1924-07-09

[Stage Direction]
W. F. KAY (Missisquoi) presented the third report of the select standing committee on Agricultural and Colonization.

[Stage Direction]
Mr. VfEN presented the thirteenth report of the select standing committee on Banking and Commerce as follows:
Your committee, have had under consideration the report of Dr. Tory on Agricultural Credits.

Said report shows that, of the nine provinces of Canada seven	already	have on	their	statute	bookslaws for the purpose of establishing public systems of agricultural	credit;	and
Whereas, a study of the systems existing in these provinces shows that there is considerable variation in the systems, both as to method and detail; and
Whereas, it	is the purpose	of all	teuch	rural
credit systems, to secure, through the better organization of security, loans for agricultural purposes at better rates of interest than have been current heretofore; and
Whereas, it is doubtful if this purpose could be best served by the establishment of a federal system operating	in the	above-mentioned	provinces in
addition to and in competition with the systems already in existence or in provinces where the need has not been sufficient, in the opinion of the provincial authorities, so as to justify the establishment of such a system; and
Whereas, it would seem to be wise, both from the point of view of efficiency and economy, if a federal system is to be established, that it be a common system for the whole of Canada and that, of necessity, would entail conferences between the federal and provincial	authorities;
Therefore, your committee recommend that the investigation of the subject be continued, in order to determine whether it be possible to co-ordinate the various systems of rural credit now in existence into a federal system, applicable to the whole of Canada, and that legislation be prepared based on the said further investigations and calculated to meet the credit needs of the agricultural classes of the dominion, and submit it to parliament at its next session.
All of which is respectfully submitted.
Thomas Vien,
Chairman.
Mr. VIEN presented the fourteenth report of the select standing committee on Banking and Commerce as follows:
Your committee recommend that subsection (f) of section 76 of the Bank Act be amended by striking out all the words after the word " the " in the fifth line thereof and substituting therefor the following " without the unanimous approval of the directors present at a regular meeting of the board or meeting specially called for such purpose, provided that the notice calling any such regular or special meeting shall set out specifically such aforementioned purpose."
All of which is respectfully submitted.
Thomas Vien,
Chairman.

Mr. G. H. BOIVIN (Shefford):: Mr. Speaker, I beg to present the third report of the select standing committee to supervise the Official Report of Debates:
Your committee have had under consideration the following matters referred to them by the House,
viz:
1.	Whether Hansard should be a record of debates only containing such items of the proceedings of the House as may be necessary to make the report of the debates intelligible, or whether it should contain all of the proceedings of the House and of the committee of the Whole House as well as the record of debates.

Report oj Debates
2.	Whether it is desirable, in the interests of economy of time, labour and expense, that the report of the debates in Hansard should be limited to such speeches as may be delivered when Mr. Speaker is in the chair, with or without a brief report of proceedings in committee.
3. Whether it i3 desirable to make Hansard an official record of all the proceedings of the House of Commons, as well as a record of the debates.
Your committee recommend that beginning with the opening of the next session of parliament and until otherwise ordered by the House, the record of the debates in Committee of Supply, be continued as at present but that there be inserted at the end thereof or at the end of the entire report of each day's debates, a list of all the estimates approved by the Committee of Supply with or without debate.
Your committee agree that economy of time, labour and expense in the conduct of the proceedings of the House and the report of the debates in Hansard is most desirable but considering the late stage of the session, the very limited debate in the House concerning the matter and the divided opinion of the members of your committee concerning the ways and means to be adopted to attain the desired results, your committee recommend that as soon as possible after the opening of the next session of parliament and after the members of the House have had an opportunity of expressing their views upon the subject, a special committee of the House be appointed with power to consider whether or not it is possible and desirable in the interests of time, labour and expense, that the rules of the House of Commons be amended or that the report of the debates in Hansard be curtailed, and to report their opinion thereon to the House.
Your committee recommend that the Votes and Proceedings do remain the official record of all the proceedings of the House of Commons and that Hansard remain a record of debates only with such items of the proceedings of the House as may be necessary to make the report of the debates intelligible and with the addition of a list of estimates approved by the Committee of Supply with or without debate.
Your committee further recommend that beginning with the opening of the next session of parliament and until otherwise ordered by the House, an additional copy of the Orders of the Day be supplied to every member, said copy to be distributed daily when issued through the post office of the House of Commons.
Your committee further recommend that the clerk of the committee have power before the opening of every session of parliament and until it may be otherwise ordered by the House, to correct and revise the permanent list already made and approved by the Debates committee, and prepare the annual complimentary list containing the names and addresses submitted by the members of the House of Commons, for the mailing of the six copies of Hansard which they are entitled to have distributed, the whole subject to the approval of the Debates committee when said committee has been appointed by the House.
All of which is respectfully submitted.
Geo. H. Boivin,
Chairman.
If I have the unanimous consent of the House, I move that the third report of the select standing committee on Debates be now concurred in.


Mr. GARLAND (Bow River):: There are
some hon. gentlemen who desire to scrutinize the report before it is adopted.
Motion stands.



OLD AGE PENSION

Mr. W. G. RAYMOND (Brantford):: I
beg to move:
That pursuant to the recommendation of the second and final report of the committee appointed to inquire into an old age pension system for Canada proceedings together with the evidence taken therein be printed as an appendix to the Journals of the House and that rule 74 be suspended in relation thereto.


Mr. IRVINE:: Do I understand that this
is a motion to concur in the report?


William Gawtress Raymond: No; this is as regards
printing.


William Irvine: I should like to have somebody make the motion to have the report concurred in. I do not know whether I am in order, but I should like to see the report brought before the House and concurred in. Can I move that as an amendment?


Mr. SPEAKER:: Notice must be given.


William Irvine: I will give notice.


[Stage Direction]
Motion agreed to.


Right Hon. W. L. MACKENZIE KINO (Prime Minister):: I beg to move:
That on and after Saturday the 12th day of July instant, until the end of the present session, the House shall meet at eleven o'clock in the morning of each day except Sundays, and that in addition to 'the usual intermission at six o'clock, p.m., there shall be also an intermission every day from one to three o'clock, p.m., and that the various committees of the House be at liberty to sit during the sessions of the House, and that on Saturdays the procedure and order of business be the same as on Fridays.


Mr. BOYS:: Will the government not consider putting the motion into effect from Monday? Saturday is an important day of the year to many of us; we have celebrations to attend. Our plans are already made, and it does seem to me that the business could be expedited equally well if we started morning sittings on Monday.


William Lyon Mackenzie King: It was not the intention of the government in any case to sit later than six o'clock on Saturday, and there is no reason why we should not so arrange the order of business as to avoid taking up any contentious matter in which hon. gentleman may be interested.


Sir HENRY DRAYTON:: The Prime Minister might let this motion stand as a notice of motion and bring it up to-morrow, when I have no doubt it could be disposed of.
Inter-Allied Conference


Edward Joseph Garland: It is quite possible that a number of hon. gentlemen have already made arrangements that would prevent their attending on Saturday next and it might hardly be fair to sit on that day. I would suggest that we begin on Monday.


Mr. LEADER:: It is the duty of members of parliament to attend to their business here; they should not let other engagements interfere with that duty.


Mr. BANCROFT:: We sat on the First of July and I think we might sit on the Twelfth of July.
Motion stands.



INTER-ALLIED CONFERENCE ON DAWES REPORT

[Stage Direction]
On the Orders of the Day:
Mr. JOS. T. SHAW (West Calgary): Press despatches having indicated that Premier Ramsay MacDonald has issued a memorandum with reference to the proceedings at the proposed conference regarding the Dawes report, and that the French press in discussing the memorandum has treated it as a formulation of British policy, I want to ask the Prime Minister (Mr. Mackenzie King) the following questions:	First, has the government
received such a memorandum? Second, will the government lay on the Table all the correspondence in connection with this matter? And, lastly, if for any reason the government is unable to table all the correspondence, will the memorandum referred to be tabled?
William Lyon Mackenzie King: The government has not received a formal memorandum but has received a communication from the Prime Minister of Great Britain intimating the matters that would probably come before the Inter-Allied Conference. That communication is very similar in its content to the memorandum to which I think the hon. member refers, and which I have seen quoted in the press. It was an intimation from the Prime Minister of Great Britain to the government of Canada of the matters which would probably be discussed at the InterAllied Conference. There was, however, a further communication, requesting that the government should name a representative to meet with the representatives of the other British Dominions in conference with His Majesty's government in London this week. The conference, I believe, takes place to-

morrow and we have asked our High Commissioner, Mr. Larkin, to represent us at that preliminary conference at which, I understand, the policy of the British Empire in this matter will be considered. Pending authority from the British Government I should hesitate to place on the Table any of the communications which have thus far been received, but I shall have pleasure in communicating to the _ British government the request of the hon. member, with a view to ascertaining their wishes in the circumstances.



QUESTIONS

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

Mr. LADNER:: 1.	How many Japanese women have entered Canada
during each of the following years: 1919, 1920	1921,
1922, 1923 and 1924 up to May 31st?
2.	How many Japanese labourers have entered Canada during each of the said years?
3.	How many Japanese other than labourers and women have entered Canada during each of the said years?
4.	Has the government any information with respect to Japanese sailors or other Japanese deserting ships while in Canadian ports, and if so, how many desertions took place during each of the said years?


Hon. Mr. ROBB:: In addition to the answer which I am tabling in reply to this question I desire to table some details which I wish to have appear in Hansard for the information
of hon. members:
1.
Fiscal Year	ended	March 31,	1919	530Fiscal Year	ended	March 31,	1920	
389Fiscal Year	ended	March 31,	1921	
338Fiscal Year	ended	March 31,	1922	
300Fiscal Year	ended	March 31,	1923	
197Fiscal Year	ended	March 31,	1924	
233April and May, 1924	
73
2.
Fiscal Year	ended	March 31, 1919	208Fiscal Year	ended	March 31, 1920	
77Fiscal Year	ended	March 31, 1921	
34Fiscal Year	ended	March 31, 1922	
23Fiscal Year	ended	March 31, 1923	
26Fiscal Year	ended	March 31, 1924	
59April and May, 1924	
12
3.
Fiscal Year	ended	March 31, 1919	440Fiscal Year	ended	March 31, 1920	
245Fiscal Year	ended	March 31, 1921	160Fiscal Year	ended	March 31, 1922	
148Fiscal Year	ended	March 31, 1923	
146Fiscal Year	ended	March 31, 1924	
156April and May, 1924	
50
Questions..
4. Japanese deserters,-
Fiscal Year	ended	March	31,	1921	
7Fiscal Year	ended	March	31,	1922	13Fiscal Year	ended	March	31,	1923	
36Fiscal Year	ended	March	31,	1924	
37April and May, 1924	
3
No returns available prior to April 1, 1920.
Office of the Deputy Minister of Immigration and Colonization
July 8th, 1924.
Memorandum.
Hon. J. A. Robb:
In connection with the answer to Mr. Ladner's question regarding Japanese immigration to Canada during the past six fiscal years it might be well for you to be in possession of information respecting the classification of the Japanese who have come to Canada during the past fiscal year and also during the first two months of the fiscal year 1924-25
The new agreement with Japan under which it is understood that not more than 150 agricultural labourers and domestic servants will come to Canada annually was completed last year about August and it is quite possible, in connection with the reply to Mr. Ladner's inquiry, that information may be sought as to the classification of the Japanese who entered Canada in 1923-24 and during the first two months of this fiscal year.
Of the 233 Japanese women who came in during 1923-24 and the 73 who came in during April and May last, the classification is as follows,-
April & 1923-24 May 1924
Domestic servants		.. .. 3	
Agricultural class	. .. 51	11Labouring class	.. .. 70	30Artisan class	.. .. 11	1Trading class	.. .. 11	7Unclassified	.... 87	24
Section 2 of the question relates to Japanese labourers and the 59 who came in during the past fiscal year and the 12 who came in during the first two months of this year are registered as general labourers.
Section 3 of the question inquires as to the Japanese, other than labourers and women, who came in during the past six fiscal years. One hundred and fifty-six were admitted during the past fiscal year and 50 during April and May last, their classification being shown in our returns as follows,-
April and 1923-24 M*v 1924
Farmers..	69	23Children	of	farming	class.. ..	6	Children	of	general	labouring	class..	6	4Mechanics..	7	iChildren	of	artisan	class.. ..	2	..Traders..	12	10Children	of	traders'	class.. ..	1Unclassified..	37	7Children	unclassified..	17	4


WHARF AT BIC, RIMOUSKI
Mr. BLACK (Yukon):: 1.	Have repairs been made to the wharf at Bic, in the county of Rimouski, during the present year?
2.	If so, were such repairs made by day labour or by contract ?
3.	If by day labour, what is the name of the foreman in charge, what are the names of the men under his control, and what wages were they paid?
4.	If by contract, were tenders called, from whom were they received and what was the amount of each tender?


Hon. Mr. KING (Kootenay):: 1.	Yes, during present fiscal year.
2.	Day labour.
3.	Paul Thibault, foreman, $4.50 per day; Joseph Thibault, carter, $3.50 per day; Romuald Lavoie, labourer, $2.50 per day; Ernest Paradis, labourer, $2.50 per day.
4.	Answered by No. 2.


DR. H. A. BOWIE
Mr. SHAW:: 1.	Is Dr. H. A. Bowie of Essex, Ontario, employed in the government service?
2.	If so, what position does he hold and what is his salary ?
3.	By whom or on whose recommendation was he appointed ?
4.	Did he have any military service, and if so, what was the nature and extent of same?


Hon. Mr. BELAND:: 1.	Yes.
2.	Medical Officer of the Federal Appeal Board; $5,000 per annum.
3.	The Federal Appeal Board.
4.	He did not serve in the Canadian Expeditionary Force.


ALFALFA MEAL IMPORTATIONS
Mr. FANSHER:: 1.	What amount of alfalfa meal was imported into Canada during each of the years 1921-22, 192223, 1923-24?
2.	What was the value of these imports each year?
3.	What amount of duty was collected each year?
4.	What was the amount and the value of alfalfa meal manufactured in Canada during each of these years ?
5.	What amount of alfalfa meal was exportd during the above mentioned years?


Hon. Mr. GRAHAM:: 1, 2, 3, 4 and 5. No statistics are available, alfalfa meal not being shown separately in the trade classification or in the industrial census.
COMBINES INVESTIGATION ACT On the Orders of the Day:


Hon. H. H. STEVENS (Vancouver Centre):: Has a petition been received by the government, under the Combines Investigation Act, with regard to an alleged combine existing for the restraint of trade, the said petition signed by Hugh Bell and five others?


Hon. JAMES MURDOCK (Minister of Labour):: An application has been received for the appointment of a board under the act and a commissioner has been named to make the necessary investigation.
Insurance Act


Henry Herbert Stevens: Who is the commissioner?


James Murdock: Major Lewis Duncan, of Toronto.


INSURANCE ACT, 1917, AMENDMENT CONCURRENCE IN SENATE AMENDMENTS
[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved the second reading of and concurrence in amendments made by the Senate to Bill No. 175 to amend the Insurance Act, 1917.
He said: The amendment to which I desire to draw particular attention and which is the only really debatable one is the addition of subsection 2 to section 7 of the bill. The subsection provides that the section shall not come into force until a day to be appointed by the Governor in Council by proclamation published in the Canada Gazette. There is no good reason why the coming into force of the section should be deferred; there are on the contrary many reasons why the provision should be invoked as soon as possible: it imposes penalties for the transaction of business in Canada by foreign insurance companies which have not obtained the necessary license under the Insurance Act. We are not going to oppose the amendment but we wish to make it clear that the government in concurring reserves the right to recommend the proclamation of the section at any time it seems desirable to do so.
Henry Lumley Drayton: Mr. Speaker, it seems to me that perhaps we have passed this legislation without giving it proper consideration. The effect of section 7 appears leally to be an attempt by the Dominion to assume jurisdiction in a matter which has largely been held to be entirely within provincial jurisdiction. In effect we are providing for a reference to the privy council again. We have had several references on insurance and on each occasion the Dominion has lost. I do not know why we should in the first instance, simply provide work for the lawyers; or, in the second instance, endeavour to force Dominion jurisdiction upon unwilling provinces. The question last came up objectively in connection with reciprocal insurance, and the provisions which we had put into effect in this respect went by the board. The broad question of insurance had been held by the privy council to be purely within the rights of the provinces and to be something which the provinces ought themselves, to look after. The reason for the Senate's amendment is simply to prevent a deadlock between the provinces on the one hand and the Dominion 
on the other while we try out this new method of wringing jurisdiction. That is the reason for the delay.
In order to point out what the situation is I will read the memorandum filed by the province of Ontario in connection with the matter, which deals with it clearly and succinctly:
Section 7 of Bill 175 of the Dominion [DOT] Insurance Act 1917 provides penalties against Canadian companies, aliens or immigrants undertaking to engage in any activities in connection with insurance without a license from the Dominion Department of Insurance. These penalties are intended as a sanction for the provisions of the said Insurance Act 1917, under which the Department of Insurance undertakes to regulate insurance contracts and the business of insurance.
The privy council has in a number of decisions declared that the regulation of insurance contracts and the business of insurance is a matter for the provincial legislatures which have fully dealt with this subject.
The proposed amendment is intended to re-assert the right of the Dominion to enforce its insurance regulations on the assumption that Dominion companies and aliens and immigrants are subject to Dominion jurisdiction to such an extent that they must obey Dominion insurance regulations which would not be binding on ordinary citizens. The contention of the provinces is that the real intent of the legislation is to regulate insurance and that, inasmuch as what cannot be done directly cannot be done indirectly, the said legislation is ultra vires.
The provinces object to the re-assertion of Dominion control and the Banking and Commerce committee of the Senate has approved a provision to be inserted in the bill suspending the operation of section 7 until proclaimed by the Governor General in Council in order to secure determination of the constitutional question by reference to the courts. The Dominion Superintendent of Insurance urges in favour of the legislation that section 7 is necessary to protect Canadian policyholders, particularly in the case of reciprocal insurance, against the alleged infirmities of provincial legislation.
The class of insurance known as " Reciprocal Insurance " was the subject of the recent decision of the pa-ivy council known as the " Reciprocal Insurance Reference 1923," in which an act of the province of Ontario containing regulations of this form of durance	was	declared valid. The method	ofregulation adopted in the Ontario statute differs fro*u that in the Dominion Insurance Act. Without regai<t however to the merits of reciprocal insurance per se or to the merits of the Ontario legislation, the provinces	are	united in claiming that it is	amatter of policy for them to decide what form of regulation, if	any,	shall be adopted and that	thematter is one entirely outside of Dominion jurisdiction. Similar questions of policy arise with respect to other forms of insurance such as the* New England Mutuals and	the	English Lloyds with respect	to
which the province of Ontario has enacted comprehensive regulatory legislation effective on the 1st of January next.
I pause, Mr. Speaker, to point out that the provinces already have enacted laws covering this very question, which laws have been held by the privy council to be effective, and simply because we do not think that perhaps the provinces have made as good laws as they might

have made is absolutely no reason why we should to-day attempt to enter their field. To resume:
Whether section 7 is passed with or without the Senate suspending provision, further litigation seems inevitable, but whereas, without the Senate provision, the provincial laws will be in confusion pending the decision of the courts, with the Senate provision, the question of validity may be expeditiously determined on reference to the Supreme Court of Canada without unnecessary embarrassment or conflict in legislation.
Other memoranda have been filed supporting in general the position taken by Ontario. This proposed amendment is thought to be in the interests of the insured. It is pointed out that the particular thing which is very largely going to be regulated under this caption of "aliens and immigrants" is reciprocal insurance. Now, the reciprocally insured have filed a memorandum stating that they do not want the proposed help, they prefer to be where they are, and these are the very people that we are supposed to be helping. I know of no reason why we should attempt, against the wishes of the provinces, to interfere further with their business. The one excuse for doing it, namely, that it is in the interests of Canadians insured, goes by the board because those Canadians say they do not want this interference, they prefer to be left just as they are. There remains one other reason only-that the Dominion desires to add to its present legal activities and thinks that it can do so by this particular method. I ask my hon. friend, why should not the section be struck out altogether; why should we have any more references in connection with this insurance matter to the supreme court or to the privy council; why should not the provinces, that admittedly have complete jurisdiction, be allowed to exercise it?


James Alexander Robb: I gathered from my hon. friend's argument that he was concurring in my observations that we should accept the amendment as introduced by the Senate. I have just stated on behalf of the government that we are accepting the amendment. As there seems to be an attempt to becloud the issue, not in this House but by agents of the reciprocal companies, I would point out that there is nothing in the bill which will make it necessary for reciprocals now licensed in Canada to withdraw; second, there is nothing in the bill which will make it more difficult for reciprocals now unlicensed to obtain licenses in Canada; and, third, there is nothing in the bill to prevent persons in Canada from insuring with unlicensed reciprocals outside of Canada, nor to prevent the inspection of risks and adjustment of losses in respect of such insurance by representatives of unlicensed re-
1924	4207
Insurance Act
ciprocals, provided the business is not solicited in Canada and provided the contract is made outside of Canada.
The situation in this respect will be exactly what it has been for the last fourteen years.


Henry Lumley Drayton: I am not opposing what the Senate has done; I only say that they did not go far enough. But why provide for more litigation in connection with this matter?


James Alexander Robb: I am not providing for more
litigation.


Henry Lumley Drayton: That is what is being done. We are legislating upon a subject that the provinces have legislated upon and that the privy council say they have a right to legislate upon. By passing this legislation we are providing for two sets of inspectors, two sets of licenses and two sets of laws. If my hon. friend will not withdraw it, there is an end to it, but I submit that the amendment made by the Senate does not go far enough.


Hon. R. J. MANION (Fort William and Rainy River):: I should like to put upon
record some protests I have received from northern Ontario with regard to this legislation.


James Alexander Robb: We have them, but I do not
object to my hon. friend's putting them on.


Robert James Manion: Unfortunately I do not
happen to have them before me, therefore I cannot read them. But I have recieved from a large number of lumber companies in various sections of northern Ontario, from the Manitoba boundary to North Bay, wires and letters protesting against this legislation on the ground that it will greatly increase the cost of their insurance. They express what I think is the general view that, having regard to the depressed condition of business at the present time, it is not well without thorough consideration to bring in any legislation which will increase the cost of doing business. Apparently the Acting Minister of Finance has had the same protests; I did not know that. But I hope that before the Governor in Council puts the sections into force some consideration will be given to the necessities of business firms affected by this legislation. We should hesitate before putting too much pressure on those business concerns.


James Alexander Robb: That is why I made it clear
that there is no change from what has existed during the last fourteen years.
Motion agreed to; amendments read the second time and concurred in.

Convention with Belgium


CONVENTION WITH BELGIUM
[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved that the House go into committee to consider the following proposed resolution :
Resolved, that it is expedient to bring in a measure to provide that a certain convention of commerce dated the third day of July, 1924, entered into at Ottawa by the plenipotentiaries appointed by His Majesty and by His Majesty the King of the Belgians, be approved, and to give effect to the provisions of the said convention.
Motion agreed to and the House went into committee, Mr. Marcil (Bonaventure) in the chair.
Henry Lumley Drayton: Will the minister explain this resolution?
M'r. ROBB: This trade treaty with Belgium will, I believe, be of material advantage to Canada. The customs tariff of Belgium is what might be termed a moderate tariff, but the coefficient of increase brings the rates up to a fairly high tariff. Article 6 provides for a surtax on goods from countries that do not apply to Belgian products under the most favoured nation treatment. The section reads as follows:
Article 2 of the same law provides that goods imported from countries having no commercial arrangement with Belgium and not applying to Belgium the most favoured nation treatment as regards commerce, navigation and customs, shall be liable to the duties fixed in the Customs tariff with an increase of 50 per cent. Goods which are not dutiable under the said tariff shall pay 15 per cent on the value thereof or shall be subject to an equivalent specific duty calculated on the basis of their average value.
We are obtaining the most favoured nation treatment from Belgium and in consideration thereof we are giving them Canada's most favoured nation treatment. We imported from Belgium for the year ending March 31, 1924, goods to the value of $5,340,875, while our exports to Belgium were $17,452,442.


Henry Lumley Drayton: The whole of
our imports are by no means subject to the Belgian high duties. The majority of our exports to Belgium are foodstuffs. Will the Minister give us the main details of those exports, with the present rates against them?


James Alexander Robb: My hon. friend is quite right
as regards foodstuffs. The exports of barley amounted in round figures to $335,000; oats, $355,000; rye, $104,000; wheat, $14,000,000; flour, $37,000; oatmeal, $19,000; whiskey, $64,000; cattle, $236,000; canned lobsters, $68,000; canned salmon, $422,000; butter, $96,000; cheese, $136,000; agricultural implements, $267,000; condensed milk, $48,000; automobiles and parts thereof, $217,000; asbestos, $358,000; meats, $35,000. There are a lot of other minor items. iMr. Robb.]


Henry Lumley Drayton: What are the
present duties?


James Alexander Robb: On butter, for instance, per
hundred kilos, maximum 60 francs, minimum, 20 francs; and the coefficient increase over that is 2, so that you multiply that by 2. On oats the maximum is 9 and the minimum 3; on wheat, rye and barley the maximum is 7.50 and the minimum free, so that the minimum tariff which we will receive will put them on the free list. These are the rates per 100 kilos.


Henry Lumley Drayton: Is my hon. friend right about the minimum tariff doing that? I thought the minimum tariff on wheat was the same as the general tariff.


James Alexander Robb: On flour of wheat, 10 francs
and 2 francs; on meal of oats, 12 francs and 4 francs. The coefficient increase on the oats and meal of oats is 2, so that you multiply 12 francs by 2, giving 24 as against 8. Canned lobster, 60 against 20, with a coefficient increase of 2; that would be 120 against 40. Relatively that is about the way it runs all the way down.


Henry Lumley Drayton: Our main export is wheat; what is the rate there?


James Alexander Robb: Maximum, 7.50; minimum, free. This tariff it is expected will come into force in Belgium about October, 1924.


Mr. LADNER:: What are the duties on
canned salmon?


James Alexander Robb: The maximum rate on canned lobsters and salmon is 60 and the minimum 20, but the coefficient increase is 2, so multiplying 60 by 2 gives 120 and twenty as against 40.


Henry Lumley Drayton: That has to do with the exports of Canada. What are the main imports from Belgium?


James Alexander Robb: The principal items we imported are as follows:
Item
Canned vegetables	
Beans	
Florist stock	
Hatters' furs	
Glue, powdered or sheet	
Cotton fabrics, dyed	
Cotton clothing, not otherwise provided.. ..
Silk fabrics	
Velvets, other than silk	
Worsted tops	
Yarns	
Artificial silk yarns	
Furniture	
Paper	
Steel billets	
Bariron or steel	
Iron or steel beams	
Amount $ 93,000
197.000
32.000
144.000
17.000
71.000
33.000
61.000
41.000
25.000
35.000 161,000
13.000
86.000
54.000
27.000
50.000

Convention with Belgium
Cream sepa rators	
Guns and rifles	
Railway spikes	
Zinc in sheets and plates	
Lamps, electric	
Glass tableware	
Common window glass	
Plate g'ass not exceeding 7 sq. ft	
Plate glass exceeding 7 sq. ft. but not exceeding 25 sq ft	
Plate g'ass not otherwise provided	
Diamonds, unset	
Fertilizers	
Zinc, white	
Nitrate of ammonia	
There are some other minor items, total amounts to $5,340,000 as against $17,542,000 of exports.


Henry Lumley Drayton: Will my hon.
friend give our own duty on glass?


James Alexander Robb: The duty on common window, and colourless window glass is, intermediate 124, general 124; so the duty is exactly the same, but there will be 10 per cent under the treaty, and that will give Ilf as against 121.


Henry Lumley Drayton: What is the duty on plate glass?


James Alexander Robb: Ten per cent and ten per cent, the same; there is nothing off that.


Henry Lumley Drayton: On this question of glass can my hon. friend tell the committee what the result of the closing down of Canadian glass factories has had on the market? My information is that the price of glass to the consumer has gone up fairly substantially, that at first Belgian glass was a good deal cheaper than glass which could be turned out in this country, but that as soon as the Canadian factories were successfully closed up, the prices not only went back but have increased Has my hon. friend any information as to the effect on the public?


James Alexander Robb: If the facts as stated by my hon. friend are true, I should think the public are paying more for their glass; but that is a world-wide condition. My hon. friend will observe that under the British preferential tariff, the British preference is lower than this. I know that representations have been made to the government on behalf of the glass industry in Canada, and the government are very sympathetic to industries of that nature. We have no desire to close down any industry, but it was represented to us that unless we put on a specific duty, not on a percentage basis but so much a square foot, they preferred the duty to remain unaltered. These people are now and have been for years, importing glass, and if during a period glass was selling cheaper in Canada, so much
the better for the Canadian people. My hon. friend will observe that under the treaty that we are arranging with Belgium, that situation is not altered, because the difference in duty is practically nothing; it does not make any difference one way or the other.


Henry Lumley Drayton: In the first instance, I do not know that I can congratulate my hon. friend upon his sympathy for the industry.


James Alexander Robb: We also have a little sympathy for the man who is going to build a house.


Henry Lumley Drayton: Yes, and the
man who is going to build a house has to pay more, now you have closed the industry.


James Alexander Robb: I do not know anything about that.


Henry Lumley Drayton: My hon.
friend's sympathy is very much like the sympathy of the Walrus and the Carpenter for the unfortunate Oysters. The glass business in Belgium is controlled, and well controlled, by close co-operation among the industries. They arrange the market prices in the foreign countries to which they export. They have not a common price for the different countries; the price depends on whether or not there is production in that country. If there be production in any country, the price drops sufficiently to make production in that country not remunerative; but when once local production ceases, the interest of the Belgian glass manufacturer assumes exactly the same form as the interest of my hon. friend towards the Canadian glass industry. The Belgian glass manufacturer sympathizes very much, he is very much interested, but he raises his prices. And he has raised his prices. My hon. friend says he does not know. I should have thought that that would be one of the first things to know in connection with the administration of these customs questions. If, by reason of that "invisible bonus" the Globe itself speaks of, which is afforded by the drop in exchange, a 124 per cent tariff is no good, and if as a further result the price is increased to the house builder, as it has been, one would think that was something one ought to know at least something about before dealing with tariff items. If, on the one hand, we have anything more than the interest of the Walrus and the Carpenter for the Oysters, so far as industry is concerned, or if we have any greater interest in the Canadian user of these goods than a mere pretended one, surely our interest does not stop by killing the Canadian industry.
30.000
47.000
33.000 121,000
68.000
32.000
838.000
727.000
272.000
347.000
702.000
78.000
88.000 69.000
The
some
Convention with Belgium

It is easy to say that if we kill Canadian industry and make this a cheap country to live in it will be a splendid thing and that prices will go down. But that result does not follow and never has, it will not in this case. The Acting Minister of Finance says that he knows about this industry and has had representations made to him concerning it. Well, it is a basic industry so far as Canada is concerned, for in this country we have the sand and the other raw materials necessary for the manufacture of glass. We have everything except such a settled fiscal policy as will enable this industry to carry on in the face of present world conditions-a depreciated currency and the prevailing rate of wages in Belgium as compared to the rate in Canada. One would have thought that to provide for the continuance of such an industry in Canada would be a good thing to do if it were feasible and the glass could be produced at a reasonable figure. I should have thought that everybody would be of opinion that it would be a bad thing to close up such an industry and at the same time pay more for our glass as we are now doing.
I ask my hon. friend how the negotiation of this treaty came about, who represented Canada in the negotiations, when those negotiations commenced, and where they were held?


James Alexander Robb: The negotiations have been
conducted between the Belgian Consul in Canada and the members of this government, and the treaty was signed by my colleague, Hon. Dr. Beland, and myself, on behalf of the Dominion. I have answered my hon. friend's question, and now I will interrogate him. I observe that he has given very close study to the glass industry and to the general conditions of that trade. Will he tell me how the tariff has been changed in the slightest degree since 1910. and during the period from 1911 until 1921 when the government of which he is a supporter were in power?


Henry Lumley Drayton: It cannot be
charged against me that I do not recognize changing conditions, and the necessity of taking action in order to meet conditions when they have changed. My hon. friend asks about the tariff. He knows very well, everybody is aware of it, that the real trouble -one of the very real troubles at any rate- is the question of exchange. My hon. friend asks what change has been made in the tariff? Why, we had a provision under which these factories would be running to-day if my hon. friend and his colleagues had not, for purely political purposes, scrapped it. We had a provision which would have enabled every single Canadian industry-the doors of which

are closed to-day as a result of continental competition and low rates of exchange-[DOT] to continue. We had our provision as to depreciated currency under which the duty could virtually be raised automatically to meet the ratio by which the outside competitor lowered his cost of production. These safeguards were all put to one side with a wave of the hand by my hon. friend's government.


James Alexander Robb: Under that arrangement-I
am seeking for information-will the same number of square feet of glass buy a bushel of wheat as it does under the present arrangement? Because these are the products we exchange. They send us glass and we export wheat to Belgium.


Henry Lumley Drayton: My hon. friend
talks about the ratio which glass bears to wheat. Perhaps he will enlighten us as to the extent to which this country can be helped in the case of an industry the producing power of which is destroyed. I point out to him that the change made by the present government, the very first year they assumed office, brought about the closing of the factory in question, and he can find that a lot of other factories in this country have been injuriously affected. No more thought is given to this industry than the Walrus and the Carpenter gave to t'he Oysters-not a bit. It would rather seem that the position assumed by the present government was: This is something which was done by the previous administration; it cannot be any good, throw it out. Well, the provision was thrown out, and a great many Canadian workers were thrown out with it. As a result the government are getting the country to a pretty pass in the case of several lines of industry. They have very largely added to the Canadian exodus as a result. Does my hon. friend suggest that the provision in question was not a very important
4 p.m. addition to protection in Canada?
And yet in answer to our representation all the hon. gentleman can do is to ask if there had been any change in the tariff since 1911. That is his whole answer.


James Alexander Robb: It is right, is it not?


Henry Lumley Drayton: My hon. friend
overlooks a matter of greatest importance. He overlooks that provision which absolutely protected the Canadian producer from what the Canadian producer suffers to-day in his own market. As the Globe puts it-in a moment of temporary clarity; it does not continue in that mood but there was a moment of comparative temporary clarity of thought -it was "an invisible bounty," and without

Convention with Belgium
that "invisible bounty," and with the Belgium franc standing on the international exchange at six cents as against 20.8, it is easy to understand why the things to which I have drawn attention have happened. Can the government deny it?


Mr. BELAND:: My hon. friend was
inquiring by whom the negotiations in connection with this treaty had been carried on. He will remember that in 1922 the present Minister of Justice (Mr. Lapointe) and the Minister of Finance (Mr. Fielding) were in Europe. They visited Brussels on that occasion, and entered into negotiations with the Belgian government with a view to concluding a commercial agreement between the two countries. At that time, however, it was pointed out to these ministers that the Belgian government were considering the revision of their tariff schedules having in mind a considerable increase in them. They said that the moment was not opportune to enter into an agreement such as contemplated, but that later if it was agreeable to the Canadian authorities they would consider the matter further. The new tariff in Belgium has gone into effect, and I understand that if the rates under it were imposed on goods of Canadian origin it would very injuriously affect our present exports to Belgium. I will only mention the case of wheat, our exports of which, I think, amounted to 12,000,000 bushels last year.


Henry Lumley Drayton: Fourteen millions.


James Alexander Robb: No. 12,568,270 bushels which
sold for $14,000,000.


Henri Sévérin Béland: 
Henry Lumley Drayton: What duty do American exporters pay in that market?


Henri Sévérin Béland: They have the same treatment in Belgium; but if this agreement was not ratified, our wheat would stand at a disadvantage on the Belgian market to the extent of 10 cents a bushel as compared with American wheat.


Henry Lumley Drayton: The Americans have a treaty?


Henri Sévérin Béland: I understand they have.
Therefore, as regards duty there is an advantageous side to the agreement. The duty on glass imported from Belgium is under the general tariff, 12i per cent, and under the intermediate tariff, the same. Under the agreement the most favoured nation treatment is to be accorded to Belgian goods coming into Canada, and this would mean in this instance a reduction of the intermediate duty by 10 per cent, which is a trifling decrease, of course, as my hon. friend will admit. As regards the remarks of my hon. friend as to the closing of an important glass industry in Canada, surely that cannot be laid at the door of any agreement as ratified by parliament, especially as it does not come into force until next October.


Mr. CHAPLIN:: This will not tend to make the industry any better.


Henri Sévérin Béland: I am bound to say that it does not improve the condition of the glass manufacturing industry, but I am not ready to admit that it is hard treatment upon those manufacturers. This industry has been closed as a result of the existing tariff, a tariff which has been in force in Canada for a long period.


Henry Lumley Drayton: Perhaps my hon. friend had better answer the one argument made in connection with the tariff, that is the exchange situation.


Henri Sévérin Béland: My hon. friend has made a statement to the effect that the price of common glass, window glass, has been increased to the consumer in Canada. I wonder if he is in a position to support that by facts. My personal information is to the contrary.


Henry Lumley Drayton: At what dates?


Henri Sévérin Béland: My information, after
special inquiries on my part, is that parties who have been buying window glass in my district did not pay about two months ago as much as they used to pay last year and the year before.


Henry Lumley Drayton: What are the
prices?


Henri Sévérin Béland: I do not know. I inquired about the price and they said that it was lower. Of course, that is a gratuitous statement of mine as much as my hon. friend's is.


Henry Lumley Drayton: I do not know
why my hon. friend says that or what his authority is for saying it.


Henri Sévérin Béland: I say it is an affirmation
of mine from information I have received.
Convention with Belgium

My source of information may be as reliable as that of my hon. friend.


Henry Lumley Drayton: My statement
was not gratuitous. The figures are on file and if the government want them, they can get them.


Henri Sévérin Béland: Another article that is
favoured under this agreement and that concerns the eastern farmer, is butter. By this agreement, butter is going to enjoy a decided advantage on the Belgian market. It is true, our export of dairy products has not been very large to Belgium, although I am glad to be able to say that it has increased substantially during the last four or five years, due to the very useful action of the representative of Quebec in Belgium, Mr. Langlois, who has spared no effort, no work, in order to introduce Canadian cheese and butter into that part of Europe.


James Alexander Robb: Two hundred and sixty-seven thousand pounds.


Henri Sévérin Béland: It is a respectable figure.
There is no doubt that under the agreement our exports of butter to Belgium will be considerably increased. I am mentioning these two items only as a reason why I consider this an advantageous agreement. As regards the argument of my hon. friend that the glass industry has been or is or will be affected by this, I really do not see that it is very strongly based on anything substantial.


James Dew Chaplin: How much revenue will
be lost by this treaty?


James Alexander Robb: I do not anticipate that there will be any loss of revenue. I think there will be an increased business.


James Dew Chaplin: 
James Alexander Robb: That is right.


James Dew Chaplin: On one item which the
minister gives us there is a loss of $10,000 that we know of, and yet he tells us that this treaty does not mean loss of revenue to this country. What is the duty on plate glass?


James Alexander Robb: Plate glass does not all come
under the one rate. Plate glass, not bevelled, 
in sheets and panes not exceeding seven square feet each, n.o.p.: intermediate tariff, 10 per cent; general tariff, 10 per cent.


James Dew Chaplin: There will be no reduction because of the French treaty?


James Alexander Robb: No.


James Dew Chaplin: What were the importations from Belgium of silk fabrics and manufactures of silk?


James Alexander Robb: Artificial silk yams amount
to $161,923 and silk fabrics $61,351.


James Dew Chaplin: And other manufactures
of silk?


James Alexander Robb: I do not notice any others.


James Dew Chaplin: What about embroideries?


James Alexander Robb: I do not see embroideries.


James Dew Chaplin: What liquors are imported from Belgium?


Henri Sévérin Béland: Very little.


James Alexander Robb: There is no liquor on the list I have.


James Dew Chaplin: What is the duty on the
silk yarns?


James Alexander Robb: 
James Dew Chaplin: What losses are due to
the French treaty in regard to that product?


James Alexander Robb: There are none.


Edward Joseph Garland: 
Henry Lumley Drayton: Does the hon. gentleman know whether they make bottles or not? Does he not know that they are turning out an absolutely different article?


Mr. McMASTER:: Why should the glassmakers of Canada go in for an article with which they cannot compete when they can make other articles and compete?


Henry Lumley Drayton: They might
think there was a limit to the drinking capacity of the country.


Edward Joseph Garland: To demand protection for a certain commodity which cannot be economically produced in Canada is subversive of the interests of the country, and such an industry can be sustained onlv at a great loss to the consuming public.


Leon Johnson Ladner: This treaty is of material importance to our beloved province of British Columbia. Plate glass seems to have been the main consideration of the committee up to the present time and I believe it represents $2,000,000 of the goods which we import from Belgium to-day. I do not know what proportion of our exports to that country comprises canned lobster, but in amount the canned salmon export is $422,000. This treaty affords our province an advantage; without the treaty we would pay on a basis of 120 francs duty, whereas under the treaty it comes to 20 francs. In other words, we are paying at present six times more than we shall pay under the treaty. The canned salmon industry of British Columbia is and has been in a precarious condition largely because we lack markets and have not had the facilities which the United States and 267
some other countries, principally Siberia, enjoy. On this item alone therefore the treaty is of very material importance to British Columbia, inasmuch as we anticipate there an increase in the export of canned salmon. We are also interested in the shipment of wheat through the port of Vancouver, and this matter, I believe, has been mentioned before in the House. I have forgotten the figures but I believe that we ship to Belgium some 12,000,000 bushels, which is a considerable item.


James Alexander Robb: We ship 12,500,000 bushels.


Leon Johnson Ladner: The minister has mentioned a number of other articles, including butter, in regard to which we shall enjoy an advantage. The general effect of the treaty is to accord to Belgium the treatment which we have already extended to Italy; the treaty is practically the same in both cases. From the purely economic aspect of the question it seems to me that, considering all the items, either of export or import, weighing them duly, and balancing the respective advantages of the two countries, Canada will stand to gain under this treaty; I believe she will gain considerably. But then I propose to refer to something other than the purely material phase of the question. I am not one of those who in the short space of ten years can forget the heroic part which Belgium on her own initiative played in that great conflict when the German hordes crossed her border. She assumed full responsibility when the aggressor threatened to wipe out the nation, and when indeed, for a time, he did disrupt the economic, social and political structure of that small country so that every one thought it would be impossible to restore Belgium to normal conditions. I paid a visit to Belgium in 1921 and I did not find any boasting or unseemly publicity in regard to what she had done. But the way in which that little country has reorganized its business, rebuilt its factories and re-entered the markets of the world might well be an inspiring example to many other countries of the world.
I do not think any member of the committee would seriously say that we should not accord to Belgium the treatment which we have accorded to Italy. Belgium, France and Italy are very similar in many of their industrial and commercial activities, and apart altogether from the purely sectional view-I admit that I see in the proposed treaty an advantage to British Columbia-I think it will be generally admitted that this is a measure which the committee might well recommend for adoption.

Convention with Belgium


Henri Sévérin Béland: Mr. Chairman, if the
hour for oratory and sentiment had not long passed during the present session, I also would indulge in some references of the kind made by my hon. friend a few moments ago. It is a very happy circumstance indeed that in the present condition of affairs the best-recognized business principles agree with matters of sentiment-the treaty is advantageous to Canada, and will undoubtedly be advantageous to Belgium, and I concur entirely in what my hon. friend says about Belgium's heroic conduct during the war.


Henry Lumley Drayton: The answer
which the hon. Minister !of Health (Mr. Be'land) gave me might well lead me to despair, but nevertheless I will not give up. He says it is the same old tariff-no change at all. Of course, the hon. minister knows there was a war because he had very painful reminders of it, and since he has become a trade expert he also knows that as a result of the war there has been a depreciation of currency in Europe, and his perusal of the Globe must have convinced him that as a consequence of such depreciation the foreign manufacturer gets an invisible, but nevertheless very real, bonus as against the Canadian manufacturer whom my hon. friend is so interested in. I thought I had made it fairly clear why things are as they are, but in his attempt to answer me he overlooked the plain fact that today, as pointed out by the Globe, the depreciated currency of most European countries gives the manufacturers of those countries a very substantial bonus in competition with Canadian manufacturers. My hon. friend recognizes the great sacrifices of Belgium during the war, but he might also recognize the great sacrifices of this country during that struggle. And when recognizing certain facts, he need not stop at congratulating the government of Belgium for putting their country on its feet again; he might go further and ask whether the workers of this country are not entitled to similar consideration. He might have put the inquiry:	"Why is it that this
government, of which I am a member, sees Canadian industry declining?" He might also inquire as to the difference between the fiscal policies of the two governments, and ask himself what happens in the case of the country whose government is looking after its markets in contrast to what happens to the country which, unfortunately, is administered by his government and is not having its markets protected. It is no good looking the facts half in the face. Belgium is coming up. Are we? My hon. friend knows that we are not.


Henri Sévérin Béland: I do not agree with my
hon. friend.


James Alexander Robb: Oh, yes, we are coming up,
too.


Henry Lumley Drayton: My hon. friend
knows very well the position of Canadian industry. Does he seriously think that a debased currency makes no difference? Is the Globe wrong, is every economic authority wrong, and only the King government right? Until he comes to that conclusion it is idle for him to talk about the old tariff and say that the glass industry was ruined by it; and he must know it. But I suppose it is quite idle to look for any real interest by him and his government in Canadian industry one way or the other.


James Dew Chaplin: Would the minister give
us again the imports of canned vegetables from Belgium?


James Alexander Robb: 
James Dew Chaplin: What is our duty on those
items?


James Alexander Robb: Beans, not otherwise provided for, per bushel, 15 cents; 221 cents; 25 cents.


James Dew Chaplin: What is the preference
on that article?


James Alexander Robb: It is 2J cents a bushel.


James Dew Chaplin: What about manufactured furs?


James Alexander Robb: Free in all classes-that is, for manufactured hats.


James Dew Chaplin: It is an extraordinary
thing that in a country like Canada we should give special concessions to anybody to bring in beans and canned vegetables.


James Alexander Robb: What does my hon. friend
think about other countries giving the same privilege to Canada?


James Dew Chaplin: We do not get it, though. If you examine the French treaty you will find that the duty on canned vegetables from Canada to France is higher than the duty on similar goods coming from France to Canada. That is my answer to the minister.
Resolution reported, read the second time and concurred in. Mr. Robb thereupon moved for leave to introduce Bill No. 247, respecting a certain trade convention between His Majesty and the King of the Belgians.
Motion agreed to and bill read the first time.

Convention with Finland


CONVENTION WITH FINLAND
[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved the second reading of Bill No. 239, respecting trade between Canada and Finland.
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Gordon in the chair.
On section 2-Favoured nation treatment to goods of Finland.
Henry Lumley Drayton: Has my hon.
friend the details as to the Finland tariff?


James Alexander Robb: I think the hon. gentleman
will find them on record; they were given when the resolution was considered. On passenger motor cars the general tariff is 20 per cent and the conventional tariff 8{ per cent; minimum duty per kilogramme, weighing not more than 900 kilogrammes, general tariff, 3.50 markkas; conventional tariff, 1.81 markkas. Weighing more than 900 kilogrammes, general tariff, 5.00 markkas; conventional tariff 2.18 markkas. Motor lorries, 10 per cent general tariff, but not less than 2.50 markkas per kilogramme. Wheels, 20 per cent general tariff and 8J per cent conventional tariff; minimum per kilogramme, 5.00 markkas, conventional tariff, 2.18 markkas. Phonographs per kilogramme, 150 general tariff; 112.50 markkas conventional tariff. Exports to Canada from Finland amounted to $6,090 for the year ending 31st March, 1924, while our exports to Finland amounted to $1,754,279.


[Stage Direction]
Section agreed to.
On section 3-Orders in Council authorized.
Henry Lumley Drayton: Is this the usual clause?


James Alexander Robb: It is following the British
clause.


Henry Lumley Drayton: Where is the
provision with regard to the termination of the treaty?


James Alexander Robb: It is found in section 3.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passedi

[Stage Direction]
Hon. J. A. ROBB (Acting Minister of Finance) moved the second reading of Bill No. 240 to amend the Bank Act.
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Gordon in the chair.
267J
On section 1-Inspector General of banks to be appointed.
Mr. SHAW:: The Banking committee today reported to the House an amendment, which had been accepted, to another section of the Bank Act dealing, I think with certain provisions to be followed in the event of loans to directors. I would ask the minister if he proposes to introduce that amendment to the Bank Act, or if this is the only occasion when members will have the oportunity to move amendments to the Bank Act.


James Alexander Robb: My hon. friend will appreciate that the report of the Banking committee, which was presented only to-day, has not yet been considered by the House. This bill has been before the House for some time, and it will have to stand on its own merits. The other matter will be considered after the House has considered the report of the Banking committee.


Joseph Tweed Shaw: What I want to know is, does the minister propose to amend the Bank Act this session, other than is provided for in this bill.-because, as I understand the rules, any member has the right now to move to amend any provision of the Bank Act. It would be of value to members if they were aware whether the minister proposes to bring down a further bill.


James Alexander Robb: I will be frank with my hon. friend and say that I intend to put this bill through with the concurrence of the House just as it stands now.


Henry Lumley Drayton: I should think the minister would also recognize that we would prabably save time if we were to do now anything that we are going to do with the Bank Act and not bring down a further bill.


James Alexander Robb: We can consider that but
frankly I have not had time to take into consideration the report of the Banking committee presented to-day. I understand there are still other resolutions before the Banking committee.


Joseph Tweed Shaw: I think there was only one
amendment.


James Alexander Robb: I think we had better go on
with this.


Joseph Tweed Shaw: My suggestion to the minister is that as there is only one amendment that passed the committee it could fce incorporated in this bill and we could dispose of the whole matter now. Otherwise there will be no opportunity of presenting that amendment to the House.
Bank Act


James Alexander Robb: The weather is getting pretty
warm and we are getting on.


Joseph Tweed Shaw: The weather has nothing to
do with legislation or it should not have.


Mr. BUREAU:: If you make the legislation as hot as the weather there will be something doing.


Henry Lumley Drayton: I think the minister ought to give us a pretty full explanation of this whole matter. We had a discussion the other day but it was not full at all.


James Alexander Robb: I would be very glad to repeat what I said in the Banking committee the other day, and on the resolutions, but I can see no good object that can be served by repeating myself. The bill speaks for itself. The government intends to appoint a competent, qualified bank inspector, and he is given fairly wide powers under the bill. He will take advantage of the Bank Act and use it so far as possible to avoid duplication of effort, duplication of expense, and if you will, duplication or irritability; for the bankers do not want-any more than anyone else-inspectors dropping in at any time. Under the Bank Act of last year auditois are selected from a list approved by the Department of Finance, and these auditors in addition to the reports they send to the Finance department are compelled under the act to send reports to each of the directors. This bill provides that they shall send these reports to the Inspector General, certified to and attested. It will also be the Inspector General's duty once a year to inspect the head office of each bank, and any branch wffiere he thinks inspection is necessary. The government have entered upon this in the full belief that bank inspection will give additional security to the depositors.
Referring to the remarks of my hon. friend from West Calgary (Mr. Shaw), I do not want him to understand that I am averse at all to the suggestions that are contained in the Banking committee's report presented to-day, but I would like time to consider the report. In the light of the experience we will gain during the year from the operation of this bill, I think both the government and the House will be in a better position to make any necessary amendments to the Bank Act next session. I think that would be better than putting through any hasty legislation just now.


Joseph Tweed Shaw: Might I suggest that we proceed with the clauses of this bill, and then perhaps the bill could remain in committee, to give the minister an opportunity to consider the amendment proposed, which could

then be incorporated in the bill without the necessity of bringing down further legislation.


James Alexander Robb: I will meet my hon. friend to this extent: I would like to make progress and put the bill through this House; and then, if we determine to do what my hon. friend suggests, the amendment to the bill could be made in the Senate. I would like to go pretty carefully into that report, because it may involve other changes, for wherever you touch one act another may be involved.


Mr. MACLEAN (York):: I am altogether in sympathy with the proposal of the minister to have an inspector general in connection with our banks, but I think the minister would gather from the discussion that took place in the committee and in this House, that the powers of this officer ought to be broader than the bill provides. I think not only should he be a first-class man, but he should be given a high salary, with a view to bringing a man of the proper type forward and developing him into an officer something like they have in the United States, namely the Comptroller of the Currency. I will point out some of the duties that I think this inspector general ought to have. He ought to be the real head of our banking affairs in Canada, and in addition he should have these duties.
1.	He ought to be comptroller of the Canadian currency, and chief officer of the Canadian treasury, in charge of all inspection of banks, trust, loan and insurance companies.
2.	He should have charge of all federal issues, whether notes or metal, as well as reserves, including bullion.
3.	He should have charge of the Canadian Mint.
4.	He should have charge of federal re-discounting for banks.
6. He ought to be Deputy Minister of Finance.
We want a great state officer, if I may use the expression, in connection with our banks, a high-class man in the treasury department. Not only should he have the duties outlined in this bill, but he should centralize all the activities of the Department of Finance. Because in all the discussions we have had on banking, as hon. members who attended the meetings of the Banking and Commerce committee will remember, we found out that at present there is a distribution of responsibility in connection with our treasury-if I may use that word and I think it is a good term to employ. Sometimes we had information from the deputy minister; sometimes we had it from officials who had been identified with inspection work. We would like this department of the treasury to be organized and to grow into a system where there would be

Bank Act
further information available and further responsibility undertaken.
Now, as to the system which prevails in the United States. In the Banking and Commerce committee we had the evidence of high officials connected with the United States treasury that over there they have a high-class system in regard to bank examination. The system of inspection we have had in this country has been almost a failure so far. The high bank examiner we had as a witness before us was able to say "I would not be in a bankr three days without being able to detect whether there was something wrong with it or not." There was something wrong with the Home Bank of Canada for years. We did have a system of inspection carried out in the last year or two but it was not effective. What we want in this country is a bank examiner, a high officer of the treasury, who would be able to tell his chief, and the country as well, within three days whether a bank was in a sound condition or not. In spite of the so-called inspection that we have had the Home Bank went on and issued its own notes although there had been an absolute impairment of all its capital. That institution issued its own notes on a capital of two millions at a time when there was not $100,000 of that capital unimpaired, and it took us eight years to find that out. What this great department in connection with the treasury of this country ought to do-and I am not criticising the proposition so much as I am declaring my desire to support the minister in creating this department-is to take charge of all the issues of notes and of all the securities on any kind of currency, to have charge of all rediscounting for the banks, and other matters of that kind and get them coordinated. I would also even extend the new controller's responsibility in another direction, perhaps associated with a committee of this House, and identify him with some simple way of dealing with the national debt. We have got a great national debt. It ought to be studied carefully and constantly by a committee of this House; and the main official in the Finance department, in studying this question would act as a sort of controller of the currency or secretary of the department. Such an officer I am quite sure-if he was working in co-operation with the standing committee and with the minister, who is and ought to be alert on these questions-would be able to do valuable work in the consolidation of our national debt and in securing a lower rate of interest than we now pay. At present these financial matters are more or less dislocated; I should like to see a thorough
re-adjustment and co-ordination carried out. The minister might begin such work with this new inspector general. Let the minister give him a substantial salary and see if he cannot rouse in him a sense of responsibility, a desire to co-ordinate the various financial services and improve the conduct of the financial affairs of Canada. And especially ought he to assume some responsibility in connection with the study of the national debt. We can save, perhaps, a million a year if we can make a complete study of the national debt and evolve some way of consolidating it and lowering the rate of interest. An officer who could bring about these most desirable results would be worth any price you like to give him. If we can pay $50,000 a year to the head of the National Railways we can surely afford to give $25,000 a year to an officer who would be a real head of the treasury of Canada, and who would take charge of all the matters I have 'mentioned and especially of the inspection of the banks.
In regard to bank inspection we want to follow the American system which might be summarized as follows: The bank
5 p.m. inspector is so alert in his business in the United States to-day that when he, or his assistant, enters a bank which has an impaired capital he calls the directors into consultation and says, "Gentlemen, you have impaired your capital; I give you one week to make the impairment good, and if you do not do it I will insist on the closing of your bank." That has happened in a good many cases and the bank examiner has brought the delinquent banks to time, he has forced them to make good the impaired capital and change some of the methods of conducting the banks. In that way he has proved himself to be a high class official and a real public servant. I hope the minister will accept these suggestions in a sympathetic spirit; that he will make out of this inspector general a real controller of the currency, a real secretary of the treasury, and that he will institute a thorough study of the national debt and how to deal with it. If the minister carries out these ideas he will make a reputation for himself, and I hope he will.


Joseph Tweed Shaw: If there is any member of
the House who, more than any other, is entitled to credit for this legislation, I consider it is the hon. member for Centre Winnipeg (Mr. Woodsworth). Because, last year, when the Bank Act was under consideration, that hon. gentleman submitted to the committee on Banking and Commerce an amendment which, in substance, contains the very principles, and indeed much of +*>* language,
Bank Act

of the present bill. At that time the Minister of Finance argued that the government could not undertake a system of bank inspection because in the event of a bank's collapse the Finance department would be under a responsibility. In reply we urged, or some of us at least,

that it would be the government's failure to provide the safeguard of an inspection that would invite responsibility. I am very glad that a year's experience, and the further knowledge we have gleaned in the interim, has resulted in establishing the principle that the government must use every safeguard to protect the public, otherwise responsibility is at once invited. May I in this connection-to indicate the transformation in regard to this matter which has taken place in one short year-direct the attention of hon. members to the following excerpt from an editorial on government inspection of banks which appeared in the Manitoba Free Press' of June 19, last:
The Faddists were right
Those who advocated the change were dreamers, theorists, visionaries, radicals, cranks, faddists:	It
is not probable that they escaped being called Bolshevists by the defenders of the existing system. Yet the bankers and the elder statesmen who took their advice as the last word in practical wisdom were wrong; and -the faddists were right, as is now admitted.
There can be no question at all that the principle contained in this bill is a sound and safe one, and now we must only seek to ensure that the legislation which we are enacting into law is -adequate for the purpose.
I have just one observation to make and I made it before the Banking and Commerce committee. The Inspector General, as the officer is called under this legislation, should have power, not only to put a bank into insolvency, but if he finds it desirable, to keep a bank in operation. We have only fourteen banks in Canada now, and I think, generally speaking, the people of Canada are not prepared to accept a greatly reduced number. Hon. members are aware that the shareholders of -a bank are subject to a double liability. In the United States, under their banking statutes, that double liability, in the event of the impairment of a bank's capital, can be called upon in order to keep the bank in operation. Under our system the double liability can be called upon only in the event of a bank going into insolvency. I presented to the Banking and Commerce committee a resolution, which I regret to say was not adopted, to give power to the Inspector General to call upon that double liability in order to replace any impairment that might take place in the
[Mr. Shaw.
capital of the bank, and thus enable the bank to continue in business if in the judgment of the Inspector General, concurred in by the minister, that was found to be advisable. The Banking and Commerce committee did not concur in that suggestion, but I am quite satisfied to await the process of events for the justification of the amendment that I proposed. I have no objection, and will raise no objection, to the .bill before the committee. It is satisfactory as far as it goes, but it will not, by any means, be a cure-all for the difficulties and infirmities of our present position.


Henry Lumley Drayton: What will this
cost? What will be the salaries?


James Alexander Robb: I cannot give my hon. friend
exactly what it will cost. He will observe that in the Supplementary Estimates we have made an appropriation of $50,000 to take care of it. I notice that the press understood that to be for the inspector general.' That is not the intention of the government, that is for the general expenses.


Mr. SHEARD:: Will that pay the wages
of all the staff?


James Alexander Robb: We estimate that it will, but
it does not make so much difference what the cost is, except that we want proper and efficient administration. We propose to assess the banks for the cost.


Henry Lumley Drayton: That is merely an assessment on business.


James Alexander Robb: It will be along exactly the
same lines as my hon. friend's friends introduced into the inspection of corporate trust and loan companies. We copied that.


Henry Lumley Drayton: I am not objecting. I will go a little further than my hon. friend now that he brings this matter up. In connection with the Insurance bill, why is he not rebating to the insurance companies what they had to pay out for the trust companies, so that each bill would stand on its own bottom? There is no reason in the world why he should not.


James Alexander Robb: We have amended the act this year.


Henry Lumley Drayton: But the arrears
have not been looked after, and they ought to have been. I am pointing out that this is merely an extra cost on doing business. The bank is going to take it out of the people, as everybody knows.


James Alexander Robb: I think so.

Bank Act


Mr. WOODSWORTH:: It is not anything
like so heavy an assessment on business as a bank failure would be.


Henry Lumley Drayton: That again is
perfectly right. There is also no question about the advisability of keeping banks running, and that was my idea at any rate as to what the legislation of 1914 was for. There will be opportunity in the future if only somebody is courageous enough to handle it in order to see that banks will not fail. Subsection (5) reads:
The minister may appoint or employ on the recommendation of the Deputy Minister of Finance and the inspector, such persons with training and experience and such clerical assistants as may be deemed necessary to carry out and give effect to the provisions of this section. Persons so appointed or employed shall receive such salary or remuneration as may be fixed by the minister.
Does my hon. friend not think the House should vote the salaries just as in the case of any other government employee?


James Alexander Robb: Hereafter, that might be
reasonable, but we do not know just at what salary we can secure an efficient officer. The report will be made to parliament of what it does cost.


Henry Lumley Drayton: Surely it should appear in the Estimates next year.


James Alexander Robb: I have just said so.


Henry Lumley Drayton: There should
not be carte blanche continuing, a right in the minister to pay just what he wants.


James Alexander Robb: No; I think that is a protection for the department and for the minister himself; hereafter, once this gets going, a reference should be made to parliament and it should be voted in the regular way. I quite agree with my hon. friend to that extent.


Henry Lumley Drayton: Does my hon.
friend think the statute is very well worded if that is the idea?


James Alexander Robb: It has been carefully considered.


Henry Lumley Drayton: Has that ever
been considered before? This subsection apparently gives the right to the minister to fix salaries just as he likes.


Jacques Bureau: This year they do not
know what the staff will be, what the equipment of the branch will be. It is hard to say that so-and-so will get so much and so-and-so, so much. As I understand the Acting Minister of Finance, next year when the branch
is organized, there will be inserted in the estimates an item covering each employee under the heading of the office he occupies and his salary. This will be submitted to parliament and voted before he can be paid.


Henry Lumley Drayton: What control
can there be by parliament when this legislation gives the minister the absolute right to fix the salary?


James Alexander Robb: How does the matter work
out in the Insurance Act? I have not had time to look into it.


Henry Lumley Drayton: The salaries in that case are voted. They come down in the ordinary way. This very year there is an increase in the Estimates for the Superintendent of Insurance.


James Shaver Woodsworth: Is there not a
statutory provision for his salary? I believe this has been exceeded by a supplementary amount granted under an estimate.


Henry Lumley Drayton: My hon. friend is quite right, and the analogy is also correct having regard to this matter. The office of the Superintendent of Insurance was created for the purpose of inspecting insurance companies. The theory was that the insurance companies should pay for the inspection, just as the banks are to pay for the inspection under discussion. Apparently, there is practically an arrangement with the insurance companies, and the original act, which threw the Lability on the insurance companies, fixed the salary of the superintendent, as a matter of fact, at So,000. The House, of course, would have the right to increase that salary if they wanted to do so, but I doubt very much if they ever had the right to charge that increase of salary as against the insurance companies because under the act, which really was a matter of arrangement and agreement, he was to get $5,000 and it was put in the act specifically to fix that salary. That is some years ago, and as salaries have been climbing, the salary for this year is $10,000 according to the estimates. I do not know whether that will all be assessed against the insurance companies. I think it will.


James Alexander Robb: Yes. I may say further that representations have been made to the department on behalf of some of the insurance companies that the work the inspector is doing is worth more and that we might well pay him more. There have also been complaints filed with the department regarding the salary
Bank Act

of the Superintendent of Insurance, but those complaints have come from companies that he has rounded up for the protection of the public.


Henry Lumley Drayton: Doubtless if he treads on a company's toes, that company will not be agreeable to doubling his salary.


Andrew Ross McMaster: The public may be
grateful for the protection given.


Henry Lumley Drayton: That is quite another thing; they ought to be but they rarely are. I fancy they know to a certain extent that all these things are just mirrored in the final cost to them; they pay a somewhat higher rate of insurance.


James Shaver Woodsworth: Is it not a poor practice to have part of a salary provided for by statute and the other part dependent upon an estimate? Should not the whole salary be provided for by statute directly or else voted from year to year?


Henry Lumley Drayton: I think we shall have the opportunity of voting $10,000 this year. What is the view of the Minister of Customs regarding the wording of that section? It does seem to give absolute discretion to the minister, and that discretion apparently is permanent.


James Alexander Robb: Someone must assume the
responsibility until we get the department organized and operating.


Henry Lumley Drayton: Of course.


Jacques Bureau: I would provide for it in the act in view of the peculiar conditions that exist. You are creating a new branch which has got to get down to work; to do that a staff must be provided and they must be paid. Someone must determine for the time being what that staff shall be paid and the logical person to do so is the head of the department. When the staff is properly organized, should a minister come back and seek to have a change made then there might be criticism.


Henry Lumley Drayton: I merely want to get a frank statement from the government.


Jacques Bureau: That is my personal opinion, and I think it is a sound one.


Henry Lumley Drayton: Then I gather that this power is intended merely to enable the thing to get started and that all the salaries will be provided for in the ordinary way after the organization is set going.


James Alexander Robb: That is quite reasonable.


Henry Lumley Drayton: If that is the understanding I do not want to press the point.


James Alexander Robb: They could not be paid if the salaries were not voted.


Henry Lumley Drayton: Oh yes, they
could be paid under the act.


William Alves Boys: Does the minister contend that under the provisions of the act the salary to be fixed for the inspector general can be lessened in the future? Suppose it was fixed at $25,000, say; when the matter came before parliament the following year, if it were thought that a good man could be got for $20,000-


James Alexander Robb: I know what my hon. friend is leading up to, but I shall not say it; in fact, I do not think that the hon. gentleman would imply anything of the kind. But suppose that we determine, as we shall, upon an efficient and capable man; if there should be a change of government and the new administration felt that he was not as good as he had been considered to be, they might reduce his salary. They would have a perfect right to do so, although they would have to defend that action before the country.


William Alves Boys: I do not like the case my hon. friend puts; that is not likely to happen, and it is not on that ground I base any criticism I have to make. Subsection 2 provides for the appointment of an officer during good behaviour and he may be removed only by reason of misbehaviour, incapacity, inability or failure to perform his duties. In other words, he is really appointed for life and good conduct.


Jacques Bureau: And efficiency.


William Alves Boys: Further on we find that the salary may be fixed by the Governor in Council on the recommendation of the minister. Surely when the salary is once fixed, and the officer is appointed for life and has entered on his duties on that basis, it could not thereafter be reduced. It might be increased, but it certainly could not be reduced; and that is too much responsibility and power to vest in the minster. There certainly should be some limitation. Possibly later on it might be found advisable to increase the salary, but to start with let us retain control at all events.


James Alexander Robb: I am not going to dispute the interpretation of the law; my hon. friend is a lawyer and I am not. I remember however that when I appeared before the committee on Banking and Commerce with a bill which was not quite so drastic as this, in regard to

the appointment of the inspector, the committee, if my recollection is correct, was unanimous in the view that we should make this provision ironclad so that the government might not be able to get rid of an efficient man. It was felt that the officer should be free to perform his duties without fear of being harassed by any government of the day. That is why these sections are drafted as they stand.


William Alves Boys: I absolutely agree that the officer appointed should be free from any improper influence and should have a free hand so long as he does his duty faithfully and capably. But that is not my point; I am pointing out that whenever you fix a salary for the lifetime of an official it may not be reduced although it may be increased. And that is going too far. It has been suggested, in answer to this criticism, that the salary will be voted each year by parliament; the implication is that parliament will be in control. But that is not so; parliament will not be in control. The salary being once fixed and the officer appointed for life, he will get that salary for the rest of his days.


Andrew Ross McMaster: The point raised by my hon. friend (Mr. Boys), was discussed before the committee. The original bill presented to us had a maximum of $25,000, but a number of us felt that it was a mistake to have any exact amount stated in the bill. It would be difficult to get a man under $25,000 if that maximum were placed in the bill; it would be a sort of notice to all and sundry that the position was worth that much and that they had better ask for that sum if they were applicants. It was thought by the committee that it would be better to leave the matter to the discretion of the minister, as it might happen that a good man could be obtained for less than $25,000, while an exceptionally capable officer might be worth more. We felt-I presume, bearing in mind the present incumbent of the position-that he would be as careful of the people's money as he would be of his own and it would not be unwise to allow this matter to rest with the minister.


William Findlay Maclean: I do not think that the present parliament can bind any future parliament, and such a view ought not to obtain. We do not propose to limit any future parliament in any respect and I will never vote for anything that may interfere with the freedom of a subsequent parliament. When we legislate to assess the banks to meet the salary of this official I do not think that we should have it understood in any way that the inspector general shall be regarded as an
Bank Act
official of the banks; he is a servant of the people whose business it is to protect their interests, and the banks have no right to have any say either in his nomination or as to the performance of his duties. In that office he should be absolutely independent.


James Alexander Robb: That is understood.


William Alves Boys: I cannot agree with my hon. friend. Let me give one illustration which I think in itself should suffice to show that he is wrong. When a man is appointed to the Supreme Court of Canada at a certain salary, will anyone argue for a moment that parliament can later on reduce that salary? Parliament can increase it, but a contract has been made with that judge for life, subject to good conduct. I am not suggesting that we should fix the salary in this bill, but I am suggesting how we should retain some control over it.


James Alexander Robb: How?


William Alves Boys: By having the minister name the salary in the first instance, and thereafter parliament.


James Alexander Robb: I took the bill to the Banking and Commerce committee with a maximum.


William Alves Boys: I agree with the hon. member for Brome (Mr. McMaster) that that was a mistake.


James Alexander Robb: They removed the maximum.
I think my hon. friend had better not insist on any salary being inserted.


William Alves Boys: I have just said that I agree with the member for Brome upon that point. But I do suggest that parliament should retain control. We have been assured by two ministers that parliament will have control because each year the estimates must come before parliament. But if you cannot reduce the estimates, where is there any control?


Jacques Bureau: A member cannot move to increase any item in the estimates, the warrant of the Governor General being necessary for this purpose, but there is nothing to prevent him moving that an estimate be cut down.


William Alves Boys: If this is fixed by the minister under the act, and if the officer appointed takes the position with his salary so fixed, and the position is for life, how can you reduce the salary? You would be breaking a contract if you made any reduction.


Andrew Ross McMaster: I think the member for South Simcoe is right, in that the contract once made with the man who is to fill this
Bank Act

office must stand. You cannot expect a high class man-and it would be useless to have any other-to give up his present work unless you hold out to him a fair chance of continued employment for a reasonable number of years at a fair salary. We were all agreed on that in the committee. I think parliament will have to trust the minister to make a reasonable contract.


William Alves Boys: Then my hon. friend agrees with me that parliament will have no control in future; it can only increase the salary?
Mr. MoMASTER: Yes.


Jacques Bureau: The Governor in Council could.


Andrew Ross McMaster: If the salary were
reduced, the man could not be obliged to remain in the position.


William Alves Boys: I think he could sue for breach of contract.


Andrew Ross McMaster: I do not think that parliament is going to turn around a year or two after the minister has engaged a man and reduce his salary. It should not be done at any rate.


William Alves Boys: It is being done on the National Railways just now.
Mr. MoMASTER: I think parliament would be well advised if they left the choice of the man and the fixing of the salary to be paid him in the hands of the finance minister. That must be done in order to have an effective choice. I think it was wise to eliminate the maximum, lest that be taken as notice to all and sundry to ask for that amount. It might also be a deterrent in getting the very best man who might desire a little higher salary. I think the member for South Simcoe is perfectly right, that a contract for a term of years has got to be made, during which time the salary could not be reduced. But if we are to have this branch start properly we must give the minister a free hand to pick the best man he can get for this very important position.


Mr. CLARK:: Is it absolutely essential
that the items for these salaries should appear in the estimates?


James Alexander Robb: I think it would be quite
reasonable that the procedure in the Insurance department should be followed here, and that parliament should know what is being paid.


John Arthur Clark: I agree that it is reasonable; but is it necessary under the law?


William Findlay Maclean: Yes.


James Alexander Robb: The salary of the commissioner appears in the list, but the salaries of the other officials do not.


John Arthur Clark: The minister says that annually we will be able to discuss in the estimates the various items for the officials, and the Minister of Customs agrees with him. Under subsection 12 I notice that all salaries are to be paid out of the consolidated revenue fund, and that an assessment shall be made annually to recoup the fund for the amounts expended. Under those circumstances why should it be necessary whether as a matter of practice or legally, to have these items appear in the estimates? It seems to me that it is only a matter of courtesy to parliament if the government decides each year to put these items in the estimates, because these salaries are first paid out of the consolidated revenue fund, and then the fund is recouped by an assessment on the banks. I do not think the minister is quite right when he says that it is necessary for these items to appear in the estimates.


James Alexander Robb: I did not say it was necessary, I said it was reasonable. I maintain that position. We must come before parliament to have this money voted, and any member can ask for details, and if not satisfied he has the same right as on any other item to move for reduction of the estimate.


John Arthur Clark: I am only asking for information. My interpretation of the bill as it stands is that the minister can at any time draw on the consolidated revenue fund for such sums as may be necessary to pay these salaries. Therefore it is not necessary to ask parliament to vote these salaries at all.


Robert James Manion: Is the salary to be paid
fixed yet?


James Alexander Robb: No.


Robert James Manion: The figure of $25,000 has
been mentioned in the past and in the discussion to-day, and it was inserted in the first copy of the bill. I do not believe in opposing the payment of proper salaries, but we should not forget that our high court judges receive about $15,000-


Henry Lumley Drayton: They receive

Mr. MoMASTER: The Chief Justice of the Supreme Court receives $15,000.


Robert James Manion: All right-and our cabinet ministers receive about $14,000. Therefore I submit that an honourable position of this

Bank Act
kind should not carry any such salary as $25,000. I believe there is a tendency in Can-. ada to-day to fix salaries too high for many positions, and I think parliament should put itself upon record that, if it be at all possible, we should get a thoroughly capable man for a salary of $15,000-and we can get many good men at that figure. I hope when the time comes to settle the amount of salary the government will take into consideration the fact that able lawyers are ready to accept judicial positions at $10,000 a year. And certainly we should be able to get a thoroughly capable man to fill a position of this sort for not more than $15,000 a year.


William Findlay Maclean: Why not get a
high class bank manager?


Robert James Manion: I do not think that is at
all necessary. There are presidents of banks in this country who might not suit for this position at all, and there may be men who are not presidents of banks but who have had a good experience in banking and auditing which would qualify them for the position.


James Alexander Robb: I do not think the government will have any difficulty in finding someone for the position. There is a stack of applications quite high now.


Henry Lumley Drayton: Is this to be a life job?


James Alexander Robb: It is to be as provided in
the bill.


Henry Lumley Drayton: We would
simply like to know what we are doing. What does the minister say as to its being a life job?


James Alexander Robb: I will read the clause:
The inspector shall hold office during good behaviour, but may be removed from office by the Governor in Council for misbehaviour or incapacity, inability, or failure to perform his duties properly.
I think that is a very clear statement.


Henry Lumley Drayton: But is that anything more than obtains with reference to the position of any member of the permanent staff?


William Lyon Mackenzie King: It is intended
to be the same.


Henry Lumley Drayton: If we are going
to do anything more we will have to do as was done in the case of the Audior General, who has a specific clause in connection with his office and cannot be removed, as I recollect, except on the vote of both Houses. But my hon. friend looks upon it as permanent; it ought to be permanent. Another question:	Does my hon. friend want
to have this salary voted, or does he not? If he does he ought to add after the words "as may be fixed by the minister" the words "and thereafter by parliament."


Jacques Bureau: And voted by parliament.


Henry Lumley Drayton: "Fixed by the
minister and voted by parliament;" that is just as good. I am not objecting to it one way or the other; I just wanted to know what is intended to be done.


James Alexander Robb: I have no objection if ^the
committee desire to add the words and voted by parliament." But if the conditions were reversed and my hon. friend were sitting here I would have confidence in his seeing to it that proper salaries were voted. Indeed, you have the double protection in that other people are to be assessed for the cost and if too much is paid they will object.


Henry Lumley Drayton: I am not objecting; my hon. friend may do anything he likes, but let us know what we are doing, that is all. If my hon. friend says the amount ought to be voted, put it in; if he wants to have the door closed to parliament, leave it out. My only desire is to make it clear. My hon. friend must not think that the banks will ever be able to do anything toward seeing that a proper salary is paid.


William Lyon Mackenzie King: I think what
my hon. friend has in mind is covered by the supplementary estimates, wherein it is provided that an expressly fixed sum be voted by parliament for these particular payments.


William Alves Boys: Even if that be so for this
year, how can it be contended that it will apply to the years to come? Subsection 11
says:
The inspector shall be paid a salary fixed by the Governor in Council on the recommendation of the minister.
That means either that the salary that is to be fixed will be a salary for life, or that the Governor in Council on the recommendation of the minister may at any time thereafter fix the salary at whatever sum he likes irrespective of the action of parliament. That is what I object to.


James Alexander Robb: The committee were most
insistent upon that. A maximum was put in there, but the committee thought the minister should have a free hand.


William Alves Boys: The House does not always
do what committees do. I found that out very recently in connection with church union, so I do not think that is the last word to be
Bank Act

said on the subject. If the minister frankly says he is reserving this power to himself and his successors in office and that they are to be above parliament for all time to come, I agree he has an act that does that. But when I make this suggestion he answers me by saying, and so does the Minister of Customs, that it will be for parliament in the future. It cannot be for parliament in the future under the section as it stands.


James Alexander Robb: If my hon. friend desires to
put in a safeguard by stating a maximum, I will not oppose it.


Henry Lumley Drayton: That is not our
suggestion.


William Alves Boys: I have already stated that I
am not in favour of that. The language stated by my hon. friend (Sir Henry Drayton) is perhaps even more concise than mine, and it would give parliament control in the future. The minister is taking power here to appoint this man and the whole staff without one of them being under the Civil Service Commission. I have the utmost confidence in the present minister and I do not suggest for a moment that he would do anything improper. But I do not think it is a right thing to do. It certainly would afford a splendid opportunity for patronage if such a thing was ever in the mind of the minister.


James Alexander Robb: Does my hon. friend desire
to add after the word "minister" the words "and hereafter voted by parliament"? If so,
I have no objection.


Jacques Bureau: Why "hereafter"?


William Alves Boys: The salary is fixed in the
first .place by the minister. The Minister of Customs will have to watch the "hereafter" all right.


Henry Lumley Drayton: It will be necessary also to add the same words after the word "minister" in the last line of subsection 5.


The CHAIRMAN:: Moved by Mr. Robb that the words "and voted by parliament" be added after the word "minister" in the last line of subsection 5, and that the same words be added after the word "minister" at the end of subsection 11.


[Stage Direction]
Amendments agreed to.
James Alexander Robb: I desire to amend subsection 6 by adding after the word "charge" in the sixth line of the subsection the words "on the premises." so that it will read:
The inspector, from time to time, but not less frequently than once in each calendar year shall make 
pr cause to be made, such examination and inquiry into the affairs or business of each bank as he may . ^eem to be necessary or expedient, and for such purposes take charge on the premises of the assets of the bank or any portion thereof.
Mv hon. friend will recall that he brought this point up on the resolution. This will clarify it.


Andrew Ross McMaster: Just what is the purport of that?


James Alexander Robb: When the resolution was
before the House there was some question as to just what was meant by the inspector taking charge of the assets of the bank. What is really intended is that when the inspector goes into the bank, he says to the general manager:	"I will take possession of
your assets, your deeds and certificates and all that you have, while I am here," and he puts them under seal.


Henry Lumley Drayton: I thought it was an omnibus affair at first, but the minister says not. This does not mean that the inspector is taking over all the assets of the bank. It simply means that he is to have as much right as a bank inspector, and a bank inspector must have the right, the very moment he goes into the office, of taking charge of the assets, or otherwise funds might be switched from the safe, or put back into the safe. This will make it clear that our inspector will have the absolute right to go into any bank premises and take over everything on the premises, for the purposes of his inspection.


Mr. MARLER:: The words are quite unnecessary.
Mr.WOODSWORTH:	Why should those
words be added? I do not see that they improve the clause, if it -has been the custom of the ordinary inspector to take charge of the assets in this way. That is all the inspector general can take charge of anyway.


James Alexander Robb: It does not weaken the clause at all. It clarifies it.


Joseph Tweed Shaw: It limits the power.


James Shaver Woodsworth: I do not know
what other assets there might be. I presume the assets in reality are in the head office, or rather, the title to the assets is there, and that is all we are speaking of in any case. There might conceivably be cases in which certain assets might not be in the head office, actually on the premises, and yet ought to be sequestrated for the time being for the purposes of the federal inspection.

Bank Act


Andrew Ross McMaster: That is not the meaning- of the words, for the clause says, " shall take charge on the premises of the assets." There may be other places. Honestly, I do not think you are improving the clause very much by that addition. It seems to me the inspector cannot take charge very well anywhere except on the premises. He cannot get twenty miles away, and say: "I am going to take charge of the assets here."


Henry Lumley Drayton: I was content to take the explanation of the minister.


[Stage Direction]
Amendment agreed to.
William Findlay Maclean: Subsection 16
says:
The government shall not incur any liability whatever to any depositor, creditor or shareholder of any bank-
That is almost a confession, so far as this act is concerned, that the government is absolved, but I hope it still leaves it open for the government to assume some liability in connection with the depositors of the Home Bank.


Mr. GOOD:: I have an addition to suggest
to subsection 16 of 56a, as follows:
And further, that a copy of this subsection, printed in large type, shall be posted in a conspicuous place in everv office of every chartered bank in Canada where deposits are accepted.
The reason why I submit this is necessary is that there has been a misunderstanding, fairly widely prevelant in Canada, as to the responsibility of the government in respect to the safety of deposits and if inspection is established, as is now being provided for, it will make it more evident in the minds of many that the government is assuming a greater responsibility. It was pointed out in committee last year by Mr. Fielding that he objected to inspection, because he thought it would involve a greater degree of responsibility. That, I think, was a mistaken view, but at all events it indicates the attitude of many people towards the question of governmental responsibility. Now if the Home Bank depositors are reimbursed, it may lead also to an exaggerated idea on the part of the public of the responsibility of the government in this connection. It does seem to me very desirable that a public notice of the exact responsibility of the government should be posted up in every office of every bank, so that nobody can claim in the future that he was misled, or that he misunderstood the real situation. It seems to me that probably the best way to do that would be to have this particular subsection, which defines the legal responsibility of the government or its lack
of responsibility, posted up in the branches of all banks, so that depositors may be notified of the exact situation. I beg leave to move, Mr. Chairman, that addition to subsection 16.


James Alexander Robb: The clause under consideration is simply a declaration of the general law.
I desire to submit in this connection, for the consideration of the committee, the opinion of the Deputy Minister of Justice:
The proviso set forth in subsection 16 of the proposed amendment of the Bank Act denying liability on the part of the government for any loss or damages sustained by depositors, creditors, shareholders or other persons by reason of anything done or omitted to be done under the section of which it forms part, is in my opinion declaratory of the law. The government is not at common law responsible for the default, misfeasance or nonfeasance of its officers or servants, and there is no authority for paying indemnity or compensation for losses suffered thereby unless it be specially provided by parliament. The proviso is incorporated only for the purpose of making it clear by express provision that the common law rule applies in this particular case in which new duties are created and assigned by the amendment in question.
Now supposing we adopted the suggestion of my hon. friend from Brant (Mr. Good), what would happen? Persons newly arrived in Canada, or people who do not go into a bank every day, might go in and see this notice posted up and say: ''Oh, this bank is in danger", and they might immediately draw out their money, and in that way create a run on the bank. Or it might bring about another condition. As every hon. member knows, we have 3,000 miles of international boundary, and the most thickly populated parts of the country are adjacent to that line. People going into Canadian banks and seeing this notice posted up might very naturally think that our banks were not safe, and draw their money out and deposit it in banks in the United States which are not as solid as our Canadian banks. There is no good purpose to be served by the suggestion of my hon. friend which has already been threshed out in the committee on Banking and Commerce. I opposed the suggestion there, and I oppose it here.


Herbert Meredith Marler: In addition to what the
Acting Minister of Finance says it seems to me that if my hon. friend from Brant (Mr. Good) will read section 16 carefully-and he probably has-he will find it will be perfectly useless simply to post up that one section alone because that section has reference to other parts of the act. This particular section would therefore be perfectly unintelligible to anybody reading it unless he had all the other sections before him at the same time. I simply throw that out as a suggestion to my hon. friend.
Bank Act

Mr. MeMASTER:	Is there not this consideration also:	I think it is an impossible
task for any legislature to, in advance, try to prevent misconceptions which may arise in the minds of certain people. It cannot be done; and I am afraid that if you try to do it in certain instances, as you cannot do it in all, you may cause more harm than good by it.


Joseph Tweed Shaw: Suppose some of these gentlemen should read this provision in the Bank Act, do you think there is any more danger of misconception in that case than if they read any other notice?


James Alexander Robb: But this will not apply to
any particular bank; it will be general.


Joseph Tweed Shaw: The intention of the hon.
member for Brant is to have some sort of placard which shall say "Section 56, sub-section 16, of the Bank Act of Canada reads as follows". That is all.
Mr. MeMASTER: In answer to the question propounded by the hon. member for West Calgary it would appear to me first of all that what the hon. member for Brant is endeavouring to attain is to give notice to people who are more or less unfamiliar with the situation in Canada, because every educated and instructed person in this country knows that the Dominion government has never held itself responsible in any way, shape or manner for the safety of deposits in banks.


William Findlay Maclean: Yes, deposits in
the government savings banks.
Mr. MeMASTER: That is true, but we are discussing chartered banks. I say that the government has never held itself responsible for the safety of deposits in those banks, therefore it is only the ignorant that the member for Brant, in his laudable endeavour, is trying to protect. But my view is that it will be no real protection for the ignorant, and that we will err if we attempt to try to prevent the mistakes and troubles that arise through people's ignorance. The government,
I am afraid, cannot do it. If the government tries to do it, although it may succeed in some cases, in the long run it may do more harm than good.


James Shaver Woodsworth: Like the hon.
member for Brant I cannot follow the reasoning of the hon. member for Brome at all. Surely in connection with all our legislation we try to give as wide publicity as possible.
I know that with regard to the game laws we have the provisions posted up in prominent places so that the people will fMr. Marlen.]
have some knowledge of those statutes and will be prevented from violating them. I know perfectly well that as respects fire risk in our northern forests notices are posted, even in the most inaccessible places, warning people of what may or may not be done respecting the lighting of fires. It seems to me that if this section is a declaration of what the minister says is the law on the matter the information ought to be spread as widely as possible among the people. Notwithstanding the assurance of the hon. member for Brome I am quite confident there are a very large number of persons throughout this country who have absolutely no idea of the law in this regard. Again and again in connection with our debates in the committee on Banking and Commerce it was said that almost anybody ought to know whether or not the banks were safe, and that in making deposits they took their own risk. In this particular instance it is simply spreading abroad this knowledge a little bit more widely, a thing we are accustomed to do in every other department of business. I know if you ship goods by railway you very often have presented to you the statement that they refuse to accept risks. In this way only can they avoid responsibility. But we have to use the railroad even though there is a refusal on their part to accept responsibility. It seems to me there is nothing whatever to be lost by taking the people into our confidence and frankly stating that they need not expect recompense from the government, although I must say that I do not think the government can altogether refuse to accept a certain responsibility from the moral standpoint even if they do refuse to accept responsibility on legal grounds.


Edward Joseph Garland: I think the remarks of the last speaker have very much force, especially when we remember that propaganda was carried on throughout this country encouraging the people to believe that the government was responsible, directly or indirectly, for the security of bank deposits. I may say that I quoted from the Financial Post an excerpt which has more than once been used in this House and is already on Hansard, to the effect that the Canadian banks, chartered under the Bank Act provided all safeguards for deposits, and that the depositor encountered no risk in placing his money in those banks. In all honesty and fairness if we are to offset that kind of propaganda it seems to me the best and most equitable way to do it would be to adopt the suggestion of the hon. member for

Bank Act
Brant. Personally I san see no objection at all to putting that suggestion into effect. In this matter my view is very much the same as in the case of immigration propaganda; that it is better to tell the whole truth than to circulate what may simply be half truths.
Amendment (Mr. Good) negatived.


William Charles Good: Just before you pass from
this item I want, on Mr. Spencer's behalf, to give notice that when this bill is proposed for third reading he will move:
That it be not now read a third time but that it be referred back to committee of the whole with instruction-


George Newcombe Gordon: I draw the hon. member's attention to the fact that this is not the proper way in which to give notice.


Henry Lumley Drayton: Six o'clock.


James Alexander Robb: Is not the bill through?


Henry Lumley Drayton: The amendment has been defeated, that is all.


George Newcombe Gordon: Shall the section carry?


Joseph Tweed Shaw: No.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


George Newcombe Gordon: All the sections have been passed except the title.


Joseph Tweed Shaw: I did not understand that they were all passed.


George Newcombe Gordon: There is really only one section. An amendment was moved by the hon. member for Brant (Mr. Good) which was defeated and the section was passed.


Joseph Tweed Shaw: I want to refer just for a moment to the amendment-I did not know whether it was passed or not-to subsection (6). The words "on the premises" were placed after the word "charge" so that the subsection would now read:
For such purposes take charge on the premises of the assets of the bank.


George Newcombe Gordon: That was passed and another amendment was introduced and voted upon and declared lost.


Mr. SHAWT:: It was passed so quickly that some of us who wanted to make some observations in connection with it were not able to make them.


George Newcombe Gordon: If that practice is followed, there is no reason why eveiy section cannot be reviewed.


Joseph Tweed Shaw: There should be no necessity at the outset for review. The insertion of those words materially limit the power of the inspector general. 1 do not think it is or was the intention that that should be done, and I think the amendment should be withdrawn. The language as originally framed in the committee was adequate and satisfactory for the purpose.


James Alexander Robb: I hope my hon. friend is not right. It was not the intention at all to limit the power of the inspector general. It. was just to clear it up. My hon. friend perhaps was in the committee at the time when this question was under discussion.


Joseph Tweed Shaw: I did not hear the discussion.


James Alexander Robb: There was some objection to the section when it came up and these words were inserted to clarify it.


William Findlay Maclean: On the advice of the Minister of Justice?


James Alexander Robb: No, I have not consulted him about it. The balance of the bill was submitted to the Minister of Justice. My hon. friend will recall that some persons said that this was unreasonable; that the inspector would go and take possession of the bank and tie it all up. The real intention is that he take possession of all the assets in the bank. Among the assets in the bank, there may be deeds for property in other parts of the country and securities held by the bank. It is the usual procedure of any inspector going into a bank. That is all it means.


Joseph Tweed Shaw: Certainly, the procedure
suggested by the minister is the only possible one under the circumstances. The bank inspector goes into the bank, he takes charge of the assets; he seals them and then he verifies them. But there may be assets that are not in the bank at that particular moment and under the amendment he has no control over them. He may desire to go out and appraise certain assets; there may be assets on the way to the bank; all sorts of things may happen, and he has no control over such assets.


James Alexander Robb: I think he has control over them. If he has not, we will clarify that point.


Edward Joseph Garland: I said in the afternoon that I thought the addition of these words was wholly unnecessary and that
Bank Act

they were intended simply to add confusion to the act. The act itself and its terms are very clear that the inspector shall for such purposes take charge of the assets. Why confuse the whole thing by adding those words "on the premises"? It must be clear that the powers of the inspector will be governed by the practice in the past in a matter of this kind. I am afraid this amendment will simply increase the difficulty of the inspector in carrying out this section of the act.


James Alexander Robb: If the committee will let the bill go through, I shall have this matter looked into carefully by the Justice department, and if there is any doubt about it I shall have it corrected through the other House.


[Stage Direction]
Title agreed to.
George Newcombe Gordon: Shall I report the bill?


Edward Joseph Garland: I wish to ask for an assurance from the minister that the passage of this bill at this time will not preclude amendments to the Bank Act that may be sent forward to this House by the Banking committee. Indeed, one was sent forward and reported to the House this afternoon by the Banking committee.


James Alexander Robb: It is the privilege of any hon. member to bring in an amendment to any act, and my hon. friend has the same right as I have in that regard. But as I stated earlier in the day, it is true there was a report adopted by the Banking and Commerce committee this morning and that report was presented to the House. It has not yet been considered by the House, and I do not want to anticipate what the House may do or to make any commitments.


Edward Joseph Garland: (Bow River): There will be no question that the report will be presented to the House for concurrence?


James Alexander Robb: That is entirely with the Banking and Commerce committee, or with the chairman. I am not going to obstruct it.


William Charles Good: Regarding the matter that has just been raised, I understand that any member can move concurrence in a report of any committee that has been presented. It is quite in order to move concurrence in this report at any time.


James Alexander Robb: The Chair will determine that. Bill reported.


CUSTOMS ACT AMENDMENT
[Stage Direction]
The House resumed from July 4 consideration in committee of Bill No. 236, to amend the Customs Act (Hon. Mr. Bureau), Mr. Gordon in the chair.
On section 1-Limitation	of allowance
upon brittle goods imported by railway or vehicle.
Henry Lumley Drayton: Why should the House consider this bill to-night? What is the justification for this legislation?


Jacques Bureau: It is to meet the requirements of the trade. When goods are damaged in transit either by water or by water and land there is an abatement of duty. A period of fourteen days is allowed the claimant in which to have the damages assessed. There is a second provision in regard to damages accruing to perishable goods such as vegetables and fruit, in which case the period allowed for assessing the damages is three days. Under section 79 of the act, providing for damages to perishable goods, there are included the words:
Brittle goods, such as crockery, china, glass and glassware.
The importers of these particular goods claim that three days is not long enough to enable them to ascertain the extent of damage sustained; the goods are bulky, they are hard to transport and much incovenience is involved. . They therefore ask that these goods be removed from section 79 so that the general provision of fourteen days shall apply to them as well as to all other goods.


Henry Lumley Drayton: Why is the
period of fourteen days fixed upon?


Jacques Bureau: I do not know. That
particular regulation did not originate with me and I have never taken the trouble to look into the history of the matter to find out what inspired the author of the act to fix upon fourteen days. The fact is that this has been the provision for a number of years; it is altogether arbitrary, but it meets the convenience of the trade.
Sir HENRI DRA\TON: Has the period of fourteen days been found satisfactory?


Jacques Bureau: We have never had any
complaints.


Henry Lumley Drayton: Will the 15
per cent apply to brittle goods?


James Alexander Robb: Yes.

Customs and Excise Act


Henry Lumley Drayton: The 15 per
cent limitation applies to perishable goods and also to these brittle goods.


Jacques Bureau: They simply asked us to
remove brittle goods, such as crockery and glassware, from the category of goods in regard to which the period of three days applies, and we have done so. No representations have been made in regard to the percentage in the case of these goods.
Bill reported, read the third time and passed.


DEPARTMENT OF CUSTOMS AND EXCISE ACT AMENDMENT
[Stage Direction]
Hon. JACQUES BUREAU (Minister of Customs) moved the second reading of Bill No. 237, to amend the Department of Customs and Excise Act.
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Gordon in the chair.
On section 1-Deputy Minister and Assistant Deputy Minister substituted for Commissioner and Assistant Commissioner.
Mr. LEWIS:: As a result of this change
will there be any difference in the salaries paid these officials?


Jacques Bureau: No. No change of salary
is involved; it is only the nomenclature we wish to change. All other officers in the service occupying similar positions are designated deputy ministers and this is to bring this department into conformity with the rest. The present titles of commissioner and assistant commissioner sometimes cause embarrassment and the officers of the department themselves have requested the change.


Henry Lumley Drayton: I do not know
that there is any objection to the proposal. While there is a good deal of wording in connection with the section I fancy it is merely to cover the different activities ol the officials. The section deals with another matter, however, and I think the minister should give an outline of what is going to be done in regard to the collection of these taxes. What is proposed to be done under this legislation? what changes are anticipated, what savings can be brought about, and what superior efficiency can be attained?


Jacques Bureau: I explained the matter fully the other day when the resolution was under consideration. The officers are convinced that by merging all collecting departments under one head an economy can be effected. I cited 268
the case of Quebec province as one with which I was more familiar. In that province we have customs ports in all the large centres as well as in the smaller places such as Sherbrooke, Shawinigan Falls, Three Rivers and Grand Mere where there are industries and manufacturing activities in operation. For purposes of income tax we have two offices, one in Montreal and one in Quebec with two different staffs. They are absolutely separate and they do nothing but collect the income tax and the business profits war tax. Our idea is to utilize all the officers who are collecting either excise or customs taxes to collect the income tax. In this way we expect to save a good deal in the way of rent as well as in regard to the personnel engaged in the collection of the taxes.
The Inland Revenue and Customs departments were absolutely separate up to 1920, when an act was passed for their merger, but nothing was done; in 1921 the merger began and was completed in 1922. To-day. instead of having duplicate offices and duplicate sets of officials in every port, we have but one office and one set of officials, and the work is running very smoothly and satisfactorily. The first object was to bring all collections under one head; the second, to save money and secure greater efficiency. The question was raised the other day that it would be very difficult to educate these men in the collection of taxes, but the only additional tax they will have to collect is the income tax. Apparently every man who is liable to income tax is able to make out his return. Therefore I take it for granted -although I have never had anything to do 'with the income tax except to pay the very little that I contribute to the exchequer according to my revenues, which are not very heavy-that the collection and administration of the income tax will present no unusual difficulties to these men. Of course, I am not talking of appeals, because they will be dealt with in the central office to which all disputes are referred. It ought not to take very long to instruct the customs officers, who are trained in the collection of revenue, to decide what should be returned in income tax, and as these men become conversant with this added branch of their work their instructors will be let out. and in that way we shall decrease the number of employees in the department. Usually a local man is better acquainted with the means of his fellow citizens and their liability to income tax, and therefore he is in a better position to require payment from them. Another reason for the change is that in the Customs and

Customs and Excise Act

Excise department we have auditors who go around the country inspecting the books of those who are liable to sales tax to see whether they make correct returns. The Income Tax department also has auditors who go around to ascertain whether those liable to income tax are making correct returns. Now, there is no reason why the system of auditing for income tax and for sales tax should be duplicated, and by this merger we shall get the whole work done by one set of auditors and effect a considerable economy without sacrificing efficiency. There may be difficulties, we do not say that we are going to accomplish this in a turn of the hand, but by co-ordinating the collection of all these taxes and securing co-operation from those engaged in the work so that one head will control the whole organization we shall avoid duplication and overlapping and secure greater efficiency from a smaller staff.


Mr. EULER:: I gather that it is the intention of the government to combine in the Customs department the collection of customs, inland revenue, sales tax and income tax, the particular purpose now being to combine the collection of income tax with these other collections?


Jacques Bureau: Yes.


William Daum Euler: With the object, of course,
of effecting economy. But the minister probably knows that these economies cannot be effected unless all these various collecting agencies are housed in one building. I draw this to his attention because of what obtains in the city of Kitchener-and perhaps in other centres as well-where we now have the customs and sales tax collecting office in one building, the express business of the customs office in another building on another street, and the income tax office in still another building in another part of the city. To make the proposed co-ordination effective, I think the government should study the situation with a view to housing these various services in one building, else the project will fail to a large extent to effect the hoped-for economies.


Jacques Bureau: That is the exact object of the bill.


William Daum Euler: I direct the attention of the minister to the necessity of studying the situation in the city of Kitchener.


Jacques Bureau: My hon. friend talks of
the express business. Some express parcels are very bulky and the collecting office must be near the railway. In regard to post office

parcels the customs officer must have room in the post office, otherwise every recipient of a parcel would have to take it from the post office to the long room and back again, which would entail danger of parcels going astray. We locate a customs officer at the post office for the purpose of opening parcels received by parcels post and appraising the contents for duty, and if the appraisal exceeds $100 there has to be a re-appraisal in the long room by men who deal with the larger amounts. But if we make the collector of customs also collector of income tax, I do not see why we would have to rent one building for him and another building for the collector of customs duties and sales tax.


William Daum Euler: I think the minister and I
are arguing for exactly the same thing. In the city of Kitchener a portion of the customs is collected in the post office building, the express part is in still another building, and the income tax office is in another part of the city.


Jacques Bureau: The express part has got
to be near the railway. It would be very inconvenient to have express parcels taken to a building in another part of the city for appraisal. It is different with freight. The cars are sealed and the appraisement is made when the cars are opened. The appraiser or the express officer will be at the office where the work can be more readily done.


William Daum Euler: The express customs office
in this instance is not at the railway. The express parcels upon which customs duty is levied are taken to another building entirely apart from the one in which the other items are collected. I think it would1 tend to efficiency to have them all in one building. The express customs office is not a railway building at all.


Jacques Bureau: That is a question that
deserves to be looked into. I have always been in favour of having all federal offices under the same roof so that when a man has occasion to deal with several offices he can find them all in one building.


William Daum Euler: I am quite in agreement
with that.


Mr. ROSS (Kingston):: Is there a customs officer at the post office in all cases?


Jacques Bureau: There is an appraiser in
the post office building in all the larger centres.

Customs and Excise Act


Henry Lumley Drayton: With regard to our experience in connection with customs and excise, I agree with my hon. friend; after all, he is only following what we started for him.


Some hon. MEMBERS:: Oh, oh.


Henry Lumley Drayton: What is the
laughter for? Is it possible that hon. gentlemen do not know that the act was passed by the former administration. I really thought everybody knew that. The minister said so himself; he gave us the date of the act as 1920.


Jacques Bureau: Yes, I did not change that.


Henry Lumley Drayton: Of course it
was not changed, but the minister is hampered in getting through his legislation by the laughter of hon. gentlemen who do not know the facts, who did not know that we had passed that act.


Jacques Bureau: I may be mistaken, but
does my hon. friend charge me with-


Henry Lumley Drayton: Oh, no, I only
charge the minister with having unfortunate supporters.


Jacques Bureau: We are satisfied with them.


Henry Lumley Drayton: The only thing they thmk they have to do here is to laugh. Sometimes they are right, but not often. Well, as I was saying, before we had this pleasant interlude, all that has been done in connection with the combination of customs and excise has been the carrying out of a well developed policy. The minister did not junk the act as was done in some other departments simply because the previous administration brought it in; he went on and carried it out, and he was right. There is a good deal of difference between the duties of excise or customs officers and the duties of officials under the Income Tax Act. The class of activity is different; the object of the investigation is different. It takes quite a long time to make officials competent in connection with income tax questions. The minister points out that this question of income taxation is a very easy thing.


Jacques Bureau: I was referring not to income taxation but to the collecting of income taxes.


Henry Lumley Drayton: The collecting
of income taxes, he says, is a very simple thing. I can remember, when the hon. gentleman was here and I was over there, the things 268i
that were said about the complexity of the income tax, the complexity of the returns, the complexity of the legislation. I invited hon. gentlemen to make any suggestions they liked in connection with the form which had to be filled in, with a view to simplifying it, but while I got lots of complaints I got nothing in the way of suggestions. The significant thing is that the act stands just as it was then so far as these collections are concerned and so far as the return made by the taxpayer is concerned. Well, that has all become simple-so simple 1


Jacques Bureau: I hope that my hon. friend in referring to my judgment on the income tax, is not attributing those remarks to me. As to my judgment with respect to the tax being simple, I said that personally I might be a little more obtuse than others, but it seemed to me a complicated thing. I base my judgment on the fact that my hon. friend himself said to every man on the street, "Get your form and make it out." In other words, he put too much up to the people in asking them to do a thing they could not understand.


Henry Lumley Drayton: Yet my hon.
friend or his government have not changed it, nor is there any thought of doing so.


Jacques Bureau: I never had anything to
do with it.


Henry Lumley Drayton: I admit that,
but the Acting Minister of Finance and the Minister of Finance have not changed it. My hon. friend practically admits he cannot make out his own tax return.


Mr. JACOBS:: Nobody can.


Henry Lumley Drayton: Another hon.
gentleman says nobody can; we are getting more confirmation. Are there any more? Well, everybody else apparently can, so we have got two.


Jacques Bureau: I am not so sure. If they were not shy perhaps you might have more than two.


Henry Lumley Drayton: Well, two will
be enough; that is pretty good fishing at the moment. My hon. friend says it is all simple because under the legislation for which I was responsible the people were asked to make out these forms. Well, the situation was the same before when all these attacks were made upon the system. He says they are simple because now people have not only to make them out but have also-
Customs and Excise Act


Jacques Bureau: I did not say they were
simple; I say they must be since the hon. gentleman has done that.


Henry Lumley Drayton: I am pointing
out that that is the reason given. That reason, of course, is absolutely fallacious and nobody knows it better than my hon. friend.


Jacques Bureau: Oh, no.


Henry Lumley Drayton: The way the
thing is done is the only way it can be done. It is at any rate the only way I see of doing it, and it is the fairest way of doing it. And this government, which is so ready to find everything wrong that we did, has not been able to make even a suggestion of an improvement.


Samuel William Jacobs: Does the hon. gentleman
lay claim to the invention of that system?


Henry Lumley Drayton: I lay claim to
nothing except that so far as I knew it was the only thing to do. If my hon. friend wants to debate the origin of the system and what ought to be done with it, I am content to do that. I would like to get the force of his interruption, and I pause for that purpose.


Some hon. MEMBERS:: Carried.


Henry Lumley Drayton: My hon. friend apparently interrupted for the sake of interrupting.


Samuel William Jacobs: Not at all. I put a question, and I will put it again:	Does the hon.
member lay claim to having invented that system, or was it not adopted from the American or the English systems?


Henry Lumley Drayton: I told my hon. friend that I did not lay claim to anything. After investigation I thought it was the best thing to do. If my hon. friend has anything better, perhaps he will tell us. He admits ne cannot make out the form, but of course under this legislation any customs man at any of these ports who has nothing to do with book-keeping and never had in his life will know all about it, and there will be no trouble. The thing is ridiculous. I say that any one who says that the present form is simple and that any one can look after it, does not know the form. It is as simple as we can make it. I would like to make it simpler, and I would like to have had some suggestions, when I was in charge that would have enabled us to get something simpler, and at the same time preserve the revenue, but I have never been able to get it. The present system works in this way: The forms are made out 
by the public and sent in to offices where we have men who have been taught to look after these matters as well as they can be taught, and their duty is to check up these forms and really to make the right assessment. I do not think it would be a good thing to transfer that duty to the collector of customs at any local port. It is the duty of these people particularly to make the assessment, and the taxpayer is looked after by the provisions as to refund. He is absolutely protected, and he ought to get, and did get when I was there, practically immediate refunds in the case of overpayment.


Jacques Bureau: I did not criticise the form or the system.


Henry Lumley Drayton: But I am pointing out to my hon. friend that the system as it now is means this: The returns are sent in, and the taxpayer then has nothing more to do with them; it does not matter what the post office address is. Then the proper assessment is made by people who are competent to make it, with the information bef jre them. More than that, not only is the assessment made as a result of the return which is sent in by the taxpayer, but it is also checked from information from a dozen and one different sources as to the man's business and all the rest of it. Dividend cheques, bond payments, and all that sort of thing are checked up for the purpose of seeing whether or not a fair return has been made. Now I do not think that can be done in the hundred and one offices to which my hon. friend refers-not a bit of it. If his idea is to utilize these places simply [DOT] as places where forms can be got and then handed in, and the proper checking will be done as it is now being done-


Jacques Bureau: The checking up will be
done in Ottawa just the same.


Henry Lumley Drayton: -I do not see very much wrong in it, but if my hon. friend expects to make collectors of income taxes out of the hundred and one collectors at the different ports he is going to find himself mistaken. He will have to get extra men in each one of those offices, and that would be only a greater expense. My hon. friend shakes his head. I do not know what it is costing him now to collect the customs tax, but I know it used to be 3.8 per cent. It may be a little lower, or it may be a little higher, but I think it is about that.


Jacques Bureau: I did not expect the question to-night, but I will find out what the figures are.

Customs and Excise Act


Henry Lumley Drayton: I think I am
about right, and if my hon. friend does not object, I am going to accept that as the figure.


Jacques Bureau: Until I find it is wrong, I will accept that.


Henry Lumley Drayton: I do not know
what it is costing my hon. friend in connection with income tax, but when I had to do with it it cost 2.2 per cent. I think it cost about 1J per cent less to collect the income tax than it did to collect the customs tax, and one reason why it costs more to collect the customs tax is that you have a concentration of offices in connection with the income tax, while you have a diffusion of offices in connection with the customs tax. That is frankly the real reason.


Jacques Bureau: How much did my hon.
friend say it cost?


Henry Lumley Drayton: I think it cost
my hon. friend about 3.8 per cent.


Jacques Bureau: In 1922-23 it cost 2.62 for
customs.


Henry Lumley Drayton: And the income tax cost 2.2. There is no reason why customs taxes should not be collected cheaper than income taxes, because you have not the amount of auditing and checking to do as in the case of the income tax, but the real reason is that we have a multiplication of offices in connection with customs tax, with ports all over the country.


Jacques Bureau: There is all the difference
in the world between them. You not only have more clerical work in connection with customs, but you have men travelling all over the country from one port to another, boarding ships, and so forth.


Henry Lumley Drayton: When my hon. friend looks after the income tax, he will find there is a great deal of checking up to be done.


Jacques Bureau: My hon. friend does not assume that we are going to abolish the head office, does he? I am not going to make the collector of customs the court of last resort. There is an office here in Ottawa where we have people who check up everything. We have a Commissioner of Taxation, and he is going to look after that checking up, but in the meantime we are going to educate the collectors of customs. My hon. friend surely does not pretend that because a man is a collector of customs he cannot learn anything about the income tax? It does not require
a person of more than ordinary intelligence to do this work. My hon. friend does not pretend that they are all supermen in the Taxation branch?


Henry Lumley Drayton: It has to be a better man than the hon. member for George Etienne Cartier, on his own statement, and a better man than the Minister of Customs, on his own statement.


Jacques Bureau: Certainly. I can find fellows working under me who can make out an income tax return better than I can.


Henry Lumley Drayton: If my hon. friend does anything more than simply use these outside places as places where the forms may be got and returns made, he is going to add to his cost just as sure as anything. An hon. gentleman says it will avoid the rush. I do not know how it will avoid any rush. The only rush is when people have held up their returns. There is no need for rush. All they need to do is to drop the return into the nearest post office box, and there are more post office boxes than there are customs offices. So I do not think there is very much in the question of rush. On the matter of auditors, my hon. friend is right. There is no question that an economy can be made in connection with auditors; it should have been made before, and I hope that my hon. friend will see that the auditors we now have are put together immediately in connection with both these taxes. There is the one place where a real economy can be made, and where there is something in this proposition.


William Charles Good: In regard to the point just raised by the ex-Minister of Finance I may say that I know one income tax station where one stenographer, a girl, apparently does all the important work. It is a fairly large station, and the man who is supposed to be in charge does very little. I think with a little training a person with ordinary intelligence can handle a great deal of this business.


[Stage Direction]
Section agreed to.
On section 2-Advisory board constituted.
William Charles Good: I should like to make a few observations on this clause.


Some hon. MEMBERS:: Oh, oh.


An hon. MEMBER:: Dispense.


William Charles Good: The other day when this matter was before the House in the form of a resolution I felt as though I could endorse the proposition definitely and warmly, but I am not altogether satisfied that the clause
Customs and Excise Act

as drafted here embodies the idea that the minister conveyed to the House when the matter was last discussed. In lines 3 and 4 we read:-
-the duty of the board shall be to investigate and study the various modes of taxation with the view of simplifying and improving the existing system.
Now, I am afraid that that may mean that this board shall have no powers to do other than to investigate existing systems or modes of taxation in Canada with a view to simplifying or improving what already exists. That is not the idea the minister gave us the other day, and I am going to propose the following alteration of the words:
The duty of the board =uall be to investigate and study various modes of taxation-
Leaving out the word "the" because it makes it apply definitely to the existing modes

-to the end that existing systems of taxation may be simplified and improved or a better system introduced.
I cannot support the proposal in its present form, but if the minister will modify it so as to enlarge the powers of the board to bring them into harmony with what he stated the other day it will be quite acceptable.


Herbert Meredith Marler: Will the hon. member be good enough to read his amendment again slowly?


William Charles Good: I shall read it again.


Jacques Bureau: The change proposed is in the fourth line where it states that it shall be the duty of the board to investigate?


William Charles Good: The amendment, beginning in the third line, would read as follows:
And the duty of the board shall be to investigate and study various modes of taxation-


Jacques Bureau: You are striking out the word "the"?


William Charles Good: Yes, striking out the word "the".


Jacques Bureau: I shall leave the question of grammatical construction to my English friends to decide.


William Charles Good: -to the end that existing systems of taxation may be simplified and improved or a better system introduced.
I think this is entirely in accord with what the minister said the other day.


Jacques Bureau: That is what I want to convey too. My hon. friend asked the question the other day if these investigations
[Mr. Good.3
were to be confined to Canada only and 1 said "No", the object is to study systems of taxation outside." The only purpose we have is to try to alleviate the burden of the taxpayer by simplifying existing systems and making them efficient and economical. I am not going to discuss the question of the correctness of the phrasing; I leave that to my English friends.


Arthur John Lewis: It seems to me that the wording proposed by the hon. member for Brant would carry out in a better way the idea which the minister has expressed, and I will support the change.


Mr. HOEY:: 
Henry Lumley Drayton: I really do not
know why my hon. friend should go on with this board at the present time. It may be proposed to simplify existing modes of taxation, but we are certainly not doing anything to lessen the burdens of the country and we are creating new offices. At a time when positions should be contracted we are creating new offices. That is what we are doing. There would be a certain amount of humour in this situation if it did not have its pathetic side. There are two sets of experts to be appointed. One set is to be placed in the Treasury department to advise the Minister of Finance as to what he ought to do in the matter of taxation. Another set of experts is to be installed in the Department of Customs and Excise'to see that the minister is right in what he brings down.


Jacques Bureau: The trouble is that I do
not bring down.


Henry Lumley Drayton: I repeat that my hon. friend is providing for two different sets of boards of experts.


Jacques Bureau: Two sets?


Henry Lumley Drayton: Yes, two sets.
One set is to be attached to the Department of Finance.


Jacques Bureau: Where is that?


Henry Lumley Drayton: We find it in
the estimates now before the House.


Jacques Bureau: We are not discussing the
estimates, we are discussing this bill.


Henry Lumley Drayton: I am pointing
out what the government are doing in connection with this idea of experts. They are now proposing-my hon. friend can contradict me if I am wrong-to put experts in the Finance department to tell the Finance Minister what to do.


Jacques Bureau: Oh, no, no.


Henry Lumley Drayton: My hon. friend
is proposing to have experts in his department to tell him what to do.


Jacques Bureau: I take exception to that.
They will not tell me what to do. The object of the bill is not to shirk any responsibility that the government should assume. My hon. friend has often said that we were so ignorant that we did not understand our laws. Under the circumstances he ought to help me along and assist in securing men who will investigate and advise.


Henry Lumley Drayton: I never accused
my hon. friend of ignorance, but I did accuse the government of passing laws that no one can understand.


Jacques Bureau: You accused the Minister of Customs of not knowing what he was administering. It is all right, I do not pretend to be one who knows it all, but when I lack information I make inquiry; that is one virtue I have.


Henry Lumley Drayton: As a matter of
fact it was not the Minister of Customs I referred to. The gentleman I had in
9 p.m. mind was the Acting Minister of Finance who was handling the question under discussion at the time.


Jacques Bureau: It was the two cent stamp on drafts you had in mind. I looked it up in Hansard.


Henry Lumley Drayton: No, my hon friend is wrong.


Jacques Bureau: I looked it up.


Henry Lumley Drayton: My hon. friend is quite wrong but then there are so many things he can very easily get wrong about.


Jacques Bureau: Far more reason for boards of advice.


Henry Lumley Drayton: What I was
referring to was the sales tax regulations in connection with lumber which, during this very session of the House, were read to the Acting Minister of Finance who had to do with that legislation, and he could not tell me what they meant. I took the position then and I still take it, that legislation of this kind should be so written that we do not need any expert to tell us what it means; that every man knows what the law is. I think it is much cheaper to make that legislation and those regulations such that they can be understood than it is to get experts to tell us what they mean. There is the proposition-two experts for the Department of Finance to advise in connection with the tariff and a board in the Department of Customs to advise what is to be done. If we really have any sense of economy, both these proposals ought to be voted down. I do not know that it is worth while pleading with the ministers to observe economy. Many things are done in the name of economy, but it is certainly very much against economy in one year to start two new boards or two new sets of expert advisers. I suppose, of course, they will have to be appointed apart entirely from the Civil Service Commission, from my hon. friends' friends.
Customs and Excise Act


Mr. FORKE:: There is an old saying: " Many men, many minds," so that there is always room for difference of opinion. I find in this instance that I am not at one with my desk mate (Mr. Hoey) in regard to this matter. I think all hon. members are in favour of economy and against needless expenditure of money. This, however, seems to me to be a question that will largely be decided by the character of the men who are appointed to fill these positions and the way in which they undertake their work. A year from now, if they have been appointed and have been doing their work, we shall be in a position to judge whether they have been of service or not. In the meantime, I can see the necessity of an investigation of this kind and I am willing to take the risk. Taxation is one of the most complicated things and requires an expert to understand it. Very few people, when a tax is imposed, understand exactly who pays it. Very often the one who pays the tax is not in reality the one who is responsible for raising the money to pay the tax. In every country there are different methods of taxation, and perhaps there is no subject upon which there is greater diversity of opinion than that of the method of raising taxation. We have now the sales tax and there are disputes every day as to who pays it and as to the method of collecting it. I am sure no hon. member has a definite idea what a proper income tax consists in, how it ought to be imposed upon the people and who ought to pay it. We see it stated often that those who are paying taxes on large amounts are paying too much and that industry is suffering because men will not make large profits if they are going to be taken from them. I would not support that idea-it may be true or it may be otherwise.
The hon. member for West York (Sir Henry Drayton) has made the statement that new jobs are being created. I have no sympathy with the creation of new jobs; I am really anxious that the cost of government should come down; but I believe that a board of this kind, with proper men undertaking the work, can be of great value to the country in giving us some idea of proper methods of taxation. I think it was stated the other day that no country has any such system as this. I am pretty sure that the state of Wisconsin has had a board of taxation for manj' years functioning continuously m advising and guiding the state legislature in methods of taxation. I quite agree with the hon. member for Brant (Mr. Good) that I would go outside of the bounds of our own country and if we can find better methods 
of taxation, we should adopt them. At the same time, I do not believe in making rapid changes. I do not believe in taking a plant out of the hothouse and turning it out in the sun so that it will die.
If changes are to come, let them come gradually; but let us have the information that will enable us to make those changes. I am in favour of having this board appointed, trusting that the right men will be appointed to do the work.


James Shaver Woodsworth: Is this board to be appointed temporarily simply to bring in a report in the next year or so, or is it proposed that it should be of a permanent character?


Jacques Bureau: As long as this system of
taxation exists and as long as we require investigation and some remedy to alleviate the burden, the Governor in Council wili decide how long the board will last. I suppose it will last as long as its services are required and it performs its duty. There is no fixed term.


Robert Alexander Hoey: That will be during our day.


William Charles Good: I should like to give an
illustration which I think is entirely pertinent. A joint commission composed of representative citizens, public men from Canada and the United States, was sent over to Europe in 1913 to study the whole question of rural credits. Attached to that commission was a gentleman from the United States who had had very extensive training in economics. He acted to some extent as secretary of the commission and he was also a special representative of the United States government. He spent some further time in Europe studying this question. When he came back, not only did he collaborate with Dr. Tory of the University of Alberta, who was also a member of or attached to the commission, in writing the report of the commission, but he was engaged by the United States government to draft the land bank legislation which was brought down in 1914, and to see that the legislation got through the House of Representatives and the Senate. Arising out of his work I think we have one of the most important and far-reaching bits of legislation and institutions that are in existence at the present time in the United States. The whole system of long term rural credit has arisen out of that investigation and largely out of the W'ork of that one man. The developments in the Canadian provinces are also due to the same work. This was work undertaken outside of North America for the purpose of investigating a particular question. I can see immense advantages which

Customs and Excise Act
have accrued to this whole continent and which may yet accrue in the future, arising out of this work. Why should it not be possible that a first class commission or board could also study the whole question of taxation, with a view not only of simplifying and improving existing methods in Canada, but of finding out whether or not there are methods in existence elsewhere which we might apply with great profit to ourselves?


Robert Alexander Hoey: Does the hon. member mean methods of collection or forms of taxation?


William Charles Good: Not methods of collection.


Robert Alexander Hoey: Well, forms of taxation are matters that pertain to the functions of parliament. and to surrender any such function would 'be to surrender one of the vital principles of government.


William Charles Good: I am not suggesting that parliament should surrender its right as the representative of the people to decide on matters of this sort. Did the United States government surrender its right to decide as to the land bank legislation? Surely not.


Robert Alexander Hoey: There is a distinction between banking and taxation.


William Charles Good: I do not see the distinction in this particular matter. We want information and we are not likely to get it unless we make a special effort for the purpose. And this promises something at all events in the way of securing .pertinent information upon which we may subsequently decide as to what we shall do. It goes without question that this parliament has the right to adopt or reject any method of taxation. We have had in our hands, and shall retain, power over all systems of taxation. But that does not render it undesirable that we should secure expert and specific information concerning this particular question. I mentioned the other day that the government had appointed Dr. Tory to investigate the question of rural credits, and upon the report submitted in consequence it is probable that legislation will be brought down next session. That seems a sensible way of going about the business of the country. We are not committing to Dr. Tory the right to determine our legislation. Not at all; we are simply employing him to act as an expert in collecting information and advising us; and I am willing and glad to take the advice of men who have time and opportunity to go into any matters such as this and make a thorough investigation. When they bring
down their reports, as they may do in the future, we shall then have an opportunity to digest them and to arrive at a sound and satisfactory conclusion.


Henry Herbert Stevens: I am not desirous of
aligning myself in opposition to the bill but after reading the clause I must confess that it seems to me very vague and indefinite. It erects a new commission with comparatively large salaries and with the power to appoint a considerable staff; and all this is vaguely described without any definite limitations but certainly involving much expense. There is no particular objective aimed at. The House can only take cognizance of the situation as it is set forth in the bill; that is all we have to guide us. And the bill provides for the appointment of an advisory board to investigate and study various modes of taxation with a view to simplifying and improving the existing system. Is this to be a permanent board, or is it just merely another royal commission? Is it merely a transitory institution which will perhaps make a study of the theory of taxation and then submit some sort of report at some future time without any definite object in view? I can see some force in the suggestion that there should be established out of the personnel at present engaged in the various departments, some board to act in an advisory capacity, and including for instance a representative from the Department of Finance, another from the Excise branch and another from the Customs department, whose duty it would be to study the present, miscellaneous forms of taxation and coordinate them, thus .avoiding needless expenditure. Such a body I conceive to be of advantage. But simply to add to the present wide range of civil service activity another board whose duties are indefinitely described, and the purposes of which are not revealed in the bill, is I submit merely to add to the burden of taxation without any tangible result. Take the clause we have before us; it certainly does not give to the committee a clear-cut and concise understanding of what is intended. I gathered from a few words dropped some months ago-it may have been in the budget debate but I am not sure- from the lips of the Minister of Customs (Mr. Bureau) that he had in mind something along the lines of what I have suggested. But certainly this bill does not give effect to any such idea. Now, the minister is a practical man and usually he is very frank in his utterances in this House. But I doubt whether he will rise in his place and assure us that there is any definite objective here. I can
Customs and Excise Act

see nothing in this legislation but a suggestion that he is responding to some ill-defined demand on the part of the public for some more orderly method of taxation. That is all I can perceive in it; a sort of apology or excuse for a response to that demand.


Jacques Bureau: No demand was made.


Henry Herbert Stevens: My hon. friend, I say,
is usually frank and I cannot charge him with the drafting of this bill; I do not even suppose that he fathered the idea.


Jacques Bureau: He pleads guilty; go for
him now.


Henry Herbert Stevens: Well I am disappointed,
because after fourteen years' acquaintance with my hon. friend I did give him credit for a great deal more practicality than he has displayed in this bill.


Jacques Bureau: The hon. gentleman is not well disposed to-night; he does not see it in the proper light.


Henry Herbert Stevens: This bill does not sufficiently define the duties of the board.


Jacques Bureau: The Governor in Council
will.


Henry Herbert Stevens: That is very unsatisfactory. Why should this House simply authorize the appointment of another royal commission because that is what it amounts to. You may not call it a royal commission, but that is what it is; it is virtually another royal commission which will have unlimited authority to wander hither and thither expending the public money without any definite instructions as to what they shall do. I can tell by simply looking into the minister's gaze that he knows that what I am saying is true.


Jacques Bureau: Oh no. The hon. member generally is very logical but I am smiling because he is wandering so far afield to-night.


Henry Herbert Stevens: The minister realizes that I have put my finger on the very weakness of the bill.


Jacques Bureau: Not at all.


Henry Herbert Stevens: The minister uses the
word "logical;" I do not think he would apply it to this clause, for if he did it would be a libel on the word. There is nothing logical about the thing at all. I had expected from the minister something of a practical character. If we had before us a measure which would bring into existence a body that was ordered by terms of legislation to simplify

the modes of taxation now imposed on the country, then such a bill would receive my hearty support. But this legislation is wide open; it is loose and ill defined. The duties of the board are not stated and it will merely add to the burden of taxation a further expenditure. I find that the chairman is to receive $10,000 and there are I believe two other members at $7,000. That is $24,000 for three commissioners, with a staff, and with travelling and other expenses-all of which merely adds to the burden of taxation.


Jacques Bureau: Cut out the travel. The
work will be done in the Connaught building here.


Henry Herbert Stevens: With what possible object? Nothing is stated in the bill to direct the board anywhere.


Jacques Bureau: You do not consult a technical expert to direct him.


Henry Herbert Stevens: There is no objective.


Jacques Bureau: There is absolutely, and
it is in very simple words.


Henry Herbert Stevens: The measure should
define the duties of the board and declare what is to be its object, and so give to the country an opportunity of at least getting some return for the large added expenditure involved.


Mr. EVANS:: Mr. Chairman, I want to
add my protest to the appointment of this board. I view with suspicion the creation of a permanent advisory board, so-called, for this work. Apparently it is to be permanent because the minister has said nothii to the contrary; neither have his colleagues. I oppose the bill on the ground that the creation of the proposed board involves a useless expenditure of public money. The Dominion is already top-heavy with officials of this kind in all departments, and the salaries of the highest among them are being increased year after year. I cannot help thinking that this advisory board is to be nothing less than a tariff commission-


Henry Lumley Drayton: They have
another for that.


John Evans: -and I have been surprised at my friends to my right opposing the bill.


Henry Herbert Stevens: We are asking for light.


John Evans: If, as the ex-Minister of
Finance (Sir Henry Drayton) says, "They have another for that", surely there is no room for two boards. I view the whole thing with suspicion. Any board of this character

Customs and Excise Act
can never take away the responsibility of parliament with respect to taxation, and the further responsibility is attempted to be removed from the people's representatives the worse it will be for the country. I have watched the appointment of various commissions. We had one conducted by the exMinister of Finance at great cost to the country.


Henry Lumley Drayton: How much was that?


John Evans: I do not know.


Henry Lumley Drayton: You would not say it was conducted at a great cost if you knew the amount.


John Evans: I do not think the hon.
ex-minister does either.


Henry Lumley Drayton: Yes, I do.


John Evans: I have seen the Railway
Commission doing what we thought at the time some of the work that this parliament should have done. However, under the chairmanship of Judge Mabee that commission became an institution of benefit to the people. Since his death it has become nothing but the plaything of party politics.


Jacques Bureau: That is not right.


John Evans: And that is what all commissions are likely to become if they are made permanent. If the minister could state definitely what the purpose of this board is to be and how long it will be in existence, perhaps I might change my mind, but in the absence of some better explanation than that already offered I shall vote against the appointment of this board.


Herbert Meredith Marler: Mr. Chairman, I had
hoped to be able to obviate speaking tonight on this measure, but in view of the remarks of my hon. friend from West York (Sir Henry Drayton) and my hon. friend from Vancouver Centre (Mr. Stevens) I fear that it requires certain additional explanation.


Henry Herbert Stevens: Hear, hear.


Herbert Meredith Marler: Explanation, as far as I
can see, is quite unnecessary, because it appears to me that this measure is one of the most praiseworthy and valuable pieces of legislation which has ever been brought before this House. The bill is perfectly clear in its statement. It proposes the appointment of an advisory board, consisting of three members, for the purpose of investigating and studying various modes of taxation, with the
view of simplifying and improving the existing systems. I will not deal for the moment with the amendment suggested by my hon. friend from Brant (Mr. Good); but what difficulty my hon. friend from Vancouver Centre has in understanding such a clearly worded measure is quite beyond me. This proposed board is to study all existing systems of taxation with a view, if possible, of simplifying them.
Objection is raised by other hon. members to the expense which will be incurred in the creation of such a board. There is no question whatever that certain expenses will be involved, but I am bound to say-and I have some knowledge of financial matters-that if this board is properly constituted and properly operated at least four times its cost will be saved to the taxpayers, and probably a great deal more.
One of the principal reasons for the creation of a board of this description was most aptly put before the House by my right hon. friend who leads the opposition (Mr. Meighen), when he said:
We have had to devise new ones-
Speaking of systems of taxation.
-and devise them pretty rapidly to meet the exigencies of a world situation unprecedented in history. In devising new ones we necessarily made errors.
He was perfectly right in that statement. No one would suggest for a moment that after the transition period in this country from indirect taxation various unintentional errors would not be made in the laws which were enacted, and I think the country as a matter of fact is to be congratulated at not being involved in even greater difficulties owing to the haste with which, of necessity, those laws were brought forward from time to time.


Robert Alexander Hoey: Will the hon. member continue the quotation?


Herbert Meredith Marler: Yes. I had intended to
do so later on, but I will accommodate my hon. friend now. The right hon. gentleman continued:
If we had a hundred commissions to advise us we would in my judgment make just a hundred times the errors. The commissions could* not possiibly have been of any assistance to us at all. The errors were cured in the main by experience.
I will controvert that in a few moments if my hon. friend will have a little patience. I think we should try to get clearly before us to-night and build up from a solid foundation the reasons for the particular advisory board which this bill proposes to create. A tax is nothing more or less than a contribution levied on persons or property for the use of
Customs and Excise Act

government;-I think that is admitted-and the object of any tax is nothing more or less than to pay debts incurred or to be incurred, for the benefit of the nation as a whole. If that object is to be attained, taxation must be spread over as broad an area as possible so as to ease its incidence on the individual and on the business taxed because if it interferes with the freedom of the individual or with the freedom of the business taxed, then the very object for which the tax was intended will not be achieved, for the source of the tax will be killed and no revenue will result from it. Therefore I repeat, the tax must be levied in as simple and light a manner as it is possible to levy it, and its collection must be made as easy as it is possible to make the collection of any tax. I doubt if in the imposition of our taxes we have followed these assumptions. It has always seemed to me that instead of making taxes rest as lightly as possible, instead of spreading them as much as possible, we have looked at certain businesses or certain individuals and decided that there was a place where it would possibly be easy to collect taxes. If a man, a business or a class of business was very successful we very likely said to ourselves that taxation should be imposed there because of the readiness with which it could be collected.


Robert Alexander Hoey: Would not the government be still the final authority, and would not political motives enter into the matter anyway? Will it not be always popular in certain quarters to tax heavily certain interests that have amassed wealth?


Herbert Meredith Marler: Not at all. The authority of the government is not in the slightest degree derogated from by this bill.


Robert Alexander Hoey: That is the weakness of the board.


Herbert Meredith Marler: It is not the weakness of the board, if I may contradict my hon. friend; it is the strength of the board, as I shall attempt to show. We should treat the people jf this country and the business of this country as partners with the nation. We should advise them as to what taxes are to be imposed, in what measure they are to be imposed, and we should seek to have those taxes simplified and collected in the easiest possible way. If we simplify taxation, and if we spread taxation in the manner that I have described, the amount of taxes collected will be gi'Eater and the opportunities for diminishing the taxes will be increased. But more than that, if we simplify the method of collection, the method of making returns and all the various in-
tricacies of taxation as they exist to-day, we shall also make the cost of doing business a great deal less. The cost of doing business in the last ten years has very largely increased; it has risen from 50 to 60 per cent of the cost before the war. That cost has to be taken up in the price of the goods supplied by the business in question, and it follows that if the cost of taxation and the cost of doing business are lessened, the cost of the goods will be considerably reduced1. It has always occurred to me that many of the bills passed by this House have wanted intensive study. There occurs to my mind the amendment made last year to the income tax law. I do not think anybody can say that that amendment was studied as it should have been studied. It was made with the best of intentions, just as hon. gentlemen on the other side when they were in power prepared their legislation with the very best of intentions. But when that amendment was passed there was a hue and cry from all over Canada as to what would happen when the law should be put into effect. All that could have been avoided had a study been made of the subject by an advisory board, which would have the opportunity of consulting the various interested parties. Had that been the case such an amendment might never have been passed. Take another instance-and I have mentioned it before in this House-the amendments made to the sales tax last year. All these amendments were made, I say, with the very best intentions on the part of the government, but I do not think the effect was properly understood. I do not see how the effect could have been understood by any body of men congregated in the House of Commons or by any body of officials. How could we expect to understand every business? How could the officials of the department understand every business? It is a physical impossibility. Consequently we passed that law and I doubt if there were six people in the House who understood the amendments, I can say with all frankness that I personally was not one of the six. An amendment to a law of that description should be considered by a board of experts before being made effective. Not only should that board of experts, as is suggested in this bill, study the proposal, but they should bring together the various businesses interested and deal with the matter in the light of all the facts and circumstances there brought out.


Robert Forke: What was the amendment to the sales tax of last year to which my hon. friend refers? I cannot just recall it.

Customs and Excise Act


Herbert Meredith Marler: There was a very serious
amendment to the Special War Revenue Act, section 19BB.


James Shaver Woodsworth: Why could such
studies as these not be carried out by departmental officials?


Herbert Meredith Marler: That is a perfectly proper
question. The study can be carried out to a certain extent by departmental officials. But what I want to see brought about is not the study by any particular department -or departments in various parts of Ottawa;
I want one central body which will correlate these various ideas and bring them together, so that all the opinions of all the departments will be included in the joint and studied opinion of this advisory board. More than that, I hope-and I believe it is the intention of the measure-that this advisory board will see business men, will see bankers, will see everybody that it is necessary to see, and discuss any amendments that may be proposed. I say frankly that I welcome this measure. I do not think anybody can accuse me of wanting to spend the people's money. I believe in economy as much as anybody in this House, and more. But I believe in this measure because I feel that it will make for added economy in the administration of our laws. I myself have had' a certain amount of experience in financial matters and I can see a great deal that could be done by a properly constituted board operating under a bill of this description. I referred to this matter when speaking on the Address, but the subject has been mentioned by many others; it has been before the people now for a considerable time. There has been a hue and cry for an advisory board of this description. Never before in the history of this country has it so frequently been said that many of our laws are not understandable. And that is not the fault of governments or of government officials. My hon. friend (Sir Henry Drayton) laughs. But surely we are not magicians. We cannot step from an old system into a new one and make up a set of laws the effect of which is fully understood. Does my hon. friend still laugh ?


Henry Lumley Drayton: Still.


Herbert Meredith Marler: He must remember certain luxury taxes that he himself imposed in May, 1920, but which, as he subsequently found, had a very detrimental effect upon business, so much so that he repealed them. He remembers that, I suppose. Why did he not foresee this result?


Samuel William Jacobs: If the hon. gentleman invites the member for West York (Sir Henry Drayton) to discuss the luxury taxes we shall be here until October.


Herbert Meredith Marler: I am not inviting him to do that.


Henry Lumley Drayton: The hon. gentleman knows that we have a very good case, and he does not want it drawn in.


Herbert Meredith Marler: I am not saying whether the luxury taxes should have been put on or taken off; that is not my intention at all. What I do say is that the effect of a tax, if possible, should be studied before it is put on, instead of putting on the tax and then finding out the effect. That is what this advisory board will do. I was going on to say that this board has been asked for on more than one occasion. At a meeting of the Canadian Bank of Commerce held last year, Sir John Aird, the general manager, spoke in these terms as regards the proposed amendment to the income tax which I discussed a moment ago, and coming from a man occupying that distinguished position a clear-cut statement of this description is of some value, I think, to all hon. members of this House. He said:
Surely the time has arrived when a commission should foe appointed to study the questions arising in connection with taxation. How can the necessary revenue be raised with the least injustice, the least irritation of the citir^n, the least detriment to production and business generally, and to the finding of capital for the enlargement of existing and the creation of new enterprises.
In addition to that, take the statement of the Financial Post of the 21st of December last, headed:	"Unscientific taxes burden for
business." In that article it discussed these various taxes in somewhat the same manner as Sir John Aird did, and it goes on to state
Time and time attain the Financial Post has urged the necessity for the appointment of a board of practical business and economic experts to act in an advisory capacity to the Minister of Finance in the framing of the tariff and other taxes under the national budget.


Mr. GOULD:: Is it not a fact that the Financial Post is prejudiced against the principle of direct taxation and in favour of indirect
taxes?


Herbert Meredith Marler: I cannot answer that question because I do not know, but I do not think it is. Let me revert to the point raised by my hon. friend who leads the opposition, when he said in his usual clear and careful way that we in this country had to _ create new taxes. Hon. gentlemen must realize the tremendous change from the indirect system of taxation which existed in this country
Customs and Excise Act

before the war to the system of direct taxation which came into vogue after the war- direct taxes such as the business profits tax, income war tax, the sales tax and other van' ous direct taxes which we dad not have an opportunity to study, but which had to be placed on the statute book to provide the necessary money for the country, and for which no precedent existed in this country. Take, for example, our taxation before the war. I shall give the House only a few figures which I think are illuminating, as showing the very marked transition between these two periods. The total revenue collected in 1914, less post office and railways- I do not include them because they are in the nature of services and one ahout offsets the other-was $136,000,000. Of these customs and excise amounted to $126,000,000, leaving a revenue from all other sources, of $10,000,000. Then take the after the war period. For the fiscal year ending March 31, 1923, in indirect taxes alone we collected $172,000,000, as against all taxes collected in 1914 of $136,000,000, but the point I desire to impress upon the House is that in indirect taxes we collected for that fiscal year $172,000,000.


Henry Lumley Drayton: What year was that?


Herbert Meredith Marler: The fiscal year ending March 31, 1923. I quote those figures to show that we had passed from a period of indirect taxation into a period of direct taxation, necessitating the enactment of very many new laws.
Let me pass to another subject, as to whether other countries have systems of boards such as this. The United States at the present time has not a board of the nature which is proposed under this bill, but the United States has had boards, and numerous boards, under the various revenue laws existing in that country from time to time. Under their internal revenue law of 1918, and I would say for the information of hon. members that the taxation under all the internal revenue laws of the United States is collected through the one bureau, there was appointed an advisory tax board, and that board had powers, not entirely similar, but somewhat similar to those of the board which we propose to inaugurate under this legislation. That board in the United States had to deal with a variety of taxes, the income tax, excess profits tax, war profits tax, inheritance tax, transportation tax, insurance tax, various taxes on beverages and tobacco, various amusement taxes and other taxes of that description. rMr. Marler.j


Robert Alexander Hoey: Was that a permanent or a temporary board?


Herbert Meredith Marler: It was a temporary board. The board was appointed for a period of two years. It was a government board, consisting of not more than six members, appointed by the commissioner, and the commissioner, as my hon. friend knows, is substantially the same as the deputy minister under our law. The revenue law of 1918 was amended by the law of 1921, in the United States, and under that law there was created an exceedingly valuable board called the Tax Simplification Board. That board functioned for a considerable time and took up various important systems of simplifying taxation. I hold in my hand one of their reports.


Andrew Ross McMaster: How many years did that board function?


Herbert Meredith Marler: It functions up until
December 31, 1924.


Andrew Ross McMaster: When was it appointed?


Herbert Meredith Marler: Under the revenue law of 1921. I hold their first report in my hand, for the year 1922. This report takes up very many subjects which certainly could be taken up by an advisory board such as is suggested under this bill. I do not intend to lay stress on this report, or to weary hon. members by reading many parts of it, but with the permission of the House I would like to quote one or two paragraphs to show the questions which arose in the minds of this board, and which certainly must arise in connection with the administration of our own laws.


Robert Alexander Hoey: Before the hon. member proceeds with that, could he give us any idea as to the personnel of that board? Was it composed of economists, or what type of men were they?


Herbert Meredith Marler: Speaking from memory
they were very prominent men. I say that, for the reason that I have on a file in my room upstairs the names of most of these men, but I cannot recall their names to memory, nor could I, from memory, tell my hon. friend from Springfield (Mr. Hoey) exactly what qualifications these men have. But as I was going on to say, this Taxation Simplification Board in this report, dated December, 1922, emphasizes the points which must arise under all new systems of taxation. These are some of the points which it brings up:
While much thought and consideration have been given in this country to tax legislation, comparatively little attention has been paid to the equally important and difficult subject of tax administration.


TULY 9. 1924
[Stage Direction]
Customs and Excise Act
It goes on to speak then of the cost of the business profits tax and alludes to the difficulty in deciding what are profits and what are not profits. In another part it speaks about the large amounts outstanding under the business profits tax of the United States, an amount of over one billion dollars, which it had collected very largely in part. Further than that it speaks about these questions of forms to which my hon. friend from West York (Sir Henry Drayton) alluded to to-night, and says in that respect:
It is desirable on the one hand to make forms of return as simple and clear as possible so that they may be understood and made out by the ordinary tax payer without the services of an expert.
Henry Lumley Drayton: Did they bring
down an amended form? What my hon. friend has quoted is a truism; we would all agree to that.


Herbert Meredith Marler: I am not prepared to
say that the board did bring down an amendment form.


Henry Lumley Drayton: I do not think they did.


Herbert Meredith Marler: I do not think the board did bring down an amended form as a matter of fact.


Henry Lumley Drayton: No they did
not.


Herbert Meredith Marler: However, I am only emphasizing these various matters which came up in connection with the Taxation Simplification Board of the United States in order to show that under the United States internal revenue laws they thought it necessary to have boards somewhat similar to the board proposed under this legislation for the purpose of studying and simplifying the laws of that country.
The same board brought in a further report in 1923 bringing out most important and most vital points not only in the interest of the country but also in the interest of the taxpayer. It is true there is no advisory board in the last legislation of 1924, but there is a board of tax appeals. Consequently what I desire to impress on you, Mr. Chairman, is this, that throughout the United States legislation, laws regarding taxes-very much akin to our own legislation, and having a distinct influence as regards our own question of taxation-these advisory boards, simplification boards, or tax boards are all looked upon as integral parts of that particular legislation, and as being necessary in the understanding of and in the
simplification of those laws which had been called into vogue and brought into effect by reason of the war on the spur of the moment when it was essential that laws of this description had to be enacted for the purposes of revenue. The legislation before the House to-night is for that purpose:	It is
for the purpose of studying our own laws; it is for the purpose of simplifying and coordinating our laws; for the purpose, if necessary, of showing how collection can more be maintained; but more than that, as was suggested by my hon. friend from Brant (Mir. (Good), this legislation contemplates an inquiry as to whether we are following the best system of taxation. That, to my way of thinking, is one of the most essential things we have to consider in this country to-day.
We had read in the press time and again complaints respecting our systems of taxation. We have had the taxation of the United States held up to us, times without number, as being lower than ours, as being taxation that we have to follow in so far as it is possible for us to do. The Montreal Star in its issue of November, 1923, when the Mellon bill was brought down said:
Canada cannot be indifferent to the movement in +he United States to reduce taxation. Mr. Mellon. Secretary of the Treasury, recommends downward revision of all the income taxes with sweeping cuts in surtaxes. "The benefits of the reduction," he says "will be distributed among all classes of taxpayers and a revision generally will help to free business and industry of vexatious interferences and encourage in all lines of industry a more healthy development of productive enterprise."
But the part of that editorial which I wish to read to the House-because it is very germane to this particular question of the taxation advisory board now before us- is this. It goes on to say:
In the United States public attention is centred to a remarkab'e degree upon the problems of taxation. During this week delegates from thirty-seven states have been in conference in New York in the endeavour to re-adjust the incidence and ease the burden of taxes. It is realized that industry must be stimulated and enterprise encouraged and capital made available for the normal and necessary activities of the nation. In Canada the whole problem is a'most neglected and we seem to be content so long as the Minister of Finance is able to squeeze out of the people, by methods however onerous and destructive, the revenue he requires.
It concludes by saying that there never was a time when a fearless examination of the methods of taxation which are choking enterprise and destroying the resources of industry was made necessary. It is that point exactly which has been brought up in the press time and time again; not only in the remarks, as I have said, of Sir John Aird of the Canadian
Customs and Excise Act

Bank of Commerce, but in section after section of the press. Take the article in the Financial Post of November, 1923. It also states, and stresses the point in pretty much the same language that I have employed, the necessity that the people should understand their taxes before they are imposed; that they should have a board of experts to go to and discuss these taxes with before the taxes are levied, so that when the taxes are levied they will be fully understood. That is also emphasized in the report to which I have made reference. The Montreal Gazette of the 17th December, 1923, speaking about the sales tax and other taxes, brings the point again before the people. It speaks about the collection of the sales tax and goes on to say:
This condition is the inevitable result of ill considered legislation and it is doubly unfortunate in the fact that it aggravates a situation already difficult enough by reason of onerous taxation applied from other angles. The Department of Customs and Excise is not altogether to blame for its evident inability to interpret and administer smoothly and equitably an unworkable statute; it is caught in the general muddle and has already acknowledged one serious error by recalling its October ruling with reference to the showing of the tax as a separate item on invoices.
Let knowledge grow from more to more,
But more of reverence in us dwell-
Then it goes on to say that the proper time has arrived to provide for a taxation advisory board. I can see in this legislation very distinct and very great advantages. I do not think the cost to the nation by the operation of the board created under this bill will be very great. It certainly will not be as great as the advantages which will be derived from the legislation itself.
There is one other point regarding this bill on which I wish to say a word: This board of experts can bring together the various systems of taxation as existing. More than that they can bring together a fair and concise system of accounts which will be understood by all the people of the Dominion. They can tell us what war taxes are and how those taxes have been expended. They can tell us what taxes are ordinary taxes and how those taxes have been expended. They can put before us a distinct statement as to how our various taxes are used and for what purposes they are used, such as we have asked for and the country likewise. I have no hesitation whatever in supporting this bill as a measure very well worthy of the consideration of the House.


Robert Alexander Hoey: Will the hon. member express an opinion whether this board should be a temporary or a permanent board in view of the temporary nature of the work undertaken by the board in the United States?
[Mr. Marler.J


Herbert Meredith Marler: I think the best way to
answer that question is to attempt to put myself in a position where I would need a board of this description. I can see, for a board of this description-and I sav I can see, because I know7 how I could employ such a board-sufficient work ahead of it for many years to come. Whether it should be absolutely permanent is a question which, perhaps, my hon. friend does not expect me to answer. But I should think the duration of the board would be a considerable number of years.


Andrew Ross McMaster: 
Herbert Meredith Marler: Does my hon. friend not
see any possibilities in a board of this description effecting great economies?


Andrew Ross McMaster: I see the possibility
of great economy being effected by a coordination of the taxing powers, by putting the taxing powers under one minister, instead of being under two ministers or three ministers as the case now is. But I see no necessity for the creation of a permanent board for the purpose of effecting that development.

Customs and Excise Act


Herbert Meredith Marler: Then my hon. friend will
admit that our laws are at present in a sufficiently understandable state to leave them alone ?


Andrew Ross McMaster: That, I think, is a non sequitur, if I may say so.


Herbert Meredith Marler: I do not follow the hon.
member.


Andrew Ross McMaster: A "non sequitur" means a non-logical observation.


Herbert Meredith Marler: That is better.


Andrew Ross McMaster: We have the Finance
Minister who imposes taxation and who collects certain taxes through the Commissioner of Taxation, who is in the Taxation department. We have the capable and genial Minister of Customs and Excise (Mr. Bureau) who collects from us taxes through a customs tariff and by taxing spirituous liquors by way of excise. I can see the advantage of having those things correlated and of having an extensive study made of the question. But I believe that can be better arrived at by appointing either men in the department or if no such men are in the department, by employing men outside of the department for the purpose of making an investigation and a report on which legislation will be based. But I feel that I am voicing, not only my personal feelings in this matter, but the opinion of the great mass of Canadian taxpayers who will object to the formation of what must inevitably, it seems to me, if this legislation goes through, create another permanent organization which I do not think is necessary.


Herbert Meredith Marler: How does my hon. friend
make his statements agree with the frequent demands in the press for such a board?


Andrew Ross McMaster: The present situation
of more or less confusion amongst the taxing powers and the taxes is not one which might not have been foreseen. It arose out of a number of new taxes being imposed in this country. Once we get the question of taxation on a reasonable basis men of intelligence who will be members of any administration in this country will be able to keep things on a proper basis and to administer the' laws once they are co-ordinated, without having to refer to a permanent body which, I think under ordinary circumstances, would be a fifth wheel to a coach. The hon. member for St. Lawrence-St. George (Mr. Marler) whose observations are always listened to with attention and pleasure in this chamber, because he brings a wealth of industry and of applica-269
tion to any observations that he makes to the House, has endeavoured to show certain ways in which this board can be of value. He said that this board could study what the effect of taxation would be and that it would do so by communicating with business people and bankers. I do not know whether it is the business people and the bankers who are likely to be taxed who would be communicated with by these boards. If it is, I am afraid the board would be very much discouraged by the information they would get from these gentlemen in respect to any taxation it was proposed to lay before them.


Herbert Meredith Marler: That is an unfair interpretation.


Andrew Ross McMaster: I do not think so. It seems to me that it flows exactly from the argument which my hon. friend has made. He says that Sir John Aird thought it would be well to have a taxation commission. If Sir John Aird meant to have an intensive study made of the whole question of taxation by someone who would do it for a certain time and then report, I have no objection. I think there is room for such an investigation. That economic experts should advise the Minister of Finance is perhaps not unreasonable, but I do not think we need to have a permanent board of such experts appointed. They should be found in the Finance department if it be properly constituted. My hon. friend went to the United States for examples. I gave him credit for frankness because the examples that he gave us from the United States destroyed the case, for in the United States where they are face to lace with situations not unlike our own, they had temporary boards. There was the Tax Simplification Board which, I think he said, would do work similar to what was suggested. That was appointed in 1921 and after three years' work it reported in 1924. I have no objection to that.


Herbert Meredith Marler: In answer to the hon.
member for Springfield (Mr. Hoey), I distinctly said that it was impossible to say how long the board would function.


Andrew Ross McMaster: I have not much doubt that if you appoint a chairman at $10,000 a year, two commissioners at $7,000, a secretary at $3,500 and ten clerks at salaries ranging fiom $1,000 to $1,800 or $2,400 a year, the board will function for a considerable time. I would trust that we can get together on legislation. I think the government is interpreting the desire of the country in proposing to have an investigation made and

Customs and Excise Act

simplification arrived at and a better collection devised. But if the government persist in this legislation and if they insist on creating a board such as is outlined, they will be going against the practically unanimous feeling of the country.


William Charles Good: There seems to be a little
doubt as to what the board will be, particularly as to its permanence. I am not enamoured of the idea of permanence nor am I altogether enamoured of the arguments presented by my hon. friend (Mr. Marler). I do believe, however, that there is room at the present for an investigating board. I do not know how long their investigation will take; it might be a year or two or possibly longer. I agree with the hon. member for Brome (Mr. McMaster) that it might be just as well for us to get together and devise some amendment which would meet the desires of practically every one in the House.


Jacques Bureau: My hon. friend from
Brome (Mr. McMaster) if I understand him, admits that it is necessary to have someone who will devote his time to the study of some method of simplifying taxation. And he says that if we have not the proper officers in the department we should get them outside, I am bound to say, in justice to the officers of the department, that in my opinion it would be impossible to get better officials than are to be found in the Department of Customs. No hon. gentleman in this House, whether he be Progressive, Tory or Grit, can possibly have any fault to find with these officers. The efficiency and knowledge of the heads of the various branches in the Department of Customs-I leave aside altogether their unquestionable courtesy-are a matter for pride, to me particularly; I feel it an honour to be at the head of such a department. I say emphatically that there could not be found a set of men better qualified to administer the collection of taxes in this country. And there is not one of these men whom we could dispense with; there is not one of them in any of the branches who is not overworked every day in the year. On the whole, therefore, I repeat, they are public servants than whom no more qualified, no more efficient and painstaking officials could possibly be found. Now, admitting this condition, my hon. friend says that we should get the proper men outside. I rather gathered that he suggested something of incompetency in some respects; but I think it can very easily be proved that the officers in question are on the contrary highly competent. So that there is nothing in that suggestion; these men are competent,
McMaster. I
they are altogether efficient, and more than that they are constantly working overtime. Why, therefore, should we place upon their shoulders these additional duties? To do so would be to create inefficiency rather than to promote efficiency. We are told to get the men outside. Well, what are we doing?


Andrew Ross McMaster: But you are making it a permanent board.


Jacques Bureau: We are not establishing a
permanent board merely because we are appointing an expert to advise on technical matters in regard to which he is well posted. We simply desire to have some qualified person examine into the various systems of taxation not only in this country but in all other places where taxes are imposed, with a view to suggesting some means of simplifying our own methods in order to lighten the burden of the taxpayer and to obviate as far as we can the present state of perturbation which exists in the trade and commerce of the country. You want us to define the duties of these men. We shall call them into consultation; we shall tell them that we have been doing something which when inaugurated was new to the country; and we shall want to know, in the light of the experience of this and other countries, what are the best means of simplifying the present system for the purposes of economy and of satisfaction generally. As the hon. member for Brome (Mr. McMaster) observed, we have never had some of these direct taxes before, and the collection of them gives rise to many grievances, as numerous letters written to the department will show. Now, you cannot ask the already overworked officials of the department to look into these complaints and to investigate the various matters which we have in contemplation in this legislation. The head of a branch has certain arduous responsibilities and he must see that the law is properly administered. What can we do, then, except appoint outside men? You may call them a board of taxation; but whatever hon. gentlemen may call the organization, the fact is that it will be under the immediate control of the Governor in Council from whom it will take its directions. The board will be established 'in the customs building and will have no administrative powers at all; they will not assume any of the responsibilities of govern-inent whatever. Their duty will be to obtain information and offer advice which will tend to help trade and industry by lightening as far as possible the burden of those who have to pay taxes.

Customs and Excise Act
If the House considers that this legislation is bad I am willing to submit to its judgment. But I am sure that if hon. gentlemen were conversant with all the details that arise in the department and which cannot be looked after as they ought to be under present circumstances, they would concede the wisdom of this legislation. Personally I think we should pass the legislation. I do not think that we should lay down any hard and fast directions as to what these men ought to do; we should leave some leeway to those who are in immediate contact with the taxpayer so that they may be able to get the information which is required and 'make proper reports upon the grievances and the complaints which are brought to the attention of the department. Of course, if hon. gentlemen wish to insinuate that the 'government, or the Minister of Customs, wishes this legislation to go through so that jobs may be provided for party friends, then in that case there is nothing to be said. The suggestion can only be denied.


Andrew Ross McMaster: No such suggestion
came from me.


Jacques Bureau: The suggestion, I think,
has been made. As I have intimated to my hon. friend (Mr. Stevens), I assume full responsibility in this matter; and I say that the legislation is necessary, having witnessed the difficulties and the grievances that have existed and do exist in connection with the collection of taxes. I have seen the difficulties against which the officers of the department have had to contend and I know quite well that, with the present burden they have to bear, they could not possibly make a special study of these matters. If .this board were appointed you would get the services of thoroughly qualified men. And let us remember that such men cannot be got for nothing. It is all very well to talk about extravagance; but to spend $28,000 for the purpose of saving the country $280,000 can hardly, I think, be regarded as a piece of extravagance. There is a difference between squandering money, spending money to no purpose, and spending money to make money.


Henry Herbert Stevens: No matter how honourable or honest the board might be, would it not require a very considerable length of time, possibly a year or more, or at any rate many months, for them to acquire a knowledge of the very facts and details which the minister tells us are now in the possession of the department? If that is so, would it not be more desirable for the minister to avail himself of the services of these expert officials 269i
whom he has at present? They are highly trained and very efficient, as I admit, and indeed gladly acknowledge from personal experience. Why not take advantage of their accumulated information rather than have an uninformed board? That is the point I tried to make clear a moment ago. It would I think be desirable to erect a board for the time being from amongst the experienced officials of the department whose training and knowledge have primed them, so to speak, with the practical ability necessary to meet the needs of this bill.


Jacques Bureau: From my hon. friend's
point of view his argument is right, because if I acted on the basis of his suggestion I should simply be appointing three chumps who would have to go to school to the officers of the department. But the object is to select men specially qualified for this work, men who will be teachers rather than pupils.


Henry Herbert Stevens: It is not a question of
ability at all; it is a question of familiarity with detail, which is something vastly different. You can take the most learned man in Canada and if he is not acquainted with the practical problems daily arising in the Department of Customs, in the Excise branch, in the Income Tax and the Special War Revenue departments, he must be considered as uninformed. If he is not absolutely familiar with these details he is uninformed in this respect no matter what his general ability may be.


Jacques Bureau: It is not a question of
ability but of information.


Henry Herbert Stevens: Hear, hear.


Jacques Bureau: Outside the officers in the various departments, in Canada and the United States, there are men who make special studies of these things, and apart from theory altogether they are quite practical men who find out on the spot just what the conditions are. They serve to guide the men who are devising modes of taxation. These are the kind of men we want on the board. Of course, if I am to take for granted what my hon. friend says, that we will have to stop the department for so many months to teach those fellows how to handle the business, I do not want them; we can carry on better without them. But if you start from the basis that these men are there knowing their business, your argument falls to the ground. My hon. friend shakes his head-well, we will agree to disagree, but I say he is wrong. Those men are coming to tell our men, after taking cognizance of the facts,
Customs and Excise Act



after considering the complaints of taxpayers, "We have gone elsewhere and we have found there that the collection is smoother and that they can get along by imposing a lesser burden on the taxpayers." That is discussed, and we may even go to council with it. It is the information we want to get, and it is a practical way of co-ordinating all these things so they will be less burdensome to the people who have to pay. If that is not worth $28,000 a year, I leave the responsibility with the House; I will not assume it.


Robert Forke: There does not seem to be very much difference of opinion as to the advisability of securing further information as to modes of taxation; the chief objection is against the permanency of the proposed board. At the commencement of the debate I spoke in favour of such a board, but if it was sought to establish another board with a big salary list, to be carried on indefinitely, I certainly would be opposed to the project. I am perfectly satisfied that the minister means well and is anxious to get all possible information in regard to taxation. It has been suggested that he might find men in his own department who would be well able to undertake this work. I am opposed to the suggestion, not because I question the ability and single-mindedness of these officials, but because I question very much if departmental men are desirable judges of the best methods and modes of carrying on the work. They think along certain lines and do their work day by day according to instructions, and without wishing to say anything derogatory of these men I cannot help thinking that the bureaucratic mind is not suited to study a change of system. For instance, I would not go to the Commissioner of Taxation to tell me how to collect income tax or what method of taxation should be employed. The member for St. Lawrence-St. George (Mr. Marler), whose remarks we all enjoyed, raised some suspicion in the minds of certain members in this part of the House when he mentioned that the board might consult certain individuals in regard to taxation. This created in our minds the impression that the ears of the commissioners would be open to suggestions from certain individuals only.


Herbert Meredith Marler: Might I interrupt my hon. friend to correct any misapprehension in his mind or in the mind of any other hon. gentleman? Such was not my idea at all. My idea was that if this advisoiy board desired to get advice they could get it; but that it was not necessary for them to go to anybody to advise them at all, they were not to take dictation from anybody either directly or indirectly. Let me make that abundantly clear.


Robert Forke: I did not mean to cast any blame upon the hon. member.


Herbert Meredith Marler: Probably I was not clear in my expression.


Robert Forke: But when he mentioned one or two names, suspicion was naturally aroused that they would get the ear of the board much easier than some other classes of our people.


Herbert Meredith Marler: Oh, no.


Robert Forke: I know perfectly well that the statement made by my hon. friend was quite sincere. It seems to me the great difficulty we have is in regard to the permanency and the cost of the proposed board. Is there no way in which we can overcome this difficulty? Some years ago in the province of Manitoba we had a board of a somewhat similar character to inquire into methods and systems of taxation from the provincial standpoint. This board was composed of a professor of economics in the University of Manitoba and one or two other gentlemen. It was not a permanent board. They sat from time to time, made inquiries, and in due course submitted their report to the government. We have a great many experts in economics and taxation whose services might be available without the necessity of creating a permanent board. For instance, many of our professors in economics are not engaged in their professional duties for four or five months of the year, and their services might easily be obtained. I would suggest to the minister that he let the bill stand over for a little while and perhaps in the interval we can come to some agreement acceptable to all parties in this House for the formation of a board along the lines I have stated, and thus remove all fear of a permanent board with its attendant annual expense.


Andrew Ross McMaster: Mr. Chairman, I think
the essence of legislation is trying to arrive at a reasonable compromise, and I would suggest, with all respect to the minister, that after the words in 3 (a) "This board shall have such powers and perform such duties as are assigned to it by the Governor in Council," the following words be added, "and shall hold office for not more than three years from the date of their appointment." If this suggestion was accepted we could get together on the legislation. I do not like the idea of creating the proposed board, calling one man "chairman" and the others "commissioners," and giving one $10,000 a year and the others each $7,000 a year; but when the minister states that it is really necessary

Customs and Excise Act
to the administration of his department and will be helpful to him to have such a board, I am prepared to go half way, and vote for it provided the limiting words suggested are accepted.


William Lyon Mackenzie King: Mr. Chairman, in regard to the length of time during which the board may 'hold office, the clause as it stands indicates that its powers shall be confined to such duties as are assigned to it by the Governor in Council. The Governor in Council can fix any length of time that it may think best in assigning such duties to the board. Perhaps if I were to indicate to hon. members some considerations that come before the government when the budget is being prepared they will see in a moment the intention underlying the purpose here suggested. We have to-day annually to raise taxation, not. to the extent, as it was a few years ago, of between one and two hundred millions, but of nearly five hundred million dollars. The government has to find ways and means from a variety of sources and by a variety of methods such as have never hitherto 'been the subject of consideration by any administration. If we were content to raise all taxation from one source or by one method there would be no need for expert advice or opinion on these matters. But take such a question as this, for example:	It is suggested that one form of
taxation which has not been resorted to in this country but which might prove beneficial is a tax on advertisements. That appeals to a great many people. The government comes to consider a question of that kind; how is the government to be guided in a decision on that matter unless it has some expert opinion to advise it? Y6u may say, refer these matters to the permanent officers of the department. The permanent officers, as the minister has indicated, are more than busy; their time is taken up beyond the hours fixed by the statute, and they cannot get any time to work out or think out new ideas or new methods. Similarly, a government comes into office and a minister takes charge of a department. He is not a tax expert at the outset; no members of the government have had special training or have given special study to the ways and means and methods of raising taxation. It is false economy for a nation not to be guided by the best, most enlightened and scientific opinion rhat it is possible to have on a question of this kind. That is the sole motive the government have in asking parliament to give it the right to establish a board with powers to advise on methods of taxation or on
any questions of taxation which the minister may refer to it. The minister will have to indicate to parliament what the board is doing, how it is discharging its functions. If parliament at the end of one year thinks there is no place in the country for the board or that it is a waste of money to continue it, parliament has only to refuse to vote the money for the board. Each year the government has to ask parliament for an appropriation for whatever outlay it may make; then is the time when the review of the board's work will be made by the House, and I venture to say that before three years have passed we shall be in a position to indicate pretty clearly to the House whether the services of the board during the preceding year or two have been such as to justify its continuance. I think it would be a mistake to fix any definite time. Three years might prove too long.


Andrew Ross McMaster: Not more.


William Lyon Mackenzie King: I think if it is left to the Governor in Council with the understanding, of course, that parliament should at any time when the estimates are before it. have the opportunity to pronounce upon the work of the board-and that is stated in the law itself-that should be a sufficient guarantee against the continuance of the board's work for any longer time than its services may be deemed necessary. Let me say quite frankly that in asking the House to support the government with respect to certain forms of taxation that are proposed the ministry would like to be able to back up its request by information as wide and as sound as it is possible to obtain. The Minister of Customs or whoever has charge of income tax should be in a position when he is asking this parliament to support a certain form of taxation to give to parliament all the information that it is possible to gather from any source, as to how that method of taxation is operating in different countries and how it is likely to operate here. That kind of information for the guidance of parliament. cannot be obtained except through expert advice and expert opinion, and it is because the government is anxious to be able to fortify any policy it may present to the House by such expert advice and opinion that it is asking parliament to assist it in that way.


William Alves Boys: Does the Prime Minister think that really competent men could be secured to fill this important position if they felt that their services might be required for only two or even three years?
Customs and Excise Act


William Lyon Mackenzie King: I do. The
remark of the hon. member for Brandon (Mr. Forke) a moment ago appealed to me:	I
believe you could obtain from some of our universities, from some of the organizations that at present exist in this country dealing specially with the question of taxation, the sendees of one or two men who would be prepared to serve on a board of the kind for a year or two years but might not be able to do so for a longer period. I think the Governor in Council should be given freedom to choose the men where they can best be found and under such conditions as may be necessary to obtain their services. It is to the government's interest to try to get the best men, and I think it should have a little freedom in making the choice.


Henry Lumley Drayton: I must confess that the hon. member (Mr. Marler) almost convinced me that we should perhaps support this measure. But I am afraid I cannot quite follow him, though I would like to be able to do so. In following him it seems to me that we would have to abandon all constitutional precedent. The hon. gentleman made some very strong arguments. He pointed out, for example, the mess that was made by the amendment to the income tax law last year embodying legislation that the government did not understand. He pointed out also the mess that was made by the amendment to the Sales Tax Act last year, legislation which the government did not understand. My hon. friend could go further. We have seen this very session the case of the lake rates, where legislation had been brought down by this government which it did not understand. But it is the duty of governments to understand, and my difficulty is to see a constitutional way in which we can appoint any board of experts as wet nurses to the government. After all, the government has to take the responsibility; after all, it is governments that decide whether legislation shall be brought down or not. The government do these things whether they have expert advisers or not. We do not get very much help from these expert advisers. Why, it was stated in connection with the lake freight rates that the proposed legislation must be all right because a body of experts had been going round taking evidence and the like, yet we could not have had a worse mess. It is the government that have been making these mistakes, whether they have experts or whether they have commissions or not. I pointed out to my hon. friend that the government were getting advice from two boards, from two sets of experts, and the Minister of Customs did not question

that. I want to refer to the estimates in this connection. Item 484, page 12 of the supplementary estimates, is as follows:
Additional amount required for Board of Customs and Inspection, to provide for salaries and expenses in connection with the Advisory Board, including chairman of the board with salary at a rate not exceeding $10,000 per annum and two commissioners with salaries at a rate not exceeding $7,500 per annum each, notwithstanding anything to the contrary in the Civil Service Act, $28,800.
Then on page 11, item 481, we find provision for another set of experts, as follows:
To provide for salaries and expenses of the advisers
engaged in tariff inquiry. Payments may be made notwithstanding anything in the Civil Service Act or regulations thereunder, $30,000.
We might just as well look it in the face at once. We are erecting two permanent bodies. What is the reason? The Prime Minister has made it clear that it is a permanent body, because it is a body that is to advise in connection with the annual budget. My right hon. friend referred to that particularly; the board was to advise in connection with matters that come up for consideration by the government at the time of the annual budget. Well, there is a budget every year. My right hon. friend further points out that it is open to parliament at any time to get rid of the board if they do not want it any longer. My right hon. friend knows that he is not treating the country fairly. When does parliament ever get rid of boards? When does it ever get rid of employees? It will be a new experience when we see it. We know very well it is never done. We know very well that if this legislation goes through as it is, with the intention, as declared by the right hon. the Prime Minister himself, that its advice is required annually for the budget, it must be a permanent board. They will be there; they will be looking for pensions and everything else, and they will be entitled to them; they will be on the regular pay-list; they will be there notwithstanding anything we have in the Civil Service Act, and there they will stay. Let us at least know what we are doing. Here is an initial expense of $58,500, and notwithstanding everything that has been said I am very, very emphatically against it. I see no reason why, on the other hand, the minister cannot get practically everything he wants without any bill at all. He has a general appropriation in his vote every year, and there is always enough in that appropriation to get the opinion of an expert, and I

Fisheries Act
venture to say that one man will do a great deal more than a board of three in connection with work of this kind.


Jacques Bureau: The Auditor General will
not pass the expenditure unless it is voted by parliament.


Henry Lumley Drayton: There is a miscellaneous vote to which it could be charged. The minister also knows that the government has not much trouble in issuing Governor General's warrants, as these estimates show. There is no difficulty whatever in getting information if the government are really in a hole and want it, any more than they have any difficulty in retaining counsel, as they do from day to day and from time to time.


Jacques Bureau: I see there is a lot of
conflict of opinion over section 2. I would ask that section 2 stand and that we consider section 3, which is just to transfer the income tax to the Customs department.
Section stands.
On section 3-Schedule amended.


Jacques Bureau: At the end of the Customs and Excise Act hon. members will find a schedule which provides that all taxes except the income tax shall be collected by the Department of Customs and Excise.


Henry Lumley Drayton: Carried.


[Stage Direction]
Section agreed to.
Jacques Bureau: As far as section 2 is
concerned, I have done what I think it was my duty to do. I have had three years of experience in the Customs department, and I have had occasion to meet people who claimed to have suffered in the way the taxes were imposed and collected, and this legislation has been suggested to me by people who pay all sorts of taxes. I must say that my relations have not been with the bankers; they are a class of people I do not see very much, and I have had no communication with them. My information has come from the man who is in business and who pays a small tax, not from the man who draws a cheque for $100,000. I consider that I have done my duty to the country in bringing this legislation forward, I have done my duty to the officers of the government, and I have done my duty to the House. I am willing now to let the House decide and throw out that clause if they choose to do so. I now move that the committee rise and report progress.
Progress reported.


FISHERIES ACT, 1914 AMENDMENT
[Stage Direction]
Hon. P. J. A. CARDIN (Minister of Marine and Fisheries) moved the second reading of Bill No. 66, to amend the Fisheries Act, 1914.
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Gordon in the chair.
On section 1-License fee for salmon cannery decreased.
Mr. NEILL:: I would like to say a few
words in support of this act. It was passed last year by this House but defeated in the Senate, largely I think for lack of information as to its meaning. One of the reasons alleged for its defeat was a letter produced from the Hon. Mr. Ballantyne, the late Minister of Marine and Fisheries, in which he said that the only reason for passing the act was because it was recommended by "the foolish Duff report". The Duff report referred to a commission which sat in British Columbia in 1922. Of course, Mr. Chairman, it is a matter of opinion whether that report was foolish or not, but I would like to point out that in some respects that commission was different from those that had gone before. For one thing it took a very short time in its operations. We had a Fisheries Commission a year or two before that, and it was two years before we obtained its report. I have heard of other commissions which went out like the Israelites into the wilderness and have never been heard of since..


Samuel William Jacobs: May I point out that the
Israelites were heard of afterwards.


Henry Herbert Stevens: At least in the House of
Commons.


Alan Webster Neill: I admit the particular and
peculiar knowledge possessed by my hon. friend, but I would like to point out to him that the Israelites I was speaking of went out into the wilderness and stayed there; they died there. He is thinking of their descendants. This commission was appointed some years ago, and possibly in time their children would have reported, but I believe the government cut off the source of supply, which brought the commission to an abrupt end.
The other commission, which somebody has alluded to as "the foolish Duff commission" at least was short in its operations. It covered a very large amount of territory and did a great deal of work, and compared to previous commissions it was particularly cheap, 8,s far as the financial cost of it goes,
Fisheries Act

and the results were very considerable. Not only was the report of some extent but, another peculiarity, the report was acted upon, a most unusual thing in the history of fisheries commissions in the past. I think the commission made a mistake in two somewhat unimportant items, but they were set right the netxt season. Otherwise, what was done was generally acceptable to the industry, and I think will prove of benefit to it. In case any members who were on that Duff commission, especially the gentleman who was associated with it as chairman, should feel discouraged, I might mention that the hon. gentleman in the Senate who produced this letter as evidence that the bill should not be passed, admitted in answer to a question that he had never read the report of the commission!
I just want to refer to the report to show why it was recommended that this bill, which is to reduce the license fees of canneries, should be put into effect. The commission reported as follows; I will give the substance.
A comparison of the fees charged for licenses on the Atlantic seaboard demonstrated that the British Columbia industry had been unreasonably overtaxed. The report then went on to point out that these fees were enormously increased in 1918, at the very peak of the high prices in the salmon industry, which ran down very badly from that time on. The return from British Columbia fisheries in 1918 was $14,000,000. In 1921 it had fallen to $5,900,000, considerably less than half.
Then there is the further point: T'nese high licenses were put on more or less m consequence, practically, of a mistake, of an error. The policy of the department up to the year 1912, was that the number of can-ners' licenses should be restricted, and not only that the licenses for canneries should be restricted but also the waters in which they fished. So that the canneries got very often a complete monopoly of a very large area and could prevent any one else from fishing in that area. One gentleman on the west coast of Vancouver island had a monopoly of 200 square miles of fishing ground. Of course any one can see the advantage of that system to those who were engaged in the industry. But that system only prevailed up to the year 1912. After that the policy of restriction was departed from conditionally and in 1917 the earners were informed that thereafter the conditions would be removed entirely and that any one could fish in anybody's waters so to speak. The Sandford Evans Commission, who investigated the question in that, year, recommended a reversion to the restrictive
rilr. Neill.]
policy but with a stipulation. In return for the enormous monopoly that was going to be conferred on these people-'because they were going to revert not only to the restriction of cannery licenses but also to the restriction of the area of waters in which fishing could take place so that it would be a very great advantage to those canneries then in existence -they recommended an increased tax on the principle that if the canners were going to get an enormous monopoly they should pay for the privilege. But fortunately or unfortunately as the case may be-fortunately I think-the department did not adopt the principle as regards restriction but they did adopt the principle of increasing the taxation which was hardly fair to those canneries which were in operation at the time; they did not get the quid pro quo which they were supposed to get in consideration of this enormous increase in taxation. I should like to point out that at that time the taxation on canneries was increased from $50 to $500, and there was a large taxation per case put on as well which would have yielded probably about the same. What is proposed in this bill, and what was recommended by the 1922 Duff commission, is not to cut off both those taxations but only one of them. They proposed to cut the license down but to allow the per capita tax to remain as it was.
There is another thing I should like to point out; Another reason why the commission of 1922 proposed to give the cannery men some reduction in the licenses was this: They had in several ways contracted the operations of the canneries and made it less profitable for them to operate, in the way of further conservation of the fish, and other changes of that character, and it was felt that it was only just to the cannery men, who were not in the most prosperous condition, to give them some compensation. I should also like to point out that the cannery industry differs from perhaps any other industry almost in the world in this regard. First the season is so short that the whole business of the year has to be conducted in a few weeks, or a few months at the most. Also the industry has been confronted for a number of years past with high costs ever increasing and an ever reducing output or catch. In any other business, for example in the making of motor cars, if a man went into that industry and invested his money with the intention of making, we will say, 15,000 motor cars in a year, subject to unforeseen circumstances, he would have a pretty good idea of the exact cost of each of these motor cars because he would know what it would cost to make

Fisheries Act
a certain quantity with given machinery and so on. But the very reverse is the case in the cannery business. You have to arrange beforehand, months beforehand, not for what you intend your pack to be but what you hope or trust it may be. I have known a cannery to provide for a pack of 15,000 cases and owing to conditions they could not possibly help-a poor run, a change of weather with a preponderance of rain or a lack of rain-experience a falling off. Instead of putting up
15.000	cases they were only able to put up
4.000	cases. Then, too, a large part of the expense is due to cans. These cans cannot be picked up in a five cent store at a week's notice. They have to be contracted for months if not a year ahead, and once delivered they must be used or they are practically lost-they rust and deteriorate before another season comes. The running expenses must also be provided for. A contract must be made with the men who run the cannery, or the operating part of it, for so many thousand cases perhaps six months before the run begins; and if the cannery only packs 4,000 cases although il had expected to pack ten or fifteen thousand cases they must pay on the larger basis because a contract cannot be made in any other way. And so they are confronted with the certainty of a large outlay although it is doubtful whether they will make a good catch or not. These are the reasons that make the cannery business so very uncertain on the coast.
I	should further like to point out that in addition to the $500 license fee which they pay the Dominion government, the provincial government is kind enough to step in-why I do not know-and charge them $400 as well. In addition to that the Dominion government charge a per case tax of four cents and the provincial government charge a per case tax of three cents, the whole thing together averaging in the case of a very ordinary sized cannery a total as regards the two governments of something like $2,000 before they make a nickel for themselves, and utterly irrespective of the fact that they may sustain a heavy loss on their operations, that $2,000 has to be paid to the Dominion and provincial governments in any case. I would submit that this is an excessive burden. Again, the canners have to pay a sales tax on the output of their canneries; but if the fish are put in cold storage or sold fresh there is no sales tax at all. There is an additional burden which
has to be paid by these men. I do
II	p.m. not think that I can be accused
in any way of being a representative of or special pleader for the cannery interests
of British Columbia, but this is a case in which I think they are fully entitled to the relief which will be provided them by the provisions of this legislation. I think my hon. friend rhe member for Vancouver Centre (Mr. Stevens) will endorse my statement that many of the canneries are in a bad way. Many of them are more or less in deep financial waters and they are being sold out, or bought out by one or two other firms. At any rate they certainly are not in a prosperous condition to-day and they need all the assistance they can get.
There is one more reason why I should like to urge the passing of the bill and it is this: At the present time the $500 tax on the operations of the cannery is levied whether you put up one case or 20,000 cases. This prohibits the man in a small way from operating at all. In support of this I should like to give a concrete case that is within my own knowledge. I was in the northern part of my district last fall and there was a large sound there, rather remote, which was full of fish at the time, but owing to the distance it had not paid any of the big canners to send their fishing boats there. The consequence was that it was full of fish which nobody was able to catch and the local fishermen there were unable to get any fishing. There was a small cannery there owned by a couple of returned men who had established a small business of putting up crab meat which can be done only in the winter months. Had they been able to avoid this heavy tax, they could have fixed their machinery to put up two, three or four hundred cases of salmon and this would have been a godsend to the local fishermen who would have had work for two or three months. They were unable to do this because they had to pay $900 before they put up a can which made the fee prohibitive. Had there been this per capita tax only and a small flat rate, they would have gone mto the business and put up perhaps two, three or four hundred cases for the benefit of everybody in the neighbourhood and to the detriment of no one at all. I think in any case the license fee should be at least limited to the amount named in the bill, $20, up to a pack of 500 cases. This is, I think, more than sufficient justification for passing this legislation as it was passed last year.


Henry Herbert Stevens: I merely wish, very
largely, if not wholly, to endorse the remarks of my hon. friend (Mr. Neill) which very adequately outlined the situation. May I point out just this one feature to the committee which in itself forms a justification for this bill? That is, when the original
Fisheries Act

heavy tax was imposed an exclusive area was allotted to each of the different canneries and reserved for that cannery. That has been done away with now and others may enter those areas and fish, thus removing the monopoly or the exclusive right and also at the same time, in my estimation, doing away with the justification for the heavy tax. This bill has my hearty endorsation.


Henry Lumley Drayton: It might help
a good deal in the Senate if the minister were to give the concrete facts which were apparently lacking last year, just what loss of revenue this means and such information. I think perhaps the loss of revenue was rather exaggerated.


Mr. CARDIN:: The loss of revenue will
be about $29,000.


Henry Herbert Stevens: I do not think it would
be fair to let that go in its rather unvarnished state. The loss of revenue from the reduction from $500 to $20 would be $29,000, but others, such as my hon. friend mentioned, would operate and they would put up a psck upon which a certain revenue would be received which must be deducted from the $29,000 loss.


Henry Lumley Drayton: How does the deficit stand now with reference to the Pacific fisheries?


Pierre-Joseph-Arthur Cardin: I have not the details here. I have only the details with reference to British Columbia.


Henry Herbert Stevens: The minister, I think,
will also admit that the expenditure which he refers to covers all classes of fisheries and is not limited merely to salmon fisheries.


Pierre-Joseph-Arthur Cardin: It covers all fisheries.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Hon. P. J. A. CARDIN (Minister of Marine
and Fisheries) moved that the House go into committee to consider the following proposed resolution:
That it is expedient to amend the Fisheries Act, 1914, and to provide,
1.	Except as otherwise provided in the act, no one shall engage in the manufacture of fish meal, fertilizer, oil, glue or products of a similar character from fish, fish offal or marine animals, except under license from the minister.
2.	That the annual fee on a license for the operation of an establishment for dry-salting herring in British Columbia shall be twenty-five cents on each ton or fraction thereof of dry-salted herring put up in the establishment during the season.
Motion agreed to and the House went into committee, Mr. Gordon in the chair.
Pierre-Joseph-Arthur Cardin: The total expenditure of last year, 1923-24, was $385,877.89 and the total revenue was $122,435.24.


Henry Lumley Drayton: It is getting
worse. What is the reason of that?


Pierre-Joseph-Arthur Cardin: In 1922-23, the total expenditure was $403,992.84 and the total revenue was $223,656.57. It might be well to place upon Hansard a resolution which was adopted at a meeting of the Canadian Fisheries Association held in Montreal on the 4th of July. This resolution is reported by La Presse of Montreal and I will try to make a translation:
A resolution was adopted asking the Minister of Marine and Fisheries to do everything possible to reduce the amount of the license for salmon canneries m British Columbia.


Henry Lumley Drayton: What is the
charge on the Atlantic now?


Pierre-Joseph-Arthur Cardin: Unfortunately I have not the information before me now, but the charge is very small.


Henry Lumley Drayton: What are the figures as to the deficit on the Atlantic?


Pierre-Joseph-Arthur Cardin: The object of the first part of the resolution is this. We propose to change section 9, which reads:
In the province of British Columbia no one shall engage in the manufacture of oil or other commercial products from sea-lions, hair-seals, sharks or dog-fish, except under license from the minister.
Instead of limiting the manufacture to the products mentioned in this section, we propose to say that:
Except as otherwise provided in the act, no one shall engage in the manufacture of fish meal, fertilizer, oil glue or products of a similar character from fish, fish offal or marine animals, except under license from the minister.


Henry Herbert Stevens: What is the reason for
this change in phraseology?


Pierre-Joseph-Arthur Cardin: The explanation which has been given to me is that the reduction works are now being used for the conversion of other fish into fish meal and so on. Fish meal is an important food and this change is made in order that these plants should be under proper control. Under the previous section it was necessary to obtain a license only for the manufacture of oil or commercial products from sea-lions, hair-seals, sharks or

Supply-National Defence
dog-fish. Now we propose that there shall be a license for the manufacture of fish meal and all products of any kind from fish, fish offal or marine animals generally.


Henry Herbert Stevens: Let us take the case of a concern which has a lot of waste material such as the heads and other parts of the offal of fish. Would they have to take out another license in addition to the cannery license if they had in connection with their cannery a fertilizer or reduction plant?


Pierre-Joseph-Arthur Cardin: No.


Henry Lumley Drayton: What about the fee?


Pierre-Joseph-Arthur Cardin: In section 19 of the amendment of 1922 the fee was based on a graduated scale: 50 cents per ton for a quantity not less than ten tons, and so on. Now we propose to make the fee a flat rate per ton.


Henry Lumley Drayton: Will there be a loss of revenue?


Pierre-Joseph-Arthur Cardin: Without being definite, I
may say that the information I have is that there will be no loss. This will simplify matters. Another amendment is intended to correct a clerical error in section 67.
Resolution- reported, read the second time and concurred in. Mr. Cardin thereupon moved for leave to introduce Bill No. 248 to amend the Fisheries Act, 1914.
Motion agreed to and bill read the first time.


Pierre-Joseph-Arthur Cardin: I move that the bill be read the second time.
Motion agreed to and bill read the second time.


Hewitt Bostock: When shall the House go into committee on the said bill?


Pierre-Joseph-Arthur Cardin: At the next sitting.


NATIONAL DEFENCE
[Stage Direction]
The House in committee of Supply, Mr. Gordon in the chair.
National Defence-administration, $301,000.
Henry Lumley Drayton: I do not want to detain the minister but we had no notice that these estimates would come up. We could object, but I understand that the minister merely wants to have an item called so that he may get the supply.


Hon. E. M. MACDONALD (Minister of National Defence):: Yes.


John Evans: I desire to bring to the attention of the committee a matter of general interest; I refer to the rights of parents and relatives to the bodies of those dear to them who were slain on the field of battle during the years from 1914 to 1918, and the question as to the power of the government to give to those desiring to do so permission to remove such bodies for final interment. The father of a boy who was slain at Passchen-daele located the body of his son in the fall of 1920 and after having unmistakably identified it he placed it in a coffin and buried it in Tyne Cot cemetery at Passchendaele pending completion or arrangements to bring it home to Canada. I will read a paragraph or two of his own words. He says:
After my return to London I went to see Sir George Perley, and on reference from him, went to the Imperial War Graves Commission, but could not get consent to bring the body home. Thereupon I consulted a solicitor in England who assured me that the question of the control of the body of a soldier in France and Belgium had been taken uip in the House of Commons in England and that parliament had decided that parents had control of the bodies of their sons killed overseas. Whereupon I took on my own account to bring the body home. I appointed Lieutenant Colonel Cawston, an officer in uniform in the Imperial Army, my attorney under power of attorney to ship the body home. Lieut-Colonel Cawston proceeded to do his work and as I learned from him afterwards he brought the body as far as Antwerp and placed it in a morgue in a properly sealed metallic casket awaiting the sailing of the boat. However, before the expected boat arrived the Imperial War Graves Commission instructed the Belgian police to remove the body from the morgue and bury it. They did so and the body I believe is now where they buried it in a cemetery outside Antwerp. We made two trips as above indicated and succeeded in locatmg the body, laid out considerable money and had all but completed our task when we were so heartlessly interrupted. If the advice of the lawyers is correct the Imperial War Graves Commission had no authority to take the body from us and some person has shockingly exceeded his authority, causing immense pain, suffering and sorrow to my wife, my daughter and myself.
I believe, Sir, that the whole matter rests with the Imperial War Graves Commission. In their agreement with the Belgian government the following article appears:
Exhumation of bodies buried in cemeteries or military graves with a view to their transport to the United Kingdom or to another part of the British Empire should only take place in agreement with the Imperial War Graves Commission.
The Belgian government has instructed its burgomasters to refuse all applications for permission to remove these bodies unless preferred through the commission. So I request that the government seek such authority from the Imperial War Graves Commission for the removal of bodies under circumstances such as I have described.
Canada Shipping Act


Edward Mortimer Macdonald: Mr. Chairman, the case to which my hon. friend has called attention is rather a peculiar one; the father is obsessed with the idea that the body of his son should be brought home tq Canada. The rule which has been applied by all administrations, including the adfninistration in Great Britain, is that the bodies of those who died in France should remain buried there. While one can understand that fathers and mothers may desire to bring home the bodies of their boys-and that is the case with the gentleman to -whom my hon. friend refers-to grant such permission would be in violation of the agreement which has been made among the various governments. I think the well-considered sense of the country has been that the proper course was that followed by the government of the day-to leave the bodies of our boys where they fell. To inaugurate any other course would mean at once a demand for an immense expenditure by Canada and by other countries engaged in the war to bring home the bodies of their slain. After all I think this would not be advisable. The gentleman of whom my hon. friend speaks has brought this matter before every minister of my department since the war, and he is evidently obsessed in this regard to a degree greater than most men. I will not go into the circumstances, because he and Lieutenant Cawston acted in a way which brought about Cawstons arrest by the Belgium government. I think the House and the country will agree with me that the proper position to take is that the sons of Canada who fell in the Great War should lie where they are until the resurrection morn.


George Perry Graham: Mr. Chairman, like most
of those whose sons were lost overseas, I had a very strong desire to bring the body home.
I went to London, examined all the plans that were being prepared for the cross of sacrifice, for the headstone, and for the cemeteries, and I gave an interview of about a dozen lines and cabled to the then government that in my opinon if the boys could be consulted they would say; "Let us lie where we finished our day's work beside our chums." I believe that is the proper course to follow. Their graves mark the sacrifice of men from all parts of the Empire, and are a record of what the men of Canada accomplished side by side with men from other parts of the Empire and their allies, and will witness to future generations just what kind of a race Canadians belong to. The history of Canada and of the Empire cannot be fully recorded unless the bodies of our boys are left where they fell to form part of that history.


Mr. POWER:: Mr. Chairman, I understand that after the war our neighbours to the south decided that the bodies of their soldiers who fell in France should be brought back to the United States. After considerable trouble and a great deal of expense some were brought back; I do not know how many. I remember reading in the newspapers that those bodies were transported to New York, but many of them had to be buried somewhere in the vicinity because no one came to claim them. The experiment was not successful.


John Evans: Mr. Chairman, I appreciate
the force of the arguments of the hon. Minister of National Defence (Mr. Macdonald) and of the hon. Minister of Railways (Mr. Graham). Two of mine were at the front, but luckily they came back. I can understand the feelings of parents whose sons were slain. I hope this case is ended once for all, and that the parents will see the force of the arguments we have listened to. For myself, I abide by the decision.
Progress reported.


CANADA SHIPPING ACT AMENDMENT
[Stage Direction]
Hon. JAMES MURDOCK (Minister of Labour) moved the second reading of Bill No. 216 to amend the Canada Shipping Act, to give effect to certain draft conventions adopted by the International Labour Conference of the League of Nations.
Motion agreed to and bill read the second time.
Mr. MURDOCK moved that the House go into committee thereon.
Henry Lumley Drayton: I would point
out, Mr. Speaker, to my hon. friend leading the government (Mr. Graham) that while this is only one little bill, it is a long one to move into committee at this hour of the night.


James Murdock: The apparent length is
due to the four conventions being included in the schedule.


Henry Lumley Drayton: Perhaps we can shorten it. Is there anything in this bill other than what we have already discussed under this resolution?


James Murdock: Nothing whatever.


Hewitt Bostock: It is understood that the
two resolutions are embodied in the one bill.
Motion agreed to and the House went into committee, Mr. Gordon in the chair.

National Railways and Shipping
On section 2-"child"ship;" "young person."


Henry Lumley Drayton: Is there anything in the act as drawn which does anything except follow the convention?


James Murdock: Not anything.


[Stage Direction]
Section agreed to.
Bill reported, read the r.hiid time and passed.
On motion of Mr. Graham, the House adjourned at 11.35 p.m.
Thursday, July 10, 1924.