1926-04-20

REPORT TABLED

[Stage Direction]
First report of the select standing committee on Railways, Canals and Telegraph Lines-Mr. Cahill.

Hon. C. A. DUNNING (Minister of Railways and Canals):: Mr. Speaker, I beg to
lay on the table copies of the annual report of the Canadian National Railway system for the year ended December 31, 1925. This report is printed in English and French and copies are being supplied to the Senate and House of Commons post offices, to be placed in the post office box of every member of both houses.



CANADA SHIPPING ACT, AMENDMENT

[Stage Direction]
Mr. A. C. CASSELMAN (Grenville-Dundas) moved for leave to introduce Bill No. 23, to amend the Canada Shipping Act.
He said: The object of this bill is to do away with the discrimination which now exists between ships clearing from Montreal eastward and those clearing from points west of Montreal eastward with respect to pilotage dues, the latter, class being obliged to pay such dues if they go east of Montreal whether they carry pilots or not, while in the case of the former class pilotage dues are not charged unless pilots are used.
Motion agreed to and bill read the first time.

[Stage Direction]
On the Orders of the Day:
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: Mr. Speaker, last evening the Prime Minister (Mr. Mackenzie King) announced certain orders in council transferring departments. I observe no mention was made of the Post Office Department. What is the intention of the government in respect to this department?
Right Hon. W. L. MACKENZIE KING
(Prime Minister):	The Postmaster General,
Hon. Mr. Murphy, as my right hon. friend knows, occupies a seat in the Senate. No change will be made in that regard during the present session of parliament.


Arthur Meighen: I am asking what is the intention of the government. Is it the intention to make the change later?
2612
The Budget-Mr. Forke


Mr. MACKENZIE KING:: I will give my right hon. friend further word on that point later.



THE BUDGET


[Stage Direction]
The House resumed from Thursday, April 15, the debate on the motion of Hon. J. A. Robb (Minister of Finance), that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means.
Mr. ROBERT FORKE (Brandon):: Mr. Speaker, before dealing with the subject matter of my address I want to compliment the Minister of Finance upon the presentation of his budget. It was concise, well put together and expressed in clear, terse language. I like the human touch which he gave in the concluding paragraph of his businesslike address, a touch that we sometimes lack in this House, and I compliment him on his very able presentation of a difficult subject. With the subject matter I shall try to deal as concisely as I possibly can.
I do not pretend to be a financial critic at all, Mr. Speaker, and what remarks I have to make in connection with the financial statement will be very largely a repetition of what the Minister of Finance has already told us in his budget statement. However, just to make it plain to myself at all events, I am going to run over some of the figures that he gave us at the commencement of his address.
He told us that the total estimated revenues for the year ended March 31, 1926, amounted to $376,800,000; that the estimated expenditures chargeable to consolidated fund amounted to $321,800,000, leaving a surplus of revenue over ordinary expenditure of $55,000,000.
Capital expenditure for public works amounted to $4,930,000; for railways and canals, $12,005,000, of which the larger amount, he explained, was for the Welland canal. The total net capital expenditure for the year amounted to $16,935,000. Other expenditures, such as the adjustment of war claims and the refunding of maturing war loans, amounted to $4,155,000, making a total of $21,090,000. Deducting this amount from $55,000,000 leaves a surplus of $33,910,000.
The total expenditure for all government services was $342,890,000, and the estimated revenue receipts for the year, $376,800,000 leaving a surplus of $33,910,000, as I have already said.
Then there have been special receipts and expenditures not included in the year's
fMr. Mcighen.]
business, one of which was the loan of $10,000,000 to the Canadian National Railway. There were, other special expenditures, bringing the total excess of special expenditures over special revenues to $11,557,000. This deducted from the $33,910,000 leaves a surplus of $22,353,000, which amount can be deducted from the national debt.
The national debt for 1925 amounted to $2,417,437,685.59 After deducting $22,353,000 from this amount, we have the total national debt at $2,395,084,685.59. I have no criticism to offer, Mr. Speaker, in connection with these figures. We are glad to know that there has been some slight reduction in the national debt, and that there is a surplus of $22,000,000 odd in the year's budget.
Now in regard to the estimates for the coming year, the amount named in the main estimates is $345,771,351. To this must be added other expenses and something for supplementary estimates, bringing the total for these additional expenses up to about $36,000,000, making the total estimated expenditure for the year $381,871,351. Looking over that amount it seems to me there is not going to be much less spent this year than last, and I think the minister has been quite optimistic in making up his budget when he thinks we are likely to have the amount of revenue he estimates for the year. If things go well and the country prospers during the next year, and we have a good crop, perhaps we may have a balanced budget, but if it should be otherwise, I am afraid it is just possible we may have a deficit instead of a surplus next year; but I am not going to pour cold water on the minister's hopes, and trust that we shall have a prosperous year;
There has been a wonderful revival of trade during the past year. Our exports increased over those of last year by the sum of $249,000,000. Our imports increased by $130,000,000 and our exports exceeded our imports by the sum of $402,695,000, I am inclined to believe, Mr. Speaker, that this large increase in our exports over our imports is largely due to the magnificent crop we had last year in the Dominion of Canada, more especially in the western provinces. Of this increased trade, 90 per cent is accounted for by empire trade. This, I am inclined to believe, would be made up very largely of our exports of agricultural and other natural products that we exported to Great Britain and other countries during the past year.
One of the encouraging features of our export trade is the large growth that has taken place in our export of cattle. For the year 1923 we exported cattle to the number

The Budget-Mr. Forke
of 25,758, valued at $2,809,796, and three years later, in 1926, we exported cattle to the number of 106,200, valued at $11,283,007, or almost five times the value of our exports three years previous, in 1923. This is very 'encouraging, and emphasizes the necessity of adequate provision being made in regard to the shipment of our cattle across the Atlantic ocean, and that freight rates be brought down to a proper point so that this trade may be increased.
Reviewing the cattle trade for a moment, during the years from 1901 to 1911, those wonderful growing years for Canada, when immigration was pouring into the country and we were building railroads and spending vast sums of money, we had a good trade in cattle, and the demand was domestic. These immigrants were pouring in, and hundreds of thousands of men were employed as railroad labourers, and they consumed nearly all the meat that was raised in the Dominion of Canada at that time. Consequently we had a good market then for our cattle. But then there came a flattening out about the year 1913, when things became very dull in the cattle trade. The war broke out in 1914, and we know what happened then. Prices rose very rapidly, and a ready market was found at high prices for all the cattle that we could raise. During the war the United States was glad to buy our cattle at high prices. But when the war was over, what happened? Our friends to the south again put up the fence. We had let our export trade go to pieces, and had no arrangements made for shipping cattle to Great Britain, and consequently the whole cattle trade fell very flat, and as a great many people are aware, a good many people were ruined. They were really bad times so far as the cattle trade was concerned. Since then we have tried to rearrange our cattle export trade to Great Britain, and as I have already pointed out we have made a considerable advancement in the three years from 1923 to 1926, almost $12,000,000 being received for the cattle we exported to Great Britain in the year 1923. This, Mr. Speaker, I think should be a reason why the government should be alive to the fact that it is necessary to see that proper bottoms and adequate accommodation are provided for the export of our cattle, and that freight rates on the Atlantic be reduced to the lowest possible point. It was rather unfortunate that the attempt that was made last year to make some advance in this direction did not succeed, but I hope the government will not be disheartened and that something will be done to see that this trade is properly taken care of.


Mr. SPEAKER:: May I ask hon. members not to indulge in conversation. I cannot hear the speaker.


Robert Forke: I want to say a few words in regard to our railway finances. The annual statement of the Canadian National Railways for the past year shows that the surplus of net earnings amounted to $33,000,000. This is very satisfactory indeed. The report goes on to say that the annual interest charges for the past year amounted to $71,-
800,000.	In the hands of the public there are interest bearing bonds and other securities amounting to $40,400,000, leaving a balance of $31,400,000 that is a liability to the government for interest and so on. Now if we take the $40,400,000 of interest that is due the public and deduct the $33,000,000 surplus of net revenue we find there is a deficit of $7,400,000. I am sure that when the public learns the fact that the deficit on the Canadian National Railway amounts to only $7,400,000 there will be a sigh of relief throughout the country. The statement goes on to say that during the year just closed the financial assistance to the railways by the government amounted to $10,000,000. There were no government guarantees and no floating indebtedness has been incurred. An unspent balance from 1925 of $2,700,000 has been utilized. The advance of $10,000,000 has been charged to the net debt of the Dominion, the railway loans being treated as non-active assets. I am inclined to believe they will be non-active for a very long time indeed. However, that is by the way. The loan of $10,000,000 covers the loss of $7,400,000 already referred to, leaving a balance of $2,600,000 for capital purposes. The total loans and payments made by the government to the railways now amount to $601,000,000. This includes interest and capital cost of the government railways. The financial position of the railways has improved immensely during the last few years, and no patriotic Canadian can read the statement without feeling proud of the achievements of the management of the Canadian National railways. A splendid service has been given the country, and year by year the system has been advancing until we are almost within measurable distance of the time when there will be a balanced budget, and perhaps in the not very far distant future these railways will be an asset to this Dominion instead of a liability.
I do not like to pass from a consideration of the railway situation without saying a word in regard to the Canadian Pacific Railway. Every patriotic Canadian wishes to see the Canadian National Railways flourish and become a profitable asset. At the same time

The Budget-Mr. Forke
he also wishes success to the Canadiaa Pacific Railway. There cannot be any other desire than that the Canadian Pacific should go on and prosper. It has done great things for Canada although, of course, many people think the country has done a great deal for the Canadian Pacific. Undoubtedly the interests of Canada and the Canadian Pacific are interwoven and when one flourishes the other must flourish also. Of course, we want our freight rates to be as low as they possibly can be. At the same time we can still carry on the battle and hold our end up. Our desire is that both the Canadian National Railways and the Canadian Pacific should flourish and prosper.
This leads me to say a few words in regard to income tax reduction, and I am going to read an extract from the Manitoba Free Press in regard to that subject which will give hon. members an idea of what the opinion in Manitoba at least is with regard to income tax reduction. The Manitoba Free Press says:
The cuts in taxation are all economically sound and politically judicious.
I hope my hon. friends to the right will notice the statement that what has been done is politically judicious anyway. The editorial goes on to say:
The rate of taxation upon automobiles was a scandal; once it was directly attacked as it was both last year and this session by Progressives and Liberal members, it became evident that it could not stand; but there was still the doubt whether the government would have the courage to deal with the question directly. To have passed the difficulty to the tariff board, which the government was beseeched to do would have been a political blunder of the first order. The tariff on automobiles is still substantial-27J per cent on cars costing over $1,200 and 20 per cent on cars below that figure. These rates, with a drawback of 25 per cent on raw material will still leave the automobile manufacturers in a strongly protected position, while the cuts will mean a substantial reduction in the price of cans. Those artless souls who think there is no connection between duties and prices are herewith advised to keep an eye for the next few weeks on the price of motors.
Mr. Speaker, to that last sentence I direct the attention of the hon. member for Fort William and Rainy River who argued in this House a few days ago that the higher the protection was, the lower the price on the article would be. So I want that hon. member just to keep his eye on the price of cars for the next few weeks and see if it works out exactly in the way he imagines.


Mr. GOTT:: How does this reduction compare with the other reduction in Ford cars?


Robert Forke: I do not know what reduction the hon. member refers to.


Eccles James Gott: The last reduction, the reduction prior to this one?


An hon. MEMBER:: That staggers him.


Robert Forke: It does not stagger me because I do not know what the reduction was.


Eccles James Gott: Compare the prices.


Robert Forke: How can I compare them
when I do not know what the reduction was?


Eccles James Gott: Look them up as other people do.


Robert Forke: I will if I have time. Perhaps the hon. member will come round and instruct me.
I want to say a few words in regard to the payment of the income tax. I notice that the cuts in income tax were received with a great deal of jubilation by the great mass of people in the Dominion of Canada. I notice also that in some of the eastern papers the statement is made that since time has been afforded to study the question a reaction has taken place. I do not know why there should be any such reaction because it seems to me it was perfectly evident on the face of it what the reductions actually accomplished. I think the cuts in income tax are something we can all indorse. I am very much in favour of reducing the tax on small incomes, that is to say on small salaries up to $4,000. I think that anyone who knows anything about the living conditions in cities, where a man has a family to educate and bring up on a small salary, will realize he cannot afford to pay income tax on a salary much less than $4,000. That feature of the budget I am well inclined to endorse. At the same time I am a believer in the income tax. A vigorous campaign has been carried on, I know it has been carried on in the lobbies of the House, against the income tax as a tax at all, but I am a believer in direct taxation.


Mr. SPENCE (Parkdale):: As long as they do not tax you, I guess?


Robert Forke: I pay my share of taxations anyway, at least I pay all that I am asked to pay. I have seen it stated that pain is a beneficent thing in the human body. It is a warning held out that something is wrong with the human system. We have sometimes been told that indirect taxation is a sort of painless extraction. It may be the same in the case of the body politic; there may be a painless extraction of taxes that may in the end prove fatal. I am inclined to think that the more we know of the taxes we are paying the better it will be from an individual and national point of view.
I was glad to hear the announcement of the Minister of Finance that there will be an estimated reduction of $25,000,000 in taxation.

The Budget-Mr. Forke
I think every one of us is anxious to see a reduction in taxation. Perhaps I might deal with that at the present time, although I intended to do so later. We continually hear it said that business cannot be carried on with the amount of taxes being collected at the present time. I wonder how we are going to get out of paying high taxes for a number of years. I know that we want economy in government. Every party when in opposition talks about economy, and every opposition generally blames the government for being extravagant, but we have found from experience that all governments are about the same, so far as extravagance goes, and I am inclined to believe that any reduction in the expense of carrying on the government is not going to amount to much. What are the conditions in Canada? We are reminded that taxes are now coming down in the United States and it is asserted that Canada must reduce taxation to the same level. But the comparison between conditions in Canada and the United States is not fair or just. Canada went into the Great war, and made great sacrifices which never can be made up. As a result of the financial sacrifices entailed by the great struggle we have a war debt. We have also a large debt on account of the Canadian National Railways which must be taken care of no matter who is to blame for the building of the railways. The United States before going into the war made vast sums of money out of it, and instead of the war placing them in a difficult financial position, they passed from being a debtor nation to a large creditor nation. The conditions in Canada and in the United States are not parallel, and I claim that Canadians who grumble and complain because they cannot get their taxes down to the same level as in the United States are not patriotic.
The incidence of taxation is perhaps just as important as the amount of taxes that a man may pay, and the question as to who pays the taxes is perhaps a more difficult question than a great many people believe. It is not always the men who are complaining the most who pay the taxes, and it is very important sometimes just to find out who is paying the taxes. We find business men complaining about the taxes. Manufacturers cannot carry ^ on, retailers and wholesalers cannot do business because they are paying too high taxes. How does a man conduct his business? What is the first thing he does? He finds out what his overhead will be, and what it costs him to produce a certain article, and his overhead is part of his expenses. If he cannot pay the taxes and carry on business he must go
out of business. My hon. friend to my right asks who is going to pay the taxes, and if I am paying my share of them. I raise cattle and I raise wheat, and most of my products are sold in the markets of Great Britain and the world, and when I pay my taxes will hon. gentlemen tell me of any method by which I can add my taxes on to the price of the article which I have to sell. I want hon. members to think over it for a minute. Do you know any way by which a farmer who raises products which have to be sold in the markets of the world can add the amount of his taxes to the price of the article he has to sell? So that I can assure you, Mr. Speaker, that the farmer or the agriculturist is just as much interested in the question of taxation as any man in business who is paying a large tax bill.
I have a few words to say in relation to the reduction that has been made in the taxation on automobiles. As has been stated in an article from a newspaper which I have read to the House, the general tariff is now reduced to 27i per cent and 20 per cent, and we find a tremendous wail going up from Canadian motor manufacturers over the reduction in taxation. I have great sympathy with our Canadian manufacturers, I want to see them prosper and do well in business, but, Mr. Speaker, if a business cannot be carried on with 27i and 20 per cent protection, it seems to me there is something wrong with that business. If we have more protection than that I claim the people of the Dominion are paying too much for their whistle and the Dominion as a whole would perhaps be in as good a position without the industry. I am not saying for one moment that we are going to do without them, but I repeat that if they cannot carry on with 27i per cent protection there is something wrong with the industry.	.
I picked up a newspaper the morning after the budget had been delivered in the House by the Finance Minister, and I saw what probably all hon. members of the House saw. We read the statement that a certain institution had closed its doors; it was a gloomy day, 3,000 people marched out in the morning to go to work, and found the door shut in their face. The whole situation was dramatic. The manager stated that they had to close their doors because they wished to look over the situation. Perhaps that was the reason, but I have seen a farmer's crop destroyed in ten minutes by a hail storm, his whole season's work gone, and the next morning he pulled out his team and plough and started to prepare for the next year.
The Budget-Mr. Forke


Mr. McGIBBON:: It was not destroyed
by any government was it?


Robert Forke: This proposition which is
before us is not altogether free trade-27i and 20 per cent. I notice that the manager of the General Motors Limited over in the United States has taken a hand in this affair, and has made the statement that they can carry on on the Canadian side if they wish to do so, and that they are not very much hurt. I notice that the Ford concern is going to carry on, and perhaps we will see more flivvers on the market than ever before. I do not know much about the automobile trade, but I am going to make the prophecy that you will find most of the companies will go right ahead and will do as much business as in the past.
Mr. .ARMSTRONG (Lambton):	Not at
all.


Robert Forke: I want to tell the House that the feeling was very wide spread that the motor car manufacturers had too much protection and that this reduction in the duties on motor cars is a very popular one in Canada.


An hon. MEMBER:: What about the shoe business?


Robert Forke: I will say a few words about the boot and shoe business. I have an extract dealing with that business and I will read it to the House, because the hon. member cannot wait. We hear a great deal about the terrible condition of the boot and shoe industry, that it is going on the rocks and that the English trade is demoralizing the Canadian trade. I have here a prospectus which I am going to read to the House. It reads as follows:
8 Per Cent From a Well Secured Preferred Stock We invite you to consider as an investment the 8 per cent preferred stock of the Humberstone Shoe Company.
This company makes "non-rip" children's shoes- 600,000 pairs of them each year. It sells them ",practically without effort" in Canada, Australia, New Zealand, West Indies and United States.
Its earnings for some years past have been approximately "three times the dividend requirements" of this issue. The management of the company is 6ound and progressive. The business for the current fiscal year is .the largest in the company's history.
If you wish ito place your money at 8 per cent, you cannot do better than give consideration to this stock. Write for full particulars.
McLeod, Young, Weir & Co.
Limited
Metropolitan Bldg.
Toronto
Montreal Ottawa Hamilton London


David Spence: Would the hon. member like to buy some of this stock?


Robert Forke: I clipped this out of a
Toronto newspaper and it ought to be correct There is in the budget some slight indication that the government has remembered the man on the street and the people at large. I have no intention of changing my position in regard to protection and I should like to say a few words regarding what is called adequate protection. The extract that I have just read is an advertisement from an industry that sometimes complains from lack of protection. A few minutes ago I said that it was not fair to be always comparing Canada with the United States. We are continually told that the United States have been prosperous because of their high protective walls, but conditions in the two countries are not parallel. In Canada we have a temperate climate from the Atlantic to the Pacific whereas in the United States they have every variety of climate. They can if they so wish be a self-contained country and produce everything that human beings require. In Canada under modern civilization we must, from the very necessity of thing?, import a large quantity of the products we consume daily, and that is one of the aspects of the case which we must take into consideration when we are comparing United States with Canada.
The United States, however, is not so self-contained as one would imagine and I will read just a Short extract showing what that country is importing even with its high tariff. In 1925, the United States imported $1,818,000,000 worth of agricultural products, $1,000,000,000 worth of which were in direct competition with their own products. I should be glad to have any member tell me why the United States would import $1,000,000,000 worth of agricultural products that they could raise within their boundaries. I can tell hon. members the reason. It was because other countries could raise them so much cheaper than the United States could.
This is a short extract from a communication by Tom King from Washington. Mr. King said:
By a curious twist of circumstances, the price often goes down when the tariff goes up.
A funny thing.
This temporarily disconcerts the protectionist, though later on he will seriously argue that raising the tariff permanently lowers the price.
We know that. That argument has been made in this House.
It so happens that ever since President Coolidge announced that the future tariff on butter should be twelve cents instead of eight cents a -pound, butter has been higher in Montreal than it has been in New York. Indeed, the American butter market is quite demoralized, and Canadian cream has gone up..

The Budget-Mr. Forke
That shows that even with protection trade will follow the path of least resistance.


Some hon. MEMBERS:: Hear, hear.


Robert Forke: I do not see what is wrong
with that. A proposition has been made by members on both sides to compensate western farmers for protection. I think the leader of the opposition (Mr. Meighen) made the proposition at one time-if I am wrong, he will correct me-that something might be done in the way of bonusing the western farmer by means of lower freight rates to compensate them for the high prices he is charged on account of protection. I know if he did not make that proposition, the hon. member who sat in the last parliament for the constituency of St. Lawrence-St. George proposed in the House that freight rates should be lowered for the western farmer to compensate him for the extra price he had to pay under protection. That was economically unsound and impracticable and I would not have anything to do with it. But I value a statement of that kind from the leader of the opposition and from Mr. Marler who sat in this House as a Liberal as showing that they admitted that the western farmer was handicapped and paid a tax because there were high protective duties in the country.


Arthur Meighen: What I stated was this, that I would give concessions in the way of freight reductions because of the fact that the western farmer did not secure as immediate and full results of the protective system as did the people in the east.


Robert Forke: I am going to pay the leader of the opposition a compliment. He stated my understanding of the matter in better language than I could. I do not think the average farmer in the Dominion has much to fear as regards being swamped by agricultural products coming in from the United States. I have a friend back in Manitoba whose family have been milking twenty-five cows all winter. They work hard; the women have to do their share, and this idea of protecting an industry has something very enticing about it. My friend does not pay very much attention to politics or economics, and I know if someone went to him and told him that if the government would put a duty of three cents on butter he would get a much better price for his cream, he would immediately say: Why do they not do so? That is exactly how the farmer is Jed astray in regard to the question of protecting his products. I am sure the dairy farmer of the Dominion of Canada has very little to fear from outside competition. No butter that crosses the
Pacific from Australia will ever come into competition with fresh dairy-made butter in this country, and the only time that there will be any competition will be under normal conditions when we are suffering from a shortage of butter. I can remember when the oleomargarine debate took place in the House and terrible pictures were drawn of conditions in the cities because children would have to use oleomargarine instead of getting wholesome butter. When butter during the winter reaches such a high price that the poorer people in the cities are unable to pay it, the farmers of the Dominion will not want any protection that will compel these people to use oleomargarine or any other substitute.
This idea of protection is very enticing. I have been trying anxiously during the present session of parliament to find out just what the position of the leader of the opposition and some of the members who sit on that side is in regard to protection. I had an idea during election time that they were in favour of very high protection-brick for brick.


Some hon. MEMBERS:: No, no.


Robert Forke: I am going to read a few extracts that I have in my hand and after I have read them perhaps we shall have a better idea of what protection means to my hon. friends to my right. I will read a few extracts from speeches delivered by the leader of the opposition during the election campaign. This is what the leader of the opposition said on September 9, at Wingham, Ont., according to a Canadian press despatch:
We know that the only thing for us to do is to get up and stand on our feet, adopt the methods that have brought the United States where they are to-day.


Some hon. MEMBERS:: Hear, hear.


Robert Forke: Very well, that is endorsed.
The Victoria Colonist's staff correspondent, writing under date October 7, reports the right hon. gentleman as saying:
We have never stood on our own feet as we should have done, and we have never fought the United States policy with the same policy.


Some hon. MEMBERS:: Hear, hear.


Robert Forke: The applause is not so loud this time. The staff correspondent of the Vancouver Province under date of October 8, quotes the right hon. gentleman as follows:
Wha.t will we do when we take office? I will tell you. We will first address ourselves to framing a tariff policy. We will put our tariff wall right up to the level of the American tariff wall.
In view of all this, why is there so much objection to the brick for brick?


An hon. MEMBER:: Not gold bricks.
The Budget-Mr. Forke


Robert Forke: The only way to build a
wall is to place brick on brick. The staff correspondent of the Toronto Globe writes on October 27:
Mr. Meighen, explaining .the Conservative party's tariff platform, said that the party advocated "a tariff comparable to the tariff of our competitor to the south."
The Port Arthur staff correspondent to the Toronto Mail and Empire says on September 29:
The Conservative leader made a strong plea for a Canada first policy, brick for brick in the tariff wall with the United States.
This is a special despatch to the Mail and Empire.


An hon. MEMBER:: That is correct.


Robert Forke: There does not seem to be any disagreement with these citations; the House is unanimous for once. The staff correspondent to the Calgary Albertan on October 10, reported him as saying:
What Canada should do was to put up its tariff wall as high as the American tariff, then we would be in a position to barter.
Now, the leader of the opposition knows very well that in his place in this House during the present session he denied any intention of building a tariff wall brick for brick with the United States. If there is any doubt about this point I will quote from Hansard of last year, at page 3788, wherein the right hon. gentleman is reported:
Tariffs, like everything else on this world, are relative; a tariff is high or is low arising out of facts in which the policy of other countries bears a very considerable proportion. Four years ago the United States of America had in force a protective tariff, substantially protective; but four years ago the Underwood tariff of the United States was relatively very small compared with the Fordney-McCumber
tariff of to-day	What might have been a
sufficient tariff five years ago is, even though uninterfered with, an insufficient tariff to-day.
I do not quote these sentences to reflect in any derogatory sense on the leader of the opposition; I have no doubt he believes in the policy he advocates. But it is desirable,
I think, that hon. gentlemen should have firmly fixed in their minds just what the policy of the Conservative party is on the question of protection. That policy is to erect a protective barrier as high as the tariff wall of the United States.


An hon. MEMBER:: No.


Robert Forke: Hon. gentlemen may say
no, but I am quoting the views to which the Conservative party has committed itself. Now I may refer for a moment or two to some of my Manitoba friends who have been putting themselves on record during the present 
session. What have these gentlemen been saying? The hon. member for South Winnipeg (Mr. Rogers), who is a politician of long experience, is naturally guarded in his statements. and he says that what we want is a tariff that can be used for bartering. That is a very mild and cautious statement. But the hon. member for Winnipeg South Centre (Mr. Kennedy), who is younger, is not quite so careful when he speaks on the tariff. What he wants is an adequate tariff. When you consider that the average tariff to-day is 22.9 per cent as compared with 20.6 per cent when the Conservative party went out of office, you will realize that the hon. member for Winnipeg South Centre is no low tariff man, but rather is right in the middle of the road. And the hon. member for Selkirk (Mr. Han-nesson) is an out and out protectionist. Now I am not making these statements and quoting the views of hon. gentlemen for the purpose of censuring them. I simply want to state the facts so that they may go on record


Some hon. MEMBERS:: Oh, oh.


Robert Forke: I do not know what is the
matter with my friends behind me; they keep on grumbling among themselves. I do not think they are having a pleasant time.


Mr. CAHAN:: Which class behind him
does the hon. member refer to?


Robert Forke: I read sometimes in the
newspapers the suggestion that the western members are making selfish demands and I do not think that anyone will deny that those members are so accused.


Some hon. MEMBERS:: Hear, hear.


Robert Forke: Well, I want to know what
those selfish demands are. We have stated our position in relation to the tariff and perhaps I may state it again, although not definitely. I am not going to say just how low I want the tariff, but I want a tariff low enough at all times to permit of outside competition. Such a tariff is the only safeguard which the consumers will ever have: there must be outside competition with home industries. And that is about as definite as I will be at the present moment on the tariff. Is there anything selfish in that? It is a legitimate policy and one which we are prepared to stand by. We have nailed our colours to the mast so far as the tariff is concerned and I can see nothing blameworthy in the position we take.
Again, Manitoba and Saskatchewan are anxious to have the Hudson Bay railway completed just as, I suppose, a great many other

The Budget-Mr. Forke
parts of the country would like to see this undertaking an accomplished fact. Is there anything selfish in the desire to have that project carried through? I shall read an extract or two in regard to the Hudson Bay railway, so that the House may have all the facts clearly before it. Here is a report from a Winnipeg paper:
At the Meighen-Rogers meeting,-
Observe whose meeting it was.
-held in the Winnipeg rink last fall, a short time before the general election, said meeting being arranged by the Conservative Association of Winnipeg, numerous banners were hung on the walls. One of these, as those who were present will remember, was to the effect that the Conservative party had started and the Conservative party would finish the Hudson Bay railway.
This is very encouraging, for if the present government goes out, as we are frequently told it will, then the Conservatives evidently are just waiting for an opportunity to complete the Hudson Bay railway.
The report continues:
Are we to understand that this statement was not founded on fact? Did the Winnipeg Conservative Association try to pull the Winnipeg public's leg? Furthermore, Hon. Robert Rogers is reported by the Canadian Press as saying at his nomination convention in Winnipeg:	Increased immigration and completion of the Hudson Bay railway were two of the needs of western Canada that the Conservative party would remedy.
Then there is the Right Hon. Arthur Meighen speaking at Regina on October 13: Canada is too vigorous, too virile and too proud to see the Hudson Bay railway carried to within seventy or eighty miles of completion and leave it there a spectacle to the world.
I may just as well read the whole thing:
In view of these facts should not Mr. Meighen have jumped into West Middlesex and called off his dogs 0-f war who were using the present government's willingness to put up money to build the line to the bay as a powerful reason why Mr. Elliott, the Minister of Labour, should have been defeated in the by-election ?


Some hon. MEMBERS:: Oh, oh.


Robert Forke: I hope my friends are enjoying themselves. The next selfish request we from the west have made is for the revaluation of soldier settlers' land. Is that a selfish request? I want to tell hon. members who were not in this House during the last four sessions that it was the Progressive group who continually kept this subject before parliament, and every soldier settler knows who were his friends in the last parliament. I get a sufficient number of communications to tell me that. Our soldier settlers throughout the Dominion know very well who have stood behind them in getting a revaluation of their
lands. Again I ask, is there anything selfish in our support of this legislation?
Then there is the subject of rural credits.
I do not think the right hon. leader of the opposition will for one moment deny that he has been in favour of some more adequate method of financing agriculture. Agriculture is carried on from the Atlantic to the Pacific, it is the basic industry of the Dominion. Is there anything selfish in seeking some method whereby that great industry will be made prosperous?
We have already discussed old age pensions. Is the operation of this scheme confined only to western Canada? Is it selfish to ask for legislation in this respect to look after our aged poor throughout the whole Dominion?
Now then, Mr. Speaker, 'having enumerated these various subjects that are before the House, I should like to know whether the western members have been selfish and sectional in the requests they have been making.


Mr. CLARK:: What has the hon. member
advocated for the workingmen of Canada?


Robert Forke: Mr. Speaker, I am afraid
the hon. member has missed my point, because the whole battle I am carrying on is for the workingmen of Canada. Does not he think that the big interests are quite able to voice their own wants? If the workingmen of Canada do not find members in this House to voice their wants, they are not likely to be heard. When the delegation of motor manufacturers interview the government this week will they not be vocal? What about the great masses of the people all over the Dominion who are buying low-priced cars, will they be in a position to present their wants, their ideas and their claims to the government? They will not be in the same advantageous position as our manufacturers. I am not finding fault with the manufacturers of Canada in looking after 'their interests, but I want my hon. friend t.o understand that I at least am speaking here on behalf of the masses of the Dominion.


David Spence: You will put
them out of employment and on the street.


Robert Forke: Some people take a very
short view of economics. When 3.000 men found the doors of the motor car factory shut in their face, I know very well what their feelings were; naturally they were resentful that anything should be done to stop operations for a day; but, Mr. Speaker, that does not alter my ideas as to what is the true economic basis for the welfare of this Dominion. My sympathies are with the workingmen.
The Budget-Mr. Forke


Some hon. MEMBERS:: Oh, oh.


Robert Forke: Well, they ought to be for
I have been a workingman all my life and know something about work. Let me quote a few words by Sir John Willison in regard to the future of our manufacturing industries, and I do not think any of my hon. friends will question such an authority. Not very long ago he said that:
Manufacturing industry in Canada would not be successful unless it was underpinned and supported by the energy, the ability and the enterprise of the Canadian people producing excellent goods at a reasonable price.
Could you get any better doctrine than that? If our manufacturers would) keep that before their eyes and not think so much about protection, they would not be in the difficult position that they sometimes find themselves in. We talk about sectionalism and selfishness. Well, we are all human and all of us are bound to be a little selfish and a little sectional, no one can be in this House for four or five sessions without realizing that generally we are representing the problems of our own particular constituencies. That is quite natural. We cannot put forward the requirements of our own districts without to a certain extent being either sectional or selfish. At the same time let us take a broad view of the whole situation. I know the Progressives are being continually condemned by the press-and I want to speak quite moderately in this connection-by the eastern papers especially, as working only for our own interests. Well, the Progressives, like the members of every other party in the House, are looking after their sections of the Dominion, and it is quite possible to look after the best interests of your own locality and yet preserve a broad view and work for the interests of the whole Dominion. Last week Mr. Calder spoke in the Chateau Laurier on the subject of "A House Divided." I made a humble attempt the other day at Toronto to speak upon "Canadian Unity." I am prepared in this House and in the country, Mr. Speaker, to stand up for Canadian unity, for a united Canada from the Atlantic to the Pacific, and I submit that those who are continually holding up certain members of the House as being selfish and sectional in their views are not doing what will tend to unity of sentiment and action throughout this country; on the contrary they are trying to split the east from the west. If I can do anything in public life I hope it will be to draw those two great sections of the Dominion closer together.
	*
During this session we have heard a great deal about Maritime rights. I can assure the House that when we came here at the beginning of the session no member of the Progressive party from western Canada was indifferent to the grievances of our Maritime friends, and every one of us was and is anxious to do everything possible to help them. Entertaining these sentiments, I was all the more sorry to hear members from the Maritimes now and then finding fault with what they called the sectional and narrow point of view that the western members were taking. I hope the people of the Maritimes will solve their difficulties in a very short time and that in the years to come that important and historic portion of Canada will be very prosperous.
What has made the present budget possible? What has enabled the Minister of Finance to tell us that he is able to reduce our taxation by $25,000,000? Do not all members believe that the tremendous crop we had last year is the main reason for the prosperity which we are now enjoying? We are continually attempting to develop the country from the wrong end. Our friends living in the cities and close to manufacturing concerns naturally imagine that we can be made prosperous by enlarging our industrial plants.


An hon. MEMBER:: So we can.


Robert Forke: How can we do it? I claim it can be done only by making the primary industries prosperous, and then every other industry will be able to carry on under equally prosperous conditions. We are often told that the high cost of production makes Canadian manufacturers unable to compete with outside manufacturers. If this be so, if they cannot compete with their rivals at home, how can they compete with them in the markets of the world? The great problems before Canada at the present time are to increase our domestic market, to increase the purchasing power of the people, and reduce the cost of living. When you have done those three things, you will have done a great deal towards making industry much more prosperous than it is at the present time.
I have a few extracts here which, with your permission, Mr. Speaker, I shall read:
The three prairie provinces depend solely for transportation on railroads. No traffic moves in or out of this area by water. For .this reason it has been comparatively simple to isolate the prairie section of the Dominion and to tabulate the incoming and outgoing shipments. With the co-operation of the railway companies this was done by the federal Bureau of Statistics, and their pamphlet gives as complete a return of prairie trade as could be given if it were a national unit, with frontiers to the east and west as wefll as to the south.

The Budget-Mr. Forke
Below are the figures for 1923, the last for which
statistics are available.
Net value of production	 $645,493,271
Exports	 270,000,000
Imports	 145,000,000
An analysis of the figures shoiws that all three prairie provinces are still overwhelmingly agricultural. The following table shows the exports:-
Wheat	 $208,000,000
Oats	 10,000,000
Barley	 5,000,000
Rye	 2,800,000
Mixed grains	 200,000
Flax	 6,500,000
Flo-ur (net value)	 17,000,000
Mill products	 5,500,000
Cattle	 2,500,000
Forest products	 1,750,000
Other live animals	 500,000
Mine products	 250,000
Dairy products	 5,000,000
Poultry and eggs	 2,000,000
Hides and leather	 2,000.000
Manufacturers and miscellaneous.. ..	1,000,000

Our imports are:-
Apples, fruits and vegetables	 $ 3.000,000
Coal and coke	 6,800,000
Crude petroleum	 1,400,000
Salt	 500,000
Lumber, timber box shooks, etc..	..	6,000,000Ties	*	
1,200,000Logs, poles, posts and cord wood..	..	800,000Refined	petroleum and	products.. ..	5,400,000Sugar	
17,500,000Iron-pig and bloom	
400,000Rails and fastenings	
2,000,000
Bar and sheet iron, structural iron,
etc	 4,200,000
Castings, machinery and boilers..	..	8,300,000
Agricultural implements and vehicles
other	than automobiles	 28,500,000
Automobiles and auto trucks	 15,000,000
Furniture	 5,500,000
Liquors	and beverages	
700,000Paper, printed matter and books..	..	17,500,000Canned	meats	
500,000Canned	goods	
3,500,000Miscellaneous manufactures	
300,000Other miscellaneous articles	
5,000,000

These figures show that the prairie provinces imported last year, from eastern Canada, $132,000,000 worth of goods, and a business on the prairie provinces that amounts to $133,000,000 a year is very well worth cultivating, I think, and very well worth looking after.


Charles Hazlitt Cahan: On what basis does the hon. member estimate that business? By railway tonnage?


Robert Forke: I do not know just exactly what the basis is, but, of course, the figures are very easy to ascertain as all the imports and exports to and from the prairie provinces must go through a bottleneck.
We have had hard times in years gone by in Canada, but I am inclined to think that we have reached the top of the hill and that from now on the going will be easier. The west has produced a vast amount of wealth during the past year, amounting in the aggregate to a very large sum, over $900,000,000, as was stated very clearly by the hon. member for West Calgary (Mr. Bennett), in the House a few days ago. That is a vast amount of money, but still there are people out there who have difficulty in making ends meet, and it is not very nice for them to read about the growing prosperity of our country. But I believe, Mr. Speaker, that times are going to improve, and that we are going to have better conditions, with better prices. I want to assure hon. members and those who read my speech, both manufacturers, business men and others, that there is no antagonism in western Canada towards industry as such, that any action we are taking is not a matter of antagonism, but simply a matter of self-preservation. We have difficulties in Canada, we have troubles, but notwithstanding hard times, I believe there is more individual happiness in this Dominion at the present time than there is in any other country in the world. We are still in the year 1926 trying to adjust ourselves to new world conditions, but I believe that we are going to be successful, and that we are going to have better times.
There are two words, Mr. Speaker, which I have heard mentioned in this House. I would not mention them to-day except that I want to make my opinions and my ideas plain. Those words are secession and annexation. Those are two words I do not want to have anything to do with, and I mention them now only to make my opinions plain to this House. We sometimes hear that this country is being invaded by a process of what we might call peaceful penetration, and I believe there is some truth in that statement. Last year Canada paid $4,500,000 for American newspapers and American magazines. I am not going to say anything against American publications other than this, that we have a few high-class magazines in the United States coming into Canada which I should be very sorry to see stopped from coming into this country, but the point I want to make is this: What is the influence of this tremendous amount of American literature that is being read by our Canadian people at the present time? I do not believe they are aware themselves just how much they are being influenced by what they read, but this is a fact I am calling to your attention.


Arthur Meighen: Would the hon. member be in favour of a duty against them?

The Budget-Mr. Forke


Robert Forke: I would not like to place myself on record at the present time.


An hon. MEMBER:: Playing politics.


Robert Forke: I would not play politics
with this question; it is too serious a matter. It is not a matter of economics; it is a matter of-


Mr. CHABOT:: Morality.


Robert Forke: That is the word I wanted. It is not a matter I would play politics with at all for one moment, and if I thought a duty on American magazines would be the right thing, I would tell the leader of the opposition so right away. But I do not know. There are two sides to the question, and it is a very difficult one to settle. I only mention this to show what is taking place.
There are some people who say that Canada would prosper much more quickly if we were part of the United States. I do not believe that for one moment. I read somewhere lately, I forget just where, that the state of Washington is no more prosperous than the province of British Columbia; it is not as prosperous or as progressive. Are the two Dakotas and Montana any more prosperous than the prairie provinces? They are not at the present time. The farmers and the rural population in those three states are not as prosperous as the people in our three prairie provinces, and when you come down to Ontario, this province is just as prosperous as the state of Wisconsin or some other states to the south. Would my good friends from the province of Quebec change places with any of the New England states? No, I am sure they would rather be Quebec.


An hon. MEMBER:: Then why are our
people leaving for the United States?


Robert Forke: We find that the great
wealth of the United States is being centered in certain places to the south, and that the northern tier of states is 'being left very much out in the cold. We are a still more northerly tier, and I am inclined to believe that were we joined with the United States, we would be worse off still. I say to my fellow Canadians: Stay with Canada. Canada is our country. I have mentioned in this House before that I am not a native-born Canadian, but Canada is my home, and every interest I have is in Canada, and I expect great things of this country. Mr. Speaker, Canada has a destiny of its own to fulfil. It can fill a place in the world's history. It can give something to increase the happiness and welfare of humanity if we

will only follow the course we ought to pursue. I want to see Canadian national unity. I do not know just how to bring it about. On the one hand, we have the east wanting high protection, and on the other, the west wanting low tariff. We must find some com-imon ground of agreement, some stopping place. However, in the meantime I hope all of us will pursue our daily vocations with industry and intelligence, trying to work out our own destiny and that of our nation.
I want to see Canada still retain her place within the British Empire. This is not the place to begin a discussion of Canada's status and her place among the nations of the world, but I want to see Canada a free nation, taking her place among the galaxy of nations. I know a whole lot of difficulties surround this question. You cannot exactly state in words the position we occupy to-day, but I should like to see our country in the years to come still a part of the great British Empire. I believe that our safety in the future, and for a great many years to come, will lie in the fact that we belong to the British Empire. Therefore I hope that we will not forget this idea.
In closing I want to quote a few words that I came across the other day. I do not know who the author is but this is his description of our Dominion:
Canada a daughter of the empire, grown to be a potent factor; but equally strong in loyalty to the British commonwealth, clear visioned-sound in wind and limb, a great race in a great country, coveting nothing, shaping and working out for itseLf with high courage, energy and ability a great destiny.
As my last word I want to say that at this time, no matter in what quarter of the House we may sit, we will be Canadians, loyal to our country and believing in its future. Canada wants men with broad vision and with faith in themselves and in their country. Given these conditions, notwithstanding our political struggles and differences, I have no fear for the future of this great Dominion.


Mr. QUINN:: The hon. member spoke of
the sympathy of his party towards the Maritime provinces, but he touched the question of our difficulties very gingerly and lightly. May I ask him to make a declaration to this House that he is in favour of, and would pdvocate the shipment of western grain through the Atlantic ports of Canada in preference to the ports of the United States.


Robert Forke: I should like to see all Canadian grain go through Canadian ports.


Some hon. MEMBERS:: Hear, hear.

The Budget-Mr. Manion


Robert Forke: Let me finish. You cannot touch a question of that kind and interfere with economics-


Some hon. MEMBERS:: Oh, oh.


Robert Forke: Very well, I cannot help it if some hon. members choose to deride this statement, personally I would be willing to lose a cent or so, or something, on my grain in order to see it go through Canadian ports; but the people who are making one-half or one-quarter of a cent profit on a bushel of grain will continue to send that grain by the cheapest and easiest of routes to the markets of the world no matter what our sentiments of patriotism or our feeling towards Canada may be.


Mr. HOCKEN:: I sympathize very much with the hon. member's sentiments but would he say that a native-born Canadian who could not get work in Winnipeg should go to Chicago and get a good job?


Mr. MILLAR:: Be a Progressive.


Hon. R. J. MANION (Fort William):: Mr. Speaker, I am sure that the hon. member for Brandon (Mr. Forke) will forgive me if I do not go into the highways and the byways of his speech. And he will probably accept my statement as correct when I say that in endeavouring to answer all the government's arguments in favour of this budget I shall be at the same time endeavouring to answer his.


Arthur Meighen: Hear, hear.


Robert James Manion: Because I have noticed that my bon. friend always takes a high and holy attitude of independence, and professes not to be looking at any of these questions from a partisan point of view. But I have also noticed that when the government are in a tight place they can count absolutely on the member for Brandon.
He did what has become quite a habit, and I suppose has been a habit with politicians for a long t:me, he put into my mouth words which I have never used. I took down the hon. gentleman's statement at the time it was made. He said that I had stated in this House that "the higher the tariff the lower the price." Well, of course, it is hardly necessary for me to say that I never made any such statement. What I did state here the other day, in a little dispute across the floor, was that the raising of the tariff does not necessarily mean an increase in the price. That is an altogether different matter. I pointed out that if you raise the tariff and give your home market to your own producers, those producers, because they produce
on a larger scale, are prepared very frequently to lower prices and very often do, and before I get through my remarks I shall give a number of instances of that.
Then my hon. friend spoke of what he called contradictions in the tariff speeches of my right hon. leader. I might suggest to him that if he wants to look up contradictions-using the pawky Scotch humour of the hon. gentleman himself-let him read some of the speeches of the Prime Minister.


Mr FORKE:: I did not try to read any
contradictions into the speeches of the right hon. leader of the opposition. I only wanted to place him where he belongs.


Robert James Manion: Well, I think my hon.
friend in trying to place the right hon. leader of the opposition where he belongs ended up by placing himself where he belongs.
He went on to ask for a definition of what our tariff policy was. I will give him one definition of what the tariff policy of the Liberal Conservative party is and it is this: It is a tariff policy to build up Canada and not to build up the United States, or any other foreign country.
The hon. gentleman spent some time ridiculing the idea that any of these automobile industries will suffer because of the tariff which has been brought in, and he pointed out that they practically would not be injured at all. Well, I am going to read a statement made by the president of the United States General Motors, Mr. Sloan. He made a statement on the subject in New York the other day and this is what he said:
There has not been sufficient time ito analyse the effect of the Canadian tariff changes, but it is very evident that it means the transfer of Canadian plants to American factories, or, in other words, the elimination of a corresponding amount of Canadian labour. Due to the fact that production in Canada will be reduced it is only fair to assume that there wild be correspondingly increased profits for American manufacturers.
That is the attitude of a New Yorker, the president of the United States General Motors, a man who is not interested in Canadian work, except in taking Canadian work from Canadian people.
And may I add this: That at the present time, and I do not think the statement can be contradicted, the tariff on automobiles coming into Canada is lower than the tariff on automobiles going into any country in the world that manufactures automobiles, and I do not except even England in this statement. The tariff of free trade England is 33| per cent, while ours is from 20 to 271 per cent.


Mr. ROBB:: What is the tariff on automobiles going to the United States?

The Budget-Mr. Manion


Robert James Manion: I do not know-


Some hon. MEMBERS:: Oh, oh.


Robert James Manion: I did not say that I knew the tariffs of all the countries of the world on automobiles. What I said was that the tariffs of other countries on automobiles are higher than the tariff on automobiles coming into Canada. I venture to make that statement and if the Minister of Finance can give any definite information to the contrary I invite him to do so now.


James Alexander Robb: The United States tariff is 25
per cent.


Robert James Manion: An hon. member who sits
behind me and who is interested in automobiles says it is 50 per cent.


Some hon. MEMBERS:: No, no.


Robert James Manion: I give the statement of an hon. member sitting behind me who deals in automobiles.


An hon. MEMBER:: That is what it is.


Robert James Manion: I hope that I shall always be a loyal enough Canadian to rejoice with the Canadian people when conditions in this country have improved for them. I wish to congratulate the Minister of Finance in being able to bring in a budget which shows an increase in revenue of something like $29,000,000. The Finance Minister also shows a better condition of the railways, as well as-and this I do not dispute-some taxation reductions with which I shall deal briefly as I pass on. In other words the Finance Minister points out that conditions are better in Canada today than they have been during the past four years. I do not dispute his conclusions in that respect, but also as a Canadian I make this statement, that after looking into the whole question as completely as I can, and laying aside also as completely as I can whatever partisanship I may feel, I am sure this better condition in Cianada to-day is, as was pointed out by the hon. member for Brandon, as a matter of fact due to the good fortune of the Canadian people and not to the good management of this government. The reason I say that is because the tariff policy, the unwise tariff policy of this government, has in the past four years unsettled the business affairs of Canada, injured the industries of the country, lessened the work and wages of the people, and increased the exodus of Canadians to the United States.
And by the extravagances of which they have been guilty they have increased the taxes, or failed to permit the decrease of taxes, which should have taken place. With

reference to the estimates which we have before us this year of the expenditures of the government, the hon. member for Brandon (Mr. Forke), who is certainly not a friend of hon. members on this side of the House, pointed out that these estimates are a good deal higher than the estimates of last year. I was going to point out that last year's estimates were $351,000,000. This year's ordinary estimates are $345,000,000, or $6,000,000 less than last year, but the supplementary estimates have yet to be presented, and the Minister of Finance (Mr. Robb) in his budget speech admitted that the supplementary estimates would increase the general estimates to such an extent as to make the year's estimates equal to the $351,000,000 in the estimates last year. But as was pointed out by the hon. member for Brandon, the old age pensions were not taken into account, the advances to the settlers act expenditure was not taken into account, nor was the expenditure for the Soldier Settlement Board. The Old Age Pension Act alone, if carried out by the people of this country in co-operation with the provinces, means another expenditure of $11,000,000 or $12,000,000 per annum, the land settlement act means another $1,000,000 and the relinquishment of the debts owing to the government under the Soldier Settlement Act many millions more. So that I submit, in agreement with the hon. member for Brandon, that this year's estimates are going to be very much higher than those of last year. In other words, this government goes on gaily spending the people's money, ignoring the fact that the burden of taxation presses very severely upon the shoulders of the people, and ignoring the opportunity to reduce that taxation.
Now, I submit, Mr. Speaker, that just as the best judge of a dinner is not the cook but the diner, so the best judge of this budget is not the Finance Minister who presented it, but the people of Canada, and after the budget is analyzed by this House and passes to the people of Canada, they will owe a great deal more of Christian forgiveness to the government than they will owe of gratitude.
Why did I make the statement that the improved conditions in Canada were due more to good fortune than to any good management on the part of the government? Because in the first place, so far as I can remember- I say it in all seriousness, and I am open to correction by speakers following me if I am wrong-I know of no act of this government in the four years it has been in power which improved or tended to improve conditions in Canada. I submit that a kind Providence ha3 seen that the Canadian people have not

The Budget-Mr. Manion
suffered all the ill effects of the unwise tariff policy and unwarranted extravagance of the late government, and I intend to give figures very briefly showing where Providence has been kind to Canada. That the improvement is due to Providence is shown by the fact that in 1925 our agricultural production was $265,000,000 greater than in 1924. In mineral production the amount was $15,000,000 greater-
I obtained these figures from the Department of Statistics-and in unmanufactured wood-these are exports; I could not get the production -a favourable balance of $5,000,000. There was an increased production in 1925 over that of 1924, to the extent of $285,000,000. That has been in no way the result of the efforts of the government; it has been the bounty of Providence. In other words, the government is not in any way responsible for that bounty to the people of Canada. The increase of $285,000,000-nearly $300,000,000- means that the people had a very much greater purchasing power than they had the year before; that the railways handled a very much greater traffic; and a consequent increase in government revenue. I admit that luck has been with this government; that Providence, by giving Canada these greater crops, has shown some favour to the present administration. But there is a Providence, they say, which looks after drunken men, and I presume the same Providence looks after governments who are drunken with the desire to hold power in spite of the wishes of the people.
Now I wish to deal very briefly with some of the alleged decreases in taxation dealt with by the Minister of Finance in his budget-though I shall leave the more thorough investigation of this matter to my good friend from West York (Sir Henry Drayton) whom we are glad to see back in the House-in relation to postage rates, receipt tax, income tax and, in a few minor respects, the sales tax. In regard to the sales tax, it was under our regime three per cent, but this government raised it to six per cent. Two years ago fhey lowered it to five per cent, where it still stands. The sales tax is a distinct tax upon all the people of Canada. It would be very much better to remove that tax than to remove the tariff on automobiles. I may say further that if we are to judge of the probable reduction in the prices of automobiles as is indicated by the figures published by the Ford people, the removal of the five per cent sales tax would have a greater effect in cutting the price of automobiles than the action taken by the Minister of Finance. It would not endanger the employment of thousands of workmen in Canada and raise the 14011-167
possibility of tens of thousands more of the Canadian people being forced to go to the most highly protected country in the world, the United States, to earn a living.
The receipt tax was not a tax of the old government, but was put on by this government. I am glad it is off. But a much more important tax, .which should also be off, and which was increased by this government, is the cheque tax. It was two cents when the former government went out of power, and it was increased on cheques for larger amounts by this government. That is a more unjust tax than the receipt tax, because the man who puts the stamp on the cheque is the man who is paying the money, and the man who puts the stamp on the receipt is the man who is receiving the money. I submit both these taxes should be off, and if the government had done away with unnecessary extravagances it could have taken both off.
In regard to the income tax, I believe that while the reductions in some cases will be of assistance to the people of Canada, in other cases they will prove of no benefit ; in fact in many cases they are no reduction at all but an increase. Take the case of a widow whose husband created an income of $5,000 in dividends, which she inherits. She would not have paid any tax in the past, but will have to pay under the new scheme. A retired gentleman of 72 or 73 years of age, with whom I sat at a meal the other day, receives, with his pension from the business he followed, an income of $2,800. His wife had the good fortune to inherit $2,000 per annum, so that this old couple, who were accustomed to living reasonably well on $4,800, were paying last year an income tax of four per cent on $800, each of them having an exemption of $2,000. He paid an income tax of 4 per cent on $800 which would be $32. But this old couple, in the autumn of their lives, are now going to pay more. They are allowed $1,500 exemption, so that he will pay two per cent on $1,300 or $26 as against $32 the year before, while in addition to that his wife will now be paying two per cent on $500 or $10, a total of $36. What is the object of this? In studying the new income tax schedules I was interested to note the variations in amounts payable. While this old couple have to pay increased taxation, those who for example make $14,009 a year have had a reduction of some $474.50 in their income tax. I do not wish to be unfair or unkind, but one might ask oneself whether those material reductions that have been made on the $14,000 salary have anything to do with the fact that members of the government receive $14,000 a year.

The Budget-Mr. Manion

Is it fair that this old couple of seventy-two or seventy-three should have their taxes increased while those getting $14,000 a year get this marked decrease? I was thinking of a jocular statement made by Mr. Lloyd George at one time when he was speaking of another government and I felt I could in the same jocular way apply the statement to this government. His statement was:
The members of this government will go down with their drawn salaries in their hands.
The postage rate has been reduced from three cents to two cents and everybody will be glad of that reduction. But this reduction could have been made long ago if the government had not given those unnecessary political bribes which were used throughout the country; for instance, millions of dollars spent for harbours which was not required to be spent, millions of dollars spent for public works, inaccessible elevators and other things such as the Union Club in London.
But after going all down these different reductions as mentioned by the Minister of Finance, I find myself wondering where the ordinary workingman who does not earn $3,000 a year, and the ordinary small farmer who does not happen to have an automobile, benefits by any of these reductions. I can find nothing with the exception that once in a while when he sends a letter to somebody away from home he saves one cent on his postage stamp. Where is the relief for the workingman who earns less than $3,000 a year unless it be that he is relieved of his job in some of those factories that are being closed on account of this budget? A very large percentage, I think much more than ninety per cent of the workingmen of Canada, will not benefit by these reductions. In other words, I found myself wondering if this budget was one entirely for the betterment of the rich and the Well-to-do, because I discovered that the rich man by this budget gets his income tax reduced, his high-priced automobile at a lesser duty, and even his Angostura bitters cheaper for his cocktail. I presume the government is hoping that at election time he will drink his cocktails to their health.
There is little if anything, in this budget for the poor people. I think it was Abraham Lincoln who said: "God must love the poor because he made so many of them." If he was alive now, he could not say that about this government because they are making the poor poorer by taking away their jobs, and making the rich richer by taking away their income tax.

I do not wish to spend any more time on these taxes; I wish to touch what is to me and, I think, to the people of Canada, the most important item in the whole budget and that is the cut in the duty on automobiles. That is the axle around which this whole budget is going to revolve, when the people have forgotten the superficial reductions in taxation mentioned by the Minister of Finance, when, in fact, the resulting relief mentioned by him is found to be a delusion and a snare, and when they realize also that this is another very severe assault upon the national policy of protection which has been in force in Canada since 1878. Once again the issue is clear-cut and well defined; the issue has come before the people as to whether we shall have protection in this country or whether we shall go down towards free trade.
Before dealing with the reduction in the tariff on automobiles I wish to say that I have no brief in any way for the automobile industry. In my riding there are no plants manufacturing automobiles or automobile parts. As a doctor practising medicine when I am at home, I have occasionally to buy an automobile and therefore I would probably stand to gain a little if prices are reduced because of this reduction in the tariff. But at the same time, as a Canadian, I am willing, if necessary, to pay a little more for my automobile or for any other line of goods in order to build up this great country of ours. Neither am I arguing from the point of view that the majority who cannot afford to buy automobiles of any kind will gain; nothing by this reduction in the tariff on automobiles. An automobile being a luxury in many cases should, I think, be taxed more highly-I do not say in all cases. It is only right that luxuries should be taxed at a higher rate than necessaries of life and certain high-priced automobiles are luxuries. Neither do I point out the fact that in many cases people bring about less happiness to themselves by securing automobiles at the cost of a mortgage on their home or on their life insurance, at the cost of that thrift which we should all encourage as good citizens of Canada. Neither do I deny nor assert that this tariff cut is not bearable by the automobile industry of this country. Time alone will answer that question.
But I assert this, that in justice to the people, and to the automobile industry of Canada, the tariff board which was appointed just eight days before the delivery of the budget, should have been given an opportunity to look into this industry before these cuts in the tariff were made. If such had

The Budget-Mr. Manion
been the case and if the tariff board had reported that these automobile manufacturers were exploiting, were taking unfair profits from the people of Canada behind a tariff wall, then I say they should either bring down their prices or have their tariff removed to a certain extent to make them deal justly with the Canadian people. It is no part of the policy of the Conservative party to allow unfair prices to the people to be put into effect behind a tariff wall by manufacturers of automobiles or any other manufacturers. But there should have been an investigation, because we have had in Canada, I repeat, a policy of protection since 1878, and so fai las I know on every occasion when the people have been given an opportunity to vote on that question, they have voted to carry on a policy of protection.
There are three outstanding dates:	1878.
1911 and 1925. I mention 1925 because it is plain that on October 29, 1925, the 116 members on our side of the House were elected on a protective policy, and it is also plain that on the other side there are many members, probably forty, if not fifty or sixty, who are out-and-out protectionists, just as much as the protectionists who sit on this side of the House. For example, would anybody question the fact that the hon. member for North Waterloo (Mr. Euler) is an out-and-out protectionist, or that the hon. member for North Bruce (Mr. Malcolm), who is spoken of as being slated for the cabinet, is an out-and-out protectionist? Would anyone say that many hon. members from Quebec are anything but protectionists? The hon. member for Joliette (Mr. Denis) in this House not long ago in the debate on the Address said frankly and plainly that he believed in protection. Indeed, I am reminded by an hon. member that he said he was elected on that policy.
In other words, the election of October 29, no matter what else it did, certainly showed that the people of Canada, with the exception probably of those in the prairie provinces, believe in a policy of protection. It showed that this government is not in agreement with the people of Canada generally, and you may take it for granted as a political axiom that when a government differs from the people of a country, the people are right and the government is wrong.


Mr. MacLEAN (Prince):: What about the
1921 election?


Robert James Manion: The people defeated us
and we went out of power, but in 1925 they 14011-1674
defeated this government and the government did not go out of power. That is the difference.
On what basis did this government make this reduction in the tariff on automobiles eight days after it had appointed a tariff board supposedly for the purpose of looking into industries such as this? They cast aside that tariff board like a sucked orange eight days after they appointed it and they cut down the tariff on automobiles. I will give the reasons of the Minister of Finance for cutting down the tariff on automobiles. The Minister of Finance (Mr. Robb), at page 2450 of Hansard, made this statement:
There is a pronounced sentiment throughout Canada that the automobile industry enjoys more protection than is needed to maintain it on a reasonably profitable basis, and in deference to that Bentiment we propose a downward readjustment of automobile, motor truck and motor cycle duties.
"In deference to sentiment throughout Canada!" I wonder why it is that this government has become so suddenly deferential to the sentiment of the Canadian people. Hon. gentlemen opposite did not show any great desire to defer to the clearly indicated wish of the people of this country when on October 29 last, as a result of the general election held at that time, the Canadian electorate showed beyond any question that they no longer wanted this government in power. The government was defeated, whatever else the election may have revealed. But it is not that the Minister of Finance and the government, in making this reduction in the tariff, felt that there was a pronounced sentiment in the country in favour of it. The fact of the matter is that they believe there is a pronounced number of votes to be gained by this concession when the time comes. That explains why the tariff on automobiles has been reduced to the extent disclosed in the budget. The government does not care what irreparable injury is done to Canadian industry so long as it can remain in office. So far as our working population is concerned, every artisan may be driven out of Canada into the United States, provided the government can remain in power. Scientific knowledge and economic investigation, which should have been the duty of the tariff commission, are of course unnecessary to this government. What is necessary is the government's popularity: it is essential that hon. gentlemen opposite should obtain a sufficient number of votes to keep them in power. In short, our workingmen must be exiled in order to maintain the present administration in office.
We hear less about an exodus now than we heard in the past, and we read less of it in the
[DOT] 2G2S
The Budget-Mr. Manion

press at the present time. Tie exodus, everyone admits, is not so ina/kid to-day as it was formerly. I have in my hand, however, an extract from the Toronto Globe of a few days ago in which the statement appears that
53,000	Canadians left this country and went to the United States in the seven months ending January 31 last, or at the rate of nearly 100,000 per annum. In making this statement the Toronto Globe is quoting from the report of an investigating organization in the United States, and the statement is not denied. Now, if this budget does the harm which many people throughout Canada believe it will do, there will be more people going to the United States shortly than have left Canada in the past.
I can quite imagine that many of our workingmen in Canada must find themselves asking this question, "Why should we be made the sacrificial goats in order to keep this government in office?" In my opinion, Mr. Speaker, the present Prime Minister of Canada through his tariff policy has been the greatest immigration agent the United States has ever had. What ri^ht has this government to make an unwarranted onslaught on the tariff policy which has been in force in this country since 1878, having been accepted and endorsed repeatedly from that time on? What right have hon. gentlemen to break the pledges which they have only recently given to this country, that no industry should be interfered with in the absence of a proper investigation? What right have they to disturb business conditions in Canada and to bring about such instability as we have witnessed during the past four years?-an instability by reason of which no industrial leader in Canada to-day dare invest his money in industry lest his own head be taken off and earned on a salver to the low tariff or free trade forces of the country who control the government.
So far as tariff matters are concerned, this government seems to live in a thick fog of confused ideas; it changes its economic mind so often that it is impossible for any sane man to follow it. The tariff history of the government would appear to me to be something for the government to forget and for everybody else in Canada to remember. But what other attitude could you expect from the government when you look around on its members and realize that there are three ministers from Saskatchewan, that free track province, for which let me say, I have every respect. There are from that province three ministers in prominent positions-the Minister of Agriculture (Mr. Motherwell), the Prime Minister himself (Mr. Mackenzie King),
[Mr. Manion.l
and the Minister of Railways (Mr. Dunning). And from the west we have also the Minister of the Interior (Mr. Stewart, Edmonton), the author of that famous phrase about the death-knell of protection. When the Minister of Railways came into the House the newspapers declared that, like charity, he was expected to cover a multitude of sins for the government. Well, the Minister of Railways has taken a very frank stand on the tariff. There was passed in the legislative assembly of Saskatchewan, in the session of 1923, a resolution which practically proposes free trade for the Dominion of Canada. Perhaps I may be allowed to quote that part of the resolution bearing on this question. It proposed:
(1)	An immediate and substantial all round reduction of the customs tariff.
(2)	The reduction of the customs duty on goods imported from Great Britain to one-half of the rates charged under the general tariff, and that further gradual uniform reductions be made to the remaining tariff on British imports that will insure complete free trade between Great Britain and Canada.
(3)	That negotiations be entered into by the government of Canada with the government of the United States with a view of establishing a reciprocity agreement on lines similar to that of 1911.
(4)	The .placing upon the free list of all food stuffs, agricultural implements, farm and household machinery, vehicles, fertilizers, coal, lumber, cement, gasoline, illuminating fuel and lubricating oils, and all raw materials and machinery used in their manufacture.
The report concludes with the statement that, a debate arising the question was put and was agreed to unanimously.


Charles Avery Dunning: Unanimously.


Robert James Manion: I am glad that the Minister of Railways admits that the resolution was adopted.


Charles Avery Dunning: Even the Tories voted
for it.


Robert James Manion: 
Charles Avery Dunning: The two statements are
entirely different, and my hon. friend might at least do me the justice of reading the whole of my evidence from which he is quoting. The whole press of the country knew perfectly well that I was speaking in large part ironically with reference to that matter-


An hon. MEMBER:: Under oath.


Charles Avery Dunning: -as the further evidence [DOT]very well reveals. However that may be, my hon. friends can take all the satisfaction out of it they wish. All I ask is that they quote me correctly, for my statement was not quoted correctly the other day.


Robert James Manion: I will read the quotation
as given by the hon. member for South Wellington, and the House will judge for itself. Let me assure the Minister of Railways that I am not trying to do him the slightest injustice. But I must say-and I say it in all sincerity-that having read the statement as quoted by the hon. member for South Wellington, in conjunction with the evidence from which I have just quoted, the two seemed to me substantially identical. This is the statement as quoted by the hon. member for South Wellington, in which the Minister of Railways is represented as saying:
This is the first opportunity to make the people of the east suffer for what they have given the west for the last forty years.


Charles Avery Dunning: And that statement is
what I object to. I nowhere used the phrase "make the people suffer," nor can any words of mine be so interpreted. Let the hon. member read the evidence again. "Letting them take a dose of their own medicine" is different from "making them suffer."


Robert James Manion: I will do the Minister justice to this extent, I cannot find the word "suffer" in the sworn evidence, but I am
going to read it again to see if the language he used can be interpreted differently. After mentioning about the prohibitive duties, he said:
It is the first time in history that the eastern people have been in a position to take a dose of their own medicine. I think they should be allowed to take it to t.he full.


Charles Avery Dunning: If my hon. friond only reads the conclusion he will find it proves that I was speaking ironically.


Robert James Manion: My hon. friend Is so particular about getting this absolutely correct that he brings to my mind an incident in the West Middlesex by-election of famous memory. To show how careful the Minister of Railways is to tell, the facts, he went down to West Middlesex and made a speech, and I have provided myself with a copy of the Globe for fear he would deny what he then said. According to the Globe report he stated:
I told Dr. Manion, when I met him the other day, "You are licked now."
And then the report goes on to tell what he said to Dr. Manion. The extraordinary thing about this incident is that the Minister of Railways and Dr. Manion had at that time never spoken to each other in their lives. I must confess that I admired the hon. gentleman's courage in relating to the people of West Middlesex how he had "told me off."


An hon. MEMBER:: Ironically.


Robert James Manion: Yes, I presume he was doing it then as he says now, ironically.


Mr. McLEAN (Melfort):: If I may interrupt my hon. friend, would it not be a good thing for the people of Ontario to get high tariff protection on their coal?


Robert James Manion: I am not dealing with coal at the moment, I am dealing with the Minister of Railways. However, I may say this about coal, I am in favour of any policy that will make us use Canadian instead of American coal on Canadian railways.


Charles Avery Dunning: Why find fault with me?


Robert James Manion: I was not. I was just showing, Mr. Speaker, the very fine feeling of my good friend the Minister of Railways towards the east, and how coming into the government at the present time to the aid of the Prime Minister he is helping to bring about that national unity which the Prime Minister has been speaking about so much lately.
The Budget-Mr. Manion


Mr. POULIOT:: Does the letter come from Mr. Patenaude?


Robert James Manion: No, but I do say this,
that a lot better things come from Mr. Patenaude than from my hon. friend, judging by some of the speeches he has delivered in this House.


Jean-François Pouliot: I have heard his speeches, and my opponent was one of his supporters, and he was beaten.


Robert James Manion: I have listened to the
speeches of my hon. friend from Temis-couata (Mr. Pouliot), and if he ever deals constructively with anything, it is news to me. His speeches have been very little but abuse of this party.
There is another branch of industry which is hit in this country and which should be protected, and that is the industry of agriculture itself. We have in the province of Ontario and in the province of Quebec two million farmers who sell from 85 to 95 per cent of their production to the industrial centres in Ontario and Quebec, and yet our duties on these agricultural goods coming into this country from the United States are only from one-third to one-half as much as the United States duties on our agricultural productions going over there. Let me give a few instances:
United Sta-tes	Canadian
Article	Duty	DutyHay	
$4.00	per	ton	$2.00 per	tonEggs	08	per	doz.	.03 per	doz.Cheese	05	per	lb.	.03 per	lb.Oats	15	per	ibu.	.10 per	bu.Potatoes	50	per	cwt.	.35 per	cwt.Butter	12	.per	lb.	.04 per	lb.Wheat	flour	
2.04	per	cwt.	.50 per	owt.


Mr. STEWART (Edmonton):: Go on with
the list and quote beets, carrots, and other vegetables.


Robert James Manion: I am quoting sufficient for my purpose.


Charles A. Stewart: Oh!


Robert James Manion: My purpose is to show
that the farmers of Ontario and Quebec are up against unfair competition from the United States. Of course, that does not worry the Minister of the Interior; he does not come from Ontario.


Charles A. Stewart: I was simply asking my hon. friend to quote the whole list.


Robert James Manion: I have not it at hand,
but I wish to point this out: Just the other day the tariff on our butter going into the United States was raised to three times our tariff on United States butter coming into Canada; before that the tariff was just double. Let me put this to any of our good farming friends in this House, and they are not all to my left or sitting opposite; there are quite a lot of them behind me in this party. Suppose they drive in to town with a load of butter or potatoes or some other farm pro-
The Budget-Mr. Manion

duction and go into a store in Toronto, say. or Montreal, and tell the storekeeper that they have a load of potatoes for sale. Suppose the storekeeper says, "I will not have anything to do with your potatoes. Get out of my shop. I will not handle your goods at any price,"-and that is what the Americans are saying to the Canadian agriculturist at the present time-what would the Canadian farmer reply to the storekeeper? Would he say, "You won't buy my goods, but I would like to buy some of yours?" No, he has too much red blood in him to say that. He would say to the storekeeper, "You do not need to buy my goods, and I do not need to buy yours. I will treat you as you treat me." And that should be our attitude towards the United States. Why should we have a tariff of only four cents a pound on United States butter coming into Canada, when they have a tariff of twelve cents a pound against our butter? As a consequence of the fact that our tariffs on agricultural products are so low as compared with the United States tariffs on the same goods, we imported last year $150,000,000 worth of agricultural products which could have been produced on the farms of Canada. Do not misunderstand me; I am not speaking of tropical fruits, or cotton, but simply of products that could have been produced on the farms of Canada, and if anybody denies it, I have the trade reports here to show that I am correct. The trade reports for 1925 show that we imported, largely from the United States. $149,201,000 of agricultural .products which we could have produced on the farms of Canada, and we imported as well $236,000,000 of farm products, such as cotton, tropical fruits, bananas, pineapples, oranges and so forth, which we could not produce in Canada.


Alfred Edgar MacLean: Would it not be fair to give as well the exports of agricultural products from this country?


Robert James Manion: 
Mr. YOUNG (Weyburn) :: Is the hon. gentleman opposed to the gold Standard?


Robert James Manion: I am not discussing the
gold standard, I am discussing protection. I am not going to get drawn into a discussion on the gold standard.
The Right Hon. Stanley Baldwin on January 27 made a speech in Which he said that since the introduction of the silk duties in England fifty new industries had started in the Brit-idi Isles for the production of silk.
Let me quote from a little work which was published last year entitled "The Gall for Protection," by G. Graham Andenon. This book is to be found in the Library of Parliament if any hon. gentleman desires to consult it. I wish to make only two or three quotations from it, and very briefly, because I do not want to take up too much time. These quotations illustrate the fact that an increase of duties does not necessarily mean an increase in price, a point which I made at the beginning of my remarks. The first quotation I wish to make is the following;
The results of the McKenna duties furnish one of the most convincing object-lessons this country has had for many years in the national advantages of a protective policy.
The Budget-Mr. Manion


Mr. HEAPS:: That was at the time the
duty was taken off.


Robert James Manion: This illustrates that when the motor industry had been built up by protection the prices came down.


Abraham Albert Heaps: The duties were reduced,
more cars were bought, and as a result the prices came down.


Robert James Manion: The duties are higher today. I am giving these quotations for the purpose of showing the effects of protection on the motor industry of England.


Abraham Albert Heaps: What you are quoting shows exactly the opposite.


Robert James Manion: No, my hon. friend is
wrong. Mr. John Bridge, General Manager of the Standard Motor Company, Coventry, says-and this will make the matter quite clear to my hon. friend-speaking of his own company:
Largely owing -to the McKenna duties the company has been able to increase its output during the past few years by 500 per cent, and the number of men employed by our company is three and a half times the number employed in 1914. We have also been able to reduce prices to pre-war level, and to secure a footing in overseas markets. But for the duties very few British oars could or wouild have been exported from this country during the last five years.
That is sufficient to show that the motor duties in England not only increased production and gave more work to the people, but lowered the price.


Charles Avery Dunning: Has the hon. gentleman the list of articles protected?


Robert James Manion: No, but there are many
articles protected in England under the Safeguarding of Industries Act.


Abraham Albert Heaps: Not very many.


Robert James Manion: Quite a number. The industries protected are now producing on a larger scale and are flourishing while many other industries unprotected are in a dilapidated condition.


Arthur Meighen: There are over 300.


Robert James Manion: Now in regard to the Dyestuffs Act, another important protective measure still in operation. The act was passed in 1920 by the coalition government of which Lloyd George was Prime Minister, and this is the statement which I find in this work with regard to it:
In 1913 Germans' made 83 per cent of the world's total production of dyestuffs, and we took 90 per cent of our requirements from abroad. To-day, as a result of the war and of government action, we have a dyestuff industry which supplies 80 per cent of our needs. The dyes made are quite equal in fastness and brightness to German dyes.
Then they proceed in regard to the prices.
In June, 1921, it is stated, the average price of British dyestuffs was a little over 4s. 4d. per pound. In December of the same year it had fallen to 3s. fid. per ipound; in December, 1922, it was about 2s. fid. per pound; and in 1923 the average was down to about Is. per pound. These figures represent a reduction of more -than 75 per cent *in the price of dyestuffs within three years of the passing of the act.
Did the raising of the tariffs there increase the price of these goods? It lowered the price of them. Where is the tariff a tax? The Prime Minister on one occasion in this House stated that a tariff is alwaj-s a tax. How is it always a tax, if in other countries it can be shown, as I have shown, that in many cases where you raise the tariff and keep the market for your own producers you lower the price of the article concerned?
I wish to make one more quotation from this book, because it contains a germ of truth which I would like to present to the House. It is a quotation from a speech of Daniel Webster, addressing the United States Senate in 1846. Mr. Webster stood very high in the estimation of the people in the United States; he was considered one of the immortals of the country. He says:
Where there is work for the hands of men, there will be work for their teeth. Where there is employment, there will be bread. It is a great blessing to the poor to have cheap food, but greater than that, prior to that, and of still higher value, is the blessing of being able to buy food, by honest and respectable employment. Employment feeds, and clothes, and instructs. Employment gives health, sobriety, and morals. Constant employment and well-paid labour produce, in a country like ours, general prosperity, content, and cheerfulness.

The Budget-Mr. Manion
I again ask, are we to ignore the lessons of history because a minority of free traders and low tariff men in this country control the government at the present time? Even England has realized that trade is a battle for markets. She has realized that her imports are unlimited and that thus she is not a free trade country, because no country traded with her on the basis of her free trade policy. But by that principle of unlimited free imports she was throwing away her weapons, opening her gates to the enemy and discarding her negotiating power. She realized that the index of a nation's prosperity is not in external balance sheers, not in the reports of Finance ministers, but in the condition of the workingman's dinner table and his clothes line. Where in this budget is the workingman's dinner table or his clothes line improved? We do not find it has any place in the budget. What we need in Canada is large production, plenty of work and wages for the people; in other words, a policy of buying and selling among ourselves. It is not cheap goods that we need; it is work and wages for our people. Suppose the tariff reduction had lowered the price of automobiles by an average of $5 to $10 a year to the man who buys a car every four or five years, is it not worth $5 or $10 per annum to the citizens of the country to build a broad Canadian development on a solid foundation?
The budget proposes a reduction of the duty on tin plates, which I am informed will injure an industry just formed in Quebec. The tin plate industry in the United States is one of the best illustrations of what can be done under a tariff to build up an industry. In 1890 the United States produced 2,000,000 pounds of tin plates, which was a mere bagatelle oecause they imported about 1,000 million pounds. In 1913, twenty-three years later, they produced not two million but two billion pounds of tin plate-a thousand times as much-and the price had gone down.
Sir Gilbert Molesworth wrote a book on the tariff question advocating a tariff policy for England, pointing out that steel rails sold in the United States for $150 a ton in 1867 when they had no tariff, and in 1885, eighteen years later, when a tariff was placed on steel rails, the price had decreased from $150 a ton to $27 a ton.. Before the war the price in the United States was $26 or $27 a ton, after they had imposed a high tariff and afforded protection for the producer in the United States. He gave a list of 214 other articles which, with increased protection, had gone down in price 25 per cent under the high tariff. Let us do likewise in this country.
Let the people of Canada apply the Golden Rule of commerce to other countries-do unto other countries as they are doing unto us. Let us have a policy of Canada for the Canadians. Let Canadian industry, Canadian thrift and resourcefulness provide us with all that we need, instead of our promoting foreign industry and buying the products of foreign cheap productiod. The issue is clear for the Canadian people to decide and to make a final decision as to their destiny. It is up to the members of this House and the government of this country to abide by that decision. This in a nutshell is the issue before the people to-day: The people of Canada must decide whether, under the lower tariff or free trade policy which this country is following, we -are to become a mere adjunct of the United States, allowing others to exploit us, to manufacture our raw materials, our asbestos, nickel, pulpwood and electricity, into the finished products, allowing them to take $5,000,000 of raw materials and convert it into $50,000,000 worth of finished production and thus get employment for their labourers and the manufacturers the profits. In other words, are we to permit ourselves to become the dumping ground for cheap producing countries? Are we to become the hewers of wood and drawers of water, the miners of minerals and growers of grain for other countries and the recruiting ground for their artisans? That is the effect of the low tariff policy.


Mr. EVANS:: Is the hon. gentleman in
favour of a tariff on the raw material?


Robert James Manion: I am in favour of any tariff which will build up the industries of Canada, whether they are manufacturing, farming or any other kind of industry.


John Evans: The hon. member said there might be many articles on which there should be a tariff. Does he approve of a tariff on raw material?


Robert James Manion: That is a very wide
subject. There are thousands of kinds of raw material, and I am not going to give an answer offhand to any question which the hon. gentleman asked me, because probably he would throw the answer at me at some future time. I want to know the kind of raw *material to whioh he refers. I do not want a blanket question of that sort, covering thousands of articles, and to be asked to give an answer immediately.


John Evans: I am sorry I did not ask the question earlier when the hon. member was discussing another matter. But does the hon. member mean to infer that England is
The Budget-Mr. Manion

going to raise that large quantity of foodstuffs now, by putting a tariff on tihose foodstuffs?


Robert James Manion: I was not trying to show she was going to try to raise it now. I was trying to show that She had ruined her farmers and agriculturists by taking the tariff off. If I were living in England I would advocate putting a duty on a lot of raw materials and raw products in order to build up agriculture in that country. But I am speaking for Canada and not for England; the people of England will have to decide that question for themselves. I was showing what will happen to Canada under free trade or under a low-tariff policy.
The people will have to decide whether or not they want a national policy of protection for all the different industries of this country, a policy of Canada for Canadians, which will develop our own natural resources instead of allowing others to develop them for us; which will keep our markets for our farmers of Ontario and Quebec and the other provinces; which will protect our workers against a system of low .exchange, of cheap labour, and of the low standards of living of the Orient and Europe; which will give stability,to the business of the country; which will open the factories which have been closed, which will give encouragement to the establishing of other factories; which will give traffic to our railways by giving them a chance to carry our raw materials and our finished product; which will give work to the workmen of our country; which will give opportunities to our boys and girls to stay at home and to indulge that noblest sentiment in the human breast, patriotism, instead of their being forced to go to the United States, the most highly protected country in the world, to earn a living-in a phrase, a policy which will give us a wide, universal development, which will lead Canada to become a happy, prosperous, and contented nation, which prosperity will bring back to our land the sons who have been exiled from it and will draw millions from other countries to fill our vacant spaces. To my mind the latter policy, the policy of protecting all the industries of Canada, agriculture, manufacturing, and all others, is the red-blooded courageous Canadian policy and that is the policy which the people of Canada should support.
Mr. Speaker, in closing, because of the attitude which I have taken, I intend to move the following amendment:
That all the words after "that" be struck out and the following substituted therefor:
In the late general election campaign assurances were repeatedly given by the Prime Minister and other 
ministers of the crown that before further tariff changes were made an opportunity would be given industries affected thereby to be heard before an advisory board.
That such assurances were officially incorporated by the government in the Speech from the Throne of the present session in the following words:
"Changes in the tariff should be made only after the fullest examination of their bearing upon both primary and manufacturing industries and that representations requesting increase or decrease of duties should be made tihe subject of the most careful investigation and report by a body possessing the necessary qualifications to advise the ministry with respect thereto. A tariff advisory board will accordingly be appointed forthwith."
That such tariff advisory board was accordingly appointed.
And this House regrets that in the case of drastic changes announced in the budget such assurances have not been fulfilled.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


Mr. DUG ADD DONAGHY (Vancouver North):: I desire in the finst place, Mr. Speaker, to compliment the Minister of Finance (Mr. Robb) upon the clear, concise and businesslike statement Which he presented to the House a few days ago. An occasion of this kind has, though of course on a very much smaller scale, its counterpart in the annual meetings of the ratepayers of our municipal governments. The mayor and council meet the taxpayers at the end of the year and, to use the popular phrase, give an account of their stewardship. Similarly, each year the taxpayers of the Dominion await with considerable interest the statement of the Minister of Finance with reference to the financial condition of this country during the year immediately preceding. It is of interest on such occasions, in reviewing the past, to contemplate also the proposals for the ensuing twelve months, and the taxpayers are always eager to ascertain whether or not there is likely to be any lightening of the burden of taxation.
The country generally received with some surprise and with a great deal of satisfaction the minister's statement, whidh is now being considered, wherein he showed that not only had expenditures been kept within the limits of revenues during the year just past, but that those expenditures had been so carefully curtailed and the business of the country so economically administered by this government that the very handsome surplus of some
S33.000.000 was achieved. This statement i3 gratifying indeed to the taxpayers of Canada. And following upon that the country received, probably with greater astonishment, the intimation that for the ensuing year there was

The Budget-Mr. Donaghy
to be a considerable diminution in the burden of taxation as disclosed by the resolution moved by the Minister of Finance. Perhaps the greatest and most outstanding act of administration since the days when the war clouds first loomed over Canada has been the much needed reduction in income tax which has been depressing business in this country for some years. The extent of the reduction in income taxes is striking, and in view of our present financial condition it would seem that we have gone as far as we can in that direction for the time being. For example, a man with a wife but no children and with an income of $3,000 per annum will pay no taxes whatever under the new schedule, while the same man, if he receives $3,500, will pay the trivial sum of $10 in taxes. Surely no one can complain of taxation assessed on that basis.
As regards the tax on incomes derived from dividends from shares held in corporations, a change has been made. The hon. member for Fort William (Mr. Manion) this afternoon offered some criticism in this regard. Heretofore the income received from dividends paid to the individual as a holder of dhares in a company was not taxable. Was that right? Was it fair that the income produced by toil and labour should be taxed while income so easily secured from capital should escape taxation?


Peter McGibbon: Does the hon. member
mean to tell me that such dividends were not taxed?


Dugald Donaghy: I am afraid the hon.
.gentleman was not carefully following my words. If he will consult Hansard he will see what I said.


Peter McGibbon: Answer the question.


Dugald Donaghy: T do not like to repeat too often. If my hon. friend will listen carefully he will get the drift of my remarks and discover what the change is. The income tax upon the profits of corporations has also been reduced. Heretofore that tax has been ten and a half per cent over and above the first $2,000 of income and it has now been reduced to nine per cent, a reduction of approximately fifteen per cent. The income tax in the United States on the profits of corporations is higher than that; it is thirteen per cent. One of the great objections to this form of taxation is that it discourages investments in the industries of the country. [DOT] I am glad to see that the government has borne this principle in mind in drafting the resolution. We stand to-day in a more favourable position for attracting capital than does the United States.
Their income tax on the profits of corporations is, as I have said, thirteen per cent, and at the end of 1926 it will be increased to thirteen and a half per cent, while ours will remain at nine per cent. So that we shall be in an advantageous position as compared with our neighbours to the south. As I say, this budget resolution places us at an advantage because our taxation on income from investments is less than that of the United States, although ours on personal earnings is higher than theirs.
Another reduction in taxation which the country welcomes, and which probably was not expected this year, is the return to penny postage. The difference between paying three cents and two cents upon letters is of considerable importance to the population generally, especially to the poor. True, it is a small amount in itself, but in the aggregate it means a substantial saving to our people. Penny postage was made popular many years ago and after a great fight it became almost universal, but owing to war conditions it had to be abrogated. The return now to this popular rate of postage is another indication that financially Canada is fast moving out from under the clouds in which she has been enshrouded since the beginning of the war.
If there was one thing more than another that caused Canadians to look with some discouragement upon the future financial outlook of the country it was the annually recurring deficits on the operation of the Canadian National railway system. We have a similar problem to-day in British Columbia, where our provincial railway is being operated at a loss. It is a grave problem to my province. On a much more magnified scale the operating loss on our national system has been a source of much worry to those handling the finances of the Dominion for several years past. I do not think any of us were optimistic enough to expect that the serious operating deficits of from fifty to fifty-five million dollars annually, to which by their steady recurrence we were becoming accustomed, would so soon drop down to the comparatively small figure of a trifle over seven million dollars. The hope that even this deficit will soon be wiped out is, I am sure, shared by all members of this House, regardless of their political affiliations. It was particularly gratifying to hear the hon. member for South Wellington (Mr. Guthrie) state last Thursday that this improved condition was a very encouraging sign, and I think he went so far as to say that there was every reason to expect the national railway system would be upon a paying basis within a very few years.
To a considerable extent discussions on the budget and on the Speech from the Throne

The Budget-Mr. Donaghy
invariably revolve around the tariff. It may be questioned whether too much importance is not attached to the annual debate upon tariff matters, and whether the two sides which battle so strenuously on this subject do so with any very deep sincerity. The history of our tariff legislation for the last twenty-five years shows practically no difference in the various tariff schedules, beyond a point or two, whether the administration was Liberal or Conservative. That bald fact has a tendency to make outsiders think that the range of debate in this controversy does not produce any very fruitful results. Let me say this: the discovery of Marquis wheat has resulted in the production of more wealth for Canada than all the discussions on the tariff that we have had since confederation. I might say the same with respect to the discovery of a new process for treating refractory ores. There are other things of importance besides the tariff worthy of consideration by this House. I welcome the announcement that a tariff board has been appointed. The tariff is too intricate and complex a subject for the people generally to understand and decide. I doubt even if many hon. members could pass a satisfactory examination on the tariff of this country. Some hon. gentlemen talk very learnedly of what the United States tariff is against our goods. This afternoon I heard an hon. gentleman on the other side state quite positively that the tariff on Canadian automobiles entering the United States was 50 per cent.


Mr. CHAPLIN (Lincoln):: I never said so at all. I never mentioned Canada.


Dugald Donaghy: I said an hon. gentleman so stated. I think we all heard it on this side. The statement was a striking illustration of what I have already said, that a great many members of this House would not pass anything like a satisfactory examination on tariff matters, either regarding the tariff of their own country or that of the adjoining republic, whose praises are so loudly sounded by hon. gentlemen on the other side. Unfortunately for the hon. member who made that remark, the tariff on Canadian automobiles entering the United States is exactly the same as the tariff on United States automobiles entering Canada.


James Dew Chaplin: The Finance
Minister does not say so.


Dugald Donaghy: The basis of the tariff on automobiles entering the United States is a duty of 25 per cent. Hon. members will find that in Vandegrift's United States Tariff,

1922, at page 70, paragraph 369. Let me read it:
Automobiles, automobile bodies, automobile chassis, motor cycles, and parts of the foregoing, not including tires, all of the foregoing whether finished or unfinished, 25 per centum ad valorem.
Then a proviso is added to the effect that if any country raises its tariff against United States automobiles higher than that point, the United States tariff against such a country will be raised accordingly.


James Dew Chaplin: Why don't you read it?


Dugald Donaghy: That supports the assertion I made a moment ago, and which some hon. gentlemen opposite challenged. Our duty on automobiles was 35 per cent, and automatically under the article I have just quoted the United States raised their tariff up to the same point, so until the resolution was brought down the other day, the tariffs of the two countries on automobiles was exactly the same, namely, 35 per cent.
Coming back to the question of the most scientific way of dealing with the tariff, I must say that the wisest course seems to have been adopted this year of appointing a tariff board to inquire into tariff matters. In my opinion this board should have been appointed twenty years ago. We would then have had the benefit of a board devoting its whole time to the study of this question in an expert manner, and figuring out the consequences that might result from raising or lowering any particular item. But instead of that, the question of the tariff had been thrown into the political arena at every election, and about four weeks of very florid oratory has been devoted in every election campaign to educating the people of this country on the subject of the tariff. At a time like that, when their minds are excited by the heat of political battle, no good results, no logical conclusion, can ever be looked for from such a proceeding.
In connection with the action that has been taken regarding the duty on automobiles, the criticism may be offered that this action is inconsistent with the general policy of referring tariff matters to a tariff board. It is quite true that the action that was taken could not be justified on any consistent principle, but nevertheless it may and will be justified by the exigencies of the circumstances and of the case.


Some hon. MEMBERS:: Oh, oh.


Dugald Donaghy: It is quite easy to conceive of one of these delicate infant industries that require the constant attendance of thf sucking bottle to keep them alive growing

The Budget-Mr. Donaghy
so big and fat and prosperous that its profits and its wealth are such as to shock the public conscience of the people of Canada. That is quite conceivable, and we have had probably the most glaring example of that which it ic possible to conceive of in any country in the Canadian Ford Company. Here is an industry protected to the extent of 35 per cent, the whole of which duty it milks and takes from the pockets of the taxpayers of this country, every dollar, and the company waxes so big and fat and pays such extravagant dividends, that the conscience of those who have not been so fortunate as to walk in these golden pathways is shocked at the necessity of keeping the milk bottle constantly at the mouth of this plutocrat. This had been probably the most glaring instance in Canada, and I am not astonished at all that public opinion has revolted and demanded that this condition be remedied by parliament, and remedied now, instead of a year from now. Every rule is proved by the exception, and the rule that a tariff board is the proper body to study and advise on tariff matters is proved by the exception in the case of the Canadian Ford Company.


Mr. ROBINSON:: Is not the hon. gentleman aware that 49 per cent of the production of the Ford Motor Company at Ford is exported, and helps the balance of trade in favour of Canada by over a million dollars a year? That being the case, how can this company take out of the pockets of the taxpayers of this Dominion every dollar of the duty?


Dugald Donaghy: That will not affect the
export very much, then. The hon. gentleman has not made his point very clear.


Mr. CANTLEY:: Answer the question.


Dugald Donaghy: There are two other matters which probably enter more into the question of the industrial development of Canada than the question of the tariff. One of those matters is the necessity for a fair and equitable adjustment of the freight rate structure all over this Dominion. That adjustment is more important than the tariff. We have heard a good deal on this subject in parliament during the past two months. We have heard the members from the Maritime provinces complain that the coal of Nova Scotia cannot at present freight rates be hauled to central Canada. They also complain that the ports on the Atlantic coast are not being used to the extent to which they should be used for the handling of Canadian grain. We have heard the same complaint regarding the ports on the Pacific coast, and we have heard the complaint that owing to the high freight rates coal from Alberta cannot be shipped to central Canada. Canada being so vast in extent, comprising as it does so many thousands of miles from ocean to ocean, is an exceedingly difficult country to govern and govern justly in order that hardships may not be imposed upon one section of a country more than upon another. There is nothing which will help more greatly to equalize the conditions of the people and the industries in the various parts of the country than a fair and equitable adjustment of the freight rate structure throughout the whole of Canada. The grain growers of the prairies desire low freight rates on their grain so that they may get that grain to the ocean and to the world's markets on a competitive basis with grain from some other country. On the other hand those who live in the cities and ports on the seacoast desire to see Canadian grain go through those ports and to see merchandise imported into Canada come directly into those ports. It i3 a matter for gratification that the government has taken another step in the latter direction. As a result of that step we understand that after the end of the present year it will be necessary that imported goods, in order to enjoy the full British preferential tariff, shall enter direct through a Canadian port. This is a step in the right direction. We should encourage the shipping of both exports and imports through our own ports.
The government, in my opinion, has taken proper steps during the past six or eight months for the equalization of the freight rates and the solution of the great problem involved. We find that on June 5, 1925, it passed an order in council which in part reads as follows:
The committee therefore advise that the board be directed to make a thorough investigation of the rate structures of railways and railway companies subject to the jurisdiction of parliament, with a view to the establishment of a fair and reasonable rate structure, which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities, so as to permit of the freest possible interchange of commodities between the various provinces and territories of the Dominion and the expansion of its trade, both foreign and domestic, having due regard to the needs of its agricultural and other basic industries, and in particular to:
(a)	The claim asserted on behalf of the Maritime provinces that they are entitled to the restoration of the rate basis which they enjoyed prior to 1919;
(b)	The encouragement of the movement of traffic through Canadian ports;
(c)	The increased traffic westward and eastward through Pacific coast poTts owing to the expansion of trade with the Orient and to the transportation of products through the Panama canal.

The Budget-Mr. Donaghy
Subsequently, on January 7, of the present year, an order was passed by the government which reads as follows:
The committee of the Privy Council therefore recommends that the Board of Railway Commissioners for Canada be directed, as a part of the general rate investigation above referred to, especially to inquire into the causes of Canadian grain and other products being routed or diverted to other than Canadian ports, and to take such effective action under the Railway Act, 1919, as the Board of Railway Commissioners for Canada may deem necessary to ensure, as far as possible, the routing of Canadian grain and other products through Canadian ports.


Felix Patrick Quinn: What is the date of that
order?


Dugald Donaghy: January 7, 1926. In
my opinion the government in that order, for the present time at any rate, has gone as far as it possibly could. The fixing of these rates is now in the hands of the Board of Railway Commissioners subject, of course, to an appeal to the Privy Council. In the order in question the government has directed the Board of Railway Commissioners as to the policy which should be pursued by them on general principles. The government has made known the general principles on which it thinks the board should act, leaving the board free to work out the scheme and the details.
Next in importance, probably, to the equitable and fair adjustment of the rate structure throughout Canada is the adoption of proper means for opening up new markets for the products and manufactures of this country. More can be done by the negotiation of favourable treaties for the development of Canadian industries and the employment of Canadian workingmen than can ever be accomplished by any debate upon tariff issues.


David Spence: Name one such treaty.


Dugald Donaghy: The Australian treaty,
and I wish to give you a fairly good example of what it has accomplished.


Some hon. MEMBERS:: Oh, oh.


Mr. KING (Kootenay):: Do not my hon.
friends opposite like it?


Dugald Donaghy: It is first of all desirable, so far as is practically possible, that the great stores of raw material which this country possesses in such vast degree should be manufactured in Canada; these resources should be worked up in Canada by Canadian workmen and give employment to our own people. In pursuance of that general principle and policy the government negotiated a very favourable commercial agreement with our sister dominion, Australia, under which

the newsprint of Canada is admitted into Australia on favourable terms. We know that in the year 1920 Canada lost the Australian market for its paper products. In that year Australia gave Great Britain a preference of $15 per ton on British newsprint. That shut Canada out of the Australian market. Through the efforts of this government, however, in negotiating a commercial treaty with Australia, Canada has now been admitted to the markets of Australia on these specially favoured terms so that her paper enters free as against a duty of $15 per ton on the newsprint of other countries. The newsprint industry of Canada is only in its infancy, but it will not be many years before it will be one of the greatest industries in this Dominion. We probably have in Canada the greatest stand of timber in the world to-day. Is it not desirable that through the negotiation of treaties opening up markets we should be enabled to manufacture the products of our forests at home in Canada and give employment to our own workingmen? One of these manufacturing processes is the working up of the rough product of the forest into newsprint. But what is the use of doing that if you have not got markets for the product? The first step to take is to find ia market. Having found a market, as we have for newsprint, the manufacturing of it at home by our own workmen naturally follows. We have a very good example of that in the province of British Columbia. About 100 miles north of Vancouver there is the town of Powell River, which is entirely a paper-manufacturing community of some 4,000 inhabitants. As a result of this treaty that company is now installing a new machine and doubling its capacity. Although that is an American concern, very few Americans are employed in it, and approximately 40 per cent of the workmen employed in that paper mill industry are veterans of the Great war, men who fought in France. What is_ the outlook in Canada for the future in the papei industry? The programme to-day of the Canadian paper industry is the installing of eighteen new additional machines. What is the programme of the world? For England the programme for the remainder of the year is the installing of one new machine, and for Finland one new machine. That is the world programme. Canada stands out preeminently over the other countries of the world in the programme she is outlining for the manufacture of newsprint. Shall we not go on and multiply treaties of this kind if possible, negotiate them wherever they can be negotiated on favourable terms, in order that the

The Budget-Mr. Sutherland (N. Oxford)
raw material of this country can 'be manufactured at home and industries built up in Canada on a sound commercial basis, utterly regardless of this wrangle we have every year in regard to protection?
We have this tariff with us; we have had it with us since we were children, and it will be with our grand-children. It is here to stay. History shows that. There is no use trying to deceive the public in regard to this matter. Notwithstanding the very heated and learned debates that we listen to between the various parties in this House, history still remains and the cold fact still stares us in the face that this good old tariff has never changed more than one or two points under any administration. The way to build up a country and its industries and to "create employment is not by wasting time debating the question; it is by going out and negotiating commercial treaties and finding i market for our raw products manufactured in Canada. The treaty with the West Indies is another example of that, and I have no doubt, if the government uses good judgment and is industrious and energetic, we will be able to multiply the favourable treaties as the years go by. We cannot get them all in one year. It is particularly commendable to note that the treaties negotiated in recent years have been made with our sister dominions. That is a very favourable outlook. We may look forward in the near future to the circle being increased, and later on we may possibly take in with our treaties, all the dominions forming the great British Empire.
I know it is not usual for a member upon his first appearance in the House to take up a great deal of time, and I have spoken long enough. I thank you, Mr. Speaker, and hon. members of this House, for the courteous hearing you have given me.


Mr. D. M. SUTHERLAND (North Oxford) :: Mr. Speaker, the hon. gentleman who
has just resumed his seat (Mr. Donaghy) who has an acute legal mind which we have seen functioning in a fearful and wonderful manner at the customs probe, has given us a very good speech to-night; particularly did that legal mind come into play when he endeavoured to explain the exigencies of the situation which necessitated that the government should not direct the attention of the tariff board to the automobile industry. Apart from that, the hon, member made a very good protectionist speech, such as I am sure his protectionist constituents in Vancouver North will welcome.
I have understood that the discussion on the budget generally takes rather a wide range, and all sections of the country present their views in regard to matters which particularly affect them. This, I take it, is an exceedingly good thing, particularly for new members in the House, of whom we have a large number. It gives them a chance to widen their viewpoints and see what is going on in other parts of the country, and it also leads one to realize that this country must be governed by a policy in which there is a good deal of give and take. The hon. gentleman could not bring himself to one thing-he could not defend the Minister of Railways (Mr. Dunning) in the situation that was brought up in the House this afternoon, when we saw the spectacle of a minister of the crown endeavouring to change the meaning of what he said under oath out in the province of Saskatchewan. That is a thing that I do not think any minister has ever been known to do in this House before. There is also the spectacle of a minister being exposed, when it was clearly shown that he went up to the riding of West Middlesex and gave details of a conversation with another member of this House, which conversation never took place at all. We have heard a good deal from members on the other side of the House about stocks going up in this country since this government came into power. What has happened to-day certainly will send down the stocks of the hon. Minister of Railways in this country and in this House. I venture to say that had these facts been known to the government, even this government, brazen as it is, would not have asked him to sit in council with them.
I wish to continue what I was saying about the different parts of the country having different viewpoints. We have heard a good deal about the coal industry since we have been here, particularly from our friends from the Maritime provinces, and there is no doubt whatever that upon the proper solution of the coal problem depends a great deal that is very important to Canada as a whole. In the report of the provincial royal commission which was made last year, a former member of this House. Mr. Hume Cronyn, in an illuminating addendum to the report, sets out clearly what the rest of the country must do to solve or help to solve this fuel problem. He says that federal assistance towards the establishment of coking ovens must be given or, second, that there must be a substantial increase in the import duty on all bituminous and anthracite screened coal. In the budget

2642	COMMONS
The Budget-Mr. Sutherland (N. Oxford)
that was delivered the other day no assistance was given to the coal miners of Nova Scotia, and the reason advanced was that the matter had been referred to a commission and therefore was under discussion and Should not be dealt with by parliament. In spite of that the question of the tariff on automobiles is being dealt with in this House without being referred to a commission for investigation.
Another matter on which I wish to touch, because it enters very closely into the questions of the day, is the question of immigration. My views on immigration may differ from those held by many others. I believe in our present situation in Canada the cities should be built up ahead of the rural districts and our endeavours should be directed towards that end, because we would thus give more employment and a bigger market to the people in the rural districts. I realize that it would be folly to bring people to the cities unless we had work for them to do. The main problem, therefore, is to provide work in our cities, to bring the people in and to build up our urban population; that is what Canada needs far more than an increase in the number of farmers to settle on our land when our farmers now, according to some of them, are having hard work to make a living. The idea of bringing in mo're farmers is being advocated more by the farmers in this House than by others, and it is the only instance within my knowledge of an industry, which is complaining of hard times, urging and welcoming more competition for itself. That does not seem to me to be logical. In my opinion the cities should be built up first.
Another reason for my contention is this, that from year to year there is very little difference in the quantity of food products that are used throughout at least that part of the world that we have to do with. There is very little increase in population and, therefore, very little need for our farmers to produce more stuff. The situation in the cities is very different. More kinds of manufactures are coming to the fore every minute and there has been a tremendous development even in the last thirty years. The whole automobile industry, the phonograph industry, the radio industry and many other new kinds of manufactures are employing much more labour and that will be the case from now on. We shall therefore have more room for employment for the people in the cities as long as we have a proper fiscal policy that will provide work for them there.
A great deal has been said about the word "protection," or "safeguarding," as it is called

in some countries. I am firmly of the opinion that on that system of protection depends to a great extent the prosperity of Canada. When I speak of protection I mean simply protection; it is something that does not need to be qualified by an adjective "high," "low," "moderate," or anything of that kind. If you protect an industry, protection is all it wants, and it is superfluous to say "high," "low" or anything else. It is simply protection this country needs; if it has that it will get along all right.
The Minister of Finance (Mr. Robb) in his address laid a great deal of emphasis on the balance of trade as regards our dealings with the rest of the world, and he cited figures that were in a way very satisfactory. Our main dealings are with the United States, and according to the latest available figures, which take us up to the end of February of this year, we have a very large adverse balance in our dealings with the United States. In this year, 1926, we have imported from the United States $123,035,937 worth of stuff more than we exported, and in 1925 we imported $97,393,324 worth more than we exported. That shows that our adverse balance of trade with the United States is getting larger, in fact being more than $25,000,000 worse this year than last year. If this policy of cutting the protection from the automobile manufacturers goes into force and many of these cheaper cars are brought in from the United States, that adverse balance will be materially larger than it is now.
This budget as a whole is what might be termed a Saskatchewan budget. That statement deserves a little explanation. The general policies in Saskatchewan seem to be policies of annihilation and assassination rather than protection, and if
9 p.m. those members from Saskatchewan who seem to favour those policies get any more power in the House than they have shown they have, there is going to be very serious trouble for this country. The reason why I attribute this to Saskatchewan is, as the hon. member for Fort William (Mr. Manion) said this afternoon, because no reference was made in the Speech from the Throne to this reduction in the tariff on automobiles. I attribute this reduction more to Saskatchewan Liberals even than to our Progressive friends and I base this statement on part of a letter written by the hon. member for Mackenzie (Mr. Campbell) to his home paper about February 5, when he said:
The Speech from the Throne reassures the manufacturers by announcing that further changes in tariff duties are undesirable.

The Budget-Mr. Sutherland (N. Oxford)
This shows that the caucus which has been carried on and the conferences which had been held between the Liberal government and the Progressive executive had not at that time discussed and decided upon this question. What happened between that time and the present? Only this, that the Prime Minister (Mr. Mackenzie King) was forced to leave Ontario and go to Saskatchewan for a seat and the Minister of Railways (Mr. Dunning) left Saskatchewan and came down-to Ottawa to take a seat in the cabinet. Those two moves are the explanation of this tariff change. I do not think any reasonable person throughout Canada can bear out the stand of the government in this matter. I do not really think the Quebec Liberals, to a certain extent, bear out this stand, because I have noticed for the last two or three days that whenever there is any applause on the other side on account of the budget, the Liberal members applaud income tax reductions and the Saskatchewan members applaud reductions in the tariff on automobiles. That shows what the feeling of the House is on the matter.
During the debates that have been going on in this House almost since the beginning of the session we have heard a great deal from nearly every province as to its own particular question, Quebec being the only exception. Practically no one from the province of Quebec has risen in his place and told the House what are the main questions in which that part of the country is interested. There is a representation from Quebec of sixty-five members, sixty-one of whom are on the other side; yet we have heard practically not one word regarding the problems of that province.


Sir EUGENR FISET:: That is because we are satisfied and happy.


Donald Matheson Sutherland: So that in the absence of any declaration on the part of the delegation representing that province in this House, we have onfy to take the words of people outside on the questions affecting the province of Quebec. After reading the speeches of influential men in that province I say unreservedly that Quebec is protectionist. Let me read first of all a letter written by the provincial Minister of Agriculture. This matter has been referred to before, but as it is important I shall discuss it again.


Some hon. MEMBERS:: Oh, oh.
14011-108J


Donald Matheson Sutherland: Gentlemen opposite scoff at any mention of the Minister of Agriculture for Quebec. I do not know whether that gentleman is in good repute with .this government or not.


An hon. MEMBER:: Very good.


Donald Matheson Sutherland: In that case, then, my hon. friends will attach some weight to his opinions.


Eugène Fiset: Let the hon. member read the explanation which the provincial Minister of Agriculture made at a public meeting in the province on the same subject.


Donald Matheson Sutherland: The statement I am about to read is set down in black and white and does not lend itself to any two constructions; its meaning is quite clear on the face of it. The letter has been mentioned before but it is so much to the point that I venture to read it again. In reply to a gentleman who had made certain inquiries of him the Minister of Agriculture in the local house wrote:
I have your letter and also the accompanying resolution. I made further application to the federal authorities this j'ear to obtain in favour of farmers a raising of the duties on agricultural products entering Canada from the United States so as to protect the Canadian farmer in the same degree as the American farmer is by the Fordney tariff. I regret not to have succeeded in my application, as the budget speech-
That is to say, the budget speech of last year.
-makes no mention of any change in this part of the tariff. I always hope, however, that the federal authorities will accede to the numerous requests which have been made to them, and to my own repeated solicitations.
That letter comes from a responsible minister of the crown in the province of Quebec, who would not write in such terms unless the other members of the provincial cabinet were in sympathy with the view he takes. And remember, the provincial cabinet is Liberal; the people who voted for hon. gentlemen opposite voted also for Mr. Caron and his associates in that province. Does anyone mean to say that those people voted at one election for protection and at another election for something quite different? I make the statement again that rural Quebec, as indeed Quebec in general, is protectionist. More than that, the sixty-one representatives opposite from that province are undoubtedly, in my opinion, also protectionist in conviction, so vhat they are not really representing their constituents faithfully in parliament. So much for agricultural Quebec.
The present president of the Canadian Manufacturers' Association, Mr. Fortier, cornea
2644	COMMONS
The Budget-Mr. Sutherland (N. Oxjord)
from the province of Quebec, and on numerous occasions he has been in Ontario, having visited Hamilton last year. He spoke, too, at the opening of the Toronto fair, and on that occasion, just as he did at Hamilton, he made a strong protectionist speech. Now, here are two gentlemen representing different walks of life in Quebec province, and both speaking out in favour of protection. I understand, although I do not know it to be a fact, that in politics Mr. Fortier is a Liberal.
Sbme hon. MEMBERS: Oh, no.


Donald Matheson Sutherland: Anyway, he is in good standing in his province, a man of sufficiently good repute to be made president of the Canadian Manufacturers' Association. The fact may have struck others, as it has certainly struck me, that in some quarters in this House it is only necessary in order to provoke applause to make sneering references to the manufacturers. In certain parts of the chamber, notably in the section representing the province of Saskatchewan, there is immediately a tremendous clapping when such remarks are made touching the manufacturers. Is that right? I notice, however, that hon. gentlemen from Quebec never do that; they never applaud any sneering remarks made at the expense of the manufacturers. Indeed, Mr. Speaker, there is noticeable a distinct line of demarcation between those who applaud the abuse of manufacturers and those who do not. The representatives from Saskatchewan always do; those from Quebec do not. And how these two elements, so utterly different, can get together solely for voting purposes, I do not know and cannot understand.
If one desires to state one's position clearly in this House or anywhere else, for that matter, it is essential to state just what his ideal is for Canada at the present time. Personally I am in favour of an all-round development in this country, embracing manufacturing, mining, farming and every other industry, so that we may become in time an important country, capable of maintaining our place in the empire. This is a subject in regard to which there is a difference of opinion in this House. The hon. member for Winnipeg North Centre (Mr. Woodsworth) and the hon. member for Labelle (Mr. Bourassa) have stood up and advocated what is tantamount to separation from the British Empire, and gentlemen from Saskatchewan as well as some others have applauded such sentiments. It is deplorable that gentlemen should advocate proposals of that kind and receive applause from any portion of the House. For my part I am absolutely in favour of our remain-I Mr. D. M. Sutherland.]
ing within the empire; and war or no war, I am for the empire.


Mr. McINTOSH:: How does the hon. member stand on the question of preferential trade within the empire?


Donald Matheson Sutherland: That question presents no difficulty to me. I am in favour of preferential trade within the empire. I am absolutely for such trade and, I repeat, the question does not bother Conservatives. Every time we have a chance to buy something which cannot be made here I say, buy it from the United Kingdom or from any other part of the empire rather than from the United States or any other foreign country.
Now, I come to the subject which is of special importance to my own constituency, namely, farming. My riding is largely agricultural. We raise a lot of first class stock in the riding and any gentleman from Saskatchewan who has a black and white cow which he prizes, if he traces its ancestry back, will probably find that the original stock came from the county of Oxford. In milk and milk products we have played an important part in the country. In the county of Oxford the Toronto City Dairy has three large plants, Neilson's of Toronto have one large plant, as have the Canadian Milk Products Company and some other concerns, and there are as well a number of country butter and cheese factories. So anything that affects the dairy industry of the Dominion is very seriously felt in that riding. And the dairy industry in that county has been adversely affected by the Australian treaty, which the hon. gentleman who preceded me (Mr. Donaghy) lauded to the skies. In this connection I have a couple of resolutions from cheese and butter factories in my riding which I desire to place on Hansard. It will be realized that these resolutions reflect the opinion of a large number of milk producers who are the patrons of these cheese and butter factories. The first is from the Bright Cheese and Butter Manufacturing Company, Limited:
That we patrons of Bright Cheese and Butter Manufacturing Company a.t our annua] meeting do protest against the Australian treaty, in that it does not afford the dairy interests of the Dominion the protection enjoyed by other manufacturing concerns in Canada.
Therefore we would ask a speedy repeal of this unfair measure; and that a copy of this resolution be forwarded to the Minister of Agriculture, Ottawa.
The other resolution is from the East Zorra and Blandford Cheese Manufacturing Company, Limited:
Resolution passed at tlie annual meeting, March 1, 1926.

The Budget-Mr. Baldwin
Whereas the federal parliament has legislated, giving to Australia a preferential tariff on cheese and butter, and by order in council has extended the same preference to New Zealand;
And whereas this legislation is detrimental to the dairy industry of Canada;
Be it resolved that the patrons o-f the East Zorra and Bland ford Cheese Manufacturing Company, Limited, of the county of Oxford, Ontario, records its disapproval of these concessions and respectfully requests immediate action to be taken to safeguard and advance the welfare of the dairy industry of Canada.
Now, there may be some Progressive members from Saskatchewan, who passed their early days in Oxford county and therefore are familiar with its political history. It has been for the most part very strongly Liberal, and consequently these resolutions from the rural parts of the county are conclusive evidence that the dairy farmers there are very acutely interested in this question, for it has been brought home to them very strongly that the Australian Trade treaty is already proving very detrimental to their interests.
With respect to the very important question of immigration, Sir Henry Thornton, speaking on the immigration policy of Canada, has expressed this opinion:
The whole future of Canada and of the railway systems in Canada depends upon increased population and upon the increased traffic which would result therefrom.
I submit, Mr. Speaker, that the government have not been doing what is necessary to secure the immigration to which Sir Henry Thornton refers. May I suggest that what I am about to read from the report of the Minister of Immigration for the fiscal year ended March 31, 1925, discloses a state of affairs that may account for the failure of whatever immigration policy the government may have? I find the following paragraph in that report:
The organization in the British Isles has been seriously 'handicapped (by the promotion of office boys to the positions of senior clerks or of assistant agents. These anomalies are being adjusted in the process of reorganization by the department, and whenever possible employees are being (transferred ,to positions where the work is within their knowledge and capacity.
Is not that an extraordinary statement to . find in a government publication?
I had hoped that the Minister of Finance when presenting his budget would have announced changes with regard to the Australian treaty:	I am yet hopeful that our friends
from Saskatchewan and the other prairie provinces will aid the farmers in the other parts of the Dominion in securing some changes in that treaty. Our friends from the west must remember that the farmers on the prairies have already a good deal of protection which
the farmers of the east do not enjoy, and I consider it is up to them to assist the dairy farmers in the east to secure a certain amount of protection as well, particularly in relation to the Australian treaty and against agricultural products from the United States. That is the great trouble of our dairy farmers, and it has been evidenced this spring especially in the egg business, enormous quantities having been brought in from the United States, thus destroying the winter market which our farmers are entitled to. I hope when this matter comes up again we shall have the united support of farmer representatives in; other sections of the House in assisting us to get redress.


Mr. W. K. BALDWIN (Stanstead):: Mr. Speaker, the hon. gentleman who has just sat down (Mr. Sutherland, North Oxford) is somewhat concerned to know our views about the tariff, and I propose to deal with that question at the outset of my remarks. First,
I do not believe you are sincere.


Some hon. MEMBERS:: Louder.


Willis Keith Baldwin: You can hear me over
there. We in Quebec have been misunderstood by other portions of this great Dominion. We in Quebec, the French and the English, the Catholic and the Protestant, have such respect for each other that we entertain no suspicions. For over forty years we had the advantage of our distinguished leader, the late Sir Wilfrid Laurier, who during that time was the dominating figure in the public life of Canada. I remember during my first three sessions of parliament whenever I saw that great man rise in his seat to address the House I was reminded of two other distinguished men, William Ewart Gladstone and Abraham Lincoln. If we to-day will remember those illustrous men, Laurier, Lincoln and Gladstone, we will not go far amiss in doing our duty as public men.
In the province of Quebec we have a contented and happy people who believe in adequate protection-not in protection simply for protection's sake, to make a few people exceedingly rich at the expense of the masses. We believe that this great country with its diverse interests must be a country of give and take. In the last parliament there were as many free trade speeches from the extreme east as from the extreme west. We have the interests of the Maritdmes at heart in this House. I have heard it said on the opposite side of the House that the last parliament had no exponents of Maritime rights, but we who sat in the last parliament know differently. We have also the great manufacturing in-


Arthur Meighen: You are badly out.


Willis Keith Baldwin: That is conclusive evidence that industry is not languishing in
Canada, and that there is lots of work for everybody. Great industrial development is under way not only in the province of Quebec but in the province of Ontario. I was in the Niagara district a few weeks ago and a young man came to St. Catharines to answer an advertisement published by a certain industry. He said to the proprietor of the in- , dustiy, "While I am coming to you for an engagement I have letters from four other industries that want me". Now that particular industry has 150 per cent more people on its pay roll than it had one year ago; it has orders ahead for six months, and other orders continue to come in regularly. Why, you would think to hear the hon. member for Fort William that devastation and everlasting ruin were facing us here. You would think that the waters would yield no more fish; that the gold mines would furnish no more gold; that the cows would give no more milk; that the silver mines had sunk to such depth that they could no longer be discovered. There was nothing but lamentations and dreariness in the hon. gentleman's treatment of the industrial situation in Canada. That is not a good thing for this country; it is not a good thing to appear in Hansard and to be read by outsiders. The whole thing is a bugaboo. We heard of factories being closed and men being thrown out of employment, but in less than twenty-four hours those factories had been re-opened. I understand a deputation is coming to interview the government in regard to the tariff. Well, a tariff is not something that cannot be changed.


Some hon. MEMBERS:: Hear, hear.


Willis Keith Baldwin: I have implicit confidence in the Minister of Finance, but we are all human and it is possible for us to err.


Some hon. MEMBERS:: Oh, oh.


Willis Keith Baldwin: Do not be alarmed; the present Minister of Finance has not made any error, and I have not acknowledged that he has done so. I say we are human and it is possible to err-


Some hon. MEMBERS:: Hear, hear.


Willis Keith Baldwin: -but there has not been any error made in this case. However, I recall the fact that the Minister of Finance in 1919 and 1920 changed his programme several times. His proposals were fought in committee, and several changes weTe made. The sales tax was changed, and other changes were brought about. My hon. friends opposite are making a great show about their desire to save the labourers and the toilers of
The Budget-Mr. Baldwin

the country, and describing the condition of Canada in most gloomy terms. It is absurd. The country is not going to the dogs as these hon. gentlemen would have us believe. Personally I am willing to go down into my pocket and help to establish industries that will give employment to our sons and , daughters. I feel good pursuing that kind of life, and I am going to keep on living for a long while yet if I continue in that frame of mind. A gentleman from New York came to see me here regarding a business in which I was interested. He wanted to come to my room in order to give a little inventory.


Some hon. MEMBERS:: Oh, oh.


Willis Keith Baldwin: Hon. gentlemen need not laugh, because I am going to indulge in a crack at the automobile. I said to this gentleman, "I will give you a cheque up to six figures." He replied "All right; I will get a taxi and come up and see you". I said to him, "If you get a taxi you cannot do business with me. You can walk to my room in less than three minutes and if you do so the cheque is yours". Think of a man wanting to ride in an automobile for such a short distance! That is an illustration of the absurd things people will do.
The hon. member for Southeast-Grey (Miss Macphail) was talking about old age pensions one day. Like myself she comes from a rural section, but while I was born in the fifties she was not. But she understands that a little money can be made to go a long way if you have a little brain and are accustomed to frugal living and right habits. The leader of the opposition belittled the pension of |20 a month. Why, $20 a month was too small 1 How could a poor man with a family of eight or ten children feed that family and clothe and educate them? Well, those of us who were 'born in the fifties were not very sparing of the soles of our shoes but we were sparing of the seats of our pants. But the leader of the opposition says that twenty dollars a month is a mere bagatelle and far from sufficient.
I take this opportunity of speaking to-night because in this budget we have a wide scope and a wide range of subjects to deal with I fully agree that the hon. member for Southeast Qrey (Miss Macphail) was perfectly right in saying that $20 a month is sufficient to alleviate the wants of anyone who is sixty or seventy years of age. They would live frugally. Of course they say that necessity was the mother of invention in those days and people succeeded in living on a very small sum because they worked hard and lived frugally. I 
do not know what conditions will be like fifty years from now; probably $60 a month would not be an adequate allowance to live upon. The hon. member for Fort William (Mr. Manion) asks why this sales tax was not taken off two or three years ago. I would remind him that this government assumed a tremendous burden when it came into power. Great deficits were accruing year after year Three years after the war they had not been able to stop the deficits. When this government came into power the Canadian National Railways were in the worst possible condition, and the Prime Minister, a student of the great Sir Wilfrid Laurier, whose judgment he had imbibed into his being, searched the country for a man large enough to run the railway. He found Sir Henry Thornton, the greatest man available in the world for the job. Sir Henry was criticized in this House in 1921 and 1922, but not so very long ago opinion in regard to him began to change, and broadminded men throughout Canada, who perhaps had formerly criticized Sir Henry came to realize that he was fully capable to assume charge of the road. Time has proven that Sir Henry Thornton is big enough and has a scope and breadth of mind sufficient to enable him to carry on the system. I expect that within two years he will be able to show a surplus on the Canadian National and if the railway is-not able to pay dividends it will at least pay expenses and wipe out the deficit. Hon. members have criticized the government within the last few days because the burdens on the people were not being lifted, but the government is now taking action which will have the result of improving conditions and making business more prosperous.
I desire to tell hon. members what the government has done and to tell them why there is a third party in this House. The Progressive party was formed some years ago, with men of strong character who had a determined idea that the great west needed representation in this House-and they have procured it. If there is a third party in the House it is because the Union government were not sincere and would not make it fifty-fifty with the other side when that government was formed, but wished to keep the iron hand of Toryism over the administration; they would not stand for a fusion with the other side. The most able men in the Conservative party thrust out their clenched fist in denunciation of the Progressive party; they had no use for them and their ideas. In 1921 a large representation from the Progressive party was sent to parliament. They did not need to read their speeches when they got on their feet, although I do not think they had the-

The Budget-Mr. Baldwin
training of some other men who come here and read speeches prepared by somebody else.
I consider it a compliment to have the members of the Progressive group in this House.
What means I possess are all invested in industry in this country. I have an interest in the industrial world, and I would not make one change in the tariff to injure industries. I have heard the former member for Marquette, Mr. Crerar, the hon. member for Brandon (Mr. Forke) and other Progressive members in this House state several times that they did not desire to injure one legitimate industry in this country. That is a meritorious attitude on their part, and that is the most that the people of Quebec want. We want a country where people can live cheaply, a country to which people can come and realize that they have a glorious place to live in. Some years ago, when a boy from New England and a boy from Canada would meet, they would discuss matters with each other. One would say to the other, " What did you pay for your hat?" The other would tell him, and it would be shown in those days that everything was in favour of the boy residing in the United States. The result was that that boy would persuade his brother to leave Canada and go there. We believe that with our great water-powers and our great industries in Canada that we can keep this country a good place to live in and educate our boys; and that is what we wish to do. But if the poor man and his wife cannot have a little butter on their bread, they will complain. It took two sessions to stop the importation of oleomargarine, which was sold in Canada in competition with the farmer's butter. Some years ago a bill on this subject was presented to parliament by the Minister of Agriculture, and only seven Tory members supported it. Last year people came into my constituency and said the Australian treaty was going to destroy the farmers. Of course it was not the farmers they were particularly solicitous about; they wanted to destroy the Liberal party, and particularly myself. They went to a creamery in the community, operated by a man of intelligence, and they tried to scare him. I heard a swashbuckling legerdemain fellow telling the farmer, " You will never sell your cows in this country; you had better get out." The farmer said, " What is the matter?" The fellow said, " Oh, it is the Australian treaty." I said to him: "You are in the civil service and perhaps it would be as well for you to keep quiet. One thing sure is that you never earn your daily bread; you are a loafer, a parasite on the public. Now you are trying to scare the farmers to death as regards something that
will not materialize." What was the result? This butter maker said to that Tory: "This government has done more for the farmer by repealing the Oleomargarine Act than all you can do or say, and no butter will come six or seven thousand miles and be six or seven weeks in coming here." What was the result? Butter has advanced in price from thirty-eight cents a pound, and you could not buy a pound of butter until ten days ago in this city for less than fifty cents.
The hon. member for Fort William said this afternoon: All you want to do is to stick to power. It is a pretty good thing to stick to what you have. We are sticking here and we will not surrender the reins for four or five years at least. You tell us that we are usurpers. What would you do if you were over here? You are in the minority; you could not get anywhere. There is no foundation for the insinuation that this country is going to the dogs when one considers the condition it was in when we came into power. You found the treasury full of money in 1911 when you won this country by misrepresentation and flag-flapping. Then you started to dismiss all the Liberals that were in office throughout the length and breadth of this great Canada of ours and you proceeded to frame an act for the outside civil service to entrench your appointees so that they could not be dismissed. You spent large sums of money in building armories which are used as places of amusement and dance halls, and this government has had to keep caretakers in them, keep them roofed and painted, and have them locked and unlocked when amusements are being carried on. In my constituency my opponent used them as great auditoriums when he had Patenaude out there and no crowd. Patenaude was supposed to be a spell-binder but he did not do the Conservative party any particular good. By the skin of his teeth he managed to get seats here for three or four or perhaps half a dozen of his followers.
Then you wanted to maintain militarism. I am against militarism. If we had 400,000 men overseas, they were disciplined over there for several years and no annual drill should be necessary in this country. It is a shame to call out for annual drill these old soldiers who were in the trenches and who know as much about war as Stonewall Jackson did, and no one else knew more about war than he did. I hope the hon. member for Southeast Grey (Miss Macphail) will be in the House when the militia estimates come up and will give us as good a speech as she gave last year. The world now wants peace. We do not want wars; we do not want to keep up a military
26o0
The Budget-Mr. Baldwin

machine, and with those 400,000 men who received military discipline overseas, we should have no need for annual drill for the next two or three decades because those men are in this country already disciplined and will be ready in time of war. But I hope there will be no such thing as war. We have in this wonderful country to the south the Monroe doctrine. I know some of the military men will laugh when I say that doctrine will keep aggressors out of this country. Looking at a map the other day I felt it was not such a bad thing that the United States had a strip of land west of the Yukon and half the length of British Columbia. They would have to fight in order to keep off any Asiatics or anybody else who wanted to come over, and while I do not wish to hide behind anybody else's wings, I do not object to go through a turnstile because somebody else turns it. If this country is safe under the Monroe doctrine, it is as safe under that doctrine as under any other, but we do not want money spent in this country to keep up a military machine and nonsensical camouflage.
Perhaps in two months from now money will be appropriated for annual drill, although I hope not, and the farmers will be sent to Petawawa when they should be on the farms, when the crops need the most attention and the weeds grow fastest. I know a man who had several horses and he took his sons and his horses to the camp. When he returned home he found that potato bugs had eaten up $200 worth of potatoes and he got enough of his medicine in taking his horses up there to earn some money. If they want to drill, let them drill in October. In my time the drilling was done in October and the boys had to hustle in order to keep warm. Militarism, I repeat, is something we do not want.
As the hon. member for Fort William was speaking this afternoon I wondered if there was any love of country in Canada. I wondered if there were nothing here to make us patriots. I wondered if our rivers were not long enough, broad enough, deep
10 p.m. enough, rough enough or placid enough, to make us love our country. I wondered if our broad prairies with all their fertility were not enough to make, us realize that we have a great country in which wre should live in happiness. I wondered if the lofty mountains were not high enough to make one visualize the greatness of this country. I wondered if all our great mineral wealth, our great lakes and our fisheries were not enough to make us love our country and be patriotic. I wondered if there was not enough in the great topography

of this country, the vast extent of 4,000 miles east and west and nearly 2,000 miles north and south, to make us love it and not sit in this House and cavil and fight for the old parties. I wondered, if all these things could not make us love our country, if we had not better take a walk around this great structure which has risen from the ashes of the great devastation of the last House. We should be proud of this great structure and proud because we have in Canada the institutions that we have. When we walk around this great structure we should look at some of the monuments of our forefathers, the statesmen of this country who have built and built well, who travelled the stormy seas when it took six to eight weeks to cross the Atlantic, in order to break t'he family compact that was ruling Quebec and Ontario at one time. After we walk around this building and visualize the statesmen who hewed out the destiny of this country and laid the foundation and laid it well, we should have some love of country. It would indeed be surprising if anyone could fail to take an enthusiastic interest in the progress of th'is young and growing country after carefully studying its traditions and its institutions- our churches, our educational establishments, our philanthropic organizations of one kind or another, our great and ever expanding industry. There is in Canada everything that can inspire one to the loftiest patriotism, and if Canadians will only appreciate their great heritage there is no reason why, remaining within the British Empire, this country should not become one of the greatest nations on earth.
As regards the budget, I gather from the headlines in the newspapers that gentlemen opposite intend to fight the thing to a finish until the dog days come. Let me assure the opposition that the people of Canada are absolutely in favour of the proposals of the Minister of Finance. Speaking for the thrifty people in the Eastern Townships from which I come, I can say that the income tax reductions have received a hearty welcome. Why Should we not retain in Canada people who, being too old to continue in active work, have yet enough to retire upon? There is no sense in taxing such people and making it impossible for them to live in this country.
In connection with the reduction in the duties on automobiles, there is no doubt that the sentiment of the Canadian people is overwhelmingly in support of the government. I dislike the automobile probably as much as anybody else does, and I can quite understand the attitude of people in the country towards those who have made themselves wealthy out of this industry. They say, "We

The Budget-Mr. Baldwin
can go across the line and buy an automobile for one-third less than we can get it in Canada. We can get gasoline in the United States for one-third less, and we can obtain all the necessary accessories at a third of the price we have to pay in this country. Under the circumstances, why should we be compelled to pay exorbitant prices merely in order to provide profits for the manufacturers?"
The complaints of the manufacturers are not sincere; they are just so much camouflage. Surely they do not need so much protection in view of the profits they have made. In the past decade it has not been an uncommon thing to read in the obituary notices names familiar to everyone as descriptive of certain types of car-the names of men who have died worth tens of millions of dollars. Has anyone any deep sympathy with these people? There appears in the Montreal Herald to-day a cartoon which is really appropriate to the ipresent situation. There is a ponderous gentleman with a corporation of extraordinary proportions and beside him there is a figure supposed to represent the Minister of Finance who proposes to reduce his avoirdupois. I for one think that Henry Ford should be made to disgorge some of the wealth which he has accumulated through the oppressive measures that have been adopted by his organizations representing his business. I have known more than twenty men who have been ruined through acting as agents for the Ford corporation. These men sign contracts with the company and when cars are shipped and delivery is not taken, the agents are obliged to pay the demurrage. The only garage man I know of who is worth a 'lot of money has worked from sixteen to twenty hours a day and he has never signed any agreement with any company to sell cars. He finds people who, having mortgaged their homes or their farms to get cars, are unable to meet their payments, and he buys those cars for a fraction of what they were worth originally. He holds them for a little while and then disposes of them at a profit. Invariably the automobile organization is heartless. I do not say that Henry Ford is aware of everything that goes on, but certainly the organization that Represent him have been a curse to the country. There are thousands of vacant farm houses in the United States and Canada, the owners having failed to pay for the cars after mortgaging their places to get them. The trouble with people nowadays is that they are not satisfied unless they can make a great display. Long ago the farmer never thought of selling his buggy because it was old; he got it repainted or revamished.
To-day, on the contrary, when a man's car becomes a little shabby he immediately disposes of it and gets something more pretentious.
I notice that the hon. member for Fort William, as well as the leader of the opposition, has left the chamber. These gentlemen probably suspected that I had something to say to them, and so dleared *out. The hon. member who spoke for the Conservative party this afternoon indulged in a good deal of adverse criticism of the government. But what are the facts? When this government came into power our dollar was worth only eighty-three to eighty-five cents, whereas it has been at a premium practically half the time during the past eight months. This is due to the fact that as a result of proper administration the trade of the country has expanded. With the favoured nation agreements which we have entered into with certain countries, our export trade has advanced by leaps and bounds, and the country has every reason to be gratified. In view of this fact, the criticism of the hon. member for Fort William this afternoon came, I thought, with very poor grace. I do not want to make any speech of the boomerang type. The Australian boomerang is said to return to the one who throws it, and in like manner unfair criticism is apt to recoil upon the critic. I am bound to say, however, that it is a matter for great satisfaction to the government that no one has been able to point to any scandal during its administration. There has been no black sheep in the family on this side, and the government is possessed of brains enough to run the business of this country to the satisfaction of the people. The Liberal .party has never been governed iby the crack of the whip. We are free thinkers.
Some hon. MEMBERS. Oh, oh.


Willis Keith Baldwin: That is right. That is
the proper thing, so long as we think tfie administration of the country is what it should be. A party that servilely obeys the crack of its leader's whip is a party of slaves, and t'he Liberal party has never come within that category. Democracy will not tolerate it, and we will not tolerate it. For that reason, to-night I stand in defence of this budget. What has the merger done for Canada? The merger has gone out and bought up all the little factories, be they woollen mills, flour mills, iron foundries, or carriage factories, and amalgamated them into big organizations, but these have almost invariably failed because the merger did not take also the men of
The Budget-Mr. Messervy

genius who had founded and directed all those little local concerns throughout rural sections. That is the trouble with the merger of a lot of our industries. The merger fails 'because those behind it try to run the organization with a man in an office surrounded by a staff of stenographers.
Let our manufacturers wake up when they get up and 'they will find themselves able to withstand a lowering of the tariff. Indeed, they will be better fitted to carry on their business. One of the worst features of this country is that we are apeimg the habits of the United States. I hope my hon. friends opposite will take their medicine hereafter, whether bitter or sweet, with a smile. Let us do the business of this parliament without unnecessary delay and get out of here at least in the month of June.


Mr. J. A. MESSERVY (Queens):: Mr. Speaker, being a new member, I wish to congratulate you, sir, upon the high office to which both sides of this House have unanimously appointed you. You are courteous and kind, possess the best possible judgment, and are absolutely fair and impartial in your decisions.
I have, sir, the honour to represent Queens county in the province of Prince Edward Island. As my time has been entirely devoted to business I am unaccustomed to public speaking, but on behalf of the Conservative party I will endeavour to contribute what I can to the discussion of the various matters that enter into the public affairs of our country.
Let us look at the map of Canada, Mr. Speaker. Our country is divided by natural barriers into four parts. First, British Columbia, separated from the prairie provinces by the Rocky mountains. Second, the prairie provinces separated from the settled parts of Ontario by a large tract of rocky country in New Ontario. Third, the central provinces, nearly cut off from the Maritimes by the northern part of the state of Maine; and fourth, the Maritimes.
Now, Mr. Speaker, we may as well face the fact that there are certain difficulties in preserving the unity of all these parts, owing to long rail hauls through sparsely settled districts. The tendency, apart from nationalistic considerations, as has often been pointed out before, would be for each of these parts to trade with that portion of the United States directly south of it. And if we are to preserve Canada as a nation this tendency must be combated. It is no use complaining for instance, of railway deficits. We must of course run our National railway as economic-
ally as possible; but in doing this all services should be adjusted with the consideration first and foremost in our minds that Canadian ports, Canadian farms and Canadian industries are not to be suffered to languish, sicken and die, simply because, in the view of some shortsighted people, it is more economical to make use of United States ports, farm products or industries.
The unity of Canada is very ill served by starving one part into a state of discontent for paltry economic reasons. And, sir, this is the state of the Maritimes. In contrast with other parts of this Dominion they are actually losing in population. In view of this, it is nothing less than a disgrace that in winter and summer our grain is being shipped through Portland and other United States ports instead of through Halifax and St. John. Furthermore, there is need of considerable adjustment in the rates on coal between the Nova Scotia coal fields and central Canada. And we in Prince Edward Island would like to find a market for our potatoes in Ontario and Quebec. As it is, most of them go south even in the face of considerable duty.
Now, Mr. Speaker, I will consider in further detail these matters and other matters vitally affecting our welfare.- I am much interested in the question of Maritime rights and stand shoulder to shoulder with my Maritime friends in advocating the rights of Nova Scotia, New Brunswick and Prince Edward Island. The three have a combined area of less than 52,000 square miles and a population of about one million people. We have one forty-fifth of the area and one-ninth of the population of all Canada. We average twenty persons to the square mile, while the average of the other six provinces combined is four persons to the square mile. So, Sir, you can see that the Maritime provinces are an important unit in the Canadian confederation. The building up of a still greater Canada depends in a large measure on the development of the Maritime ports for commercial purposes.
Halifax has the best port in North America, and during the war it was used extensively for the moving of troops and exporting of foodstuffs to England. It has splendid docking facilities and a large grain elevator. It is a crime to pass this port for the shipping of grain for any port in the United States. It is the duty of the government to make it possible for shippers to use this port without loss to themselves. It is contended that the distance to Halifax is greater than to Portland, and other United States ports, and that freights are higher to Liverpool via Halifax than via United States ports. The Maritimes

The Budget-Mr. Messervy
claim it as a right that all Canada should help to lighten this burden for the building up of an all-C'anadian trade as well as to increase the prosperity of the Maritimes.
We have a splendid graded road of railway built on Canadian soil. The Canadian Pacific Railway and the Canadian National Railways have each a fleet of up-to-date steamers at their disposal. There is no valid reason why Halifax should not with St. John have a large wheat trade with Great Britain during the winter and summer.
Another matter that the Nova Scotia members should strive for is the making of Halifax a port of call for the largest and fastest steamers afloat, such as the Olympic and Mauretania, sailing between England and New York, and have them land, both on their inward and their outward voyages, passengers and mails during the winter and summer.
St. John is another port of great value to Canada. This port has the Canadian Pacific steamers calling during the winter months, and all the influence of the board of trade, the local government and city council, together with any other influence they can bring to bear, along with the influence of their members at Ottawa, should be used to get for the port of St. John her fair share of business. If the United States shipments of wheat were shut out, there would be sufficient quantities both in winter and summer to keep these ports busy as well as Montreal.
The coal company in Cape Breton is depending on increased sale of their coal in the provinces of Quebec and Ontario. Mr. Speaker, I wish to call the attention of this House to the immediate necessity of the coal company erecting coal plants at Montreal, Toronto, Windsor, Fort William and other centres for the storage of coal, the installing of coke ovens, and, if necessary, the manufacture of by-products from the coal. During the summer months the coal company can rush large steamer cargoes of coal to Montreal. Smaller steamers and barges can carry cargoes of coal from Montreal as far west as Fort William. Large quantities of coal can be stored by the aid of cheap water rates, which will enable the coal company to compete and perhaps undersell the American companies to the manufacturing concerns in Canada, while the coke can be used for household purposes in Ontario and Quebec. To do this business, the coal company must have live, pushing, determined agents, and in this way I feel sure immense quantities of coal can be disposed of.	_	,
I would also urge, in connection with the operation of the West India treaty, the erection
of a canning and preserving plant in the Maritime provinces, because the West Indies require large quantities of canned goods, such as fish, peas, beans, potatoes, in fact, all kinds of vegetables, as well as fruit, berries, meats, soups, condensed milk and all kinds of poultry, also pickles. The farmers and fishermen of Prince Edward Island would benefit from the establishment of such a plant for they could ship to it large quantities of vegetables and fruit. It would in that way open up a new avenue of trade for us and be a great boon to our Maritime provinces.
At the time when Prince Edward Island entered confederation in 1873, we borrowed from the Dominion government 13,400,000 to pay for the railway which we had built. Adding interest at five per cent to this amount brings the total cost of this railway to date to $5,610,000. I do not think that any other province has had to pay for its railway accommodation in this manner. All have been provided for out of the general fund, and it is evident that we are entitled to be reimbursed for this $5,610,000. As one representative of the province of Prince Edward Island, I ask the government and parliament now for a refund of this amount, and I feel sure that the justice of our claim will be recognized.
The exodus from Prince Edward Island during the past three decades has reduced its population by upwards of twenty thousand people. Many of the youth of the island have left their native province to locate in western Canada and the United States. Those who go to western Canada are assisting in building up our great Dominion, and we offer no regrets for their loss, but when they leave us to locate under a foreign flag we feel the loss keenly.
We also want another car ferry steamer, and it should be an oil burner. Forty years ago, and previously, all our imports and exports had to be handled within the six months of comparatively mild weather. This was a necessity which business well understood and accommodated itself to. For a period of thirty years we had a winter service by means of ice breaking steamers running between Georgetown and Pietou, whereby not only mails and passengers, but a certain amount of freight, were transported, and during the latter twenty years of this period there were two winter steamers on this route.
With the advent of the car ferry service at the Capes, the whole export and import trade of the island has taken on a radical change. The import trade is now carried on in the winter pretty much as in the summer. The retail merchants and coal dealers no longer
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find it necessary to lay in, in the summer and autumn, goods and supplies sufficient to do them till the following spring, for the car ferry steamer is kept busy all winter for almost six months in carrying the imports required for the business of the province. No coal or such kind of goods was ever imported on the winter steamers between Pictou and Georgetown. The export trade has also largely increased during the winter months, and will doubtless continue to increase with the coming years. The present service is of great advantage not only to business men, but to the farmers. While it enables the merchants to stock up with goods only as they require them, it also makes it possible for the farmers to export in the winter with almost as great a facility as in the summer. In this way both are benefited, the merchant in having less interest to pay than when he had to carry six months' supplies in goods, with the added advantage of being able to keep his store trim and attractive with supplies of fresh goods as needed, and the farmer in being able to sell his products in a strong market, thus the better enabling him not only to pay his bills to the merchant, but to buy more goods at his store. This is a state of things I wish to see continued, and not broken in upon by any want of attention on the part of this Parliament.
At present there is only one steamer available for service at the Capes. It i3 twelve years since she was built. Twelve years service has demonstrated improvements in construction which can be made in the building of a new steamer. The continuous and persistent fighting for years of heavy ice between the Capes must have done much to weaken and impair the present boat. If by any misfortune anything should happen to disable her during the winter season from performing the service for a fortnight, or even for a week the dislocation of business and the consequent loss, damage and inconvenience to a whole province would be difficult to estimate. Not only so, but to a people so dependent on imported coal it would entail great suffering, and it is therefore well to look ahead and take means to ensure against such a calamity.
Prince Edward Island is one of the most beautiful places in the world during the summer time. We have a splendid climate and lovely pastoral scenery. Once a tourist comes to Prince Edward Island he wants to come again, that i3, if he is not scared away by the difficulties and discomforts of the trip. If he comes by train he must leave his Pullman car at Sackville, change trains there, change again to get on the ship and again on leaving her. Now all this is very inconvenient and

unpleasant, especially for women with much luggage and possibly young children. In summer at least we are entitled to a through sleeping car operated from Boston or Montreal to Charlottetown, and the day coaches also should be taken over in the steamer, but as it seems that the steamer cannot handle these cars and at the same time bring over all the freight, this cannot be done at present. Our people are greatly interested in the great benefit to be derived from the cultivation and expansion of the tourist trade, and we have made substantial outlay in connection therewith. There is much in the construction and equipment of the present boat, and in the rail approaches thereto, to annoy and hamper that trade. Every motor car that goes to and from the island has to be loaded on a flat railway car and then hauled into the boat by means of an engine. If the driver of an automobile wishes to cross he must be at the station at Borden or Tormentine at least half an hour before the boat sails, and when he crosses he is kept in the boat usually for another half hour before the car can be hauled out in the same manner in which it came in. These restrictions are very annoying, and call for redress. A new boat so constructed as to permit autos to be driven by their own power on and off the vessel would be a great convenience, and would contribute powerfully to the success of the efforts of those of our people who are labouring so faithfully to interest tourists in our splendid climate, our charming scenery and our unsurpassed sea bathing. With great confidence I ask the government to place a sum in the supplementary estimates for the building of a new boat, which the other representative for Queens (iMr. Jenkins) has also asked for. Such a vessel is certainly needed. Furthermore,, as all hon. members well know, it will provide efficient communication between the island and the mainland, which is one of the terms of union on which Prince Edward Island entered the 'Canadian confederation.
Now, as to the products of Prince Edward Island. Last year the "million acre farm" yielded well, and the province fully maintained its reputation in the matter of farm products owing to the very large export of potatoes, including not only the seed stock, for which we are becoming justly famed abroad, but also tubers for the table. It is estimated that, about 1,500,000 bushels, valued at $1,875,000, were-shipped, including 350,000 bushels shipped through the Potato Growers' Association. The railroad had all it could do to handle

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the immense crop. A large number of shipments were also made from Charlottetown by steamer. Fortunately the mild weather prevented any damage being done by frost. I have here a statement furnished by the Department of Agriculture which will be of
interest as showing the acreage, yield and prices of the island's principal field crops. I will not take up time by reading the statement but with the permission of the House I should like to have it placed on Hansard. The statement is as follows:
Agricultural Products
-	Acreage	Yield	Price Bush.	Value30,835	641,000 bush.	$ cts. 1 50	8 cts. 961,500 00168,727	5,771,000 bush.	0 45	2,596,950 004,663	136,000 bush.	0 90	122,400 002,496	68.000 bush.	1 00	68,000 0022,497	934,000 bush.	0 GO	560,400 0034,101	5,907,675 bush.	1 25	7,459,593 759,692	5,815,200 bush.	0 15	872,280 00249,423	374,134 tons.	10 00	3,741,340 00
16,382,463 75
Dairy Products and Eggs
Cheese
Butter.
Eggs..:
2.000.	000 lbs. 1,800,000 lbs.
4.000.	000 doz.
21c.lb. 39c.lb. 28c. doz.
S cts.
420.000	00
702.000	00 1,250,000 00
Total.
2,642,000 00
The above figures show that the total value of field crops, dairy products and eggs was $19,024,463.75. It was a good year for dairying, and a gratifying feature was the improvement in quality of the output, due in a large measure to the carrying out of grading regulations. The export of animals and animal products was also large, and the prices were higher than the previous year.
The value of the harvest of the sea was nearly $400,000 greater than that of 1924, as shown by a statement furnished by Fisheries Inspector Gallant. I should like this statement also to go on Hansard. It is as follows:
Quantity ancl Value of Fish caught in the Province of Prince Edward Island for the Year 1925
Kinds of Fish	Quantity	Value
	12,771 cwt.	S 114,939
	5,250 bbl.	52,250
		77,259
		24,808
Cod 		58,445 cwt.	116.890
		22,021
		1,936
	1,531 bbl.	1.531
	40 cwt.	320
	1,202 cwt.	3,606
	90 cwt.	1.8Q0
	84 cwt.	168
	37 bbl.	81
		4,875
		953,756
	16,573 cwt.	189,742
		
		1,518,982
		
An industry that we pride ourselves upon, and one which was started in Prince Edward Island, is the silver fox industry. Now, if we send a pelt to the United States we are charged a duty of 50 per cent, which means in the case of a pelt worth $300 a duty of $150. The United States are also engaged in breeding foxes, but while they dharge us a duty of 50 per cent they send pelts into our Canadian markets duty free. The inevitable result will be that they will surely capture those markets from us unless proper safeguards are adopted in Canada. At the Royal Winter Fair in Toronto foxes from Prince Edward Island, as usual, carried off all the prizes.
Now I come to deal with the question of freight rates. A great deal has been said about t'he unfair division of freight rates. I will give an illustration of how that works out. Oats and potatoes are among the chief articles raised in Prince Edward Island. If a shipper sends a carload of oats from Fort William to Sydney, a distance of 1,876 miles, he pays a freight rate of 62 cents per 100 pounds. To ship a carload of oats from Fort William to Halifax, a distance of 1,723 miles, costs 57 cents per 100 pounds. On the other hand the freight rate from Tignish, the most westerly point of Prince Edward Island, to Sydney, a distance of 436 miles, is 36i cents per 100 pounds; and from Tignish to Halifax, a distance of 294 miles, the freight rate is 30
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cents per 100 pounds. As to export rates, the following will serve as an illustration:	A
shipper at Fort William sending products to Halifax intended for Newfoundland, the West Indies or Great Britain, enjoys a rate of 34 cents per 100 pounds. On the other hand on a shipment from Tignish to Halifax a freight rate of 30 cents per 100 pounds is charged, a notable discrimination in favour of the Fort William shipper.
The House can see the disadvantage under which Prince Edward Island labours. It will be apparent to any person how unfairly we are treated. This freight rate question must be settled on a more satisfactory basis if the Maritime provinces are to receive that measure of fair play to which they are justly entitled. I may point out that at the annual meeting of the Charlottetown Board of Trade it was stated that after much agitation throughout the Maritime provinces on this matter, Mr. S. C. Cornell had been engaged by the three lower provinces to investigate freight rates and questions relating to Maritime interests. This gentleman has already unearthed a good many difficulties which militate against Maritime prosperity. For example, the discovery was made very recently of a freight charge on potatoes extending a more favourable charge to southwestern Ontario than to Prince Edward Island. A submission has been made in this regard which has resulted in a partial remedy of the trouble. I am not going to enter into figures, because figures cannot be retained in the mind and they are subject to change from day to day. Let me impress upon the House, however, that the question of freight rates is a vital one in the province from which I come.
Dealing with the question of transportation, the Charlottetown Board of Trade enumerates the following amongst the needs of Prince Edward Island:
1.	The need of a second car ferry.
2.	The need of a longer continuation of the double mail and passenger service from and to the mainland.
3.	The need of a better local passenger service.
4.	The need of more railway yard room to handle the increasing export freight, at the time of the heavy movement of crops in the autumn.
5.	The need of a safe deep water terminus with better frost proof warehouse accommodation.
6.	The need of complete widening of the gauge of the railway of Price Edward Island.
7.	An improvement in the accommodation for transfer at Borden and Tormentine.
It is the conviction of many members of the board in question, particularly those who have been actively engaged on the time table and transportation committees, that the lately perfected Diesel electric passenger coaches

would go a long way towards solving our local passenger difficulties. It would seem to be obvious that so long as much of our local service is given by mixed freight and passenger trains, no really satisfactory service can be looked for. The introduction of Diesel electric cars would make it possible to separate freight and passenger trains and fnr each to give better service.
Although I am opposed to the government yet I must say that the establishment of a disease-free area in Prince Edward Island has met with general approval, and will no doubt accomplish much good. It is estimated that we have about 100,000 cattle in Prince Edward Island. About 55,000 of these are milkers; the others are young and beef cattle. Naturally in view of the favourable condition in which we are now placed these figures will tend to show an increase in the years immediately to come. We are proud that in this matter, as in several others, our province leads the rest of the Dominion in having become throughout its entire extent a disease-free area. The result of this splendid movement has been, of course, to promote a greatly increased demand for cattle from this area, a demand which we are not >ie>t able to meet. It is hoped that within a reasonable time our people will be able to realize on this demand and thus establish another permanent and splendid market for our products.
While referring to some of the many matters Which are of particular interest to our people, and which I feel it my duty to place before this House, I would like to point out that some months ago an American syndicate commenced experimenting by boring for oil on Governor's Island, situated a short distance from the mouth of the harbour leading into Charlottetown. The borings on that island, which is about one mile long and three quarters wide, have reached a depth of about 1,300 feet or more. Already there has been an outlay of about 1250,000 and it is estimated that a total of S300.000 will be expended. This provides employment for labour. It is quite a novelty in our province; and should the promoters strike oil there is no telling what a vast benefit there will be not only to Prince Edward Island but to the Maritimes provinces generally.
It will be of vital importance to the farming and fishing industry of Prince Edward Island, if one of our government merchant marines freight steamers with cold storage accommodation should make Charlottetown a port of call on the way to Great Britain. A splendid business could be worked up with sheep,

The Budget-Mr. Messervy
cattle, butter, cheese, eggs, hay, oats, lobsters, bacon and live hogs for the British market. The steamers now pass outside of Prince Edward Island; by going around the west end of the island to Charlottetown they would not be more than thirty miles out of the course that they take to Great Britain.
I would also request that merchants be not asked to guarantee space, but that it be advertised that a steamer will call at this port for Great Britain, say every two weeks going and coming. Our merchants can then send their travellers through the British Isles and work up business. At first one steamer could go to Liverpool, the next trip could be to Glasgow and the next to London, which would give them the choice of these three large markets, Manchester might be one of the ports, which is a very large market. This service would be of immense value for the farmers of Prince Edward Island, as they cannot compete now with the railway freight rates by sending their goods to Halifax, St. John or Montreal for shipment to Great Britain. Charlottetown is the capital of the province, and is entitled to this direct service. With the steamship service to Pictou, Nova Scotia, Magdalen Islands, Newfoundland, Sydney and Halifax, and with a direct steamer for Great Britain and the West Indies, Charlottetown will become quite an important port..
The bringing of steamers to Charlottetown would enable our longshoremen, labourers and truckmen to find work, and they want it badly. We have a splendid body of men forming our longshoremen's associations or unions. They work night and day, rain or shine, and deserve every encouragement. There is a steamship line now operating between Charlottetown and Pictou, and this gives a very valuable connection between Prince Edward Island and Nova Scotia, Large amounts of freight have been moved by this line. We also have another steamship coming from Pictou, calling at Charlottetown, Souris and the Magdalen Islands, and this service is an excellent one, I think the best that has ever been provided. A first class steamer is on this route and makes regular trips during the summer months. We would like another steamship connection between Gaspe, Charlottetown, Summerside, Souris, Magdalen Islands and the Sydneys. This would be a very valuable connection to us because the steamer could bring coal on her return trip landing either at Magdalen Islands, Charlottetown, Summerside or Gaspe. I think a very profitable business could be worked up, and I would especially call Mr. Speaker's attention to this new service because he represents Gaspe and Magdalen Islands,.
I wish to mention some improvements that I would suggest in connection with the railway on Prince Edward Island. The Diesel electric line should be built, starting from Charlottetown, connecting with Tracadie, running along the shore to Brackley Beach, thence to Rustico, thence to Malpecque and into Kensington, connecting with the main line there. This would give splendid accommodation to our farmers at the outlying districts, and be of immense value to our fishermen at Rustico and all along the north side of the island-and I must point out to you that Rustico is one of the most valuable fishing grounds in Prince Edward Island. It would assist our fishermen to ship their fish by express quickly to the large cities, and would help them to build up this industry. A railway running along the shores of Richmond Bay between Malpecque and Kensington would tap immensely rich deposits of the finest mussel mud, which is a splendid fertilizer and is always in great demand among our farmers. There would be a splendid freight traffic over this line and worked, as it would be, by tihe Diesel electric locomotives, the operating cost would be very small. The line could be further extended along the south shore of the island from Borden to Charlottetown, thus supplying the farmers in this district with excellent fertilizer and bringing a valuable freight traffic as well.
I would strongly urge that the new railway shops that it is proposed to build at Charlottetown should be larger thaq the present ones. -We want to do more repair work on the cars-painting, woodwork, mechanical repairs and the like; we want more men employed there and fewer cars sent over to Moncton to be repaired. This work can be done as well as, if not better, art Charlottetown than anywhere else. We have the very best workmen there. In 1921 some of the Liberal candidates on the hustings promised that the railway shops would become a beehive of industry and would assist labour of all kinds, but the reverse has taken place. Our men have been discharged and work has been curtailed.
We also want our superintendent to have greater authority in purchasing and matters of that kind, and to be given full powers in every respect regarding the operation of the line from 'Sackville throughout the whole of Prince Edward Island. He has splendid ability and can do this as well as anyone. Moncton has entirely too much to say in the management of our Prince Edward Island railway.
I wish to urge the necessity of more yard room for docking and shipping facilities at the

265S

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railway wharf in Charlottetown, and the enlargement of the frost-proof warehouse there; it is entirely too small. I understand the wharf has been condemned; steps should be taken at once to have it repaired. The road bed from Charlottetown to Souris and Georgetown, I understand, is ready for the widening of the gauge and this should be done the first thing in the spring, as our people are clamouring for the completion of the wide gauge railway on Prince Edward Island. Another important branch should have the gauge widened, namely, from Charlottetown to Murray Harbour. The present line goes through a splendid settlement, and it is only a narrow gauge railway.
In speaking of frost-proof warehouse accommodation at Charlottetown I would also recommend that you put a frost-proof warehouse at 'Souris, Georgetown, Borden and Summerside for this reason: in winter time, during the month of January, the whole of February and part of March, snow storms block the country roads and our railways for days, keeping our farmers from hauling their potatoes, especially in frosty weather. In the fall when they are taking potatoes from the ground they can store them in these frostproof warehouses, so that refrigerator or heated cars can be despatched during the winter mouths. The price obtained would then give splendid profit, thereby benefiting the people of Prince Edward Island and furnishing freight for the road when times are dull. I would earnestly urge upon the railway authorities to have the road bed well ballasted all over the island railway.
Our fishing industry is good. We have taken out of the waters this year about $1,500,000 worth, and we could quite easily make it $5,000,000 worth. We must remember that the people on the south side of Nova Scotia living near Lunenburg and La Have operate in fishing schooners in the spring of the year around our island, and then later on the Grand Banks. We can do the same. We could get together a fleet of vessels, place our products on the markets of the Mediterranean and South America, and work up a splendid business. An increase of our fishing operations would be of immense value to Prince Edward Island, giving employment to every kind of labour in connection with the building and fitting of vessels, and the curing and shipping of fish.
It is necessary, in order that all the available ports in Prince Edward Inland, may be utilized, to keep the harbours and rivers on the north and south shores of the island well dredged. The water accommodation thus

provided would give lower freight rates for the shipment of produce and the receiving of coal and lumber, our small vessels being enabled to enter and leave these harbours and rivers without grounding. Small harbours can also be dredged for fishing boats so as to allow our fishermen to prosecute the fishing industry more successfully. I would urge the Public Works department to place one dredge on the north side and the other on the south side of the island so that this work can be done quickly.
I	plead for lower freight rates for merchants along the line of railway who have to ship by cars all the year round from the several stations. Our ports are well located and we cannot complain about the water freight rates in summer, but for about five months of the year Prince Edward Island has very serious ground for complaint as to the high railway freight rates that prevail in the winter months, when we must ship and receive all goods by rail. *
The United States tariff, in my opinion, operates against the farmers of Prince Edward Island. This has been fully discussed, and I need not say very much about it now. The following statement will show the comparative rates of duty on certain articles between the United States and Canada :
Articles	To the U.S. from Canada	To Canada from the U.S.Eg&s	8c. per doz.	3c. per doz.Batter	12c. per lb.	4c. per lb.Cheese	5c. per lb.	3c. per lb.Wool	100%	271%Vv heat	4ic. per bush.	12c. per bush.Flour in bbls	$2.04 per bbl.	50c. per bbl.Potatoes	50c. per 100 lbs.	35c. per 100 lbs..Hay	S4 per ton	$2 per tonFox pelts	50%	Free
I do hope that all hon. members on both-sides of the House of Commons will treat the-matter in a non-partisan light and charge the United States the same duties on the same kind of articles, especially farm products, as they exact from us. Is not this fair and equitable treatment from every angle and every point of view that you may argue?
I quote the following just to show the quick action of Canada in 1872. In 1872 Sir Francis Hincks, Minister of Finance in Canada, took off the 10 per cent duty on tea imported into Canada. In the same year the United States people put on a duty of 10 per cent on tea that was imported from countries west of the cape of Good Hope, and this 10 per cent special tea tax was charged on all tea exported by the way of Canada to the United

The Budget-Mr. Alesservy
States. Sir Francis Hincks immediately passed an act in the same session imposing a duty of 10 per cent on all tea coming from the United States. This act preserved to Canada its own tea trade and we enjoyed all its advantages. I understand that at the time the duty was fixed on eggs at three cents per dozen, the average price of eggs was fifteen cents per dozen which tax was figured at twenty per cent. But now that the price of eggs is forty cents per dozen, twenty per cent duty would be eight cents per dozen, which would be the same as the United States is charging us.
The West India treaty will be a good one for Canada and it should be given a fair trial. I have visited most of these islands several times and I know some of their requirements. The Maritime provinces should benefit by this treaty, especially Prince Edward Island, as many of our farm products and fish are wanted there. I want to impress upon the government the great necessity of having a steamer with cold storage accommodation call at Charlottetown going and coming from Montreal. There is a good market here for molasses from the West Indies, and we can give this steamer all kinds of produce: oats, potatoes, eggs, butter, cheese, cattle, horses and fish for the West Indies and Cuban market. Without the calling of this direct steamer the markets will be of very little use to us because railway freights are so high to Halifax, St. John and Montreal.
We all know that raw material is practically the advertisement for our vast Dominion to immigrants from abroad. An immense supply of timber, pulpwood, nickel, asbestos, minerals and such like draws the people here. We do not want our raw material to be shipped out of this Dominion, we want it here, and manufactured here. We want to feed the workers in the factories from the farms. Our raw material , is a guarantee for our debt and bonds which we have afloat and so on no account should it be allowed to leave this country. It may take a little time for us to give sufficient notice to people who have been trading in raw material with the United States, but the only true way to save Canada and help to pay off her debt is to prohibit the export of our raw material and manufacture it here. Let United States people who wish to make use of our raw materials in manufacturing come over here, and employ our Canadiain workmen in their factories in Canada instead of manufacturing our raw material in the United States.
I remember in 1897 being in Great Britain, and to show hon. members how anxious the Canadian Pacific railway was in soliciting im-
14011-1&&J
migrants for Canada, I was met in Bristol, London and Liverpool and presented with advertising matter regarding Canada: "One of the greatest countries in the world; all it needed was men. Are you going there?" I told them I was living in Canada. I remember I was canvassed publicly in that way on the streets. We should be determined at all times to have our agents in Great Britain, France, Norway. Sweden, Holland and Denmark do this persistent kind of canvassing. We will never succeed unless we push it quickly and firmly; quick action is necessary. Certainly our own Canadian people are the best, and every effort should be made to keep them at home because they are educated to our conditions; next to them come immigrants from the British Isles and France, then the Danes, Hollanders, Swedes and Norwegians. We rely upon the fairness and justice of our immigration agent in Great Britain to send us our fair share of immigrants, farmers, fishermen and capitalists, suitable to Prince Edward Island.
With regard to protection as an aid to Canadian farmers, I will quote in part what President Coolidge says about protection as an aid to the United States farmers:
Protection is a great benefit to agriculture as a whole. The $780,000,000 of agricultural produce imported lost year had to pay $260,000,000 for the privilege of coming in to compete with our own farm production. Protection greatly aids diversification and so eliminates an unprofitable surplus. Any study of dairy products, flax, wool and many other commodities will demonstrate that it does.
In aiding industry the present tariff helps agriculture because prosperity in our industries is of more value to the farmer than the whole export market for food stuffs.	,
I strongly support the policy of protection for farmers, manufacturers, merchants and fishermen. This was the clear-cut policy inaugurated in 187S by Sir John A. Macdonald, and the principle remains the same If we wish this great Canada of ours to be powerful and to get the large population she should have, we must adhere strictly to the policy of protection. Protection will bring immigrants to our shores and it will increase labour and instil confidence in our manufacturers.
We have many returned soldiers in Prince Edward Island and I wish now to speak for these as well as for the veterans in all parts of Canada. I ask hon. gentlemen to remember that while these men, our fellow Canadians, were suffering, bleeding, dying in the muddy fields of France and Flanders, the rest of us at home here were turning over inflated dividends or making big wages in war work, and every now and then we read of some veteran, too proud to beg and unable to

The Budget-Mr. Messervy
get work, who has decided to end it all by putting a bullet through his head! A charming spectacle this, is it not? We will not employ battle-scarred veterans because they are lazy and dissolute; our Board of Pension Commissioners sees to it that no man gets more than can be helped. What a praiseworthy example of economy in the public service! What, think you, would be your annual tribute to Germany to-day if these men had not won the war for us? A little more, I venture to say, than those pensions meted out with the greatest precaution taken to see that every hero gets not a cent more than is coming to him.
Such practice in dealing with our returned soldiers should come to an end; in fact it never should have existed at all. If a man has been taken on the strength of a unit and served overseas, and it is found on discharge that through illness or incapacity his earning power is diminished, he should be in receipt of a pension. Furthermore, it is up to every employer to give returned men the preference every time and, if necessary, legislation should be put into effect to make sure that every returned veteran has employment suited to his ability.
As for the "shiftlessness" and "drunkenness" of some of these men who have fought and bled for us there are few indeed who have come through four years of hell without scars of the spirit as well as of the body. I demand then, Sir, in the name of those who have fought and bled, in the name of those who have fallen, and in the name of the honour and decency of this Dominion, that no returned soldier, his wife or his family shall ever hereafter be allowed on any pretext whatever to want for food, clothes or home, or any of the common necessities or decencies of life.
In concluding, then, I wish first to appeal to our horn, friends from the great west sitting on this side of the House with us. Their honesty and integrity are unquestioned by all, and I am sure that all their actions here are guided by the larger interest of Canada, as they see it. To these hon. gentlemen I would submit that we do not come from Prince Edward Island, the little sister of the Dominion, and from the other provinces by the sea, as beggars imploring favours, but as equals asking for our rights. I am sure the hon. gentlemen from the other provinces see that we in the Maritimes could, from the nature of the case, have no share in the apportionment of the crown lands and territories. These Sir, rich as they are in farm lands, lumber, pulpwood and minerals, are

part of our heritage as well as theirs. Can they then grudge us the help we so sorely need? I feel sure they will not. And I appeal secondly to the hon. gentlemen opposite me, especially to our friends from Quebec. They have always stood out solidly for a vigorous Canadian nationalism. They know, Sir, that hurt to one of its members is an injury to the whole body. I am sure they would not wish to see the whole fabric of our country damaged by the neglect and starvation of its Maritime members. We depend upon the support and help of hon. members of the House of Commons.
I thank you, Mr. Speaker, for your kind, courteous and considerate attention.
On motion of Mr. Marcil the debate was adjourned.



ADJOURNMENT-BUSINESS OF THE HOUSE

[Stage Direction]
Mr. Mackenzie King moved the adjournment of the House.
Sir GEORGE PERLEY:: In view of recent rumours in the press, may I ask whether any changes will be announced to-morrow in the budget proposals?


William Lyon Mackenzie King: That question is somewhat similar to one asked by the leader of the opposition (Mr. Meighen) last night. I am not aware of any changes, and I do not understand why the question should be asked.
Motion agreed to and the House adjourned at 11.05 p.m.
Wednesday, April 21, 1926.