1926-05-11

REPORT PRESENTED

[Stage Direction]
First report of the select standing committee on Standing Orders.-Mr. Morin (St. Hyacinthe-Rouville). -
Mr. MORIN (St. Hyacinthe-Rouville) moved:: That the House do concur in the adoption of the first report of the select standing committee on Standing Orders presented this day.


[Stage Direction]
Motion agreed to.

Louis-Simon-René Morin: That the petition of the Commercial Mutual Fire Insurance Company of St. Hyacinthe, province of Quebec, presented this day, praying for an act to exercise throughout Canada the business of insurance against fire and lightning, and the report of the Clerk of Petitions thereon, be referred to the select standing committee on Standing Orders, pursuant to the provisions of rule 88.


[Stage Direction]
Motion agreed to.

Louis-Simon-René Morin: That in accordance with the recommendation contained in the first report of the select standing committee on Standing Orders, the petition of James McCutcheon Coleman, presented on May 5th, praying for an act to extend the time for the payment of fees on certain patents owned by him, be now read and received.


[Stage Direction]
Motion agreed to.

Mr. SPEAKER:: I have the honour to
inform the House that I have received the following letter:
Ottawa, May 10, 1926.
Sir,-I have the honour to inform you that the Right Hon. F. A. Anglin, acting as Deputy of His Excellency the Governor General, will proceed to the
Senate chamber on Wednesday the 12th instant, at 5 p.m. for the purpose of giving the royal assent to certain bills.
I have the honour to be, Sir,
Your obedient servant,
A. F. Slaben,
Governor General's Secretary.
To the Hon. the Speaker of the
House of Commons, Ottawa.



DUMPING DUTY-AUSTRALIAN BUTTER AND FRUIT

[Stage Direction]
On the Orders of the Day:
Hon. G. H. BOIVIN (Minister of Customs):: 
Sir HENRY DRAYTON:: I wonder if my hon. friend could tell us the date when the dumping duty of six cents became effective?


Georges Henri Boivin: I am under the impression
that all invoices for butter shipped after the 1st of January were received subject to amendment, and the dumping duty of six cents has been imposed since that date.


Mr. FRED DAVIS (East Calgary):: Are
we to understand that in the case of all

The Budget-Mr. Heenan
butter released on the basis of the payment of a duty of one cent a pound the dumping duty of six cents will be enforced?


Georges Henri Boivin: It depends on the date of the shipment.


Alfred (Fred) Davis: Take the case of shipments
made since January 1st.


Georges Henri Boivin: It will apply to all butter
which left Australia after the 1st of January .and for which entries were made subject to amendment.



STRIKE IN GREAT BRITAIN PROTECTION OF CANADIAN WHEAT

[Stage Direction]
On the Orders of the Day:
Mr. T. L. CHURCH (Toronto Northwest):: I desire to ask the government these questions :
1.	What steps are being taken by the government to safeguard Canadian wheat in view of the general British strike now continuing?
2.	As a matter of emergency has arisen will the government provide some measure of protection to our wheat by either financing it or affording some sort of guarantee as to prices?
3.	Has the government communicated with the banks, or the Canadian Bankers' Association, to come to the help of the grain dealers if the strike continues indefinitely, so that the farmers who grow wheat will not suffer?


Mr. MACKENZIE KING:: My hon. friend had better put his question on the order paper.


Hewitt Bostock: The question goes on the order paper.



THE BUDGET


[Stage Direction]
The House resumed from Monday, May 10, the debate on the motion of Hon. J. A. Robb (Minister of Finance), that the Speaker do now leave the chair for the House to go into committee of Ways and Means and the proposed amendment thereto of Hon. R. J. Manion.
Mr. PETER HEENAN (Kenora-Rainy River):: Mr. Speaker, as a new member I
had not intended to take part in this debate, but inasmuch as several statements have been made that are calculated to mislead the public, especially in connection with Ontario affairs'
I deem it my duty to say a few words in connection with the same.
But before going on to discuss Canadian affairs I ask that I be permitted to say a few words in connection with the trouble threatening the Old Country at the present time. I am sure, Mr. Speaker, that I express the views

of every member on both sides of this House when I say that I hope the clouds now hovering over Great Britain will soon be dispelled, and that a better understanding between the parties to this great conflict will soon be arrived at. In this regard I notice evidences of an inclination on the part of some people in Canada to attribute ulterior motives to both sides. There are a great many persons in Canada who have blood relations and dear friends in the old land who feel impelled to express their views on the question. I think upon reflection, however, we will all agree that heated argument upon this side of the Atlantic, especially at the present stage of affairs, will do very little good. I am sure it is the desire of everyone to abstain from any action which might be productive of harm and to do nothing which would delay the early conclusion of a settlement honourable to both sides. I have great faith in the ability of the British people to overcome difficulties no matter how grave they may be, and I sincerely hope that no words will be expressed on this side of the ocean other than words of encouragement and helpfulness in the expectation that both sides of the controversy may soon get together and settle the dispute in a way that will be mutually fair and honourable.
The hon. member for South Renfrew (Mr. Maloney) yesterday delivered what I may call a nice little speech.


Some hon. MEMBERS:: Hear, hear.


Peter Heenan: Yes, it was a nice little political speech, and I desire to congratulate the hon. member upon it. It was too bad, however, that the hon. gentleman had to bring in the labour trouble in Nova Scotia in order to make political capital. In bis effort to do that the hon. gentleman misinterpreted the whole situation as it existed there. I agree entirely with the hon. gentleman that there was no need to order troops into Nova Scotia on the occasion referred to. But seeing that troops were ordered there, the hon. gentleman should have truthfully stated how that came about. I think the hon. gentleman stated yesterday that this government had ordered the troops to be sent to Nova Scotia, and had instructed them to shoot. The hon. gentleman followed this up by stating that the soldiers did shoot and that bloodshed had followed. My information is that there was no shooting on the occasion in question and consequently no bloodshed. The Prime Minister and the Minister of the Interior both undertook to explain to the hon. gentleman who was responsible for the ordering out of the troops. May I now supplement what they said. The law specifically places the

The Budget-Mr. Heenan
responsibility of ordering out troops on the shoulders of the attorney general of each province. The act which deals with the matter is the Militia Act which was amended in 1924. Section 81 of that act reads as follows:
In any case where a riot or disturbance occurs, or is anticipated as likely to occur, the attorney general or the acting attorney general of the province in which is situated the place where such riot or disturbance occurs or is anticipated as likely to occur on his own motion or upon receiving notification from a judge of a superior or county or district court, having jurisdiction in such place, that the services of the active militia are required in aid of the civil power may by requisition in writing addressed to the district officer commanding the military district in which such place is situated, require the active militia or such portion thereof as the district officer commanding considers necessary, to be called out on active service in aid *of the civil power.
The next section, section 82, points out that if the district officer commanding a military [DOT]district is not present, or is unable to act from sickness or any other cause, the officer for the time being commanding shall call out the active militia. There is no discretion in the matter, the officer commanding is obligated to call out the militia when he receives a requisition from the attorney general.


Mr. QUINN:: Did not the Liberal government of Nova Scotia send a requisition to the Liberal government at Ottawa asking for troops to be sent to Cape Breton?


Some hon. MEMBERS:: Order.


Felix Patrick Quinn: I think I am in order. Am I not in order, Mr. Speaker?


The ACTING SPEAKER (Mr. Marcil):: The hon. member can only put a question with the consent of the hon. gentleman who has the floor.


Felix Patrick Quinn: I am asking the hon. member a question. Did the attorney general of the Liberal government of Nova Scotia not send a request to the federal government of Canada for troops, on which request the troops were sent into Sydney, N.S., and as a consequence blood was shed?


Peter Heenan: I thought the hon. member was listening to me and trying to follow me.


Felix Patrick Quinn: Yes, very attentively.


Peter Heenan: If he had been listening I would not have to repeat myself. However, it is a fair question. If the attorney genera] did send such a request, he did not know his business under the act.


Felix Patrick Quinn: That is an admission.
HOi 1-209


Peter Heenan: All he had to do was to make a requisition for troops from the district officer commanding, not the federal government, and if the Liberal government in Nova Scotia did requisition the Liberal government of Canada to send troops and the federal government sent them, I would be one of the first to condemn the government for doing so.


An hon. MEMBER:: Then condemn them.


Felix Patrick Quinn: That is what I said.


Peter Heenan: But they did not do it, and the records do not show that they did it. The attorney general-the Liberal attorney general of Nova Scotia, if you will-requisitioned troops from the district commanding officer, and he said-


Felix Patrick Quinn: The hon. member cannot
hide behind the act.


Mr. MACDONALD (Antigonish):: Since
the hon. member for Halifax (Mr. Quinn) knows so much about it, let me tell him that the troops went to Nova Scotia on the request of the district officer commanding, without any request from Ottawa at all, without our knowing they were there until they arrived.


Mr. ARTHURS:: How was it possible that the local troops in district No. 2, Toronto, should be transferred to Nova Scotia without the intervention of Ottawa?


Finlay MacDonald: Look up the act of 1024 and you will find that is the way in which it was done.


Peter Heenan: I desire to draw attention to the fact that the Minister of National Defence (Mr. Macdonald) is not making this speech, and. that I have no objection whatever to hon. gentlemen opposite asking me any questions they like.


Felix Patrick Quinn: I ask the hon. member
whether troops can be sent to any part of Canada without the authorization of the Department of National Defence.


Peter Heenan: Yes, according to law, I do not agree with the law; the law ought to be changed. I am going to appeal to the Minister of National Defence to introduce an amendment to provide that no troops can be sent anywhere except on the responsibility of the government. I will go further and say that if the calling out of the troops had anything to do with, or contributed in any way to the defeat of, the Liberal government of Nova Scotia, I consider they got their deserts. But the hon. member went

32S6

The Budget-Mr. Heenan
further. He said the troops were ordered out, that they were ordered to shoot and that they did shoot and kill. I cannot find any record of. any place where there was any shooting done or anyone killed; so that evidently the troops refused to comply with instructions. I think when the hon. member made his speech he got his wires crossed. I believe he was actually thinking of the strike of 1919 in Winnipeg, because I know that the troops were ordered there; the troops went in and they were ordered to shoot; they did shoot and did kill, and the Conservative government of the day, or the Union government which was the same thing, were responsible.


Mr. HEAPS:: We were told that the troops went in there without a request from the provincial government.


Peter Heenan: I understand they were
sent in without any request.


Abraham Albert Heaps: Does the hon. gentleman
know that in 1919 the troops went into the city of Winnipeg without the consent of the provincial government? I know that this government was a party to sending the troops in there.


Georges Henri Boivin: Not this government.


Henry Lumley Drayton: Does the hon.
gentleman make that statement of his own knowledge? I will tell him that there were no troops used in the Winnipeg strike. There were forty-nine mounted policemen there and no troops at all.


Peter Heenan: If the hon. member makes that statement of his own knowledge why did his party object to the papers in that connection to be laid before the House?


Henry Lumley Drayton: I am putting
the hon. member right, troops were not sent in.


Peter Heenan: I do not know if they
were troops or not, they were red coats and and they shot and killed.


Henry Lumley Drayton: Forty-nine
nounted policemen.


Peter Heenan: And the people who were .rilled or injured would not care very much whether you called them troops or policemen. I was in Winnipeg at the time.


Felix Patrick Quinn: May I be permitted to ask
a question?


Charles Marcil: Not without the consent of the hon. member who is now speaking, but I would ask the House to discontinue discussion along this line.


Felix Patrick Quinn: Have I permission to ask
a question?	.


Peter Heenan: Go ahead.


Felix Patrick Quinn: Is the hon. member aware
that two years ago in the coal riots in Cape Breton people were killed?


Peter Heenan: Oh, if the hon. member
wants to become reminiscent, I remember some time ago when I was a little boy in Ireland there was a riot.


Felix Patrick Quinn: I am talking about Canada. Let Ireland go. I am just as Irish as the hon. member who has the floor.


Peter Heenan: Pardon me; I did not
mean that to be a smart answer to the hon. member (Mr. Quinn); I was answering the hon. member for South Renfrew (Mr. Maloney), who spoke yesterday about what happened a year ago in Nova Scotia. During the Winnipeg strike I was there; our men kept out of the strike. Therefore, I know something about it, and I know there was no more need for troops in the Winnipeg strike in 1919 than there was for troops in Nova Scotia last year. I am simply trying to get the facts before the people. All that was necessary in the Winnipeg trouble was that the Minister of Labour, who was on the job, should have used a little horse sense, and there would have been no blood shed. But instead of that, they chose to have the troops sent in. It was premeditated, it does not make very much difference, because I think if hon. members on the other side would allow the files to be brought down they would find it was all premeditated, that when the boys were being discharged or demobilized on their landing, special men who would do their bidding, were picked out to be sent to Winnipeg, and they were very careful that those who, they thought, would not do their bidding were not sent. I say the government is entirely responsible for that.
I desire to congratulate the Minister of Finance on his financial statement, and I do this very sincerely, because I consider that $22,000,000 of a surplus is something that any government might be proud of. I notice that hon. members in their speeches find different excuses why this government should not receive credit for having a surplus. I have often thought it is too bad that public men, men who aspire to be statesmen, should become so partisan in their views that they cannot even give credit where credit is due.
The hon. member for South Wellington (Mr. Guthrie) the other day in an effort to throw cold water on the surplus, actually

The Budget-Mr. Heenan
compared the financial affairs of the Dominion with that of Ontario. He said that while the statement of the Minister of Finance (Mr. Robb) was satisfactory at least to some extent, they could not give any credit to the government; that the credit was all due to Providence for giving a bountiful crop. On the other hand and almost in the next breath he lauded the financial condition of Ontario, and while admitting that that province had also a great crop and that Providence had been kind to Ontario, he gave the credit to the financial experts of the Conservative government of Ontario. This is what the hon. member said when he was speaking of economy:
If there is one thing which the people of this country demand at the present time, it is that the expenditure of the national government be cut down. I know of no cry throughout the province of Ontario more persistent than that government economy be exercised to the very last degree. We hear that cry in our provincial legislature, and we are pleased to note that the government of Ontario has put the finances of the province on such a footing that within a reasonable time that province will regain its former financial stability.
I was a member of the Ontario legislature for six years, resigning my seat to run in the last election. My position has not yet been filled; the government of to-day apparently consider that the north country is just as well off without a representative as with one. I would at least have thought they would try to get a Conservative to represent that district because even a Conservative is a little better than no representative. Having an interest in the financial condition of that province I secured a copy of the public accounts and this is what I find. At the end of 1922, which was the last full year of the Drury regime, the total debt of the province amounted to $240,506,176. At the end of 1925, after three years' administration of the economical Conservative government, the total debt amounted to $324,922,473, or an increase of $84,416,297.


Mr. STEWART (Leeds):: How much of
that is included in the Hydro-Electric development?


Peter Heenan: This is ordinary expenditures only. The argument that the government of Ontario is putting up in order to hoodwink the people is that a certain amount of this money has been expended on the Hydro-Electric which is a revenue producer. After Drury got through, the Conservative government of Ontario during the past three years added practically $67,000,000 to the debt of that province. This does not include one cent of Hydro-Electric or any other revenue producing investment. I wonder if that is 14011-209j
the manner in which the hon. member for South Wellington would like this government to run the finances of this country.


Mr. KAISER:: How much of that represents obligations incurred by Drury?


Peter Heenan: During the last three years when the Tory government of Ontario were in power, $67,000,000 was added to the public debt on their own account and they are responsible for it. I am not trying to shield Drury or his government for whatever thev did.


An hon. MEMBER:: Or Peter Smith.


Peter Heenan: There are a good many
Peter Smiths only they have not been caught The hon. member for South Wellington says that the cry for economy prevails all through the province of Ontario. Let us see how this economical Conservative government answered that cry for economy. In 1922 the Drury government spent $37,000,000; in 1925, in answer to this cry for economy, the Ferguson government spent $51,000,000. I ask again, if that is the way in which the hon. member for South Wellington would like this government to economize, that is by continuing to increase expenditure notwithstanding the fact that the public debt is increasing. The Ferguson government collected $6,000,000 more from the people last year than they did in 1924 and $12,500,000 more than they did in 1923 and yet they show a deficit of $5,000,000. Is that the way in which the hon. member for South Wellington would like this government to carry on the finances of this country? As a comparison with the Drury regime because I notice the provincial treasurer all through his speech made a comparison with the last horrible year, as the Conservatives call it, of the Drury regime, I should like to point out that if last year the Tory government of Ontario had received only the same amount of money as the Drury government did in 1923 and spent the same amount as they did in 1925, they would have shown a deficit of $17,500,000 last year instead of $5,000,000.


Mr. NICHOLSON:: As my hon. friend is
discussing provincial and not federal politics, what was the actual deficit in the last year of the so-called Drury regime?


Peter Heenan: I am glad my hon. friend asked me that question because I might have forgotten it. As regards discussing provincial politics I am answering one of my hon. friend's friends who tried to tell this country that the finances of Ontario are in good shape and that this government should copy that province. Hon. members will recall that the
The Budget-Mr. Heenan

provincial election took place in June, 1923, and the government changed hands in July. The Drury government spent a good deal of money that year, but hon. members will have to admit that the Tory government not only kept the books, but fixed them so that they made it the most horrible year it was possible to make it. They paid every cent they could find to pay and they urged everybody to put in their bills, saying: The going is good; come on in. On the other hand it was generally known that they encouraged people who owed money to the government to withhold their payments until the end of the fiscal year when the books were closed. It was therefore by cooking it in this way that the Conservative government of Ontario was able to show that the Drury government had practically a deficit of $15,000,000.


George Brecken Nicholson: Nineteen and a half millions, my dear friend.


Peter Heenan: I should not be surprised if you were to say 90 million. After manipulating the finances of the province in this way the Conservative government of the province then compared their record with that of the Drury government, but I would again point out that if they had received only the same amount in 1925 as the Drury government received in 1923 and spent the same amount as they did, they would have a deficit of $17,500,000 in the past year.


George Brecken Nicholson: That is not as bad as nineteen and a half million.


Peter Heenan: But the whole story is not told merely by showing the deficit. The Conservative government of the province has persistently asserted that what it was able to accomplish it accomplished without creating new taxes. It has successfully fooled the people. The press comes out with headlines like these:
No new taxes. Old deficit cut'. Surplus of two
pillion dollars.
The press can publish these headlines for the simple reason that the government of the province gives out intimations to this effect long before the legislature gets the public accounts. Evidently there is method in their madness, for they have misled the press.
The Ferguson government did double the dues on timber last year and that is a new tax, and they put on a new tax on gasoline and beer from which they received $1,174,000. They might have got more out of the beer had it been good beer, but the fact is that the people of Ontario have been just as greatly disappointed in their 4.4 as they have been in the Ferguson government. The Fer-

guson government also benefited by an increase in motor permits to the extent of $850,000, and in succession duties they received an additional $1,600,000. A number of rich people having died, the government col-' lected the taxes from their estates; and I hardly think that the hon. member for South Wellington had that in his mind when he said that Providence had been good to the Ferguson government. The Minister of Finance is not in his place, and so I will address this appeal to the Prime Minister (Mr. Mackenzie King): Do not let the government accept the views of financial experts from Ontario as a basis for them to go upon.
I do not think that we ought to dispose of the question of Ontario's finances without considering the way in which some of the money has been spent. I suppose it is general knowledge that in Ontario we have what is known as the northern development fund. It is usually supplemented to the extent of $5,000,000. The legislature votes the money in a lump sum, placing it in charge of the Minister of Lands and Forests, so that the government or the minister has a blank cheque for $5,000,000, which is supposed to be used for the development of fifteen districts in northern Ontario in respect of roads, bridges and so forth. These districts are each supposed to get a square deal in this matter. But do they? I want to tell the House that during the past three years this development fund has been used mainly for the purpose of corrupting the electorate of northern Ontario, and I make that statement after giving the matter due consideration. I say it knowing the responsibility of a public man in making a statement of the kind. The fund has been used mainly for the purpose of corrupting the electorate of northern Ontario and when such corruption has failed it has been used in order to intimidate, to discriminate against, and even to persecute settlers in the. north country.


Mr. McGIBBON:: Does the hon. member
know that the last grant went through at the last session of the local legislature with practically no objection from either the leader of the Progressives or the leader of the Liberals?


Peter Heenan: Of course; it does every
time. But that does not say that it has been used by Progressives or Liberals. I am telling you how the money was used, and I do not think that the people of the province should allow it to be spent in this way whether by unanimous consent or not. It should be voted to the different constituencies and not placed in the hands of any minister, Liberal,

The Budget-Mr. Heenan
Conservative, Farmer or Labour. Now, I made a charge on the floor of the Ontario legislature last year that public servants, men paid out of the coffers of Ontario, were going through the north country persecuting and intimidating the settlers in that district.


George Brecken Nicholson: As a northern Ontario
man I protest against these statements made in a federal budget speech and referring to a state of affairs in regard to which no explanation can be given.


Peter Heenan: Instead of protesting-[DOT]


George Brecken Nicholson: I rise to a point of
order.


Hewitt Bostock: What is the point of
order?


George Brecken Nicholson: The hon. member presumably is discussing the federal budget, and instead of doing so he is criticizing provincial finances entirely. He is making charges with regard to public men in the province of Ontario in a forum in which those public men can have no opportunity of answering.


Hewitt Bostock: I do not see the point
of order.


Peter Heenan: I can see further than
you can, Mr. Speaker. The point of order should be this: that instead of a man from northern Ontario protesting against these facts being made public, he should protest against the damnable practices of the Tory administration in northern Ontario.


Some hon. MEMBERS:: Order.


Hewitt Bostock: I must ask the hon. member to withdraw that expression.


Peter Heenan: All right; we can substitute anything just as bad.


Some hon. MEMBERS:: Order.


Peter Heenan: What do you want me to do-say my prayers?


Hewitt Bostock: The withdrawal must be
complete.


Peter Heenan: Well, I will say, the rotten practices engaged in in northern Ontario. Now, I am appealing to the Ontario members of this House and I can assure them that the statements I make I can prove; I am not here simply blathering. I made these statements on the floor of the legislature when the Prime Minister of the province, instead of doing as my hon. friend has done, stood up on the floor and said that if there was such a horrible thing going on in the province he would have an investigation and strike off the heads of any civil servants who might be guilty.


George Brecken Nicholson: My hon. friend could
not prove his case.


Peter Heenan: My hon. friend says that
I could not prove my case. I have eighteen affidavits, twelve of them signed by men who never voted anything but Tory in their lives and who never will. All of these affidavits bear out what I have said and no investigation has ever been held. Yet my hon. friend says I never proved my case.


Mr. ROWE:: Would the hon. member
permit a question? He has stated that there was corruption in northern Ontario, and that he spoke of this corruption in the provincial house. Would he now tell us the words he used in dealing with this question, and when he spoke of it?


Peter Heenan: I said then that I wanted
to draw to the attention of the people of the province of Ontario the practices being carried on in northern Ontario. There were civil servants in that part of the country, engineers, warehouse keepers, bookkeepers and timekeepers going through the country and especially the riding I represented, gloating over the hardships of the settlers due to the fact that they had suffered two partial crop failures. These men were telling those settlers that they would get no assistance and no roads built until they saw fit to vote for a Conservative candidate and put him in office. That was my statement, and the Premier said that if he could find anyone who had done that sort of thing, and if I would give him the names of the men responsible, he would strike them off the payroll. But the investigation has never yet been held.


Hewitt Bostock: Though much latitude is
given in a budget speech, as in a speech on the Address, hon. members should however confine their remarks to the questions belore the House. The hon. gentleman is now dealing with provincial politics, and I would ask him to speak on the budget.


Peter Heenan: While I am willing ic
abide by Your Honour's wishes in the matter, I might say that as a new member I sat here looking for a lead. I have noticed that different members on both sides of the House have been permitted to ramble all over the country, speaking of provincial as well as Dominion affairs, strikes, lock-outs, murders and everything else. I will abide by that ruling, but in fairness I ask you, Mr. Spgaker, not to rule that way in view of the fact that two
The Budget-Mr. Hcenan

hon. members opposite, the hon. member for South Wellington (Mr. Guthrie) and the hon. member for Toronto Northwest (Mr. Church) made statements in regard to provincial affairs which were misleading to the public. Surely, having a knowledge of these things, I have a right to answer those statements. I wait now, Mr. Speaker, for your ruling.


Hewitt Bostock: An answer to a statement previously made is permissible, but every speech should be confined to the question at issue. We are now considering the budget, the tariff, the financial policy of the government, and hon. members on both sides of the House must direct their remarks as much as possible to those questions.


Peter Heenan: Well, I was nearly through anyway. I do not think, however, that Your Honour caught the gist of my argument. I feel that if you had done so you would not have ruled in that way, because I am now going to show that this $5,000,000-


Some hon. MEMBERS:: Order.


Peter Heenan: What is the matter with
my hon. friends; if they are out of order why do they not get a prescription? I was going to show, Mr. Speaker, that money out of this So,000,000 fund was used not only in provincial affairs but also during the last federal election, in works and wages, in order to defeat this government. In view of that fact, would Your Honour still rule that I should keep away from this question?


Hewitt Bostock: So long as I do not call
the hon. gentleman to order he may continue.


Peter Heenan: As I have already said, I
made the statement on the floor of the House and since that time it has been supported by good Conservatives. During the last federal election the provincial Minister of Lands and Forests went through that country promising roads, bridges and everything else, to such an extent that a Conservative candidate actually protested against it. Some hon. members opposite may think I am prejudiced.


An hon. MEMBER:: Oh, no; absolutely not.


Peter Heenan: Thank you; once in a
while we get our hon. friends to tell the truth. No one, I think, will question the standing in the Conservative party of Mr. 4 p.m. John J. Carrick. He was the federal Conservative member for Port Arthur; he sat in the Ontario House representing Port Arthur, and ran in the last federal election as an independent Conservative. After appealing to the Premier of 
Ontario and to everyone else in authority in connection with these promises made by the Minister of Lands and Forests he was forced to wire the following m-esage to the Lieutenant Governor of Ontario:
The honour of the crown is being besmirched by the Port Arthur Conservative machine. An announcement of the Nipigon pulp limit tenders is being withheld from the public to be used here for the advantage of the machine candidate. No party owns our government resources, they belong to all alike, Liberal and Conservative, and should not be used for the advantage of any party. The Conservative machine advertises that Hon. James Lyons, Minister of Lands and Forests, will address a meeting in the Colonial theatre here Friday and will have a message "re the sale of pulpwood to our mills." The announcement of any government tenders have always been made through the press. Why should Mr. Lyons come here to make the announcement on the public platform except to influence votes for the Conservative machine candidate? Mr. Lyons spoke at Hornpayne and Sioux Lookout and promised them road grants, bounty on iron ore, and to survey agricultural lands, to influence votes in this constituency'. The provincial Conservative machine are intimidating their employees in this constituency and coercing their support to the machine candidate with a threat of dismissal. On behalf of the self-respecting citizens of this constituency I respectfully enter a protest to you as our Lieutenant Governor of the province of Ontario.


Mr. MANION:: Mr. Carrick was defeated
in the last election, was he not?


Peter Heenan: Mr. Carrick was defeated
in the country, but polled a majority of 500 in the city of Port Arthur, where he was known.


Robert James Manion: He ran as an independent
candidate, not as a Conservative.


Peter Heenan: An independent Conservative.


An hon. MEMBER:: There are no independent Conservatives.


Peter Heenan: I thought they were all
independent, 'because I heard the hon. member for Fort William (Mr. Manion) say the other night that hon. members opposite were not whipped into line.
Mr. Carrick also published a daily paper, and in that paper he states that a lady-
I do not want to mention her name here- took an affidavit that she was intimidated; she was told that if she did not work for the machine, it would be difficult lor her and her husband to make a living in that part of the country. I noticed that when we were discussing the Peace River election in this House the other day my hon. friend from Fort William (Mr. Manion) several times referred to the Saskatchewan machine.
I want to tell him and this House that I have never seen anything in my life anywhere that could compete with the machine we have in Ontario, but it is a Tory machine.

The Budget-Mr. Heenan
I do not like my hon. friend from Fort William giving credit to the western provinces for having all the good things, when we have in this province of Ontario a machine that the western provinces cannot possibly * beat, and I think from a patriotic standpoint the hon. member ought to give his province credit for that.


Robert James Manion: The machine never came
into my riding.


Peter Heenan: I admit that. I believe
the hon. member is too decent a fellow to even allow the Minister of Lands and Forests, though he be a Conservative, to come into his riding.


Mr. GOTT:: He came into minfe, and I
was proud of it.


Peter Heenan: Maybe you got some of
this, did you?


Eccles James Gott: Nothing like that.


Peter Heenan: I think it is only fair for me to say there is no man for whom I have more respect, or for whom the people who know him have more respect, than the hon. member for Port Arthur (Mr. Langworthy), and everybody in that part of the country entirely relieves him of any responsibility in connection with this matter. Though it is only fair for me to say that, just the same I have never heard the hon. member for Fort William or the hon. member for Port Arthur get up in any public place and protest against these practices.


Robert James Manion: There is nothing to protest against. The hon. member is pointing out some very wicked things which happen to suit his speech, but so far as I am concerned. I was up there in the election and I saw nothing whatever of these tactics. Ministers have made speeches in Port Arthur, and that, of course, was quite within their rights. But I know nothing of any tactics of this kind that were followed out there.


Peter Heenan: We have a Conservative
paper in Kenora called the Miner and News, in which "it is stated that Mr. Lyons spoke in that town and promised them all kinds of things, but evidently the people did not believe him because that town gave your humble servant a majority of nearly four hundred. This is a Conservative paper; there is no doubt about that, because its editor has received the nomination for the Conservative party in the next provincial election. I do not want to take up time reading from this paper unless any hon. member requests it, but it show's that Mr. Lyons promised all kinds of things-roads, bridges
and highways galore-to be built next year. There was a case of the provincial Minister of Lands and Forests taking part in a federal election and trying to bribe the settlers of that country with this kind of thing, and the point I want to make is, that no minister, whether he be Liberal or Conservative, should have a five million dollar fund under his hand to do with as he sees fit. The money should be voted by parliament for the specific purposes or roads for which it is to be used.


William Earl Rowe: Did the hon. member object in the provincial House to that $5,000,000 being spent in northern Ontario? Were not the people of Northern Ontario just as much disappointed over many other promises they had received before, in regard, for instance to the Backus deal and the building of many pulp mills in that part of the country?


Peter Heenan: Yes, and I shall discuss
that in a few moments; I am glad the hon. gentleman has reminded me of it. During the Drury regime, if you will look at the expenditures that were made all through that north country, you will find that there were constituencies in which Conservatives got as much, and sometimes more than the constituencies W'hich had members supporting the Drury government. There was no need to object to that, because no discrimination was shown. Last year $3,000,000 was spent out of this $5,000,000 fund, and I defy any lawyer or accountant in this country to go through the public accounts and point to any specific work to which a specific amount could be applied. The best one can do is to take the report of the Minister of Lands and Forests, which shows that some 277 or 300 jobs were done, and you will find from the public accounts that the $3,000 000 was paid to over
3,000	people and firms scattered all over* northern Ontario, an area four times larger than old Ontario itself. I think the seriousness of this matter is not realized and that is why I say, and say in all sincerity, that this money should be voted by the legislature for the specific jobs for which it is intended, and ministers of the crown should not be able to promise to do any other work with that money except as voted by the legislature.
I have made some charges in regard to the civil service being used for political purposes. I made this charge on the floor of the legislature last year. The actions of the same civil servants in this last election actually constitute a scandal in the history of the country for political manoeuvring. These men went around the country tearing down bills from telegraph poles in the country dis-
The Budget-Mr. Heenan

tricts where our meetings were advertised, and when the Conservative speakers would come around, these same men used government cars and went out in the country "and brought in road gangs to ensure good meetings. These were men who were paid out of the public moneys of this co>mtry, and I want the hon. member for East Algoma to stand up now and say whether he protested against that kind of thing. I am sure he would protest against it if he knew it was going on.


George Brecken Nicholson: I was all over northern Ontario and I saw no such thing going on.


Peter Heenan: There are none so blind
as those who will not see.


Eccles James Gott: Did the hon. member assist
W. E. Raney in formulating the charges against the Hon. Mr. Lyons?


Peter Heenan: I may answer that too.


Eccles James Gott: I will call your bluff. Were
you connected with Mr. Raney?


Peter Heenan: Whoever formulated the
questions was all right, and the questions were all right, but they made a poor job at investigating the matter. Nevertheless, whoever formulated the questions did so in such a manner that the Minister of Lands and Forests saw fit to resign rather than answer them.


William Earl Rowe: Did the hon. member-


Hewitt Bostock: Order. This is not a
debate; it is becoming a cross-examination.


Peter Heenan: In order to prove my
case, let me say that one of the reasons I resigned my seat in the provincial legislature .was in order to run in the federal election last year and protest against these practices that were going on, to protest against using public money to bring settlers into new Ontario from the Old Country, and sending them out into New Ontario when they got here and telling them to hew a farm out of the bush, and then have the hired thugs of the provincial government go amongst them and tell them that they would not get a square deal until they voted a Conservative in for that particular riding. That was one of the issues in the district that I had the honour to represent. Notwithstanding the fact that the machine went up there, and that these hired thugs went all over the district, the people of that provincial riding gave me a majority of nearly eight hundred. This confirms the statement I am making on the floor of this House. Now, there are none
l Mr. Heenan.]
so blind as those who will not see. It was well known to every Conservative in that part of the province that an issue would be made of these doings when the proper time came. As a matter of fact when I ran in the election I did so as a protest against such methods, and I hope opposition members in this House from the province of Ontario will take notice of the verdict w'hich the people rendered on the occasion referred to, and that all such practices will be strictly tabooed by them in the future. When I accepted the nomination for the riding we knew that one of the gang, or one of the advisers of the provincial government, intended to secure the nomination for the Conservative party. It was in order to keep that man out of public life-a man who would so far forget himself as to lend himself to the designs of a gang that would advise any government, whether Liberal or Conservative, to persecute the settlers in the northern country-that I offered myself as a candidate, and I succeeded in defeating him. There is one more member of the gang now before the public for the next provincial election, but I am quite content to leave him in the hands of the people of the district.
A comparison has been made between the way in which the finances of Ontario are administered by the provincial government and the method adopted by the federal administration. The hon. member for South Wellington, for example, made such a comparison. I ask that hon. gentleman to state whether he would follow the financial methods of the present Ontario government if he were on the federal benches, or whether he would use the public money in the way in which I have stated it has been used by the Ontario government? I think I have a right to ask that question, and that it is a perfectly fair one in view of the statements which some hon. gentlemen opposite have made.
The hon. member for Toronto Northwest (Mr. Church), during his speech on the evening of Friday last, gave utterance to the following statement:
New Ontario has been economically annexed to the United States. Why do I say that? Because New Ontario has been a happy hunting ground for American millionaires for years past. Mr. Drury, the former Premier of Ontario, gave to Mr. Backus, a Milwaukee millionaire, an enormous timber area, an empire in itself.
I had been under the impression, Mr. Speaker, that the Conservatives advocated a policy of establishing industries to manufacture raw materials of Canada in this country. I had thought that hon. gentlemen

The Budget-Mr. Heenan
329.1
opposite advocated the adoption of a tariff as would compel Americans to establish industries in this country, rather than permit the exportation of Canadian raw material to the country to the south to be manufactured and to give employment to American work-ment there. It is very difficult to follow the varying arguments of successive Conservative speakers. On the one hand they say "Let us have such a tariff that American capitalists will be forced to establish factories in Canada and give employment to Canadian workmen." On the other hand, when American millionaires are induced to locate in Canada, they set up the cry that we are being annexed to the United States. Really it is very difficult to follow such arguments or to find any harmony between them. However, I am getting used to inconsistencies of this kind on the part of Conservatives. It is true that the Drury government did sell a timber limit to Mr. Backus in 1921. One would think that the Conservatives-of course I have special reference to those in Ontario-were loath to do business with Mr. Backus either through fear or some other cause. But what are the facts? We find that they did do business with Mr. Backus only they went about it in a different way from that adopted by the Drury government. The latter government disposed of a timber limit openly, to Mr. Backus; the whole transaction was open and aboveboard. But how did the present Conservative government act in their dealings with Mr. Backus? At the last session of the legislature before the last federal election the Minister of Lands and Forests announced, amid a loud beating of drums, that no doubt the people of Ontario would be glad to know that the government had cancelled some water powers granted to Mr. Backus by Mr. Drury. The announcement was followed by such a rattling of desks on the part of the Conservatives that that furniture was in imminent danger of destruction. But strange to say, after the election was over, the same minister returned the same water powers to Mr. Backus. The people of the district were not aware that such a thing had been done. Even the mayor of Fort Frances, although the town was particularly interested in the agreement with Mr. Backus, was not aware of it. Worse than all, the Premier of the province made the humiliating confession that he did not even know that negotiations had been going on for the return of these water powers and was entirely in the dark as to the transaction. This was about two weeks before the then Minister of Lands and Forests resigned.
Now, I ask hon. gentlemen opposite, from Ontario, this question:	When they do
business with Mr. Backus, or any other millionaire, is it better to act in an open and straightforward fashion or to work in a stealthy, secret manner? If my hon. friends will refer to the Toronto Telegram of March 15, they will see where the Premier of On-, tario made the humiliating confession, that he did not know that the transaction referred to had taken place. I am not discussing whether it was advisable to enter into the arrangement or not. Personally I think that a man who spends thirty, or forty or fifty-million dollars in establishing paper mills in Ken or i, as Mr. Backus did, who gives employment to about two thousand men, and who pays about $40,000 in taxes for a period of ten years, ought to be encouraged. But when we do business with him we should do. it openly so that the public shall have full and complete knowledge of what is going on. No public matter should be handled according to the backdoor methods practised by the Conservative party in the. province of Ontario, It is not generally known that the Hearst government, in which Mr. Ferguson was Minister of Lands and Forests, sold Mr. Backus, a timber limit in 1914.


Eccles James Gott: I rise to a point of order.
About twenty-five minutes ago Your Honour ruled the hon. member was out of order in discussing provincial issues. Since that time he has made charges that have not the least foundation and cannot be substantiated.


Some hon. MEMBERS:: Order, order.


Hewitt Bostock: I have ruled that provincial politics should not be discussed during the debate on the budget, but I followed the hon. member and I do not think he has contravened the rules. The charges he has made are in connection with the last Dominion, election, and these charges can be made on the budget debate as well as on the debate on the Address. I do not see that he is out of order, but one must connect such charges, with Dominion affairs. Let me repeat that hon. members should confine their remarks to-the questions at issue. Rambling remarks in reference to provincial politics are not permitted during the debate on the budget. I therefore hope the hon. gentleman will confine his remarks to the points at issue.


Peter Heenan: I commenced by complimenting the Minister of Finance on his budget, and I proceeded to answer the hon. member for South Wellington when he advised the Minister of Finance to copy the financial policy of the province of Ontario*
The Budget-Mr. Heenan

He made certain statements, and I think it is only fair that they should be answered. I do not think that one party should get what they wish on Hansard and that the other party should be ruled out of order and prevented from answering. The 'hon. member for Toronto Northwest made a speech on Friday night in which he made certain charges; another hon. member asked some questions in connection with his remarks, and I am trying to .answer those questions. Surely, if a member is permitted to ask a question I should be allowed to answer it, and I can assure hon. members that before I get through I will connect this matter with Dominion affairs. I am just wondering whether my appeal to the House will be of any value, because an hon. member for one of the Ontario constituencies has stated that I have been making statements and charges that are without foundation. I have already told him that I have affidavits and documents to substantiate every charge I have made. It is the old saying, there are none so blind as those who will see. It is not generally known that the Ontario government sold Mr. Backus 2,000 square miles in 1914, and made a contract which permitted him to build a mill or not to build it just as he wished, and according to the agreement the mill was to be built on this 2,000 square miles or in the vicinity of it. They led the people .of Kenora to believe that the industry was to be established in that town. That is the whole trouble in connection with the matter the hon. member for Toronto Northwest spoke about on Friday night. An agreement was made, and I was present at all the proceedings. We made an agreement by which the water powers of the province of Ontario were disposed of, and the powers in the vicinity of Kenora were safeguarded. Not a pound of pulpwood was to be exported to the American side, and no power can be exported; everything is to be manufactured in Ontario. I want my friends on the other side of the House to advise the Ontario government to please copy, because they have not been doing it.
I feel sure that every hon. member will be glad to see the progress that our railroads are making in this country. I refer to Dominion, not to provincial roads. When we find that there is an increase of practically nine and a half million dollars in last year's revenue, with a decrease in working expenses of five and a half million dollars, making a betterment of approximately fifteen million dollars, I think there is room for gratification in connection with our railroad operation, indicating as it does wise management and loyal co-operation on the part of the workmen. It shows efficiency in every degree. As
{Mr. Heenan..]
an indication of the efficiency with which our railways have been operated, the employees moved nine and a half million dollars more of revenue bearing freight with a less consumption of coal to the extent of one and three-quarter million dollars, which again shows great efficiency in the operation of our road.
In looking over the yearly reports, Mr. Speaker, I was glad to see that the presidents of both roads give great credit to the employees. I observe that Sir Henry Thornton, in one paragraph of his report, stated that they are now considering the consolidation of the different pensions schemes throughout the system. There are different pensions schemes on the different branches of the Canadian National Railways, and I am satisfied that when these are consolidated we will have a pension system second to none in existence. I think hon. members will agree with me that the workmen on the Canadian National Railways who are showing such loyalty are entitled to this pension. I do not intend to go through the report, because I feel satisfied that the Minister of Railways (Mr. Dunning) will deal with it in detail. I want to point out that the Canadian Pacific Railway report, while not presented with so much detail, shows they made $853,000 last year over and above the preceding year, but they cut down $2,074,000 in expenses, or, in other words, they laid off a great many of their employees altogether. They put a good many of them on short time, and in other ways helped to keep down the expense, so that they were able to show a surplus of $2,927,000 over the preceding year. That shows again loyalty and efficiency on the part of the men engaged in the transportation of the commerce of this country. The men who are employed on the railroad and are so loyal to their employers should not be subjected to this unwarranted, misleading propaganda that is being distributed through the country. I have before me Railway Bulletin No. 5, of the Railway Users Association of Canada. They endeavour to show that the government of this country had more to do with the increase in freight rates than any other factor. But I am wondering when the government really had anything to do with the increase. The bulletin goes on to state that there are 20,000 more people employed on the Canadian National Railways than there ought to be, it does not mention the fact that 3,000 fewer men were employed on that railroad last year than the year before. They point out that the wages of railwaymen employed on the Canadian National are higher than the wages of those employed on the Canadian

The Budget-Mr. Heenan
Pacific. The wages of railroad men throughout this country are standardized; there is a standard schedule of wages; but notwithstanding that fact this propaganda sheet points out these differences in wages between employees on the Canadian National and employees on the Canadian Pacific:
	Canadian	Canadian
	National	Pacific
	per hour	per hour
Freight engineers.. ..	.. $1.05	$0.97Freight firemen.. ..	.. .78	.72Freight conductors..	.. .90	.82Freight brakeman. ..	.. .70	.63The whole thing	from beginning	to end is
misleading and it should be refuted; the men who are employed on our railways should not be subjected to this kind of propaganda. While I am on the question of our railways and discussing the efficiency of the men and the pension plan, I want to point out that the Canadian Pacific Railway also have a pension plan which is very much appreciated by the employees from which the company receives a great deal of benefit as other organizations are doing who have pension plans by laying off their old men when they reach the age of sixty-five years and replacing them by younger men. They consider this is a benefit, an investment.
In connection with the Canadian Pacific pension plan, there is one regrettable feature which I feel it is my duty to mention at this time, namely, that the regulations pertaining to it provide that if an employee breaks his continuity of service he becomes deprived of his pension. We have an example at the present time of how this rule is applied. No doubt hon. members will remember that in 1908 the machinists and carmen went on strike. This strike was legal in every respect; the laws of the country and the laws pertaining to the constitution of those engaged in the strike were observed. And now eighteen years afterwards we find that many of these men, having contributed to the upbuilding and prosperity of the company, are reaching the age of sixty-five years and are being taken from their work and deprived of their pensions.
I am not going to argue at this time that the public is contributing to this fund through freight, passenger and other rates, or that the government should take a hand in the matter. I feel that all that is necessary at present is to draw the attention of the head officials of the Canadian Pacific Railway to this matter in the hope that they will give it their due consideration. I think I know the company well enough to believe that when we appeal to a big-hearted man like Mr. E. W. Beatty and his associate officials, they will rise to the occasion and be too big to hold spite at the end of eighteen years and discriminate against their old employees. I sincerely hope before we meet next session this grievance will be eliminated.
I had intended to touch on a few other matters, but I will leave them for another occasion. I am sorry if in any way I have transgressed the rules of the House. I had not thought I was doing so, because, as I said before, I was answering questions that had been raised by members of the opposition. I felt it was my duty to do this and any statements that I have made I am prepared to prove.
As regards the cut in the tariff on automobiles, as a new member and not an expert in tariff matters, I have listened attentively to the arguments advanced by older or more experienced members. I have observed from time to time that members on the other side of the House have deplored the fact that the tariff on automobiles has been cut; not one of them that I have heard has yet stated that the duty ought not to be cut.
The amendment to the motion would, I think, make a man vote for the budget rather than against it because it is a compliment to the government. Any member who votes for the amendment surely votes confidence in the board that has been constituted. That is the way in which I view the amendment so that the government may take what consolation they like out of that. If I were in the Ontario legislature I would be permitted to say that the amendment was a "4.4" amendment; there was no body to it, and therefore if anything were necessary to enable me to reach a decision as to how to vote, it would be the amendment.
It is very difficult for a man who is listening to arguments in an endeavour to arrive at a conclusion, to determine how best to vote when he finds that on the resolution of last year in favour of cutting the tariff on automobiles, six Conservatives voted to reduce the tariff and some of them were re-elected as protectionists. Again, I am informed that the hon. member who represented Oshawa on the Liberal side last year put up a very hard fight in this House against any cut in the tariff on-automobiles, and yet he was defeated by his own people in the last election. It is therefore very difficult to tell just what the people want. It is apparent that the people of Oshawa were not very much concerned about that matter during the election or they would hardly have defeated the man who championed their cause on the floor of this House.
3296	COMMONS
The Budget-Mr. Chaplin (Lincoln)
So that, inasmuch as the opposition only want to have the matter referred to a board in which they have no confidence, while on the other hand the government make the positive declaration that they have expert opinion that this cut will not affect the industry, I have come to the conclusion that there is nothing for me but to vote with the government.


Mr. J. D. CHAPLIN (Lincoln):: I think, Mr. Speaker, that in describing the speech of the hon. member who has just taken his seat (Mr. Heenan) in the way you did, you will probably meet with the approval of the House. Certainly it was an address that might properly be termed rambling, for his remarks had reference to matters that do not appertain to this House in the slightest degree. This hon. gentleman who has just spoken was a supporter of the Drury government and if there was any one man in Ontario who contributed to the defeat of that government, it was the hon. member himself. He tells ua that he was mixed up with the Backus deal, that he was in on that transaction. That is generally understood in our province; it is known that he was very much in on that transaction. And that was one of the reasons why the Drury government went down to defeat. This hon. gentleman supported a government one of whose ministers, the provincial treasurer, ran the province into the hole and himself into gaol. This is the kind of man that comes here and in this parliament defends the Drury government. The proper place for him to have made his defence was in the legislature which he left. Why did he leave that legislature? Why was he not man enough to make his charges there instead of coming here for the express purpose of discussing the subject? He talks about blanket money being voted. I can tell the hon. member that he will have an opportunity to make all the protests he wants against blanket propositions when the estimates are before this House for consideration. If he wants to put as much ginger into opposition against blanket votes as he shows to-day he will have his opportunity here; he does not have to go to Ontario to do it. The hon. member tells us that he stood up in meetings with Mr. Drury, *but this deal was called the Raney-Backus deal. Mr. Drury was not mixed up in it for he would not go in with the bunch of people who were in on it. The hon. member tells us that he was well in on the deal, and as I say that was pretty well understood. He also tells us that he does not know very much about the automobile business, having to take his information from older members. Well,

here is a labour man coming into the House and in face of a deputation of thousands of people, all workers who are seeking their rights, he has not one solitary word to say in their behalf. That is the kind of labour man who represents or pretends to represent labour in this House.
The hon. member has referred, as other hon. gentlemen have frequently referred in the course of this debate, to Providence having helped the government. For this budget we have evidently two benefactors to thank- one the government, and the other Providence. A charming gentleman, an old member of the House, said the other day that he thanked Providence for being on the side of the government. Well, I am willing to give Providence all the credit, and I go further and thank Providence that things are not worse. This is not the first time that we have heard of this government invoking Providence. If I remember rightly the Prime Minister (Mr. Mackenzie King), in a speech in one of the constituencies near Toronto, probably North Bay, called upon Providence to help him out of a difficult situation. According to a. newspaper report:
Mr. King pressed the point that under the constitution the Senate could not be reformed except from the outside. "I cannot ask the Governor General to let me appoint senators," he said jocularly; "I can only pray lervently to Providence to take away some of the old ones."
So that Providence has been invoked to>
remove senators from this sphere in order to-allow Liberals to be appointed in their stead.. Just imagine invoking Providence to have Mr. Duncan Marshall made a senator! It only remains for the government to supplicate Heaven to remove another senator to make room for "the Honourable" W. T. R. Preston. The newspaper report of this particular speech of the Prime Minister tells us that he made the remark "jocularly". I have heard of ministers making remarks ironically, but I am at a loss to see any occasion for jocularity in a prime minister's attitude to Providence. I have seen the right hon. gentleman here for quite a number of years, and I must say that I have never seen him in a jocular mood while on his feet. It may be that he is more jocular when'he gets down on his knees.
The last time I had the honour to address this House at any length I was invited by the hon. member for Rosetown (Mr. Evans) to read from the farmers' platform what they had to say therein on the plunder on boots and shoes. I did not then have the time to go into the question, and besides I made it clear that there were other members quite as well qualified as I was to deal with the subject, indeed, better qualified inasmuch as they had

The Budget-Mr. Chaplin (Lincoln)
a greater knowledge of the business. I have not heard anyone opposite say one word in defence of this industry from the standpoint of the tariff. Do they realize that probably the next industry to be attacked is the boot and shoe industry? Do they realize that boots and shoes are a necessity in this country, being in demand by everyone, and that if we are to have a general tariff reduction there is no line of goods more likely to suffer than boots and .shoes?


An hon. MEMBER:: Furniture.


James Dew Chaplin: Furniture, did someone say? That might not suit the hon. member for North Bruce (Mr. Malcolm). I understand that the hon. member is likely to be invited into the cabinet.


Mr. MALCOLM:: Thank you.


James Dew Chaplin: Well, there will be one protectionist in the cabinet, but he may be a furniture protectionist. The article in the farmers' platform which I desire to read is headed, "Plunder on Boots and Shoes." The hon. member for Rosetown wanted me to put before the House what the farmers had to say in this regard; he wanted me to show what was their attitude to the boot and shoe tariff. The article is a follows:
Let us consider somewhat more specifically just what the protective tariff costs the people of Canada and how it affects wages. The census bureau gives the following daia on the Canadian boot and shoe industry for the census year 1910:
Value of home-made product	$33,967,248
Number of employees	 17,227
Salaries and wages paid	 $7,698,333
During the year ending March 31, 1911, Canada imported $2,045,835 worth of boots and shoes, the duty upon which was $585,996.71.
In that year the Dominion imported six times the value of boots and shoes from the United States that it did from Britain, and paid duty thereon amounting to $522,809.70, equal to 30 per cent.
The value of the domestic product for that year is given as $33,967,248, of which $60,935 was exported.
Now if our contention is sound that the manufacturers add the full amount of their protection to the selling price of the commodity when disposed of in the home market, the people of Canada paid for that year by way of taxes the following sums:
Customs duties	$	585.996 71
To the manufacturers	 10,177,893 90

Wages and salaries paid	 7.698,333 00

That is to say the Canadian people paid by way of taxes directly and indirectly more than $3,000,000 in excess of the total wages and salaries received by employees in the boot and shoe industry during the same period.
If we were to consider the interest of the country and of the wage-earning classes alone it would have paid the people to have scrapped every boot and shoe
factory in the land, handed over the workers their full wages and to have paid a direct subsidy to the government of more than $3,000,000, and the nation would have gained enormously thereby, especially if the artisan had been put at some truly productive work.
That in short, is an example of the principle laid down in this book. I did not hear any great applause when I read that article; many times before when this has been read my hon. friends to the left have applauded loudly. I would not expect to get so much applause from hon. friends opposite in that little Saskatchewan corner, but they believe in the very same principle.


Mr.   MAODONALD@Glengarry: Why
not?


James Dew Chaplin: That is exactly what I say; why not? I ask my hon. friends from Quebec to take notice of the fact that it is no interest of theirs that seventeen thousand people should lose their employment; I have not noticed any applause from those gentlemen respecting this proposition of the farmer's party.
There is one thing they omitted to answer in that article. In the last clause, as you will notice, they say, "and the nation would have gained enormous/ly, especially if the artisan had been put at some truly productive work." Would my hon. friend who just interrupted tell me what productive work he would give these seventeen thousand artisans, after having closed these factories? What will become of them if that policy is carried out? They will go, as thousands of others have gone, to the United States; they will leave this country if they cannot get work.
As I said before, that illustrates the principle, and now I will read for the benefit of the House how that principle was demonstrated in connection with the boot and shoe proposition:
As already explained, under a system of protection the consumer is compelled to pay a tax upon all imported goods that come under the tariff schedule. Upon all goods of domestic origin, produced under a protective system, the consumer must likewise pay a tax-although in this case the revenue finds its way to the bank account of private individuals alone.
I might expect my hon. friends to say that that is all right, but I want to illustrate this principle by taking another line of commodities, because it will be noticed that this booklet says, "any commodity that comes under the tariff schedule." I will give as an example the class of goods produced by the farmers, and we will see how it works out. It is said that one way of proving or disproving a case is to prove it absurd, and I will leave it to the House to judge whether or not this proves
3293	COMMONS
The Budget-Mr. Chaplin (Lincoln)
to be an absurdity. The total value of agricultural products in Canada according to the year book of 1924, which is the. latest one from which I could get complete 5 p.m. figures, amounted to $1,708,000,000.
The total export of farm products for that year was valued at $503,391,402, so after deducting the exports from the total production you get the home consumption Consequently the amount consumed within Canada totalled about $1,205,000,000. Following tihe same method of calculation, during the year we imported from the United States a total of $65,546,476; from the United Kingdom $64,324,300, and from other countries as well, making a total importation of $149,201,231 of agricultural products similar to those raised in Canada. The duty collected on these importations amounted, roughly, to $29,000,000 or 20 per cent. If it is correctly contended that a similar tax was collected on ail the commodities produced within Canada, ,"i per cent must have been collected on the total of $1,205,000,000. I ask you, Mr. Speaker, or any other hon. member where that money went; who got the money? Twenty per cent of that amount would total $240,000,000; who got away with that swag? On a basis of 600.000 farmers in Canada this would mean that each farmer got $400 of extra money. He still had the money from the goods he had exported; he had the money from the produce sold in Canada, but in addition to that he had another $400. No one knows where that money went to except my hon. friends to my left who produced this wonderful argument, and my hon. friends in the Saskatchewan corner who would back it up if they could.


Mr. McLEAN (Melfort):: Does that $149,000,000 which the hon. member calls farm products include the $19,000,000 of whiskey that year?


James Dew Chaplin: 1 will answer
that by asking the hon. gentleman to turn to our trade returns of 1924, where at page 1420 the figures from which I have quoted appear with this footnote supplied by our own officers:
In this classification the expression "Canadian Farm Products" refers, in the case of exports, to commodities actually produced, in their original state, on Canadian farms.


Malcolm McLean: You were speaking of imports.


James Dew Chaplin: As to imports
it says:
In the case of imports, it covers all commodities of which the basic raw materials are such as Canadian farms produce.


Malcolm McLean: Exactly, but
would the hon. member answer the question whether that $149,000,000 does include the $19,000,000 approximately of alcoholic liquors that came in that year?


James Dew Chaplin: I do not think it does, but whether it does or does not has no relation at all to the argument I am making-not one particle. If the hon. gentleman wants to take out the $19,000,000, he is perfectly free to do so, and I will figure out for him how it works out.
As I was saying, Mr. Speaker, when I was interrupted, according to this calculation- and it is based upon the principle laid dowr. in this platform-each farmer in this country not only got the money for the products he-exported and for the products he sold in this country, but in addition he filched out of the pockets of the people by way of plunder- that is the word they use-another $240,000,000 that did not belong to him, and which came out of the poor consumer of this country. That is the kind of argument these gentlemen put up. And this book, Mr. Speaker, is well edited. It is called the Farmers' Platform. It was drafted by the Canadian Council of Agriculture, and has been adopted by the United Farmers of Alberta, the Saskatchewan Grain Growers' Association, the Manitoba Grain Growers' Association and the United Farmers of Ontario. I do not hear anybody getting up and cheering about the argument this book puts forward.
Now let us take another example. Let us take apples, for instance, just to show in a small way how it works out. In 1924 we imported 195,000 barrels of apples, and the duty collected was $176,000. Our total average crop-I have not seen this year's returns, but I have looked over the figures for a number of years-runs to about five or six million barrels, but taking the lower figure,
5,000,000 barrels, we exported last year 1,600,000 barrels, which would leave for home consumption 3,400,000 barrels. Now the same contention is there. According to this book, on every barrel of these apples sold for home consumption the producer put 90 cents more in his pocket. I wish to heaven, Mr. Speaker, that these gentlemen could convince our farmers in Ontario that they had received that money; I wish they could bring it to pass. But don't you see, Mr. Speaker, the thing is absurd? But it is not a bit nor a whit more absurd than the argument on the boot and shoe proposition that is made all over the country, and which we hear in this House particularly from the new members for Saskatchewan. The gentlemen to my left

The Budget-Mr. Chaplin (Lincoln)
do not give us that argument any more; they know better now; they have learned their lesson.
I want to refer now to some of the remarks of the Finance minister, and first of all to his statement about the increased business of the country. The minister laid some stress upon the fact that the balance of trade was very much in our favour. First of all, let me say that I do not disagree with that statement, but I do submit this, that if it is a good thing generally to have a balance of trade in our favour, then it is a good thing to have a favourable balance of trade with our largest customer. That is a sound proposition. What do we find in respect to our trade with the United States? Our exports last year increased $57,000,000, and our imports increased $100,000,000; in other words, in one year the balance of trade against us increased by $43,000,000. In 1926, to the end of March, they sold us $609,000,000 worth of goods, and we exported to them $474,000,000 worth. I submit, Mr. Speaker, that if it is a good thing, if it is logical and right, to have the balance of trade in your favour, then you had better have it in your favour as regards the people who are doing everything they can to hammer your heads off.
Let us take a few of our exports, in which we had an increase of $57,000,000, and see what they consisted of. I shall run over them briefly as I do not wish to take up very much
time:
Animals	 $1,300,000
Asbestos	 1,800,000
Beverages, ale, beer and whiskey	 6,300,000
Chemical products	 1,400,000
Fertilizers, raw products, cyanamide and
ammonium sulphate	 900,000
As regards asbestos, we ship them our raw material; and coming to chemical products, we ship them fertilizer. We have a big plant at Niagara Falls, and we ship them the raw fertilizer and buy back the finished product. This government within the last year or so has put out of business ten fertilizer plants in this country. This one plant remains in business at Niagara Falls, using an immense quantity of power, and the fertilizer in the shape of ammonium sulphate and cyanamide is going over to the United States to be further manufactured.
Our exports of grain products increased by $3,400,000, and of grain, $4,000,000. Our exports of wheat increased, in bushels, from
5,400,000	to 9,200,000. Our exports of oats decreased by 4,000,000 bushels. Why? They did not take our oats to mix with their old wheat to make it better. We actually allow these people to take the best wheat from us,
to mix with their own stuff and grade it up, and then compete with us in foreign markets.
Our other increased exports were:
Hav	 $1,000,000
Meats	 1.600,000
Metals, aluminum, brass, copper	 3,700,000
Iron, pigs, ingots, etc	 2,500,000
Farm implements	 1,200,000
Nickel	 2,200,000
Fresh milk and cream	 1,800,000
Paper	 6,700,000'
Seeds	 7,000.000
Vegetables	 5,100,000
Wood, unmanufactured	 6,000,000
Wood, manufactured, including pulp.. ..	5,000,000
Raw wool	 500,000
No doubt the increase in potatoes was larger on account of the scarcity of potatoes recently. Now take the imports and let us note the difference. They are manufactured articles principally. We are sending them our raw materials and our young men also. Those materials are manufactured in United States and we take back the finished products. First of all there is binder twine. We have heard a lot about the amount of binder twine that is imported. Well, the importation has increased from twenty-four million pounds to thirty-nine million pounds or, taking the value, from $2,900,000 to $5,400,000. The import of chemical products has increased from $16,366,000 to $18,750,000. They consist principally of drugs and fertilizers. The fertilizers come back in manufactured form. Then there are paints and varnishes, finished articles. Cocoa and chocolate increased half a million; grain products increased a million; meats increased $700,000; metals increased from $146,000,000 to $1%,000,000. An increase of nearly $50,000,000, and every bit of the manufacture represented by this increase could be carried on in this country. Rolling mill products increased $5,000,000; vehicles, including autos, increased from $25,000,000 to $39,000,000; oils and petroleum increased $5,000,000; silk-mostly manufactured goods- increased by $3,000,000; stone products increased by 8.000 000. Our increased trade with the United States has been principally in raw materials, commodities that they are getting short of. On the other hand we are taking from them, in constantly increasing quantities, goods that could be made to advantage in this country. I repeat, we are sending away our raw materials to be manufactured in the United States, and along with them the best of our manhood. Take some articles that we could sell, and that we should sell, to a very large consuming community. Take cheese for example. They sell us actually four times as much cheese as we sell them. On the face of it is not that most ridiculous?
3300	COMMONS
The Budget

Mr. Chaplin (Lincoln)
Here we are, a much larger agricultural population in proportion to what they are, and they sell us four times as much cheese as we sell them.


Henry Lumley Drayton: And they have ten times our population.


James Dew Chaplin: Just figure it
out for a minute on the basis of population. Taking their population as 120,000,000, as a result of the quantity of butter we sell to the United States each person there gets one-quarter of an ounce once a year. Why, Mr. Speaker, that is not enough to make a smell in the pan. In the matter of lard, conditions are worse. Now let us take eggs. If the people of the city of Detroit alone-I will ask my hon. friends opposite to figure this out and omit the children or babes in arms in the calculation-bought one egg once a year they would consume all the eggs we sell them in the course of twelve months. Just imagine it! If in that one city of Detroit each person had an egg once in the year they would consume more eggs than we sell the United States for tihe entire twelve months. And yet we open our doors to people who use us in this way. We are crazy, that is all. They treat us as mud under their feet, and we stand for it. But it is possible to bring them to time. If the government had the nerve they could fetch these people to time.
My hon. friend the " furniture minister " is not here at the moment, but I come to the article of furniture. The United States sells us 11,000,000 worth of furniture and all we sell them in the way of furniture is $22,000 worth. That is the amount we sold them last year. Why, that million dollars would keep quite a few people employed in this country. Nobody would recognize that fact any quicker than the gentleman about whom I spoke a few minutes ago.


Mr. MacLEAN (Prince):: Before my hon friend leaves that branch of the subject will he permit me to ask him a question? What happened from 1911 to 1921 when eggs were coming into this country at the rate of almost 14,000,000 dozen a year? Was my hon. friend asleep at the switch?


James Dew Chaplin: My hon. friend says they came in here?


Alfred Edgar MacLean: Surely.


James Dew Chaplin: Somebody possibly may have been asleep at the switch, but I am prepared, and have so stated, to advocate the imposition of a duty so that no eggs whatever will come into this country. 
I will not make it easier for Australian eggs or Chinese eggs or any old eggs to come into Canada either.
Some hon. members have told us in the last few days that the United States are getting tired of the tariff, that they are going to make a change in that respect, that they are going to set matters right, that the people over there are getting sore on the tariff game. We were told that six or seven years ago. If my hon. friends opposite would get some of the old speeches and read them over they will find that the same prediction was made at that time. Do my hon. friends know what happens over there? Each time the product of another country finds its way into the United States they raise the duty a little more. W hat has happened quite recently? The duty on butter put up, the duty on wheat put up, and do you know what will happen next? Have hon. gentlemen observed what occurred the other day? and it is the first premonition of what is going to happen to milk and cream. We have a nice market there at present; we send them eight or ten million dollars' worth. But the other day the report was published all over the country on the authority of the Health Commissioners of New York city that the quality of the milk and cream coming into the United States from Ontario was awful-in fact this gentleman described it as "bootleg" cream, whatever that meant. Perhaps the Minister of Agriculture could tell us what bootleg cream is. I do not know what it is myself; perhaps some farmer has been transporting it in his boot. At all events these people are looking for an excuse to exclude our cream. That is all they are doing, and that is just what is going to happen. We were told too by a man who knew that cows were decreasing in the United States. "Why," he said, "the number of cows is going down all the time and the United States are bound to have imports of dairy products soon." But what is happening? I have on my desk the official statistics for the year ending 31st December last. What do we find? The United States imported $10,000,000 of milk and cream practically all from us. Of butter they imported $2,600,000; that is all the butter they imported. They exported butter to the value of $2,400,000. But mark this; in addition to this exportation of butter they exported
151.000.	000 pounds of condensed and powdered milk and cream, to the value of $17,000,000. That country was able to export last year
151.000.	000 pounds of powdered cream, importing only $2,100,000 wo'rth; they exported almost the same quantity of butter, yet they tell us they are going out of the dairy busi-

The Budget-Mr. Chaplin (Lincoln)
ness. If they go out of the business they will have to go into it faster than they are doing in Alberta if they ever hope to catch up.
Another matter of interest to the people of the country is the income tax. I am not opposed to the minister proposing to collect -income taxes from people who are striving to evade taxation by forming joint stock companies, privately held joint stock companies, for the purpose of holding the funds and thus evading taxation. I am absolutely in favour of that proposition of the minister and have no hesitation in saying so. But, Mr. Speaker, under the present proposal there will be injustice. I have in my mind the case of a public utility in my own district which operates electric light, electric power and street railway, which established small concerns in different towns under special charter, and then amalgamated them all under one charter in accordance with the law. Under this law it would seem that these different companies are to be taxed, each one on its profits, and then later the parent company will be taxed also. I do not agree at all with the principle of taxing profits twice, but in this case the profits are not only being taxed twice, but three times, and perhaps in some oases four times. I do not know whether the minister intends to make any change in that regard, but I certainly recommend that he look a little closer into it. I know of many cases of small factories that are held by companies which are entirely within families, and it appears to me that in cases of that kind it is absurd to tax the profits in the concern twice. It is ridiculous to tax the profits of the company and then tax the company again in dividends. It simply cannot be done. It would mean that you would put a premium on people evading the tax, and they can evade it. In those cases it would not be hard for the people themselves who are running the concerns which are privately held to take every dollar by way of salary, and the government would not get a dollar of company income tax at all. Why should you put any of your citizens in that position? It is not fair or right that taxes should be collected from the same money twice. This government has by its actions driven artisans out of this country, and now it proposes to follow that up by driving out the money too. As soon as you begin to tax the dollar beyond what you should, you are going to lose the dollar; just make up your mind to that.
As a matter of record, and not for anything .more than the record, I find that during last 14011-210
year 3,061 farmers paid income tax, and paid in amounts $162,000 out of $56,000,000. Under the new tax levy many thousands of workers escape taxation, but widows and others, dependent upon their income from investments and savings, are taxed heavier than they were before. I think that is wrong and that those resolutions might very properly be amended.
What did the minister say when he spoke of these tax reductions? He said he was pleased to say that he was going to make tax reductions all along the line. Here is what he is reported as saying in Hansard:
With a desire to make available new money for development our proposals provide reductions all along the line.
Is that statement correct? Is it in accordance with the facts? Is the reduction all along the line? I submit, Mr. Speaker, that * there is a decided increase on a great deal of the line, a very decided increase, and that in no case is there any decrease all along the line. As I said before, the taxing of the same profit twice is unfair, and I feel certain that in the end it will not be in the interest of the country or of the treasury itself. I warn the minister that when the dollar is taxed excessively it will get away from us.
I wish to give some examples of the actual working out of some of these proposals, just to show what the result will be. For instance, a married man without dependent children with a salary of $5,000 and a dividend income of $5,000 more, in 1924 paid in taxes $241.50; and now he pays $290. That is no decrease along the line. The married man whose income comes from dividends in Canadian corporations, which have already paid an income tax, and' whose wife has a separate income, on a $10,000 salary in 1924, paid $115.50 income tax. This year under this law he would pay $425, an increase from $115 to $425. On a $20,000 income his tax will be increased from $745 to $1,815, and on a $30,000 income the increase will be from $1,900 to $3,900-not very much decrease along the line there.
Take another schedule: a married man with an income of $10,000 derived from Canadian stocks will pay $299 50 more than he paid last year, but an unmarried man with the same income derived from foreign stocks will pay 8246.50 less than he paid last year. An unmarried man with an income of $10,000 derived from dividends in Canadian companies paid last year $115.50; to-day he will pay $415. An unmarried man whose -whole income is from dividends of foreign companies on an income of $10,000 lart year paid $630 whereas

3302	COMMONS
The Budget-Mr. Chaplin (Lincoln).
this year he pays only $415. A married man without dependent children whose income is $14,000, of which $7,000 is salary and $7,000 is dividends, paid $556.50 in 1924, whereas to-day he will pay $670.
A salaried man with an income of $14,000 last year paid $1,144.50, whereas this year he gets off with an income tax of $670. I do not see many of my friends the ministers here, but this fits their case; they have looked after themselves quite reasonably and I do not blame them at all. It seems to me that
the ministers will naturally vote for this. I do not say that they will not get us all to vote for it. Why should they not say: Come along boys, and help us?
For the information of the House I have a schedule worked out from which I want to give half a dozen cases, and I ask permission of the House to place it upon Hansard so that the minister may have an opportunity of seeing it because I cannot imagine that he ever had the proposition worked out for himself. The schedule is as follows:
Canadian Company Dividends
Dividends of Canadian companies payin'? income tax are free from normal income tax at the present time; but under the proposed amendments to the Act this benefit will not be available to stockholders in the future. Changes to the act as set forth in the budget speech have the effect of greatly increasing the amount of income tax payable by the stockholder in respect of such dividends for incomes up to approximately $50,000. For incomes in excess of $50,000 the amount of income tax-to be levied in respect of dividends grows less on the increases in income than the amount payable at the present time.
The table set forth below shows the percentage taken by the income tax-both at present and as proposed-of increases in income, where such increases are derived from dividends of Canadian companies. There is also shown in the right-hand column the increase or decrease of the amended tax over that at present in force.
Increase in income	Percentage taken by income tax of increase in income when derived from dividends of Canadian companies	Amount to be taken by proposed amendments compared to that taken by present act	Increase in income	Percentage taken by income tax of increase in income when derived from dividends of Canadian companies	Amount to be taken by proposed amendments compared to that taken by present actPresent act	Proposed act	Present act	Proposed act	$ 2,000 to	$ 3,000....	none	none	$28,000 to $30,000....	13-G5%	22%	3,000 to	4,000....	none	2%	f Not taxed at	30,000 to 32,000....	14-70%	22%	50% "j present.	32,000 to 33,000...	15-75%	22%	40% "4,000 to	5,000....	none	2%	f Not taxed at	33,000 to 34,000....	15-75%	23%	46% "\ present.	5.000 to	6,000....	1-05%	3%	186% Increase	34,000 to 36,000....	16-80%	23%	37% "6,000 to	7,000....	2 10%	4%	90% "	36,000 to 38,000....	17-85%	23%	29% "7,000 to	8,000....	2-10%	5%	138% "	38,000 to 40,000...	18-90%	24%	27% "8,000 to	9,000....	3 15%	0%	90% "	40,000 to 42,000...	19-95%	24%	20% "9,000 to	10,000....	3 15%	7%	122% "	42,000 to 43,000....	21-00%	24%	14% "10,000 to	11,000....	4-20%	8%	90% "	43,000 to 44,000....	21-00%	25%	19% "11,000 to	12,000....	4-20%	9%	114% "	12,000 to	13,000....	5-25%	10%	90% "	44,000 to 46,000...	22-05%	25%	13% "13,000 to	14,000....	5-25%	11%	110% "	46,000 to 48,000...	23-10%	25%	8% "48,000 to 50,000....	24-15%	28%	8% "14,000 to	15,000....	fi-30%	12%	90% "	50,000 to 52,000...	25-20%	26%	3% "15,000 to	16,000....	6-30%	13%	105% "	52,000 to 53,00!)....	26-25%	26%	16,000 to	17,000....	7-35%	14%	90% "	53,000 to 54,000....	26-25%-	27%	17,000 to	18,000....	7-35%	15%	104% "	18,000 to	19,000....	8-40%	18%	90% "	54,000 to 55,000	26-25%	27%	3% "19,000 to	20,000....	8-40%	17%	102% "	59,000 to 60,000...	29-40%	28%	20,000 to	21,000....	9-45%	18%	90% "	64,000 to 65,000...	32-55%	29%	11% "21,000 to	22,000....	<1-45%	19%	101% "	69,000 to 70,000....	34-65%	30%	13% "22,000 to	23,000....	10-50%	20%	90% "	74,000 to 75,000....	37-80%	31%	18% "23,000 to	24,000....	10-50%	21%	100% "	79,000 to 80,000....	39-90%	32%	20% "84.000 to 85.000....	43-05%	33%	23% "24,000 to	26,000....	11-55%	21%	82% "	89,000 to 90,000....	45-15%	34%	25% "26,000 to	28,000....	12-60%,	21%	67% "	94,000 to 95,000...	48-30%	35%	28% "99,000 to 100,000....	50-40%	35%	29% "
For the purpose of more accurately comparing tire effect of the old and new scale of taxes, it has been assumed in the above chart that the income under consideration is that of a married man without dependents.
I want to point out some glaring cases. For instances a man who to-day is paying income tax under the clause in regard to incomes from dividend, on a $5,000 income pays 186 per cent more than he paid before. On a $10,000 income the percentage is decreased somewhat; he pays 90 per cent more than he did before. On a $40,000 income the percentage is decreased still further; he pays only 20 per cent more than he paid before.

On a $50,000 income he does not pay any more than he paid before. In other words this proposition is made for the rich man, not for the taxpayer of moderate means. When you come to incomes of more than $50,000 the situation is reversed. This is not a decrease all along the line; it is worse than that. It is an increase part of the line and a decrease on the very end of the line on incomes that can well afford to pay th<~

The Budget-Mr. Chaplin (Lincoln)
tax. When you come to incomes of $60,000 there is a decrease of 5 per cent; when you reach incomes of $70,000 there is a decrease of 13 per cent, and when you reach incomes of $90,000, the decrease is 25 per cent, whereas on the smaller incomes the amount of the tax is increased.
I want to say a word or two now about the Canadian National Railways. Nobody is better pleased than myself, no party is better pleased than we are, in being able to learn from the minister that the fortunes of the National Railways have shown an improvement. I trust the improvement will continue. On looking over the financial statement of the Canadian National Railways I find very little information as to expenditures on capital or branch lines and even less information as to the question of hotels. It seems to me that the shareholders of this corporation have the right to receive information on these particular items. I have lately seen it frequently stated in the press that it is in the mind of someone to enlarge the Chateau Laurier. Surely the minister does not propose any such thing as this; surely we have enough capital expenditure now. If the minister could demonstrate that these hotels had made money, the matter would be different, but I understand that every one of them has been showing losses for years. In that case why on earth we should embark on more expenditures for hotels is beyond my comprehension.
I wish to refer to one phase of this financial statement of the National Railways, because it is quite interesting to me and no doubt it will be interesting to some hon. members who have been telling us with so much elation that the profits of the road have been due to the increase in the haulage of grain, and that when you have a good crop year you have a good profit year. That is the argument they used to refute the statement that came from the railway companies directly that they were losing money on the haulage of grain. I find on looking over the tonnage revenue published in the Financial statement of the National Railways, page 33, that of material such as wheat, oats, com, barley, flour and all these things that apply to the farm 144,000 tons less were hauled in 1925 than in 1924. If anybody can show me how you can produce an increase in profits by hauling less stuff I will give him the palm unless it be that when you are losing money on hauling material, the less you haul the better off you are. That is just what has happened in this case. For the year there is an earned profit of $32,000,000 over and above the overhead of the railway and not 14011-2l0i
one cent of that was earned on the grain. That is evident on the face of the report, and if anybody were to deny it I would feel like applying to have his head read.
Where does the profit come from? The second lot of products that were hauled were products of animals and the quantity was reduced by 12,000 tons, so that no profit can be figured from that. The products of the mines show an increase in haulage of 671,000 tons. The produets of the forest eaime up with another addition of 360,000 tons, while in the products of manufactures and miscellaneous commodities there was an increase of 1,626 000 tons. And these three articles provided the $15,000,000 profit, less of course what was made by savings. Undoubtedly the statement show, and shows quite clearly, that savings were made in expenses. The report indicates emphatically-it is as plain as the nose on a man's face-that not one cent of that profit came from the things which hon. gentlemen of the Progressive party suggest. Not a dollar of the new money came from that source at all.


Mr. CAMPBELL:: How does the hon. member account for the fact that in the months in which the largest tonnage of grain is handled the net revenues are higher than in other periods of the year?


James Dew Chaplin: I do not think the hon. gentleman is quite correct when he says that the net revenue goes up. I admit that the gross revenue may, but inasmuch as it takes some time to get in the returns I do not think he can substantiate that statement.


Milton Neil Campbell: Yes.


James Dew Chaplin: The fact of the matter is that in this particular business no one can say where the profits come from. One would have to know when the other commodities were moved. It may be that these other commodities were carried at about the same time, and that would make some difference. But my hon. friend, who is pretty astute, knows, I am sure, that, as this statement will prove beyond the shadow of a doubt, not one cent of those additional earnings came from these products.


Milton Neil Campbell: If the hon. member will take the trouble to look into the weekly earnings he will find that from October the net earnings begin to increase, and they come down again when the grain moving season is over.


James Dew Chaplin: Did that happen this year?
3304	COMMONS
The Budget-Mr. Chaplin (Lincoln)


Milton Neil Campbell: Yes.


James Dew Chaplin: If it happened this year then there was not as much grain moved as there was last year. In this business as in any other you have to spread your expenses over the year. This applies in railroading just as it does in manufacturing, and probably more so. Certain expenses in connection with the purchase of this, that and the other necessity must be spread over the year, and the account is not made up until the latter end of the year. That is what might happen in this particular case.
I want to impress upon the House the fact that while the Canadian National Railways have had a year of improved business they have still some distance to go before they are out of the woods, so to speak. According to the statement of the Canadian National Railways the deficit increased by $41,000,000. Now, we can congratulate ourselves upon the assumption that the road has pretty nearly paid its way, but you have to remember that the government is not getting one cent of interest for the large amount of money which it has invested in the railways. Indeed, as the Minister of Finance (Mr. Roob) says, that investment may have to be written down. Be that as it may, the fact is that we did not earn enough to pay even the whole of the interest that was due the outside bondholders; we were eight or ten million dollars short in that direction. There is, therefore, no use in our shaking hands with ourselves before we have passed the other stile. We have a long way yet to go, and there is no reason why we should talk about reducing rates. I want to stay the minister's hand' from reducing rates to some of our friends for fear they may postpone the day when the railways will get upon a parity basis. The government of Canada have had to step into the breach and pay eight or ten million dollars to meet the interest upon bonds that were held by outsiders, and it has taken no money on account of its own investment in the road. True enough, the situation is improved, and I am glad of it. But the Canadian people do not want to lose sight of the main fact of the case, and the actual situation is as I have stated.
Last year the Minister of Finance, when he had to perform the duty of announcing a decrease in revenue of something like $50,000,000, made a virtue of necessity and took credit for having reduced taxation to that extent. He said, "we have been fifteen or twenty millions short in our sales tax collections and fifteen or twenty millions short in 
the customs tax. Consequently we have relieved you of so much taxation." I assume that, having treated that decline in revenue of $50,000,000 odd as so much of a reduction in taxation, the minister this year, with an increase in revenue of some $30,000,000, will put the shoe on the other foot and admit an increase of taxes on the people to that extent. That, I think, is a reasonable proposition: surely the argument cuts both ways. I notice that last year when it came to customs taxation my hon. friends to the left were quite pleased to see the amount reduced. I want to ask them how they feel now that customs taxation has increased from $108,000,000 to $127,000,000. Is the difference a matter of taxation this year, or is it an increase in revenue? Last year when there was a reduction the minister declared that he had relieved the people to that extent: now that he has increased his collections what does he say? The Minister of Public Works (Mr. King), smiles. Probably he will tell us what the Minister of Finance thinks.


Mr. ICING (Kootenay):: You are doing very well.


James Dew Chaplin: If that is tbr only answer the minister can give we will compare the figures over a number of years. In customs taxation the government collected in 1925-1926 the year ju3t closed, $127,000,000. The year before they collected $108,000,000; and -for the successive years prior to that they, collected $121,000,000, $118,000,000 and $105!-000,000. These were the amounts they got in customs taxation. They are pretty regular, showing neither any great reduction nor any considerable amelioration from the standpoint of the people. Let us take the sales tax: I find, under the head of Special War Tax Revenue and Sales Tax, that in 1920 the government collected $15,500,000. In 1921 there was collected $78,000,000; in 1922, $73,-
000.000; in 1923, $108,000,000, and in 1924, $120,000,000, in, round figures. In 1925 it fell to $85,000,000, and we were told the taxation was being reduced. This year it has risen again to $95,000,000, making this the second or third largest year during the whole period. This is the largest item next to customs revenue, and yet we are told that taxation is being reduced.
It was this government who increased the sales tax, and it is not now proposed to lessen that burden at all. The people are told that they will not be allowed to lick the stamps for the receipt tax; that the postage has been reduced, and some other. little things done, which are not noticeable at all. The big taxes remain, however, and the big expenditures also remain. The trouble with this government

The Budget-Mr. Chaplin (Lincoln)
is that they do not know enough to economize. The hon. member who preceded me delivered a long lecture on economy; it was too 'bad the minister did not hear it because the hon. member who is just from the provincial House told us all about taxation, and how economical the provincial government was. This government is spending too much money; taxes are too high; we are not going to be able to compete with our great neighbour to the south unless taxation is reduced. This reduction announced by the minister is no reduction at all, but is simply an adjustment of taxes. Taxes are imposed upon those least able to bear them, and taxes are removed from those who can pay. That is what has been done with the income tax.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS THIRD READING

[Stage Direction]
Bill No. 20, respecting the Pacific Coast Fire Insurance Company.-Mr. Clark.

[Stage Direction]
Bill No. 19, to incorporate the Agents Insurance Company.-Mr. Malcolm.

[Stage Direction]
The House in committee on Bill No. 92, respecting the Grand Orange Lodge of British America-Mr. Hocken-^-Mr. Duff in the chair.
Section 1 agreed to.
On section 2-Section 1 paragraph (e) repealed.
Mr. HOCKEN:: It is desired, Mr. Chairman, to put clause 2 of section 2 as clause 2 of section 3.


The CHAIRMAN:: All right.
Section as amended agreed to.
Sections 3 to 8, inclusive, agreed to.
On section 9-Commencement of act.


Horatio Clarence Hocken: I have a slight amendment to make to this section. I move that section 9 be amended by leaving out in lines 41 and 42 the words "to be held some time in the year 1926" and substituting therefor the words "at their next meeeting following the passing of this act." The reason for that is that
this bill may not pass until after the date of the meeting of 1926.


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


[Stage Direction]
The House resumed the debate on the motion of Hon. J. A. Robb (Minister of Finance), that the Speaker do now leave the chair for the House to go into Committee of Ways and Means and the proposed amendment thereto of Hon. R. J. Manion.
James Dew Chaplin: Mr. Speaker,
when the House rose at six o'clock I was discussing the question of taxes and expenditure. Now I want to refer for a moment or two to the public debt. The public debt for the period from 1920 to 1926 inclusive stood each year as follows, in round figures:
1920		 $2,248,000,000
1921		 2,340,000,000
1922		 2,422,000,000
1923		 2,453,000,000
1924		 2,417,000,000
1925		 2,417,000,000
1926		 2,395,000,000
It will be noticed that even with the credits of the present year the debt stands at $55,000,000 more than it did in 1921. There is this further fact which I consider of prime importance: In an ordinary business when a debt is paid that was incurred in or returned from a former year, we usually credit that to suspense account; we do not treat it as a part of that particular year's business. It would be misleading and wrong to say that that was the profit on that particular year's business. My contention is that any money of that sort that came in during the last fiscal year should by right be passed at once to the public debt account and should have gone for the reduction of the public debt. Had the sum we received from Great Britain on various accounts also been credited to the public debt, there would have been a greater reduction of that debt by eighty or ninety million than there is to-day. But the present government placed those receipts into the regular account just as they did in the case of other regular governmental receipts. They treated it as an item of that character and did not apply it as they should have done to the reduction of the public debt.
We have heard nothing from the Minister of Finance in respect to the Roumanian and
3306	COMMONS
The Budget-Mr. Chaplin (Lincoln)
Grecian loans. We have not been told whether these countries have paid their obligations to Canada. Last year the government took the credit for the payment before it was known whether Roumania or Greece were going to pay or not. They have not told us anything this year as to whether these countries have kept up their payments or not; we know nothing about it.
Now I come to a consideration of the tariff resolutions announced from the budget. The first item has to do with some of the treaties that have been entered into. We had to change our tariff in conformity with some of the treaties that were made a short time ago. The first item on the schedule is meats. In other words the members in this House who are free traders, who will not stand for any kind of protection, are quite satisfied to raise the duty on meats for the benefit of another *country. Why was the duty on meats raised in this case? For the benefit of Canada? Oh, no, for the benefit of Australia! Some hon. gentlemen are free traders but they can stand being protectionists for Australia. I would ask these hon. gentlemen if they will not be protectionists for the sake of their own country? Protection is good enough when it applies to some other country, but it is of no use in the interests of Canada. The Minister of the Interior (Mr. Stewart), need not laugh. Hon. gentlemen opposite go to the West Indies and make a treaty, and then they come back and submit to this House increased duties on lines of goods that are intended for the protection of people of these islands and not for the protection of the people of Canada. For example there is cocoa, coffee, ginger, nutmegs and arrowroot. If the ministry would pay a little more attention to their own people rather than to the people of other countries they would accomplish more good.
In the tariff resolutions there is a long schedule with respect to sugar. This government have changed the sugar schedule three times for the protection of the coloured people in the West Indies and to the detriment of the people of this Dominion, particularly to the disadvantage of three or four counties in the province of Ontario. This government do not believe in protection for the farmers of the counties of Kent, Lambton and Essex, but they do believe in that policy when it comes to helping coloured labour in the West Indies. That is the kind of protection that hon. gentlemen from Saskatchewan and other provinces of the west are voting for.
(Mr. J. D. Chaplin.]
There is an item in the schedule dealing with the duty on table salt. The Minister of Finance offered no explanation when he announced the item, but here it is. The article is not pure salt. It contains some mixture permitting it to enter on a basis of five per cent, ten per cent and fifteen per cent respectively. It may be all right, but it does not seem to me that it is going to be of any particular benefit to the salt industry of this country. I find also such things as bananas and fruits of all kinds, fruits that are not produced in this country at all, but as to which we are quite satisfied to tax ourselves in the interests of the people of some other country. That may be good business for those people but it does not appear to be very good business for us. I would rather put taxes upon something that would protect the Canadian people instead of the people of some other country.
Passing from the sugar schedule, the next item is "angostura bitters". I think some comment has been made upon this item already. This is where the cocktail comes into use. In the interests of those gentlemen who want to use angostura bitters the duty is reduced from $10 to $5. Can it be argued that such a reduction as that is for the benefit of the workingmen and the farmers of this country?
We come now to the serious item, which has caused a good deal of talk throughout the country, namely, the automobile schedule. Before discussing that schedule I should like, for the information of the House, to disclose what takes place in the department. We have a Finance department which makes the laws respecting duties, and then we have a Customs department which is the executive and carries out the laws that are laid down by the Finance department. When the duties were placed upon automobiles they were fixed at 35 per cent. At the time those duties were imposed no provision whatever was made in respect of the parts. Parts were not mentioned at all, and consequently the Customs department had to make a regulation covering what were parts of automobiles. In their judgment, and with the knowledge they had, they decided that the parts of an automobile consisted of the following; the wheels, the chassis, the top and the body. That constituted an automobile, and those were all the parts of an automobile. Of course the inconsistency of any such ruling will be quite apparent to anybody when I tell you that the parts of a wheel would not be considered as parts of an automobile. For instance, while a wheel is a part of the car, the hub of a wheel would not be part of a

The Budget-Mr'. Chaplin (Lincoln)
car. That is the style of business that is being carried on in the Customs department.
I am not blaming this government or any one at all, but I simply say those are matters which grew up in the department. The people in the department are not acquainted with the business they are handling.
The other day, in order to obtain some information from the department, I visited the place to ascertain the conditions there.
I asked one of the chief clerks what the duty on an automobile hub was, and what do you suppose he told me? He looked through the list and found "hub blocks", and he said "the duty on that would be the same as on "hub blocks". Those who have been here for a number of years know very well that the hub block was a block made for the old style of carriage. It was an dm Mock with a hole through it, and this officer was going to fix the duty on automobile hubs the same as the duty on a hub block used twenty years ago! That is an illustration of the knowledge some people have of the business. When I tell the House that in an automobile there are 160 or 200 parts which have to be made or brought in-at any rate they have to be provided-for the manufacture of a car, you can see how far you can get with a department which decides in its own judgment that there are only four parts to an automobile. You can see the inconsistency and the foolishness of trying to work a Finance department and have the Customs department interpret what is in the minister's mind. I am not criticizing the minister for that at all. My remarks are not based upon that suggestion. I hope that possibly some good may come from my remarks and that it may be so arranged that men in the Finance department will know what they are doing, and what they want, or that the other people will find out what they want and do it. But that is certainly not the case in this instance.
Now we come to this situation. We find the minister has put in the tariff schedule a clause that now covers, as far as I can make out, parts of automobiles, but parts of automobiles evidently are not going to be the same parts as they were before. They mujt change that. What is going to be done is hard to say. One thing is sure, namely, that this clause and this automobile business cannot be properly, definitely and reasonably discussed before we see what changes are going to be made. There must be some changes. I warn the minister that under the present proposed tariff this business runs a chance of being ruined, I do not care what anybody says. Unless some changes are made
the business is gone. The parts man cannot stay in business unless the automobile man remains in business. It is impossible, because if a car comes in and certain parts are to be made here, it does not make any difference how cheaply they can be manufactured here, they will never get on that car. The same thing applies to tires. If automobiles complete are allowed to come in at low rates of duty, the tire man may be willing to make his tires as cheaply as possible, yet there is no chance on earth of his getting the business; consequently you run the risk of putting the parts man out of business unless you conserve the automobile business. If, on the other hand, you decide that the automobile people can function by bringing in the car mostly manufactured, or over half manufactured, you still put your parts men on the block and their investment in this country is gone.
The hon. minister said the other day, " I discussed this matter with automobile people." He did not say that in the House, but he made that statement; I do not suppose it was particularly private. But as far as I know he never discussed the matter with the parts people and they never had a chance to discuss it with him before they came down. Here is an industry about which the minister had not the proper information. He could not get it from the Customs department, because they did not know anything about it and do not yet. He gets information from one or two sources, and I will warrant you that the information the minister got since he made the changes is a lot more than he got previously; he knows more about the difficulties now than he ever knew before. It would have been a good deal better if he had got the information a little ahead of time.
But somebody says that the people knew these changes were going to be made. The truth of the matter is that the automobile people relied on the statement of the Prime Minister, made in the cities which he visited; they relied upon his statement that there would be no changes in the tariff and that he was appointing a tariff commission. The people expected to make their representations to the proper place, and the tariff board was the place for them to go. I am not saying whether the tariff is too high or too low; I do not care, but I say that no government has any right to strike at the heart of any industry without making a proper and careful analysis of the whole situation. That in my opinion has not been done. The argument is used that Mr. Henry Ford says that automobiles are too dear. He wants free trade
3308	COMMONS
The Budget-Mr. Chaplin (Lincoln)
in automobiles. Well it is a strange thing, Mr. Speaker, that after a man has lived to be three score years or more,, and has built up a giant business in a country which has had a protective tariff quite as high as our own, he should come to us and say, "You ought to have free trade." That may be a good thing for Mr. Henry Ford, but I do not know that it is such a good thing for us or that Henry Ford should be the judge as to what is good for Canada.


John Warwick King: Did Henry Ford
not say that it would be a good thing for the automobile industry at Windsor or at Ford city?


James Dew Chaplin: If Mr. Ford said what the minister says he said in respect to the automobile industry at Windsor, I think I would be quite entitled to ask Mr. Ford why, if he believes in free trade, he did not years ago ask the United States government for free trade in that country.


Mr. STEWART (Edmonton):: That is not the point. Did he not say that it would be a good thing for the business at Windsor and that he could manufacture? It is a very hard pill to swallow, is it not?


James Dew Chaplin: I do not know whether the Minister of the Interior is making the speech or not. He is evidently trying to make my speech for me. Nobody objects more than he does when somebody else interrupts him during his speech.


Charles A. Stewart: Not at all. I have not objected yet.


James Dew Chaplin: If Mr. Ford can make a statement in respect of Canada I certainly have just as much right to make a statement in respect of him and the United States. Let us assume that he is right and he knows his business. Let us assume that it is a good thing for Canada. I would like to ask him if it would not be a good thing for the United States. Has he ever made application to have the tariff reduced in that country? It is a fine thing for a man, after he has made hundreds of millions of dollars, to say: Certainly, boys, I am ready to do an export business all over the world and the rest of you can have free trade now. He did not say that when English automobiles were ready to be shipped into the United States some years ago. He reminds me very much of the late Andrew Carnegie, who was a steel manufacturer in the United States and whose plant formed the nucleus of the big giant, the United States Steel Corporation. Being a Scotchman, he was quite content to stay in 
the United States, to take the benefit of the tariff for twenty-five or thirty years in order to build up this giant business, and when he sold out to the United States Steel Corporation he suddenly became what he was originally, a Scotch free trader.
As regards automobiles and Henry Ford, if a man who is in the business desires to have free trade I would be very much inclined to give it to him. I do not see any reason why we should not; but is there any reason why the government should go to work and kill other industries? The Ford business is one by itself; it is a peculiar business. This man has built up a business on probably a different principle from that of anyone else. He started out to build one car; he stuck to that one car through thick and thin for at least fifteen years. He never changed the model; he never had any tools to make; he continued to manufacture the same thing Each year instead of putting some new contraption on his car in order to induce people to buy it, he reduced the price by fifty or a hundred dollars and he got the sales. Nobody else could do that. There was only one Ford car; it had no competitor in that particular line within a hundred to two hundred dollars of the price.


Charles A. Stewart: Is he not an example of a man who has managed his business economically and well? Did he not do the same with the railway he purchased? He had no protection on the railway.


James Dew Chaplin: He is not the only one who has managed' a business successfully. Henry Ford is in a Class by himself. He makes his own steel; he has his own lumber yards, his own limits, his own mines. He buys everything at cost right down to hard tacks. That is his business and no one has any complaint to make of that. He took a railway that was bankrupt, and because of the quantity of freight he had to handle himself he could divert freight over his road and thus make it pay. Is the fact that he was able to do that any reason why you should put your own railroad out of business?
'Mr. STEWART (Edmonton): Not at all.
I am just drawing attention to the fact that Henry Ford' never asked the United States for protection so far as I know, and that he ran a railway.


James Dew Chaplin: I never said
that Mr. Ford asked for protection, but Mr. Ford lived for twenty or twenty-five years under protection and took advantage of it. He says now that his company took advan-

The Budget-Mr. Chaplin (Lincoln)
tage of protection in Canada and I ask the minister the question: Did he not do so in the United States too?


Charles A. Stewart: Certainly
he did, and every one of my hon. friends opposite would do the same.


Mr. CHAPLIN (Lincdln):: I did not state and I never heard that Mr. Ford asked the United States government to take the duty off automobiles.


Charles A. Stewart: The question I asked my hon. friend was: Can he state that Henry Ford ever asked1 for protection?


James Dew Chaplin: I never spoke to Henry Ford about the question and I cannot answer it. I would like to ask the minister a question: Is he in favour of free trade on cars?


Charles A. Stewart: Not free
trade on cars.


James Dew Chaplin: Then he is
worse than Henry Ford.


Charles A. Stewart: My hon.
friend is asking me a question and I shall be glad to answer it. My hon. friend has been arguing for half an hour that no consideration was given to this question; that we plunged madly into it. We did nothing of the sort. The same statement was made about the tariff on farm implements.


James Dew Chaplin: I do not mind being asked a question, but I object to the hon. gentleman making a speech.


Charles A. Stewart: With 'all
due respect to the hon. gentleman, he asked the question and I answered it.


Hewitt Bostock: The hon. member asked a question, but I think he is now asking for protection for himself.


James Dew Chaplin: I do not mind being asked the question, but I do not want the hon. gentleman to answer it too.
I am sorry the Minister of Finance is not in the chamber because I want to refer to one more item on the schedule. Hon. members will remember that some years ago I stated in this House that I approached the late Minister of Finance, the Right Hon. Mr. Fielding, with the request that' he place a duty on the dyeing of silk. There was no duty in 1921 upon the article that it was proposed to put on the market and the manufacturer who was desirous of coming here to do the dyeing asked for 10 per cent protection. The minister said: Of course we are not a protectionist government and I will not make
any promises, but if it looks reasonable to us I will consider the matter. In the 1922 budget the minister was good enough to place a duty of 10 per cent upon the silk dyeing industry and in my locality about $100,000 were spent by a small firm in establishing a silk dyeing industry. It so happened that the minister, along with the then Minister of Marine and Fisheries, who afterwards became Minister of Justice (Mr. Lapointe), went over to France and made a treaty with that country. By means of that treaty about one-half of the duty was cut off.
I want to refer to another act of perfidy, or, Mr. Speaker, if you consider that too strong a word, let me say another breach of faith on the part of this government. A couple of years ago, I believe in 1924, an English concern came to Canada and approached this government with a view to having a duty imposed on artificial silk, which product they were prepared to make. This company, I may say, is the largest English concern in the silk industry and one of the foremost companies of the kind in the world. They came here and interviewed the minister, submitting certain proposals as to what they would do. They offered to erect a plant at a cost of between $2,000,000 and $3,000,000 and to utilize our wood product in the making of artificial silk. We do not know what took place but at any rate the government met them, and following that interview a duty was imposed on this article At the same time a drawback was provided for the purpose of allowing people interested in the importation of this commodity to bring in their supplies in the meantime until the factory should be started. Mr. Fielding in 1923 at page 2648 of Hansard volume 3 is reported as follows:
A ncsw industry is promised us for tihe manufacture o-f artificial silk. It is represented to us that this industry will employ a large amount of labour and we have every reason to believe that if we can make encouraging terms a great industry will be established. We propose to make a classification in which it will be treated largely as silk, and we have every reason to hope this will lead to a very' important industry being established.
The Englishmen, it appears, were not quite satisfied with the lengths to which the minister had gone, and after some further negotiations the resolutions were changed in committee to meet their views, with the result that they got the terms they desired. The drawbacks were also arranged. The company afterwards wrote to the minister and told him that they were going to be somewhat late in getting their mill going. They wanted to make sure first that their product was a success, and so
3310	COMMONS
The Budget-Mr. Chaplin (Lincoln)
they asked the minister to continue the drawback arrangement until such time as their plant might be put into operation. The minister did so. There was passed an order in council, which I have under my hand, extending the time to December 31, 1925. A few weeks ago the government were informed that these people were now ready to produce in Canada. They had experimented long enough with the Canadian raw material to ascertain that the article they could produce here was first class. As a matter of fact it was better than they had anticipated, for they found that our wood excelled their expectations. Now, very much to their surprise, the minister brings down a budget containing an entirely new arrangement in favour of another firm who are about to begin operations in the province of Quebec. The effect of this departure of the government's is that the duty which this English firm has had on its product for three months and fifteen days is now practically removed. Three-quarters of the duty has been taken away, and these people would be stranded if it were not for their strong financial position. That is what I term an act of perfidy. It is a breach of faith on the part of this government which will do us no good in any market of the world when what has taken place becomes known. I have no brief for these people, nor have I any information other than I have been able to pick up. I may observe, however, that they came to my city because it was the centre of a small growing industry, engaged in the manufacture of silk. This is the treatment that they have received at the hands of this government. They have invested in the town of Cornwall over $2,000,000 and they employ about 500 people to-day. It is going to be two years before the firm in Quebec are ready to produce and in the meantime the product of the other people is allowed to come in practically free. In other words, 75 per cent of their finished article will come into the country under a drawback. That is the kind of treatment which this government metes out to people who come here to do business.
I think I have taken up enough of the time of the House, Mr. Speaker, and I beg to thank hon. members for the careful attention with which they have followed my observations.


Mr. A. J. MACDONALD (Glengarry):: My purpose in participating in the present debate, Mr. Speaker, is to direct your attention to the fact that notwithstanding the wonderful progress of the province of tMr. J. D. Chaplin.]
Ontario along industrial lines its outstanding and predominant industry is still agriculture. Fortunately all parties concede that agriculture is our basic industry and that when this industry prospers all others prosper. In view of this fundamental fact it is reasonable to expect that the elected representatives from the province would be very much concerned with the present position of this industry, and that its requirements would evoke the sympathetic interest of hon. gentlemen opposite. I submit that it is fair to say that during the progress of this debate whatever sympathies hon. gentlemen opposite have shown have been on the whole with the protected interests.
Having been closely associated with the farming industry of my native county of Glengarry for the last thirty-five years, and having an intimate knowledge of the constant struggle on the part of the vast majority of them to make ends meet, even in that fertile county, I have endeavoured to evolve a reasonable explanation for this condition of mind on the part of hon. gentlemen opposite. Perhaps a casual analysis of the report of the Chief Electoral Officer in respect of the last general election will provide it. Looking at this report one finds that, sixty-eight Conservatives were elected out of a total of eighty-two candidates. They were elected by 57 per cent of the votes polled, and 38 per cent of the total possible vote, and of these sixty-eight members, four are classified as farmers, one as a retired farmer, three as farmers and breeders of pure bred stock and one as contractor and farmer.
With all due deference to the superior training and the intellectual attainments of the many gentlemen of the learned profession in that group I submit, Mr. Speaker, that this very training precludes them from a sympathetic understanding of the problems confronting the farmers of this country and that those among them who should be sympathetic have permitted their sympathies to be dulled by their environment. How many of the elected representatives from Ontario have a clear understanding of the income and expenditure of the average farmer? Yes, how many gentlemen connected with tin press of this Canada of ours have an adequate conception of the income and expenditure of our average Canadian farmer? In the final analysis the press may be held accountable for the wealth of misunderstanding prevailing in the industrial and urban centres of our fair country in this respect. In this connection I wish to direct your attention to an article in Toronto Saturday Night which was

The Budget-Mr. Macdonald (Glengarry)
reprinted by the Ottawa Journal of the fifth instant and which reads:
Taxes, Tariffs, Industry
When the Canadian Council of Agriculture met the cabinet the other day the members expressed themselves strongly against the reduction in the income tax. These philanthropists believe in taxation. Of course they do-for everybody but themselves. Their worry is not that they pay income taxes, but the reduction in the income tax may by hook or crook make it necessary to levy other taxes and these may get to them in time.
As for the application of the income tax, be it high or low, they have no reason to worry. Last year according to recent figures there were exactly 3,061 farmers in Canada paying income taxes, and the sum total they paid was $162,000. This chicken feed was contributed by 530 Ontario agriculturists, to the amount of $19,351. In Quebec 42 paid $3,775, which was just about half the sum that British Columbia farmers paid. In the Canadian west farmers appear to have a reasonable view in respect to their responsibilities. In Saskatchewan 1,492 farmers paid $70,956.
In Alberta 663 farmers paid $49,894, though Manitoba fell down with only 171 farmers paying $6,303, but this was nearly twice what Quebec paid.
As fifty per cent of the people in Canada either live on farms or draw incomes from them the question of income taxes so far as they are concerned is rather a joke, particularly in view of the fact that upward of half of the country's wealth is derived from the farm.
Of course if the 168,000 employees who in 1925 produced $13,973,000 as their contribution toward the income tax collected, could live off their salaries in the same manner as the farmer lives off his acres, with no one to check them up, our interest in the income tax would not be of a character to keep us awake nights.
And this brings up another question. If the government proceeds to rip the vitals out of industry who is to pay the taxes? Where is the government to find that six or seven hundred million dollars necessary to meet the yearly liabilities? Land taxes look to b'e in sight.
In 1924 Ontario and Quebec paid $44,000,000 out of the total of $56,000,000 paid in income and war taxes, while out of $4,700,000 paid as business profits tax Ontario and Quebec contributed $3,500 000. If industry is to be sacrificed to make a holiday for the Progressive party and such part of the Liberal party as believe in such things, the time will come when a complete revision of taxation methods will be necessary to meet new conditions.
The tenor of this article suggests that inasmuch as upwards of fifty per cent of the country's wealth is derived from the farm, and fifty per cent of the people in Canada either live on the farm or draw income therefrom, the farmers are dodging the payment of income tax because there is no one to check them up. May I suggest that rather than this smug assumption on the part of the would-be saviours of this country that the men and women engaged in our basic industry are dishonest, the fact that only 3,061 farmers paid the small sum of $162,000 in income tax out of a total of $56,000,000 in the year 1924 should be a compelling reason why every man interested in the economic situation and future welfare of our country should pause and ask himself where we are drifting.
For the information of the House and those people in this country not familiar with this problem I invite you to consider seriously with me, as the importance of the subject fully warrants, the financial statement of one of our young farmers engaged in dairying and mixed farming, covering his business operations for the years 1922, 1923, 1924 and 1925. It is my firm conviction that even a superficial examination of these statements will lead to a better appreciation and understanding of many of the problems confronting us at present, and understanding it may force us, even against views honestly held, to consider our whole fiscal policy before it is too late.
This young man owns a 109-acre farm with 50 acres under cultivation, 20 acres of pasture and 30 acres of bush. The value of the farm and stock is $9,000, against which he has a mortgage for $5,000, which is not an unusual condition among the farmers of Ontario. The following are the! financial statements foi 1922, 1923 and 1924:
Revenue-
42,160 pounds of milk from 8 cows at
$1.24 per cwt	
Cows and cattle sold and used	
Hcgs sold and used	 [DOT]
Insurance on horse killed by lightning
Eggs and poultry sold and used	
Hay sold	
Wood sold and used	
Maple syrup sold and used	
Potatoes and roots used	
Expenses-
General repairs	$129	00Taxes	
94	35Fire insurance	
6	50Feed bought for hogs	
161	45Hired help	
60	00Threshing and Dressing	
55	00Blacksmith bills etc	
30	00
Horse bought to replace that killed 110 00

Balance	 $1,073 88
Annual payment on mortgage of $5,000, amortized over 20 years at 6 per cent. 435 90
Balance available for clothing, groceries, medical aid and all other necessities... 1923
Revenue-
44,830 pounds of milk at $1.54.
Cattle sold	
Hogs sold and used	
Eggs and poultry sold and used.
Hay sold	
Maple syrup sold	
Wood sold and used	
Potatoes and roots used

3312	COMMONS
The Budget-Mr. Macdonald (Glengarry)
Expenses-
Repairs	$100	00Taxes	
87	72Insurance	
0	50Feed bought for hogs and depreciation in value	
353	09Hired help	
08	75Threshing and pressing	
39	25Blacksmith bills etc	
35	00
690 31

Annual payment on $5,000 mortgage.. ..	435 90

Expenses-	
Repairs		
	
	
Feed for hogs and hens.. ..	
Hired help		
Threshing		
Blacksmith bills etc		
718 66
.	$1,136 99
Annual instalment	 435 90

mean, I propose to consider in detail the omissions as affecting particularly the mining industry.
Now, with particular application to the mining industry in our own country, wherein does the budget fail? First and foremost, no consideration is given to labour, the most essential element in the success of mining or any other industry. I refer especially to the homes and living conditions of the miners and those who live in mining towns.
A discovery being made, development and construction proceeds apace, a town or city springs into existence, and the inhabitants are forced to install water works and sewage systems, build roads, schools, churches, and public buildings. In one stroke they must accomplish what entails years of slow and patient growth in a fanning or any other industrial community. This being done, and the mine put on a producing basis, the federal and provincial authorities step in and reap the benefit without a word of thanks or a gesture of gratitude.
Take for example, the case of a city in the province of Ontario, a city owing its birth and existence to the discovery and operation of a mine, the city of Timmins with a population of some seventeen thousand people. Under the Mining Tax Act of Ontario, that city is not allowed to levy any tax on the profits of the mine within its precincts, nor upon the mill or other mine buildings. The Ontario Mining Tax is not really a profits tax but is an arbitrary method of giving the provincial government a revenue from profitable operations in lieu of a royalty, while assuring would be investors that stability indispensable to a successful commercial enterprise. The act is based on the report of the Royal Ontario Nickel Commission of 1917, which report takes into consideration the taxing systems of every mining country in the world. Let me quote clause 5 which contains the gist of the act:
5. (1) Every mine in Ontario, the annual profits of which exceed $10,000, shall be liable for and the owner, manager, holder, tenant, lessee, occupier, and operator of the same shall pay an annual tax as follows:
(a) Three per centum on the excess of annual profits of such mine above $10,000 and up to $1,000,000.
0>) Five per centum on the excess above *1,000,000 and up to $5,000,000; six per centum on the excess above $5,000,000 and up to $10,000,000; seven per centum on the excess above $10,000,000 and up to $15,000,000, and on the annual profits above $15,000,000 a percentage or percentages increasing in like progression.
Of this amount, the provincial government allows fifty per cent up to a maximum of
835.000	to go to the local municipality. Over and above this, the federal government lifts 
about twice the total and contributes nothing to the municipality.
Allow me to refer to the profit and loss statement for the Hollinger Mine for the year 1925:	'
Taxes, province of Ontario	$152,296 62
Municipal taxes (except residences owned
in city)	 35,000 00
Dominion of Canada 1925 taxes	 388,000 00
Dominion of Canada 1924 taxes (adjustment)	'	 57,597 34
Not only does the federal government corral more than double the amount levied by the province but the levy is made without allowing the mine to deduct from profits the amount paid either the province or the municipality.
A further incongruity lies in the fact that with regard to the federal income taxes, no allowance is permitted for money spent by mining companies on outside ventures. As everyone knows the development of new mines is extremely hazardous in a financial sense, the proportion of payable mines to the total number of properties on which work is done, being very small. If mining organizations are going to survive they must get new mines, but as the law stands for every dollar spent by a mining company in outside prospecting, exploration, development, and equipment, a tax is paid, and even under the new tax regulations the cost to the companies is $1.04i. It seems only reasonable to ask that in view of the large, very large element of risk in the development of new properties, mining companies should be allowed to spend annually a certain percentage of their capital in outside ventures and that this money if so spent, should be exempt.
With regard to the reduction in the rate from ten and one half per cent to nine per cent, I consider it is merely a matter of shifting the burden with a net loss to the actual shareholder. As pointed out by the hon. member for Quebec West (Mr. Parent):
If you happen to be part owner of a mine, the company first pays the income tax, and as shareholder or part owner you must also pay, so that whereas you are given consideration for depreciation only once you must pay the tax twice.
On hearing that statement I was inclined to agree with the hon. member, but on further investigation I find it is not true. There is a fifty per cent allowance on net profits for depletion of the mine, also an allowance of fifty per cent on mine dividends in the case of gold and silver and twenty-five per cent in the case of copper. No allowance is made in the case of nickel. This is an incongruity which should be rectified.

The Budget-Mr. O'Neill
Reverting to the case of the municipality, I consider it is only fair, equitable, and just that the Dominion, spending a very small item on geology or any activity contributing to the success of provincial mining ventures- I mean comparatively	speaking-should
acknowledge indebtedness to the working man and help reduce his tax burden. He pays income and property tax to the municipality as well as income to the Dominion as well. To my mind, it is nothing short of robbery on the part of the federal authorities. The case is totally different from every other community. The city in question, and every mining city as a matter of fact, is situated away off on the frontier; the inhabitants are all workmen raising families, and the school question is more acute than that of housing. Why, in Timmins last year more than the provincial allowance of $35,000 was given out in charity to the workless! Yet the federal money grabber can walk off with approximately one-half million dollars without the slightest qualms of conscience. The same applies in the good old township of Tisdale, in Teck, and down through the silver region.
Recognizing the fact, Sir, that Canada's mineral industry has reached such tremendous proportions, I believe, and I am sure all hon. gentlemen in this House will agree with me, that the time is ripe for the immediate calling of a conference of representatives from the Dominion, the provinces, and the various mining associations for the purpose of framing uniform and non-duplicating tax laws and uniform mining laws in general throughout the Dominion of Canada. I have heard mining men of experience and prominence say that the federal mining laws are beyond all doubt the worst in the world, both as to acquiring and as to holding mining property. There are some irritating differences between the laws of Ontario and those in vogue in Quebec, and these could easily be ironed out before the industry becomes further established. I might add that I have heard mining men from Africa, Australia, and the United States state that Ontario mining laws worked out to greater advantage than any with which they had experience.
It might not be inadvisable here to refer to the present status of Canada's mining industry. The situation is well outlined in a report by S. J. Cooke, chief of the Mining, Metallurgical & Chemical branch of the Dominion Bureau of Statistics at Ottawa in the course of an address at the opening session of the annual meeting of the Canadian Institute of Mining and Metallurgy in Montreal, March
3rd, 1926. Reviewing the developments of the year, Mr. Cook pointed out that the production of minerals reached a value of $224,846,237, an advance of $15,262,831 over the total for 1924, and well towards the record valuation of $227,859,665 attained in 1920, when new production records were established. Among the metals the remarkable advances in the production of gold, lead and zinc were the most outstanding. Improvements in outputs marked the totals for nickel, copper, cobalt and silver. Sales of asbestos increased during the year by more than $2,000,000 to a total value of $8,995,854. Improvement in the production of other non-metallic minerals was noted in the figures for fluorspar, graphite, gypsum, natural gas, petroleum, quartz natural sodium sulphate and carbonate, salt, talc, and soapstone. Production figures for coal, feldspar, pyrites and mica were below those reported in 1924. Except in coal, losses were negligible. Coal showed a loss in tonnage amounting to 508,796 tons and as coal at the mines sold at slightly lower prices during the year the value of the output showed an even greater loss proportionally than the tonnage.
Metal mining in Ontario showed wonderful prosperity in 1925. Gold, silver, nickel, and copper were produced in abundance and in addition to these leading minerals there was a production of almost every other economic mineral with the exception of coal. British Columbia's output of lead, zinc, copper, gold and silver added greatly to Canada's mineral wealth. Quebec's asbestos fields continued to supply by far the greater part of the world's tonnage of this useful commodity; lead, zinc, gold and silver were also reported. Developments in the Rouyn field in Quebec were watched with interest by the mining world during the year. Much progress was made. Alberta, Nova Scotia and British Columbia produced large tonnages of coal in addition to other minerals. Manitoba's mines yielded gold and silver, but more important perhaps than the actual yield of metals was the fact that Manitoba's mineral area was made the subject of a more intense study during 1925, than in other years so that the prospects of production from this source were very considerably improved. New Brunswick's coal and building materials added to the total for Canada. Interest in the oil-well developments in Alberta was very keen throughout the year; it is probable that very encouraging developments will occur in the mineral industry in this province in the early future.
Upwards of 64,000 persons find employment in Canada's mining industry. Ontario, British Columbia and Nova Scotia mines alone fur-
The Budget-Mr. O'Neill

nish employment to more than 45,000 persons. Nearly 20,000 are employed in Canada's metal mining and non-ferrous metallurgical works. About 34,000 people are employed in nonmetal mining and approximately 11,000 in the production of structural materials and clay products. To these salaries and wages totalling approximately $83,000,000 are paid annually. The importance of the purchasing power represented by the employees of Canada's mining industry is sometimes not fully appreciated. Fuel and electricity constitute an expense item reaching a total of almost $20,000,000 a year; much of the progress that has been possible in the mining industry in recent years has been due to the extensive development of hydro-electric power facilities.
Investment in Canadian mines amounts to approximately $632,444,000; of which $281,-
828,000	is invested in metal mining and metallurgical works treating Canadian ores; $259,-
361,000	represents the investment in non-metal mines and $91,255,000 the cost of properties and plants producing structural materials and clay products.	.
Mining, now third in rank among Canada's primary industries contributes extensively to the wealth and prosperity of the Dominion. Large tonnages of freight move from and to the mines; many subsidiary industries depend upon the mining industry for their prosperity. Canada's progress in the production of mineral wealth has been notable particularly in recent years; the developments in established fields have won the confidence of the investing public; the discovery of new mineral areas has provided attractive opportunities for those of a more speculative nature; the growth and evident stability of the mineral industry stamp it as one of the great and increasing factors in Canada's industrial and commercial life.
At this point, Sir, I would refer to certain special items in the matter of the mining industry regarding the tariff and sales tax. Here is where 1 may find myself a bit isolated, although I am sure it is the policy of the protectionist party not to advance the interests of one class at the expense of another, and should be, of course, the policy of the government.
With regard to tariff and sales tax, the intention and the desire of the government apparently is to remove or lessen the duties on essential machinery for production in natural resources. The government has been very considerate to us, but there are a number of items where there is discrimination, due in part to the fact that the tariff takes no con-fMr. O'Neill.)
sideration of advances in mining and metallurgical practice, and also due in part to a lack of knowledge with regard to the machinery used by the industry. Following I might mention several items in which this appears to be the case.
There is a considerable consumption of dehydrated borax by the mines, particularly in refining of gold bullion. Ordinary borax comes in duty free, although it is used in the manufacture of a large number of articles which themselves are protected by a duty. The only difference between borax and dehydrated borax is that in the latter some of the water is driven off, but although it is still borax, when imported in that form it pays a duty of 17| per cent.
Mine hoists are not specifically mentioned in the tariff and because of this fact they come in under article 453 and pay a duty of 27J>
per cent plus 5 per cent sales tax. Compressors and wire ropes also pay a high rate of duty and sales tax. If either hoists or compressors are used in the lumbering industry or ropes used in connection with block and tackle, they come in under reduced rate of duty and are exempt from sales tax. This appears to be discrimination against the mining industry in favor of lumbering and as they are both basic industries, there seems little excuse for it.
Rock drills come in under reduced rate of duty and together with drill steel are exempt from sales tax. Drill sharpeners however and steel tempering furnaces pay a high rate ol duty and also pay the sales tax. As the twc latter are used in the manufacture of the drilling bits, it would only seem reasonable that they should be at least exempt from sales tax.
Tariff item 460 provides that, "sundry articles of metal as follows, when for use exclusively in mining or metallurgical operations" shall come in duty free. It appears that the limiting of this to articles of metal is unfair, in some cases. I might point out that steel cyanide tanks come in duty and sales tax free, while wooden tanks, for the same purpose, pay a duty of 25 per cent plus 5 per cent sales tax. You know filters all have filter cloths; American filters have redwood sectors and filter cloths. A complete filter, including the canvas and Redwood sectors, come in duty free, but spare Redwood sectors pay 25 per cent duty plus 5 per cent sales tax and extra cloths or bags pay 35 per cent duty plus 5 per cent sales tax.
I might also mention that crushers, ball mills, tube mills, and so on, come in under reduced rate of duty and are exempt from sales

The Budget-Mr. O'Neill
tax. Cyanide machinery comes in duty free and is exempt from sales tax. Between these two, however, are the classifiers, and the Department of Customs and Excise considers that classifiers do not property belong either to the cyanide machinery or to the crushing machinery, although they are of course essential to both. Because of this classifiers have to pay 274 per cent plus 5 per cent sales tax.
I might also mention that mine cars, and so on, are exempt from sales tax, but the rails on which they run are not. The 6mall mine locomotives, for underground use, which are practically the same as cars, pay a duty of 35 per cent plus 5 per cent sales tax, although they are not manufactured in this country. They perform the same function for the mines as tractors do for the farmers and tractors or locomotives in lumbering operations. Farmers can bring in tractors duty free; lumbermen can bring in tractors and locomotives at 20 per cent, exempt from sales tax. Any person can buy a tractor under a duty of 27i per cent plus sales tax, but the mine locomotive pays a duty of 35 per cent plus 5 per cent sales tax.
It seems to me that the timber used in mining operations should also be exempt from sales tax, because it is really a by-product of farming; also in view of the fact that a certain amount of clearing is done around the mine and the timber is sold. As hon. members know, it does not enter into the final product and timber once put underground has no salvage value. As used in the stopes it is essential to the operation of rock drill and steel, both of which are exempt from sales tax, and as used in the shaft it is essential to the operation of mine cages, cars and skips, which are also exempt from sales tax.
I am also inclined to think it is rather unfair to differentiate to the extent that is done between machinery for the cyanide process and machinery for concentrators, where the same machinery is used in both cases. When used in the cyanide plant it enters duty free and is free from sales tax, while the same machinery used in concentrating ores is not exempt and pays a high rate of duty. Flotation oils, et cetera, are exempt from sales tax when used in the production of a product which itself is not exempt, but when used in connection with gold or silver ores they have to pay a sales tax. These are only some of the items to which I should like to refer.
There is also the question of salt used in the refining of nickel. This is not the ordinary type of salt as manufactured in Canada, but 14011-211



REVISED

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is a rock salt which has to be imported from the United States. Rock salt used by the fishermen comes in duty free, but the nickel companies have to pay a duty of five cents per 100 pounds. The government has more or less laid down the principle of a rebate of duties on articles consumed by companies manufacturing for export. It seems to me that this should apply in the case of rock salt, because 97 to 98 per cent of the material produced in our nickel refineries is for export, and of course, as hon. members are undoubtedly aware, nickel sent into the United States has to pay a duty of three cents a pound. The salt as used in the nickel refinery is used for giving a chloridizing roast. It does not enter into the final product, being consumed in the process of manufacture. The free importation of this can affect no Canadian producer; but if the government cannot see their way dear to place this salt on the free list, I think it is only reasonable to ask for a rebate of the duty on account of the salt being consumed' in the process of manufacturing a product for export. These subjects might come under the consideration of the newly-formed tariff commission; they would form excellent material on which the commission mi^ht cut their eye-teeth.
That covers some specific items to which I wish to refer, consideration of which would prove an encouragement to the mining industry, but I do not suggest for a moment that I have covered the whole field. I should like to come now to a short consideration of the iron and steel industry. Failure to adjust the specific duties on the basic forms of iron and steel so as to bring their ad valorem effect up to the general level of duties on other materials marks one of the most outstanding disappointments in the budget.
As regards the province of Ontario, this great basic industry is dependent on imported ores in spite of the fact that several companies have demonstrated what can be done by the beneficiation of 'low grade Canadian ores. The O'Connor holdings at Temagami. the Ko-Ko range further to the west, and the Onaman iron range, are all attractive possibilities. At Moose mountain, some thirty-five miles west of Sudbury, more than
100,000,000 tons of magnetite have been proved up by the owners. In the Atikokan district some 25,000,000 tons of magnetite have been blocked out. The deposits of nonBessemer ore in the Michipicoten district are extensive, and millions of tons of red hematite have been taken from the Helen mine. From

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The Budget-Mr. O'Neill
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tile Magpie mine siderite is obtained and roasted before shipment to the blast furnaces at Sault Ste. Marie.
In central Canada our source of supply is the high grade deposit of the Mesaba range ill the state of Minnesota. This is being rapidly depleted and the chief reason why it is being shipped out in a wholesale manner is because of the local taxing system. This is a case where the municipality have abused their taxing power and it pays investing capital to exhaust the supply rather than to pay tax on the ore even in place. It is for the purpose of avoiding a similar occurrence that Ontario restricts the municipal taxing powers, and in order to profit by the experience generally I say that we should have a conference between the provincial and federal authorities to arrange uniform mining taxation throughout the Dominion of Canada.
I should like to quote this statement from the editorial page of the Iron Age of April 9, 1926:
The time is not far distant when the furnace men will not be able to obtain their ores at the low prices which prevail at present. The cream of the lake deposit is being shipped at a rapid rate, and it will not be long before the leaner ores will have to be treated to meet the demand. The supply of rich ores will not last many more years.
Commenting on the situation an editorial in the Canadian Mining Journal under date of April 9, 1926, goes on to say:
To Canadians the iron ore situation is a matter of more importance than is generally recognized. We axe producing no iron ore and have no mines ready to produce. We have an extensive iron and steel industry employing a large nuimlber of men and contributing largely to the welfare of the Dominion; but we are still depending on supplies of iron ore from other countries. The definite (warnings that have been recently coming from the lake Superior iron producing states should not be ignored in Canada. For the present year there is not likely to be any difficulty in securing supplies from the United States at low prices; but the time is coming when we may 'have to pay dearly for our inactivity in developing iron ore resources of our own.
The iron	ore supply for	our large iron and	steelindustry in	Nova	Scotia is	fortunately assured.	Theoperators there own very large iron ore deposits in Newfoundland and are at least drawing their supplies from within the empire if not from Canada itself. The Newfoundland iron mines together with the Nova Scotia coal mines give (the industry there a firm footing which has permitted it to grow even though competition	with	imported	iron and steel 'has madethe business less	profitable	than it should be.	The
needed impetus to the Nova Scotia enterprise could be given by increased protection.
Soane action on this matter is necessary for the welfare of the iron and steel making industries in all parts of Canada; but we are here considering a problem which is more particularly of interest in the central and western provinces.
In central Canada there is no satisfactory supply of either coal or iron ore.

That is more or less an assumption.
Here the outstanding advantage is proximity to the consumer of iron and steel and this, coupled with the business ability of the men in control of the operations, has made it possible for the iron industry to become firmly established at some centres without a domestic supply of iron ore or coal. The latter defect has been remedied as far as possible by making the coke from imported coal instead of importing the coke. For the present there is no other source of fuel. We have however other possible sources of iron ore and we should not be satisfied with the progress we are making towards utilizing them.
Hon. members will remember that the Iron Ore committee appointed by the Ontario government investigated the situation and recently presented their report recommending that the government offer a bounty of one cent per unit of iron on each long ton of merchantable iron ore marketed from Ontario mines, the "unit" being one per cent of iron in each ton of iron ore. Thus if the iron ore asayed 40 per cent iron the bounty would be forty cents per ton. This bounty is granted for a period of ten years from the date a,t which it became effective. In order to make this proposition a success the Dominion government was expected to assist the industry correspondingly, but so far federal aid has been confined to pious wishes.
Surely this great industry, whose status is looked upon as the barometer of the times in every thriving country, is as worthy of a subsidy as the deserted farms of this country are. The cost to Canada would not surpass the amount involved in the subvention referred to in the bill to aid colonization recently submitted to this House. It would mean infinitely more to the nation and to our railway systems.
A subject of cognate interest is that of coal. In respect to the coal situation, the budget of 1926 marks a further disappointment to the interests of Canada by reason of the government's failure to correct the mistake made last year when the duty on bituminous coal was lowered three cents instead of being raised, and their failure to make anthracite screenings dutiable at the same rate as soft coal with which it competes.
I desire now to refer to the discoveries of coal in northern Ontario. In view of the recent development in that part of the country along the Mattagami river north of the Transcontinental railway, I would call the attention of t'he government and of every hon. member to the possibility of solving our fuel problem in central Canada through these discoveries in northern Ontario. The possibilities of the field deserve a thorough investigation, and I would urge upon- the government the advisability of immediately co-operating with the

The Budget-Mr. O'Neill
3319 '
provincial department in this respect. In the past some writers and geologists have scouted the idea of its being possible to find coal in this particular area, but the nature of the latest discoveries and the opinions of several prominent mining men make it evident that the country has a splendid future in this matter. On this point let me quote the Canadian Mining Journal of May 7, 1926. At page 483 the following appears:
Not only do the clays and associated beds of lignite occur on the banks of the Mattagami but they are also to be found on the banks of the Missinaibi, forty miles west, so that a very wide area comes within the range of investigation.
This is the important feature:
The clays in this section of northern Ontario were described by Joseph Keele, formerly of the Dominion Department of Mines, as belonging to the lower cretaceous series. The coal of Alberta and Saskatchewan occurs in this series. Formerly it was supposed that the lignites which are found in the same localities as the Mattagami clays were of inter-glacial origin. Now it is commonly believed they are of pre-glacial origin.
Unquestionably these coal-bearing cretaceous formations may be found to be of great national economic value when intensive exploration is carried on, but the task is too great for individual effort and every encouragement should be given immediately by both federal and provincial authorities. It has always been recognized by those interested in the coal industry in the north country that the construction of the Georgian Bay canal was indispensable to its success. One question which is now before the people of that part of the country is the construction of the Georgian bay-0 ttawa river canal and the improvement of the French river to facilitate the transportation of coal and supplies by water to North Bay. This would mean a great deal to northern mining and industrial interests and this section of the system is a pressing necessity of the hour. May I at this point quote the late lamented Sir Wilfrid Laurier as he is reported in Hansard, February 23, 1914 at page 1036:
I am so confident of the future of the country that I have no hesitation in saying that none of the resources which nature has given us in the way of transportation can be neglected, that every possible advantage of that kind should be improved. Nature has provided us with two outlets from the west, one by the St. Lawrence and the other by the Ottawa river. Both of them are needed to carry on the enormous development which must take place in the west.
My excuse for venturing to mention this subject on the present occasion is the fact that it has always been closely allied with the development of our great deposits of iron ore in the north country. I know that as the matter stands we are dealing with something that seems to trench upon the sphere of the 14011-2li£
provincial authorities, and doubtless at no distant date the whole problem must engage the earnest attention of this House. I believe the carrying out of this gigantic enterprise by private capital under federal charter depends upon determining whether or not the surplus waters in navigable streams belong to the province in which the streams flow, and I trust that the government will tell us without delay what policy they intend to pursue in relation to this important principle.
Passing from a consideration of iron ore I desire to say a word or two on the copper situation. In view of the wonderful develnn-ment that is taking place in northern Quebec I should like to put on Hansard certain extracts from the London Times Trade and Engineering Supplement which will be of particular significance. I am rather inclined to believe that it is the intention of the Copper Export Association of the United States to do to the rest of the world what they imagine Great Britain did in connection with rubber. Let me quote from the paper I have just mentioned, of April 24, 1926, the following:
The perfecting of methods of ore treatment with a view to conserving the all too limited world supplies of metals and minerals is not merely an empire problem but one which concerns mankind as a whole. Our civilization is so dependent on the use of certain metals that too much thought cannot be devoted to the prevention of waste, both in extraction and utilization. The struggle for materials of this kind will be a fruitful source of international disputes within a century or two.
That covers pretty well my views in regard to the free trade proposals of hon. gentlemen touching machinery and one thing and another. I quote further:
With the principal execeptions of copper and lead, the British Empire is particularly well provided with, deposits of the industrially important metals, both precious and base. The deficiency in copper may be merely temporary; since recent discoveries in northern Rhodesia promise a large output from that region within the next decade.
The discoveries in northern Quebec in copper are unequalled by any that have heretofore been made in the civilized world. In this connection I should like to quote from the Wall Street Journal of May 6, 1926, an article under the heading:
Copper Trade Outlook Increasingly Bright
New Export Association Representing 90 per cent of World Production, Formed to Do Away With Unjust Competition.
(Special From Boston News Bureau)	*
This association, so far as we can ascertain, is composed not only of the copper producers of the United States but of producers in South
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America, Europe, South Africa and various other countries excepting Japan which at present is standing aloof. The article says:
To prophesy better things for copper companies in general during the past two years has required an extraordinary degree of optimism. Copper shares have steadily fallen in public favour and only a few companies have made any dividend money. The rank and file have either lost money or did not make enough to compensate for the exhaustion of the ore assets. But really the outlook is far from hopeless. A new Copper Export Association, stronger and bigger than its predecessors, has been formed, and 90 per cent of the world's production is represented therein. This is the first time the so-called big producers have been able to sit around a table and agree to stop cutting each other's throats.
In only one year since 1920 have our refineries produced more copper than was shipped to foreign shores
and to American manufacturers. That was in 1923, when refined output amounted 2,327,770,000 pounds against shipments of 2,314,786,000 pounds. In 1925, American refineries produced 2,704,618,000 pounds of copper a record for any war or peace period. And shipments exceeded this outpouring by about 127,000,000 pounds, bringing stocks down to 146,161,000 pounds of refined metal, the smallest since the war, and comparing with 641,474,000 pounds at the end of 1920. In 1920, in face of a huge surplus, the average price of electrolytic copper was 17.50 cents a pound. Last year it was 14£ cents, with surplus down almost to vanishing point.
With the permission of the House I should like to put on Hansard the following table showing this statistical improvement with price trend in pounds:
-	Refined product	Shipments	End period	Average price1st quarter 1926	692,620,000 2.704.618.000 2.600.664.000 2.327.770.000 1.577.658.000 1.074.394.000 1.670.759.000	688,372,000 2.831.448.000 2.639.568.000 2.314.786.000 1.814.810.000 1.179.932.000 1.731.406.000	150.412.000 146.161.000 272.868.000 311.770.000 298.786.000 535.936.000 641.474.000	14-00 cts.1925	14-12 "1924	13 02 "3923	14-42 "*1922	13-56 "1921	12-65 "1920	17-50 "
This is more or less repetition, but I trust there will be no objection. The conclusion is that the consumption is still running ahead of the tremendous production, but because of cut-throat competition among copper producers their thousands of shareholders have been left profitless. On top of this I should like to quote from the editorial page of the New York Times of May 8, 1928, as follows:
Almost simultaneously the British Colonial Office announced a policy intended to raise the pnice of rubber, and the Copper Export Association was formed to raise the price of copper. While the objectives are similar the methods are different. Addressing the "National Foreign Trade Council, Dr. Klein of the Department of Commerce said that "international commercial relations are endangered by price-fixing and other political intrusions in raw material exports, the costs of which are to be borne primarily by foreign consumers." Our copper export association is not at all political. It is a combination which our laws allow in foreign trade but forbid at home. Authorized under the Webb-Pomerene law, it aims to represent 90 per cent of the world production. To the extent that it takes the surplus off the domestic markets it is better able to raise home prices. Others may complain as well as Americans, but it is a common grievance. The copper combine does not ask foreign consumers to bear any part of our tax levies, and professes merely a desire to stabilize the price and keep it from falling below cost of production. Our constitution forbids an export tax. The British rubber export restriction raises prices of exports. This is a restriction of trade of which there is no example in our large exports of raw materials. Some of our laws lay us open to reproach for political intrusion in international commerce, but in the matter of raw materials we are more sinned against than sinning.
fMr. O'Neill.]
This Copper Export Trading Company will be very comprehensive, including not only all the important producers and smelters of North and South America but those of Europe Africa and Australia as well. This brings us back to a consideration of our copper wealth. We do not seem to realize what has taken place in the northern part of Quebec. When you consider the holdings of South America, Spain, various parts of the United States and Australia, and realize that when they produce to their utmost, no matter how low copper goes, due to the wealth of our mines in northern Quebec we can continue to produce after they have been shut down. I would like to quote just one official statement regarding the Home mine in the Noranda district:
A horizontal drill hole, No. 329, driven from the third level north of No. 1 shaft has euit eighteen feet of ore averaging $8 in gold and 27 per cent copper. The average gross value of this ore at 13-cent copper is $78.20 per ton.
If we are about to face a copper monopoly through the formation of an American export association I would suggest, Mr. Speaker, that it is advisable for our Department of Trade and Commerce to realize the holdings we have in the northern part of Quebec, and get in touch with the men who have that monopoly. We should be protected within the empire and the department should see that a condition similar to that experienced

The Budget-Mr. O'Neill
in connection with rubber in the United States may not obtain in Canada with regard to copper.
I notice no mention in the budget of good roads. The section of the country from which I come would welcome very heartily any subvention or help in the form of good roads. I submit that the time has arrived when the great division between east and west should be bridged by an international highway, which should be constructed with federal assistance.
There are other considerations to which I should like to refer, and one in particular on which I touch with a certain amount of reluctance. But I take my cue from the principle enunciated in this House by the Prime Minister in the course of a recent address, when he stated that the formation of public opinion is often more important than definite legislation. In this connection I wish to make a few observations on one of the greatest problems of the day, the question of prohibition. 1 quote again from the New York Times of May 8, 1926. This article is written in the lighter vein, and while I am not inclined to touch on that angle, at the same time I appreciate the argument. The article is as follows:
Rustic John Barleycorn
According to the Year Book of the Department of Agriculture, bad times on the farm are to be ascribed partly to prohibition. Representative Black of New York, speaking by that book, proceeded on his own authority to place the annual loss in a single crop, the barley that no longer goes into beer, at $100,000,000. The loss in the matter of hops is "incalculable." Confronted by three farm relief bills which a floundering committee on agriculture has dumped together on a still more distracted House-bills which nobody wants, but which all Representatives confronted by farming constituencies feel obliged to take seriously- Representative Black says blandly, "Let good old beer do it"! The farmer would have prohibition. Sustained through the winter by frosty 'hard cider from the cellarage, soothed by elderberry wine and cherry bounce-
Not to mention our 27 per cent Niagara wine-
-he exercises his moral nature with indignation against the city man's crock of suds. And now, tardily, the effect of his crusading spirit is brought home to him. The barley crop alone once yielded him ten times as much in farm relief as the Aswell bill offers. And so, as Mr. Black urges, in the eyes of constructive statesmanship farm relief goes hand in hand with relief of urban gullets.
Here, surely, is new light on John Barleycorn. Through the ages he has been pictured as a rakish city chap, the affable familiar spirit that wets the workman's whistle and whets the politician's eloquence; that gives the last indispensable flavour to the clubman's midnight rarebit, and even flourishes in the midst of fine ladies where picnic luncheons are served. Now at last John Barleycorn emerges in his true character. He is a bearded grain. Last as first he belongs among the worthies of the farm. Spendthrift and rake? He
is sown in sobriety and reaped in thrift. If for a time he is an erring and a prodigal son, he says with another repentant and home-coming rustic:
"Like him that wanders I return again;
Just to the time, not with the time exchanged,
So that myself bring water to my stain."
Banish John Barleycorn? Banish Whiskered Jack and banish all the world!
Such ,.is the article. I wish to refer now, Sir, to prohibition particularly as it is in vogue in Ontario and in the great republic to our south. It may be looked upon as a malignant cancer destroying the very vitals of our civilization. Prohibition has defeated the very object it was designed to effect; it was supposed to elevate the moral tone of the nation, but in reality the opposite result has been accomplished. Beyond all doubt there is more liquor, of an injurious and damaging brand, consumed clandestinely to-day than was ever thought of in the days before the introduction of the present system, and unfortunately the evil effect is in evidence among a class in the community who formerly regarded an imbiber as a social pariah. In the psychological working out of prohibition it is considered a clever achievement to spier a drink under present conditions. Between the millstones of natural or inherited tendency on the one hand and the added thrilling: inducements incident to prohibition, the-younger generation is exposed to a moral' degeneration, and is forming habits which will play havoc with society at a time when they must shoulder the responsibilities and duties of to-morrow.
Why delude ourselves on this great moral issue? Illustration is unnecessary, but to confirm our own personal observations let me refer to a conversation I overheard the other day between two travelling men, men of experience. When reference was made to the revolting effects of prohibition, one man remarked, "I have just placed an order for
275,000	pocket flasks at - " naming the town, "and in the immediate vicinity." On inquiry he was prepared to admit that the sale of these flasks was mostly to the younger set, which is an astounding fact. But the statement of the other man was even more so. He said, "I am a boiler inspector, and in making my rounds, I inspect the boilers in high schools and collegiates. On all sides the story is the same. The janitors complain of the youth of to-day in most shocking terms. They say their first duty in the morning is to go about the buildings to collect the six and eight ounce empties and the unmentionables strewn about on all sides."
The Budget-Mr. O'Neill
[Stage Direction]
Surely, Sir, the problem should be grappled with openly and courageously, and it is to be sincerely hoped that the country's morals will receive the same careful consideration as the material issues. Furthermore, the present system is debasing our medical profession and engendering a general disregard for law and authority. All head and no heart makes for sterile politics; compromise is essential. As has been well said:
With something in them of the beast, and something [DOT]of the god, mortal men can know little of unmixed emotions.
I trust that at our next provincial election our authorities will be brave enough to grapple with the situation regardless of considerations for their political future one way mr the other.
There is one other suggestion I should like to make to the Minister of Finance. I have not an exhaustive knowledge and cannot say whether the scheme would be workable, but the suggestion has reached me from the north country that the metal cobalt might be used as a five-cent coinage by way of advertising a very picturesque and useful by-product for the purpose of familiarizing the public with this metal.
As to the reduction of postage, the postage was raised 50 per cent, and is now lowered only 33] per cent. I might ask, what has become; of the other 16J per cent? In this connection I should like to refer to the underpaid staff of the Post Office department, particularly the baggagemen carrying the mail. I think too much credit should not be taken by the government for taxation reductions when these men are receiving such comparatively low pay.
It was not my intention to deal in prophetic censure of the present administration, Sir, but I must state on behalf of the great race that comes from the land where politics is the breath of life that it is a matter of supreme regret that perhaps for the first time in the history of this great Dominion no son of Erin adorns the treasury benches of Canada directly at the present time. This is felt keenly by every Irishman, especially in the province of Ontario, and the absence is interpreted as indicating that the Liberal party has lost the breed of noble blood. We all pay due respect to certain "dephlogisti-gated" Irishmen in the cabinet at the present, but at the same time we should like to see a Teal son of Erin adorning the treasury benches of this House. That there is not one is but another link in the catena of evidence which makes it possible to prophesy a grand victory for the old Tory party.
[Mr. O'Neill.
For the reasons I have given, Sir, I do not see how I can support the budget. I would recall again a quotation of the Great Chief "Le Grand Mort," who in his speech on the Address in 1911, stated:
We [DOT] are living under constitutional government, an elementary principle of which is that the men who form the administration must have a common policy.
Drawing the logical conclusion from that statement, I submit that I cannot support this hybrid offspring of an unnatural alliance. Before I sit down, Mr. Deputy Speaker, as this is the first occasion on which I have had the opportunity of offering a few remarks since your selection for the position which you adorn with so much dignity, may I offer you my congratulations on your elevation to your high office?
Mr. LIGUORI LACOMBE (Laval-Two Mountains) (Translation):: I feel, Mr. Speaker that it is my first duty to offer my congratulations to the hon. member for Timiskaming-North (Mr. O'Neill) for the enjoyable piece of oratory we have just listened to. His address shall indeed prove a source of inspiration to future generations, as it is replete with such literary gems as they might wish to scatter through their speeches, and it will also convey to them valuable lessons in mathematics, specially in connection with the ground rules.
Mr. Speaker, before dealing with the ,ub-ject matter of this debate, I must first, not only in my own behalf, but also in the name of the French-speaking members of this House, express my sincere admiration for the commendable stand taken by the hon. member for Toronto-Northeast (Mr. Baker) who, when addressing the House on the budget, on the 6th May last, spoke in French. It was all the more gratifying to us to hear that French voice from Toronto as we know that it is inspired by a feeling of sincerity and sympathy, and that it conveys to us the lofty ideals of union, peace and harmony that obtain between the two great races living side by side in this Dominion of ours. I take great pleasure in congratulating him specially for having, as so many others have done previously, urged the use of the two official languages in this country. In view of the fact that no better opportunity could arise under the circumstances, I wish to make a plea, in behalf of my own race, for the vested rights of the French language, not only in parliament, but in the -country as a whole, and I would suggest that, when the government do restore the two cent rate of postage, provision be made also for the issue of a bilingual stamp.

The Budget-Mr. Lacombe
The budget, as brought down by the hon. Minister of Finance (Mr. Robb) whether it deals with the improvement of the economic conditions in the country, the readjustment of our financial standing, or any other matter of great national import, affords quite a diversified field of endeavour to any member wishing to take part in this debate. The population of Canada, I am sure, hailed with a feeling of hope and confidence those reductions which this government has been pleased to bring about in the income tax, the postage rate, and generally in the public expenditures of this country. The striking decrease in our national debt, the general reductions in the taxes which will be a relief to the overburdened taxpayers, the material progress shown in the management of our railways are, in my humble opinion, indicative of the ability and wisdom of those who are entrusted with the administration of public affairs, and also bear witness to their sense of duty and loyalty.
Hardly four years ago when the right hon. leader of the opposition (Mr. Meighen) and his !hon. colleagues were forced by the popular will to relinquish power, the Liberal government had to carry on through the most trying conditions it had ever .experienced. Unemiplojunent waa rampant all over the country. Those who now discuss most bitterly tihis important problem of our national life -were at that time occupying the treasury benches, while the right hon. leader of the opposition was Prime Minister. It was incumbent on those hon. gentlemen enlightened by a sincere and true patriotism, to make up for such inroads on the public funds for which a prodigal and antinational administration were responsible.


An hon. MEMBER:: Hear, hearl


Liguori Lacombe: On the 15th of April last the hon. member for South Wellington (Mr. Guthrie), in the first of a series of speeches in criticism of the budget, attributed the ever-increasing prosperity of Canada to the magnificent effort of her people and to the liberality of Providence. With all due deference to the hon. member, I beg to state that under the administration of the right hon. leader of the opposition, and of his predecessor, we have been time and again blessed with the gifts of a bountiful Providence and with abundant crops, but the governments then in power did not know how to make the best, in the interest of the Canadian people, of the great opportunities offered by an incomparable nature and the liberality of a generous Providence. Throughout the country, in our immense western
plains as in our rich and fertile eastern regions, when the products of the soil were reaching a promising maturity, when the first and best interests of Canada and her fondest hopes commanded our leaders to act with extreme prudence and to the best advantage of our country, yet too young to be sacrificed on the altar of an exaggerated and blind loyalty, by striking agriculture at its very heart they wrenched from the Canadian farmer his vitality, his strength and the vigorous arms necessary to gather the crop. What has been the result of that guilty enthusiasm? An overwhelming debt, taxation, the instigation of strikes and often misery and agony. So, on December 6, 1921, from one end of the country to the other, there was but one voice to condemn the costly policies of our predecessors. Then the Liberal government entered upon its work of economic restoration, of readjustment of our finances with the generous and sane support of the mandatories of the people. This is why, in a magnificent effort of energy and loyalty our leaders go on legislating for the common weal, with a sentiment of doing their duty and of acting in the public interest.
Allow me, now, Mr. Speaker, to express my views in regard to our tariff policy. I see that the government has cut down the duty on automobiles entering the country, leaving however to our national industry a protection of 20 to 27J per cent. Especially in the course of the last decade the automobile industry has given our 'commerce a tremendous impetus and it is to be counted among the great factors of progress. Even agriculture finds it most advantageous. A touring car had been considered for a long time as a luxury reserved exclusively to people of means. With a true humanitarian outlook our leaders realized that those who toil, work and suffer during long hours of a protracted labour have a right to a share of the rest, of the well-earned relaxation, and of the happiness enjoyed by the rich and the powerful. I believe that will, more than anything p'se be to their credit.
In a. country like ours, with sudh diversified interests, with aspirations often incompatible, the tariff must not sacrifice the interests of one class towards benefiting another, nor injure the rights of anyone. That is why the Liberal government is an enemy to all monopolies and condemns those who impose upon the people. Besides, what did we see under the system of high protection favoured by our predecessors? Our imports were very much in excess of our exports and the balance of trade was turning more and more against us from day to day. My hon. friend the

The Budget-Mr. Lacombe
former minister of Finance (Sir Henry Drayton), who is now laughing, is well aware of the fact. Speaking on behalf of the government the minister of Finance recently announced to the delight of all the Canadian people that our domestic and foreign trade was making Considerable strides, giving Canada a favourable balance of trade of over four hundred million dollars. Are. we not entitled to take some pride in our country when it so readily comes out victorious of the nearly insurmountable difficulties which beset it through the inefficiency of a prodigal and incompetent administration? That is why, Mr. Speaker, I am 'loath to accept the views of certain large interests and contributors to the electoral funds of hon. gentlemen opposite, who apparently are very much put out by the cutting down of the tariff duties on automobiles. On the contrary, the price of the cars being much lower and within the reach of 'almost everybody, there will be, as a consequence, an increased demand. Therefore, instead of hampering that industry the government are expanding lit and giving it a new impulse. I shall go further and, according to the principle that I laid down a moment ago, that the automobile had become a prime necessity, I do not hesitate to say that it would be unfair, in order to give one industry an exaggerated protection, to deprive the farming and other Canadian industries of the valuable opportunity to progress and to reach their goal But should the buying of a car affect the welfare of the poorer class by making them the victim of an exaggerated luxury, I should at once disapprove of the expenditure that the fondness for the automobile involves.
Did hon. members opposite, absorbed as they are in the earnestness of their policy of protection, ever think for one moment of the interests and the unquestionable rights of 'he consumer? Do they forget that an increase of the tariff means more taxation for the people? Do they forget that the Canadian producer is continually requesting the government to find new markets for his products and that the one truly national tariff policy is that which is beneficial to all and hurts nobody. That is what this government had in mind when it established new business connections with European countries. After all, is it not the way of founding the public administration on the principles of sound political economy? Therefore I am glad to pay this compliment to the present members of our government that owing to their sane and enlightened administration Canada is recovering from the crisis that followed the war better than any other country in the world.

The present, budget evidences a state of welfare akin to prosperity and none are more jealous of it than our opponents. Let me tell them very sincerely that pertinacity, economy,
wisdom and efficiency, in conjunction with the so valuable and so varied natural resources of this country, can solve all difficulties, even to paying off the enormous indebtedness that, they forced upon us.
I also notice with pleasure quite a substantial reduction in the postal rates. That re duction relieves all classes of the community: manufacturers, business men, farmers, professional and labour men and will give a new impulse to every line of commercial activity.
The repeal of the receipt tax will be received by the people with a good deal of satisfaction, for apart from the inconvenience inseparable from all taxation, that was the cause of numerous misunderstandings and much trouble.
Realizing that the small wage earners and those who have not the advantage of being wealthy are entitled to as much aid and fair play as possible, this government thought, proper to make some alterations in the income tax act. It is a striking contrast as between the present administration who are not sparing of care for-those who need it the most, and the former Tory government whose protection seemed to be applied only to people favored with a fat purse. In support of this statement I need but point out the income tax exemptions granted by the conservative government to Victory bond subscribers.
Mr. Speaker, before concluding these few remarks, let me take up in this House a statement made recently by the hon. member for South Winnipeg (Mr. Rogers) at Montreal, being the repetition of the ever recurring wail of an opposition (hankering for power. " Where is the government," said he-before the so-called Liberal-Conservative association of that city. I do not know, Mr. Speaker, that the government is anywhere but in the majority of the representatives of the people and only partisans lured by the desire of power can deny it. Does the hon. member forget, that the people of this country have eloquently ratified the decision taken by our leaders to summon parliament and to rule with the majority of its members? Does he forget that the government have won victory after victory in all the by-elections since held and have splendidly increased the majorities received by their supporters in the general election of October 29 last? When hon. members wrongly assert that there is no legislation before the House, I wonder whether they are

The Budget-Mr. Morand
not suffering from the same delusion that blinded them at the opening of the session. But in spite of the erroneous statements spread about by their opponents, the Liberal administration are pursuing their work of economic reconstruction, always progressing in the path of prosperity and carrying out very well the task with which they were entrusted by the people of this country.


Mr. RAYMOND MORAND (East Essex) (Translation):: 
Mr. PERRAS (Translation):: Where did the hon. member gather such a notion?


Liguori Lacombe: Will my
hon. friend allow me to ask him on what grounds he makes this statement that the province of Quebec is Conservative?


Raymond Ducharme Morand: Judging
from their ways as a whole.


Mr. RHEAUME (Translation):: Except
their way of voting.


Liguori Lacombe: Would my hon. friend tell us what are the ways he has in mind.


Raymond Ducharme Morand: I except their way of voting.
I do not propose, Mr. Speaker, to take up very much of the time of the House with the comments I wish to offer on the budget.
An hon. MEMBER (Translation):	Speak
French.


Raymond Ducharme Morand: