1926-04-30

Hon. R. B. BENNETT (West Calgary):: Mr. Speaker, I desire to present the petition of James Arthur Collins, of Chisholm, in the province of Alberta, lumberman, praying that the House of Commons of Canada may determine and declare that Donald Macbeth Kennedy was not duly elected and returned at the election held on the 29th day of October,

The Budget-Mr. MacDonald (Cape Breton)
1925, and that the said return was and is void, and that it may be declared that the petitioner was duly elected at the said election and is entitled to be returned as the member elected to represent the electoral district of Peace River in the House of Commons of Canada.



RESIGNATION OF CIVIL SERVICE COMMISSIONERS

Right Hon. W. L. MACKENZIE KING (Prime Minister):: I desire to lay on the table of the House copies of the correspondence between certain members of the Civil Service Commission and the government respecting the resignations of the former.



PRIVATE BILL


[Stage Direction]
Bill No. 93, to incorporate The Canadian Dexter P. Cooper Company.-Mr. Hanson.

[Stage Direction]
On the Orders of the Day:
Hon. CHARLES STEWART (Minister of the Interior):: A few days ago I was asked by the leader of the opposition (Mr. Meighen; whether any changes had been made in the regulations governing natural gas and petroleum leases. I am now informed by the officer of the department that no changes whatever have been made in those regulations.



THE BUDGET


[Stage Direction]
The House resumed from Thursday, April 29, the debate on the Motion of Hon. J. A. Robb (Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendment thereto of Hon. R. J. Manion.
Mr. FINLAY MacDONALD (South Cape Breton):: Before saying the few words I have to say on the budget, I would like to extend my congratulations to the hon. member who preceded me in this debate (Mr. Lapierre). I listened to his speech last night with a great deal of interest. I think it was an excellent speech, moderate in tone, and well sustained in argument. I agree with a great deal of what that hon. gentleman said, but I have to differ with him in some of the conclusions he has drawn. I had heard before of the great wealth of that rich northern country from which he comes, of the great mineral resources that are there waiting to be developed, and of the necessity for capital to develop those
resources, but I would remind him that capital is very timid; it will go no place to develop any industry unless it is assured of protection. It is said that the doe of the forest is not more timid than the wolf of Wall Street, and before the hon. gentleman can hope to have the capital necessary to develop that country invested in it, I venture to think he will have to have a government in power here that will assure that capital adequate protection for its investments.
With regard to the budget, I regret to say that when the hon. Minister of Finance (Mr. Robb) in presenting his annual financial statement a few days ago spoke of the prosperity that existed in Canada, he spoke in a tongue that was foreign indeed to the ears of the people of the part of the country from which I come. It is useless to tell people that they are prosperous. People know whether they are prosperous or not, and if they are prosperous they will find some evidence of it in their own pockets. So far as I have been able to observe, there have been no indications from any province in Canada of the existence of prosperity there at the present time. It is pleasant news indeed, Mr. Speaker, to hear of prosperity existing in any place, even if our own common sense tells us that such is not the case. But I am afraid that this alleged prosperity has no existence outside the imagination of some mathematician in the Finance department.
The Minister of Finance attributed this alleged prosperity to various causes, chief among which was prudent administration on the part of this government. Other causes may have contributed such, for instance, as good crops, increased production at home, and increased buying abroad, but when the Finance Minister couples with these things which we are all agreed have contributed to what little prosperity the country has enjoyed, the statement that some of the credit is due to the prudent management of this government, he goes far to destroy whatever confidence we may have had in his budget. Following the announcement of the Minister ot Finance came the usual chorus of applause from hon. members supporting the government. I do not begrudge those hon. gentlemen any satisfaction they can get out of the budget. The occasions have been few indeed during the present session on which hon. gentlemen opposite have had reason to applaud the acts of the government. Furthermore, the party press from one end of the country to the other took up the jubilant refrain, and we were informed that this budget was one of the greatest the country had ever
2968	COMMONS
The Budget-Mr. MacDonald (Cape Breton)
known. It was, they said, a Liberal budget, a budget for the people, one that was going to reduce taxation and the burden of the people. Now that was pleasant news for us, and when the budget was being delivered I felt very much like joining the supporters of the government in applauding the statements of the Finance minister. However, a little further examination disclosed that possibly the budget was not all it was claimed to be. At the first glance it seemed to be an attractive budget, some have even gone so far as to say that it was an election budget, but like many attractive things it was more or less deceptive in its character; and as we come to examine its chief features we realize that iv is very far indeed from meriting all the encomiums that have been passed upon it in this House and in the party press.
I think the usual course in discussing the budget is to call attention first to what it contains, and in the second place to point out its omissions. There are some attractive features about the present budget. Some taxes have been eliminated, and to the extent that there has been lessening of the burden of taxation we must all feel duly grateful. The government is entitled to credit for the remission of the stamp tax and some of the sales taxes. But there are three main features in the budget for which particular credit is claimed and these are such as to invite special attention. The first of these is the reduction in the income tax, but I cannot help thinking that the Minister of Finance has been extravagant in his claims as to the extent to which the burden of taxation has been lessened. It is said that there are but two things in this world from which we cannot escape, death and taxes, but the physician who holds out a hope of a postponement of the one and the Minister of Finance who promises a remission of the other may very often raise expectations that may prove illusory. When subjected to the acid test of practicality highly extolled remedies are frequently found disappointing. In the case of this budget I think careful examination discloses that it falls very far short of the merits claimed for it. I cannot claim to be an authority on the subject of income tax. It seems that a certain number of people will be exempt from the payment of income tax. To the extent to which this is true, the budget will be popular. But there are a great number of people who are going to pay very much higher income tax than they did before. I refer to those people who hold stock in Canadian companies the dividends of which were formerly exempt but are 
now subject to income tax. It would appear, therefore, that the income tax has been shifted from the shoulders of one class of the people only to be placed on the shoulders of another class. I do not believe that very much revenue is going to be lost by this adjustment, but that the taxes paid by the people of Canada under this shuffle will be just as large as they formerly were, and that there will be no remission of the burden in such cases.
The second feature of the budget to which most attention is directed is the reduction of the duty on automobiles. When I heard that reduction announced by the minister I felt very much like joining in the applause in which hon. gentlemen opposite indulged. We have no automobile manufacturers down in Nova Scotia, and I felt very satisfied indeed when I learned there was a possibility that we were going to get our cars at a very much cheaper rate. That is a local and a selfish view, but it was the view I held until my eyes were opened by the delegation that came to the capital recently from Oshawa and other towns in Ontario. That delegation did not consist of manufacturers. It was composed of workingmen, the class of men that I am used to and that I represent in this House. In addition the delegation comprised representatives of the municipalities of cities, towns and counties in the province of Ontario. I have been closely associated with municipal government for a quarter of a century. I know from my own experience in the city of Sydney just what the feeling is and the fear of anything that threatens danger to the industry upon which our livelihood depends. I have talked with these men and got their point of view, and I could almost imagine myself talking to-a lot of my old workmen in Sydney. I knew what their feelings were, when fear entered their homes, when it seemed inevitable that their little savings were to be dissipated,, that their jobs were to be lost and that they would have to seek elsewhere their means of livelihood. We have had that experience down in my own home town, and I know what it is. Then came the delegation which. waited on the Prime Minister (Mr. Mackenzie King). I attended that meeting and listened to their addresses and their pleadings to the Prime Minister. They appealed to him to faithfully carry out the solemn pledge he had made to them as Prime Minister of Canada... That is all, and there is nothing unreasonable in that request. One man reminded him of sitting on the same platform with him in the-city of Oshawa and told him of the solemn pledge he had given to the people of that city'
APRiIL 30, 1926	2969
The Budget-Mr. MacDonald (Cape Breton)
that their industries would not be interfered with pending full investigation. The Prime Minister was then pleading for his job. He was then speaking to them as Prime Minister of Canada, asking to be continued in that high position, and giving them that solemn pledge. They were here pleading for their jobs, and asking him to carry out the solemn pledge which he made. Their argument was reasonable and was unanswerable. Mr. Speaker, I looked then for the Prime Minister to rise and tell them that no matter what the influences were, no matter how secret or sinister, he was going to carry out his pledge to them, if the government had to be wiped out of office next day. Unfortunately, that was not the tone of the Prime Minister's reply, but in answering them he made a political speech in which he stated some very strange and curious things. He said the matter was in the hands of parliament, and that so far no person had ventured to move an amendment to the provision in the tariff regarding automobiles. Unless I have terribly misconceived the meaning and purport of the amendment which has been moved in this House by the hon. member for Fort William (Mr. Manion), that is exactly what it means. They were asking him not to touch that industry without due investigation, and that is exactly what the amendment asks. I want to make clear my own position on this matter. I am in favour of reducing the duty on automobiles, but I am also in favour of giving the automobile manufacturer a chance for his life. He has to convince me that he needs this protection in order to live. It is a difficult and complicated matter, but I am willing to take the judgment of the tariff board on it. I confess they would have difficulty in convincing me, but I am at least willing to allow the automobile manufacturers to have a day in court.
There is another feature of this matter that should receive a little attention. If the automobile manufacturer is stabbed in the back to-day, what is going to happen other manufacturers to-morrow? What is the use of a tariff commission, if we are not going to wait for their finding on any question, but are going to determine whether or not we will reduce or increase the tariff on account of some underhand or secret or sinister influence. Possibly, Mr. Speaker, this exemplifies the great distinction and difference that exists between the two parties in this House on the question of protection. The Conservative party stands for protection and has so stood since 1878. There has been no wavering or turning aside. We have spoken with one voice from the Atlantic to the
Pacific. Everywhere that our leader has gone the same declaration has been made regarding the adherence of this party to the great principle of protection. Without meaning to cast any reflection on the good faith of my hon. friends opposite, I venture to point out to them that their history and present attitude with regard to this great question of protection has been a varied and difficult one to understand. Up to 1896 they opposed protection, and they offered alternative policies of various kinds. From 1896 to 1911 there appeared to be some difference of opinion among our friends opposite as to what policy they were putting forth. The hon. member for South Huron (Mr. McMillan) yesterday stated, I think, that the Laurier-Fielding tariff was not a protective tariff. The hon. member for Vancouver North (Mr. Donaghy) previously had said it was. We know among a certain following of the present government free trade and lower rates of taxation appear to be favoured. On the other hand, we have seen in this House instances where member after member supporting the government has risen and declared that he won his election on the policy of protection and that he stood for it in this House. It is not therefore difficult to understand to which party great industries must look for protection if we are to ask capitalists to invest their money in industries in this country.
By this downward revision of the tariff the government has given a stab in the back to various industries, and this example, popular as it may be in some localities, is but another tolling of that knell that was to proclaim the death of protection in Canada. When we come to view the matter in that aspect we see that the very slight benefit that the country is going to derive from the lower purchase price of automobiles is more than offset by the great danger that will strike Canada even through the mere threat of the destruction of the principle of protection.
The third feature of the budget to which the Minister of Finance (Mr. Robb) directed attention and for which he took credit was the great progress that has been made by the Canadian National Railways. It is a matter of congratulation, I think, to us all that the Canadian National Railways has reached within seven million dollars of payment of interest due on its securities held by the public. So far, so good. But when you come to ask us of the Maritime provinces to throw our hats in the air cheering the present management of the Canadian National Railways, you are asking too much. We are not going to do that.
2970	COMMONS
The Budget-Mr. MacDonald (Cape Breton)
There are two views held with regard to this great railway project in this country. One view which is held largely in Montreal and Toronto is that the Canadian National Railways is to be treated and operated as a private company with the object first, last and all the time of paying its way and, second, for the purpose of developing the resources of the country. I have seen lately two editorial utterances from leading papers in Montreal and Toronto on this question and I am going to read one from the Montreal Gazette, a very responsible paper. It says, dealing with the question of coal transportation from Alberta and Nova Scotia:
What has happened, however, exemplifies one of the greatest dangers to which the Canadian National Railways can be exposed, the danger of being forced by politicians to operate upon a political rate schedule.
Right there I take issue with the article. I say: You cannot take the Canadian National Railways out of politics if you regard politics as it should be regarded as the management and development of the country. The Canadian National Railways must be regarded as an integral part of the machinery of Canada, the main object being not to produce dividends but to develop that portion of the country through which the railway passes. Those two divergent views are clearly held. V7e hold one; the centres of Montreal and Toronto hold the other.


Mr. MACLEAN (York):: What would
happen to the Canadian Pacific if that were the case?


Finlay MacDonald: I was
pointing out the difference between a privately-owned company and a publicly-owned company. I regard the Canadian National Railways as a part of the machinery of this country and the earning and paying of dividends as a secondary matter altogether to the development of that part of the country through which it passes. The article continues:
That this danger has been averted for the time being is due to the fact that Sir Henry Thornton, fully appreciating his responsibility as a public trustee, declined to play the part set for him by the governments of Ontario and Alberta. The Dominion government have boasted repeatedly of their determination to keep the Canadian National system out of politics. The public know, and Sir Henry Thornton certainly knows that, if the system is ever to succeed, its administration must be unhampered by political considerations. In yielding to the importunities of the Ontario and Alberta governments, Sir Henry would have committed himself to a hopelessly unsound princple and would have opened the door to a long series of political impositions. That he resolutely refused to take this dangerous step is a fact which is decidedly to Sir Henry's credit, and 
the public of Canada will leam to thank him for the course that he pursued. It -is the president's natural anfbition to build up the earnings of the Canadian National Railways to a point at which the railway will be self-supporting, and he has been able already to show a very comfortable operating surplus. If, at the bidding of any politician or group of politicians, he is to accept traffic at losing rates, the aim to which he has devoted so much energy and ability will never be realized, and the railway, into which the taxpayers have poured so many millions of their money, will never pay its way. There are probably few people in Canada who would not prefer that the country's -fuel requirements should be met out of Canada's own resources, but that preference must always be subject to practical economic considerations, and the Canadian public will not improve t-heir position by aggravating one problem in the effort to solve another.
As regards the railway situation we want our own railway back. Take your Canadian National Railways and do what you please with them; but give us back our Intercolonial railway and we shall be satisfied to bear the deficits which that road may incur, because that road and the management of it will give us some consideration and hope that does not exist now for the development of our natural resources in the provinces. The Canadian National Railways are being managed entirely with a view to the west. They have an enormous system of hotels in the west and none in the Maritime provinces. They lost hundreds of thousands of dollars in their hotel system throughout the west where they have magnificent hotels and golf courses. We have nothing of the sort in the east and they pay no attention to any request we make in that direction. In the town of Pictou they started a little bungalow system of hotels but got no encouragement from the Canadian National management, although an expansion of the hotel system throughout the Maritime provinces would secure an immense tourist trade and pay dividends on the capital invested in the hotels themselves. The service we get in the Maritime provinces is poor in every respect; the train service, the motor service and the track service are all inferior. As a matter of fact the management is starving the track. They shortened up the track force with the result that we have had within the last two or three months three or four accidents which I am told have been due entirely to the diminished service on that portion of the railway. The difference between the treatment accorded the west and the treatment, or lack of treatment, rather, which the east has received was very well exemplified here last spring when we tried to get our coal moved from Nova Scotia at the same rate as Alberta coal was carried for. Did we get any concession in that respect? Alberta coal was moved at

The Budget-Mr. MacDonald (Cape Breton)
a lower rate than actual cost but this concession was refused Nova Scotia, and when the representatives of that province related the sufferings of the miners there they were met with goodnatured smiles and jocularity on the part of members of the government. The government appear to have one idea when dealing with the Maritime provinces, and that is to exact everything that the traffic will bear. I know of numerous instances which display very bad business judgment on the part of the management itself. For example, I know of a little industry in that section of the country which all along has been giving about $50,000 a year in freight to the Canadian National Railways. The company have been using, for the purpose of transporting the freight to the main line, about one mile of track which was laid down years ago by the railway. They have not been paying for the use of this track, but this year the management of the Canadian National Railways insisted that the company pay an interest charge upon it, although, as a matter of fact it was nothing but scrap when it was first laid down. The company refused to meet this demand with the result that the railway spiked the switch, declining to afford this service any longer. In consequence, the company are making an effort now to have their products transported by water, and the Canadian National Railways will in all probability-I hope they will-lose this revenue of $50,000 per annum from the company.
A few years ago we had in S'ydney a terminal wharf in connection with the Canadian National railway. It was partially destroyed by fire some years ago and has never been rebuilt, having been allowed to fall into disrepair. No attention has been paid to that wharf. In the estimates of this year I find an item of $75,000 for the purchase of the site and for the building of a wharf within 200 feet of that railway terminus. One-half of that amount would repair the old terminus and the other half of the money could give us a new wharf. Unfortunately, however, one structure is under the Public Works department while the other comes within the purview of the railway. Surely these two departments must be on speaking terms with each other. As the money which will be spent for wharf facilities there will come out of the common treasury of the country, I would urge the Minister of Public Works' (Mr. King, Kootenay) to look into this question carefully, for I am sure he can save the country many thousands of dollars.
Cape Breton is the natural gateway of Canada. The government may spend a lot of money, as in fact this Dominion has spent, in developing port facilities at Montreal, Quebec, Halifax and 'St. John. But notwithstanding all the millions which have been already expended and the millions which will be spent in the future, the fact remains that Cape Breton offers the natural advantage of being the front door of Canada. Some years ago a rather interesting experiment was made when a transatlantic steamer was stopped some miles off Sydney harbour, where some of the passengers and the mails were removed and sent by rail from Sydney to New York and Montreal. These passengers and mails arrived in New York twenty-four hours ahead of the steamer. The incident was never repeated, the matter having been hushed up. Nothing further was ever heard of it. What was the reason for this? The explanation is that it did not suit the financial interests that had all their money invested in the port facilities of these various ports to have it acknowledged that the natural trade route from Europe to the orient passed through the island of Cape Breton. No doubt the time will come when that island will come into its own, but this will never be while such a government as this remains in power or while the Canadian National Railways continues under its present executive. I do not like to make cheap criticisms of men occupying high executive offices, but I am bound to say with regard to the head of the Canadian National Railways that as a chief executive he is certainly a very good afterdinner speaker.
Now, in a budget debate it should, I think, be the object of every speaker to view things from the national standpoint; but we may be forgiven if in discussing questions of this kind we assert our own point of view and claim the rights that are due our oven industries in the Maritime provinces. And certainly none of those industries is afforded any encouragement by this budget. From the Maritime point of view the budget is indeed a very disappointing and discouraging document. We have in that part of the country three great industries in which I am particularly interested, the fisheries, coal and steel. Off the coast of Nova Scotia there lie the greatest fishing grounds of the world. From the shore to the banks, 400 miles away, nature has placed at the disposal of man' the most abundant school of fish that is to be found in the known world to-day, but we cannot take advantage of this wealth.
Our shore fishermen pursue a hazardous occupation, but they receive no benefit from
2972	COMMONS
The Budget-Mr. MacDonald (Cape Breton)
any rural credit scheme; they are obliged to fit themselves out with their own little fishing plant, and on that plant they cannot secure a loan of any kind. Frequently their nets are brushed away by steamers and by floating ice, and in many cases the fishermen lose all their equipment, but no assistance has ever been given them by this or any other government.
Now, the development of our fisheries is a very important question, indeed, it is a national question and should be treated as part of a national policy. There should be a great national development of our fishing industry from the catch to the table. We want our fishermen in the first place to be educated in curing fish. I understand there is some movement on foot by the government to do this, and I commend its purpose. We want a system of transportation and cold storage, and most of all we want a system of education in cooking fish, especially throughout the province of Ontario. I do not believe that the people of this province know how to cook fish. Perhaps they do not get the right kind of fish to cook. Certainly they appear to give all their attention to fresh fish, and I hope some epicure will commend to the people of Ontario the good qualities of salt fish, which in may instances are preferable to the fresh article. Some years ago the United States government sent a lady through the states to teach the women how to cook fish. Possibly the Minister of Agriculture (Mr. Motherwell) might use his good offices to have her sent over here to instruct our people how to properly cook fish from the Maritimes so that the market for our fish may be developed in this province. It is said that meat comes from the Lord, but cooks come from some other place. After eating fish in this city I am inclined to agree with that dictum.
I am not going to take up the attention of the House by a lengthy discussion of the coal question. It has been stressed, perhaps beyond the point of patience of many hon. members, but I think we have made plain to them exactly what we want.
4 p.m. We want an increased duty on coal. We want freight rates that will enable us to get our coal into the central market. We also want introduced this session, if possible, the bill which I understand the government introduced last session, providing for assistance in the establishment of coking ovens.


Mr. MEIGHEN:: Introduced the resolution, but dropped it after the election.


Finlay MacDonald: Well, it will take some years to get coking ovens ready for operation. I am content that the government of the day should receive every credit that may be due to them for the introduction of such a bill. I put a question on the order paper the other day relating to this subject, but I received a somewhat evasive answer as to the intention of the government. There is one thing, however, they could do to help our coal industry-they could make the Canadian National Railways buy Nova Scotia coal and Alberta coal-Canadian coal-in accordance with the pledge given by the Prime Minister to the people of Nova Scotia at Amherst on October 4, 1921, when he said:
Free trade is not the policy of the Liberal party.
Might I call that to the attention of the hon. member for South Huron?
Free trade is not the policy of the Liberal party. If it were I would oppose it because I believe it would bring disaster to our industries and remove from the farmers the home market, which is practically the only market they have left.
I am a lirm believer in the establishment of a national coal policy for Canada. No country, especially a country with cold winters, which depends on a foreign nation for fuel, can claim to be independent of that nation.
These are the words of the man who was entrusted with power four years ago:
Every pound of coal purchased by the government should be mined by Canadian miners and transported over government railways to the points of consumption. Coal required by other consumers in Canada should be transported at cost.
We want nothing more than the fulfilment of the Prime Minister's promise. And far be it from me to entertain for a moment the thought that a person occupying such a proud position will not carry into effect the promise he made on the hustings.
With regard to the steel industry, we have in the city of Sydney a steel plant organized and put into operation some twenty-five years ago. It began under the most favourable auspices and continued until some four or five years ago, when unfortunately this government began to tinker with the tariff, with the result that that great institution in which millions and millions of dollars have been invested is to-day on the verge of bankruptcy, and the men employed in it meet me on the street with the same look on their faces that those men had who came here from Oshawa the other day. Possibly that is the reason why I felt sympathy for them and changed my mind so quickly with regard to the reduction of automobile duties. The following is a list of the various drawbacks and tariff tinkerings which this gov*

The Budget-Mr. MacDonald (Cape Breton)
eminent has put into force. It is rather long and I ask the permission of the House to put it on Hansard.
This is the statement referred to:
Drawback of Duty on Spring Steel, Steel Billets and Axle Bars
According to items 1007 and 1008 of the present tariff, a drawback of duty is provided on importations of the above articles. This drawback is absolutely unwarranted at the present time, since the Canadian steel industry is able and we are prepared to make the steel necessary for the purposes.
Steel Products free of Duty The following steel products are now allowed into Canada free of duty:
Barbed wire of 9, 12 and 13 gauge for fence-making; pig iron for most agricultural implements; used rails for re-rolling into reinforcing steel, bed slats, etc.; rolled steel for most agricultural implements; bright wire 10, 11, 12 and 13 gauge for springs and mattresses, and many other products.
Rebates of Duties on Steel Products The following items are subject to rebates of duties: Pig iron used in the manufacture of agricultural implements; billets, axles bars and flat spring steel when used in the manufacture of other than railway and tramway vehicles; steel for manufacture of spiral springs for railways; steel under 1J inch diameter or 1J inch square when used in the manufacture of locks and knobs; steel used in the manufacture of hardware as specified in item No. 1009 of the general tariff; bar steel for chainmaking; wire rods not over f inch diameter when used in the manufacture of 9, 12 and 13 gauge galvanized wire.
Coke
At the present time coke imported into Canada for metallurgical, foundry and domestic purposes comes in free of duty. This coke is being made in Canada, and if a duty were imposed greater sales would be possible, with the result that by-products in the form of gas, tar, sulphate of ammonia, and so forth are left in this country. What is needed to properly assist Canadian coke production is a duty of $1.00 per ton on coke imported for metallurgical purposes other than pig iron.
Rebate of Duty on Coal imported by Operators of By-product Coke Ovens
Under present tariff regulations bituminous coal imported for the manufacture of coke by operators of by-product coke ovens is subject to a rebate of 99 per cent. Suitable coals for the manufacture of metallurgical and domestic coke are available in Canada, and any coals imported for this purpose should be subject to the regular duty on bituminous coal. If it is considered necessary to pay steel plants using American coal 50 cents per ton as is being done at present, we believe operators using Canadian coal should receive the same treatment.
But another feature of the tariff tinkering is brought to my attention by a resolution which was passed by the Works Committee of the steel industry a short time ago. The resolution was introduced at the regular meeting of the committee on Tuesday, October 6, 1925. Mr. T. M. Keating, of the rolling mills, was the mover, and Mr. D. J. McDonald, of the mechanical department, the seconder, and the resolution met with the unanimous approval of the committee. These men are known to me, Mr. Speaker. They are men of more than ordinary intelligence, men who have been Liberals all their lives so far as I know, but who, in their own defence, were obliged to forsake their party at the last election and throw in their lot with the Conservatives. The resolution is as follows:
Whereas, the population of the city of Sydney and surrounding districts are depending' either directly or indirectly on the steel and cool industry;
Whereas, anything of an industrial or economic nature that effects adversely these industries must necessarily be reflected in loss of wages to the employees and lack of prosperity to the whole community;
Whereas, steel rods, billets, and other steel products, from European countries are being dumped into Canada in competition with the Canadian-made article;
Whereas, steel rods have been landed at Sydney at a much lower cost than they can be produced at our own steel plant;
Whereas, the underselling of the product of our own plant is made possible because, first on account of the depreciated currency of these European countries, second, because the present duty on steel products, billets, rods et cetera, is not sufficient and does not give the amount of protection that was afforded previous to the war, or when the cost of production was much less than obtains to-day;
Whereas, the workers in these countries with depreciated currency have a much lower standard of living than our Canadian workmen;
Whereas, on account of this unfair competition the steel trade is losing some of its best customers-fact we are prepared to prove;
Therefore, be it resolved, that the General Works Committee, representing -the men most seriously affected, in meeting assembled call upon the Sydney Board of Trade as being the representative body of the communities interests to demand of the federal government that provision for protection be made against the importation of iron and steel from countries with depreciated currency.
So much with regard to that.
Another statement that I wish to put on Hansard is one issued by the general manager of the Dominion Iron and Steel Company to the representatives of the General Works Committee reading as follows:
In keeping with the discussion we had with you at a joint committee meeting held on September 3, covering the subject of plant operations. The question of importation of foreign billets and rods was taken up with the idea of ascertaining why it was more advantageous to the company to purchase continental billets or rods than to manufacture same in our own plant.
We were asked for a price on 5,000 tons of billets for delivery to our very good customers in Montreal, the Peck Rolling Mills, and lost the business.
We understand the billets have been purchased from Europe at $22.75 per gross ton, c.i.f. Montreal. (This is within 50 cents of the price of pig iron at Montreal.)	_
It would cost the British Empire Steel Corporation $5.20 per gross ton to take a similai quantity of billets from the billet mill, load them on a boat and deliver them in Peck's plant at Montreal.
Why is this?
1. The steel plants in France are mining ore, coal and limestone, and making steel with labour paid in
2974	COMMONS*
The Budget-Mr. MacDonald (Cape Breton)
francs, which are now wortih 4.7 cemts of Canadian money per franc, and were worth before the war 19.3 cents per franc.
2. If the workmen in Cape Breton and France have received the same rate of increase in wages upon those paid before the war, it simply means that the French workman is being paid 4.7 cents in worth of Canadian money instead of 19.3 cents formerly paid, or say 25 cents instead of a dollar.
What are the remedies?
file government should protect Canadian workmen against imports from countries where wages are paid in depreciated money.
Those customs duties which are fixed by the ton, and to-day give only half the protection they gave when first imposed, should be increased to cover the increase that has taken place in wages.
Coal should be available for steel-making purposes at a much lower cost.
Such, Mr. Speaker, are the views of the men who are engaged in this industry of making iron and steel in the island of Cape Breton. That concern to-day is on the verge of bankruptcy simply because this government has withdrawn little by little the protection which was absolutely necessary to enable it to conduct its business at a profit.
The commision which this government has appointed to look into Maritime matters will no doubt take up the question of coai and steel. With regard to the commission itself, we from the Maritime provinces were at first opposed to the idea. We did not want a commission to look into our affairs or to tell us what we required, but now that the commission has been appointed I, for one, intend to give them whatever assistance may be in my power, and to place before them all the evidence that is available touching on the interests of my constituency. I do hope, perhaps not as confidently as I might otherwise, that when their report comes in here, suggesting and recommending certain remedies for the ills from w'hich we are now suffering in the Maritime provinces, it may be received, adopted and acted upon by the government of the day, and that the disabilities under which we labour may disappear.


Mr. W. A. HALL (South Bruce):: Mr
Speaker, may I be permitted to congratulate the Minister of Finance (Mr. Robb), not so much on the splendid financial statement he has presented, but upon his courage and good sense in taking advantage of the circumstances that made it possible? Doubtless this is the best budget since the Fielding budget of 1897. Its good effects will be felt by people of all conditions, especially the working classes. The circumstances that made this budget possible constitute the greatest achievement of the King government. According to the press of both political parties the Robb budget is being well received by all the people in this country, except by two cities where motor

cars are assembled, or perhaps I should say where motor cars are manufactured in part. However, Henry Ford, of the Ford plant, has declared himself in favour of a reduction, not only of 15 per cent, but of 35 per cent in the duty on automobiles, in other words, in favour of free trade. This may be accounted for by the fact that the Ford plant has passed the-stage of infancy and does not require further nursing. Let me remark here that it would! be a Godsend if we had more Fords in Canada.
The Robb budget presents six things-three-reductions and three increases. Reductions, first in taxation, both direct and indirect; secondly, reductions in expenditure; thirdly, reductions in the national debt. It presents increases, first in trade and commerce; secondly, in reveune; and thirdly, an increase-in the surplus.
Direct taxation has been reduced in four different ways:	First, by removing the sales
tax on many articles; second, by wiping out the receipt stamp; third, by adopting two-cent postage instead of three-cent, and fourth, by lowering the income tax. These adjustments in the income tax have been so welt -planned that the greatest relief will come to the most numerous class of our income tax payers. It will bring relief to the people of small incomes, and will doubtless produce widespread benefits. The reduction in the income tax will doubtless not affect national revenue very much, as there will be more money available for production. This has been the experience of the United States and also Great Britain.
Coming to the increases, first, the trade of Canada has been increasing during the last eight years by leaps and bounds. Canada ranks second among exporting nations of the world on a per capita basis, and stands fourth among the world traders in foreign markets. The total trade for the fiscal year ended' March 31, last including exports and imports was 82,258,534,453. The increase in exports from last year was $249,000,000, and the increase in imports $130,000,000. The favourable balance of exports over imports during the year amounted to $402,695,000, as compared with a favourable balance of trade of $29,000,000, during the last year of the Meighen government. Our import trade accounts for about ninety per cent of the increase in the balance of trade which shows the value of trade treaties within the empire.
Now let me deal wdth the question of expenditure. The expenditure has been reduced in five different w^ays: First, by practising rigid economy in the different departments of the government; second, by lessening the number

The Budqet-Mr. Hall
of civil servants; third, by lessening interest in the refunding of debts; fourth, by lessening the deficit of the Canadian National Railways; fifth, by lessening the deficit of the Canadian Government Merchant Marine. The total expenditure last year was 1342,890,000, or $120,000,000 less than the total expenditure for the last year of the Meighen government. The national debt was reduced from $2,417,437,685 to $2,395,084,685, by applying the surplus or excess of revenue over expenditure to reduce it. The revenue for the last fiscal year was $376,000,000 as compared with a revenue for the previous year of $346,000,000, showing an increase of $30,000,000. The surplus of revenue over expenditure was more than $22,000,000 or an increase in surplus over last year of almost $22,000,000. The deficit on the Canadian National Railways amounted this year to $38,800,000. This represents interest to the public amounting to S7,400,000 and interest to the country amounting to $31,400,000 on money loaned to the railways by the government. The deficit on the Canadian Government Merchant Marine last year was $668,000. This shows a great improvement as compared with the deficit in the last year of the Meighen government which was over $9,000,000.
The Liberal party stands for a downward revision of the tariff, while the Conservative party calls for an upward revision. But there are insuperable obstacles in the way of too great reductions, chief among which are financial obligations. The Conservative party argues for stability of the tariff, while at the same time it talks of building a tariff wall brick by brick equal to the United States tariff, necessitating change and thus instability. The United States during the last quarter of a century has had the Wilson tariff, the McKinley tariff, the Dingley tariff, the Underwood tariff, and the Fordney-MoCumber tariff. In Canada we have had the National Policy, the Fielding tariff, the White tariff, and the Robb tariff, the last the best of all. Thus we see that in neither Canada nor the United States has there been any great stability, but rather stability by change. A gradual reduction in the tariff should be our aim.
Let me remark here that a tariff for revenue and for protection is somewhat of a contradiction. This double function cannot operate at the same time. If our industries have to be protected the tariff must keep goods out of the country. If revenue is the aim of a tariff goods must be brought in. Goods cannot be brought in and kept out at the same time. Tariff revision downward is all important. The limit to this is adequate revenue. The future prosperity, solidarity and stability
of our country depends on increase of our exports and imports. The only way to carry on foreign commerce is to import and to sell exports in exchange for imports. We need to export $200,000,000 worth of produce yearly to pay our foreign liabilities, namely, the interest on borrowed money. This is the only way we can pay that interest. These exports are derived largely from agriculture and allied interests. The products of the farm, the products of the forest, the products of the mines, the fisheries and so forth must pay the greater part of our external liabilities. We must be able to meet our financial liabilities as a nation. Consequently we must not place any unnecessary obstacles in the way of trade -no high tax on instruments of production, no unjust tax on capital, and no high tariff wall to obstruct trade and international commerce.
Just as expenditure of the individual should be within the limits of his income, so should the expenditure of the government be within the limits of the revenue. But what is fat better is to have a large surplus, as the King government had for the fiscal year ended March 31, 1926. Doubtless this government has made long strides along the road of public economy. This, Cobden described as public virtue. While lavish expenditure is a terrible public evil carying in its train many others, the only solution is individual and national economy. The estimates presented for this year show a very great reduction in expenditure, $120,000,000, from that of the last year of the Meighen government, 1921-22.
Then to return to the tariff again, may I ask what is a sound and sane and sensible and safe tariff policy for Canada? To whom shall we go for such a policy? Not to the Conservative party. We all know that the historic policy of the Conservative party is a policy of protection-protection for protection's sake-to enrich the few who are protected, at the expense of the many who are not. But the right hon. leader of the opposition endeavours to meet this in a rather sly way by promising to place a high duty on the products of the latter class. Is this not another blind intended to deceive? Although many good citizens believe this to be a sound policy, yet many more, just as good citizens, pin their faith to a moderate tariff-a tariff only for adequate revenue. This is the policy of the present government. However, I am of the opinion, if we are to get a sound and sane tariff policy we shall have to turn back to the policy of the Liberal party in 1911. That is the tariff as it then was with the amendments that were contemi976

The Budget-Mr. Hall
plated by the government when it went out of power. In this there is the framework of a sound and sane tariff policy. However, with changing conditions, variations must be made to suit the changed conditions.
The hon. member for South Wellington (Mr. Guthrie) said that the policy of the Liberals from 1897 to 1911, was the national policy of the Conservatives from 1879 to 1896. This is not so. If the hon. member will read his own speech, as recorded at page 1705 of Hansard of 1901, I think he will be convinced that this is not the case. In that speech he charges the Conservatives with inconsistency. He reminds them that they said that the policy of the Liberals at the revision of the tariff in 1907, had torn down and destroyed the National Policy, and then afterwards, when things changed, he says they turned to a sane and sound policy. If you will turn to the records of that time you will find that the Tory leaders as well as the Tory press denounced the Liberal policy of 1897. They said that the Liberals had torn down and destroyed the National Policy. But as the years passed and the country prospered and developed the Tories swung around and claimed the policy to be theirs, namely: to be the National Policy. In the same manner the hon. member claims that the right hon. leader of the opposition is the father of the Canadian National Railways, having unified and consolidated the different railway systems. But what is the truth? The Meighen government passed the Railway Act to take over the different systems, but the unification consolidation and co-operation of the different systems was left to the King government to accomplish. This government placed the Canadian National Railways under one board of directors with one president and general manager, Sir Henry Thornton,, instead of under four or five boards with as many presidents and managers. We all know the results produced by this policy.
But to return to the Liberal policy of 1897; proof that it was not the National Policy of the Tories is afforded by taking the facts and figures of the period from 1897 to 1911. Take the actual savings in custom duties, and the savings that were made by the reduction in the prices of home manufacturers. You will find the changes made represented hundreds of millions of dollars in the pockets of the people of Canada. Then how could it be the old National Policy? It was the policy which made this country grow and prosper as it never had before. During this period, there was the greatest development, the greatest prosperity,

and the greatest increase of population- amounting to 34.17 per cent-that had ever taken place in Canadian history. There was added to the population almost two and a quarter millions. This was Liberal rule under Laurier, with a tariff for adequate revenue. But the period from 1879 to 1896 was characterized by depression, by lack of development, by lack of prosperity, by a very small increase of population, amounting to only 11.44 per cent, the smallest of any like period in the history of Canada. Mark you, this was Tory rule with a high protective fiscal policy. They called it the National Policy. Indeed, several of the then leading Conservatives confessed in the House of Commons that high protection had not accomplished what it was intended to do,-in other words, it had failed.
But in the early part of this period of Tory rule, their leaders as well as the Tory press claimed that the National Policy would cause industries to flourish, would give employment to everyone, would retain in Canada her own people and would increase her population greatly. What happened? From 1884 to 1891 there came to Canada 886,00(0 immigrants. Out of this number only 36,000 remained in Canada as shown by the census containing the number of foreigners born in Canada.
Now, Mr. Speaker, permit me to read some extracts from Hansard bearing on this matter. In 1892, Hon. T. M. Daly, Minister of the Interior, in the Tory government, said:
I do not believe that our fiscal policy has anything to do with our people going to the other side of the line. As the census showed that the National Policy had not accomplished its objects.
Mr. Daly declared that the National Policy had nothing to do with the emigration. In the same year, Mr. R. Armstrong, president of the Young Conservative Association of Toronto, said:
The question as to why thousands are leaving this country every year and going to the United States, should engage our serious attention, for it is quite evident that the older heads are not going to do so.
I am informed that no fewer than 6,000 persons have left this city during the past year-left all that is near and dear-and gone into foreign exile. In short, there is no concealing the fact that we are being annexed in job lots every week and there is not a voice raised against it.
In the same city, Mr. J. H. McGhie, afterwards one of the members for Toronto, said:
The men who were spangled with knighthood, sit talking of loyalty in the midst of ruin and desolation. It was from the young men, that they must expect a new order of things.
Now' judging from these statements and facts, a few out of many that might be cited, those were very dark days for Canada,-

The Budget-Mr. Hall
manufacturers making no headway, unemployment, emigration almost keeping pace with immigration, Canadian-born drifting by thousands across the line, farmers quitting the land, skilled workmen leaving for the country south of us and unsatisfactory conditions generally due to industrial depression. This is another case of promises made to the people of this country-promises that could not be fulfilled. The National Policy of the Tory party was to be a panacea for all ills. But it utterly failed. Consequently, the Tory party with its policy became discredited, was defeated at the polls in 1898 and was succeeded by the Liberal government which had a real fiscal policy.
One of the first things to engage the attention of this new government was tariff reform. In 1897 a thorough revision of the tariff took place when forty-seven different articles were added to the free list and duties reduced on 147 o|hers including farm implements. In addition a substantial preference over the rest of the world was given to the products and manufactures of Great Britain. Sir Charles Tupper, and his party due, I suppose to their super-loyalty, bitterly opposed the British preference as well as the whole revision of the tariff. Sir Charles surprised the House by his historic attacks found in Hansard, volume I, page 1291, year 1897. He said in part:
The result is that this tariff goes into operation and the hon. gentleman knows that the industries of this country are already paralyzed, while hon. members gloat over the destruction of Canadian industries. I was reading the wail, the sorrowful wail of these industries in the Montreal Gazette, where one manufacturer after another declared that these industries were ruined, that their mills must close, and that they saw staring them in the face, a return of the deplorable state of things that existed when the hon. gentleman who last addressed the House was in charge of the fiscal policy of this country. I say that a deeper wrong was never inflicted upon Canada.
I ask, where was his super-loyalty? The Tory cry was, as it is to-day, preference for preference, Canada first. This makes one think of the present leader of the Conservative party in his pre-election speeches last year when he repeated Sir Charles Tupper's words: "preference for preference, Canada first." Thinking like this, made it easier for him to make his famous Hamilton speech.
The concessions given to the farmers of free binder twine, barbed wire, other fencing wire, Indian corn, cream separators, and so on, were denounced by the Tories on the score that they would result in the wiping out of these industries in Canada. But what happened? These industries continued to flourish as never before. The Robb tariff will have a similar effect on the automobile 14011-189
industry. Although binder twine and the other products mentioned are on the free list still as far as I am aware, and although these gentlemen declare that the British preference and the tariff changes would seriously injure our manufacturers, the contrary has proved to be the case. Mr. Speaker, will you allow a few more extracts from Hansard? On different occasions the Tories moved in the House the following resolutions:
Moved, that the House, regarding the operation of the present tariff as unsatisfactory, is of opinion that this country requires a declared policy of such adequate protection to its labour, agricultural production, manufacturers and industries as will at all times secure the Canadian market for Canadians.
Speaking on this resolution, Mr. Rufus Pope, Conservative member, said:
The resolution that I would have preferred would be a resolution for a Chinese wall all round.
Mr. Blain, member for Peel, during the same session-1902-said as reported in Hansard of that year, page 1499:
I hold that the tariff should be so arranged that every institution in this country which is manufacturing goods to be consumed by the Canadian people, should have sufficient protection to keep out the same class of goods made in any foreign country; and I have no hesitation in saying that if that country should be England, the policy of Canada should be framed in the interests of the Canadian taxpayer as against the people who are producing the same class of goods even in the Old Country under the same flag.
Mr. Henderson, Conservative member for Halton said, during the same session:
It was said in the early days of the present tariff that the Liberals had stolen our clothes. I have never said so, and I do not consider that they have done anything of the kind. I am only sorry that they did not, for it would have been better for the country if they had. Their tariff is instead just the antithesis of ours.
That is what Mr. Henderson states in regard to the Liberal tariff as compared with the Tory tariff. He says that one is the antithesis of the other. These quotations amply show that the Tories regarded this as a new fiscal policy. Indeed, they claimed that the Liberal policy would paralyse the industries of the country. They hoped and prayed for this, but their expectations were doomed to disappointment. On the other hand the Liberals claimed that this new policy would benefit the industries instead of injuring them, just as they claim that the Robb tariff will help the automobile and allied industries on account of increased sales rather than hurt them. Indeed, I challenge anyone to point out a single industry ruined by similar changes in the tariff. On the contrary, all modifications of this kind have invariably produced beneficial results to the industries affected.



The Budget-Mr. Hall
In this instance, as in all others, time proved the Tories wrong and the Liberals right. There followed a great revival of business, trade and commerce improved and even manufacturers flourished as never before. After this the Tories swung around and said that the Liberals had made no material changes in the tariff; that their so-called National Policy was still in force, and that the Liberals were wearing their clothes. Is this not what the Conservative party now claims? But the people had not forgotten what the Tory leaders as well as the Tory press had said and done when the Fielding tariff was enacted.
Perhaps the most outstanding feature of the new tariff was the British preference. Its results have been highly beneficial alike to Canada, Great Britain and the empire. This preference at first was a reduction of one-eighth, later one-fourth and still later one-third of the general tariff. As I said before, the Conservatives strongly opposed this preference; they spoke of it as a myth, a sham, a fraud on the British people, a danger and menace to manufacturing industries, the thin end of the wedge to destroy protection in Canada.
The leader of the opposition (Mr. Meighen) referred to this preference in his speech at Kitchener last October in the following words: I would give a preference to the people of Great Britain, Australia, New Zealand, any people within our empire, but on this condition that they give us a preference in return, until then it is no duty of Canada to continue the preference.
Now, Mr. Speaker, what does the leader of the opposition mean by this statement? If he were leader of the government would he terminate this preference? That seems to be the logical conclusion. The Conservative party is certainly true to its name; the same yesterday, to-day and forever. The very language of Sir Charles Tupper is employed by the present leader of the opposition, namely: preference for preference. Let me say here, that the Hamilton incident is in keeping with this occasion at Kitchener. On both occasions, what a manifestation of superloyalty! By the way, further proof of Tory super-loyalty in Lord Elgin's time was shown by the burning of the parliament buildings in 1849, by pelting the Governor General with malodorous eggs, and by other manifestations of hostility.
We also heard during the campaign last autumn a great deal about the decrease of immigration and the increase of emigration. The opposition in the House as well as the Tory press still continue the mournful, doleful wail. May not this account for the great
	,
increase in the favourable balance of trade- the large export of exaggeratedly pessimistic news? The leaders and press of the Tory party have indulged in this trade, apparently with a certain morbid satisfaction. This tendency has been altogether too general among responsible persons in the Tory party. Their dismal prophecies, loud wails, though not taken too seriously at home, cannot fail to be believed by the people of other countries, and thus produce incalculable injury to Canada. The Robb budget, however, should dispel any such lurid and unwarranted impressions in Canada.
We are ready to admit that since the Great war immigration has slackened and emigration has been more active. There are many reasons for both, which we all know. But I am glad to say that the grounds for these reasons are gradually passing away and conditions are already fast improving. But my Conservative friends claim to have one sure remedy: "protection for all industries"-their cure-all nostrum. Why, Mr. Speaker, it reminds one of a patent medicine advertisement. What are its claims? It would beckon the exiles back to their homes. It would call home the sons and daughters who have gone. It would give work to those who are here. It would bring immigrants from other lands and so forth. But will this remedy do all these things? No more than any patent medicine will cure all diseases. Why, Sir, this is an old remedy, tested and found worthless, tried by the Tory party for nearly twenty years. The experience they had with it was that the longer it was used the worse conditions became, especially during the five or six years from 1891 to 1896. These were the darkest days of Canada.
The population of Canada was practically at a standstill outside of Quebec. The population in the Maritime provinces actually diminished. Ontario's population increased in these five years only about one per cent. Most of the few immigrants that came to Ontario soon found their way into the United States. The results of the Conservatives' efforts during this time to populate the west was described by a western Tory paper in the following graphic language:
The trails from Manitoba to the states were worn, bare and brown by the wagon wheels of departing settlers.
During this period between 1891 and 1896, about 100,000 immigrants were brought into-Canada at a great cost, most of whom crossed the line later into the United States. Indeed, we could not keep our own people. The United States census of 1900 showed that over

The Budget-Mr. Ryerson
1,000,000 of the population of that country had been born in Canada. Is it any wonder then that the people of Canada discarded this once much lauded nostrum of "High Protection" and voted a change of government in 1896, thus securing for themselves a worthwhile remedy-Liberal rule?
Then followed the golden era of prosperity and contentment under Laurier, the brightest and most glorious period in Canadian history. In conclusion, let me say that the Robb budget augurs well for a repetition of similar conditions in Canada under the King government.


Mr. R. E. RYERSON (Brantford City):: Mr. Speaker, as this debate has been running on for some time and, to my mind, has covered every feature of the budget, I find that it will foe difficult for me to add anything new to the discussion and consequently my remarks will not take up very much of the time of the House.	Prom the standpoint of the
workingman and his family there is not one feature in the budget generally that has anything to offer him of benefit. They will not be interested in the reductions in income tax They will probably be interested to learn of the wonderful trade expansion and the increased prosperity of this land so ably set forth by the Minister of Finance (Mr. Robb). But they will wonder just what share of that increased prosperity will be their proportion. What the workingmen of this country are most anxious and concerned about in all this is the proposed drastic tariff reduction in regard to the automobile industry which so closely affects the many centres where this industry flourishes, and which again threatens to upset and demoralize the labour markets of Canada.
With good reason they will remember their experiences of the past four years, during which other manufacturing industries have been attacked by drastic reductions in the tariff.
They have suffered in the past, and the majority of them have a definite opinion as to the principal cause of this suffering. Is there any wonder that this important class of our citizens will look with suspicion and doubt upon this particular feature of the budget?
Representing as I do, Mr. Speaker, the industrial city of Brantford, I claim to know something of the burden of taxation which has rested so heavily upon the shoulders of our citizens, and also the evils of tariff reductions and the tariff tinkering of this government, which have from time to time so seriously upset and injured the industrial life of our city, and it is in connection with these two 14011-189i
features of the budget that I desire to offer some criticism. However, Sir, before touching upon these matters, may I be permited to say that while many hon. members of this House will not agree with the government as to the cause, I feel sure every one of us, as well as the general public, will rejoice and bo thankful for the improved trade conditions which prevail throughout Canada and which have made possible the very satisfactory financial statement which the hon. Minister of Finance has presented. That the government has, as a result of these favourable conditions, been enabled to some extent to reduce the burden of taxation, particularly in the case of moderate incomes derived largely from salaries, is a matter for further congratulation.
Now then, Mr. Speaker, in connection with the reduction on income tax, may I be permitted to point out that a close study of the proposed changes reveals the fact that there is a large class of our citizens who will receive none of the benefits of this reduction, but who on the contrary are penalized and will have to pay more. I refer, Sir, to that class whose incomes are largely derived from dividends from Canadian corporations whose earnings are subject to the corporation tax. Under the old act, this class of income was exempt for normal tax purposes but now will be fully taxed the same as other incomes. In my opinion this double tax will prove a very great mistake and one that will seriously' hamper the further industrial development of our country.
Many of our industries are languishing today for lack of additional working capital, and millions more are required for new enterprises. May 1 ask, Mr. Speaker, where is the additional capital to come from? Those of us who have experienced the difficulties of securing new capital for existing and new industries during the past two years well know that the investing public have been very careful and timid. The general business depression which has existed, and the uncertainty caused by reductions in tariff from time to time has made the investor extremely cautious. What will his attitude be now when the effect of this increased taxation becomes known? Is there anything in this budget to encourage him to continue investments of this nature? On the contrary, I claim there is much in this double tax and in the tariff reductions to turn him entirely away from this class of investment.
There is another point, that I wish to bring out, and it is this, that in the matter of these dividends there is also a third tax, which of course this parliament is not responsible for, but which however exists. I

The Budget-Mr. Byerson
refer to the municipal income tax, which is levied on all dividends. It will be observed that by adding this municipal tax to the double tax, under this proposal, there will be three distinct taxes levied. The total of these combined taxes will run anywhere from 15 to 20 per cent upon the earnings of every industrial corporation whose earnings are paid out in the form of dividends.
In the city of Brantford, and I doubt not but what this statement will apply to any manufacturing centre in Canada, there are many of our citizens who have invested their surplus savings in local manufacturing industries, largely, in the first place, for the purpose of building up their city, and who have from time to time put back into these companies the dividends received from them, to provide additional capital, and whose income to-day is partially or wholly derived from this source. Is it reasonable or fair, Sir, that this class of our citizens should be penalized, as they will be, under these proposed changes? I maintain that they are entitled to equal justice, and it is on their behalf that I appeal to the Minister of Finance for consideration in this matter.
I would like now to refer briefly to the tariff reductions as proposed in the budget, particularly those relating to the automobile industry. I frankly admit, Sir, that I possess very little knowledge of this industry, but I do claim to know something of the demoralizing effects upon a community where important industries have in a similar manner, during recent years, been attacked by the policy of this government. Many of our manufacturing centres have gone through this experience, and have suffered untold hardships because of this policy. Not only has the manufacturer suffered, whose particular product has been directly affected by tariff reductions, but the general feeling of doubt and uncertainty as to where these reductions in tariff would stop and which industry would next be placed upon the altar for sacrifice, has acted as a damper upon all manufacturing enterprises. These conditions have in turn reflected upon the entire life of the community, causing lack of capital for new and existing enterprises; unemployment problems for the municipalities; increased taxation; trade depression in all lines of business; decreased values in real estate; untold hardships and sufferings by the industrial workers; separation of families, and thousands of our people have been compelled to leave their homes, to seek employment across the line. Is it any wonder, Mr. Speaker, that I view with concern and alarm, this latest attack upon the industrial life of this province?
[R. E. Ryerson.]
I do not for one moment charge this government with all these distressing conditions. No more do I credit them with the distinct improvement which now exists.
But, Sir, I conceive it to be the first duty of any government, at a time of general depression such as we have been passing through, to extend, to the very limit of their energy and powers, every assistance and help to foster and encourage the flagging indus-tires of our country. Has this been the policy of the government? Have they, during the past four years, given to this country one item of important legislation that has in any way assisted or helped the existing manufacturing industries or encouraged the establishment of new ones? I claim not, Mr. Speaker. On the contrary, every move and action has been one of blundering and open hostility. The "fixed policy" of the government has been one of attack and tearing down instead of intelligent assistance, fostering and building up.
I am not in a position or qualified to offer an opinion as to whether the automobile industry has been too highly protected or not. I know that throughout the country there is a well-defined opinion that in comparison with American prices we in Canada are paying too much for our cars, and that Canadian manufacturers have been taking an undue advantage of the protection they have enjoyed. I maintain, Mr. Speaker, that the whole subject is one of technical knowledge and that we in this House, who are not in full possession of that knowledge, have no right to pass judgment. For this very purpose has the tariff commission been appointed. If not for this, then how can the government justify its existence? Why, Sir, this very feature was one of the campaign promises of the Prime Minister (Mr. Mackenzie King). Again, in the Speech from the Throne, a definite promise was made in the following words which I quote:
They believe that in the interest of industrial development every effort should be made to eliminate the element of uncertainty with respect to tariff changes; that changes in the tariff should be made only after the fullest examination of their bearing upon both primary and manufacturing industries and that representations requesting increase or decrease of duties should be made the subject of the most careful investigation and report by a body possessing the necessary qualifications to advise the ministry with respect thereto. A Tariff advisory board will accordingly be appointed forthwith. This board will be expected to make a careful study of the customs tariff, the revenue to be derived therefrom and the effect of the tariff and allied factors on industry and agriculture.
After accepting and voting for the adoption of this definite policy, how can any member of this House support the budget in respect to this drastic reduction in tariff? Are the

The Budget-Mr. Sylveslre
promises and pledges of this government to be considered as worthless and of no meaning? They either do not know their own minds or deliberately seek to deceive and fool the public.
May I suggest another reason for these broken promises? It is this-the selfish desire and determination to cling to office at any cost, and the absolute necessity for the support of the western group of free traders. I have listened to speeches delivered in this House by Progressives and western Liberals, some of whose vision does not appear to extend beyond the four corners of a wheat field. No one reading or hearing these speeches could doubt their meaning and that nothing short of free trade or the total annihilation of all manufacturing industry would satisfy them. As a sample of this, I need only quote from Hansard, at page 283, January 20, of this year, a portion of the speech delivered in this House by the hon. member for St. Boniface (Mr. Howden):
Suppose that over night or in the course of a few days our manufacturers from end to end of the Dominion closed their_ doors, I wonder what the effect of their action would be on the country. Would we have to shut down? Would we have to move out? I am willing to admit that the country would receive a very rude jolt, and that commerce generally would be badly embarrassed for a time, but eventually conditions would readjust themselves. The farmer would probably continue producing crops every year and selling them in the world's markets. Within a certain period of time the population directly affected by the action of the manufacturers would either settle on the land or find other occupation, the country would recover from the shock, and in the long run I imagine we would not be so very much worse off.
The only comment I desire to make, Mr. Speaker, is this. If the hon. member has fairly expressed the sentiment and opinions of the other nine Liberal candidates who contested constituencies in Manitoba in the recent elections, then the workingmen of our industrial centres can truly give thanks that the other nine were defeated and that he is the sole Liberal elected from that province.
May I say in conclusion, Mr. Speaker, that just so long as this govern-5 p.m. ment retains power by the domination and dictation of any sectional class of free traders, just so long will real prosperity and national unity be denied us.


Mr. ARM ANTI SYLVESTRE (Lake St. John) (Translation):: Mr. Speaker, I deem it
my duty t-o take part in such an important debate as the one now engrossing the attention of the House, especially when I note the enthusiasm with which the budget has been received. There is no doubt that this budget
has brought relief to all the homes; however, on the other hand, it has spread confusion in the ranks of our opponents. The best evidence of this can be found in the speeches of the hon. members for Fort William (Mr. Manion) and South Wellington (Mr. Guthrie) who, forced to admit the prosperity of our country, find no other justification than to ascribe this prosperity to Providence. It is a fact, Sir, that Providence has been especially kind to us, but our hon. friends forget the old proverb, which is always true:	Help yourself
and God will help you. Ever since the present government have assumed power, they have given proof of moderation and especially of economy in the administration of public affairs. They succeeded in wiping out the endless deficits which took place under the Conservative regime-in this instance Providence came to our rescue-while under the Conservative rule we have never known anything else but bad administration, wild and foolish expenditure. There is, therefore, nothing astonishing that Providence did not lavish its favours on such a government.
I am overjoyed with the budget. I spoke, a moment ago, of the relief which it has brought in the homes. I wish now to say a few words about the cutting down of the income tax. To-day, owing to this reduction, every home and in particular every individual will be able to set aside a good deal of savings. Indeed, not only do we reduce, but a remedy is applied to a state of things which was in the past entirely unjust; we discriminate as between the earned and the unearned income. It was unfair that a man who had but his salary to live on or to provide for the needs of his family, should be placed on the same footing as the one who drew the same income, but derived it from dividends or inheritance. To-day, we assess the income with more fairness. The doing away with the stamp duty on receipts is also an excellent measure.
Another very popular measure throughout the country is the return to the penny postage rate. On and after July 1, 1926, instead of 3 cents the postage fees on letters in Canada and to the United States will be but 2 cents, that is a saving of 33 per cent, Everybody will admit that it is quite an appreciable reduction.
Another item in the budget which meets with my entire approval, is the tariff reduction on automobiles. I live in a district where this means of travelling is at present, spreading more and more. The automobile is no more considered an object of luxury, but is in daily use, owing to the precious saving of time which we realize. As this reduction

The Budget-Mr. Sylvestre
applies to low price cars, it is again a popular measure, because it especially affects the mass. When I see manufacturers organize delegations, regardless of expense, in order to come and tell us that on account of such reduction -of so little moment-they will be forced to close their factories, I cannot, Sir, believe in the sincerity of these people, for I am not aware that the profits which the manufacturers make go to the people; they rather go to a priviledged class of society. No, this reduction will not be the cause of the closing of these factories. On the contrary, there will be a compensation owing to the increased number of sales.
It also affords me pleasure to discuss the important question of our railways. By a subtle intellectual effort, the hon. member for South Wellington (Mr. Guthrie) tried to ascribe to his leader, the one who, at present, guides the policy of the opposition, all the merit of the good management of the state railways. It is quite true, that it was under the rule of the leader of the opposition that the National railways were purchased, however, the hon. member forgot to mention the fabulous and fantastic price paid for a heap of old scrap iron and an entirely depreciated stock. We should rather congratulate the government on its judicious choice in selecting Sir Henry Thornton for the management of our railways, who, thanks to his able management, obtains magnificent results, to such an extent that these railways instead of being a burden to the state will before long be a source of revenue. And while on the subject, allow me to refer to something which especially interests the portion of the population which I represent in this House.
The county of Lake St. John located beyond this granite wall which is called the Laurentides, is reached only by the National railways. Half, at least, of the population of my county is at a distance of ten, fifteen, forty and even fifty miles from the railway. There is no need of further emphasizing this fact-since I represent an entirely farming community-in order to point out not only all the disadvantages and inconveniences which result, but also the necessity incumbent on the government railway to encircle with rails the county I represent. And that is what I beg the government to do. The time of evading the issue has passed 1 Too long have the farmers and settlers waited! Too long have the farmers and settlers of my county borne the burden! The time has come to grant them what they ask and I shall only cease insisting on my claim when this object has been attained.

Last night I listened attentively to the speech of the hon. member for Brant (Mr. Smoke). I must acknowledge that he had at least the frankness of expressing his views when so many of his freinds, in the opposition, share these views but dare not express them. He stated that he had noticed that there existed in the province of Quebec a certain antagonism against the province of Ontario. My good friend is very much ill informed. It is evident that he has never visited our province or he would express himself otherwise. I especially extend an invitation to him to visit us and if he accepts, he will meet a busy, hard-working and sympathetic people; he will meet a law-abiding people; finally, he will meet this good old French cheerfulness, as well as the smile which is seen only among our own people and impossible, Sir, to find on the faces of those who sit in the opposition.
An hon. MEMBER (Translation):	Hear!
hear!


Armand Sylvestre: At the
outset of this session, the sympathetic and distinguished member for Sherbrooke (Mr. Howard), in a brief speech, paid a very high compliment to the French Canadians. It is always delightful to hear people sharing neither our faith nor our language, speaking about us in praiseworthy terms. The hon. member for Sherbrooke lives among us and he has learned to respect us instead of despising us. Is this not the best example of tolerance which can be found? I do not think that it is an easy task to find many such cases in the other provinces. Although not belonging to the same faith or race as ours, the hon. member for Sherbrooke, nevertheless, represents a county of which three-fourths are French Canadian, and I admit that never has this county been better advised than in choosing the member who, at present, so worthily represents it. That is why I state:	No antagonism whatsoever exists in
our province against the province of Ontario. We are proud of our province, we are proud of our country. When I listen, for instance, to certain patriotic statements of my friends in the opposition, I would be inclined to believe that they alone love their country. I am not aware, however, that the opposition have a monopoly of all virtues and learning. I might retort: We also love our country but not in the same way. With your exaggerated high protective policy, you only think of the large interests, while we-I am not a freetrader, I rather place my trust in a moderate protective policy-love our country in a

The Budget-Mr. Stinson
different manner because we concern ourselves with every class of society. We do want our industries to prosper. They prospered under our rule and they will still prosper; however, we want the small wage earner to also have his share of happiness in this country; we wish to protect him and we come to his relief by reducing the tariff and helping him in every possible way. And I am convinced, Sir, that our love, if it is less demonstrative than that of the opposition, is certainly more to the point, for instead of contenting ourselves with uttering high-sounding statements, we use means which bring results. That is why I am convinced that, under the present rule, we are but at the dawn of our expansion, we are but at the beginning of an era of prosperity which will ever increase. For, it cannot be denied, it is self-evident, from one end of the country to the other, from ocean to ocean, there reigns an epoch of prosperity unknown for a long time past. It is not by appealing to race prejudices; it is not by attempting to set up classes, one against the other, that we will accomplish the most useful work; but it is simply by advocating closer ties, by asking that, throughout Canada, people perform the same good work as practised in our province, for in Quebec all races come into contact daily without any friction whatsoever, in Quebec all religious denominations carry on without people insulting one another. That is why, the day-to which we all aspire-when conditions which prevail in our province will have become general throughout, Canada, we shall become a united nation, we shall form a whole, concentrating all our efforts-the common daily effort-towards the same goal, the same ideal, which consists in the development and expansion of our country, thus shall we succeed in making it greater, more beautiful, more united and more prosperous.
Mr. T. H. STINSON (Victoria, Ont.); Mr. Speaker, at the outset I want to congratulate the Finance minister (Mr. Robb) for the comprehensive way in which he has presented the budget. It is clear in most parts, contains some jokers in others, but on the whole it does not offer to the country the Christmas tree that the Speech from the Throne contained for our Progressive friends.
I believe in giving credit where credit is due. We thank the minister for some reduction in taxes. The receipt tax is gone, for which we are truly grateful. That tax was always a tax in the line of a nuisance. I think that he would have been well advised if he had abolished the cheque tax also, and left the postage rate as it is. The cheque
tax retards business, and everything that stands in the way of holding back business should be removed as far as possible, with the hope of developing business and creating employment for our people. The postage reduction we appreciate, but the saving will not fill the dinner pails of many people in Canada, and I trust that the minister will not take part of those savings out of the pockets of the poorly paid postmasters. I want to read an extract from the letter of a country postmaster in my riding touching on this question. He says:
I would like to draw your attention to the statement in the paper re two-cent postage. It is coming to the people all right, but there is no statement as to how they are going to treat your postmasters. As you know, all post-masters are paid on commission. If Mr. Robb takes one-third of their salary away, how does he expect them to carry on?
I would be glad if the Minister of Finance would keep them in mind, and do something for these poorly paid postmasters throughout the country districts.
The income tax reductions will not afford relief to very many actually requiring relief at the present time. The ordinary workman is not now paying income tax. We appreciate the reductions, but I am afraid that the changes are going to do more harm than good; certainly they will seriously operate against Canadian industry. The fundamental principle that money should only be taxed once by the same government is taken away by this amendment. When invested in Canadian corporations the income of the company is taxed nine per cent. When passed on in dividends, it is again taxed in the hands of the shareholders. This is going to make it difficult to get money to finance new enterprises in Canada. It will have the effect of forcing capital into foreign investments, capital that is badly needed for development purposes in Canada. The proposed amendment will be particularly hard on a certain class of well-to-do farmers who have put their money into co-operative enterprises, such as elevators, flour mills, seed and grain businesses. The company will pay to the government nine per cent on its income, and the dividends when distributed are taxed again in the hands of the shareholders, while the non-incorporated company or man, in opposition to the farmers' company, only pays the one tax.
Clause 11 provides that where a corporation having undistributed income redeems its shares at a premium, the premium shall be taxed as a dividend against the shareholders. Such a regulation would seemingly disrupt the entire stock market, on shares listed at over par and which are subject to call at a price
The Budget-Mr. Stinson

over par. These shares may be sold four or five times on the market during the year, and to determine who is to pay that tax is going to be a difficult question. Let me read an extract from the Financial Post in its issue of April 23:
"It's a fine day; let's go out and kill something," is the reputed watchword cxf the sporting Britisher. "It's a prosperous period; let's go out and stop some of the prosperity," is the condensed substance of the Hon. Mr. Robb's budget, delivered just after we went to press last week. Most Canadians had not realized how prosperous the country was, until Mr. Robb had, so to speak, "drawn a bead" on that prosperity.
The reductions in the income tax are admirable. That is, they would be if the revenue thus lost to the Exchequer were being made up from any proper source. But the proposal to impose a special tax on corporate profits, over and above all ordinary taxation of the company's business and of the incomes of its proprietors-a tax on the company for being a Canadian company and nothing else-is so astounding that for a long time we were unable to believe that this was what the government intended to enact.
Next we come to the question of reduction in the motor duties, which brings up the whole question of the tariff and what our policy should be as it vitally affects the whole Dominion of Canada. The problem of the tariff has been one of the most persistent and controversial in Canadian history, affecting as is does the well-being and prosperity, directly or indirectly, of every citizen. When Canada was New France the control of trade and commerce was vested in the king alone. It led to excessive favouritism and caused a tremendous amount of smuggling, while trade itself was almost at a standstill-and apparently history is repeating itself, according to the evidence that is coming out at the customs probe these days. In the early days of British rule the regulation and division of customs duties was the source of bitter quarrels between Ontario and Quebec. In 1869 Canada asserted definite control of her tariff _ problems when Sir Alexander J. Galt made a firm declaration of Canada's right to regulate her own tariff, and Great Britain at once acquiesced. Since confederation the tariff has been a leading political issue, with the announcement in 1878 by Sir John A. Macdonald of a National Policy " to benefit and foster agriculture, mining, manufacturing, labour and other interests of the Dominion."
With Sir John A. Macdonald's success in the elections of 1878 Canada became a protectionist country. It is significant testimony to his vision and foresight that since then no political party, until recently, has ever advocated complete free trade as the proper course of action for Canada. We have had cries of " low tariff ", " commercial union " with the United States, or " reciprocity," but never " free trade " as a party slogan, but

the present Progressive group from the west have in the back of their minds free trade, as expressed by some of them. As early as 1876 Sir Wilfrid Laurier declared himself a moderate protectionist, admitting that protection was a matter of necessity for a young nation in order that it might obtain the full development of its own resources. When the Liberals came to power in 1896, after eighteen weary years in the wilderness, there was no real change in the tariff except for the preference extended to Great Britain. The lapse from orthodoxy in the ill-timed reciprocity plan of 1911 was decisively rejected by the country. During the war period the only alteration in the tariff was a sur-tax imposed for special war revenue. Thus from 1878 to 1921 Canada, with the general approval of her people, was a moderately protectionist countiy. Since that time the altered aspect of the political scene has made the tariff problem a serious and disturbing one.
WTith the formation of the farmers' or Progressive party a strong group appeared in 1921-since materially diminished-advocating a new national policy which included, (1) a wide extension of the free list; (2) free trade with Great Britain within five years, and (3) a general all-round reduction of duties. That party had gathered around it the doctrinaire free traders, some labour groups which the general post-war depression had hit hard, and some farm groups. The Liberal party also began to fish in troubled waters, and in 1919 pledged themselves to tariff reforms almost as drastic as those of the Progressives. The Conservative party alone remained true to the principles of adequate protection for all-a Canada first policy.
Owing to the three party system, the electors in 1921 put the Liberals, though a minority party, in power, and since their accession the tariff has been tinkered and tampered with, the hand of the Liberals being forced by the Progressives until nothing is certain in the business world but uncertainty. Following the precedent, of 1896 the Liberals increased the British preference with calamitous results to the woollen industry. In a single year 1923 Canada imported from Great Britain eleven and a half million yards of tweeds and worsteds, even more than the United States. The importation of woollen hose jumped from approximately two and three-quarter million pairs in 1921 to eight million pairs in 1923. It is significant to note here the effect that has had on the sheep industry in Canada. There are to-day from 750,000 to 1,000,000 less sheep in Canada than there were in 1921. Even such a staunch Liberal as Senator David has pro-

The Budget-Mr. Stinson
tested against this policy, which cuts directly at our own manufacturers. Then, with a wary eye to the farmers' vote, the duty on American agricultural machinery was reduced two and a half per cent, causing no reduction in price to the farmer but leading to an increase in imports of $3,716,000 and seriously damaging our steel industry. These reductions give new hope to the low tariff and free trade supporters, and the free trade movement has already increased in noise if not in strength. And now follow the motor reductions.
In view of these facts it is well worth our while to analyse carefully four aspects of the tariff problem:
1.	What has been the growth in Canada under protection?
2.	What is the relation of the present European situation to our industrial welfare?
3.	What is the position of the United States?
4.	Why should Canada not follow the example of Great Britain and pursue a free trade policy?
Now, as to the first problem, the development of Canada under protection. If the basic industries, agriculture, lumbering, mining and fishing have made remarkable progress, as well as the manufacturing industry; if the trade of Canada has enormously expanded, then we may reasonably draw the logical inference that protection has not hampered our advancement but has been a positive boon, keeping our raw materials for manufacture in Canada, creating new sources of wealth causing the appearance of factories backed by foreign capital, and making Canada a broader and more self-sufficient nation.
First of all let us note the remarkable development of our aggregate trade, which under protection has multiplied almost sixteen times. Our export trade climbed in 1922 to fifth place in the world as compared with tenth place in 1913. We are surpassed only by Great Britain, the United States, France and Germany. In 1922 we exported products valued at $100.63 per head of population, standing third in the world. In imports Canada stands eighth in the world. In 1879 our aggregate trade amounted to $149,488,188; in 1923 it had increased to $1,747,760,880. Our export trade with the United States in 1924 was $430,715,496, while in the same year we imported from the United States $601,295,121. Our trade with the British Empire increased, amounting to $414,163,218, of which $360,094,021 went to Great Britain in 1924. A noteworthy feature is the increased trade to the Orient, China buying $15,058,259 and Japan $25,696,621 in 1923.
The growth of agriculture in field crops between 1900 and 1923 is over five hundred per cent. Wheat production has increased three thousand per cent. The agricultural wealth of Canada in 1923 was $7,365,475,000. The agricultural revenue of Canada in 1923 was $1,342,132,000. Of that agricultural revenue Saskatchewan had $291,493,000, and Ontario $400,511,000. Ontario paid income taxes in 1923 to the amount of $25,435,613, whereas Saskatchewan paid $1,527,606. There was not much difference in the agricultural revenue, but as to taxation the large difference was paid by business, and yet our western friends would destroy it by their policy. If the Ontario farmers follow our western friends it will lead to their paying more taxes than they ever did before.
Now let me deal with other branches of industry. The lumbering industry between 1881 and 1922 increased over 300 per cent. The pulp and paper industry, a new industry fostered! by our tariff which comipels the most of our pulpwood to be manufactured in Canada, has a capital investment now of $381,006,000. Our fisheries, the finest in the world other than those of the North sea, have an annual production of $41,800,600 and have increased 600 per cent. The mining industry, in the period from 1881- to 1923, increased 210 per cent, and has a capital investment of $493,694,000. Our railways have increased in mileage 1,450 per cent. In the foregoing statistics I have covered the basic industries of agriculture, lumbering, mining and fishing.
Now let me come to manufacturing, which our friends from the west decry so much. The following figures will indicate the growth of this industry in the period from 1881 to 1921 inclusive:
Employees Capital Production
1881	
254,894	$ 164,957.423	$ 309,731,8671921	
517,141	3,210,709,288	2,747,926,675
In 1921 our exports to all countries amounted to $1,189,163,701. In 1924 our exports to all countries were $1,045,141,056, being less afteT the tinkering had taken place with the tariff. These figures bear silent and sure testimony to the increase in prosperity of Canada under a system of moderate protection. No branch of our life has failed to share in increased wealth, while on the other hand manufacturers have not excessively prospered at the expense of others. The fact that the average number of employees in a Canadian factory is less than twenty shows that protection, as is bo often charged, cannot have fostered monopolies and trusts to any appreciable degree, if at all. Furthermore, the tariff has been far from hampering the export of our primary
The Budget-Mr. Stinson

introducing the new tariff schedule, which gave substantial increases of duty on more than 50 items, Mr. Pratten, Minister for Trade and Customs, stated that within two years from 25,000 to 30,000 additional employees would be required for industrial development resulting from the new duties. Assuming that five persons were directly and indirectly dependent upon each wage-earner, from 100,000 to 150,000 persons would be advantaged. The new schedule reflected the desire of the Commonwealth government to assist industries which could be developed in Australia.
Meanwhile, the position of the primary producers of Australia is being steadily improved, not through tariff reductions which would be detrimental to industry, but through the introduction of better and more efficient marketing methods which tend to stabilize prices on a more profitable basis. A federal Department of Markets has been established, and according to the Prime Minister, the work of the new department "is giving satisfactory results in the orderly marketing of our primary products. The increasing production from our industries and the expansion of our overseas trade during the last decade is a wonderful record of achievement.
From many points of view textile and dothing factories provide the most interesting section of Australia's manufacturing industries. The doctrine that it has been an economic waste to send Australian wool to other countries and import manufactured goods made from that wool, instead of using the raw material locally and providing employment for a large number of Australians, has appealed to an increasing extent to the public mind of the commonwealth as ithe years have advanced. This point of view found expression in the recent changes made in the tariff, which have aJready had an important influence in improving the prospect of many mills and factories, and of stimulating greatly increased manufacture.
The effect of these tariff changes, plus trade depression and the reduced buying power of the farmer, has been very serious for the Canadian manufacturer. Between 1920 and 1922 the number of employees decreased from 685,349 to 517,144. Since then there has been some increase, but even now there are only 89 men employed in 1924 to 100 in 1920.
It is true that the tide of depression has already receded with Europe returning to normal, but competition for trade will be far heavier than in pre-war days. Belgium is ba/ck to pre-war production and hopes to expand. She has taken our glass trade. France has restored her devastated areas with the newest and most efficient equipment and has acquired the iron ores of Alsace-Lorraine and the coal of the Saar Valley. She is today the leading iron and coal country of Europe; she is almost entirely self-sufficient and potentially the richest country in Europe. Her greatest industrial problem is to secure sufficient labour without being swamped by foreigners. Italy has undergone a drastic purging and reorganization, will balance her budget in 1926 and is planning an intensive industrial campaign in order to absorb the labour of the large number of Italians now

barred from America. The German manufacturer, at ridiculously low cost, was able to wipe out his mortgages when the mark declined, and he modernized his plant. Concentration of industry has proceeded, then, by leaps and bounds. The German railways are now the best in Europe. Under the Dawes plan, accepted by the great powers, Germany will be paying heavy reparation sums for at least a decade to come. Fundamentally those reparations must be paid with goods, which means increased German production and increased export trade. As Herr Stresemann says:
The war caused the hot-house growth of manufactures -competition has grown much keener in 'the international market.
Austria is almost back to efficiency and is regaining her hold on Balkan trade, while Czechoslovakia is the best governed and least unharmed industrial country in Europe. Even Poland is settling down to peaceful ways. Mr Strachey, of the London Spectator, says:
Europe is at bottom in a thoroughly sound position-for trade reviv'all. It is full of skilful, eager workers, managers and traders of all sorts. It is also full of well-equipped factories and it has develop the scientific use of the various forms of power to a high degree of perfection.
In the light of these facts it can be seen that the Canadian manufacturer may scarcely hope to make any appreciable gain in export trade for some time to come. In fact, he will do well to retain his increased share gained during war time when Europe could not compete with him. He has certain prospects in the Orient but even there the German is fast becoming a powerful rival. One is more and more forced to the belief that the home market must be the great mainstay of the Canadian manufacturer, and the eastern farmer for years to come. If that market is destroyed for him by a low tariff or free trade his position will be exceedingly hazardous. We must see to it that such a tiling does not take place.
The second great factor in our tariff system is the United States, the colossus of the industrial world, with an area of unbounded fertility, of every variety of climate, with almost every resource for manufacturing except rubber and some of the minor metals and with a protection system established 135 years ago. The war gave her the supreme chance to seize world leadership in trade. She turned from a debtor to a creditor nation; she now possesses half of the world's gold and her wealth equals that of any other five nations combined. Her wealth was 350 billions in 1921, sixteen times our own. She possesses 45 per cent of the world's

Private Bills
iron and steel, 50 per cent of the coal, 60 per cent of the copper and cotton, 70 per cent of the oil. Through the war her manufacturing plants outgrew her home market and She is to-day the greatest exporting nation in the world. In 1922 her exportable surplus was 653 millions, an increase in nine years of 33j per cent.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 25, for the relief of Elizabeth Gertrude Orr.-Mr. Lennox.
Bill No. 26, for the relief of Melville James Andrews.-Mr. Duff.
Bill No. 27, for the relief of Harry Reginald Oddy.-Mr. Jacobs.
Bill No. 28, for the Telief of Mildred Roxie Horner.-Mr. Lennox.
Bill No. 29, for the relief of Frances Muriel Burnet.-Mr. Geary.
Bill No. 30, for the relief of Ada Toms.- Mr. McClenaghan.
Bill No. 31, for the relief of Vera Sanderson. -Mr. McClenaghan.
Bill No. 32, for the relief of Noel Leslie Deuxbury.-Mr. Bell (Hamilton).
Bill No. 33, for the relief of Lillian May O'Reilly.-Mr. Arthurs.
Bill No. 34, for the relief of Jean Victoria Dillane.-Mr. Lennox.
Bill No. 3(5, for the relief of Ethel Alberta Barker.-Mr. Arthurs.
Bill No. 36, for the relief of Annie Hazel McCausIand.-Mr. Jacobs.
Bill No. 37, for the relief of Sterling LeRoy Spicer.-Mr. McClenaghan.
Bill No. 38, for the relief of Amy Bell Cor-ney.-Mr. Bell (Hamilton).
Bill No. 39. for the relief of David Frank Crosier.-Mr. Bell (Hamilton).
Bill No. 40, for the relief of Ethel Gildea Nye Brown.-Mr. Duff.
Bill No. 41, for the relief of Edward Thomas Faragher.-Mr. Peck.
Bill No. 42, for the relief of Bertha Viola Lidkea.-Mr. McClenaghan.
Bill No. 43, for the relief of Mike Ayoub (otherwise known as Michael Ayoub).-Mr. MoClenaghan.
Bill No. 44, for the relief of Alice Marion McGinley.-Mr. Garland (Carleton).
Bill No. 45. for the relief of Harold Edgar Perinchief.-Mr. Garland (Carleton).
Bill No. 46, for the relief of Hendel Tueraer Lubrinetsky.-Mr. McClenaghan.
Bill No. 47, for the relief of Paul Hugh Turnbull.-Mr. Garland (Carleton).
Bill No. 48, for the relief of Helen Elby Pollington.-Mr. Mewbum.
Bill No. 49, for the relief of Alexander S\ swart.-Mr. Hams.
Bill No. 50, for the relief of William Melville Moore.-Mr. Casselman.
Bill No. 51, for the relief of John Samuel Milligan.-Mr. Anderson (Toronto).
Bill No. 52, for the relief of Marion Richardson.-Mr. Jacobs.
Bill No. 53, for the relief of Isadore Boadner. -Mr. Jacobs.
Bill No. 54, for the relief of William Albert Thomas.-Mr. Casselman.
Bill No. 55, for the relief of Gertrude Isabel Clark.-Mr. Church.
Bill No. 56, for the relief of Helen Seymour O'Connor.-Mr. Casselman.
Bill No. 57, for the relief of Yetta Selma Trachsell.-Mr. Wright.
Bill No. 58, for the relief of Alexander Dewar.-Mr. McClenaghan.
Bill No. 59, for the relief of Florence Burrell.-Mr. Jacobs.
Bill No. 60, for the relief of Edith Marion Byam.-Mr. Lennox.
Bill No. 61, for the relief of Charles Davidson.-Mr. Jacobs.
Bill No. 62, for the relief of Doris Selina Irvin.-Mr. Jacobs.
Bill No. 63, for the relief of Frank John Davis.-Mr. McClenaghan.
Bill No. 64, for the relief of John Norman Smith McMurray.-Mr. Charters.
Bill No. 65, for the relief of Archie Claire McIntyre.-Mr. Duff.
Bill No. 66, for the relief of Mabel Elizabeth Harcourt.-Mr. Bell (Hamilton).
Bill No. 67, for the relief of Louise Gordon Pook.-Mr. Bell (St. Antoine).
Bill No. 68, for the relief of Ezillah Harriet Cole.-Mr. Stinson.
Bill No. 69, for the relief of Gertrude Burnside.-Mr. Kay.
Bill No. 70, for the relief of Cora Mae Murray.-Mr. Goodison.
Bill No. 71, for the relief of Janet Thornhill Gorrie.-Mr. Anderson (Toronto).
Bill No. 72, for the relief of Lillian DuBord Bulloch.-Mr. Jacobs.
Bill No. 73, for the relief of Henrietta Schierholtz.-Mr. McClenaghan.
Bill No. 74, for the relief of Maude Elizabeth Gilroy.-Mr. McClenaghan.
The Budget-Mr. Stinson
[Stage Direction]
Bill No. 75, for the relief of Richard Howard Buckley.-Mr. McClenaghan.
Bill No. 76, for the relief of William George Darlington.-Mr. McClenaghan.
Bill No. 77, for the relief of Arthur Watson.-Mr. McClenaghan.
Bill No. 78, for the relief of Frances Marjorie Warren.-Mr. McClenaghan.
Bill No. 79, for the relief of Charles Douglas Palmer.-Mr. McClenaghan.
Bill No. 80, for the relief of Isobel Lamon-tagne.-Mr. McClenaghan.
Bill No. 81, for the relief of Jane Johnston Mitchell Wells.-Mr. Geary.
Bill No. 82, for the relief of Jeremiah Gibbs.-Mr. Mewbum.
Bill No. 83, for the relief of Caroline Elizabeth Risbridger.-Mr. Mewbum.
Bill No. 84, for the relief of Cassie Woodley. -Mr. Church.
Bill No. 85, for the relief of Isabella Freeman.-Mr. Harris.
Bill No. 86, for the relief of George Guthrie. -Mr. Stewart (Leeds).
Bill No. 87, for the relief of Lily Stead.- Mr. Mewbum.
Bill No. 88, for the relief of Alice Grace Hopkins.-Mr. Mewburn.
Bill No. 89, for the relief of Vera Catherine Searle.-Mr. Ladner.
Bill No. 90, for the relief of Sidney Charles Frost.-Mr. McClenaghan.
Mr. DEPUTY SPEAKER:: The motion is that the foregoing bills be read a third time. Is it the pleasure of the House to adopt the motion?


Mr. POULIOT:: Mr. Speaker, are all these bills being carried in anticipation of June weddings?


Mr. BEAUBIEN:: Carried on division, Mr. Speaker.
Motion agreed to and bills read the third time.



SECOND READING

[Stage Direction]
Bill No. 92, respecting the Grand Orange Lodge of British America.-Mr. Hocken.


[Stage Direction]
The House resumed the debate on the motion of Hon. J. A. Robb (Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendmenc thereto of Hon. R. J. Mlanion.
Mr. STINSON:: Mr. Speaker, when the
House rose at six o'clock I was pointing out some of the natural [DOT] difficulties we have to encounter owing to a decreased tariff. Geographically, Canada and the United States are one-the Maritime provinces looking to the New England states, British Columbia belonging to the Pacific, Ontario and Quebec sharing the Great Lakes system with the eastern states, and western Canada having the natural frontier. The resulting "pull" of the United States upon us, offering as she does superior wages and opportunities has been tremendous. Between 1921 and 1925 we lost in population to the United Spates some 500,000 people. Obviously with her wealth of population and her industrial machine American industry can in nearly every instance produce at a lower cost than can Canadian industry, and can offer a greater variety with her mass production. The effect is to be seen in our adverse trade balances with the United 'States. In 1901 our imports from the United States were $107,377,906. In the same year our exports to the United States were $67,983,673. Coming to the year 1923 we find that our imports from the United States were $540,917,432 and our exports to that country $369,0S0,218. In 1923 our imports from the United States formed 67 per cent of our total imports. The total import amounted to $60 per head of our population, while our exports to the United States amounted to $3.25 per head of her population.
The greater part of our imports from the United States are of manufactured articles, and the need of a tariff against her is obvious if we are to have any manufactures of importance and to become at all self-sufficient. Since the war the United States has seen fit to increase her tariff against us, especially against, our farm products, in order to protect her farmers. If a wealthy nation thinks protection advisable, we should have even more reason for adopting a similar policy. Moreover, protection compels the American manufacturer to establish branch factories in Canada, in order to share our trade. They employ Canadian workmen, and make investments in Canada which are of great value. Since 1901, six hundred and eleven American factories have come to Canada on account of protection, and nearly two and three-quarter billion dollars are invested in Canada. These factories represent 61 per cent of our motor industry, 40 per cent of our electrical apparatus, meat packing, rubber, brass and copper, condensed milk and petroleum industries. Without our tariff would these industries have come to Canada? I say no. Without increased protection shall we be able to attract

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new firms or can we withstand American increased wealth and efficiency? Again I say no. The lower our tariff the fewer workmen we employ and the more of our sons we lose to the United States-a loss which we cannot replace and which we can least afford. The exodus from Canada during the last few years, especially the younger men, has been a great drain upon this country. We are losing some of our best brains to t'he United States, and this should not be allowed to take place.
Lastly our serious financial position makes it dangerous for us to run any risk of financial depression in industry through a low tariff. During the war we had to take over control of the Canadian National railways with 22,000 miles of track. These railways are built in excess of our present needs, they are heavily capitalized and have heavy interest charges to meet. Until 1923 they failed to meet operating expenses apart from interest charges. The annual fixed1 charges are nearly $70,000,000, if we include interest on loans and allowances made by the government. Despite the skill and energy of Sir Henry Thornton, we must face the prospect of a heavy burden in our railway system for years to come. If our industries are ruined by a low tariff the railways will be among the first to suffer, and their losses are the country's losses. If the industry of Ontario and Quebec be destroyed, the western freight rates must of necessity increase. If you take the report of the Canadian National Railway, you will find that the line is divided into three divisions, the eastern regional division, the central division and the western division, and of the three divisions the one that is making the profit is the central division, where you have the industrial population and industrial development. If that industrial development is ruined it means that the freight rates to the west must of necessity be increased. I acknowledge to our western friends that they cannot profit from protection to the same extent as we in the central provinces can. That being the case, so far as I am personally concerned I am willing to make amends to them in the matter of freight rates sufficient to take care of any additional amount that they lose by reason of protection.
The war has given Canada an increased debt of $2,453,776,869 as compared with $338,996,850 in 1914. The interest on our debt has increased from $14,687,796 to $136,007,667. Nearly two billion of that sum is war debt- an unproductive debt which added nothing to our resources. Furthermore we have not as yet reduced that debt one iota. On the contrary, when the railway financing is included,
it has increased. So long as that debt remains such a heavy charge, economy in government, coupled with increased production, is essential if we are to build up a surplus revenue. Our protective tariff represents a revenue of nearly $130,000,000. Reduce the tariff and that revenue falls. Can Canada afford that? Does the farmer want to pay the amount of tariff reduction in direct taxes? Our taxation is heavy enough, in all conscience-$43.15 per head as compared to $22.41 in 1913, or $5.88 in 1871. So far in discussing the tariff issue we have noted the progress made under protection in every branch of production, the growing dependence upon manufactures of our Canadian people, the increased competition in world trade caused by post-war conditions in Europe and America and the special need for stability, sound production and increasing revenue in order to meet our heavy burden of national debt. In view of these facts it is difficult to see how a low tariff is wise or justifiable.
There is one argument of the free trader, however, that has not yet been discussed. That is the argument by comparison, in which the theory is advanced that Great Britain has prospered as a free trade country and that Canada should do the same if she followed her example. By analysis of Britain's position that argument may be shattered. First of all, Britain only became a free trade country after centuries of protection during which she laid the foundation of her commercial and industrial strength. In the reign of Edward III, in the middle of the fifteenth century, England began to foster the weaving industry, to limit importation of goods and to discourage exports of raw materials. This policy was steadily pursued especially in Tudor times. Navigation acts in the seventeenth century fostered colonial trade and British shipping. At the close of the seventeenth century 1,200 imports were taxed. In the late eighteenth century, however, a series of inventions, coupled with abundant iron and coal and a long commercial experience, caused the famous industrial revolution which landed Britain on her career as the world's workshop. Europe was tom by wars and political unrest, the United States was a young struggling nation and Britain thus had the start by a half century. As Cobden and Bright boasted, Britain feared no competition at home and could undersell anybody abroad. Under these conditions Britain could well afford to relax protection, especially excessive duties on raw materials and food, since at that time agriculture was protected by the Corn Laws of 1815. Those laws particularly
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affected the workers who were poorly paid and who were forced to pay high prices for food, and the manufacturer who wanted cheap raw materials, cheap food for his men and an increased exchange of manufactures from England for food in other countries. Then arose the campaign led by the middle class manufacturers for the repeal of the Com Laws. Subsequent to 1820 numerous duties were reduced; the Corn Laws disappeared between 1846 and 1860, and by 1860 virtual free trade existed. Hon. members will note that the transformation was spread over a period of forty years and took place only when Great Britain had a position of unsurpassed superiority.
The results of the movement are interesting. The repeal of the Com Laws led to a concentration on manufacturing and a onesided development of national life that made Britain dependent upon the world for seventy per cent of her food supplies. Her agricultural population fell from 49.8 per cent in 1846 to 21.9 per cent in 1913. In spite of such protection methods as her embargo upon Canadian cattle, only recently lifted, agriculture is one of the greatest problems of British life.
In the advancement of industry, while free trade has been her tariff policy, England has helped industry by such methods as the Trade Facilities Act, which affords ample capital for industrial concerns-surely an indirect form of protection; by discrimination in insurance risks against Canadian shipping, and other methods, and latterly by the Safeguarding of Industries Act.
To-day many in Britain seriously doubt whether she can afford to maintain free trade as her tariff policy. All parties are worried over British trade. The London Nation has opened its columns for a discussion of the conditions of British trade, while Labour admits that it cannot be a conjurer and sweep away unemployment at will. To-day Britain pays annually on her debt to United States a sum almost equal to her pre-war budget. She is beginning to wonder whether her present tariff policy is the safest one. She no longer leads the world in industry, being surpassed by the United States, while Germany and France are crowding on her heels. Even as matters stand she has an advantage over us in having no country such as the United States as a next-door neighbour and geographical twin.
We cannot, then, like Britain, accept free trade as our policy, because we have not the foundations of wealth and supremacy that Britain possessed when she accepted free trade; because our geographical position is

vastly different and because economic conditions have totally changed since that time. Viewing the matter from every angle we must admit that Canada must retain her policy of protection, that she cannot afford a low tariff as economic conditions are at present, and that the present uncertainty must be ended if Canadian industry and Canada itself are to prosper.
I read this afternoon a memorandum from the Premier of Australia showing conditions that had operated to their benefit by reason of their adopting a policy of manufacturing their wool in Australia rather than of shipping it abroad. Following that up it seems to me we should take a leaf out of her book in regard to our wheat. At the present time we are building up on Canadian wheat one of the greatest cities in the United States. The greatest milling centre in the world is Buffalo, and it has been built up there in the last few years largely upon Canadian wheat. Last year there was milled in the city of Buffalo something like 7,000,000 barrels of flour, while there was milled in Canada from the Atlantic to the Pacific some 19,000,000 barrels. They have adopted a system of milling in bond; in other words Canadian wheat can be shipped to Buffalo, milled in bond and sent out to compete in the world market with our Canadian flour. The result is that the United States is getting the direct benefit of that, is building up that wonderful city and at the same time taking away from us transportation charges that our railways need. If there was an export duty on Canadian wheat forcing the milling to take place in Canada, it would not in my opinion decrease or curtail our market, but it would add that further industry to Canada for both our labour and our railways.
This matter was referred to the royal inquiry commission and they made a report on it in which they stated that it was a matter of great importance not only to the millers of Canada but to the farmers of the country generally. I am going to read a short extract from the report as was made at that time:
At the present time, the duty on Canadian wheatentering the United States-is 42 cents per bushel. On wheat flour, crushed or cracked wheat, and similar wheat products, the duty is $1.04 per hundred pounds. These duties are practically prohibitive in their effect. They prevent Canadian wheat or wheat products having access to the American domestic market. On the other hand under the provisions governing milling-in-bond and drawbacks, it is quite possible for the American millers to obtain Canadian wheat virtually free of duty to grind for export. Considerable quantities of Canadian wheat are ground in American mills, and exported abroad under these conditions. This American flour ground in American mills, but the product of Cana-

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dian wheat, enters into competition with the output of the Canadian flour mills. The benefits of manufacture are lost to Canada, while at the same time, the general benefits of reciprocal free trade in wheat and wheat flour do not exist. It was suggested to us that in view of these conditions, an export duty should be levied at the same rate as in thfe American tariff, upon Canadian wheat and wheat products entering the United States. The American tariff having already closed effectively the domestic market to the Canadian farmers, the result of such a levy would be to eliminate the export of American flour ground from Canadian wheat, and to transfer this market to the Canadian millers.
Now let us see for a moment how this milling in bond has been increasing. In 1921-22 the quantity of Canadian wheat milled in bond in United States was 6,172,837 bushels. In 1922-23 this had increased to 9,280,787 bushels, and in 1923-24 it had increased to 13,901,837 bushels. It will be noted that of the crop of 1923-24 the total reached the large quantity of over 13,900,000 bushels. The flour product of this quantity of wheat would be in excess of 3.000,000 barrels while the offal by-product would be 111,000 tons. These 3.000,000 barrels of flour made from straight Canadian wheat was sold abroad under United States trade names in direct competition with the product of Canadian mills. In the same twelve months Canada exported to countries other than the United States 11,973,916 barrels of flour.
Out of a total demand of 15,000,000 barrels of flour of Canadian quality, United States millers supplied no less than 20 per cent. With free Canadian wheat for this export trade, United States millers have certain advantages in rates 'and position which will always enable them to sell in competition with Canadian mills. Had the Canadian mills been in the competitive position natural and proper in view of all the conditions, then the extra 3,000,000 barrels should have been ground in Canadian mills and would have represented an increase of 25 per cent in export output. Now what does this mean to Canada? The manufacturer's costs of converting wheat into flour, including labour, selling expense and overhead, but not including the cost of bags or other containers, may be estimated at approximately sixty-five cents per barrel. At this rate the costs on 3,000,000 barrels would be $1,950,000. This amount was actually paid out in the United States in the year instead of being distributed to labour and capital in Canada. If Canada had milled this additional quantity Canadian transportation companies would have moved 14,000,000 bushels of wheat to Canadian mills and would have moved 3,000,000 barrels of flour and 111,000 tons of offal from Canadian mills, whereas this wheat actually moved direct by water from Fort 14011-190
William and Port Arthur to United States ports, chiefly in United States lake vessels, and no part of the product afterwards used Canadian routes. This meant that the loss to Canadian transportation companies on the movement of the wheat to the mills and the flour to the seaboard was in excess of $1,500,000. In addition to that, on the 111,000 tons of bran and shorts the additional earnings of Canadian transportation companies would have been 31 i cents per 100 pounds, or a total of 8679,300, if distributed for consumption in Canada, or a substantial portion of $550,000 if exported.
This movement of wheat to the United States is directly affecting a number of our own towns and cities in the matter of railway transportation. Take the town of Lindsay, which is a divisional centre on the Canadian National Railways. The wheat moved on the lakes and on Georgian bay to Midland passes through the towns of Lindsay and Belleville on its way to seaboard. But since this great milling industry 'has been established at Buffalo there has been a gradual falling off in the movement of wheat through Georgian bay to seaboard, with the result that the railway-men earned $200,000 less in wages in 1925 than in 1921 in the town of Lindsay. I am not attributing this fact entirely to the difference in the movement of grain, because certain other factors have to be taken into account; but in large measure it is due to the fact that the grain is going to Buffalo rather than through our own ports. It is time therefore that action were taken to remedy this condition of things. The grain should go through Canadian and not through American ports.
There is something else that must be considered.' Canada is losing all the advantage that would accrue from the sale of this flour under Canadian trade names. It is exported as United States domestic flour, 9 p.m. thus helping the United States to retain its reputation in the world's markets for high grade flour, to the benefit, whether blended or not, of all the domestic produce of that country. The effect on Canada is unfavourable. When selling, the United States miller may represent the flour as the product of Canadian wheat, or he may not. If he does not, the impression is created that perfect substitutes for Canadian wheat and flour can be found in another country, and that is absolutely to our detriment. The magnitude and importance of the Canadian milling industry are clearly shown by the official returns published in the latest issue of the Canada Year Book for the year 1922. The capital employed in 434 flour mills war

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$65,928,521 and salaries and wages paid during the year totalled $7,083,398. The purchasing power of industry in the year, as represented by the amount paid out for material and supplies, was the very large sum of $125,312,923, and the value of the products, $151,237,671. The net difference between the latter two items, $25,924,748, represented the values created in Canada by the industry.
I realize that the prosperity of the Canadian farmer is fundamental to the development and success of the milling industry and wish it to be clearly understood that in advocating this duty I do so in the belief, not only that it would not depress prices, or restrict opportunities of sale for producers, but that on the other hand it would strengthen the position of Canadian products with advantage to every Canadian interest. If this flour were consumed in the United States, as it is not, that would mean that a market for Canadian wheat, which otherwise has been very limited and uncertain, would be enlarged by the use of wheat in this way. But under existing conditions no increase in the demand for Canadian wheat is brought about. If there is no increase in consumptive demand there can be no effect on the basis of prices. Indeed, the United States miller cannot be as substantial a support to the market as the Canadian miller, for the former can drop out of the business the moment he finds it equally profitable to grind United States wheat. The greater part of the milling in bond is done at Buffalo, but at any lake Erie port Canadian wheat can be laid down from Fort William-Port Arthur at a freight rate lower on the average than that to any Canadian port on the lakes. A mill at Buffalo pays lower transportation costs on Canadian wheat than does any eastern Canadian mill. It is by special laws and regulations of the government of the United States that the American miller has been put in a position to do this business. It is the policy of that government to give all the employment possible to United States labour and capital in its milling industry, even when the main product is not required in, and is even denied access to, the domestic market. As imports of Canadian wheat into the United States for actual consumption in that country are, under the present tariff, absolutely negligible and merely permit the export of a little more United States wheat or flour, in competition with Canadian products abroad, the general application of an export duty would not in such a case be open to objection on the ground that it might restrict the market for Canadian products.

I am deeply interested in Canada. I am interested in everything that will make Canada a nation worthy of her great natural resources, and I will support legislation that will bring that about, no matter what political party may introduce it. I should like to see Canada develop in such a way that we might have a job for every man at a reasonable wage so that he could maintain his home, educate his family and send them out fully equipped to take their place in the world. We want a Canada where the young Canadian can use his education and ability for the benefit of the land of his birth, and thus free his father and mother from the anguish of seeing him expatriate himself to a foreign country to make a living. We want a Canada-first policy, and that can be built up only upon a reasonable tariff system based upon scientific examination. That must be the settled policy of Canada. Tariff stability based upon protection is the greatest confidence builder known to business. It helps the farmer, the labourer, the manuacturer, the retailer; it assists and promotes evei-y branch of our national life.
Mr. CHAS. B. HOWARD (Sherbrooke): I rise to give my unqualified support to what is perhaps the most popular all-round budget that has ever been brought down in the Canadian parliament. I join with my leader in thankfulness that Canada which suffered so much during the Great war is one of the first of the allied countries to recover from the after-war depression. I also join with my friends on the other side of the House in "thanking Providence for having been so good to us". At the same time I like to think of the old maxim which was mentioned by my good friend from Lake St. John. (Mr. S.vlvestre) that "God helps those who help themselves".
Canada's great and increasing prosperity has been accomplished because all classes; the rich and the poor, the mighty and the weak, the capitalist and the labourer, regardless of race or religion, have joined together in this commendable work. The common people have placed their shoulders to the wheel, and guided by a sane government, have accomplished world-renowned achievements! I was pleased the other day to listen to the speech of one of the oldest members of this House, my hon. friend from Bona venture (Mr. Marcil), who did not hesitate to say that the present budget was the finest of any that he had listened to during his twenty-seven years as a member of this House. Twenty-seven yean takes us back to the days when Sir Wilfrid

77ie Budget-Mr. Howard
Laurier was in power and when the national ddbt was at its minimum, and consequently taxation was light and any increase of taxes did not affect the people so directly as it would at the present time, particularly as any increase then naturally followed the steady development of the country. But during t'he ten years from 1911 to 1921, our national debt was increased by $2,000,000,000. as we say in French; parce qu'ils avaient tous les mains dans le plat; and therefore our rejoicing today is all the greater that the Minister of Finance has been able to bring down a budget containing a substantial reduction of taxation. I am pleased to be a member of the House in this fifteenth parliament because I believe that in the years to come this budget will be regarded as one of the greatest achievements in our political history and will be looked back upon as one of the milestones in Canadian development.
I pick up the local paper from mv home town and on the front page in big headlines I read this:
British budget is presented by the Hon. Churchill. General trade improving, but basic industries depressed.
J present this by way of comparison after listening to my hon. friend on the other side (Mr. Stinson) who stated in his speech that the basic industries of Canada were improving. The next statement is this:
Under budget as presented existing rate of taxation will be continued for 1926-27.
England, the Mother of Parliaments, and her taxation rate for 1926-27 is to be continued on the same basis! Contrast this with the budget of Canada-notre pays-substantially reducing taxation so soon after the war. There is no question about our increasing prosperity. Money in the pockets of the people will show that business is improving. But in case my statement should be doubted, let me cite two items which it has been a great pleasure for me to read recently. One is:
The Canadian Pacific Railway March net best since 1918. Gross up $1,300,000 over March 1925, while expenses increased only $623,306. Good first quarter. Net $2,675,000 above that shown in first quarter of last year.
In other words, the net for the first quarter of the year of that transportation system of which we are all so justly proud shows an increase of $2,675,000. Then we are also pleased that the Canadian National Railways-our own system-for the month of March comes out with these figures:
A net of $4,191,000, an increase of $2,500,000 over the same period last year, or an increase of 156 per cent.
Now, these reports coming from our two great railway systems are significant. Taking 14011-190i
the Canadian National figures, if you multiply the $2,500,000 by twelve, I think you will see that by the end of this year the system will be able to meet its interest to the public.


Richard Bedford Bennett: Mr. Speaker, I wonder if the hon. gentleman really understands what he is saying.


Mr. HOWARD:: I have a fairly good idea.


Richard Bedford Bennett: The Canadian National Railways did not earn its interest charges by over $40,000,000,


Charles Benjamin Howard: I did not say anything to the contrary.


Richard Bedford Bennett: The hon. gentleman said it would earn $40,000,000 next year.


Charles Benjamin Howard: I said that this year and last year it nearly met its interest on all the outstanding indebtedness to the people of Canada, not on the money that has been put up by the government.


Richard Bedford Bennett: The balance of it is part of our national debt.


Charles Benjamin Howard: I would ask hon. members to listen to this evidence of prosperity in the business world:
The Ford output at the Canadian plant is still growing, there being an increase of over 8,000 cars in the five month period compared with a similar period last year. The output of tractors is also on the increase.
This is not a statement given out for the government, but a statement furnished to the company's shareholders. At the bottom I find the following:
The total sales and income for the five month period is $16,191,000, an increase of over $5,000,000 in the first five months over last year. Showing a net profit of $1,000,000 for the period.
Let me give another item concerning the automobile industry generally:
"The auto industry attains a record output for 1925." There were manufactured in Canada during 1925, 124,000 cars, worth $82,000,000. . . . export shipments from Canada were the highest on record, the total value of automobiles and parts exported during the year being $39,000,000.
One more item to show our increasing prosperity. This is from the banking standpoint, and it comes very near to me, for it is published in the Financial Times, and we know the politics of this paper. It states in connection with the building of a new paper mill just north of the city of Sherbrooke:
About five years ago this same company was Obliged to put out a bond issue carrying a rate of interest of 8 per cent, and it sold just as few bonds as it possibly could. When it is ready to build its new paper mill,
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instead of re-financing, the president says: "We have arranged with our bank to loan us the money by our putting up these 8 per cent bonds as collateral security and getting our money at 6 per cent."
This shows the improved financial situation in the banking and industrial world.
Now, Mr. Speaker, what I think we should ask ourselves in connection with the budget is this:	Was this reduction in taxation justified? In replying to that question, lest my figures may be disputed by some hon. members on the other side, as they have just been disputed by the hon. member for West Calgary (Mr. Bennett), instead of taking my figures from the Canada Year Book or the blue books of this government I will take them from the 1925 report of the Royal Bank of Canada. I take that report because I see from its first page that the president of that institution is one of the head Tories of Canada, so I am sure hon. gentlemen opposite will not dispute these figures. There are no figures given for 1911, but at page 26 of that report I find that in 1910 the net public debt of Canada was $48.64 per capita, and that in 1921, when this government came back into power, the net debt per capita was $266.36; in other words, it had jumped from $48.64 to $266.36. The next year there was an increase of $4. Then what do I find? In 1925 it had decreased to $258.16, a decrease of $8.20 per capita for every person in Canada.
Turning to the next page of the report, page 27, I find that the total gross debt of Canada w'as practically the same in the years 1923 and 1924, but in 1925 it had decreased by $80,000,000. I also find that the net debt in 1923 was $1,814,000 000, and in 1921, $1,804,000,000, or a decrease of $10,000,000. In 1925, the net debt of Canada was $1,767,000,000, a further decrease of $37,000,000, which, with the $10,000,000 decrease of the previous year makes for the two years a decrease, according to Conservative figures, of $47,000,000. I say, Mr. Speaker, that this justifies the reduction which this budget proposes in the present income tax.


Mr. LADNER:: Does the hon. gentleman
not know that the apparent decrease in the debt is largely due to the fact that this government ceased making direct loans to the Canadian National Railways, as was done under Mr. Fielding, and instituted the practice of guaranteeing the bonds, and in that way showed a saving in one year of $70,000000?


Charles Benjamin Howard: I have reason to believe what was stated by the Minister of Finance, that the system of bookkeeping has not been changed. fMr. Howard.1
It has been stated in practically all the Tory press during the past two weeks that every member on the Liberal side and on the Progressive side of this House discusses only the reduction in the automobile tax. I shall therefore for a few minutes pay attention to the reduction in the income tax, and the first thing I wish to take up is the method of taxation.
I would like you to remember, Mr. Speaker, that this income tax was put in force in 1917 and became effective on the 1st of April, 1918, and I have no hesitation in saying to this House that the system of income taxation as called for under the income tax legislation of 1918 was one of the rottenest systems that has ever been put over any country. I say so because it disregarded the fact that all people in this country have the same rights. The government of that day placed upon the statute book that famous surtax, and anybody who knows what a surtax is knows that it is simply a way of allowing the rich man to get a preference over the man who is earning an ordinary salary. I am proud to stand on this side of the House and to say that under the income tax proposals brought down by the present Minister of Finance there is no class distinction of any kind. I also wish to state that the load has been lightened especially for those people who needed relief, the man whose salary was reported by his employer, and who perhaps was raising the large or the largest family, and therefore needed the most relief. This government has seen fit to raise the exemption of that class.
About two days after this budget was brought down, somebody ran across a certain kind of income that might bear a heavier tax than in the previous year. The Tory press broadcast the fact that the income tax reduction was only a bluff, that as a matter of fact there was an increase in the tax. There can be no question about the $3,000 exemption, but let us take the business man who is carrying the load of the country and has an income of, say, $10,000. Last year the man with an income of $10,000 paid $619.50; this year he will pay $290. But the man with the same income derived from dividends cn, say, Canadian Bank of Commerce stock, probably left to him by his great grandfather, and who last year paid only $115.50 while the business man paid $619.50, will this year pay, not more than the other man-because this government does not go on that basis- but he will pay the same as the other man, namely $290.

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Richard Bedford Bennett: I am sure the hon. gentleman would allow me to ask him a question. Does he realize what that means to the people who bought securities from brokers free from normal tax and now find themselves deceived and having to pay this extra tax?


Charles Benjamin Howard: I do not think the question affects my argument in the least.


Mr. GEARY:: I suppose the same would follow in the case of a widow whose whole income had been left to her?


Charles Benjamin Howard: They are as well able to pay as the man who is carrying the load and has six children to provide for and educate. The great point is this, Mr. Speaker, that under this budget every man knows where he stands.
One thing more. Travelling up and down this country in the last five years I have come across this situation, which has been remedied by this budget. A man will ask you on the train:	Who makes up your income tax? Naturally you will mention whoever is your auditor in your home town, and then he will say to you: "I used to be employed with the Income Tax department, but I am now in business for myself; if you will allow me to make up your income tax I will save you one-half of what you are paying now and we will go fifty-fifty on the balance." But under this budget, Mr. Speaker, there will be none of that kind of business for any man can sit down and find out for himself exactly what he has to pay.
The Tory press call this a Progressive budget. I would like to ask them how they get that way. There is not one single Progressive member from the province of Quebec, and yet there is not a member from that province who does not support every clause of this budget. If this budget was dictated by the Progressives, how do you account for the cut in the rich man's income tax? I go further: I say that this budget was brought down by the Liberal party with the help of the Progressive party, because they are willing to assist in the passing of any legislation which is in the best interests of the people of Canada as a whole. There have been many governments with a majority running from thirty to fifty in this House who would never have dared to face the financial interests of Canada and bring down a budget favourable to all classes, but this government, which on the first vote taken in this House had a majority of only three, and which, with our allies the Progressives, has a majority to-day running from only ten to fifteen, were not
afraid to take the consequences. We stand, therefore, on the merits of this budget.
We have been criticized by our Tory friends and the Tory papers on the ground that Canadian industries are hurt by this budget. I should like those who really think that is the case to turn to page 2456 of Hansard and in the part of the budget recorded there they will see whether this government stands by Canadian industries or not. An industry in the town of Drummondville which is spending $7,000,000 to-day on the erection of one of the finest cellulose manufacturing plants in Canada, came to this government and received what? They were allowed to bring in from the United States a certain part of the material they required for one year practically free of duty, and another part of the material for two years, so that they could get their own plant going by that time. When their own plant is in operation the tariff will be applicable as it is to-day.
With respect to the argument that this budget will discourage Canadian industries let me point out that the Montreal Gazette of yesterday states that the Spruce Falls Power and Paper Company's industry will be developed at a cost of $25,000,000. That industry is in the province of Ontario. Now that industry is not afraid to spend $25,000,000 just after the bringing down of the budget. But I want to tell hon. gentlemen of the prosperity that is coming to the province of Quebec. Perhaps it is not generally known that the Aluminum Company of America is spending in the northern part of that province the enormous sum of $100,000,000, two and a half times the totali valuation of the city which did me the honour to send me here. One development involving an expenditure of $100,000,000! And those people are coming here and are going to manufacture aluminum in the face of the budget brought down on April 15 last.
I do not desire to criticize the budget in any way, but I should like to see the time soon when the stamps on notes will be the same as on cheques, and I feel sure this will be realized in due course. I should like also to see the restoration of the duty that was taken off cyanide pumps in 1914 by the Tory government, thus allowing them to be manufactured in Pittsburgh, Pennsylvania, and shipped to t'he great mining companies in northern Ontario and northern Quebec free of duty. Whatever that duty was I should like to see it restored, so that the business of $50,000 which went out of Canada last year will go to the city of Sherbrooke. I say that not because I want the price to be increased.
The Budget-Mr. Howard

but because I think Canada is entitled to that business. I congratulate t'he government on keeping out inferior spring scales such as might cheat the Canadian consumer.
Now I come to the tariff on automobiles. I wish to be perfectly frank in my statement. Most of you know my position on the tariff question, but I will state it again. I believe in using the tariff to protect our industr;es, to protect our farmers, and to protect our consumers as long as that protection is not taken advantage of to increase the price unduly. I believe in using the tariff to eliminate foreign competition-


An hon. MEMBER:: Good Tory doctrine.


Charles Benjamin Howard: -but I do not believe in allowing any monopoly to start in this country, keeping it on the nursing bottle for over twenty years, and then allowing it to bleed the Canadian consumer without taking any steps to reduce the price. The hon. member for Frontenac-Addington (Mr. Edwards) stated the other night that the tariff would not increase the price of articles. If he were here to-night I would ask him how he could make such a statement as that in view of the price of Canadian automobiles as compared with the price of American automobiles? The same hon. gentleman quoted an item, which I now hold in my hand, with respect to Henry Ford, and he stated that Henry Ford was not an authority on automobiles. Well, if Henry Ford is not an authority on automobiles I do not think the hon. member for Frontenac-Addington can be an authority on the Orange Lodge.
To illustrate my point with respect to the effect of the duty, let me say that in Sherbrooke we have an industry employing five hundred hands. There is a duty on the class of goods which it makes of twenty-seven and a half per cent. But the Canadian price to the Canadian consumer instead of being higher than the American price to the American consumer is actually less. There is another industry in Sherbrooke engaged in another line of manufacturing, which enjoys a protection of thirty-five per cent, the same as the manufacturers of automobiles had. Yet that factory's price in Sherbrooke to the Canadian consumer is exactly the same as the price for the same line of goods in the United States. There are two other industries in Sherbrooke, two of the biggest in that city. They manufacture full-fashioned silk stockings for ladies and enjoy & protection of thirty-five per cent. When these articles are imported into Canada they are subject to thirty-five per cent duty, but do Canadians

pay a higher price for silk stockings? No, in every retail store throughout the Dominion these stockings can be bought at $2 a pair, which is exactly the same price as that paid in the United States for the same quality of goods. There is also in Sherbrooke a big factory which employs one thousand hands. That industry runs day and night and, as I said before, sometimes on Sundays. The duty on the products of this industry is twenty per cent. It used to be twenty-five per cent, but a reduction of five per cent was made and no delegation came to Ottawa to protest. But in spite of the fact that there is that protection of twenty per cent, the average yearly Sales price to the Canadian consumer is only five and three-quarter per cent over the American price. Now, Mr. Speaker, these are examples of industries that are engaged in manufacturing in Canada and yet treat the Canadian consumer fairly.
Now let me come to the question of automobile prices. I will give some figures in that regard, but I will be brief. I have given the figures before, but on account of the fact that they were disputed I wish to repeat them. This is taken from American Motor, a magazine published in the United States, of the issue of April, 1926. It gives the price of every car in the United States, f.o.b. Detroit or at the manufacturing town. This is what I find:
		United	Per
Canada	States	centMcLaughlin Buick Sedan..	$2,020	$1,295	56Oakland Coach	1,720	1,095	57Oldsmobile coach	1,495	950	57*Chevrolet Coach	1,055	645	63*
Then I find this statement appearing in our daily press:
"In spite of legislation which we do not consider to be in the best interests of the country, we believe it is the duty of all patriotic citizens to carry on and do their utmost to build up Canada," said Wallace R. Campbell, vice-president and treasurer of the Company, in making the announcement.
"We hope that the increased production will justify the cut, and we are depending on the people of Canada to keep us going."
And alongside of that in the very same paper I find the following item:
"We have definitely decided to discontinue the manufacture and assembling of the Oakland, Cadillac, Olds-mobile and G.M.C. truck immediately, and all these cars will now be imported complete from the United States," said R. S. McLaughlin, president of the . General Motors of Canada, Limited, this afternoon. The General Motors plant here employing 3,000 hands, closed down temporarily on Friday morning after the tariff announcements of Hon. J. A. Robb, Dominion Minister of Finance, but will reopen on Monday morning. Mr. McLaughlin declared that the closing of the plant was "no bluff".
There is not a member in this House who does not know that the Canadian workman

The Budget-Mr. Howard
is the finest workman in the world, bar none We want to do everything we can to protect him, but I ask hon. gentlemen to be honest and fair. Industries that were in the business during the war, employing 4,000 to 6,000 men, did not close their doors the morning after the Armistice was signed in November, 1918. They did not put their workmen at once on the streets, but kept them for months afterwards; they did not remove them until the country could absorb the surplus labour. That is why I say-and I believe it is the opinion of the people of Canada generally- that any firm who would close their doors and put their faithful employees on the street before knowing what the effect of the budget on the people of Canada would be, have no right to manufacture in this country. If the manufacturers had been honest and played the game fairly, no government, neither this government nor any other, would want to do anything to injure the industry, because we all should have but one aim, the upbuilding of our country.
Some feeling has been expressed, some suggestions have been thrown out and statements made, that this was a movement of the province of Quebec against Ontario. I deprecate such remarks as these. Anything that benefits Ontario benefits Quebec, and anything that benefits Quebec benefits Ontario. I will give you one example to-night to show whether or not Quebec is playing fairly. The Montreal Light, Heat and Power Company is paying to this country, an income tax of three-quarters of a million dollars and is supplying power to the citizens of the province of Quebec in the district of Montreal, while the Ontario Hydro Electric Commission, which is supplying citizens around Toronto, is not paying one nickel by way of income tax. We in Quebec think they should be on the same basis as our Quebec companies. When we talk about justice in this country we mean justice to everybody, rich and poor, the people in the west and those in the Maritime provinces, and as long as the present government remains in power this country can be assured that they will rceeive even-handed justice.
In the United States there is one automobile to every six people. In Canada there is only one automobile to every thirteen people. When an automobile manufacturer tells you that he will close up his factory in Canada and go back to the United States he knows he is bluffing. He knows that this country of ours, Canada, which our taxpayers have built up, is the only country in the world where he can build a car, get the advantage of the British preference and sell it
in the British Empire, which extends round the whole globe. The automobile manufacturer knows that the Australian government demands that in order to obtain the benefit of the British preference he has to make 50 per cent of his car in Canada, and that is where the rub comes. He wants to get the benefit of the British preference if ten per cent is manufactured in Canada. He also knows that in one of the small British possessions, India, there are three hundred million people; they are only beginning to build their highways, and they will be the greatest purchaser of automobiles in the future. For my part I want to do justice to the automobile manufacturers. We want to treat them fairly but we should see that they treat the Canadian purchaser accordingly. The hon. member for Fort William (Mr. Manion), stated he would apply the golden rule. In other words, we should treat them the same as they treat us-meaning the United States. A book was handed to me by the Minister of Finance which showed that you could'manufacture automobiles in Canada and ship them to the United States on the payment of 25 per cent duty. But when you make them in the United States and bring them in Canada there is a duty of 35 per cent. My hon. friend must have forgotten that in advocating his polic}' of brick for brick!
The hon. member for Yancouver-Burrard (Mr. Clark) following the speech of the hon. member for St. Boniface (Mr. Howden) the other night, directed a question to me, namely, he asked me how I liked the tariff policy which the hon. member for St. Boniface has expounded. I leave it to the House to say whether there is any difference between the policy I have enunciated to-night and the policy expressed by the hon. member for St. Boniface. He spoke about the duty on vegetables coming into Canada, the duty on potatoes, strawberries and so forth. We have a tariff board, and my opinion on this subject is that there is no need to place a duty on those products from the month of January to the month of July when Canada does not produce any of them. But if the tariff board adjudges that these products during the season they are produced in Canada are subjected to foreign competition, it is for them to decide whether they should put on a duty to eliminate that foreign competition. The matter has already been submitted to them.
In conclusion, as I see the situation it amounts to this: when this House convened on January 7, the present government was

The Budget-Mr. Howard
sustained by a majority of three. This government asked for an adjournment of six weeks in order to elect their ministers in the best interests of Canada. But that adjournment was held off and was cancelled by the action of members of the opposition. If they had granted that adjournment, they might have reduced that majority by one, but they did not do so and consequently the majority is increasing every day and has increased. I sat in this House and heard the speech delivered by the hon. member for Vancouver Centre (Mr. Stevens) when he spoke for about three hours:-one of the greatest addresses that has ever been delivered in this chamber-on the eve of the election in Prince Albert. It was supposed to have been in the interest of Canada, but I have decided that it was in the interest of the Conservative party. The result of the Customs investigation, which we cannot speak of in this House until the report from that committee comes in, will justify my remarks in due course. But up to date there has not been one particle of suggestive criticism offered.
In closing I am frank to state that all that is the matter with the opposition and their discussion on this question is the fact that they regret that their lack of tactics and generalship has increased our majorities and has placed the present government in power for years to come and prevented the opposition from bringing down this very same budget 1


Mr. W. E. ROWE (Dufferin-Simcoe):: Mr. Speaker, I beg the indulgence of this House for a time, I hope not too long to-night, to offer my support to the amendment moved by the hon. member for Fort William (Mr. Manion) to the budget presented by the Minister of Finance (Mr. Robb). There has been a good deal of discussion in this House over the budget and no doubt a great deal of interest is being taken in it throughout the whole Dominion of Canada. This interest is well justified because it constitutes the business programme of the country for the coming year.
Some have termed it an "election" budget. If it is it may still serve for better government. Others term it a "Saskatchewan" budget, and as hon. members from that province smile almost in jubilation at the most contentious changes it enunciates, one cannot help thinking that the desires long since expressed by the three ministers from Saskatchewan on fiscal matters are being more and more felt by the government. It has also been termed,
I believe, by the hon. member for Fort William as an "American" budget, and I fear

if its principles are put into effect that such a description may be justified. As I listened, however, to the hon. member for Brandon (Mr. Forke), independent though lhe professes to foe, enthusiastically defend it in detail, and with apparent satisfaction endorse it in full and laud the government in general, I wondered if it would be fair to term it a "Forke-handled" budget. Whether or not there is in any of these terms a proper description the government alone ' may know, but surely such a budget would have been indescribable to themselves at the time when the Speech from the Throne was brought down in this House, when parliament and the people in general were solemnly promised that no change in the fiscal policy of the country would foe made without a thorough investigation by the tariff commission into the affaire of the industries concerned. Since then the tariff commission, which was appointed in due time, was expected to assume the responsibilities for which it was created, namely, to investigate such industries.
I cannot say whether the automobile industry has been unduly protected or not or whether this is too great a reduction in the tariff or not enough. If this government assume to know, why appoint a tariff board? If they do not know, why speculate so recklessly with a theory that practically threatens the existence of a great and growing industry? It is surely reasonable to assume that an industry involving 180,000,000 of capital investment in this country, employing 20,000 skilled labourers with a payroll of over $30,000,000 annually and supporting 100,000 people who are directly interested, would be worthy of the consideration of this new board if its appointment is in any way going to be justified by this government. The action of the government seems as if it realized the futility of the board to act effectively without any principle by which to function. If that should be the reason for our not having a report from this new tariff eommisison, this reduction in the duty of 15 per cent, or a reduction of 43 per cent of the original protection on automobiles by the government will at least serve as an enlightenment of the principle on which the government desires the new board to function with reference to the boot and shoe industry, the furniture industry, the silk industry and other industrial enterprises that enjoy similar protection.
The hon. member for Brandon has on different occasions explained his unselfishness, stating that sectional desires are far from his mind. As a farmer I might be pardoned if I too give expression to my own unselfishness as to these tariff changes, as I rep-

The Budget-Mr. Rowe
resent the riding of Dufferin-Simcoe which has not a manufacturing plant in any way subsidiary to the manufacture of automobiles, but which is a large rural riding almost solely engaged in agriculture for which its fertile soil is favourably adapted, and therefore which is a riding of purchasers of motor cars and other machinery manufactured outside of the riding. I feel that if I were to admit any selfishness it would certainly not be with any lack of interest in the agriculturists of Canada. When I say "agriculturists" I do not mean only those who are engaged in one phase of that great enterprise, but I am also mindful of those engaged in mixed farming who make up by far the greater majority of the agricultural class in Canada to-day.
The reason, that I am here to-day is because the agriculturists of my riding realize that a national protective policy as enunciated by the leader of the Conservative party is of fundamental importance to their interests. Therefore I wish to make it clear to this House that even though the hon. member for Brandon leads a remnant of what once promised to be an important party in this country and though he has a special circumstantial influence in this parliament which he may never enjoy in the same way again, he in no way represents the farmers in Canada outside of a very few sections when he states that the farmers do not want protection and that a home market is not of fundamental importance to the future success of our business.
I do not want to reflect in any way or. the sincerity of my hon. friends to the left when they say that they are not a class or a sectional representation in this House because I feel that they are sincere in their interest in the whole welfare of our Canadian people. But I regret that such a reference to their sincerity of purpose is in no way a tribute to their judgment of practice in the interest of agriculture because I feel that the interests of industry and agriculture in Canada are so closely identified that any fiscal policy that retards in any way one of these great basic industries, similarly reflects on the other. I realize that at this particular time in our country's history wheatgrowing does not feel the benefit of a protective policy to the same extent that the balance of agricultural production does and while I hope I realize fully the value of wheat production in agriculture, I also realize that no matter how fertile any soil may be, it cannot be used indefinitely for the production of wheat alone, so that Canada is already fast becoming a country of mixed farming.
We saw long ago the effects of lowering the duties to benefit one particular class in this country, and the results invariably were such as were experienced in the lowering of duties on farm implements. This did not benefit the farmers one dollar; in fact, after that reduction by this government they paid more for almost every tool of production which they used on their farms, and other classes suffered and were forced to deplete the home market by going to a foreign market to manufacture the implements there. We have watched our Canadian people leave our country to seek employment since this government came into power. There are 15,000 Canadians engaged in the farm tractor industry in the United States who ought to be working in this country. What we need is a policy that will keep these people employed in Canada, preserve to them a high standard of living, and increase the home market for all our agricultural producers, as well as for our manufacturers and retailers. Such a policy is bound to react favourably upon those who are engaged professionally and upon all other classes of the community.
It is not necessary to put on Hansard facts and figures which probably are already on record. It would seem, however, that the government at any rate has not yet realized the situation in Canada sufficiently to see the error of its ways. We know what the effect of its policy has been on the fertilizer industry as well as on farm implements. The result of their theorizing has been to put out of business a large portion of our fertilizer manufacturing industry. This has depleted the market for farm products in Canada by driving out of the country, to seek employment in the United States and elsewhere, those workmen who were engaged in this industry. And far from the government's efforts resulting in a lowering of the price of fertilizer it has increased it: the American manufacturer is now able to charge higher prices because of less Canadian competition.
Some Canadians may be satisfied to remain just producers of wheat and the recipients of the surplus industrial products of the United States. But is it fair that, because they happen to hold that innocent international view, this country should give to the American, the Australian and the New Zealand agriculturist, as it does to-day, an advantage over the Canadian farmer in eggs, butter, cheese, meats, grains, fruits and in fact every other commodity for which the home market is badly needed? I need not put on Hansard the list of duties, which I
The Budget-Mr. Rowe

fancj' has already been reported, but why should we allow, almost $200,000,000 worth of foreign agricultural products to be sold in Canada under an advantageous tariff? The wheat producer of Canada prays that Europeans may continue to eat white bread in order to take his surplus, and he wants special transportation rates. He is not concerned with the home market. But he seems to forget that after all wheat growing is only one phase of a great enterprise in a district in which, unless all natural precedents fail, there will be a more diversified production before long. If only the Canadian market were protected for the Canadian farmer there are many lines of agriculture which would prove just as profitable as the growing of wheat. Under a proper system of protection, not only would our home market be enlarged, but important phases of agricultural endeavour would be directly stimulated, as for example, the textile industry. Surely this government should have studiously avoided the error committed by its own party under its great chieftain, Sir Wilfrid Laurier, who, realizing the disastrous effect upon eighty-eight woollen textile mills after the lowering of the duty in 1897, retrieved his mistake and increased the tariff again from 23J to 30 per cent in 1904. Is it not a strange fact that before 1900 we had more sheep in Canada than we have to-day? In 1921, before the present government speculated in freer trade and lowered the duty on textiles, we had 1,000,000 sheep more than we have now. Our textile industry suffered heavy losses and thousands were put out of employment, being forced to leave their homes. Previous to that time we had 3,600,000 sheep and lambs, as against 2,500,000 to-day. Canada is by climate adapted to the raising of sheep, and with our vast areas we have only 2,500,000 as compared with 25,000,000 in England, with its small territory. And Australia has 80,000,000 head. With the aid of the so-called farmer party this government saw fit to reduce the duty on Australian mutton from three cents to one-half cent, allowing that dominion a special advantage also in woollen products. Since the British preference was lowered we find that almost one-half of the total imports from Great Britain have been textile products, which in 1925 amounted to over $72,000,000. Is this fair to the Canadian textile industry?
In 1923 the present government, through the French treaty, reduced our duty on French textiles to nineteen per cent on some lines, and below 30 per cent on all. Although Great Britain, still believed by some to be a 
free trade country, protects its textile manufacturers to the extent of 33 J per cent against competition, the idustry in that country pays less in wages to its factory hands than do the Canadian mills. Since 1923 our imports of woollen and knitted goods from France have increased three-fold, until in 1925 they amounted to over $3,000,000. When we consider that we produce only one-half of the textile requirements of our people and that the farmers produce only one-fifth of the raw wool consumed in Canada, is there any justification whatever for any action that tends to discourage such a great dual enterprise as the woollen industry? As a producer of mutton and wool I claim that with adequate protection for our textile industry, as well as protection against foreign mutton and raw wool, we might increase our sheep industry by one hundred per cent, with considerable advantage to this Dominion. The sheep industry is one that increases the fertility and productive qualities of the soil instead of robbing it of its best elements, as the growing of wheat tends inevitably to do.
When I say, Mr. Speaker, that a sound protective policy is as essential to argicultural development as it is to industry, I think I am only voicing the opinion of our party, as enunciated by the leader of the opposition (Mr. Meighen) in his resolution of a year ago, that we should protect the products of Canadian agriculture against- unfair competition from foreign commodities which enjoy a tariff advantage. This particular phase of a national protective policy is recognized as most essential to the agricultural area of Dufferin-Simcoe which I represent. But realizing that a policy of national protection is bound to reflect its advantages in every locality, I would not consider it fair if I did not advocate, equally in the case of other activities, the same principle of adequate protection. I believe in the principle of protection as applied not only to the enterprises of my own constituency, but to coal and steel in the east, and industrial enterprises, just as I view with sympathy the question of western freight rates. My ideal is a policy that will make for national development throughout the Dominion as a whole.
I want to compliment the Minister of Finance (Mr. Rhbb) on the picture he has painted in his budget of the improved conditions of the country at the present time No doubt he had the advantage of the blesset co-operation of Providence-; nature smiling or. our wheat fields during the past year provided a good background for that picture. I

The Budget-Mr. Fansher
have no doubt the reductions in the income tax and the stamp tax will be welcomed, even if they do seem to be a couple of years late in coming. It would appear that the sales tax, the receipt tax and the tax on cheques, all increased by this government when it came into power, might well have been materially reduced if not abolished. Since the present government took office in 1921 the tax collections have been greater year by year than they were in any year of the former government.
Now, independent of the bright and picturesque appearance of the budget, we find that last year's expenditure was some $22,300,000 over previous years, and our estimates for the coming year promise still greater expenditure. Therefore, Mr. Speaker, while the government seem to have become artists in the painless extraction of taxes from our people, it would be more economically sound if, first, they would show a reduction of expenditure; then the other side of the ledger might be expected to follow favourably, as a natural consequence.
It is indeed gratifying to anyone in public life to note the great respect that the mem-oers of the different parties have in common for the traditions and lives of those two great leaders, the late Sir Wilfrid Laurier and the late Sir John A Macdonald, but I am sure the country resets that there is no evidence in the present government of a desire to perpetuate the policy of their late great leader, Sir Wilfrid Laurier, whose traditions of stable government have been forgotten, or exchanged for the good-will of the Progressive party in order that the government may continue to enjoy administrative power.
The hon. member for Brandon, (Mr. Forke), who was at one time hailed as a farmer leader, according to a press report, stated in Toronto that he had been termed a Liberal, but that he was not, that he was only a Liberal in action, or an "advanced Liberal". If he is correctly reported, he no doubt was talking true to form by classifying himself as nearly to the Liberal party as words could classify him, and the only, evidence of any greater similarity would be his votes and utterances in parliament. His words, Mr. Speaker, were surely carefully selected, because it seems rather unique that in order apparently to secure the support of himself and his party the government might well be classified as "advanced Liberals," they having never hesitated to break any advanced promises they have made in order to allow the hon. member for Brandon and his friends to be "Liberals in action." For some time I have
been much interested in the hon. leader of the Progressive party. He follows the same vocation as I do, and he was at one time supposed to represent that particular class of our people in parliament. But the large and expansive agricultural area that has constituted his environment no doubt tended to broaden his views. Therefore it is not any wonder to-day that the people of Canada can scarcely perceive whether the one time Farmer party has broadened from its earlier class consciousness and absorbed the Liberal party, or whether the Liberal party has broadened from its identity with great traditions and absorbed the Progressive party, or whether both parties,, as David said of his enemies, "have covered themselves with their own confusion." Perhaps so far as the interests of Canada are concerned that matters not; but one thing they have done-they have covered industry and labour with a confusion of dissatisfaction, uncertainty and lack of confidence that will reflect on many lines of enterprise and possible development in this country.
Is it not time, therefore, that we had some stability in our fiscal policy in the interests of commercial, industrial and agricultural advancement in this favoured land of great resources and possibilities? Is it not also time that we had some stability in government policy to restore confidence in a great and energetic people who await Canadian opportunities for a high standard of living in preference to the hope of employment in a foreign country?


Mr. W. R. FANSHER (Last Mountain):: Mr. Speaker, as this is the first occasion of my addressing this House I crave your indulgence while I make a few observations on the budget. Before doing so I wish to draw attention to a few remarks made by the hon. member for Victoria (Mr. Stinson) with reference to the milling of wheat in Canada. He quoted a recommendation in the report of the grain inquiry commission, which was appointed to investigate the grain trade from A to Z, that an embargo of 42 cents per bushel be placed on wheat going to the United States. I have a memorandum here which shows that the average price of Canadian flour on the Liverpool market for the month of March was 381 cents per sack lower than the price for the same quality of Canadian flour in Winnipeg. If we add the 42 cent6 duty, or the embargo, to that 381 cents, we would be paying 801 cents more for our sack of flour in western Canada than the Liverpool consumer would have to pay.
The Budget-Mr. Fansher

The hon. member for Dufferin-SimcoefMr. Rowe), who has just sat down, has told us how the farm implement business has gone to pieces in the last few years, particularly since the election of 1921, I am sorry I have not the exact figures before me, but they have been placed on Hansard, and if my memory serves me correctly they show that there are considerably more than one thousand more men employed in that industry now than four years ago.
He also made reference to the textile industry, and argued for protection for that industry. It is amply protected now, I think, to enable it to stand on its own feet. I would just like to remark here, dealing with it more fully a little later on, that any* business that is running efficiently must of necessity manufacture as cheaply as possible. It must get its raw material as cheaply as possible, and must cut out all waste and all non-essentials if it is to compete in the world's markets with other industries of the same character. We are producing what we can produce in Canada more cheaply than other countries. We are doing it 'sometimes under a handicap of weather, sometimes under a handicap of other conditions, but always under the handicap of protective tariffs. While we export many millions of dollars' worth of the products of this country, we have to import a similar amount of other articles that we do not produce, or cannot produce as cheaply, in Canada, and if you inquire into the textile industry in detail you will find that that is the reason why the textile industry in this country is suffering to some extent, and especially does that apply to the cotton industries.
The hon. member for Dufferin-Simcoe was very solicitous for the welfare of the Progressive party. I do not wish to take up his remarks in a critical spirit, but if he continues to speak in the same tone of the Progressive party I should just like to suggest that he may find himself in a year or two in the position described by these lines:
Vice is a monster of so frightful mien,
As to be hated needs but to be seen;
Aet seen too oft, familiar with her face,
We first endure, then pity, then embrace.
In another year or two we shall possibly see him embracing the principles of the Progressive party.
I should like to speak for a moment of the beneficial effect the principle involved in this budget will have upon business in general throughout Canada. It is very pleasant, I am sure, to the entire population of this fair Dominion to know that we have at last come to the point where we can meet our expenditure from current revenue, and have

a tidy sum left over to our credit. Some few years ago in western Canada, and I have the privilege of representing a western constituency, we almost despaired that that time would ever come, but here we are. We have reduced our national debt, not by a large amount it is true, but still very appreciably considering the years through which we have come. It is also very gratifying to know that the Canadian National Railway is almost at a point now where it will no longer be a drain upon the Dominion treasury. We are sure that the managing general, so to speak, of that great railroad, will soon bring it to the point where it will be paying back large sums every year of the money that has been advanced.
I think all will agree with me that the great basic industry of Canada is agriculture. I do not need to argue that point, or to bring any proofs, because it is generally admitted. We have been told for a number of years at election time, we have been told on the floor of this House, and we have been told through the press of this country, that agriculture is our great basic industry, the foundation of all other industries. The reports of all the Canadian banks in the past year bear out mj contention. Agriculture is our great bask industry; it produces an enormous amount oi wealth, and because of the new wealth it brings into the country it has 'a beneficial effect on all other industries in Canada that cannot be gainsaid. The agricultural production of this country has contributed to the exports of Canada to the extent of 82 per cent, and an industry contributing such a large percentage to the wealth of Canada surely deserves, consideration. But agriculture has been in distress for some time. I am sure that when I have finished my remarks hon. gentlemen will see that it is necessary to relieve this industry from that distress, in order that other industries may enjoy what they would like to enjoy through protection.
Through protection the whole cost of living is gradually raised to a higher level. The man in the factory has to pay more for his clothes, for his furniture, for everything that he consumes. Therefore, he has to get more wages. That increase in wages has to be added to the cost of the article that he produces, and so the merry circle goes, until we have built up a cost of production in Canada that will not enable us to compete with other countries in the world's markets. There is another thing that has added very materially to this cost of production of which I shall speak a little later, but I wish to say here

The Budget-Mr. Fansher
that the principle involved in this budget, namely, that of lowering the duties, is a step in the right direction which will gradually lower the cost of production so that we can successfully compete with other countries in the world's markets.
I would suggest that in the next budget submitted to this parliament there be a reduction in the duties on the necessities of life. That would be of advantage to everyone throughout Canada, and would tend to lower the cost of production of which I have just spoken. We have- heard a good deal about the loss of population in Canada, about our young men and young women crossing the international boundary line to get work. The situation seems to me to resolve itself into a fight, as it were; a competition between the industrial part and the agricultural part of Canada, or between other industries and the great basic industry of agriculture. A certain pressure has been exerted against this great basic industry that it has not been able to stand, and it has been crumbling. Coming from western Canada I know whereof I speak. Many a farmer in consequence of this pressure has gone to the wall and has crossed to the United States, and in some cases has been assisted to go there. In other instances the farmer has saved enough out of the wreck to enable him to go to the United States without assistance in order to get work. This has been the result of the crumbling process I speak of which has been in operation for a number of years and was largely brought about by the war. Of course other industries have felt the effect, because the farmers could not produce from the soil the amount of wealth they had been producing, and could not give the factories of this country the orders they needed so much.
We have embarked upon an immigration policy with the idea of building up Canada and of filling up its vast spaces. With that policy I agree. But when we get immigrants it is necessary to supply them with work. It is not' coal miners for Nova Scotia or the western provinces that we need, or artisans. We require the class of immigrants that will go on the land and produce. There is plenty of land available in western Canada and plenty of work for immigrants of the right class, and there are still many farms in eastern Canada that should attract agriculturists from other lands. So there ought to be no difficulty in these newcomers making good homes for themselves, or in making a success of agriculture provided this basic industry is placed on a fifty-fifty basis with other industries in Canada. After we have secured these immigrants, and they have started to work,
then we must secure markets for their products. The securing of markets is important, probably more important than securing the immigrants, because if there are not markets for the products of these people they will not stay long with us. What is more, we need profitable markets. I will leave this part of my subject for the moment, and return to the question of markets a little later on.
The industrial depression in Canada, of which we have heard so much during the present session, has been due greatly, I think, to the depreciation in the value of the agriculturist's dollar. We worked hard to produce wealth, and at the end of the year when we balanced our accounts we found we were no better off. We kept at it for a number of years, and then began to inquire what was the matter. We commenced to look around. We found that the bed on which we slept enjoyed a protective duty of thirty per cent. All our clothing and all our furniture were protected to the extent of thirty-five per cent. Our agricultural machinery has a protection of from seven and a half per cent to seventeen and a half per cent according to the character of the implement. Our harness, in fact everything that we use on the farm, is protected. We apply our brains and our brawn to the cultivation of the soil and we produce beef, pork, grain, and other commodities which we have to sell on the world's markets. With the duties as they are we realize that we are greatly handicapped, and if the Progressive party stands for anything it stands for a gradual lowering of the protection of which I have spoken, so that those engaged in the great basic industry of agriculture can compete successfully in the markets of the world. If we were placed in a position to do this, such a flood of orders would pour from the farming sections of Canada into the manufacturing centres as would cause the manufacturers to forget all about a protective tariff; they would not need it then. But we are starting at the wrong end. We are building up the structure before we have constructed the foundations.
There is another thing that has entered very materially into the cost of production in Canada. I am not offering this as any argument for my remarks to-night, but I make reference to it because I think something could be done in this direction. I refer to the costs of distribution in Canada. I have before me a little memorandum containing the price of a few articles sold in the west as compared with the manufacturer's price for the same articles in eastern Canada. For one of these articles the price charged in western Canada is from
The Budget-Mr. Fansher

$2.75 to $2.85, whereas the manufacturer's price is $1.38, a difference of $1.47. In the case of a second article, which is used in all Canadian homes, the cost to the manufacturer is a little less than $55, whereas the retail price to us is over $110. I make these references because I think they will have some effect on my argument as to what we are doing to help ourselves in western Canada. We studied the tariff, we studied the cost of distributing goods from the manufacturing centres of Canada, and also what it cost to distribute farm products, and it led us up to the point where we formed an organization that is known probably all over Canada and in a good many parts of the world-I refer to the wheat pool. We found from our study of the situation as it existed in the marketing of wheat and other grains that there was a great discrepancy between the price which we received and the price which the consumer paid. So we thought out the plan of forming this wheat pool and getting our products on the world's markets at the lowest possible cost. As a result of this I can say that outside of the physical handling charges it has cost us less than a cent a bushel, we market our wheat at a saving, in some instances on the lower grades of wheat all the way from a few cents to a sum as high as thirty-one cents a bushel and possibly higher. I wish to point out that we are doing all we can by this means to increase the value of our dollar, so to speak. We are enhancing the net return to ourselves in the manner indicated. The two articles to which I refer are produced in eastern Canada-


Mr. EVANS:: Name them.


William Russell Fansher: I do not wish to name
them. I can give the names of the articles and the prices privately to any hon. member who wishes that information, but I do not desire to make a public statement because that would not be fair to the parties concerned. I would point out that we farmers of western Canada have gone a long way to make the purchasing power of our dollar one hundred per cent, and I will throw out the challenge to the industrial magnates, as I may call them of the manufacturing centres of Canada, that they do something from their end of the business and give us the products of their factories at the least possible cost of distribution. Perhaps it is not a fair thing to put up to them, because they manufacture so many different things, of such different natures, that they would not be able to do as we have done with wheat. If that is the case, if it is not possible for them to do so-as some of them have suggested to me-then it is

up to us to go further and organize our purchasing power.
I stated a few moments ago that when we got immigrants of the class who could go on the farm and they began to produce, we would need markets for the products of their labour, and I want to quote a few figures showing that outside of the United States Great Britain is our best market for our products. There is a great difference between the amount of goods we import from and the amount we export to Great Britain. The figures will be shown by the following table: .
Year	Imports	Exports1923	
$141,330,143	$379,067,4451924	
153,586,690	360,057,7821925	
151,083,946	395,483,433
I quote these figures to show that we are importing from Great Britain less than half the amount we export to that market, and I want to draw some conclusions from this fact. I wish to give two illustrations which occurred in very recent history, well within the memory of any young man who is within my hearing. Hon. members will remember some few years ago that Great Britain was short of rubber. The United States had a corner on rubber, and as a result _of that condition British rubber manufacturers were somewhat handicapped. It was not, however, as large an industry then as it is now. They proceeded, therefore, to evolve a plan whereby they could supply themselves with rubber. I do not need to relate all that took place in this connection, because the facts are well known. But I want to make a reference to one other article, to show the efficiency of British capital in dealing with a situation of this kind and to indicate the manner in which an application of the same principle may be made to our wheat market.
For a time this rubber question caused the British industry some concern. But hon. members know what has happened in this connection in recent years. British financiers proceeded to plant rubber in every section of the empire in which it could be grown, and the result is that to-day seventy per cent of the entire rubber production of the world is controlled by British finance. In fact they so efficiently control it that prominent citizens of the United States have stated that England is paying off her war debt to that country out of the bounties on rubber. So much for the efficiency of the British financiers in regard to the rubber question. The same thing happened in respect to cotton. The United States at one time produced the greater portion of the world's supply of cotton, and the consequence was that Great Britain found herself short of a sufficient

The Budget-Mr. Fansher
supply to keep her mills running. In order to take care of this condition the British government proceeded to build great dams across the river Nile for the purpose of providing irrigation for the waste deserts of Egypt, which, it was proved, could produce the best cotton in the world, so that in a few years they will be able to supply themselves with their own raw material.
Hon. members may ask, what has this to do with the question before the House at the moment? Well, this is what it has to do with it. When Ramsay MacDonald was in power in Great Britain he sent a commission over to Russia to investigate trade conditions there, and investigations and negotiations have been going on to some extent ever since. To-day the Prime Minister of Great Britain has two delegates in Russia inquiring into conditions with a view to the supplying of British goods to the Russian peasant in exchange for the wheat which he produces. The expert economic adviser of the Prime Minister of Great Britain is now at the head of the commission consolidating the co-operatives there, so that they will be able to carry out this proposition. I may be asked, what has that to do with Canada? Well it has this to do with Canada; if Russia supplies Great Britain with wheat and Great Britain supplies Russia with manufactured goods, what are we going to do with our wheat? Great Britain has been taking and will continue to take our wheat until such time as Russia can produce enough to supply the British market. Britain has been taking enormous quantities of wheat and flour from Canada-not all directly from Canada, because a considerable quantity of Canadian wheat is ground in the United States and shipped from there to the British market; yet it is the Canadian product, produced on Canadian farms.
The figures which I have quoted as to the exports and imports between Great Britain and Canada show that our imports from Great Britain are so small compared with our exports to them that British financiers are getting tired of the position in which we stand, taking from them, as we do, less than half the value of our exports to them. They will probably do just as they did in the rubber and cotton industries; they will turn their attention to Russia, and they will secure from that country the wheat which they so much need for their home consumption. What is the use of bringing immigrants to this country and putting them on the land to produce, if we do not look well to the holding of that market for our products in the
future? I think we should make every effort possible to take more goods from Great Britain so that she will be in a better position to take the products of our farms.
Some hon. members have argued in this House that we do not need to take imports for exports. But let me point out that if I produce wheat or other agricultural products, they are the product of my labour. Some hon. members say that when that product goes over to Great Britain it can be paid for in gold. That is all very well, but that wheat or other agricultural product is of no value until it is consumed, and who consume it? Industrial workers consume it. And how do they pay for it? They pay for it with the product of the labour of their hands, the same as I pay with the product of the labour of my hands for the things I buy. They have to produce goods to pay for what I produce and export to them, and if I cease to take their goods they will cease to take mine.
I think I have shown in a few brief remarks that we must do something pretty soon in regard to our British market or we may lose a large portion of it to the Russian people. The trade commissioner from Russia to the United States was at St. Paul when that general conference of representatives of different countries in regard to marketing the products of the farm, or what we might call the great pool conference was held there. He made the statement that they would have 200,000,000 bushels of wheat for export next year and that before 1930 they would have reached their pre-war standard of 500,000,000 bushels of wheat. This is something that we should not treat lightly; we should do all in our power to retain the British market so that we may have at least a reasonable chance of exporting our surplus farm products. True it is that we are developing markets in other parts of the world. Some of our wheat is going to Japan and China, some to South America, and possibly in the not distant future the United States will be compelled to come to Canada for some of the wheat she needs for her great nation.
In connection with the tariff on automobiles, I wish to deal with the question of trucks. I think it was in 1917, When the greater production campaign was on, that farm tractors under $1,400 in value were admitted into Canada free. I think trucks of a large tonnage should be admitted into Canada free. In Canada we have no manufacturers of this style of truck and I will explain why I think these trucks should be admitted into Canada free. We have in western Canada a vast railway system, in fact two systems, but they

The Budget-Mr. Fansher
do not cover the entire country. There are on each side of our railway lines tremendous stretches of land that are non-productive because it is almost impossible to farm in that land and draw the product to market at a greater distance than fifteen miles from a railway. Some are drawing their grain twenty miles and some further, but that is not profitable. My contention is that trucks of a five-ton capacity could bring in the products of farms thirty miles away to those lines of railway as profitably as a farmer can now draw his grain with horses fifteen miles. This would widen the territory of production on those branch lines; it would practically double the quantity of traffic those roads would have to haul. That, I think, would be a very simple solution of part of our railway problem. This idea has not been advanced in the House before to my knowledge, but it is one that came to my mind several months ago.
The United States has often been referred to as being a very rich country and its high tariff has been advanced as the reason for that. That is a matter of opinion. The United States comprises the largest population and the greatest area of free trade country in the world, and that fact has contributed very largely to its success. In other words, it has become very rich and well established as a nation probably above all others because of its unique position in having such a large stretch of country within which free trade exists.
But another thing that has not been mentioned before that has been one of the greatest factors in the advancement of the United States in the last few years is their improved banking system. I have no quarrel with the Canadian banks as they now exist. They manufacture money, I was going to say, and turn it out to us for use, but I believe it is principally for the good of the banks. In comparing the two systems I would say that the banking system of the United States excels that of Canada in that it is useful to the common people; it has given them a chance to buy, to sell, to produce, and the United States have prospered more from that cause in the last eight or nine years than owing to their protective tariff or their unique position in being practically a self-contained country having a tropical climate in the south and also the northern climate of the great wheat belt.
I want to make one more comparison before I take my seat. I have often thought of Canada as a young giant. We know that the young men and young women of these days have rather insatiable appetites and they often
[Mr Fansher.]
slake those appetites to their own detriment. A young person to be strong and vigorous must adhere to certain rules governing the appetite, the digestive organs and so on. This young giant of Canada has had its tastes pampered to a very large extent. It has stuffed its stomach, as it were, the central provinces, and it has caused gout in its feet down by the Atlantic and an anaemic condition in the great arms of production in western Canada. The diet on which this young giant has been fed during the past number of years has contributed very largely to that situation and that is the diet of the old National Policy. I would suggest a change in the diet of this young giant so that the lifeblood may pulsate from one coast to the other. I would suggest that the rations of the old National Policy be decreased gradually and that there be substituted for that the new national policy as propounded by the Progressive party. In that way, we would have a strong, vigorous country, well able to take care of itself in the competition that is now becoming so keen with other countries of the world.


Mr. SEGUIN (L'Assomption-Montcalm) (Translation) :: Mr. Speaker, I do not
intend to take much of the time of this h>on. House, however, I deem it my duty to express the great satisfaction felt by the electors of the beautiful and large county of L'Assomption and Montcalm in regard to the budget speech lately delivered by the hon. Minister of Finance (Mr. Robb). Moreover from one end of the country to the other, since the budget has been brought down, numerous and very clear signs of approbation have come as an endorsation of the stand which the government has taken. The budget speech characterizes well the Liberal policy which lends itself to the needs of the people and knows how to put forth, notwithstanding the protests of interested financial and manufacturing groups, a wise legislation, far-seeing and devised toward protecting the interests of the great majority of the people of the country.
The most striking points in the budget speech are the following:	A surplus of
$55,000,000; a reduction of $22,353,000 in the public debt; revenues estimated at $376,800,000 for the fiscal year 1925-26; a decrease of taxes estimated at about $25,000,000; a substantial reduction in the income tax affecting particularly the small wage earners and the head of families; the disappearance of the stamp duty on receipts; a cutting down and further exemption in connection with the sales tax; a reduction of

The Budget

Mr. Segvin
the duty on automobiles; conditional drawbacks allowed on material entering into the manufacture of automobiles; penny postage on letters; balance of trade in our favour amounting to more than $402,695,000, the largest since the war is over; British preferential tariff applied to goods transported directly into the country without being reshipped.
This is, I think, one of the most democratic budgets that we have had for a number of years, if indeed such an instance can be found in the fiscal history of our country since Confederation.
The present government through the mouthpiece of their Minister of Finance, have clearly and precisely defined the policy which they intend to follow, in order to lighten as much as possible the people's burden while providing sufficient revenues to balance the budget and meet the national indebtedness. The present government is proceeding strictly on the lines of the Liberal policy which were laid down, by the right hon. Sir Wilfrid Laurier. Always anxious to give full and entire justice to all the provinces and to grant the utmost privileges, in keeping with the exceptional conditions prevailing in our country, the government has striven to give to all groups and to all parties in the country, as well as to all classes, the greatest possible measure of favours.
The government's ultimate aim, so far as the situation created by war allows, has been to unceasingly endeavour to bring down the cost of living by lowering the customs duties wherever it was possible, without endangering the life of the industries which are essential to the economic structure of the country.	It has also directed its efforts
towards reducing the cost of production in the basic industries, by allowing a freer entry into the country of the raw material essential to these industries. The government has endeavoured to contribute as much as possible to the lowering of the cost of living; and that is why the tariff has been reduced to such an extent on a great number of articles which are not produced in our country, as well as on certain tropical fruit, also on ginger, spices, cane sugar and sponges; this will enable the Canadian people to effect a saving of many thousands of dollars yearly in the home.
Mr. Speaker, the marked reduction in the tariff on automobiles valued at $1,200 or less is a further proof that the government is endeavouring to unburden the people. The automobile industry, in Canada, if we are to believe the statistics which have been 14011-191
published of late by most of the financial newspapers, has realized substantial profits. It was but right, therefore, to reduce the tariff on automobiles so as to bring down the price for the Canadian consumer. To-day, the automobile has become an entirely indispensable accessory in the commercial and social life of the people, and the farming class itself is, perhaps, the one which will benefit the most from the reduction in the tariff.
The lowering of .the tariff on tin which is not produced in our country will allow the manufacture of tin cans at a lower cost and be a factor in reducing the cost of living. This is a further proof of the Liberal government's earnest desire for the welfare of the people and its endeavour to lift the burdens which the war has accumulated upon their shoulders.
The doing away with the receipt tax, the reduction in the income tax, and the sales tax in certain cases, are so many measures which the public highly welcome. An effort was made in certain quarters to rouse the workmen of automobile factories. The untimely announcement of the closing of the works of the General Motors, at Oshawa, did certainly create a sensation; however, the reconsidering of this decision taken with the sole aim of embarrassing the government has produced the opposite effect and has shown up the bad faith of the protectionists. We must not forget that the automobile industry in our country is made up, in general, only of American branch establishments which control the market without any other competition than that which may exist between them. We must neither forget that most of these branches were established in this country in order to take advantage of the British preferential tariff and allow them to reap greater profits on their exports.
One will recall that last year, when the reduction in duties on farming implements took place, the same protests were registered, the same warnings of disaster were given by these Tory prophets. Yet the manufacturers of farming implements continued to prosper and some of them even increased their profits notwithstanding this reduction in the tariff.
Last year, like to-day, Sir, we were given to understand that the industries so affected would close their doors, that a large number of workmen would be thrown on the street, that the trekking of our people across the borders would increase in a more alarming proportion. What was the outcome of these warnings of disaster?

The Budget-Mr. Seguin

The manufacturers of automobiles have realized millions in profits, thanks to the high protective and preferential tariffs. Is it fair that these manufacturers, for the most part Americans should continue to amass wealth in such a scandalous way at the expense of the Canadian people? Is it fair that the difference between the sales price in the United States and in Canada exists simply because of the high tariff which has, up to now, allowed Canadian manufacturers to demand exorbitant prices for their cars? The difference in these prices does not only apply to touring cars, but also and especially to tractors and motor trucks. Owing to this high protective tariff, the Canadian farmer found himself at a disadvantage in relation to the American farmer. The same could be said for the manufacturer, the contractor and the trades people who made use of motor trucks in their business.
The reduction, Sir, in the income tax and the changes brought on in its administration also receive the public's sanction. Hence, the government gives further proof of its desire to lighten the people's burden. It is but fair that the business man who draws dividends from his investments, should not be placed on the same footing as the wage earner, who gets a living by the sweat of his brow. In most cases the people with independent means live on their income without being of any benefit to the community, while the wage earner is an asset owing to his work. Was it not but fair to establish a difference between the two in regard to the inoome tax?
What do yiou think now of the return to the penny postage? Is it not true to state that this measure is purely a Liberal conception, and that there does not exist one person in the whole Dominion who will not feel its good effects? Might I suggest to the hon. Minister of Finance, in order to commemorate with still more joy Dominion Day, that in making the first issue of these postage stamps they be made bilingual, thus doing justice to the two official languages recognized by the constitution of the country.
Are not all the changes, Sir, announced in' the budget speech of a nature to spread joy among all classes of society, as well as being a final answer to the whisper of death? It is, therefore, with confidence that the Canadian people can look forward to the future, now that the Liberal party, with the help of Providence no doubt, has succeeded in bringing prosperity to our country which the evil Borden-Meighen governments seemed to have banished forever. As a whole, the budget seems to meet the public's approval, if we make an exception for those who are

directly affected or are blinded by their political passions. Judging from the measures brought down, the Liberal party once more has emphasized the policy it intends to follow, which has been that of its leaders for the last thirty years past. It is the golden mean between high protection and free trade. It is the wisest policy for a country like ours, it is the only policy which acknowledges the rights of the people in every part of our vast country. It is this constructive policy that the people endorsed at the last general elections, it is that policy that the province of Quebec approved by its vote. And it is for toe pursuance of this beneficial policy that I shall register my vote in favour of the budget resolutions, as submitted by the hon. Minister of Finance.
I think, Sir, that it will be to the satisfaction of everybody if, at this late hour, I move the adjournment of the debate.
Motion agreed to and debate adjourned.
On motion of Mr. Motherwell, the House adjourned at 11 p.m.
Monday, May 3, 1926