1925-03-27

ALLEGED ARRANGEMENTS FOR GOVERNMENT OFFICES IN GENEVA

[Stage Direction]
On the Orders of the Day:
Hon. R. J. MANION (Fort William and Rainy River):: Mr. Speaker, I have a telegram from Toronto on which I wish to base a question. I presume it is an item in the Mail and Empire of this morning. It says:
A Mail and Empire agency despatch from Geneva says: "Canadian government has rented pretentious offices in the Quai Woodrow Wilson, where Dr. W. A. Riddell, permanent envoy, expects to entertain Canadians all summer."
Is this entertaining part of the policy of economy, or is it a correspondent's picturesque touch?
I want to ask the Prime Minister (Mr. Mackenzie King) if there is any truth in the statement made in this despatch with regard to the rental by the government of offices in Geneva, and if the government will make a statement in that regard.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: It sounds a good deal like some despatch the Mail and Empire might get. I do not know anything of the matter referred to. I will make inquiry.

The Budget-Mr. Carroll



THE BUDGET


[Stage Direction]
The House resumed from Thursday, March 26, consideration of the motion of Hon. J. A. Robb (Acting Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendment thereto of Sir Henry Drayton.
Mr. W. F. CARROLL (Cape Breton South and Richmond):: Mr. Speaker, will you allow me to join with those who in this debate have expressed regret at the continued absence from the House of the Minister of Fir ante (Mr. Fielding). We all miss the gentleman whom the newspapers of this country in recent years have called the "little grey man from Nova Scotia", and who as a matter of fact is a great Canadian statesman, a man who has gi seed the political life and the legislative halls of this country for well nigh half a century; a man who has an international reputation and who is looked upon in all quarters as one of the empire's ablest and most astute statesmen. That being true, we are nevertheless deeply grateful that we have as Acting Minister of Finance the keen, alert, active and. businesslike member from the district of Huntingdon, (Mr. Rob'b), who in the two budget speeches he has delivered in this House ho? placed himself in the front rank of finance ministers in this country.
Coming to the subject matter of this debate, me budget, I wish to say at the outset that there is nothing startling or sensational in it. It is, however, a dear, brief, businesslike statement of the financial condition of Canada, delivered by a businesslike Acting Minister of Finance. It does contain some surprises. During the past year, especially in the last six months of it, we were told by the press of this country that a deficit would be shown in the budget statement. It is a matter of gratification, however, that notwithstanding the world-wide depression which Canada has unfortunately shared; notwithstanding a considerable decrease in revenue; notwithstanding the fact that we lifted from the shoulders of the Canadian people last year millions of dollars of the weight of taxation, the Acting Minister of Finance is able to come down to this House and announce-'and announce truthfully-that we have a surplus of almost $2,000,000 of revenue over actual expenditure. That, Mr. Speaker, is a statement which will appeal to the people of this country and will give them renewed hope and renewed inspiration as to what Canada may be for the future.
102i
Coming down more particularly to the items in the budget, representing as I do a maritime country where upon the success of our fishermen depends the success of the commercial and other interests of the province, it is a matter of gratification to me, as it must be to the fishermen of Nova Scotia, to know that the acting Finance minister has reduced from 27 1-2 per cent to 15 per cent the customs duties on engines to be used exclusively in the propulsion of boats bona fide owned by individual fishermen for their own use. This, Mr. Speaker, will be a benefit to the fishermen not only of Nova Scotia, New Brunswick and Prince Edward Island, but also of the province of Quebec along the Gaspe peninsula, as well as of the Pacific coast. In addition, it is in keeping with the policy of this government in reducing the taxation on the implements of production.
Another proposal in this budget is the organization and appointment of a board which will act as expert advisers to the Finance department in 'matters of trade, tariff and taxation. This, I think, has been a long-felt want in Canada, and the proposal made is a move in the right direction. As I understand it, it is the intention to organize this board of experts from within the government departments and outside, men who will have special knowledge of trade, tariff and taxation, and who will be able after investigation to give the Finance department the very 'best advice on tariff matters. I agree, however, entirely with the hon. member for Brandon (Mr. Forke) in what he said yesterday, that notwithstanding the government has decided to create and organize this board of experts, yet in the final analysis now and for all time to come the responsibility for 'tariff changes must rest upon the government and the Parliament of Canada, So far as I am concerned, and I presume so far as the people of this country are concerned, they will not lightly stand for any independent boari, however expert they may be, forming and putting into effect any tariff regulations until they have first been passed upon by the parliament of this country.
The next item in this budget, whSh to me and to the Maritime provinces, and. especially to the province of Nova Scotia, is of supreme importance, is the regulation Which will readjust the duties on bituminous coal. This government, Mr. Speaker, has done not a little toward1 giving this country a Canadian fuel policy. Let me point out a few of the problems which this government has tackled relating to our fuel resources and our coal development.
The Budget-Mr. Carroll

In the session of 1923 tlhe Finance minister of the day in 'his budget speech announced that he was going to allow lignite to come into this country free. That was done to benefit the western operators and the miners in the province of Alberta. It was done also with a view to taking 'advantage of the reciprocal arrangement which a few years previously had been made in the tariff schedules of the United States, whereby any class of coal which was allowed to enter the United States free would have free entry into Canada, -and vice versa. The ihon. member for Bow River (Mr. Garland), in the session of 1923, in the course of a debate in this House on a resolution introduced by one of the members for Toronto, read a resolution passed by the Red Deer Valley Coal Operators' Association. I have no doubt 'that the government of the day was also approached, and as a result, in that session the Minister of Finance acted as I have said, and I am given to understand by a very reliable authority that this action has materially assisted the lignite coal industry in the province of Alberta.
In the session of 1924, after the Mines branch of this government had investigated the possibilities of getting coal from the east and from the west- into our central provinces the Minister of Mines had an appropriation of $200,000, which in effect meant that a subvention of one-fifth of a cent per ton per mile was to be granted in the carriage of eastern coals west and western coals east. That had a, very beneficial effect so far as the coal trade of Nova Scotia is concerned; I am not in a position to say whether or not Alberta reaped any benefit from that arrangement. The item was passed very late in the session of 1924, and it did not become effective, I believe, until the middle of August that year, but notwithstanding that, the operators in the province of Nova Scotia were enabled to market one hundred thousand tons of coal in markets which up to that time they had not been able to reach.
This year the government has brought down another policy, if I may call it such, respecting cSal. They have levelled up the duties on slack coal and run of mine coal to 50 cents a ton. Previous to this, and for some years the duty on run of mine and screened bituminous coal was 53 cents a ton, and on slack bituminous coal 14 cents a ton. This had the effect of creating an anomalous condition in the coal trade. Bituminous coal run of mine is identically the same article as bituminous coal slack, though in a different condition. Yet there was this difference in the duties. It may

be interesting, Mr. Speaker, to ascertain why the duties have remained in this anomalous position for very many years past. Well, slack coal up to seven or eight years ago was of very little market value. In the early days under our tariff the duty on slack and run of mine bituminous coal was identical. For some years it was 50 cents per ton, and for a few years 60 cents per ton. In 1907, I think it was, the duty on slack bituminous coal was fixed at 14 cents a ton, and the duty on the other 53 cents a ton. In 1897 the duty on round coal or run of mine bituminous was placed at 53 cents a ton, and the duty on the slack was. put upon an ad valorem basis of 20 per cent. The value of this slack coal was so low and so variable, and the market for it so small, that the customs authorities decidted to fix 65 cents a ton as the import price for duty purposes. That was not done by order in council, nor was it a part of a budget brought down in this House; it was a custom which grew up in the Customs department. Twenty per cent of 65 cents would be 13 cents a ton. In that way this anomalous condition of affairs grew up, and when the tariff of 1907 was brought down and readjustment made in the duties on coal, instead of going back to the ad valorem rate, the duty on slack coal was placed at 14 cents, and the duty on the other was left as before.
Now, Mr. Speaker, the market for slack coal in this country has very materially increased in the last number of years. Our coal industry in the province of Nova Scotia has been in a very precarious condition since the war. In 1913 the sales of Nova Scotia coal amounted to 6,164.000 long tons; in 1914 the sales went up to 6,478,000 long tons. In 1918 t/he sales fell to 5,265,000 long tons; in 1923 they rose to 5,507,000 long tons, but in 1924 they declined again to 4,448,000 long tons. Was there any good reason why, during the period from 1914 to 1918 when the wheels of industry in this country were running faster than they ever did before, the sales of Nova Scotia coal should have decreased by 1,200,000 tons? The reason is not far to seek. In 1915 a line of steamships-a thoroughly up-to-date line with fine terminal facilities in Nova Scotia and at Montreal-was developed by the then Dominion Steel Corporation and placed
2,000,000 tons of coal in the Quebec market. During the war, between 1914 and 1916 those ships were commandeered. Thus we lost the Quebec market; it was captured by the United States: and up to this time we have not recovered it. There is another reason for the decline in the sale of Nova Scotia coal. The United States did not, enter the war until some

The Budget-Mr. Carroll
years after hostilities had been commenced. When they did go into the war they had their men so picked that their industries would1 not be in any way injured by their war activities. Not so in this country. When the war broke out the men who supplied the bone and sinew to Canadian industries enlisted by thousands and tens of thousands, making such a. drain upon those industries that the military authorities instructed their recruiting sergeants in the province of Nova Scotia in the year 1916 to keep away from the coal fields otherwise the coal mining industry would be ruined, and permanently ruined. It is true that many of our most expert miners who had enlisted returned from the front, but many never came back.	I believe
that the coal industry of Canada, having special reference to the province of Nova Scotia, was hurt by the war to a greater degree than any other productive industry in the Dominion; as a matter of fact it was practically destroyed. In the meantime, while the industry in Canada was being contracted, the coal industry in the United States was -being developed to an enormous extent. That was the state of affairs we had to face in the province of Nova Scotia in 1918.
In 1923, or before, and for some time during that year, there was a great coal strike in the United States. In that year we shipped through the port of Louisburg almost 1,000000 tons of bituminous coal for the New England market. But on the termination of the strike we lost that market and to-day not one ton of coal is being -hipped to New England, a condition which has existed for some time. To illustrate further the actual situation, and to prove the contention which I have been making, let me point out that in 1914 the province of Quebec took 2,381,000 tons of bituminous Nova Scotia coal. In 1924 we had a market in the same province for 1,570,000 tons of coal, so that in that one market alone we lost practically the sale of a million tons of coal in that ten-year period In the last four or five years the price of slack coal has been increasing, and to-day it has practically the same market value in central Canada as run of mine coal. This improvement with respect to slack coal was brought about by innovations in our manufacturing industry in the way of installing new furnaces to use that kind of coal, and to-day practically every great manufacturing industry in Quebec and Ontario uses almost entirely slack bituminous coal in its operations. Last year there was an improved demand' for our coal in the markets of Montreal and Ottawa; in fact 40,000 tons of our coal
were sold to the E. B. Eddy Company just across the river here. That improvement was made possible by the eft irts of the Department of Mines and the small subvention which was given us through the instrumentality of the Minister of the Interior.
As I have said, the United States mines developed wonderfully during the war period. They opened new mines over there and the cost of production decreased, whereas the cost of production in Nova Scotia increased. May I point out that in the province of Nova Scotia twenty per cent of the cost of operations is taken up with the pumping of water out of our mines, a difficulty which it is almost impossible to overcome. On the other hand	in the	case of many mines	in	theUnited States	all they have to do to	get	thecoal is to tunnel into the mountain; and as a matter of fact enormous quantities of coal are mined there without the help of man power at all, and consequently without the assistance of men who have become experienced miners. Again, we have an eight-hour day in the mines of Nova Scotia as a result of custom and1 of statutory enactment, but there	is no	such provision m the	case	ofmany	mines	in the United States.	Tn	the
case of the Nova Scotia mines there is also a compensation law in force the funds for which are provided entirely by the manufacturers, operators and lumbermen in that province. Not one dollar of that compensation cornea out of the pockets of the miners, operatives or workers in the lumber industry. Under the pension scheme in connection with the-coal industry a miner who has worked for1 a company and reaches the age of sixty-five years may be given a pension which, in the cases which have come under my observation amounts on the average to from $40 to $45 a month. Not one dollar of this pension comes out of the pockets of the employees themselves. These are some of the burdens imposed upon the coal operators in the province of Nova Scotia. On the other hand the operators in the United States are free of these restrictions. And there is the further fact that in the case of some fifty per cent of the mines the men work as long as ten, twelve and fifteen hours a day.
I have given the reasons why the Nova Scotia coal industry finds it impossible, at the end of the war, to compete with United States coal in the Montreal market. Our greatest market, of course, is the little province of Nova Scotia itself where last year we consumed 2,000,000 tons of our own production but mostly run of mine coal. Now, to show how the physical difficulties of mining have in-
The Budget-Mr. Carroll

creased in Nova Scotia as compared with the United States, let me quote a few more figures. In 1908 the annual production per man in the province of Nova Scotia in the mines wlas 545 tons; in 1924 the average production iper man in those mines per year was 369 tons. That is a falling off of .more than a hundred tons a year. In the United States in 1908 the production per man per year was 603 tons, and in 1924 the production per man per year was 756 tons, an increase in the production per man of 153 tons, compared with the decrease of almost a hundred tons in the province of Nova Scotia.


Mr. GARLAND (Bow River):: Would the hon. member have any objection to putting that on a day's basis-the production per eight-hour day, instead of per year?


William F. Carroll: I have not worked that out. I am afraid I am not a very good mathematician and will have to leave that to somebody else.


Edward Joseph Garland: Permit me to suggest that that would have a very important bearing on the conclusion my hon. friend is trying to reach.


William F. Carroll: I am arguing that the
production of coal has become much more difficult in the province of Nova Scotia, while in the United States since the war, and since the opening up of the vast territories of coal in that country during the war, the production has become very much easier. That is the conclusion 1 am reaching, and it is a matter of fact. Anybody who knows anything about coal mining in either of these countries knows that as we produce coal year by year we are getting further and further into the bowels of the earth and further and further under the sea. The longer the haul the more the coal will cost, and the further we go under the sea the greater will be the cost. In the United States, they have not, up to the present, faced this serious handicap.


Mr. GARDINER:: Can the hon. gentleman tell us the number of day's work per annum in Nova Scotia and the number of days' work per annum in the United States in the coal mines?


William F. Carroll: I have not the figures before me, Mr. Speaker, but I will admit that last year the days' work per annum per man in Nova Scotia were not up to the standard, especially in three or four mines, and I can say the same thing of the United States. Let me point out that to-day and for the past few months there have been in south-west Indiana alone 17,000 idle miners; so that they have

their troubles in that country, as we have our troubles in Canada.


Robert Gardiner: If there are 17,000 idle
in the United States is it not because of the closing down of the mines?
Mr. CARROLLj I do not know. I am placing the facts before the House, and hon. members can draw their own conclusions. It may be that they are closing down the mines. I have no doubt in the world:-and I want to be fair with the hon. member-that the vast coal production of the United States in the last number of years, especially during the last few years of the war and since then, cannot continue, because they were over-producing.


Mr. PRITCHARD:: Does the hon. mem-
' ber think the increase in the cost of that coal has been brought about by the fact that there was no duty on it, or at least a very small duty, and that they began to improve the quality and got the business in better shape?


William F. Carroll: I am coming to that
phase of the question. I think it is simply the demand for the slack coal that enhanced the price, because ten years ago slack coal was very little used in the industrial centres of Canada. However, I am going to touch on the question my hon. friend brought to my attention. I have many figures regarding importations from the United States, but I do not think I shall bother the House by placing them on Hansard. What is the reason that this government has been asked by the people of Nova Scotia to have a levelling up of the duty on slack coal, the same as on run of mine and bituminous coal? First of all, I support that proposition Mr. Speaker, because we were in an anomalous position for many years in that regard. I support it secondly because in the last number of years smuggling has become an art in the country, and the United States operators were using this anomaly in our coal duty to smuggle in run of mine coal under the heading of slack coal. That is a matter of which I have personal knowledge. I have personal knowledge that large lake boats come down to the city of Montreal, with two compartments, one loaded with slack coal and the other loaded with run of mine or screen coal. They screen that coal at the mine. They separate the slack from the run of mine. They bring it in, and the slack pays fourteen cents duty and the run of mine pays fifty-three or fifty-four cents. After the duty is paid they mix that coal and it becomes good run of mine coal, and they sell it ^ in the city of Montreal as such. The imposition

The Budget-Mr. Carroll
of the duty on slack coal will prevent a fraud on the customs, because it will prevent smuggling of run of mine coal into this country in the way I have mentioned.


Mr. KELLNER:: How do they mix it?
It seems to me a hopeless proposition. I do not know how they can mix it.


William F. Carroll: It is not a hopeless proposition. I have mixed it myself in my own cellar. I have bought slack coal down there for fifty cents a ton and gone into my cellar and mixed it with run of mine coal or screened bituminous coal, and it makes a splendid furnace coal. It is almost as easy to mix the coal as to mix a western cocktail.


Donald Ferdinand Kellner: Would the hon. member
tell us what percentage of it continues slack? It is stated in the press that there has been only a small percentage of American coal coming in as slack.


William F. Carroll: That is correct. Out of
15,000,000 tons of bituminous coal imported into this country, something over 3,500,000 was slack coal. If we .get some of that slack coal into the province of Quebec and further west there will be a better market for it than there was last year. That is another reason why I support this change in the tariff. I support it also for the reason I intimated in an answer to the hon. minister the other day. I not only supported it, but I went to the government with two delegations from Nova Scotia in support of the proposition. If this thing works out as I think it will, we will have in Montreal a market for anywhere between 700,000 and 1,000,000 tons of slack coal .more than we had last year. I support it also because it will give more work to the miners of Nova Scotia, and furthermore it means that we will be living up to what this government proceeded to do when they came down with their first coal policy in 1903, because it is a broad Canadian coal and fuel policy.
I mlight go on and develop the situation with regard to the announicement made the other night by the Minister of Mines in connection with coke ovens, but I do not know that the time is opportune and I will leave that until the bill comes down. What will be the result? |Miay I read an article from the Ottawa Citizen? The gentleman who writes the editorials for this paper is a great admirer of mine. May I point out what the Premier of Nova Scotia Ithinks off this increased duty on slack coal? He has been for many yeans Minister of Mines of that province, and in a statement published in the Citizen of March 15, this appears:
Premier E. H. Armstrong, for many years minister of mines in the Nova Scotia government, in a statement issued this afternoon, interpreted the Change in the tariff to mean a direct saving to the Nova Scotia operator, competing in the St. Lawrence market cf thirty-six cents per ton in the selling price of his pioduct. It has been estimated that the ten per cent wage cut proposed by the British Empire Steel Corporation would effect a saving of twenty-two cents per ton in the selling price of coal. This is taken to mean, by close observers of the situation, that under the new tariff the British Empire Steel Corporation can afford to pay the 1924 wage scale, and at the same time enjoy a fourteen cents per ton advantage over the selling price they hoped to effect by reducing the wage scale by ten per cent.
Moreover Premier Armstrong estimated this afternoon that tariff change would enable the Nova Scotia operators to market an additional amount of coal approximating anywhere from three to four hundred thousand tons.
I make the quantity considerably more than that. In this connection the householders of this country iare not affected. As a matter of fact, itheir position is improved because no (householders will use slack coal unless it is a mixture that I have mentioned before. For stove or cooking purposes they must use run of mine icoal unless they are wealthy enough to buy anthracite. Therefore, this does not in any way affedt the householder or the price of bituminous coal. As a matter of fact, it improves that condition by reducing the rate from 53 cents to 50 cents a ton. I wish to read some opinions, and first of all I will read the opinion of the Ottawa Journal in regard to this change in the tariff:
The increase in the duty on slack coal, while expected to greatly increase the market for Maritime coal in eastern Canada as far west as Toronto, will not, it is believed, have any other effect on industrial centres west of Toronto than of greatly increasing the price of American coal it is necessary to import.
This slack coal will be used entirely iby the manufacturers of Ontario, and whereas we are given to-day by this change in the duty an ad valorem duty of 16 per cent, on this coal, we in Nova Scotia and those in the western provinces are paying for goods on which there is a protective tariff of from. 27 to 35 per cent ad valorem, so I think Ontario manufacturers can stand itheir share:
The imposition of the tax is felt to be largely the result of representations by the Canadian Manufacturers' Association and others, who are anxious that Canadian coal fields in the Maritime provinces be fully developed. Nine thousand million tons of bituminous coal lie in the coal fields of the Martimes, but in spite of this huge mass, it is not felt that production there can equal the demand for the coal that the new tax is bound to produce, as the question of supply is largely a matter of the number of mine openings which can be economically operated, and it is generally admitted by experts that the number of openings which can thus be made there is greatly limited.
Maritime coal in Ottawa was practically unknown a year or so ago, the total amount used in the industrial
The Budget-Mr. Carroll

plants of this district a year or so ago being around 14,000 tons
And I may say that this icame entirely from the province of New Brunswick, from the Minto mines:
At present however several of the large industrial plants, notably the E. B. Eddy Company, have been us'ng the Maritime slack coal.
And that became possible through the intervention of this government last year. Last year the Eddy company took from the province of Nova Scotia somie 40,000 tons of ooal. What do the coal dealers in the city of Ottawa say?
Several local merchants are pleased with the imposition of the new tax. Mr. J. G. Butterworth last night stated that the tax was undoubtedly a good thing, and would work advantageously to the Canadian mines in Nova Scotia. He thought it would go far to rectify the present unsatisfactory conditions existing there through the men in the mines being able to work only part time.
Mr. Napoleon Belanger, of the firm of O'Reilly & Belanger, wras also of the opinion that the tax was a good thing. It was impossible to state at this date just how the American dealers would meet the situation. They might reduce their prices so as to offset the tax. In any event, however, it would be good for the Canadian mines.
These people are dealers, I presume, entirely in fuel for domestic purposes, and slack coal is not such a fuel. I may be told that the Progressive party in the west and the low tariff men of the west will, of necessity, have to live up to their principles by opposing the imposition of this extra duty on slack coal. But I believe the western Progressives are just as broad in their Canadian point of view as are the Bluenoses of Nova Scotia or the corpulent men of Ontario and Quebec. I had serious doubt for some time as to how the operators and the people of western Canada would look on this subject of the putting up of the duty on slack coal to the same point as the duty on round coal. My fears in that respect have been dissipated, because long before the government brought down the budget, we had the views of western operators and the views of western politicians who, I presume, represent public opinion in western Canada. On the 11th February, 1925, the following appeared in the Edmonton Journal as being the policy of Mr. Greenfield and the Edmonton government, representing, I believe, public opinion in Alberta in regard to this subject:
The question of the dumping of coal at lake head, and the need for an adjustment of the duty as between slack coal and run of mine coal, is no new one to the government-
He was speaking for the government:
- taid Premier Greenfield to-day, referring to the memorandum of the Edmonton Board of Trade now

being drawn up by the coal section of that body. As a matter of fact, proceeded the premier, we have for the past eighteen months been taking up this subject with the Department of Customs at Ottawa,-
That is as long as I have been taking it up.
-and I have good reason to believe that ere long the duty on coal will be adjusted so that slack coal will pay the same duty as run of mine coal, thus preventing the separation of the two grades at Duluth,-
Tlieir troubles are at Duluth; ours are farther east.
-shipping in the slack separately under the low duty, then re-mixing at Winnipeg and selling the mixture once again as run of mine coal.
The very proposition we have had to contend with in the Maritime provinces. He goes on:
Referring to the Anti-Dumping Act, Premier Greenfield said that in his opinion this should be made the same as the United States act, with the valuation for duty purposes made at point of production, instead of at the point of direct export. The Alberta government, he added, would continue to press for this concession also until it was secured.
I have not looked into the details of the revision so far as the anti-dumping clause goes but I think the wishes of Premier Greenfield are being complied with in this respect.
' If we can succeed in these two things," concluded the premier, "we shall have greatly improved the position of Alberta coal in the competitive Winnipeg market. Nova Scotia is also pressing for the same thing as Alberta, and we have every hope of ultimate success."
The Edmonton Board of Trade passed a resolution along similar lines, as did the Board of Trade of Calgary, whose resolution I have not with me, and Premier Greenfield took the matter up. And a week or ten days ago a delegation from Nova Scotia appeared in Ottawa to impress upon the government the necessity of doing exactly what they had done in regard to coal. The government of Alberta has a trade commissioner who is well and favourably known to many of us and he was on his way east when the Nova Scotia delegation was on the way to Ottawa. They got in touch with him to ascertain his views and those of the government he represents as trade commissioner, and a telegram came from Premier Greenfield, as follows:
Edmonton, Alberta, March 18, 1925. Howard Stctchbury,
Chateau Laurier,
Ottawa, Ontario.
Replying your wire seventeenth please represent province with Nova Scotia delegation Thursday setting out our view in accordance with letters recently sent to Minister of Customs and Minister of Finance.
These are the very views which the Edmonton Board of Trade expressed in February or January of this year. It is the policy of the

The Budget-Mr. Carroll
Alberta government, who I have no doubt represent public opinion in the
4	p.m. province of Alberta; they are with the people of Nova Scotia in the matter of this duty. Now what about the operators? I have heard it said both in this House and outside-


Mr. KENNEDY (Edmonton):: If I understand the first telegram Which the hon. member read in regard to a statement of Mr. Greenfield's,-


William F. Carroll: It was not a telegram.


Donald MacBeth Kennedy: It was a
press report, I think. He asked for an equalization of the duty. Is there anything there to show by what means he would seek that equalization?


William F. Carroll: I do not think there is
any secret about it. Mr. Stutchbury happened to arrive here when the Nova Scotia delegates were before the government; I met him that night and we discussed the situation.. He wanted to interview the Prime Minister and other members of the government, and he declared that the desire of those he represented was that the duty on slack coal should be levelled to fifty-three cents a ton. Well, the government has not entirely complied with that request, having fixed the rate at fifty cents. But there is no doubt as to where the government of Alberta stands on this question and if any further documentary proof is needed it is to be found on the files of the Minister of Finance and the Minister of the Interior, which will give evidence as to what is the attitude of the Premier of Alberta.


Mr. GOULD:: It has occurred to me that
it would have been more in keeping with the professed free trade principles of the government of Alberta and of Mr. Greenfield if that gentleman had advocated a reduction of the tax on run of mine down to the level of slack coal.


William F. Carroll: I do not know about that. I do not know whether he has expressed any opinion publicly on that point, but I take it that Mr. Greenfield is an astute man. I had the pleasure of meeting him once, and while I am no judge of human nature I considered him in that light. I presume, therefore, that Mr. Greenfield was in accord with public opinion in the province of Alberta on this subject. My hon. friend shakes bis head; well, I shall leave him to settle the point with the Premier of Alberta.


Mr. MEIGHEN:: It looks as if the Progressives were no better than the Libera' party out there.


William F. Carroll: Both of them are very
good. They are working hand in hand so far as this matter is concerned, and I am not referring to the members of this House. The Progressive party in Alberta is certainly cooperating with the Liberal party on the question of coal and I congratulate them; I have no doubt a great amount of good will follow. I was about to say when I was interrupted a moment ago that it has been suggested both in this House and outside that the coal operators of Alberta and British Columbia were opposed to the levelling-up of the duty on slack coal. I am not going to express any opinion held by the operators of Vancouver inland, where there are big mines, but I will give the opinion of the mining operators of the Crowsnest pass as well as the operators in other parts of Alberta. I have here a copy of a telegram sent on March 17, 1925, from Calgary, Alberta, as follows:
Howard Stutchbury,
King Edward Hotel,
Toronto, Ontario.
Answering your wire of fifteenth stating that you are informed western operators opposed to equalization of duty on slack and run of mine bituminous coal, association to-day passed resolution favouring equalization of tariff on slack and mine run imports and favouring also the imposition of a duty on coke and briquettes manufactured from bituminous coal see my wire to Camsell January tw'enty-eighth.
R. M. Young.
I have dealt at some length with this matter because I consider it important and I will now nut. on Hansard the comparative prices of run of mine coal in 1907, 1923 and 1924 to show how the ad valorem duties were affected. In 1907 the import valuation of slack coal was 65 cents a ton; in 1923, $3.63 and in 1924, $2.34. It fell to that extent in 1924 owing to the fact that coal was being dumped into this country at that time by the operators of the United States. And that is one of the grievances which the Premier of Alberta entertained in this matter. The quantity of slack coal imported into this country as compared with run of mine coal has increased tremendously in the last number of years. The import of slack coal from the United States as compared with the whole bulk of bituminous coal increased from 19 per cent to 26 per cent in the period of four years between 1920 and 1924. Here is another reason why somebmg should be done to level up this duty.
Much has been said with regard to immigration into this country and emigration from this country. I do not think that this government or any other government should, use the public funds 'to induce to immigrate to this country the carpet knights or the drawing
The Budget-Mr. Carroll

room dudes of London. Edinburgh, Paris, Vienna, or any other parts of Europe. What they should do, and what I hope they axe doing, by their immigration policy is to bring in the robust European, I care not what nationality he is, who will be willing to go on our farms and into our forests, our fisheries and our mines, and to brave for a year or so the hardships which are natural to those industries; and who will not be discontented or discouraged as to his chances in this country if he does not become a millionaire the first. 3'ear. We should do everything we can to keep our own people in our own country. There are some ways that this government can assist in keeping with us permanently the people we now have here. It-is unfortunate 'that a great many of our best people go to the United States. We are trying to get them back, and many of them are coming hack, but the proportion is not in favour [DOT] of Canada. Part of the trouble in this country is that the colls and the claims and the clamours of our great industrial centres-I mean, more particularly our great ocean ami river ports-have been so strong and so insistent upon this government and other governments, and so much attention is therefore being paid to these larger projects, that the smaller things are sometimes forgotten. Let me suggest a few things which to my mind would 'help to keep our own people within our own borders, at little or no cost to the country.
First of all, 'the Post Office Department can do very much to help make our rural population happier and more contented. They could develop and extend the rural mail delivery far more thau they are doing to-day, and at very little cost. Where personal mail delivery is impossible the government can do a great deal more than they are doing in giving the people of remote rural districts in every province a mail delivery at least once a day, excluding Sunday. That certainly would make for a happier and more contented people. I believe the Agriculture department also can do a great deal towards accomplishing this same end. Lines of communication should be established between, the Agriculture department at Ottawa and all the remoter rural districts. One or two intelligence officers should be appointed by the Department of Agriculture in all such remote rural districts. These officers would receive instructions from the department, by mail, with suggestions as to remedies for many of the difficulties experienced by the farmers in those districts-suggestions as to how they

might do better on their farms; how to conserve their forests; how generally to carry on their work in such a way as to make them happier and more contented. The Department of Marine 'and Fisheries could do very much to help the fishermen, without any great cost, by teaching them how better to prepare their fish for the market.
May I, without in the least desiring to reflect upon previous governments, or upon the present government, illustrate the point I tried to make a few minutes ago when I said that the wants and the claims and the clamours of our great ocean ports were overshadowing everything else 'and perhaps causing the government to forget that we have thousands of males of coast line in Canada which are not 'being properly developed? There is a small fishing hamlet on the southern side of the district which I have the honour to represent. It was settled by French Huguenots and English and Scotch Catholics three years after the founding of Louisburg. They developed little farms there and lived contentedly by farming and fishing. The French engineers of the day, well trained in matters of practical value to the people in this little hamlet, built across the harbour for a distance of some five or six hundred feet a breakwater, I shall call it, which prevented the broad sweep of the Atlantic from destroying the fishermen's boats, fishing gear and so on in the inner harbour. For a hundred and twenty years that breakwater stood and triumphed over the assaults of the Atlantic. For a hundred and twenty years the people of that district made a living by farming and by fishing. They did not become wealthy, but they were happy and contented. Some little maintenance work was done after a hundred and twenty years, but finally in the tremendous storm that swept that country in 1910 the remaining portion of the breakwater was torn away, so that if there was any sign of a breeze from the the sea it was practically impossible for these people to get their fishing boats, of which they had about one hundred and fifty, out to the fishing grounds on the Atlantic. The government of the day were approached in the matter, and it was requested' that an estimate be made of the cost of putting that breastwork into repair. It was estimated that $17,000 would do the work, and the government of the day placed in the estimates in 1911 the sum of $17,000 for that purpose. Well, bigger things eclipsed the needs of the poor fishermen of this hamlet. The reciprocity pact came on; the government went very hurriedly to the country, and a new government came in. Then

The Budget-Mr. Carroll
there wa^the war, during the period of which nothing was done. While the war was on, however, so high was the price of their product that these fishermen could live as well by fishing one day a week as they could when they fished five or six days a week before the war. Nothing .much was said at that time. In 1922, however, I took the matter up with the government, but the answer was, "We have no money. We are trying to reduce expenses. We are retrenching. True, we are spending millions of dollars in bringing in immigrants, but we are retrenching." In 1923-1924 twenty-five families whose fathers and grandfathers and1 great-grandfathers had been the best citizens of Nova Scotia were obliged under the stress of circumstances I have related to pick up their beds and whatever they had and betake themselves to the fishing grounds of Gloucester and other parts of the United States. We are spending millions of dollars to bring in immigrants, but not a thousand dollars to prevent immigrants from going out. I am not criticizing the government in respect to this matter, nor am I criticizing former governments who refused to take action in this respect, but I am giving this note of warning that the needs and necessities of the small places in this country must not be overshadowed by the great things for which people in other parts of the country are asking.
We hear doleful tales of the present condition of Canada. We hear that the public debt is so great it is going to ruin us, that we will not be able to meet it. The public debt is well over two billions of dollars, an enormous amount, but, Mr. Speaker, if I owed two billions of dollars, and ih'ad assets of untold value mounting into the billions and billions of dollars, I would think I was fairly well off. Have we got the assets that this debt of two billions olf dollars represents? Yes we have the assets, and our only lost assets are represented by the debt that was accumulated during the war, but I do not think any man in this House or in this country will say that the money we spent during the war, and the debt we 'thereby accumulated, wias wrongly spent. Yes, we have a large debt, (but our .assets are enormous. Our imports are less than our exports, we are selling more than we are using, we have a surplus in that direction. I think that does not forbo.de disaster for this country, I think it shows that so far as trade is concerned, this country is .in a healthy condition. And in that regard, Mr. Speaker, may I give the opinion of an English economist and expert in trade matters:
Winnipeg, March 23, 1925. "I am confident the world is on the verge of the greatest expansion of trade ever seen, and in this movement towards prosperity Canada lias obtained a running start,"
Those are the words olf Sir George Paish. He says further:
I anticipate higher prices for Canadian wheat over considerable period of years. Canada is ready now to increase her production greatly. The railways are there. All there is needed is farmers to till the soil, and these should be easy to get.
That- is the opinion of .a gentleman whom I personally do not know, but whom the Winnipeg F-ree Press designates as a well-known British economist.
I was somewhat surprised Itkat .even on this sale of the House, in the miidst even of .the Liberal party, we have same people who are beginning to develop a tone of pessimism. Last night the hon. member for Kings (Mr. Hughes) in addressing this House in a very able speech suggested that the word "secession " was becoming more commonly heard in this country, and that the sentiment in favour of secession was becoming more pronounced in the Maritime provinces. Mr. Speaker, I come from the Maritime .provinces, I am a Maritime province man, and il would ask: What have we got to gain by secession? WThat have we got t-o lose iby secession? If there is any person either in the Mlaritime provinces or elsewhere who will show me that we are going to be winners iby secession, I am not so hopeless in my way of thinking but that he might convert me. But I say, Mr. Speaker, we would be ten thousand times worse off than we are to-day in every one of the Maritime provinces.
M.y hon. friend from Kings says that we have no market in central Canada for our fish, that only two and a half per cent of our oatoh is marketed in central Canada. That may be true to-day, .but that very condition is due to the war. Before the war, our railways carried fish from Cape Breton, Nova Scotia and New Brunswick in well-equipped refrigerator cars, and we developed a wonderful market in central Canada for our fish. When the war came, those cars were taken off. The service was resumed two years ago under the present management of the railways, and I am willing to assert that inside of two years, if this refrigerator car service is developed, we shall not have only two and a half per cent of that market in central Canada, but we shall get the great bulk of it.


Mr. HUGHES:: We have the great bulk of it now.
The Budget-Mr. Carroll


William F. Carroll: No, you have not.


James Joseph Hughes: Oh yes, I have it from
wholesale men in Montreal. Further, it is four and a half, not two and a half per cent. The wholesale men in Montreal tell me that less than one per cent of their fish comes from the United States.
Mr.	CARROLL:	Let	me	tell	my	hon.friend	that Montreal	does	not	comprise	central Canada. He forgets that fact. Is his idea of the geographical situation of this country so limited that he immediately jumps to the conclusion that Montreal is central Canada?


James Joseph Hughes: Oh, no.
Mr.	CARROLL:	Let	me	tell	my	hon.friend	that I have	letters from	people in
Toronto, Hamilton, Guelph and several other cities in Ontario, telling me they require more fish and are not able to get it under the present freight rates that have existed during and since the war. I was surprised that my hon. friend from Kings should make those remarks.


James Joseph Hughes: The freight rates now on
fish from Nova Scotia are very favourable.


William F. Carroll: Absolutely. But when did they become favourable? Can you establish a market in a year? We lost that market during the war. My hon. friend is like some other people in this country, who wish to become millionaires overnight. We are not capable of regaining that market in a year or two. It took eleven years to establish that market prior to the war, and it will take us ten years to re-establish it.
Let me say further with regard to this talk of secession, that in 1867 when Nova Scotia and New Brunswick joined confederation we had in Nova Scotia 330,000 of a population, and in New Brunswick 252,000, and for one hundred and twenty years those provinces had been established.


Mr. FORKE:: If I may be allowed to impinge upon the debate for a moment, I would inform my hon. friend that Manitoba exports fish to St. Paul, Minneapolis and Chicago. I think we export more fish than the province of Nova Scotia. That may seem strange to my hon. friend from the Maritime provinces.


William F. Carroll: I am not surprised, then,
that my friends in Minneapolis and other sections are so weak in brain power if they have to live on whitefish. In our part of the country we get the real stuff. I do not want to be discourteous to my hon. friend but I want to point out to him that I am not talking about duties at all; I am talking

about freight rates and the available markets so far as Nova Scotia is concerned.


Robert Forke: I had no idea of finding fault with my hon. friend, I wanted to give him information so as to disabuse his mind of the idea that we do not grow anything but wheat out on the prairies.


William F. Carroll: Oh, I know. I have
caught a few fish out in Saskatchewan and Manitoba and was caught as a fish out there myself too, but by gentlemen of a calibre different from that of the hon. member for Brandon.
I was saying, Mr. Speaker, that we are not in a hopeless mood in the Maritime provinces. In 1867 Nova Scotia had a population of 330,000 and New Brunswick had a population of 252,000. That was our population in those provinces after the lapse of one hundred and twenty years. In the next fifty years the population of Nova Scotia was increased to 523,827 and the population of New Brunswick, I think, to 387,860. In other words in fifty years Nova Scotia increased its population by 59 per cent, while New Brunswick increased its population by 54 per cent. Down there we are sometimes faced with serious problems as the people of other parts of Can-ade are. Nevertheless speaking as a Nova Scotian I want to see the great bulk of our population happy and contented. And they are going to be happy and contented. I do not believe you can find any fair-minded, thinking man in the province of Nova Scotia to-day who will see in secession any brighter days for that province than we have enjoyed and are still going to enjoy under confederation. The papers some time ago spoke of the hon. member for Springfield (Mr. Hoey) as a secessionist, which simply goes to show that when the public journals get an idea they broadcast it very freely irrespective in some instances, of whether it is right or wrong. The hon. member for Springfield is no more of a secessionist than I am. He is a broadminded Canadian, a gentleman who has come to our shores and who has made good and will continue to make good. Speaking as a Canadian we invite millions of men of the mental and* physical capacity of the hon. member to our shores.


Robert Forke: Hear, hear. You cannot get them, they are not made.


William F. Carroll: So far as I am personally concerned I shall persuade my foe" robust little Canadians to go on singing "O Canada, .we stand on guard for thee." Let every father in Canada teach his children the same

The Budget-Mr. Hocken
refrain and we will have in this country in a few years, notwithstanding the present rivers and floods of pessimism, a very contented people. We have our problems but they are not insurmountable. We can solve them, we must solve them. We have the Crains, we have the muscle, we have the driving force, and we have the intellectual vigour to enable us to do so. We have great natural resources, we have a wonderful country, and if we need capital we can get it both at home and abroad. What we want in order to develop in this Dominion is a tone of optimism and a feeling of broad Canadian patriotism. Speaking for the people of the province from which I come I think I can say till! we have no fears for the future; it looks bright to us.


Mr. H. C. HOCKEN (West Toronto):: Mr. Speaker, I join with my hon. friend who has just spoken in deploring the illness and absence of the Minister of Finance. I particularly deplored his absence last session, because I am convinced that if he had been here at that time we would not have heard "The death knell of protection" nor "The first crack out of the box." Hon. Mr. Fielding is too experienced in the work of the Finance department to have taken steps to frighten capital as was done in last year's budget. Ever since that budget was presented there has been a diffidence and a fear on the part of capital to invest in industrial enterprises which has brought us to our rather desperate industrial position.
Mr. Speaker, we have been told on several occasions that the policy of this government is "Wait and see." So far as the present budget is concerned I think I might add this much. "Wait and see, but we will not let you see it all." because the annual statement has been brought down before the end of the fiscal year. That being the case an accurate accounting of the year's business cannot be made. Instead of being provided with exact figures we are driven to estimates, and naturally these estimates have been prepared m accordance with the necessities of the government at the time. I submit, Mr. Speaker, that is an absolutely improper thing for the government to do. The national government should be an example to all business men in the country; and if any business man, or any incorporated company, prepared its annual statement in the way Canada's annual statement has been prepared for this House, that man, or that company, at least, would be liable to heavy penalties. The laws of the provinces of Canada would not permit estimated statements from incorporated companies. But this government I suppose, Sir, is above the law, and it tries to hoodwink the people by the methods that have been adopted. However, I do not think it will succeed. I, at least, will do what I can to show the people of Canada the way the government, in some particulars has attempted to hoodwink them. The government has been ably aided by its press, and has sent forth through its principal organ in this country a statement so misleading and inaccurate that I think attention ought to be called to it. In the issue of the Globe following the presentation of the budget, in 48-point type running right across the page, we find the statement that "Canadian taxpayers are $52,800,000 in pocket," the inference being that the government has saved them that amount in some mysterious way. In smaller type I read that this has been accomplished in the face of big reductions in taxation. I should like some person to tell me in what way taxation was reduced last year. In what way have taxes been reduced so as to account for the placing of this $52,000,000 in the pockets of the people? I take up the statement of the Acting Finance Minister (Mr. Robb) and I find that the loss of revenue consists chiefly in a reduction in the amount received from excise taxes,-the sales tax, the stamp tax and the receipt tax. Any person who can argue that that is a saving to the people of this country must have a very peculiar kind of mind. It indicates clearly that the volume of business transacted in this country was some hundreds of millions of dollars less last year than the year before. If that is an evidence of prosperity to any man's mind I submit he ought to take a course in elementary arithmetic and get some little understanding of business methods. The government has not reduced taxation. This government is imposing higher taxation to-day than has ever been imposed in the Dominion of Canada in all its history. It has a sales tax of five per cent against a sales tax of three per cent when it came into power. It raised the tax to six per cent and pretty nearly ruined the country, then reduced it to five [DOT] per cent, and in addition to that it has imposed a stamp tax on receipts, which is an onerous and irritating tax upon the business of this country. So that, Mr. Speaker, instead of a reduction in taxation, we have an increase in taxation, and yet the journalistic representatives of this government have the mendacity to set out with the largest type they possess that'the people are fifty two million dollars in pocket. The Acting Minister of Finance (Mr. Robb) did not say anything like that.
The Budget-Mr. Hocken

I do not think he would dare to say that, because he has a personal reputation to sustain. Indeed we have been informed this afternodn that he is something more than that. He is a superman. I admit cheerfully his agreeable qualities, and I have very high respect for his integrity, and therefore I am satisfied he would not be a party to such statements as have been made in the chief Liberal organ of the Dominion, a statement intended I verily believe to mislead, because I cannot conceive of any responsible newspaper man being in the position to write headings for a paper like the Toronto Globe being so dull of intellect as to imagine he could get away with a thing like that.
Much is made of the fact that the government claims a surplus. These c'aims of surpluses have been made by every legislature and every government we have had since confederation, and thes^ are susceptible as a rule of many interpretations; but this is a very modest surplus, $1,800,000. It has to be observed that it is obtained by unwarranted estimates of the revenue for the present month, for if the revenues of the present month had been kept down to the average for the year, instead of showing a surplus they would have shown a deficit. This government says there is a surplus of $1,800,000, and it adds to that $4,000,000 of interest due from a frozen loan. Roumania and Greece owe to this country many millions of dollars. They have not paid the interest on it, and the interest now amounts to $4,000,000, a substantial sum, and the government has the audacity to say that this $4,000,000 which has been unpaid over a period of years is an asset. They do more than that, Mr. Speaker, they call it revenue.


Arthur Meighen: A new asset.


Horatio Clarence Hocken: A new asset. They call
it revenue, but 'they have not got it. Revenue is something you have, something that has been paid, but they put it in as revenue, added it to the surplus and make the surplus $5,800,000. I am afraid my hon. friends are following the example of the late managers of the Home Bank, They capitalized the interest on frozen loans, and that is what led them into trouble, and their eventual insolvency. We only have to carry this process a little further, up to a certain point where our natural resources will not suffice, and oui assets will not be sufficient to meet the increased debt charges, then we will be as insolvent as the Home Bank. I have great confidence in the people of this country, and I do not think we are going that far, be-

cause I am looking forward in the course oi the year, or possibly the next year, to the people changing their board of directors, and then we will have no more of this unpaid interest on frozen loans charged u>p to assets and revenues.
The government also makes a serious misstatement when it tells the country that the debt has been increased by thirteen million dollars. WTell, it is something to have them admit that much. They might have added to the estimate of current revenues and reduced that a few million more, butt they apparently went as far in that direction as they thought it*was wise to go. But if we take the operations for the year we will find that, instead of the debt having increased thirteen million, it has increased a hundred and five millions. I will tell hon. members how it is made up and I will challenge anyone to deny the accuracy of my statement. Loans were made to the Canadian National Railway amounting to $S2,000,000.	Every
* bond has the guarantee of this government, and it is as much a national bond as if the name of the National Railway did not appear upon it at all. The credit of the country is pledged to meet those bonds to the extent of $82,000,000. Then we have an over-estimate of this month's revenue of at least $6,000,000. The minister estimates the revenue during March as $35,000,000. He has no warrant whatever for doing that. The fair thing to have done would have been to divide the year's revenue by twelve, and if he had done that he would have found hiis estimate $29,000,000 instead of $35,000,000. but he has added the revenue for this month which cannot be accurately revealed by any person until the end of the month, and has brought down his budget before absolute accuracy could be obtained. By that peculiar process-rather I think discreditable process-he has secured what he has presented as an asset of $6,000,000. I submit that will have to be added to the national debt, and the overdue interest of $4,000,000 which is an addition to the national debt and he has admitted $13,000,000. That makes altogether $105,000,000 which has been added to the debt of the country during the present year. I submit the Acting Minister of Finance (Mr. Robb) has offended seriously, first in capitalizing debts and calling them assets, and secondly in making excessive estimates of revenues to bolster up an annual statement which might have remained until he had presented it with the accurate figures.
I wonder, Sir, what any banker would say to a client who presented his annual state-

The Budget-Mr. Hocken
meat as the Acting Minister of Finance has presented bis statement to this House, who laid before his banker an annual statement that was based on estimates of the last month's business. I have not a very extensive experience with bankers, but such as I have had leads me to the conclusion that the banker would say to me, " Mr. Hocken, you had better seriously and materially reduce your discounts. Your credit will be curtailed. A statement of this kind does not 'warrant us in giving you the credit we have been giving you in the past." Therefore, from the standpoint of the finances and the debt of this country, it is quite evident that the rosy reports that the Acting Minister of Finance (Mr. Robb) has presented to the House are not warranted by the facts. I go so far as to say that this taxation, and largely the taxation of this parliament, is strangling the business of this country It is proved in the return, in the fact that $35,000,000 less was collected this year than last year on excise account. There is no better indication of the state of business than the amount paid in sales tax, stamp tax and receipt tax. It is the most accurate barometer of business that can be j reduced. That reduction of $35,000,000 convicts the government of having imposed taxation that is altogether too heavy to 'be borne, and that it is resulting in a substantial decrease in the business of the country. It will be a great disappointment to business throughout Canada that there is no reduction in the soles tax this year. It is an impost that is hard to be borne, and it has ramifications of the most serious character upon general business.
I thought I would draw up, for the edification of the House and the special consideration of the Acting Minister of Finance, a list of taxes that business has to bear in my province, and 1 presume the same is true of other provinces. Every business man is under ton cifierent taxes. He has ten different levies to meet upon his business. From the federal government he has the income tax, cheque tax, receipt tax and sales tax. From ihe provincial government he has the workmen's compensation tax and now he is to have a gasoline tax. In case that might 'be thought to be a trivial affair, there are not very large businesses in Toronto where the managers estimate that the gasoline tax means $1,000 a year in additional taxation. Those are six. Then, of course, he has the ordinary municipal taxation, real property, business tax, income tax and a frontage tax.


Mr. CALDWELL:: Does the tax apply
to gasoline used for commercial purposes?


Horatio Clarence Hocken: It applies to gasoline used for all purposes, because the tax is levied at the point of sale. There can be no differentiation between consumers.
Mr. MANION. The farmers are to be exempted.


Horatio Clarence Hocken: Yes. The danger of all
this is that these taxes have to be added to the cost of production. My hon. friends will say that this is passed on to the consumer. No doubt most of it is.


Donald Ferdinand Kellner: I think the hon member
has neglected to mention the customs tax.


Horatio Clarence Hocken: The hon. member can add the customs tax if he likes. I am citing direct taxes. These taxes are imposed and extensive statements have to be made with regard to all of them, so that this is .another tax really because the labour involved by chartered accountants preparing these statements is a matter of heavy cost to a business of .any .size. Industry pays a larger proportion of the customs tax than any other portion of the people of Canada. But what I was referring to was direct taxation enforced upon business, which taxation has to be taken out of the receipts, and which makes it so difficult to do business. I know these taxes may 'be .passed on to the consumer, but that makes the purchasing power of consumers in the -cities that much less. It makes the product that the industry produces not only higher in price but smaller .in volume, and this again increases the price. These taxes increase the cost of living. We -are always talking about the cost of living. Everything that increases the cost of production of any article in general consumption must increase the cost of living. But these taxes also seriously embarrass trade in all its ramifications, and they make competition with the United States that much more difficult. My hon. friends have been reading the papers and they will know there have been substantial reductions in taxation in the United States. The aim of their President, Mr. Coolidge, is to reduce taxation to a per capita t-his year of $25. In the Dominion of Canada last year the taxation was $47 per capita. That is an additional burden upon the industry of this country and this adds to the difficulty of competing with the industries of the United States. It will not do to put that aside and say:	That is
immaterial; it does not count. It is one of the things that hampers industry in Canada
The Budget-Mr. Hocken

and that causes a great deail of trouble. It is leading to the economic penetration of the United States into the business of this country. I wonder if my hon. friends know to what extent that is going on? Business after business, some old-established concerns, are being taken over by American capital. We have one in Toronto, a business that was in operation, as I ican recall, when I was five years of age. That is a good while for a business to be in operation, and it has grown to be the largest of its kind in this country I refer to the Christie-Browni Biscuit Com-' pany. That biscuit company is being taken over by the International Biscuit Company of the United States, a biscuit trust. That is only one example of 'the economic penetration by United States capital into the business affairs of this Dominion. It is a serious thing because, when the capital of one nation acquires control of the industry of another, it is then in a position seriously to injure that particular nation. It is not a safe proposition for any country, especially one the size of Canada, to be subject economically to a country like the United States and to have all the capital for the conduct of its industries supplied from that source. It would be a thousand times better for us if we had that capital supplied from Great Britain, with which country we are so closely related. I would not object to that so much, but I do not want the stars and stripes to wave over the biscuit factories or the factories of any other industry of this country. I have had letters recently from men doing business in Wall street, New York, drawing roy attention to the extent to which American capital is invading this country and getting control of its industries, amd I have been invited to express my opinion as to the future of Canada under those circumstances, because in financial circles in New York, as I am informed, this is regarded as simply a prelude to the political penetration of Canada by the United States. I am offering that, not as my opinion, 'but as that of a man who is doing business in the financial district of New York. At all events, I think it must be admitted by every person that it is a serious thing for Canada to have our industries controlled more largely than they are now by capital from the United States.
The result of all this excessive taxation is a general depression in industry which reacts on all classes of the community.


Mr. SPEAKMAN:: Does the hon. gentleman contend that it is the excessive taxation in this country that is bringing American capital here?


Horatio Clarence Hocken: I am contending that the excessive taxation makes it difficult to carry on business.


Robert Forke: It would be the same for
the British capitalist.


Horatio Clarence Hocken: I should be better satisfied to see British capitalists come here. Would the hon. member just as soon have American capital controlling Canadian industry?


Robert Forke: I have been trying to follow the drift of the hon. member's argument. I do not see what difference it makes whether we have British or American capital so far as taxation is concerned; they would both have to pay the taxes. Personally I am at one with the hon. member in this, that I would rather see British capitalists come here.


Horatio Clarence Hocken: Quite so. Now, the Canadian company finds it difficult to continue, and it falls into the hands of an international trust under which it can be operated cheaper than it can if conducted as a separate Canadian industry. I do not mean to say it will suffer any less from taxation because it is in American hands, but these large aggregations of capital controlling Canadian industry and operating under an American trust make it possible for them to carry on where Canadian industry would be unable to exist.


Mr. EVANS:: Will the hon. gentleman say why so much Canadian capital finds its way into foreign countries? Take for 5 p.m. instance the financing of the sugar industry in Cuba and the tractor industry of Brazil, and so on.


Horatio Clarence Hocken: One of the faults I have
to find with the present taxation is that Canadian capital will not go into industry. It gets from government guaranteed bonds of the National railways, at 5 per cent, a better return than it can receive from industry. And the capital invested in the industries of this country is at the mercy of further increases in taxation, which all makes it more difficult to operate.


Mr. ROBB:: Is the hon. member aware
that there is $900,000,000 of Canadian capital invested free of taxation as a result of the financing of the party he himself supported?


Horatio Clarence Hocken: There are government
bonds exempted from taxation to that extent, yes. But I wonder how much of that is held in the United States. These big .fortunes in the United States have been going into tax-free bonds at a rate to excite public attention over there on the part of the press. It is

The Budget-Mr. Hocken
regarded there as a serious thing, and these great aggregations of capital in the United States have purchased a large proportion of this $900,000,000 of Canadian bonds.


James Alexander Robb: Not a very large proportion.


Horatio Clarence Hocken: How much?


James Alexander Robb: My information is that the
great bulk is held in Canada.


Horatio Clarence Hocken: That is broad. Let us
take the case of a Canadian capitalist who is able to put his money into tax-free Canadian bonds at 5 per cent. If he put that money into anything else he would have to pay 30, 40 and 50 per cent income tax, whereas taking a low rate of interest on tax-free bonds he can still be a lot ahead.


James Alexander Robb: I admit that.


Horatio Clarence Hocken: And the money is being
withheld from the development of industries; it is withheld from the development of our natural resources, by reason of the excessive taxation imposed upon it. I submit to the minister that in the circumstances there is nothing which this country needs so much to-day as a reduction in taxation. We cannot compete alongside the United States unless we have lower taxes. The present excessive taxation is seen in the general depression of industry and business, and we have that fully set out in the figures that have been submitted. We have for instance some $35-
676,000	less collected in excise taxes than the year before; there is a shrinkage in business as represented by these figures. But the undue taxation is also seen in the departure of so many native-born Canadians to the United States to obtain employment.
My hon. friend (Mr. Forke) speaking the other night told us that the policy of the present government, as he understood it, was to reduce the cost of the necessities of life. Well, I thought while the hon. gentleman was .speaking that the government had certainly succeeded in reducing one important necessity, and I will give them credit to that extent. They have undoubtedly succeeded in reducing what I consider to be the prime necessity of life, the one upon which all other necessities rest, and that is wages. The government have succeeded in reducing wages in this country. The pay envelope in Cape Breton is reduced to three days a week and it is the same in other parts of the country, while in some cases there is no pay envelope at all. So that the government is entitled to that much credit, and I freeljr accord it.
But not only are our people drifting over the line; unemployment has got to such a stage as to tax the resources of private charity, as well as the revenues of our municipalities. This government takes no responsibility for the unemployed; that is a matter that is not in the British North America Act. Private charity is obliged to take care of these people, and evangelists are opening soup kitchens and giving free lunches in our city. And the municipality is spending thousands weekly maintaining a house of industry. Every police station of the city is crowded each night with men who are unable to find any other place in which to lie. Not for years within my recollection have the police stations been so flooded with men who wanted be is as they have been during the past year. Now there is only one way to remedy this situation and that is by lower taxation, a little more encouragement for the industries to keep these men employed. I find no mention of these problems in the budget; they are treated as nonexistent, and I am afraid that the government is not inclined to give to such matters the attention they deserve.
It is all right to talk optimism. Every little while someone who is properly heeled himself, who has a good salary, a man who perhaps is living under the protection of a public institution, makes a public speech to a Canadian club and says, "Let us be optimists". That is all right in a way; and there is no more pronounced optimist in this country than I am. But when a man has an empty stomach and nothing at all in his pocket, when he has no prospect, no bed, it is pretty hard to maintain that optimism. A man who is an optimist under these circumstances is certainly equal to that celebrated character in one of Dickens' books who thought it was a credit to himself to 'be cheerful only under the most a 'verse conditions that could possibly exist.


Robert Forke: Mark Tapley.


Horatio Clarence Hocken: That's the gentleman. It was only when he was trodden down into the ground that he felt he had a right to bn proud of his cheerfulness. But it is pretty hard for a man whose stomach is empty to be optimistic. I have great faith in Canadians. I have seen them come through hard t-mes. I have seen them tighten their belts when they could easily take up another hole in the belt without stretching it very much. On more than one occasion we have found our way back to prosperity.


Mr. CHARTERS:: How about the reduction on grape fruit?

The Budget-Mr. Hocken


Horatio Clarence Hocken: Grape fruit is not very filling unless you eat the peel, and I do not know how that would agree with one's digestion. I have noticed that the usual way the people of this country return to prosperity is by way of the ballot, and I do not think that test can now be long deferred. That makes me feel optimistic.
This government seem to think that the highest type of statesmanship is to discover new sources of taxation. Instead of practising rigid economy, reducing the cost of government in every particular, they go along with no apparent effort in that direction. During the past year 1,572 new employees were appointed by the Civil Service Commission at the request of the government. Surely that is an excessive number to add to the service if the government are really desirous of reducing its cost.
I am glad, Mr. Speaker, to see that agriculture is prosperous. I am glad to see that agricultural products are commanding high prices. But I would like to see the market gardener, for whom the hon. member for South York (Mr. Maclean) spoke yesterday, prosperous as well as the grain grower. I would like to see the constituents of the hon. Minister of Railways and Canals (Mr. Graham) a little more prosperous, because he represents a market garden constituency too. All along lake Erie and in the southern counties bordering on lake Ontario there are market gardens, and I regard the people who are engaged in this work as agriculturists. I do not know what my hon. friends to my left would call them; but they are working the land; they are providing the things that the people want. But by reason of the present tariff the appetite of the public for these products is satiated before the products of our own market gardeners come in. The hon. member for Brandon (Mr. Forke) says that is the fault of the climate; you cannot beat the climate, therefore we cannot do anything to help it. But something could be done to heilp it. If a tax were put on these early vegetables, particularly the early fruits, then the people who wanted them could pay the tax; the country would get the revenue, and the people who are growing these things in Canada would also benefit.


Mr. PUTNAM:: Would my hon. friend advocate that?


Horatio Clarence Hocken: Most assuredly I advocate it. I advocate higher duties on market garden produce and early fruits, with three cheers and a tiger.
[Mr. Charters.l
The government, Mr. Speaker, have acted like a body of men fearful of every step they take. The budget makes no decreases in duties because of the east, and no increases in duties because of the farmers of the west; so the government stand pat. They are like a lady who walks down one of our Ottawa streets on these slushy days and picks her steps very warily for fear her feet will get wet. But capital in this country has no confidence in the present government. The real Finance minister-the sick Finance minister, rather-would not have frightened capital as it was frightened last year by at least three members of the government. He would not have put capital in the position of being fearful of investment. On the contrary, I think he would have done what he had promised to do, maintain a stable tariff. He would thereby have incurred, perhaps, the disapproval of my hon. friends to my left, but his knowledge of affairs and his experience-


John Evans: They have seen the error
of their way.


Horatio Clarence Hocken: Yes; the experience and
the judgment and the ability, represented by the Minister of Finance, lay on a sick bed, and they saw the error of their way. They not only made reductions in the tariff, but they frightened to death anyone who could understand what was meant by "the first crack out of the box."
There is another matter to which I want to refer, namely, the export tax on power. Before dealing with that, however, I would like to suggest that if the government really wanted to encourage industry in this country; if they wanted to enable the country to get the maximum benefit from its natural resources, they might have put an export tax on pulpwood, or if you like, an embargo on pulpwood. There is nothing I can think of that would so certainly add to the industrial wealth of Canada, without in the slightest degree requiring a tariff, as the development of the paper making industry here. We allow our wood to be cut down and sent out as wood, by the cord, getting for it what is a mere trifle, instead of taking the legitimate and self-preserving method of saying, "This is a great natural resource of this country, and we are going to have it manufactured here; we are going to send out the finished product or we Shall not send it out at all." If the government took that stand, paper mills would be established all over the provinces of Quebec and Ontario, and the favourable baJlanoe of trade would be very materially increased.

The Budget-Mr. Hocken


Mr. WARNER:: Would that not likely be United States capital?


Horatio Clarence Hocken: If it was United States
capital the pay envelope would go to Canadian workmen, and the Canadian grooer would get his trade, the Canadian shoemaker would get his trade and the Canadian farmer would get his trade.


Daniel Webster Warner: I thought the hon. gentleman was afraid of United States capital.


Horatio Clarence Hocken: I am not so sure it would be all United States capital. British capital is available for sure-fire industries, and there is no reason why others than the Sturgeon Palls mill, which is operated by British capital, should not be established on a similar basis all over the two provinces. You can only keep our own population at home by giving them work, and when you give them work and let them earn good wages, as paper mill men do, then you have a state of general prosperity for the merchant, for the farmer and for everyone concerned-even for the banker, although my hom. friends to my left do not care very much about him.


Mr. MacLEAN (Prince):: I see by your own paper that they are coming home.


Horatio Clarence Hocken: Does my hon. friend deny there is a substantial exodus to the United States


Alfred Edgar MacLean: No, but they
are coming home raider this government, I am glad to see.


Horatio Clarence Hocken: How many are coming
home?


Alfred Edgar MacLean: In the last month, 44,044.


Horatio Clarence Hocken: And 160,000 went away in the same period. If that is the kind of exchange that is going on, and if my hon. friend is satisfied with it, I beg to say that I am not.
I want to say a few words, Mr. Speaker, on the tax on power. This will produce a revenue, we are told, of $400,000. Well, $200,000 of that tax will be paid by the municipalities of Ontario. lit will not be paid by those who use the power, because the power contracts that exist in the province of Ontario are for long periods, and it has been necessary for the municipalities to take over those contracts when they took over the plants which are providing the power sent across the line. The municipalities own those plants. The Toronto Power Company and the Ontario Power Company together are sending out 103i
approximately 100,000 horse-power. They
must continue to send it dut at the price they are now getting, and all that this tax means is that the consumers of power in Ontario will have to pay this $200,000 to the Dominion government. If the idea were to exact a tax and get some revenue from one of our natural resources sent out of the country-and I cannot conceive of any other reason-then it absolutely fails so far as the province of Ontario is concerned, because, as I say, these contracts exist and must be carried on for a considerable period by the municipalities that own these plants. But that is not the material objection. I want to say and I venture to assert, Mr. Speaker, that the time will come when what I say now will be recalled in this House. A real act of statesmanship, so far as this power is concerned, would be to place an embargo on the export of power. I do not know, and I do not care, whether anybody else in this House agrees with me, but I am prepared to stand by that proposition, because in my opinion it is one of the most important that faces Canada. Twenty years ago electrical power meant nothing to the people of this country. It was used in small quantities then, but since that time, and coming down to to-day, hydro-electric energy has become a commodity that is required in practically every home and every municipality and every industry, and for this country, which has a large quantity, and can develop much larger quantities, to go on exporting that power when it is as certain as that day follows night that in a short time we will be wanting it for our own purposes is a policy that I think is about as stupid as anything that could be adopted.


Mr. SNOWBALL:: May I ask the hon.
member if there is any loss in that power now going out? Will not the power be there next year, or has it gone forever once it has crossed the line?


Horatio Clarence Hocken: When that power is once
exported it is practically gone forever. No man in the United States will make a contract for power unless it is for so long that at the end of that period it will be impossible for this country to recover its power. The cost of installation for the use of large units of power is so great that nobody on the other side could afford to invest capital in such an enterprise unless a continuous supply of power was assured over a long period.
There is a proposition for the development of power now at Carillon Falls. According to information that I have, they will develop there 400,000 horse-power, and only 100,000
The Budget-Mr. Hocken

of that horse-power is to be reserved for the use of the people of Canada. Three hundred thousand horse-power of the amount developed at that point is to be exported to the United States, and it is to be exported on a twenty-five year agreement.


James Alexander Robb: Where does my hon. friend
get that information? What is the basis for making that statement?


Horatio Clarence Hocken: I got it out of one of the newspapers. That is the common talk. It was stated in the city of Quebec yesterday.


James Alexander Robb: The government have not
heard of it.


Horatio Clarence Hocken: There are a great many
things the government do not hear of first. There is no doubt they are developing the power there.


James Alexander Robb: So far as I know they have
not put a pick in it yet. They have not got a contract.


Horatio Clarence Hocken: They have not got a contract? Well, it has been talked of for some time, and it has come down to definite propositions and definite figures in the press of yesterday; I am quoting from the press of yesterday. However, I am quite content, if it suits my hon. friend, to let that go, and I will make my argument on something else.
It may be argued that an embargo on power would offend the United States because it is an unusual proceeding to take. But the conditions are unusual with regard to power. Power is not like any other natural resource. It occupies a position all by itself. I want to point out that if an embargo is not put on now, an effective embargo cannot be put on later. After we have exported, and are exporting, large quantities of power to the United States for a considerable period, it will be impossible for us then to put an embargo on the export of power without grave international complications. While the United States might be offended at such an act on our part to-day, they would have much greater right to be offended if we took that action after a lapse of twenty or twenty-five years, when we discovered that we had made a mistake and wanted to undo it. I submit, Sir, that electric power generated by water is the greatest of all our natural resources. It is something that is perpetual. It is not like a mine that can be dug out, and then it is done; but it is something that runs on perpetually, and is of such a peculiar quality that there is no other natural resource the nation has to compare with it. It affords us in the Dominion of Canada perhaps the

most substantial hope of successful competition with the United States in industry. Cheap power to a large industry is an important consideration, and with Canada possessing the tremendous volume that it does to-day we will be in a position as we develop to compete with the United States on a lower duty than would otherwise be the case, because this will act as some measure of protection.
Power is a commodity which is used in almost every phase of community life to-day. The municipalities add to the pleasures and comfort of life by electric lighting, and by the use of power for their municipal services, and in many other ways. It is used all over any city where there are elevators. It is used in industries so that western Ontario has become practically a hive of industry, with large developments since this power was available for industrial purposes. It has facilitated the growth of industry in western Ontario to a greater degree than any other single factor, and it is providing in our homes, and upon our farms-in farm homes as well as in city and town homes-conveniences for the wife, for the husband and for the whole family. There is nothing that touches the lives of our people more intimately to-day, financially, socially and municipally than this tremendous asset that we have, and for that reason I submit that it should not be exported.
Let me just indicate to my friends what a development there has been during the last few years. I take you back only about two years to the installation of the Chippawa plant when the first generator was installed- only two years and yet 400,000 horse-power is being generated now. Every horse-power is sold and the people are clamouring for more. There is a demand for more power notwithstanding that big development. That has not gone into industry because I venture to say there is less power being used by industries in western Ontario to-day than there was two years ago. There are fewer industries working and nonei of them are working double time. That has all gone into the homes and into the municipalities, into making life more pleasant and agreeable to the people of our country. I deduce from that, Mr. Speaker, that if we had a million horse-power developed in this province it would not be very long before every horsepower would be in demand in Ontario, and it would be used for the benefit of industry and for the benefit of the people in every walk of life.
I think we are only at the beginning of the advantages to be obtained from the generation and distribution of this wonderful new

The Budget-Mr. Hocken
agency of civilized life. I do not think any person can stand here to-day and forecast the future. In the future more electrical power will be needed in this Dominion if we can estimate from the experience of the past. We only have to go back about twenty years when Mr. P. W. Ellis, of Toronto, and Mr. Patinson of Brantford, made their first investigation as to whether it would be feasible to develop power at Niagara Falls and sell it to the people of Ontario. That is not more than twenty years ago, and while I have not got the figures- I venture to say that there is a million horse-power being generated and sold in the province of Ontario to-day. If that has been our experience in the last twenty years what is going to be our experience in the next two decades? And have we not a right to look further than the next twenty years? Have we not the right to try and get a vision of the future needs of this country and prepare for them, protect those future needs by what we do to-day?
So far as my own province is concerned this export tax is not serious. It means $200,000 to the municipalities but I guess they can stand that better than they can stand some other things. I do not know that an export tax is going to hurt the province of Ontario seriously, but it may be different with the province of Quebec under the conditions that exist in this country to-day. I have no particular brief for the province of Quebec, except that I like to see every part of our country prospering to the highest degree possible. But I should like to try and convince my hon. friends who represent that province that they are in a dangerous position with regard to the export of power, and they need an embargo many times worse than does the province of Ontario. In the latter province the provincial government has given the municipalities control of the power developments, and they will control those power developments in the future. The province of Ontario, fortunately, is in a position to protect itself against the export of power, and all the power that is generated within its precincts will be used for the benefit of the people and for the development of industry in the province. But the conditions are different in the province of Quebec. There the legislature has been somewhat short-sighted; they never caught the vision of the public ownership of the generation and distribution of power, and all the power developments are now in the hands of private capital. I am not going to discuss the wisdom or otherwise of that except to point out that it
leaves the province of Quebec in a hopeless plight so far as the preservation of its power is concerned unless there is an embargo. If the embargo is not put on until 50 or 75 per cent of the power generated in Quebec has been sold then the restriction will be impossible. What will be the result? That this great agent for industrial development, this extremely valuable accessory of the development of industry will be denied to the province of Quebec; it will be enjoyed by the adjoining province to the west.


Mr. CAHILL:: Does my hon. friend argue that the province of Quebec has no right to put an export duty on power exported from that province, to put an additional tax on power used outside the province?


Horatio Clarence Hocken: I do not think the province has any such power.


Frank S. Cahill: They are doing it now.


Horatio Clarence Hocken: I do not think the province has any such power. I am not speaking as a constitutional authority, but it would surprise me if any province has the power to put an export duty on anything. However, I submit this in reply to my hon. friend; Let these private owners, these "power barons" as they are called, develop all the water powers of Quebec; let them make long-term contracts and send that power over to the United States. In that ease I venture to predict it will never be recovered for the people and that province, which in some other particulars has advantages for industrial development, will lose what, after all, is the greatest advantage it oould possibly have. I do not know whether those who represent the province of Quebec in this House will think it worth while to consider seriously the position as I present it, but I submit that it is one they ought to consider. If there were a man in the province of Quebec with the vision of Sir John A. Macdonald, who foresaw what the result of building tihe Canadian Pacific railway would be, who could arouse the people of that province to 'the necessity of the preservation of their own white coal, their own electric energy and power, he would be serving that province in a most eminent degree.


Mr. BELAND:: May I interrupt my hon.
friend for a moment. In his most interesting remarks he pointed out a few minutes ago that the province of Quebec had no power 'to impose an embargo on any resources of the province of Quebec exported to the United States. Strictly speaking that is
The Budget-Mr. Hocken

true, but I am certain my bon. friend will not hold the view that the government of the province of Quebec have not the right, for instance, to impose a larger stumpage duty on lumber or timber cut in Quebec which is not destined to be manufactured within the province. I think I am perfectly right in stating that if the province can exercise that power as regards timber it cam also exercise the same power in respect of electric energy if that power is not intended to be used within the limits of the province. That is what I submit very humbly. I am not an authority on the subject but I presume the provinces have that ri^ht and power.


Horatio Clarence Hocken: Well, Mr. Speaker, I am
not a constitutional authority on that particular point. I know, of course, that the government of a province can regulate the conditions under which its timber goes out. Still I submit this:	Once that power is
sold and sold on long-term contracts extending over a period, say, of twenty-five years certain vested interests are established, and the recovery of that ipower at the expiration of that time would 'be exceedingly difficult if not entirely impossible, and might result in serious complications with the neighbouring government. There would be immense sums invested in installations, we will say in Lynn, Massachusetts, where pethaps seventeen or twenty million dollars would be invested in transforming, anid distribution plants. I say that these vast investments of United States caipital would be most influential in preventing an embargo or a restriction being put upon the export of powier that would keep it for the people of Quebec.
This is a question that I think should be considered, not from the standpoint of immediate profit, but from the standpoint of the luture needs of this country, and I feel quite sure if it is treated in that way that the wisdom of placing an embargo upon the export of power will appeal to the business men of this country. Give Massachusetts cheap Canadian power- and they are getting it for sixteen dollars a horse-power, we are informed by the press, while they are paying thirty dollars in Montreal-give Massachusetts cheap Canadian energy, and deny that privilege in full measure and in sufficient quantity in Quebec, and how are they going to compete? My policy would be to keep in this country that one thing which will bring the industries of Massachusetts, to Three Rivers, St. Hyacinthe, and to Sherbrooke for instance, and provide labour for the people there. Retain the present population, bring in more population and thus
[Mr. Beland.J
add to the general prosperity of the country.
I will close with the prediction that the time will come in this House when if will be recalled that an effort was made on this occasion to persuade the government tc place an embargo upon the export of electrical energy from this country to the Uniced States.


Alfred Edgar MacLean: 
Sir HENRY DRAYTON:: Does my hon.
friend think he is representing my argument correctly in his attack?-because I want to disillusionize him of the idea. I did not argue anything of the kind, and I never drew any such conclusion. Perhaps it would be fair for me to put my hon. friend right. I said that the government were indirectly responsible for this tremendous loss of revenue, because they had by their policies stopped business. checked enterprise and created an exodus.


Alfred Edgar MacLean: I do not think
I was very far astray in my observations. I find that the goods were not imported. My hon. friend has endeavoured to lay this at the door of this government. The point I wish to make is that it is impossible to do that. Does my hon. friend contend that it would be much better for the people of this country to buy goods which they do not need and to pay this $13,000,000 out in duties plus the cost of the goods?


Arthur Meighen: The hon. gentleman is
mistaken. We contend that it would be far better if the tens of thousands of people of this country who cannot buy the goods they need, were able to buy them.
Mr. MaaLEAN (Prince): I will leave that to the judgment of the people themselves. As the old saying goes, they can cut their garment to suiit the cloth.


Henry Lumley Drayton: That is what
they are doing.


Arthur Meighen: They have no cloth or
garment either.


Alfred Edgar MacLean: If they do not
need the goods they would be very foolish to buy them. The fact is that the people have not imported the goods and, therefore, it cannot be attributed to this government, it cannot 'be argued that the loss of revenue in that respect is due to a reduction in the duty. Our friends seem to be very much grieved that the people have not paid out this money. They would much rather that the people of this country were out this $13,000,000 plus the cost of goods-goods they possibly do ndt need. The people are to be congratulated on showing their good sense in not entering upon reckless and unnecessary expenditure in buying -goods which they do not require. It is rather amusing that the only applause which my hon. friends in that section of the House generally get is when they oan refer to some business closing down. I do not think that is a good spirit to show. We have always had business failures and we shall always have business failures, no matter what government is in power. I am quite certain that if m:y hon. friends look over the failures which have been reported for the last number of years and compare them with the failures of the last three years, they will find there is no -difference in that regard.
Coming to the finances of the country, I find it rather amusing to see our friends in that corner of the House worrying in case there might be a small deficit. Last session they wasted a great deal of energy in trying
1614	COMMONS
The Budget-Mr. MacLean (Prince)
to wipe out a surplus of from thirty to thirty-five million dollars which was in the budget of that year. This year, with expenditures amounting to $342,177,000 and estimated receipts of $344,000,000, the government have again balanced their budget, and they are able to show a surplus over expenditure of $1,823,000. No wonder the Acting Minister of Finance (Mr. Robb) used the expression that this is something in which all Canadians may feel a justifiable pride. The leader of the opposition, I see, smiles very graciously at that statement.


Arthur Meighen: He might as well have
left out twenty or thirty million more and had a bigger surplus. It is too bad to have it as small as that.
Mr. MaoLEAN (Prince): If my right hon. friend will have a little patience, I will deal with that subject later on. It is also gratifying to note that over $4,000,000 of an adjustment of loans to Roumania and Greece exists, and that bonds for this amount have been issued and transferred to this Dominion as an active asset, which, if added to the surplus of $1,823,000, makes a surplus of $5,823,162. In addition to this, it has been shown that there is a reduction of $270,650 in the standing public debt. All of this shows that we are making progress in the right direction. It is also shown that there is a reduction in interest charges on refunding loans, and this will mean a saving of over $2,600,000.
Our hon. friends opposite have endeavoured to argue this away, but under the signed declaration of chartered accountants it has been proved that these accounts are absolutely correct. How does this compare with the financial showing made by our friends apposite? Let us take the last year that they were in office. In 1920-21, their estimates for that year alone were $758,000,000, to be met with a revenue of less than $400,000,000. Will my hon. friends deny that?


Arthur Meighen: I think it is all wrong.
Mr. MaoLEAN (Prince):	Had they been
returned to office, the country would have been presented with another deficit of over $300,000,000, to be added to the long list which they had already left, which is as
follows:	
Date	Deficit
1914		
1915		
1916		 1917			
1918		
1919		
1920		
[Mr A. E. MacLean.]	
In 1920 they capped the climax with a deficit of $674,000,000. This was with the dollar below par and hundreds of thousands of dollars being paid out for soup-kitchens throughout the country. It is really amusing to have our friends come before the House at the present time and endeavour to read a lecture to the Acting Minister of Finance on financing. I think it comes with very poor grace from my hon. friend opposite to 'attempt anything along that line.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Mr. PIUS MICHAUD (Restigouche and Madawaska) moved the second reading of Bill No. 33 respecting The Restigouche Log Driving and Boom Company.
Arthur Meighen: Explain.


Mr. MICHAUD:: This company was incorporated by act of the legislative assembly of New Brunswick in 1879, and by chapter 155 of the statutes of Canada 1910 the name was changed from The Restigouche Log Driving Company to The Restigouche Log Driving and Boom Company. The petitioners were incorporated, and chapter 155 of the statutes of Canada provides, as regards the powers of the company, as follows, in section (28):
The company may construct, acquire, charter, navigate and maintain tugs, boats, dredges and other craft for towing logs and for other use in and about the said booms, and also may, for its own use, construct, acquire and operate telegraph, telephone and electric light lines in connection with its business and works upon the Restigouche river.
Section (29) provides:
The directors may issue bonds of the company to the extent of $150,000 par value, which bonds shall be a first lien upon all the plant, property, assets, rights, credits and revenues of the company and upon all logs being the property of the members of the company, irom year to year handled by the company while such logs are in the possession of the company or under its control, and shall be secured thereby.
Under the present legislation, it is provided:
Cl) In addition to the bonds authorized by chapter lo5 of the statutes of 1910, the directors of The Restigouche Log Driving and Boom Company (hereinafter called "the Company") may issue bonds (hereinafter called "renewal bonds") of the company, not exceeding in the whole the sum of $150,000 par value. The directors may, at any time, issue a part of such renewal bonds equal, in the aggregate, to the par value of those of the bonds authorized by said Chapter 155

The Budget-Mr. MacLean (Prince)
(hereinafter called "old bonds") which have matured and have heretofore been paid by the company, and hereafter, as and when any old bond or old bonds mature and are paid by the company, the directors may issue in place thereof respectively a renewal bond or itnewal bonds, from time to time, for an amount or amounts, not exceeding the par value of any such old bond or bonds so maturing.
The bill further provides:
Any such renewal bonds so issued to replace any old bond or bonds which have heretofore been paid by the company or which shall hereafter be paid by the company, shall be distributed pro rata to and amongst all those persons, firms and corporations who, as members of the company in the fiscal year in which any such old bond or bonds have been or shall be paid, have contributed, or shall contribute by tolls, or assessments towards the payment of eabh of such old bonds. Such renewal bonds shall be distributed to such persons, firms and corporations in the proportion that the amount paid by each such person, firm or corporation to the company for tolls, or assessments in such fiscal year bears to the total amount received by the company from its members therefor in such year.
What the petitioners desire is a renewal of the old bonds.
Motion agreed to and bill read the second time.



SECOND READINGS

[Stage Direction]
Bill No. 34, to incorporate the British Consolidated General Insurance Corporation.-Mr. Irvine.
Bill No. 35, respecting The Mutual Life Assurance Company of Canada.-Mr. Mewburn.
Bill No. 36, to incorporate Guaranty Trust Company of Canada.-Mr. Chevrier.


[Stage Direction]
The House resumed consideration of the motion of Hon. J. A. Robb (Acting Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means and the proposed' amendment thereto of Sir Henry Drayton.
Alfred Edgar MacLean: Mr. Speaker, when the House rose at six o'clock I was referring to the financial situation and I had outlined some of the deficits that had been left by the previous government. I may be permitted to analyze briefly the cause of some of those deficits incurred under the regime of our hon. friends opposite. I made some reference to the consolidation of the interest which was due on the loan to Roumania and Greece. I think we can congratulate this government on attempting to do something to have this account put in a satisfactory condition. As you will remember, this loan was made at a time when the financial resources of Canada were taxed to
their very utmost. Our friends who are today so critical of the country's finances seemed to be reckless of them at that time and were willing to plunge in and spend money in almost any way that could be found. In fact one would almost imagine they were looking for some channels into which they could turn the public moneys of Canada. In that connection I wish to refer briefly to Hansard of May 18, 1921, and to a speech made by the hon. member for Chambly and Vercheres (Mr. Archambault) on that day. He said:
I now come to a very interesting matter and one with which I dealt to some extent last year, I mean the credits extended by the government to Greece and Roumania. Although I spoke upon this question last year there have been some further developments, and I believe I shall be able to convince you, Sir, that the high standard of political morality in this country has remained unimpaired according to certain mentalities that we find in this House. Sir, in our efforts to probe the morality evidenced in connection with these credits let us examine the whole subject. It will be remembered that in the month of May, 1919, the then Minister of Finance, Sir Thomas White, asked this House to vote these credits because the population of Roumania was starving and needed food; and I can well remember the right hon. gentleman saying at that time, "Will the population of Canada remain unmoved and not help the population of Roumania which is now starving?" Well, Sir, two credits of $25,000,000 each were opened, one for Roumania and one for Greece. Of this amount, $26,989,000 has already gone and only $3,500,000 has been spent on food.
This very small loan, out of $50,000,000, was all that our hon. friends were able to spend on foodstuffs for the starving people of Roumania; and you will note, Mr. Speaker, that that was the excuse for granting the loan. I quote further:
The hon. member for Megantic (Mr. Pacaud) said the other night that the government of Canada, in answer to a merchant in Belgium who asked that food should be exported from these moneys, said that only one-fifth of the credit to Belgium could be devoted to the purchase and exportation of food. Now, Sir, a return was brought down last year to an order of the House-I refer to "Sessional Paper No. 147." This return shows conclusively that companies controlled by the Minister of Marine (Mr. Ballantyne), the hon. member for Haldimand (Mr. Lalor), the hon. member for Brantford (Mr. Cockshutt), the hon. member for Lincoln (Mr. Chaplin) and the hon. member for St. John (Mr. Elkin) had sold goods for export which had been paid for by the government. I was under the impression that the disclosures of last year would have had their effect and that there would not be a repetition of any such transactions; but although since April 19, the government of Roumania has defaulted in two or three payments of interest, and probably Greece also, more of this money has been going to favourites of the government, and a further sum of $5,342,077.32 has been advanced. On March 4 an order of the House was passed for a return showing:
1.	The amounts loaned or the credits made by the government of Canada since the 19th of April, 1920, (a) to Greece, (b) to Roumania. '

The Budget-Mr. MacLean (Prince)
2.	The respective dates of these loans or credits to (a) Greece, (b) Roumania.
3.	The nature of goods bought by the government of Canada (a) for Greece, (b) for Roumania.
4.	The names of corporations, firms or persons from whom these goods have been purchased, (a) the nature of the merchandise in each case, (b) the amounts paid by the government to these corporations, firms or persons in each case and also the date of said payments.


Arthur Meighen: Will the hon. gentleman tell me what rubbish he is reading.


Alfred Edgar MacLean: I am reading from Hansard of May 18, 1921.


Arthur Meighen: Whose speech?


Alfred Edgar MacLean: Under his own government

a speech, as I stated, delivered by the hon. member for Chambly and Ver-cheres. I suggest to my right hon. friend that that would have been a very good time to have applied the closure.
Mr. MEIGHEN- It would have been better applied.


Alfred Edgar MacLean: Yes, for my hon. friend. He said further:
Although the Minister of Militia in discussing the estimates of his department the other day denied that any goods belonging to the Militia department had been sold to Roumania or Greece, I find at page 3 of the report the following-I am giving the various sums
in round figures:
Militia and Defence:
March, 1920, military equipment ....	$ 30,000
May, 1920, military clothing	 325,000
April, 1920, dubbin	 3,000
I do not know that I need read it all, because I know it is not agreeable to our friends opposite to hear this history. But it is very important at this time that the House should know the causes of the huge deficits which were rolled up at that time. If hon. gentlemen opposite can give a satisfactory explanation of these expenditures I Shall be glad to take my seat to hear what they have to say.


Arthur Meighen: Will -the hon. gentleman permit me?


Alfred Edgar MacLean: With pleasure.


Arthur Meighen: I reality wondered what
imagination gifted with mendacity could possibly have prompted the utterance of such rubbish as the hon. member read. The government had nothing whatever to do with the placing of any contracts at all or with the selection of the goods, nor is it a fact that any company controlled by the gentlemen mentioned got even those contracts. The gentlemen -mentioned, I presume, were interested in some companies whom the commission appointed by -the Roumanian and

Grecian governments bought goods from, but just -as many Liberal members of parliament were connected with companies that sold as were Conservative -members of parliament. That was demonstrated over and over again. The government had nothing whatever to do with it.


Alfred Edgar MacLean: I do not for
one moment excuse any Liberal or any Conservative


Arthur Meighen: He does not need an
excuse. The Liberal was just as honourable about it as the Conservative. It is the reading of such rubbish by the hon. gentleman that I object -to.


Alfred Edgar MacLean: I thank my
right hon. friend for reading me a -lecture. I am ready to take all that he chooses to hand across, as it is emphasizing my point.


Arthur Meighen: You need it.


Alfred Edgar MacLean: I wish to point
out tha-t the na-mes are on record of the different parties who were interested and to whom large amounts were paid. The story is familiar -to a great many members of the House, but when we -are read -a lecture on the financial situation of to-day as compared with -the financial situation under hon. gentlemen opposite, I think it is time for some hon. member of this House to rise up and protest and show some of the things that have taken place under the regime of hon. gentlemen opposite. The hon. member for Chambly and Vereheres went on to ask a question about supplies, and said:
That is your opinion. I find also that the Department of Militia and Defence sold to Greece the following:
Brushes	 $ 11,728
Boots	 635,000
Braces	  8,320
Denim	 38,000
Sweaters	 150,000
Blankets	 876,000
These are all items which I do n-ot think the government of Canada can escape responsibility for. They were sold either by the government or by a department which was, or should have been, under the government's control. I do not propose reading any further, but there is a great deal of information contained in this speech, and I refer hon. members and the country at large who wish to go into this matter any more fully to Hansard of May 18, 1921, and they will find many names of men of the government of that day in this interesting transaction.

The Budget-Mr. MacLean (Prince)
Coming to the amendment that was moved by the hon. the ex-Minister of Finance (Sir Henry Drayton) the other day, I notice that one of the first items he mentioned in his amendment is the sales tax. He says:
Conditions in Canada urgently demand reductions of taxation, especially of the sales tax and other levies which have been increased by the present government; the House regrets that the financial statements now presented show no evidence of the economy necessary to make such reductions possible, but rather disclose an alarming increase in the public debt.
My hon. friend refers in the first instance to the sales tax. I wish to submit a statement in that connection to show that there was a loss of revenue due directly to the reduction in the sales tax of last year.
The decrease in revenue this year is estimated to amount to about $52,800,000 brought about by a decrease in customs duties collected of about $13,300,000, a decrease of excise taxes of $35,676,000, the chief source of this tax being the sales tax and a decrease of about $2,353,000 from delayed business profits tax. These decreases were offset to some extent by an increase of about one million dollars in excise duty and about $2,300,000 in income taxes collected.
The revenue of this country, which is estimated to be about 344 million dollars, is taxation, and it is evident that a decrease in revenue is a decrease in taxation. Our estimated population at present is about 9,225,000. Therefore, this decrease in taxation means a saving in taxes of about $5.75 per head for each man, woman and child in this country.
This was brought about by reducing the duties on agricultural implements and on the materials imported for the manufacture of these implements, and by removing the sales tax from all the articles and materials consumed in the process of manufacture of these agricultural implements, as well as by reducing the sales tax from 6 to 5 per cent. Like reductions were made in the duty payable on articles relating to the fruit growing industry, poultry industry, dairying industry, mining and quarrying industries, the lumbering and fishing industries. The sales tax was removed also on these articles. The list of exemptions was increased among which we find, binder twine, cream separators and others.
These reductions have no doubt stimulated our Canadian industries, the result, as I have showed, being that we imported 70 million dollars less for the period covered by the eleven months ending February, 1925 than during the eleven months ending February, 1924. Although this meant a loss in revenue of about twenty million dollars, it decreased the burden of taxation on our Canadian people to that
extent, as well as encouraged our Canadian people to supply the decrease in importation by enhancing Canadian production to supply our demands.
So I do not think that the ex-Minister of Finance could very well prove his contention that the sales tax was immaterial, or that the reductions that were effected last year did not mean a reduction in the revenue and also a big reduction in taxation.
I	wish now to refer to another matter which always receives a great deal of attention in this House; I refer to the question of the tariff. I hold in my hand a resolution which has been standing on t'he order paper in the name of the right hon. leader of the opposition since February 5. It starts out by saying:
This Dominion requires an immediate revision of the Canadian tariff on a definitely and consistently protective basis.
So evidently there is no doubt in his mind but that this is the proper course to pursue. Higher protection. He goes on to say:
That such revision should apply to natural products such as farm products, fish, and coal with no less thoroughness than to manufactured goods.
I	would like the hon. gentleman to explain to the House what benefit a protective tariff would be on agricultural products. A protective tariff against goods of which we have a surplus cannot be effective. The hon. gentleman will admit that water cannot rise above its own level, and this is a similar case; American agricultural products cannot come in here unless there is an absolute shortage on the Canadian market. As far as the duty is concerned on American fish coming into Canada, any man in the Maritime provinces or in any other part of Canada who has any knowledge of the fishing industry will admit that the only market in which the Canadian fisherman can obtain remunerative prices for his fish is the American market. Again, I would like any hon. gentleman in this House to point out where American fish is supplanting the Canadian article on the Canadian market. To my mind the mention of fish in this resolution is simply propaganda, an endeavour to appeal to the fishermen. It has really no significance.
If I wished to go into that a little further, I migdi't submit figures to show that the total imports of fresh fish from across the border into the whole of Canada from the Atlantic to the Pacific amount to only $364,000, and of this amount, $233,000 is for oysters, or what are known as shelled oysters, which are imported into Canada under a duty of 10 cents per gallon. I leave it to the people
1618	COMMONS
The Budget-Mr. MacLean (Prince)
of Canada who consume this article whether in their opinion the policy advocated by the right hon. leader of the opposition in his resolution is in the interests of this country. Those oysters cannot come into the Maritime provinces because they would not be used there even if they were brought in and given away free. It is only in the extreme western sections of Canada where it is possible to sell these American oysters. The few oysters that we do have in the Maritime provinces to ship at the present time find a ready market in the cities of Quebec and Montreal and in the Maritime provinces themselves, so that the word fish in this resolution is pure political propaganda.
The next paragraph refers to the conservation and development of our natural resources. No fault can be found with that, but every member on this side is just as anxious to see our resources properly developed as hon. gentlemen opposite are.
The next paragraph is more or less of a surprise coming as it does from the Conservative party who on different occasions have endeavoured to make the people of this country believe they were the great imperialists and had a monopoly on this side of the water, of patriotism and loyalty to the Motherland. Still we find this paragraph goes so far as to state that hon. gentlemen opposite are in favour of withdrawing the British preference already granted to Great Britain and which is an inducement for goods to come through' Canadian ports. Their excuse for this policy is that it is in the interest of the workers of the country. This again, to my mind, is purely political propaganda and an appeal to the workers and the manufacturing interests of the country. Well, I will venture the assertion that if hon. members opposite were in power to-morrow they would not dare to put such a proposition into effect.
In this connection I think it will be only fair to point out how the existing duty, even under the British preference, affects the Maritime provinces. We have two gentlemen in this House one the member for St. John and Albert (Mr. Baxter) and the other the junior member for Halifax (Mr. Black) who claim to be the champions of the rights of the Maritimes. Let me point out to these gentlemen how this policy of a withdrawal of the British preference would affect the Maritime provinces. Supposing a ship load of goods valued at $100,000 arrives at the port of St. John or the port of Montreal. Immediately that ship docks a crowd of customs officers at once patrol the docks. They pounce upon that ship and even under 
present conditions will ask to have handed over at least $20,000 in duties. Supposing you increase the present duty 10 or 15 per cent and instead of $20,000 the sum demanded would be $35,000. Will hon. friends opposite point out how thev expect the ports of St. John and Halifax to flourish under such a proposition? They cannot answer this argument and the very suggestion would drive business from those ports. As I said before, if they held the reins of power to-morrow they would not dare to put any such proposition into effect. If they did I do not see how the orators of the Conservative party could go to the country and again fool the people by waving the flag of loyalty to the Mother Country.


Mr. GOOD:: Would the hon. gentleman advocate taking off all the duties on British goods coming in so as to increase the trade entering Maritime province ports?


Alfred Edgar MacLean: It is all right for the hon. gentlemen who have not the responsibility of governing the country to advocate a policy of that kind but in view of the financial condition of the country regard must be had to ways and means whereby sufficient revenue can be raised to meet the needs of Canada. Even with the preference as low as it is there has been a greater increase in imports from countries which do not enjoy the preference than there has been in imports from Great Britain.


William Charles Good: Would that not be all the more reason why we should reduce the duty on British goods still further?


Alfred Edgar MacLean: My hon. friend might be justified in his view but the present arrangement is working out fairly well. The preference already granted has tended to bring goods to Canadian ports. Ninety-nine per cent of the goods imported from Great Britain now come to Canadian ports as a result of the 10 per cent additional preference that was granted last year. I certainly would be in favour of a further increase in the preference if it were at all possible; I am entirely opposed to the proposal of hon. gentlemen opposite to withdraw the preference and I think that when we take that stand the country is behind us.
There is this further fact, and it will perhaps be an effective answer to my hon. friend, that according to official figures the imports from Great Britain in Canada in 1924 actually decreased as compared with the previous year. I do not know how the hon. gentleman can explain that. At the same

The Budget-Mr. MacLean (Prince)
time Canadian exports to Great Britain increased- Nevertheless the protectionist opposition will still argue that the British preference is responsible for admitting into Canada an increasing volume of British goods.
I might further point out that during the same period while imports from Great Britain were decreasing imports from Germany were increasing at an enormous rate on which a high duty is charged. Canada grants no tariff preference to Germany yet that country supplied goods to Canada last year to the value of nearly $6,000,000 as compared with less than $5,000,000 in 1923 and $2,000,000 in 1922. When our friends of the opposition blame the Liberal policy of the British preference for the increased popularity of British goods in Canada they should also explain the reason for the growing volume of German goods to which no tariff preference is accorded. But the expounders of this protectionist policy are in the game for some other purpose than to enlighten the public. They cannot fool the people all the time but they look forward to fooling part of the people part of the time, and in that way to again put something over the Canadian public as they did in 1911.
The next paragraph in this resolution recommends the appointment of a tariff commission. Had that proposition been advanced by the government bon. gentlemen opposite would be the first to utter denunciations because of the appointment of another commission. However-, if the present government did not get better results from the appointment of such a commission than the country obtained from the tariff commission of some years ago over which the ex-Minister of Finance presided the expenditure for the purpose would be a pure waste of money.
The last paragraph in the resolution contains the only sane proposition in the entire list. This has reference to transportation burdens, and suggests that relief be given to the western and Maritime provinces by way of a contribution from the government to reduce freight rates. I should like the House to take notice of that fact: The proposition of the right bon. leader of the opposition is that the western and Maritime provinces be given relief in freight rates by a contribution from the government of Canada. The proposition may be commendable but I cannot see how the originator of the proposition can reconcile that policy with the attitude he is taking with regard to the government's proposed control of ocean freight rates. What he is proposing is absolutely along the same line as the policy of the government
contemplates. Would the right hon. gentleman be good enough to point out to the House and country, what benefit it would be to the producer of the Maritime or western provinces to grant a reduction of rates to Montreal only to find that when the goods arrived there the ocean rates were prohibitive and that the goods could not be exported at a profit. This is something I should like the right hon. gentleman ito explain when he next comes to discuss the Petersen contract.
I	know that hon. gentlemen opposite are quite adept at Changing their position in an endeavour to square themselves with their proposals, but it wild take all the ability of the right hon. leader of the opposition to explain the really ridiculous position in which he finds himself by reading this clause of his resolution.


Mr. STEVENS:: I should like to draw
attention to the fact that this discussion is wholly out of order, but inasmuch as the hon. gentleman has been debating this resolution for some twenty minutes I trust that hon. gentlemen on this side of the House will also be accorded the privilege of discussing it when they come to reply.


Alfred Edgar MacLean: In reply to my
hon. friend let me say that I am quite in order. I understood, when the hon. gentleman did not have a chance ito discuss this resolution on private miemfoer's day, he would have a chance to 'discuss it on the budget, and I am quite sure he will avail himself of the opportunity.
I think I have paid enough attention to this rather peculiar document, and I pause for a moment to draw the attention of the House to another motion, and I only wish I could say that I thought it was prepared by some other member; but unfortunately the members of the House will find that it was prepared by the same hon. gentleman. I find the resolution which I have reference to stood in the name of the right hon. leader of the opposition (Mr. Meighen), who was then the member for Portage la Prairie, and in this connection I wish to read from page 1915 of the Debates of the House of Commons of January 18, 1911. The ex-Minister of Finance (Sir Henry Drayton), in addressing the House in one of his pedantic flights of oratory used the word "wobbled." I think he attributed that to the quality of this government, or possibly some of his friends on this side of the House. I wish to point out that this resolution to which I have just referred, which was submitted by the right hon. leader of

The Budget-Mr. MacLean (Prince)
the opposition which I am about to read, is not wobbling at all. It is worse than that. It is an acrobatic feat which possibly very few of us can perform, and that is a complete somersault, or right about face, or looping the loop, as one hon. member suggests. This resolution of January 18, 1011 reads as follows:
That in the opinion of this House, a substanttial reduction in the import duties on agricultural implements is now due the agriculturists of Canada, and is in just accord with the true ends of a protective tariff.
He then goes on to say:
But the charge I have to make and which I hope to bring home to the government this afternoon is not that one, though it is the most serious; it is this, that in their attempts to continue the National Policy which had obtained for years before, they have overlooked, they have neglected one essential feature of that policy, they have quite forgotten its guiding principle, namely the principle that as our industrial institutions advanced in strength and as they were able with every advance to acquire a hold on the home market, the import duties were to be diminished and adjusted in order to meet the evolving and changing conditions. It is that restraining, guiding principle which I claim this government has entirely overlooked and as a consequence they have allowed, in the respect which I am discussing this afternoon, protection to run rampant, and they have for reasons which are only too obvious become the slaves of those who helped them into power, and who now maintain them there behind ramparts of gold.
And so on all through his speech. The leader of the opposition, the gentleman who proposed this resolution, now asks for a higher protective tariff. The maxim, "consistency thou art a jewel" is correct. I just imagine, if any hon. gentleman on this side of the House placed himself in this ridiculous position, to what flights of oratory our hon. friends opposite would rise in exposing his position to this House and to the country at large. But proceeding on this line a little further, I find that the hon. ex-Minister of Finance (Sir Henry Drayton), speaking on the budget on April 10, 1924, seemed to lament the fact that we were shut out of the American market. He said:
We would further expect something to be done to help the Canadian farmer who to-day is shut out by an absolute barrier from his natural market to the south.
If this statement which the hon. gentleman expressed in the debate last year was correct on April 10, 1924, was it net also correct in 1911, when hon. members opposite shut us out of that market, and shut us out in the Maritime provinces to the detriment of those provinces possibly for all time to come? Yet those hon. members to-day will stand up in this chamber and say:	"The government
should do something to let the Canadian farmer into the market to the south of them, which is their natural right." I think this is
fMr A. E. MacLean.]
so amusing that we can hardly realize that the hon. gentleman would express such sentiments, and as an hon. member suggests, a real and national tragedy was enacted at that time involving the infliction of a great wrong on the people of Canada. Discussing the matter further the ex-Minister of Finance says:
The tariff has nothing to do with the difficulties of the farmer.
He gave us three causes for it, hard times, the practically prohibitive tariff of the United States directed in the main against farm products, the deflation of prices applicable to grain and live stock, and the loss of the purchasing power of the great consuming country due to the war. Here again the hon. gentleman stresses the fact that file United States is our only market, and again I ask, if it was right on April 10, 1924, ivhal was wrong with it in 1911 when our friends, with the assistance of the Canadian Manufacturers' Association, diut us out of that market, probably for all time to come?
In this connection I wish to point out to my hon. friends in the section of the House almost directly opposite to me, what the manufacturers' attitude is to-day in regard to this same question, and I quote from the Financial Times of April 10, 1924, shortly after the last budget speech was delivered. This paper is published in Montreal, and the article reads:
The Manufacturers' Association at their meeting stated as follows:	" The future seems clear for an
out-and-out struggle between two ''-
Mark these words:
-" between two, not three, political groups for the maintenance or destruction of the fiscal policy that was brought into effect in 1878."
The Manufacturers' Association realize that the aims and objects of our friends of the Progressive party and of a large majority, I must say, if not all, but, I hope, of all of the Liberal party, are the same, and it is their duty at the next eleotion to go out and fight both the Progressive party and the Liberal party on this issue. The article continues :
It may be that the manufacturers and labour elements in eastern Canada will be forced to take up the gauge. The tariff, unfortunately, has been thrust again into the political arena. The manufacturers must remember, therefore, that it is votes that count, and they must be prepared to justify a protective policy to the electors, to the consumer, if they are to win out in the political fight.
If who is to win out? I ask hon. gentlemen whom this has reference to. Is it any political party that is going to win out? No, they say, if we are going to win out; if the

The Budget-Mr. MacLean (Prince)
Manufacturers' Association are going to win
out! It is their election and they say:	We
must join with the Labour party and go out and defeat those two other parties, the Liberals and the Progressives.
As their official champions in the federal field the Conservative leaders should be prepared to dispense with the extreme exaggerated attitude and statements that set forth their views on the present budget. Mr. Meighen's first interview was hardly the carefully considered, serious, statesmanlike opinion that the country had the right to expect. It too, was strongly tinged with political considerations.
As we have urged before, the Canadian Manufacturers' Association, if it enters the fight officially, must make it clear that it holds a reasonable view on " protection," and that it is quite prepared, and, indeed, will insist on periodic revisions of the tariff not only upwards-
Mark those words.
-but in a downward direction where manufacturers are taking advantage of excessive customs duties to bear too heavily on the average consumer. Extreme demands can only alienate support.
Hon. members will notice that they endeavour to camouflage that a little at the last, but let them go out and defeat those two parties at the next election, and I can *assure the people of this country and hon.
members of this House that the 9 pan. revision of the tariff will certainly not be downwards, but be upwards with a vengeance. I do not know whether I am within my rights or not, but I am going to take a long shot at it and say that whoever sees another campaign fought in this country will see the money which has been extracted from the pockets of the consumers by the Manufacturers' Association thrown into that campaign to defeat the two parties which I have just mentioned. I will not withdraw or qualify that statement, and if they succeed it will not be the Conservative party that will be in power but the Manufacturers' Association.
We have endeavoured to deal with the tariff to some extent, and we have pointed out some of the reasons for the falling off in revenue. Hon. gentlemen opposite and especially the ex-Miniister of Finance (Sir Henry Drayton) seemed to be very much concerned at the present time over the workmen. The hon. member seemed to be able to weave that word " workers " into his argument many times. I should like to ask that hon, gentleman if he has carefully considered the tariff revisions and what is the largest item in the whole tariff list of reductions. If the workers of this country are to succeed, the first essential is a reduction in the high cost of living. The largest item in the whole list of tariff reductions which became effective last year
is on the importation of sausage casings which stand in the list at $55,000 as a loss of Tevenue to this country. Will my hon. friends say in this House that this duty should be restored on this article which enters into an article of food that is bought by the working man every day of the year. I do not think that they will venture such an assertion. I also wish to show that in the total imports the tariff reductions are largely in the general tariff. The next largest item to the one to which I have referred is that of agricultural machinery. But taking the tariff reductions as a whole the reductions and the loss in revenue on the general tariff amount to $15,000,000. In the preferential tariff, as I pointed out before, the amount is about the same as that of the previous year. The treaty rates which were largely criticized in this House this year and last and which we were told were not worth the paper on which they were written, have worked out splendidly and we find that the imports under the treaty arrangements of 'last year from the different countries show an increase of something over $2,000,000; or in round figures, the imports under treaty rates in 1924 amounted to $5,731,000, while for the first ten months of this year they amounted to $7,916,000. Therefore, it is obvious that the treaty arrangements that have been entered into by this government have not only worked out splendidly from the standpoint of bringing in cheaper goods, but have had the effect of increasing the revenue. As I pointed out in the first portion of my remarks, it canuot be laid at the door of this government that the reduction in the duty was the cause of loss in revenue, because it has been plainly shown, and anyone who glances over the returns will see that the great loss in revenue was due to lack of importations, and no government can force people to buy or import against their will.
A good deal of the time of the House has been taken up with a discussion of loans to the railways. As I discussed that matter somewhat fully last session, I will not trouble the House with any further remarks regarding that question. A clipping which I have in my hand referring to Sir Henry Thornton reads:.
London, June 30, 1924.
King George received the premiers of the Canadian provinces at a garden party at Buckingham Palace. In questioning the visitors on Canadian affairs, His Majesty expressed very particular pleasure at the success of Six Henry Thornton as president of the Canadian National Railways. " You have taken a good man away from us in England," said the King.
1622	COMMONS
The Budget-Mr. MacLean (Prince)
I	do not think we want any higher tribute to the gentleman who is president of the Canadian National system at the present time. We have our grievances in the Maritime provinces, but the president of the road has paid us several visits and has done a great deal in the direction of remedying the situation. He has been very painstaking in every detail that has been brought to his attention, and although we have not obtained all the reductions which we had hoped for, nevertheless certain reductions have been made by means of which the Maritime provinces have |been placed on a very much better basis than in previous years. When we came into confederation we were supposed to receive certain rights but as time went on and so many different changes came about in the railway system those rights were gradually taken from us one by one until now they have almost completely disappeared. Have we ever studied the railway situation in this light? We have a great many government services in this country all of which possibly are essential; but I think hon. gentlemen will agree with me that perhaps there is no service that can be rendered. by this government which is as essential to the people of Canada tojday as the service rendered by the Canadian National Railways. We spend millions on other services; do we get any returns? We may get returns in an indirect way, but it is a very indirect way indeed; and we do not get interest on our money nor do we see the results in any very tangible form. Now here is an institution which has given to the people of Canada a service which they could not possibly have got along without. We all hope the day is not far distant when this service will be on a paying basis; but until that time comes is it any crime that some assistance should be given to the Canadian National Railways by the government of Canada? I do not think it is. Someone will say, why is it that the Canadian Pacific Railway is able to get along and pay dividends while the Canadian National Railways are hardly able to meet operating expenses? My answer to that question is this:	The Canadian Pacific
Railway built its roads into those portions of the country where dividends were in sight, whereas the Canadian National system was built into those sections of Canada that needed to be opened up so that the great hinterlands of the north might be settled. That in my opinion is the answer to such a question. The Canadian Pacific Railway went

after dividends, and in doing so they built their roads where they expected the traffic to pay. The Canadian National Railways on the other hand have up to the present time been operated in the interests of the country and if they have not been as successful as their rival the reason I think is just as I have stated.
It may not be of interest to the House to know this, but I may say that before coming to Ottawa to attend the present session I prepared at the request of the railway commissioners a brief which I submitted to the management of the Canadian National Railways in regard to reductions. We felt that we had certain grievances in Prince Edward Island which called for some remedy, and after gathering all the information that I could upon the subject I submitted this brief to the Canadian National and have received their reply. With the permission of the House, Mr. Speaker, I should like to place this statement on Hansard: It is most interesting to the people of the Maritime provinces and it deals with questions affecting not only Prince Edwrard Island but also the provinces of Nova Scotia and New Brunswick. The management endeavoured to meet us as best they could, and I may observe here that they have before them other items which they state will receive their careful consideration.


Mr. SPEAKER:: I must point out to the
hon. member that no statement not read in the House may be incorporated in Hansard without the consent of the House.


Alfred Edgar MacLean: I understood
that, Mr. Speaker, and that is why I asked the permission of the House.


Henry Herbert Stevens: I suggest that the hon.
member read the statement. We are interested in the views of his province in regard to these matters.


Alfred Edgar MacLean: I have no objection to reading it if the hon. member insists.


Thomas Wakem Caldwell: Who wrote the document?


Alfred Edgar MacLean: Mr. Dalrymple of the Canadian National Railways. The management did not meet our views altogether and as I proceed I shall explain our case as we saw it. The document is dated February 27, 1925 and reads:

The Budget-Mr. MacLean (Prince)



CANADIAN NATIONAL RAILWAYS

[Stage Direction]
Traffic and Express Department Montreal, Quebec,
February 27, 1925.
At Hamilton
A. E. MacLean, Esq., M.P.
House of Commons,
Ottawa, Ontario.
Dear Mr. MacLean :
In re Rates on Traffic-Prince Edward Island.
Your favour of February 13th, addressed to our president:
There has been some slight delay in answering the enquiries as several of the statements made were of an omnibus character and involved research.
I will, however, endeavour to answer the various complaints or comparisons in a tabulated manner, as follows:
(a)	Railway insists on consignee discharging shipments of potatoes at Charlottetown-cars to warehouse-whereas work is performed at St. John without expense to consignee.
The statement is not quite correct; it is, nevertheless, a fact that we assume the expense of unloading potatoes, in packages, when for furtherance by water. We do not assume the cost of unloading shipments in bulk.
The situation at St. John is somewhat different to that existing at Charlottetown, for the reason that the potatoes originate practically at the outskirts of Charlottetown, paying to the transportation company a minimum rate, w'hereas the commodity destined to St. John travels a much longer distance,-besides, we do not absorb the handling charges on traffic which pays a rate less than 10 cents per hundred pounds.
With the opening of next season, at Charlottetown, we will see that the feature of handling is placed on a parity with St. John.
(b)	Five days free time allowed at Charlottetown and ten days at St. John.
This is correct. The extra time allowed at St. John was for the purpose of over-coming irregularity in transportation, or. in other words, a railway disability caused by the fact that the potatoes moved for long distances, even in excess of 400 miles, whereas, at Charlottetown, the maximum distance is 117 miles. There would appear to be no good business reason for extending the time at Charlottetown and so far we have had the impression that the only reason why the extra time has been requested is for the purpose of utilizing railway equipment for storage, owing to the absence of adequate warehousing accommodation.
We are making a further investigation on this angle of the situation and are open to conviction.
(c)	Distance tariff rates on potatoes are greater than in New Brunswick to St. John.
This statement is not correct. The local rates, between all stations in the Maritime provinces, are on a mileage basis and the one distance tariff applies throughout the territory. In the case of export, the rates to both St. John and Charlottetown are precisely the same for corresponding distances, except that the rate to Charlottetown for distances 100 miles to 120 miles is held to a maximum of 13 cents, while to St. John the rates go up to 14 and 14J cents.
(d)	Wants general reduction in rates on potatoes to Sydney, Montreal, Halifax and St. John, but as Prince Edward Island and New Brunswick rates from Dominion points are on same basis as lower provinces admits this means a general reduction
[DOT] throughout Dominion.
There is quite a long answer to that question, and I think I might be allowed to put it on Hansard without reading it.
Henry Herbert Stevens: We would like to hear
it.
Mr. MaeLEAN (Prince):	My hon. friend
is interested?


Henry Herbert Stevens: Yes indeed.
Mr. MaeLEAN (Prince): I quote:
Rates on potatoes between and from points in the Maritime provinces have been subject to special consideration a great many times, during the past few years, and substantial reductions have already been made to assist the producer. The increases made since 1918, result of enhanced expenses due to things which need not be elaborated upon at this time, have, in so far as relates to potatoes for export, been entirely wiped out and in this respect the Maritime provinces have had preferential consideration.
Perhaps my hon. friend will not like to hear that.


Henry Herbert Stevens: No, I like to hear that.
I	am very glad to see it.
Mr. MaeLEAN (Prince):	Right here
I want to pay a compliment to the hon. member for Vancouver Centre (Mr. Stevens). In connection with the trip which the men from the Maritime provinces took across Canada, I think my hon. friend made the best suggestion of any that were offered. If he was correctly reported, his statement was that the remedy for the difficulties of the Maritime provinces in this regard was to bring the Maritime provinces within 300 miles of Montreal. My hon. friend has a good grasp of the situation. I wish we could reciprocate by bringing the western districts within 300 miles of that same great city. I presume he meant a subsidy.
The Maritime provinces are handicapped in that whatever products they have for export to Great Britain must very largely be shipped first to Montreal, involving a long rail haul of about 700 mlies, and then these same products are loaded on the ships at Montreal and are again brought back right past our doors. That is a tremendous tax on the farmers of the Maritime provinces, and to a certain extent it is the fault of the Maritime provinces themselves. A few years ago the suggestion was made that stoek-yards should be established somewhere in the Maritime provinces where stock for shipment across the ocean could be collected and where the buying could be done. There was this disagreement, however, among the different towns in the Maritime provinces as to where those stock-yards should be located, and in the meantime the thing went

1624	COMMONS
The Budget-Mr. MacLean (Prince)
by the board and the stock-yards were never established. It seems to me, to use the words of the hon. member for St. John and Albert (Mr. Baxter) when he thundered here a few nights ago, and suggested that the government should wake up, that we in the Maritime provinces should wake up. If St. John and Halifax want to retain the export trade of the Maritime provinces it is up to them to wake up and provide the facilities and to agree with one another when any proposal of this kind is made.
The next question is as follows:
(e)	Wants potatoes carried at special or commodity rates and cites coal as a basis to shoot at and gives certain comparisons. Later advocates rates should not exceed rates on grain in western Canada.
In this connection I compared the rates on coal from the Maritime provinces to Prince Edward Island. I pointed out that it, to produce a ton of coal at the pit's mouth costs approximately $3, while it costs from $9 to $15 to produce a ton of potatoes, and that they sell at destination at about the same price. The rate on coal from Sydney to Tignish, Prince Edward Island, is 13 1-2 cents per 100 pounds, and the rate on potatoes from Tignish to Sydney is 38 cents per 100 pounds, a difference of 25 cents per 100 pounds or a preference of about 200 per cent on a commodity that costs 200 per cent less to produce. Coal has a commodity rate, and my contention in this case was that if coal was given that rate for Nova Scotia, then potatoes should get the commodity rate for Prince Edward Island. Another point brought out was that the freight on a carload of coal of 60,000 pounds, at 13 1-2 cents, delivered at Tignish, was $81, while the freight on a carload of potatoes of 60,000 pounds, at 38 cents, from Tignish to Sydney, was $228, although the values of the two carloads at destination were practically the same. Of course the railways will not take this into consideration; they say the two articles are so extremely different in character that that cannot be considered. The reference to that in this memorandum is as follows:
This proposition is so fundamentally unsound that nothing would be gained by discussing it.
In (f) we advocate general advances over the Dominion in the rates of luxuries and expensive goods, and a reduction on cheap or bulky articles. I think that is a proposition worthy of consideration. The reply to that suggestion is as follows:
In principle we quite agree with you as to advances on luxuries and expensive goods and this if consummated would have a natural tendency to enable us to reduce our rates on what we usually call basic commodities, but you will appreciate action even in

respect to the latter would be controlled, as heretofore, by the result of our expenses in operation.
(g)	Wants local rates on potatoes to St. John and Halifax reduced to same basis as export.
Reply to this is already covered by (d).
(h)	Gives reference to certain statements made by Premier Armstrong.
Premier Armstrong stated that freight rate from Kentville to Sydney, 317 miles, was 53 cents, while from Toronto to Winnipeg, 1,232 miles, it was only 55 cents. In other words, there was a difference of only 2 cents over that long distance.


Thomas Wakem Caldwell: Would that be on the same commodity?


Alfred Edgar MacLean: Yes.


Mr. SPENCE:: And the same year?


Alfred Edgar MacLean: Yes, the
same year. Another instance was quoted in connection with the shipment of a box of tomatoes from Hantsport to Halifax. The freight charge was at the rate of $12.80 per 100 miles, while the rate from Grimsby, Ontario, to Halifax, was $2.50 per 100 miles. In his address before the dairymen's meeting Premier Armstrong declared that he wanted to "burn it into the minds" of the convention that these inequalities "could not be permitted to continue." He gave another instance of discrimination in freight rates. Now, the reply made by Mr. Dalrymple to that point was as follows:
Comparison of rates from Kentville to Sydney is made with rate from Toronto to Winnipeg, on apples. The latter took what is known as the Crowsnest agreement rate, which the railways are not willingly subscribing to, and if, because of the existence of this low Crowsnest basis of rates the railways are obliged to reduce all of their tariffs throughout the entire country to the lower level of such agreement rates then I can say to you very frankly there will not be sufficient money left to enable the transportation companies to furnish adequate service for our Canadian commerce.
(1)	Hay-Claimed should have flat rate from all stations on Prince Edward Island to Sydney, St. John and Halifax, as it loads so light to the carload that the rate to make it pay has to be out of all proportion to the value.
We will see what can be done in the matter of export rates on hay, from Prince Edward Island territory.
The next article dealt with is fox feed, which is an important commodity down there, and which should be fourth class instead of first class. He says:
These food stuffs consist of livers, beef hearts and horse meat shipped frozen and usually in refrigerator cars; same requires equal care to that of perishable traffic for human consumption, and we are decidedly of the opinion that the fox industry can well afford to pay first class rates. In fact, to use the argument contained in the papers which you were good enough to send us, this business might be classified as a luxury.
t

The Budget-Mr. MacLean (Prince)
We went on to ask for a reduction of freights on mixed carloads of potatoes and turnips and other freight from points in the province of Prince Edward Island to the mainland. In summing up he says:
It will perhaps not be amiss for me, at this time, to call your attention to what has been done in the matter of freight rate adjustments, affecting Prince Edward Island, during the past two years;-amongst other things the following are for your information-
(1)	Formerly rates were the combination of locals to and from island and main land, now all mileage tariffs applicable in the maritime provinces are on the flat main land basis with no additional charge for car ferry or narrow gauge line services. This involved considerable reduction in our revenue and without much increase in volume of tonnage.
(2)	Prince Edward Island is now on the flat Halifax and Mulgrave bases on all traffic to and from points west of Quebec,-a reduction in railway revenue.
(3)	Class rates between Prince Edward Island and territory west of Quebec have been readjusted on a lower level.
(4)	Reduced mileage scales locally in the maritime provinces, including Prince Edward Island, on potatoes, grain and products, have been made effective.
(5)	Rates on potatoes for export have been reduced to the point that all increases granted by the Board af Railway Commissioners since 1918 have been eliminated and such situation does not exist in any other part of the country that I know of.
(6)	Reduced rates have been established on potatoes to western Canada.
I am simply mentioning the foregoing in an endeavour to convince you that we have not been neglecting the maritime situation.
I am sorry to detain the House, but this is a very live question with us down there, and I trust I have not wearied hon. gentlemen too much.
When I was speaking a few moments ago regarding the upkeep of the railways, into which we were throwing a great deal of money, I forgot to mention that the government supply and keep in repair the water roadbed, the canals, lock tenders, lighthouses, danger buoys, docks, unloading facilities, and so forth, free to the lake carrier vessels. Why not do the same with the railways, and figure the rate on cost of rolling stock and operation only, instead of trying to make it pay interest on the fabulous cost of construction and upkeep of roadbed, and so forth? This is a suggestion which I think is worthy of the consideration of this House.
It is not my intention at this time to discuss the Petersen contract. That has been discussed from very many angles. I just wish to say that I believe the government has brought this proposition down in good faith. They are submitting it to a committee that will look into the question from every angle, and as I said before, if this proposition of the government to reduce ocean rates is blocked, we must lay the responsibility at 104i
the door of hon. gentlemen opposite, and to my mind, it will be another national tragedy, comparable with the result of the 1911 election, when we were shut out of the market of the United States. The same people who did that are to-day endeavouring to shut U3 out of the markets of Great Britain, not perhaps in the same way, but in another way which will be probably just as effective.
The other night mjr hon. friend from Cape Breton South and Richmond (Mr. Carroll) was speaking in support of coal duties, to which I am very much opposed. Coal duties may be very much in the interest of the people of Nova Scotia. My hon. friend mentioned the fact that if I would not support this duty on coal, I was not a good maritime man. I wish to tell the hon. gentleman that if I am not a good maritime man, I am certainly a good Prince Edward Island man, because the imports of coal from Nova Scotia into our province, as has been pointed out by the hon. member for Kings (Mr. Hughes), are very large indeed, and the people of Prince Edward Island feel they are paying a very high premium to the coal mines of the province of Nova Scotia.
Another factor which has injured us greatly not only in the province of Prince Edward Island, but also in the province of New Brunswick is the embargo which has been placed on Canadian potatoes by Great Britain. This embargo became effective just at the time we were getting our shipments started nicely through that new channel of trade. I wish to thank the Minister of Trade and Commerce for what he did. and to say that I do not believe the people of this country are making the use of the Trade and Commerce department that they might. We were forced this fall to look abroad for markets for our surplus potatoes, and we took the matter up with the Department of Trade and Commerce here. They immediately took it up with the High Commissioner in London, and went into the matter so thoroughly that in the course of a very few weeks we had a stream of shipments going forward to Great Britain. Then what happened? The Americans, who have shut us out of their market by the Fordney tariff, immediately became jealous because our potatoes were going forward while there was an embargo on American potatoes, and they took the matter up with the British government and scared them so badly by telling them that our Canadian potatoes were affected in a certain way that it was not safe to allow them entry into Great Britain, that an embargo was put on our potatoes.
1626	COMMONS
The Budget-Mr. MacLean (Prince)


Thomas Wakem Caldwell: Might I interject, not that our potatoes were affected, but that we had the Colorado beetles?


Alfred Edgar MacLean: My hon. friend is quite correct. We went into this question and found out that the Colorado beetle has been prevalent in Great Britain for a great many years, but I am sorry to say that the British government listened to the representations made by the American government, and extended the embargo they had put on American potatoes to Canadian as well. This is a matter that the Department of Agriculture are working on, and I hope that yet some relief may be found. Our potatoes had a splendid reception over there and turned out well. We were opening up a great trade, especially in view of the shortage that obtained in Great Britain. I sincerely trust the Department of Agriculture will be successful m persuading the British government to remove this embargo.
Another matter that has been discussed in the Maritime provinces is in regard to the car ferry steamer plying between Prince Edward Island and the mainland. To my mind there is no justification in the world for charging the cost of operating that ferry to the Canadian National railway system The car ferry was put into commission as part of the compact under whim Prince Edward Island entered confederation, whereby continuous steam communication was to be maintained between that province and the mainland. Now, there is no more reason for charging the operating expense of that car ferry against the Prince Edward Island branch of the Canadian National railway system than there is for charging up in the same way any of the othe' subsidies which were granted to Prince Edward Island at the time of confederation. That car ferry has given splendid service. It cannot, however, go on forever and I hope the time is not far distant when a second steamer will be provided. I am credibly informed that the traffic on that route is .so constant and so pressing that the steamer has not had a proper overhauling since she was first put into commission. The fact is that she cannot be taken off the service for a sufficient length of time to permit of a thorough overhauling, and I hope the government will not delay in seeing that a second vessel is provided for that service. It has been suggested that the present steamer should be converted into an oil burner. Under present conditions in winter time the vessel starts out on her trip. She has perhaps been out for five or six hours, it may be for eight or ten hours, and is almost at

the point where she could make her landing. By that time however, owing to the ice conditions, her fires become dirty, her steam pressure is lowered, and she loses power just at the very moment when it is needed to push her through the ice into her dock. Consequently she is brought to a standstill and the fires have to be cleaned, with the result that she is carried by drifting ice sometimes eight or ten miles, or even fifteen or twenty miles, up the straits. If the steamer were converted into an oil burner this difficulty would be overcome; the vessel would have the same maximum of power all the lime and, under proper conditions, could dock eight or ten hours earlier than she is able to do sometimes under existing conditions.


Henry Herbert Stevens: She w:u!d be good for
the Petersen fleet.
Mr. MacLEAN (Prince) * No doubt she would but we could not spare her for that purpose even to meet the wishes of my hon. friend.
A question brought up when the estimates of the Department of Agriculture were under consideration was the creation of a disease free area in Prince Edward Island. I am glad to say that the minister on that occasion gave us a very favourable answer, and I hope the work will be undertaken and pushed to a successful conclusion. I think the province as a whole is willing to adopt the suggestion of the government and endeavour to make Prince Edward Island a disease free area as far as tuberculosis is concerned. We have some of the best herds of dairy cattle in Canada, perhaps in that section. Our dairy products are unexcelled in quality, and with the assistance proposed for the eradication of anything in the nature of tuberculosis our live stock will be given a standing in the markets of the world which it cou'd never attain in any other way. The opportunity will also be afforded of advertising the fact that the dairy products of Prince Edward Island come from a disease free area and consequently they will be able to command much better prices in the world's markets.
In conclusion let me say that I do not think the people of Canada need be downhearted. We hear a great deal of pessimism from members on the opposite side, especially from our Conservative friends. They are indulging in a lot of "blue ruin" talk as the result of the likelihood of this government being continued in power. I think, however, that Canada is making substantial progress, a fact which is confirmed by the budget so recently brought down, notwithstanding any-

The Budget-Mr. Woods
thing which hon. gentlemen opposite may say to the contrary. Comparing other countries with Canada I notice that their per capita debt is very much in excess of ours. The per capita debt of Oanadia is given at $268, that of New Zealand at $792, Great Britain $791, France $540, and Australia $359. Notwithstanding the huge deficit rolled up at a time when hon. gentlemen opposite were in power I am glad to say that the per capita debt of Canada compares very favourably with other countries of the world.
I am proud of the party to which I belong, and am exceeuingly proud of the leader of this great party, the Right Hon. Mackenzie King, who has not only proven himself competent to handle Canadian affairs but has attracted the attention of the nations of the world by the position which he has taken in world affairs. I am proud of this party which has a record unexcelled in any country on which the sun shines; a party which has given to the people legislation in the interests of the masses as against the classes; a party which has stood for the interests of the common people; a party which has considered all classes, not handing out special favours to any pet monopolies; a party which has stood by the agriculturist, the fisherman, the lumberman and the artisan; a party which has redeemed its pre-election pledge to the best of its ability under the handicaps with which it was faced when it took up the reins of office; a party which can appeal to the country on a clear cut .policy which aims at the alleviation of burdens where they are the most pressing, still having due regard to placing Canada in a sound financial position before the countries of the world. I ask, are we downhearted? No. Our public debt per capita is much less than that- of a great many other countries of the world. Our resources are unlimited. Let us bury forever the pessimistic views to which I have alluded and let our country go forward in its career of development with that optimism which is so essential to success.


Mr. R. J. WOODS (Dufferin):: Mr. Speaker, in beginning the few remarks which I intend to offer I feel that I am in a very happy position from the fact that I am not bound by the shackles of any party, and that I am free, as I have been since I entered this House, to support legislation, from whatever quarter of the House it may come, if I deem it to be in the best interest of the country, or to oppose it if in my opinion it is likely to have the opposite effect. On two
occasions since I have been a member of this House I opposed the budget, and voted against it, and on one occasion I supported it.
I am somewhat disappointed in the budget at this particular time. I was hopeful that we would get a budget something along the lines of the budget delivered in this House last session, but to my disappointment there is no evidence of any advance beyond the point reached by the budget last year. We had expected, from the statements made by hon. gentlemen on the other side of the House, that last year's budget would be the death knell of protection. And this session I had expected that there would be some further reductions in the customs tariff on the necessities of life. I did not expect a slashing reduction and a complete sweep of the tariff; but I looked for something more than we have received. One feature of the budget in my opinion will not meet the views of those deeply interested in a low tariff and a freer trade between the nations that we have to deal with. I refer to the dumping clause. In this budget we have had a revision of the dumping clause. I have been looking over the budget for 1907 and have also considered the present budget. I have not a legally trained mind, I am a common man from behind the plough, but in my view when the dumping clause was introduced in 1907, goods coming into this country were valued at the regular market value in the country from which they were exported. As I understand the present revision, goods imported from other countries to Canada will be valued on the basis of the value of such goods in this country, or on the value of the goods on sale in this country. What does that mean? It simply means that if you go to a foreign country, buy goods and import them into Canada, you are forced, regardless of the customs tariff, to pay for those goods the value of the same goods in this country. For example, if I go to the United States and buy an article which is sold in that country for a hundred dollars and bring that over, when I come in contact with the Customs department I find that the selling price of those goods in Canada is a hundred and twenty dollars, with no reference to the customs; whatever customs duty might be placed on them would not matter. The result is that when I bring goods into this country, for an article which was sold in the United States at the regular market value of a hundred dollars I would be forced to pay a hundred and twenty dollars, before I would be per-
The Budget-Mr. Woods

mitted to use it after bringing it into this country.


Thomas Wakem Caldwell: Plus the duty.


Robert John Woods: Regardless of duty. As
I understand it, the dumping clause governs the whole protective feature of the goods coming into this country.


Robert Forke: There is nothing in that
clause that I can see that prevents the Minister of Customs putting any value he likes on the goods.


Edward Joseph Garland: Hear, hear.


Robert John Woods: We would not assume that he would put any higher value than the market value in this country. But assuming he puts on the same value, what does it mean? It means that the combined organization of manufacturers in this country could fix the price almost at any level and prohibit the consumer in this country importing goods from a foreign country without paying the price the same goods would cost him in this country. If I am right in that assumption, it is the most vicious form of protection that the human mind is capable of conceiving.
The debt of this country has been discussed time and again, and possibly almost every person in the country knows that we are loaded with a debt of almost two and a half billion dollars, which has to be met. It is a most unfortunate thing that we are saddled with such a burden. It appears to me that this enormous debt is a result of the lack of vision in war-time and the failure to collect from the people who were then making abundance of money. At the time the war was on, the farmers, the labourers, manufacturers and all classes of people were making a very great deal of money, and could with- ' out any inconvenience whatever have paid almost the entire war debt as the war went on. But, for lack of vision, we are saddled with this debt and we are compelled in some way or another to pay it. The question is how are we going to meet that debt. One of the ordinary methods which assists the average individual when he gets into debt, whether rightly or wrongly, is to retrench. There are two methods. The first, is to increase our revenue and bring more money into our possession with which to liquidate our debt. The other method is to retrench. In my opinion, the government of to-day is not retrenching as rapidly as it might do. There are many departments connected with the government of this country, and possibly there is no department in which there could
	, j
not be more retrenchment than there is at the present time. I am going to mention two or three departments out of the many in which there might be a cutting down of expenditures and a lessening of the estimates that go through this House. The estimates of the Department of National Defence might be cut down. I do not want to be misunderstood. I believe in a proper police force. I believe in our Royal Canadian Mounted Police and in a permanent militia to a certain extent, sufficient to look after the internal affairs of our country in case of any disturbance or need. But we have what is called the annual drill of the militia, and a considerable amount of money is spent on this. I had a little experience in my younger days in that regard, and I look upon it as almost a waste of money. A number of officers, some of whom do not take much from the revenues of this country for their sendees, take charge of the annual drill as the men go out into the various camps for one or two weeks, and some young men go out and have a fairly good time during this period. They continue that sort of thing each year for two or three years and then they are discharged. They are not trained to be soldiers, and a great number of them, as I saw them in my younger days, were not physically fit ever to make soldiers. I believe that branch of our Department of National Defence should be cut down. The hon. member for Comox-Alberni (Mr. Neill) brought in a resolution regarding the defence of the Pacific coast and he stated, I think, that there was a coast line on the Pacific of about 10,000 miles to be guarded. If we are going to guard that, against whom are we going to guard it? Against other nations that might come up against us? If we are to put on a force sufficient to stand against any of the surrounding nations that possibly might rise up in war against us, that- would saddle us with another debt possibly almost equal to the one we are now carrying. When we were forced into the struggle some years ago, the Canadian people with their energy, their physical power and their willingness to defend their country, in a short time got ready an army to send overseas in defence of the British Empire. I believe a good deal could be saved by retrenching in the Department of National Defence.
Possibly the Department of Public Works might also be cut down a little. In the estimates I notice a great number of wharves -you would think there were wharves in almost every little part of the country-that have to be repaired and kept up. I am con-

The Budget-Mr. Woods
versant with only a very few of them; but taking my cue from the Belle River wharf, as regards which I made it a point to make some inquiries, not from Conservatives particularly, but from Liberals, friends whom I know in that part of the country, I find that, in their opinion as they gave it to me, it was practically a waste of public money at this particular time to put the Belle River wharf item through last session.
Another department in which there might be retrenchment is that of the Auditor General. As we look over the Auditor General's report, we find that the late Auditor General was receiving a salary of $6,000. He came through the strenuous times of the war and he had no doubt a very efficient
10 p.m. staff with him. For some time there was no Auditor General, but the deputy and his staff took care of the work. We have now another Auditor General appointed at a salary of $15,000. If the late Auditor General could look after the work properly-and I understand it was looked after properly by him and the staff that he had with him during the strenuous period of the war-surely it is not necessary to add another $9,000 to the salary of one man to take the place of the man who is past and gone. I want to go just a little further along that line. On looking over the estimates for this year I find an added estimate of about $33,000 for the Auditor General's department to put new blood into the staff of that department. We have been talking about cutting down the civil service; but we see one department, instead of cutting down, adding to the extent of more than $33,000 during the present session. This looks as if something was wrong, as though there must be someone who wants a particular job, or someone in sight to be placed in a nice desirable position in that department. I think that is all I will specify in regard to the different departments, but I believe what I say is true of these departments, and what is true of these departments, I believe is true of every department. 1 believe there could be a retrenchment -and a cutting down, specially when we consider the burden of debt and taxation that the people of this country are carrying.
The policy of the present government seems to be to increase the revenues. This was shown not very long ago when a resolution was brought forward by the hon. member for Macleod (Mr. Coote) for the reduction of the customs duty on automobiles. The Acting Minister of Finance (Mr. Robb) on that occasion gave as a reason for retaining
the duty the necessity for revenue. It appears to me now that the government should not spend all its energies in loading and re-loading the people of Canada with extra taxation to the very limit, while there is a possibility of reducing our debt by retrenchment in a great many directions.
I am more favourable to the sales tax than I am to the customs duty. The sales tax is something in regard to which we are more in the light; we know what we are paying for. Although it may be shouldered on the consumer ultimately, we know at any rate more about this tax than we do about the customs tariff and the dumping clause that protects the various industries. Personally, I prefer direct taxation; I want to know exactly what I am paying for.
Let me refer now to the stamp tax on cheques, a matter I discussed when the legislation was put through this House in the first session I was here. At that time the Minister of Finance (Mr. Fielding) fixed the maximum at $2 but the following session he reduced it to SI. As I see this stamp tax, all it means is that the wealthy men of this country who are able to put their signature to cheques of over $2,500 will be exempt from a tax which others will have to pay. The tax now is 2 cents for every $50 or fraction of $50 up to. $2,500, but above that sum it does not apply. It looks to me therefore as if we are legislating in the interests of the rich people of this country, and it borders very closely if not entirely on class legislation.
I want to touch for a moment now on protection, which has been the great cry of our friends to the right. One thing that has surprised me in this respect is that hon. gentlemen to our right have not put this principle in the form of a platform, as the hon. member for Kings (Mr. Hughes) observed last night, when he said that certain resolutions contained the issues upon which the Conservative party were likely to go to the country. Hon. members to my right moved an amendment to the budget and I must say that it strikes me as being very meaningless; it is not a resolution from which we can extract very much. So far as I can see, their amendment is not a policy at all. But if, as the hon. member said last night, our friends are going to go to the country and appeal to the people on a certain platform, it is a mystery to me at any rate why they have not submitted it to the House in the form of an amendment to the budget with a view to having it threshed out on the floor. Why do they not want to bring it to the attention of the
The Budget-Mr. Woods

people as coming direct from the Parliament of Canada? Were hon. gentlemen timid, were they a little bit afraid to launch out on the great sea of protection in this way? At any rate, they seem to be holding back until some future time when no doubt they will bring forward their policy on the hustings. Now, protection does not always protect, and in this regard I want to read a brief statement I clipped from the public press written by Mr. Tom King who is the correspondent of the Globe at Washington and who writes in this instance touching the situation in the United States. We are told that there is a high protective tariff over there, and this perhaps is true in the case of a great many articles. But this is what that gentleman says about the situation as he sees it:
The United States farmers already have tariff protection, but a customs wall is useless to producers of wheat, corn, cotton and hogs. They have a surplus for export and must take prices fixed in the world's market.
What is true of the United States is also true of Canada. We are a large agricultural nation and we are producing in excess, by millions of bushels, of what we can consume in wheat. Of hogs, cattle and farm produce we also have an excess of production over consumption; and as we must place those prodilcts on the markets of the world in competition with other countries, protection does not avail us very much. And this is the same in the United States. So that protection does not always protect.
Personally I am not a free trader; I never believed in absolute free trade so long as we were up against a tariff wall in other countries. But I do not believe in retaliation, and I do not believe that it would be wise for a moment for Canada to put up a tariff wall against the United States or any other country simply because they excluded our products in that way. I do not think however that we ought to regulate our tariff; we should regulate the duties on the necessities of life, in the interests of the masses. We should not make things harder for the general public by increasing the cost of living and so driving the people out of the country. I believe therefore that it is our duty to regulate our tariff with the principle in view of the greatest good to the greatest number and not in the interests of any class or small section of the people.
There is another point I would like to touch upon-and I am not sure that it is not a delicate one in some respects; I do not know what view my western friends who sit around me hold in regard to it. But following the idea that I have just expressed of doing the greatest good to the greatest number, my

opinion is that the government would be acting wisely if it put an export duty on wheat. Let me give you my reasons. I have said that protection does not always protect, and that we have to put our surplus produce on the world's market. But the United States to-day has a protective tariff of forty-two cents a bushel against our Canadian wheat, and the result is that the millers of the United States buy our wheat, take it over to their mills in that country, mill it and export it. I am informed on good authority that when they export it they get the benefit of a drawback to the extent of 99 per cent of the duty paid. The duty that the United States has put against Canadian wheat does not help the farmers there but it does benefit the great milling companies of the United States, while it injures the millers of our own country. If our wheat was milled in our own country we would get the benefit of the byproducts for feed, and we all know how necessary those by-products are in such a province as Ontario. We must have them for the feeding of young stock and in connection with our dairy operations. But when the United States get our wheat and export it, with practically no tariff charge when you consider the drawback of 99 per cent, our milling industries are preventing from handling it and sending it over to Great Britain in the form of flour, and we are deprived of the use of the by-products for our young stock and for dairy feed.


Mr. HOEY:: Before the hon. member gets away from that, has he thought out what effect an export duty would have on the sale of our wheat in Europe? Would it not drive the Canadian exporter off the markets of the world? You cannot put an export duty against the United States without putting it on also against Europe.


Robert John Woods: Well, it might have some effect in that way, but it would build up our milling industries and give us the by-products. Whether rightly or wrongly, I cannot help thinking that it would be a wise thing to do, because it would operate very much in the interests of this country; it would bring a great deal of revenue into the treasury and would help pay off our national debt as well as give us the other benefits that I have described.
During the recess we heard a great deal of the cry of blue ruin; we got it all over this country from the Atlantic to the Pacific. Let me read a despatch that appeared in the press with regard to a meeting held at Stratford last August and addressed by the right

The Budget-Mr. Woods
hon. leader of the opposition (Mr. Meighen).
It says:
"Workmen banished, homes boarded up, factories closed, stagnation in business, and despair in the hearts of our artisans, these are the fruits of the policy of Mr. King's Government," said Right Hon. Arthur Meighen in addressing a crowd of more than 4,000 at the big Conservative picnic in Queen's park here today. In his address he dealt largely with the record of the King government since it has been in power, the chief characteristic of which, he said, was " duplicity." He charged that changes in (the tariff had closed more than 2,000 factories and had banished over 300,000 Canadians to the United States and prophesied that the coming winter would witness hardships untold which the government would be powerless to deal with without revoking all its pledges.
We have also been told by our friends to the right-and if my interpretation of the dumping clause is correct, there is some foundation for their statement-that the tariff reductions of a year ago did not decrease the price of farm implements. I assume that it is the manufacturers who are opposed to the reductions in the customs tariff and who are anxious to have the duties increased-that is, if we are to judge from the statements of our friends to the right. Well, if reduction of customs duties does not bring down the cost of implements in this country-and we are told that in some cases the prices are actually higher since the reductions of last year-why are the manufacturers up in arms against the customs tariff? If they can make as much money under a low tariff, why should they Object to the reductions? From the time that I came to this House, there was no perceptible reduction in the tariff until last session, and if in three or four months the houses could be boarded up and men turned out of work and 300,000 people could slip over to the United States, and all that kind of thing, to me it would be a phenomenon. I cannot see how it all could happen in such a short time.


Thomas Wakem Caldwell: The products of the
factories did not come down in price. That is, the machinery had gone up.


Robert John Woods: That is right. Now, I want to refer to a statement made recently in this House by the hon. member for Fort William and Rainy River (Mr. Manion). Referring to the present condition of affairs in Canada with regard to employment and so on, he said that he had never known it to be so bad. He went a little further and said that from bis knowledge of history he had never known it to be so bad; that such a serious state of affairs had not existed since the period between 1873 and 1878. Now, perhaps I will be pardoned if I tell the House something cf the conditions between 1878 and the close
of the century, based on actual experience. In the latter part of the eighties and possibly all through the eighties, and in the early nineties, conditions to my mind, and I came through them, were much worse than they are at the present time. I was actively engaged in farming in the early nineties and part of the eighties. I was in the working class, and knew considerable about the conditions in 1878, and onward; so much so that I was interested in politics at that particular time while still a young man, and I was then a very ardent supporter, I must confess, of the policy of Sir John A. Macdonald, which our friends to my right always advocate. In the early nineties the farmers could hire a man on the farm for S15 and $16 a month. The farmers at that time received about $4 a hundred for dressed hogs, and about $3 to $3.50 a hundred for live hogs. They could sell beef cattle that had been stable fed for six months at a price-I was going to say at the enormous price of 4 cents or 4} cents a pound. I came through that particular period and have had actual experience of these conditions; I am speaking of Ontario; I do not know anything about the other provinces. I have had the actual experience in this province of selling dressed hogs, beautiful carcasses, for $4 a hundred, and of selling in May beef cattle that had been stable fed all winter for $4 a hundred. These were the conditions back in the nineties, when as I say we could hire our men for $15 and $16 a month. Compare that with conditions to-day. Hired men to-day on the farms in our locality and round about are getting from $30 to $40 and in some cases $43 a month the year round, and their board. In some cases they have a horse fed for them, and they have the opportunity of driving out with their own horse and rig supplied by the farmer, in addition to getting $40 a month the year round. There was no horse fed for them in the early nineties, and they were then only getting $15 and $16 a month. To-day while the farmers have difficulties to contend with, and high prices generally, we can sell live hogs at $12 and $13 a hundred, and beef cattle at from $6 to $8 a hundred in the province of Ontario. Of course, we may have got into a little extravagant way of living, which is all right in its place if we have the means to do it, but conditions to-day make it far easier to live on the same plane, and to have as few "outings" so to speak, than they did in the eighties and nineties, under this great protects ive policy, this panacea for all our ailments, that was launched in 1878 as the great National Policy for the Dominion of Canada.
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But we are told by our friends to the right that the people are leaving this country. We have heard so much of that great cry of blue ruin, and in that connection I am going to quote from an editorial in the Toronto Mai! and Empire in an issue of about a month ago. It says:
Why is it that people leaving Britain seek homes rather in the United States than in Canada?
That is the question put by the Mail and Empire, and this is its answer:
The answer is that they are influenced by continuous reports of abounding prosperity and opportunity for employment at high wages in the United States, whereas the reports from Canada are very discouraging to the British people looking abroad for work. They hear of hundreds of Canadian factories being closed down, of large numbers of our people brought to distress for want of employment, and of hundreds of thousands of them leaving the country to make a living in the now famed land of opportunity next door to us.


Thomas Wakem Caldwell: They must have been
reading Hansard.


Robert John Woods: I do not know where they got it from, but that is what the Mail and Empire says in its issue of February 21, 1925.
Now I am going to read another statement contained in a despatch from the Canadian press, dated Hamilton, February 24, 1925:
Addressing the members of the Canadian Bankers' Association at a dinner here to-night presided over by A. R. Lancefield, Sir Joseph Flavelle, of Toronto-
A man we have all heard of and whose reputation we know, and whose statements carry some weight in this Dominion:
-declared that creeping into the national life of Canada was a spirit of whining, which reflected no credit on the " men of the northern zone." He was at a loss to know what had got into some men lately, for all they appeared to do was to whine and scold at this, that and everything. This attitude was neither Canadian nor courageous. While he disagreed partly with the method by which some of Canada's post-war taxation had been levied, he thought it was time to stop scolding and get on with the day's work.
But there is another side to it. We have heard a great deal lately about the lack of prosperity, but there is something to be said on the prosperity side, and I want to read one or two extracts I have here in regard to prosperity. I want also to say that if the reduction in the customs tariff last session brought prosperity to this country, it appears to me a terrible mistake that the government of the day did not continue and go a little further in the direction they went last session, in order to bring further prosperity to the Dominion of Canada:
The largest shipment of hardware ever made in Canada left the plant of Beatty Bros., Fergus, on Saturday afternoon in a special Canadian Pacific train of 24 cars, and was composed of more than 2,000

iron farm pumps, 1,000 step and extension ladders, and 1,000 electric and hand washing machines, and barn equipment, for spring delivery to 700 dealers throughout western Canada.


Thomas Wakem Caldwell: Wnat is the date of
that?


Robert John Woods: I do not know the date
of the item but it occurred within the last two months. I am satisfied it is not more than two months since the shipment was made. Here is a further paragraph I desire to read:
Industrial conditions in Guelph, which have not been very satisfactory all summer, are beginning to pick up. The general opinion expressed by local manufacturers is that business is improving slowly, but surely, that the comer has been turned, that the industrial situation is on the mend, and the country on the road back to prosperity.
President John M. Taylor of the Taylor-Forbes Company, one of the largest industries in the city, is optimistic as regards the outlook. This company's radiator plant is working six days a week, and overtime every night, in an effort to fill orders on hand. Crowe's iron works, another important industry, is now operating five days a week. President C. R. Crowe reporting a noticeable inprovement in conditions. The Canadian Diamalt Company, a subsidiary of the Fleischman Yeast Company, is also busy.
That the peak of the depression has been reached and passed, is the opinion of R. Marsland of the Guelph Carpet and Worsted Spinning Mills Company, Limited, who is confident that industrial conditions will show a decided change for the better after the new year.
Here is another quotation from Ottawa:
The trend of employment at the beginning of October was upward, according to returns from 5.855 firms tabulated by the Dominion Bureau of Statistics. These employers increased their payrolls from 765,422 persons on September 1 to 771,932 at the first of this month.
Manufacturing showed considerable improvement, especially in the textile, iron and steel, canning and confectionery divisions. Logging, transportation and trade also were more active, while further, though smaller, declines were registered in construction.
I have another paragraph but I will not take the time to read it. I want to refer to a manufacturing concern in my own county. It is a woollen manufacturing industry and the only one we have in the county of Dufferin. That company to-day is running night and day rhifts.


Thomas Wakem Caldwell: I thought the woollen
mills were all shut down last year.


Robert John Woods: The^e were rumours to that effect. However the one in the county of Dufferin did not shut down but is running night and day Shifts at the present time.


Thomas Wakem Caldwell: Good.


Robert John Woods: It employs one hundred and fifty hands

about sixty-five men and boys, and the remainder women and girls. That

The Budget-Mr. Woods
does not bear out the argument that because the customs tariff was reduced last year the country is going to ruin.
Now, I want to refer to another point and that is that protection is driving small industries out of the country. I believe the protective policy has had more to do with driving small industries from our towns and villages than anything else which has taken place in Canada. It has depopulated the rural sections of the Dominion and is forcing the young men and women, and other workers, into the large centres. Then when conditions are not favourable in those centres they cross to the country to the south to look for employment there. At any rate I am convinced of the fact that protection has done more to break up our small towns and villages and to destroy our small industries than any other agency.
Now I am going to relate a condition which came to my notice very recently which, I think, will prove conclusively the statement I have made. It is a condition that was brought to my attention by some of the fence manufacturing companies of the province of Ontario, and it is this: The Canadian fence companies that weave wire fences for the farmers import certain lines of wire free of duty, and I approve of the Canadian manufacturers obtaining their raw material duty free because it should lower their production costs and enable them t-o put their products on the market at a reduced price. The companies that manufacture woven wire fences have the privilege of going into the open market buying No. 9, No. 12 and No. 13 wire and importing it free of duty. There is a No. 10 wire which is a Shade lighter wire than No. 9, but which still makes a very good fence. There are, as far as I know, only two large companies in Canada that manufacture steel wire for fencing, and they also manufacture fences out of No. 10 wire. They import their raw material free for the manufacture of that wire, and they put their fences woven from No. 10 wire on the market in competition with fences woven from No. 9 wire, selling them as a light No. 9 wire fence or as a standard gauge wire fence. Now, the other companies that weave wire fences do not manufacture the wire. They can go to these two particular companies and buy No. 9, No. 12, and No. 13 wire at practically the same price at which they can buy it across the line and bring it into Canada; but when it is a case of getting No. 10 wire, which is protected by a 20 per cent duty, these two particular companies manufacturing this wire
say to the other companies "We will give you that wire at so much" which represents the 20 per cent duty added to the price. It is a prohibitive price for other manufacturers desirous of weaving fences from No. 10 wire. So these two companies enjoying this special advantage sell No. 10 wire at a price fifty cents higher than the other companies who sell No. 9 wire fences and they also sell No.
9 wire as well. Now fencing in this country is a very important matter not only for the farmers on the western prairies but elsewhere in Canada. Fences made from No. 10 wire can be put on the market only by these two favoured companies; the other concerns are prohibited from weaving and selling No. 10 wire fence by the addition of the 20 per cent duty. What is going to be the result of this? The result will be to drive out the other woven wire fence companies and to give a monopoly of the business to the two companies that manufacture the wire and also turn out woven wire fences, but who are selling fences made from No. 10 wire at fifty cents a hundred higher than they sell fences made from No. 9 wire. That concrete case has been brought to my attention. I have laid the matter before the government, and they say it was an bid thing and has been there for years; but I am hopeful that the government of the day will remove that discrimination against the small manufacturer in favour of the larger manufacturers of wire and fencing.
In conclusion I desire to state that we have had two old, historic political parties in this country but only one policy, and that is the reason that this group to which I belong sits in this corner of the House to-day. I have read the reports in the public press of the various speeches which have been made by members of the old political parties as they toured the country during the recess. An effort has been made by them all over the country, from the Atlantic to the Pacific, to get rid of the group in this comer of the House and to get back to the old party system.	[DOT]


Robert Forke: They will not succeed.


Robert John Woods: Never. I believe that is
the reason we are here to-day. In 1878 the Conservatives came into power on the National Policy. They held office for sixteen or eighteen years, and then the Liberals adopted another policy and fought for the Mackenzie tariff or the low tariff. What did they do when they got into power? They pulled their boat right up alongside the Conservatives,
The Budget-Mr. Woods

and they launched out just in exactly the same direction. We must give them credit for having introduced the preferential tariff, which was a benefit to the country. On the whole, however, as the people in the country are aware, and as they have been told repeatedly in the back concessions, we have two parties in name but one party in policy. The hon. gentleman who preceded me (Mr. MacLean, Prince) quoted from an address by the right hon. leader of the opposition (Mr. Meighen) in regard to the lowering of the tariff. I quoted from the same address a year ago, about the manufacturers hiding behind the ramparts of gold, and it is time this was done away with. That was in 1910. The Conservative policy then was, "We must get down to a lower tariff". They were going to appeal to the people and wanted to get hold of the people on that low tariff policy. But what happened? The Liberals outwitted them, went over to the United States and stole the Conservative platform. We know that the Conservative policy back in the eighties and nineties was that as soon as the United States was willing to put the natural products of the country on the free list Canada would do the same, and that we would have reciprocity in the natural products of the country. But the United States refused to accede to that request until 1911, when the Liberals went over there and made an arrangement with them in regard to it. The Conservatives then felt that they were up against it, that the Liberals had taken the ground under their feet, and some scheme had to be launched. What were they to do? They wanted to get into power. At that particular time I knew a little of the workings of that historic party to my right, and I got into the caucus. I have not time to tell my hon. friends about it to-night, because I have to catch the train. I was in dose touch with an hon. member who sat in the House for thirty years, who for a time occupied the position the hon. Speaker at present holds and who later was transferred to the Senate. He and I were very friendly. What did they do? They said, "There is one hope of getting into power, and that is the loyalty cry". They raised the Union Jack to the top of the mast. I do not know what they did in other localities, but I know that in my locality they fought the contest on that particular line and nothing else, and they succeeded in winning.


Henry Herbert Stevens: Was that not a good place for it?


Robert John Woods: It was a good place. I can assure hon. members I have no objection to

the Union Jack being hoisted to the top of the mast. They won the election and the Liberals were in the cold shades of opposition. In the year 1919 they adopted the old platform of a reduced tariff. They were elected in 1921. I must admit that we got a little, and that they made a nice move last session, but we have got to the starting point again, more particularly in reference to the matter which I mentioned, namely the dumping clause.


Mr. FORTIER (Labelle) (Translation):: Mr. Speaker, the budget speech, this year, affords to the citizens of this country the satisfaction and joy of noticing a marked improvement in our finances. For a long time to come, we shall look forward with much anxiety to the yearly budget statement of the Minister of Finance, because we shall bear in mind the never to be forgotten days of the Great War, the sacrifices we bore up with and the heavy obligations incurred. These war oebts must be met. The word of honour and pledges of our predecessors must be scrupulously adhered to. Therefore, this year as in previous years the Acting Minister of Finance rightly stated:
However, upon the Dominion treasury had fallen the cost of our share in the war, the interest on the war debt, the pensions to our disabled soldiers and to the widows and orphans of our men who had fallen at the front. The present government, representing the will of the Canadian people, has constantly borne in mind the debt we owe to the disabled and the needs of the widows and orphans, which necessitated pension increases from year to year.
We therefore have cause to rejoice that the government has managed the affairs of the country with such foresight and economy that, after having discharged in full the heavy debts, which were a consequence of the war, and met the needs of the hour, it can bring down a budget which shows a favourable balance. The latter is the result of a wise administration. 1 he government first of all deserves our confidence on the score of wise economy. The statement of the Minister of Finance will be received with much satisfaction by the electors. Among other things the minister said:
On the other hand, by reductions in general expenditures and by refinancing maturing loans, the government has succeeded in reducing the interest charges and also our annual expenditures, thus enabling us last year to report a material reduction in our net debt and this year a substantial reduction in taxation and a surplus in the government's own administrative services.
The government's financial transactions may thus be summed up: debt decrease, taxation decrease, expenditure decrease and a favourable balance in this year's budget.
This financial success of the government is the vindication of the people of this country

The Budget-Mr. Fortier
who have entrusted the Liberal party with the ship of state. Had the government to its credit but this record of restoring the finances on a sound basis, it would be entitled to the confidence and gratitude of those who had entrusted to it the task of working for the reconstruction of the country shaken by the war. Deeds speak more eloquently than high sounding words or great promises. What did the people expect, in 1921, from the government? The post-war reconstruction, the balancing of our finances. The latter has just been done by the Minister of Finance. He has established this favourable balance notwithstanding a decrease in taxation, that is to say, in the revenue, although refunding more than $35,000,000 of the national debt. I do not know when we shall be called upon to go before the electors so as to obtain their endorsation of the acts of this government, but I feel certain that no administrative acts will commend themselves more to the consideration, the confidence and respect of the people than the great concern of our leaders to re-establish equilibrium in our finances. However, the management of our national railways will be the source, for some years to come, of considerable deficits as well as capital outlay necessitated by the improvements and equipment of the railway. However, we cannot do otherwise than shoulder all the responsibilities of said management which we have not sought, but that we have accepted with the solemn promise to give it a fair trial.
Discussing the chances of success of the State management of industries, in France the champions of this system assure us of good results, providing however that the undertaking be left in the hands of a permanent and responsible chief. The government was fortunate in entrusting the management of our National railways to Sir Henry Thornton. Indeed, since he was chosen president of the railway board, Sir Henry has carried out great improvements to the National railways. This railway ownership is to the advantage of our country and helps wonderfully to the development of the newer parts of the country and to the spreading of the population. I have the honour to represent in parliament a settlement, where for more than twenty-five years, the sturdy settlers have gradually conquered the virgin forests to establish on the mountain slopes and in all the valleys of the Rouge and Lievre rivers the flourishing farms and numerous parishes which make up a wonderful landscape in the Laurentian mountains. So as to meet the needs of the settlers, accommodate these far off settlements and open up the back country, the railway has
become an indispensable thing. It has always been' a wise policy for our federal as well as provincial governments, to grant to private companies the necessary subsidies to induce the latter to build railways through those settlements. But do these private companies, even encouraged by these various grants always meet the needs of those districts? Do they not often require subsidies representing a considerable proportion of the cost of construction? This being the case, would it not be wiser for the government to build themselves the railway rather than supply the funds to have them built by others and for others.
Railways, however, are so necessary to the exploitation of natural resources and the reasonable development of our country, that it would be expedient to complete, as circumstances would warrant, the National railways and to subsidize, when necessary private companies willing to build branch lines. At all events, we should congratulate ourselves in possessing a national railway which furthers so well the development and expansion of our young country, and we should not fear, for some time to come, the adverse financial situation which government ownership creates.
I realize that in certain quarters, these contentions may be challenged. Commercial centres, large cities do not feel the need, as settlements directly interested in the construction of branch lines do, of continuing state-ownership. Those who receive excellent service do not generally wish for more. But as their hopes, however, turn towards other fields of vantage, they seek for such ends funds which are otherwise invested. Let me point out to you that commercial centres and large cities have come in existence through these means of communication and in particular through these railways which link them with outside points, with neighbouring or far off regions, and which contribute largely to the wonderful development of trade and industry. The great voice of cities should equally mingle their appeals to that of those parts to be developed so as to support the claims of our rural districts for the extension of our railways.
Let me conclude these few remarks concerning the National Railways by the following assertions:	1. Railway ownership is an excellent thing and, at all events, it should be considered as such for the purpose of ensuring a fair trial to this undertaking.
2.	In a young country like ours the railway is the forerunner of colonization activities.
3.	It is a duty to stimulate by means of subsidies the building of railways in settled dis-
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tricts and for stronger reason, it is the government's duty to build railways when circumstances demand it.
The Minister of Finance has given us a glimpse of the dawn of a brighter day in the revival of activities which agriculture seems to display. He says:
But there is a bright spot. Agricultural industries, especially in the prairie provinces, are now receiving the benefits of greatly increased prices for last year's crops, and these increased revenues are being applied, not to luxuries or comforts, but to wiping off the indebtedness incurred during the lean years. The farm, free from debt, brings more general economic value to the owner and to Canada as a whole.
Now, agriculture is the oldest, the noblest and the most remunerating of all industries. Why do we give such prominence to agriculture? It is because we are aware that it is in this industry that humanity has its fountain-head of life. While all other industries confine themselves to transforming the raw materials of which they only utilize a part, agriculture multiplies its raw materials, increases them tenfold or even a hundredfold. The sun is its great assistant in this work of creation. Agriculture is therefore one of the main branches of human activity, it is the oldest. Fenelon says that, "agriculture which is the basis of life, is the source of real worldly goods." It has always been looked upon of such importance that all the ancient traditions agree in giving it a divine origin. The notion that we have formed of agriculture, in Quebec, is that it cannot be progressive or remunerative unless it has as its basis the dairy industry. When fifty years ago, the country was suffering under a general depression and it was in the throes of a most serious economic crisis, what was the remedy proposed? Our clergy, our statesmen rose and proclaimed an agricultural crusade. They founded, in 1882, a dairymen's association and they spread throughout all the parishes this truth: that the dairy industry is the principal means of salvation for the farm.	Our fathers will bear
witness to the fact.	It is the dairy industry which saved us from ruin; it enriched the farm, the homestead, by first paying off the mortgage and by restoring to the soil its original fertility.
In what other parts more than in those old provinces of the Dominion, is it necessary to always proclaim that the dairy industry is indispensable to agricultural development. In our parishes economic conditions may be gauged by the state the farm values stand in direct ratio to the number of well

equipped and well managed butter and cheese factories as well as to the high quality of the herds. In the interesting settlements which I have the honour to represent we realize that the example of prosperous agricultural centres must be followed, and that is why this industry has had such an awakening. Is it not there that dairy industry is most needed to complete and consolidate the national work of colonization performed by our worthy and heroic pioneers.
To retain these energetic sons on the Canadian soil, to keep the settler with us, to offer him as well as to his repatriated fellow-citizen, new lands to settle upon, that is. the policy which thrills with enthusiasm the heart of those who love their province. I call as witnesses those who were the great servants of our country. Does not one read on the pedestals of Cartier's monument, the advice which he gave to his fellow citizens and which he expressed in these simple words, "Let us take possession of the soil." Let us listen to this other congenial voice, that of Manager Labelle, the apostle of colonization: "It is absolutely necessary"-he repeated to the pioneers he had settled in the new parishes-"that you devote your time to the development of your primitive clearings so as to make of these wonderful northern lands, watered by rivers and lakes, the excellent pastures which will make of your region the Switzerland of Canada."
Great and numerous are the advantages which the dairy industry brings to our farms. The land is bare and desolate when it is not stocked with a fine herd. And does it not seem to you that the landscape is more picturesque, farming life more charming and attractive when you discover on the hills or the plains, in the midst of extensive grazing lands, a magnificent herd of milch-cows. Their variegated colourings bring joy to one's heart. Every evening they slowly wind their way towards the home bringing to the family the best, the richest, the healthiest food: the good and unadulterated milk.
But this hope of a new dawn, through the revival of agriculture, would shine with a brighter light, if the government had been allowed to realize its policy of new markets for the output of our products. These markets are necessary to hasten larger production and to sell at profitable prices, all the products of our farming industry.
What we need, is a trade convention with our neighbours to the south, so as to allow us to export on that market, which is the natural and best outlet that we can hope for, our farm products suitable for exportation.

The Budget-Mr. Fortier
I have faith in the future and believe in the destinies of our party which the Canadian people will return to power at the next general election. I hope that the voting, by testifying to a greater confidence in the policy of our government, will allow them to realize this programme of trade intercourse with the United States, so as to favour the Canadian farm and, thereby, bring to this country a better economic situation.
Now, it is with the aim of reaching, with greater facility, the so necessary markets that the government has concluded a contract with English shippers so as to control and reduce the excessive freight charges on our exports to Europe.	The government acted
wisely for, in the Petersen contract, they showed both desire to meet the needs of the hour, by striking at the transportation trust, and the prudence which must attend such a vast undertaking.	The government critics
willingly admitted the need of breaking up the trust, but they fear that the project will not serve the ends sought. If their contentions are right, those yearly subsidies during the progress of the contract are the most economic, because in case of failure, they will prove the less expensive, providing that when this contract terminates we shall be free from all future responsibilities.
In closing my remarks I wish to congratulate the government on its praiseworthy effort to better our economic situation. The government have understood that it is by these means which I have just pointed out, and by others also, which they unflinchingly put into practice, that they may reach their goal. Let me remark, by the way, that in order to carry the burden of the debt and those obligations which are summed up in the taxes, we must necessarily adopt such means as to make a more general assessment of taxes. However, this assessment cannot be carried out -with the present population. We must, therefore, increase our numbers.
It is with that aim in view that the government has adopted a sound immigration and repatriation policy. And, in order that this immigration be controlled, we must require at the port of embarkation a certificate from the immigrant establishing that he is sound of body and mind. It is a prudent and wise move to restrict the number of these ports of embarkation so as to stimulate a healthy immigration flowing from Belgium, France, Switzerland, the Scandinavian countries and the British Empire, and it will do away with many quite justifiable prejudices against unrestricted immigration.
And, to stem the emigration of our people, we have but to continue the policy so well established by the government which consists in obtaining all the advantages possible so as to encourage the Canadians to make their home on the land and help them in settling and farming.
In realizing the beginning of this task of restoration accomplished by the government since they are in power, I publicly reiterate my confidence in them. And I state that it is with pleasure that I shall support with my vote the budget which has just been delivered with such ability and eloquence by the !hon. Acting Minister of Finance (Mr. Robb).
On motion of Mr. Stevens the debate was adjourned.
On motion of Mr. Beland the House adjourned at 11.10 p.m.
Monday, March 30, 1925