemption for the father of five children. The rules of the House permitted me only to ask the government to consider the advisability of making the change. The resolution was well received by the Minister of Finance and was carried unanimously. I had hoped, I may say, that these changes would have been embodied in the budget. I admit that I was disappointed, but not at all discouraged, because last year when I spoke on the same matter the change was not incorporated in the budget but at the close of the session the Minister of Finance brought in a biii under which he raised the exemption from $200 to $300 for each child. Therefore, 1 still have hope that a similar agreeable surprise is in store this session for the father of large families. Such an amendment, I am sure, would only be fair and wise.
I am not going to weary the House, Mr. Speaker, with the arguments that I brought forward on the 21st of March and in previous sessions regarding this matter. Let me simply summarize them. I am advocating this change, first, because large families should be encouraged, because it is the most natural, the most efficient and the sanest way of increasing the population. My second reason is that the sum of $300 is ridiculously low when one has in mind the amount required for the upkeep of a child. My third reason is that the high cost of the upkeep of children is fMr. Archambault.]
the principal cause of voluntary sterility and race suicide in this country. My fourth reason is that they have similar legislation in France, in England and in the United States, where in each case, the exemptions and allowances in respect of large families are greater than they are in Canada. I gave all these figures when I proposed my resolution on the 21st of March. I may also add that since presenting the resolution I have been flooded with petitions endorsing it. I have laid on the table of the House petitions containing over 15,000 names asking for this change.


An Hon. MEMBER:: How many families?


Joseph Archambault: Fifteen thousand families, probably 75,000 children at least. The signatures were only those of fathers of families. The only argument I have heard against that proposal is that such a change would result in a decrease of revenue. I will take care of that argument later in the course of my remarks.
The second point I wish to discuss is the unjust enactment or ruling of the taxation department regarding those who are married under the regime of community of property. This regime, I believe, exists only in the province of Quebec. Under our civil code persons can be married under the regime of community of property or under the regime of separation of property. If they are married without contract they fall under the regime of community of property. Now, subsection 3 of section 4 of the Income Tax Act passed in 1917, reads as follows:
Any persons carrying on business in partnership shall be liable for the income tax only in their individual capacity.
Discussion arose as to whether this section covered the case of a husband and wife married under the regime of community of property and whether they could separate their incomes for taxation purposes. Most of the legal authorities admitted that this was the right point of view, namely, that they could separate their incomes for taxation purposes. But in 1919 an amendment was passed and the law now reads as follows:
Subsection 3 of section 4 of the said act is repealed and the following is substituted therefor:
Any persons carrying on business in partnership shall be liable for the income tax only in their individual capacity; provided, however, that a husband and wife carrying on business together shall be deemed to be partners for any purpose under this Act.
The result is that a couple married under the regime of separation as to property pay much less than a couple married under the regime of community of property. Let me illustrate by an example. We will take two

The Budget-Mr. Archambault
couples without children whose income is $6,000. The first couple, we will say, are married under the regime of community of property; the husband has a salary of $3,000 and the wife has an income of $3,000. They are exempted up to only $2,000, leaving $4,000 on which they pay 4 per cent, or $160. The second couple are married under the regime of separation as to property; the husband earns a salary of $3,000, and his wife has an income of $3,000 the same as the first couple. The husband has an exemption of $2,000, and the wife also has an exemption of $2,000. Therefore they only pay a tax on $2,000, or only the sum of $80, while the other couple married under the regime of community of property pay the sum of $160. I say, Mr. Speaker, that that ruling is absolutely unjust and unfair, and I hope that the Minister of Finance on consideration will make a change in the law in order to put these two couples, whether married under the regime of community of property or separation, on the same plane for taxation purposes.
The third question which I desire to bring before the House is the differentiation between earned and unearned income for the purpose of taxation. I have had a resolution on the order paper regarding this matter for some time, but unfortunately it was not reached, and I therefore take this opportunity of discussing it now.
I may say, Mr. Speaker, that this differentiation exists in England and in order that this distinction may be thoroughly understood I will give the definition in the English law regarding earned and unearned income;
The expression "earned income" means-
Profits of office.-Any income arising in respect of any office or employment of profit held by the individual.
Pensions.-Income in respect of any pension, superannuation, or other allowance, deferred pay, or compensation for loss of office given in respect of the past services of the individual or of the husband or parent of the individual in any office or employment of profit, whether the individual or husband or parent of the individual shall have contributed to such pension, superannuation allowance, or deferred pay or not.
Property emoluments of office.-Any income from any property which is attached to or forms part of the emoluments of any office or employment of profit held by the individual.
Any income derived from farms.
Any income derived from a profession or trade.
There are some further particulars which are not so important. I believe, Mr. Speaker, that this legislation is very commendable. I believe, Mr. Speaker, that the man who derives his income from his own work, from his trade or profession, should not be asked to pay as high an income tax as the one who derives it from money that he has invested or
from money that he has inherited from his family.


Some hon. MEMBERS:: Hear, hear.
Mr. ARCHAMBAULT; When the individual who works and earns his salary spends that salary, he spehds his own capital, and when he dies, if he has made just enough during his lifetime to enable him to support his wife and children, they are left without a cent, while in the case of the other man who has a large income from an inheritance or from money that he has succeeded in putting aside, when he dies his wife and children are left with both capital and income. If the man who works and earns his income suddenly becomes sick and cannot work, in many instances he cannot draw any income. In many cases he has no money and it means privation and hardship for his wife and children. Suppose, for -instance, that a man earns by his work $3,000, representing a capital of $50,000. He spends that for the maintenance of his family. As I said before, he would leave nothing when he dies. But if he has an income of $3,000 derived from an inheritance or accumulated capital and spends that income during his lifetime, when he dies his family is left with both the income and capital. Hon. gentlemen can easily visualize the difference.
I would suggest three rates of taxation: First, the highest rate on incomes derived from inheritance; second, a higher rate than the third but not as high as the first one, on incomes derived from accumulated capital; and thirdly, the lowest rate on incomes derived from the labour of the people.
Reverting to my first point and the objection brought forward that increasing the exemption for children would mean a great decrease in revenue, I meet this objection first in a general way by asserting that the beneficial results of the enactment in encouraging large families 'would amply compensate for the loss of revenue. Then I also suggest a means of getting more revenue from another source and at the same time removing what is in my opinion, at least, an injustice which exists under the present law. As the law now stands, an individual does not pay anjr income tax on dividends received from companies or persons taxable under the act, even if those dividends should be as high as ten, fifteen or twenty per cent. The reason alleged for such exemption is that the tax should not be paid twice, and that as the company has already paid the tax the stockholder should not be called upon to pay it again. That may be true, but I contend, Mr. Speaker, that if the company has made enough profits to pay a tax and on top of that declare
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a dividend of 15 or 20 per cent the stockholder who receives that dividend, which is a personal revenue like a salary or income, should also be taxed. Why on earth should he not be taxed?
Do hon. members realize how many wealthy individuals with incomes ranging from $10,000 to $100,000 do not pay any tax on these incomes if they are derived from dividends from corporations? Allow me to give another example to illustrate the point. Let us suppose a person, whom we will call John, earns a salary of $5,000 by his daily work. He is married and has three children. He is first exempted up to $2,000, and then he is allowed an exemption of $900 for the three children, leaving a balance of $2,100 on which he has to pay a tax of 4 per cent, or $84. As I said before, when he dies his wife and children are probably left without any money because he had to spend all his salary during his life time to support them. Now we will suppose a second man, whom we will call James. He has $100,000 of capital invested in companies paying dividends from which he derives an income of $7,000. He does not pay one cent of income tax. When he dies his wife inherits that capital of $100,000 and continues to receive that income upon it of $7,000.


Mr. MARLER:: How does my hon. friend work that out?


Joseph Archambault: If a person has
$100,000 invested in corporations, which pay the income tax and then distribute a dividend of 7 per cent; the individual who gets the income of $7,000 from this investment does not pay a single cent of income tax upon it.


Herbert Meredith Marler: In other words, no normal tax is collected from him.


Andrew Ross McMaster: The normal tax is collected at the source?


Joseph Archambault: Yes, but if the
company has made enough profit to pay that normal tax and, besides that, to pay 10 or 15 per cent of a dividend I do not see why a tax should not be collected from the individual. I may say that I am not particularly fond of the tax on corporations. In very many cases it is collected from persons who would not have to pay if they had invested their money in property instead. Take a small shareholder who has invested, say, $15,000 or $20,000. Out of this he does not make an income of $2,000. If he is unmarried he is exempted only $1,000, if married $2,000, and he must pay an income tax to the government; because the company takes from the profits of the invested money of that person a certain share to pay the tax. If he had invested that money in

mortgages or in property he would not have to pay income tax. However, I believe that it would be advisable for the Minister of Finance to consider this matter very thoroughly because I am of the opinion that some change could be made. As matters stand now the clerk, the mediun* salaried man, the professional man, the small merchant, cannot escape the law; but those who are best able to pay are provided with all kinds of means to obtain exemption for the whole or the greater part of their incomes.


Mr. BOYS:: I should be glad if the hon. gentleman would allow me a question. Let us assume that a man has worked hard, whether on the farm or in business, and reaches the age of 65 or 70. Let us take a farmer who has got a couple of hundred acres, with buildings and everything up-to-date and all clear; he sells his property for $20,000 and moves into town, retired. On the other hand consider the case of a bank manager or a railway president with a salary of $50,000. Would you exempt the latter and tax the former?


Joseph Archambault: If the income of
the farmer is high enough to come within the provisions of the law then it should be taxed. But what I say is that the man who earns his salary should pay less than the one who derives his income first of all from inheritance and in the second place from even accumulated capital.


William Alves Boys: Would you show special consideration to the bank manager or the railway president who gets $50,000.


Joseph Archambault: My hon. friend is stating extreme cases.


William Alves Boys: No.


Joseph Archambault: I am dealing with common every day cases. I believe that the farmer who has accumulated $20,000-


Oliver Robert Gould: There is not any such.


Joseph Archambault: -is scarce in this country; and furthermore he would not get an income of $2,000 out of such a farm and he would not have to pay any" income tax.


William Alves Boys: I was dealing with the principle. If the principle is right in one case it should be right in all cases. There are a great many farmers, I am glad to know, and I am sure my hon. friend agrees with me, who have estates worth $20,000.


Ernest Lapointe: With a $2,000 income?

The Budget-Mr. Findlay


Herbert Meredith Marler: I think the hon. member
(Mr. Archambault) is differentiating between class A income and class B income. He is pointing out that class A income is earned and should be taxed less than B income which is inherited or accumulated.


Joseph Archambault: Yes.


Herbert Meredith Marler: I think the point is exceedingly well taken.


Joseph Archambault: I am very glad
indeed to have the approval of my hon. friend. Now, I do not wish the House to misunderstand my suggestion; I do not want to have the minister impose a penalty on thrift or on successful business achievement. My contention is not that capital should be attacked in any sense, because I believe< that where there is no capital and no big business there is no work and consequently there are hard times. But I also believe on the other hand that a fair re-apportionment and re-adjustment of the income tax would bring about a friendlier spirit between the wealthy, who are willing to be fair, and the less fortunate who would then realize that they are not victimized or overburdened. As I said in rising, my only purpose was to discuss some aspects of the income tax. I believe I have put my case as well as I can before the House and the minister, and I hope that he will take into consideration the few principles that I have dealt with and embody them into the bill which he will bring before the House later on the income tax.


Mr. J. W. FINDLAY (South Bruce):: The hour is late, and I have to catch a train in about two minutes, but as I look at the clock I realize that we are under what we call daylight saving, and I still have a few minutes to spare. I am not so sure, Mr. Speaker, but that the situation in which I am placed at the present moment might be made use of by the whips of the different groups in this House on certain occasions. For instance, the next time the hon. Minister of Agriculture (Mr. Motherwell) is going to address this House, it might be well for the chief whip of the government party to see that he is situated somewhat as I am at the present time. It might be well for the Conservative whip to see to it that when the hon. member for South Oxford (Mr. Sutherland), and the hon. member for North Toronto (Mr. Church) are billed to speak, they too have a pressing engagement somewhere shortly after they start. The shepherd of our own flock might, perhaps, work out this idea on the hon. member for Strathcona (Mr. Warner) or, perhaps,
better still the hon. member for Assiniboia (Mr. Gould).
I listened with a great deal of interest and pleasure the day before yesterday to the address given by the hon. member for Brantford (Mr. Raymond) and I always enjoy listening to him. His genial, humorous manner appeals to me, but I had some small degree of sympathy for him. I felt he was in somewhat of an awkward situation. He told the House this budget under discussion was satisfactory to him because of the fact that the ex-Minister of Finance (Sir Henry Drayton) could not find much fault with it. It appeared strange to me that almost the only argument which the Liberals presented in support of this budget was the fact that the chief critic of the Conservative party could not find very much fault with it. It appears to me, Mr. Speaker, that the days of the millennium must have arrived, and the lion and the lamb have surely lain down together.


Harold Putnam: Which is the lamb?


John Walter Findlay: I rather think the lion is inside the lamb. I listened with very much interest and pleasure to the speech of the Minister of the Interior (Mr. Stewart). I have a great deal of admiration for the hon. member, but he also aroused my sympathy. He has not altogether fallen from grace, as he said yseterday:
I do not believe and I have had nothing to convince me that so heavy a rate of protection is required as is given to the industries existent in this country to-day.
I for one want to know definitely why such high protection is needed for some of these industries.
With both of these statements I can respond with a hearty "Amen." A peculiar situation exists at the present time. I claim, Sir, that I am a Liberal. That statement may perhaps cost me some votes if I ever find it necessary to look for votes again.


Mr. GARLAND (Bow River):: It surely will.


John Walter Findlay: What I want to tell this House-and I hope my voice will go further than this House-is that as I understand Liberalism I still am a Liberal. Up to the present moment I cannot find myself guilty of having ever gone back upon what I was brought up to believe were true Liberal principles, but if I were to support this budget I am afraid my sleep would be disturbed for a good many nights to come. I was very much pleased with the speech which we listened to a few minutes ago by the hon. member who just sat down (Mr. Archambault). I have not the slightest doubt that he was more pleasantly and more genially employed in delivering a
2S84
The Budget-Mr. Findlay

speech of that kind than he would be in attempting to defend this budget. His speech was along Liberal lines,-fairly good Liberalism. I regret very much that I did not have an opportunity this afternoon of hearing all of the address of the hon. member for North Waterloo (Mr. Euler). I was very much impressed with the part I did hear. It was delivered in a fair and genial manner, but he too appeared to be in a peculiar situation. He made a speedy attempt to defend the tariff proposals but I could not help thinking of the days gone by when he and many more members sitting on the government benches to-day used to attack and condemn these very same tariff proposals, and I wondered why it was that to-day we find men who, a few years ago, were very emphatic and very energetic in their condemnation of the system of protec-titon, to-day defending a budget which they cannot but admit is a protective budget.


William Daum Euler: The hon. member says that I used to attack and condemn proposals such as are in the budget. Will he quote statements of mine to that effect?


John Walter Findlay: I do not know that I can recall any particular instance, but I think I am not out of the way in saying that the hon. member as a Liberal has in tfie past opposed the protective tariff? Is that not correct?
I want for a few moments to refer to the amendment proposed by my honoured leader (Mr. Forke). It is charged that this amendment was carefully worded in order that it might not get the government into trouble. The duty of the group sitting in this section of the House is neither to get the government into trouble, nor to get the government out of trouble. As I understand our business, it is to endeavour to get good legislation, and personally I have never yet been prompted by any desire to get this government out of trouble. I must confess that I had some hopes; I was buoyed up with a good deal of hope that we might be able, by some means or another, to get something in the way of tariff reduction, relief from taxation, from this so-called Liberal government. You know it is said that "hope deferred maketh the heart sick." Sometimes it also makes it rebellious, and the time may come when we may be prompted, perhaps from a spirit of revenge, to join our forces even with the Conservative group from which we have no hopes of getting anything. We may, however, be tempted, from a motive of revenge, to join our forces with the gentlemen who sit to our right.	[DOT]


Some hon. MEMBERS:: Oh, no.
Mr. Findlay.]


John Walter Findlay: You are driving us to that. That may be the only course that is left open to us, and we may some time in the near future be compelled to take that course.
I was on the verge of saying that I could not help, the evening before last, drawing a comparison between some of the speeches that were made in this chamber. It is an unfortunate circumstance that it sometimes happens that a really good speech is postponed until the late hours of the night.


Some hon. MEMBERS:: Oh, oh.


John Walter Findlay: I am not saying that that has happened to-night by any means, but it did happen the night before last. During the afternoon and the early hours of the evening, a fairly well-filled chamber and a crowded gallery listened to a sort of burlesque on parliamentary procedure. Late in the night, when most people had gone home, a well thought-out, careful and sensible speech was delivered and almost lost on an empty house. That was an unfortunate occurrence. I only wish that I could bring before this House at least one of the thoughts that were presented to this Chamber by the hon. member for Nelson (Mr. Bird) the other evening. He was endeavouring to show how this movement in which we are engaged was a movement which was permanent, a movement which had come to stay, a movement which could not be injured because of ridicule hurled at the party in this House who are representing and supporting it. He said that the movement was greater than we are; that it would live after we were all gone; that even those who had been with it temporarily and who had gone back to the fleshpots could not but feel for a long time afterwards the exhilaration which they had received while amongst us. That thought I want to convey particularly to the hon. member for Muskoka (Mr. Hammell). When I use the prefix "honourable", I would like the Press Gallery and the Official Reporters to understand that an interrogation mark should come after that prefix, or my real meaning may not be conveyed to the country.
I am very much disappointed in the budget which has been presented to the House by a Liberal government. I have been a Liberal all my life. I supported Liberal principles because I believed in them, and I had hopes of this government which was elected on a platform containing planks in regard to their trade policy which I approved, which I believe a large number of the people of Canada approved, and which were largely responsible for putting this government into

Labour and Organization
power. There is not the slightest doubt that many people, especially in Ontario, were deceived by the trade planks of the Liberal platform of 1919, which planks this government since coming into power have repudiated. The time will come when the people will again have an opportunity to express themselves at the polls. As was said this evening, when this government have cut themselves loose, openly and above board from their platform of 1919, the people of Ontario and, indeed, the people of the whole of Canada from one end to the other will know exactly where the government stand. The next time they will appeal to the people, the people will understand perfectly that they can expect nothing in the way of tariff reduction or in the way of Liberal principles from the government which occupy the treasury benches at the present time.
On motion of Mr. Grimmer the debate was adjourned.
On motion of Mr. Mackenzie King the House adjourned at 11 p.m.
Friday, May 18, 1923