1926-05-07

REPORT PRESENTED

[Stage Direction]
First report of the select standing committee on Banking and Commerce.-Mr. Malcolm.
CHANGES IN THE BUDGET On the Orders of the Day:
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: Mr. Speaker, yesterday
the Minister of Finance (Mr. Robb) stated there would be no substantial changes in the budget. I do not think I am far astray in drawing the inference that there will be some

Budget Changes
changes, about which there may be difference of view as to whether they are substantial or not. I will ask the minister now to say whether he intends to make the nature of those changes known to the House before the close of the budget debate.
Hon. J. A. ROBB (Minister of Finance); Mr. Speaker, if there are such minor changes as it is necessary to submit to the House, surely that is always the procedure. But if the changes are only in minor details, such as are made in committee after listening to the arguments which I imagine my right hon. friend and others may make, I ask him: Is it necessary to present those before the budget is voted on? Let me tell my right hon. friend again that during this debate I have received many compliments from his followers and others as to the popularity of the budget; others have said it is an election budget. I can assure my right hon. friend that any changes which may be made will in no manner take away from its popularity.


Arthur Meighen: Now that the minister
has delivered himself of his speech, will he revert to the question I put to him:	Whatever the changes are, describe them as he may choose, will they be announced before the budget debate is closed or will they not?


Mr. ROBB:: Perhaps my right hon. friend
will renew that question on Monday.


Arthur Meighen: Then there will be no
announcement on Monday of changes? If I may assume that, I am quite prepared-


Some hon. MEMBERS:: Order.


Arthur Meighen: I will try to keep in as
good order as hon. gentlemen opposite. I am prepared to adopt the suggestion of the minister if he will guarantee that there will be no changes announced on Monday.


Mr. CAHILL:: Guarantee nothing.


Arthur Meighen: Will the minister not
say?


Some hon. MEMBERS:: Order.


Mr. SPEAKER:: Order. The right hon.
gentleman is entitled to put that question when the orders of the day are called. I would ask the House to maintain decorum.


Mr. CANNON:: One question, not six.


Arthur Meighen: The minister asked me
to wait until Monday to renew my question. I ask him in return, if when I do that he will say that he will not announce changes on Monday. If he is going to announce changes on Monday, I would look rather foolish putting my question again touching such changes.


James Alexander Robb: I will make no announcement
of any changes on Monday until I have listened to my right hon. friend. At least I will go that far with him.


Arthur Meighen: Will my hon. friend not answer me frankly? I asked him if he proposed to make any changes whether he would announce them before the budget debate is closed. This question he asked me to defer until Monday. Now I ask him again:	Will
he defer the announcement of those changes past Monday? Surely it is a fair question.


James Alexander Robb: What is the point?


Arthur Meighen: My point is this, Mr. Speaker: I want to know in advance whether or not the minister is going to make any changes. I feel that the party which I represent has a right to know, and I will not know in advance if the minister makes changes on Monday with no previous intimation. I am asking him to make that intimation now; he refuses and asks me to wait until Monday. In order that I may be advised now, I again ask him to undertake that there will be no changes announced on Monday, otherwise I will not have any notice in advance.


James Alexander Robb: On the routine proceedings?


Arthur Meighen: Or on the orders of the day, at the opening of the budget debate, or at any time on Monday.


James Alexander Robb: I fear I must be dense, but I do not understand my right hon. friend. If he proposes to ask me again on Monday whether I am prepared to go further than I have gone to-day, he surely would not expect me to be able to answer to-day.


Arthur Meighen: The minister does not understand my point. The question I put to-day was whether the minister intended to alter the budget proposals before the close of the debate. He asks me to wait for an answer until Monday. I am asking him- because I think we have a right to know in advance-whether or not any changes are proposed. Consequently he must defer any changes until after Monday, or we will not know in advance. I am prepared to wait and renew my question on Monday, if he will tell me the changes will not be made then. If he can tell me on Monday that there will be changes made at a later time I will be satisfied.


James Alexander Robb: I will not make any change until I have given my right hon. friend a fair intimation of such proposed change.
Budget Changes


Arthur Meighen: One day's notice?


James Alexander Robb: I will not say that.


Arthur Meighen: The minister may give me a half minute's notice, on this understanding, and I think I am entitled to more than that. I am only asking for one day's notice.


James Alexander Robb: When does my hon. friend intend to speak?


Arthur Meighen: I will know better when I know what the budget is. I would like to speak on the budget as it is to be, and that is why I am asking this question, which I think is only fair.


James Alexander Robb: I can make my right hon. friend clear on that. In general what has my hon. friend in mind? Is it the tariff or the income tax?


Arthur Meighen: Mostly the tariff, but I want the minister's answer to cover everything.


James Alexander Robb: I told my hon. friend yesterday that there would be no substantial changes in the tariff.


Some hon. MEMBERS:: Order.


Hewitt Bostock: Order.


Arthur Meighen: I am not doing this to delay the House, Mr. Speaker, but it is a matter of extreme importance. Leading a party, as I do, I think I should not be put off with a mere evasion. The question is most simple and clear, and I want the Minister of Finance to tell me to-day whether there are to be any changes made before the debate closes or, if I must wait until Monday to renew my question, will he then undertake that the proposed changes will not be announced until Tuesday at least?


Mr. ROBERT FORKE (Brandon):: Mr. Speaker, I would like a little information in regard to this matter. I suppose all hon. members want to know if there is to be any change in the budget. I do not exactly understand this situation. The budget has been brought down; why is it necessary to interrogate the Minister of Finance every day as to whether or not there will be any changes? I want to know the reason; I want to know why there is special privilege. The House is entitled to all the information the right hon. leader of the opposition may leceive.


Arthur Meighen: I am trying to get that information for the hon. member, if he will permit me. Perhaps the government would

prefer that I ask the hon. member himself. Now I will repeat my question. The minister will not give me any notice whatever, on his answers so far; I ask him again if he will undertake that there will be no changes announced in the budget until we are given notice. I did not understand my hon. friend's answer, if he gave one.


James Alexander Robb: My recollection is that I answered that question.


Arthur Meighen: Will the hon. gentleman repeat it? It was an evasion; it did not answer the question at all. Does he undertake that there will be no changes until we get into committee?


James Alexander Robb: I think I made it clear to my right hon. friend that we would follow parliamentary procedure. I told him that if changes were made before parliament generally, before we go into committee, they would be considered, but that on the general principle this budget will go through as it is.


Arthur Meighen: In the minister's opinion are there changes proposed which should be made before we go into committee?


James Alexander Robb: No, not at this moment.



DUMPING DUTY-AUSTRALIAN BUTTER AND FRUIT

[Stage Direction]
On the Orders of the Day:
Mr. J. L. STANSELL (Norfolk-EIgin):: I would like to inquire of the government with respect to certain statements appearing in the press to the effect that, owing to the heavy importation of Australian butter and fruit, and the fact that such imported products were being sold greatly below the market price, the government has imposed and started to collect a dumping duty of 6 cents per pound on butter, and also on certain fruits.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I observe, Mr. Speaker, that the Minister of Customs (Mr. Boivin) is not in his seat at the moment. I will direct his attention to the question asked by my hon. friend, and ask the minister to give an answer early next week.



EQUALIZATION OF FREIGHT RATES

[Stage Direction]
On the Orders of the Day:
Mr. L. J. LADNER (Vancouver South):: Yesterday I asked the Prime Minister if any application or representation had been received by the government from Mr. John Oliver, Premier of British Columbia, relating to the reduction or equalization of freight

The Budget-Mr. Donnelly
rates by this parliament. The right hon. gentleman then said that he would answer this question to-morrow, which would be to-day. I wonder if he would be good enough to give me the answer now.


William Lyon Mackenzie King: I think if my hon. friend would read a little further he would see that I said if he would put his question on the order paper I would try to give him an immediate answer. I will give him an answer when his question is placed on the order paper, but not until then, because I am not in a position to make a reply until I have studied the question.


Leon Johnson Ladner: That reply related to the questions concerning the Peace River block and the Dominion railway belt. This is a different matter; there is widespread public comment in this connection in British Columbia, and I would like to know whether or not an application has been received by the government or by the Minister of Railways relative to the question of freight rates, and their reduction by parliament. Surely the Prime Minister can say if such an application has been received.


William Lyon Mackenzie King: I have no desire to withhold the information from my hon. friend. In any conversation I have had with Mr. Oliver since he has been in Ottawa, he has not mentioned the subject of freight rates. He may have spoken to some of my colleagues on the question, so I would not like to make an answer until all the members of the government have had an opportunity of saying whether or not they have been communicated with. In this connection I might say, Mr. Speaker, that many questions asked on the orders of the day should properly be placed on the order paper.


Leon Johnson Ladner: But, Mr. Speaker-


Hewitt Bostock: The hon. member has already spoken.


Leon Johnson Ladner: I would like to ask a question of the Minister of Railways, to whom I addressed the same question yesterday. The Prime Mlinister then spoke on his behalf, but I would like to ask the Minister of Railways if he has the information and if so, to give it to the House.
Hon. CHARLES A. DUNNING (Minister
of Railways and Canals): What is the question?


Leon Johnson Ladner: The question is: Has any application been made or have any representations been received by the government or the Minister of Railways, or has there 14011-203.
been any conversation relating to the question of reduction or equalization of freight rates by this parliament, on the application by Mr. John Oliver, Premier of British Columbia?


An hon. MEMBER:: How long ago?


Leon Johnson Ladner: Since his arrival here
during the present session.


Mr. DUNNING:: I can make exactly the
same answer as did the Prime Minister. I have no recollection of any such matter being dealt with in conversation with Mr. Oliver. As to representations, I would like the question put on the order paper, and I can then ascertain if there are any written representations in the department relating to the matter.



THE BUDGET


[Stage Direction]
The House resumed from Thursday, May 6, the debate on the motion of Hon. J. A. Robb (Minister of Finance) that the Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendment thereto of Hon. R. J. Manion.
Mr. THOMAS DONNELLY (Willow Bunch):: Mr. Speaker, in rising to make a
few remarks in favour of the present budget, I wish first of all to compliment the hon. Minister of Finance (Mr. Robb) for his businesslike, concise and clear-cut statement of his budget proposals. I wish also to compliment him for the businesslike manner in which he presented the budget. We have been in session in this House now for something like four months, and though I am only young in the political sphere, having come into touch with politics only in the last six months, I think I am safe in saying that his is the only businesslike address we have heard in this House during the last four months; I mean by that, the businesslike statement we would expect to hear delivered to the shareholders of a large joint stock company or big corporation. I think the hon. Minister of Finance is to be complimented on that.
This budget has been called by different names. Some people have called it the people's budget; some have called it an economical budget; some have called it the poor man's budget; but I believe that it will be known in history as the Robb budget, as a compliment to the Minister of Finance who brought it down.

The Budget-Mr. Donnelly

I wish also to compliment the Liberal party in having remained true to their principle of legislating for the majority of the people of Canada. The Liberal party has always recognized that farming is the one basic industry of this country, and from time to time it has passed legislation favouring that industry, believing always that when the farming industry prospers the whole country prospers. That is the reason, Mr. Speaker, why the country at the present time is prospering, and always has prospered under Liberal administration. It has been the good fortune of the Liberal party to present many satisfactory budgets to this parliament but I think I am safe in saying that this budget outstrips them all. It is, I believe, the besc budget we have ever had before parliament in the last twenty-five years, and it is so considered by the ordinary man on the street. I believe the Liberal party should be congratulated because of the stand it has taken with regard to legislation at the present time. Conditions are better in this country, and the improvement is continuing; there is no doubt about that. For proof, all we need to do is to look at the press of the country, and read the editorials and the financial reports, which are all loud in their praise of the better conditions prevailing throughout Canada. In confirmation of that let me read a short extract from the annual report of the Canadian National Railway system for this year, where on page 8 I find this:
The work of the industrial department has been carried on to the greatest extent possible, with the result that on the Central, Atlantic and Grand Trunk Western regions there were located on or near our lines over 250 plants representing investments to the extent of many (millions of dollars, in addition to which very substantial extensions were made to plants already located on o-ur lines.
The industrial development taking place in the Chicoutimi and lake St. John district is remarkable. An enormous amount of electrical power is being developed for use by existing and new manufacturing concerns. The Duke-Price Company is expected to develop at Isle Maligne and Chute a Caron over 1,250,000 h.p. The works in contemplation by the Aluminum Company .involve the building of a new /own-Arvida-which it is expected will have a population of 25,000 people within a comparatively short time. The very large expenditures involved in this development and the expected permanent employment of a large body of workers should have a present and far-reaching future effect in tihe province of Quebec in regard to general business and more particularly the pulp and paper and mining industries.
Let me read another extract from the Monetary Times of April 23, 1926. This issue was sent to me that I might read an article condemning the income tax, but on looking it over, on page 5, I find this:
The budget as a whole has, however, been favourably received and has been regarded as a bet on the part of the government that the present improvement

of business is likely to continue or grow better. Business indications generally, it has been pretty widely conceded, suggest that the government has a good chance of winning its bet. Of course, the Conservatives give the credit tor the improvement to Providence, and not to the cabinet;' but they appear to have given up their thesis, heard too frequently in recent sessions, that hard times were knocking at the door, and that the country was in danger pi business collapse. At all events, the change in the Conservative line of criticism is welcome, and is not likely to do that great party any harm. Preaching "blue ruin" has never been good politics in Canada, whether it was done by Conservatives or by Liberals.
These extracts, Mr. Speaker, show that times in this country are getting better, and the government, realizing that times are getting better, have been able to reduce taxation. Many speakers on the other side of the House have said that this is a good thing, that we are doing the right thing now, but that we should have reduced taxation a long time ago. Let me try and answer the man who says that by saying this:	A man is
not the ruler of his own destiny; he is influenced a great deal by his surroundings by heredity, by the influence of his predecessors. There is an old saw which says that if you want to train a boy right you must begin by training his grandmother. That is just the thing this government has had to contend with, and the grandmother it has had to contend with is the old women who controlled the finances of this country before 1921. The difficulties from which this country has been suffering for some time past have not been due to anything that has been done by the Liberal government; they are due to what was done by the people ,who ruled this country before 1921, and the conditions from which we have been suffering have been due not only to the things our predecessors did, but to the things they should have done but did not do, and which have left us in the condition we are in at the present time. It was they who made it impossible for us to reduce taxation previously.
It has been argued that the taxes should be still further reduced; I say yes. It has been said that the taxation should have been reduced sooner; I say yes to that also, but the failure to bring these good things to pass cannot be laid at the door of this government; it must be laid at the door of our predecessors who governed this country before 1921. In order to prove this, let me refer to our taxation before 1921.
Now, I want to compare our revenue from taxation with that of the United States for the period from 1914 to 1924 inclusive. Hon. gentlemen opposite are fond of comparing the conditions in Canada with the conditions in the United States, and I want to make a

The Budget-Mr. Donnelly
comparison as regards the revenue from taxation. The figures for Canada are taken from the Canada Year Book, page 743. The figures for the United States are taken from the report of the Secretary of the Treasury. I have added the postal rates, which are not included in their figures, in order to have a fair basis of comparison with the Canadian figures. The figures shown by the comparison are as follows:
Total Per Capita Revenue From Taxation
Canada United States
19W	
$21	21	$10	321915	
16	93	9	781916	
21	42	10	671917	
28	45	13	941918	
31	31	43	541919	
36	91	48	101920	
40	52	67	101921	
49	43	56	351922	
42	72	47	161923	
43	45	48	261924	
43	01	40	90
The United States entered the war in April, 1917, and immediately they shot up their taxation. Their fiscal year ends in June while our fiscal year ends in March. The per capita taxation in the United States for the year 1917 was $13.94. It had increased by $3.62 from 1914. This was only an. amount sufficient to account for the decreasing purchasing power of the dollar, but in 1918, the first year after they had entered the war, the per capita revenue for taxation in the United States was $43.54. They adopted the plan of paying for the war as it went on; a sort of "pay as you enter" plan if you like, I do not want to be too severe but these things are a matter of national history, the facts are there. The Americans tried to pay for the cost of the war as the war went on, and while they had inflated prices. We did not adopt that plan. We waited until prices began to come down, and then we began to put on the necessary taxation to pay for the war. That was the trouble. So, in 1921 when this government came into power the war had not been paid for and yet the obligation must be met. This government started to meet it. Our revenue in 1914 was $21.21 per capita, and in 1916 it was $21.42. For the year ending March 31, 1918, it stood at $31.31, and when we take into account the depreciated purchasing power of the dollar, that was not very much-we had hardly advanced our revenue at all. In 1920 the American per capita revenue was $26.58 per capita more than ours was. Or, to put it in another way, the Americans collected a per capita revenue in the two years 1920 and 1921 of $123.45. Our per capita revenue for 1919, 1920 and 1921 was only $126.86. That is to say the Americans were collecting almost as much per 14011-203J
capita revenue in two years as we were collecting in three. As I say, when the Americans entered the war they shot up their taxation. Now, if we take the years from 1918- the year following the entry of the Americans into the war-to 1923 and total up the amount of taxes the Americans collected during that period, and also total the amount of taxes the Canadian government collected for the same period, we find that the Americans collected per capita $66.17 more than we collected. Now take it on the basis of population. Our population in Canada in the year 1921 was 8,788,000. If we had paid the same rate as the Americans we would have had $581,691,960 more revenue and with the interest and compound interest added the amount would have been brought to something like $700,000,000. Deducting this sum from our present national debt, which is in the neighbourhood of $2,400,000,000, our national debt at the present time would have been only $1,750,000,000. With our national debt reduced to that figure the Finance Minister could have announced a reduction in taxation of another thirty or thirty-five million dollars. He could have done that easily, or have reduced the national debt by an equivalent amount. He could have taken his choice and done as he pleased.
These are not pleasant things to contemplate, but they must be faced. We did not follow the example of the Americans and pay for the war as it went along. Neither did we adopt the system which the English followed. We adopted rather the French system. That is to say we decided to wait until the war was over and then endeavour to pay for it. There are only one or two things which prevent Canada from being in the same condition that France is in to-day. Our country did not suffer from the war in the same way that France did. Furthermore, our national resiliency, our great natural resources, and the character of the people themselves, saved this country and put it back into a sound financial condition.
Now let us look again at what the United States has done. As I say, hon. gentlemen opposite are always comparing Canada with United States, therefore let us make another comparison. The United States faced the question of tax reduction and they dealt with it by means of heavy taxes. They collected more from their people than we did during the war to lighten the burden of taxation in the future and to meet interest charges. Had we adopted the same system in this country we could have achieved the same results. Everybody knows that during the war time many large corporations received enormous
The Budget-Mr. Donnelly

profits. I have just been looking at the report of one large industrial corporation and I find whereas their normal earnings were something like $600,000 or $700,000, that during the years 1917, 1918 and 1919-while the war was on or immediately following it- their income rose to something in the neighbourhood of $1,250,000. Moreover, personal incomes were high during the war. But though personal incomes were high at that time I want hon. members to understand we had no income tax in this country. AVe had no income tax in Canada until the year 1917 and we began to face it in 1918. We collected $78,000,000 in the fiscal year ending March 31, 1922, when deflation set in. On the other hand the Americans, our neighbours to the south, collected during the year 1917, $1,110,000,000 income tax. We are told that we ought to reduce our income tax and that we ought to have reduced it a year ago because the Americans reduced theirs, but we did not impose an income tax until four years after they did, so that we cannot be expected to reduce our income tax as quickly as they. There is another thing that should not be forgotten in regard to the American system. In that country they have what they call a federal inheritance tax. We have an inheritance tax in certain provinces of Canada, but we have not a federal inheritance tax, and a good deal of money is collected by the United States government from their federal inheritance tax. So that I think we have very little to complain of in this country on account of the condition of affairs. The situation briefly is this: first, because we failed to	pay	for a	large share	of	thewar while it	was	going	on, due I	say tothe failure of	hon.	members opposite	to	facethe situation	as it	then	existed and	to	pay
for the war as it was going on, this government has to deal with the condition that confronts it now, and what, therefore, has this government done? It has faced the problem of paying for the war. It has collected taxes, not as hon. gentlemen opposite say, to cover the extravagances of the administration, but to provide for the necessities of government. This had to be done, and the condition was caused by the war. We had to increase taxation to take care of the peak load and I think we should be thankful that we are able now to reduce taxation. We have got over the peak. The situation is better, but still there is a great problem to be faced. I have confidence in the ability of the government and of the Minister of Finance to face it and I have sufficient confidence in this House and the people of this country to realize that they will support the minister in bringing these happy events 
to pass. I refer to the further reduction of our national debt. I would like to see the national debt reduced still further, and such taxation continued as is necessary to put the country on a sound basis.
I have further evidence to prove that when hon. members opposite ruled the country prior to 1921 they did not -try to pay for the war. I wish to place a few figures on the record. In the year 1919 our national debt stood at $1,574,531,033 and in 1922-that is two years -it stood at $2,422,135,802. These figures are taken from the Canada Year Book, page 752, and relate to the period when hon. gentlemen opposite were ruling the country. Of course hon. members will say it was due to the war. True it was on account of the war, but the Americans closed the war at the same time we did. They got through when we did, but did they increase their national debt during those two years? Let us see what they did between 1919 and 1922. I have the figures here. In 1919 the United States national debt stood at $24,479,302,376, but in 1922 it stood at $22,996,416,115; so that they reduced it by about $2,000,000,000. They reduced their debt, not very much, 'out they reduced it, while our debt was increasing. The year 1922 marked two things in Canadian history. For one thing, it marked the passing of my hon. friends to the left of the Speaker, and it marked another thing namely, the time when this country began to meet its obligations and to cut down its national debt. Look at the figures of the national debt since this government took office. I have taken the figures from the Canada Year Book. In 1924 our national debt stood at $2,417,783,275. In 1925 it was $2,417,437,685 not much of a reduction, but in the year 1926 it was $2,395,084,685, so that a reduction has been made. You will see that under Liberal administration, hampered as the government has been by. their predecessors in office, hampered by the legislation and by the load placed upon them, they have started to reduce our national debt. It has not been reduced very much, but still there is a little reduction. They ran the country in a businesslike way, they reduced our national debt, and I would like to see taxation kept up for some years, so as to be able to reduce still further our national debt In the year 1925 the national debt of the United States stood at $20,211,000,000. These figures are obtained from the Department of the Secretary of the Treasury. They take no account of what is owing to the United States from foreign countries. Debts of this character due the United States amount to about $10,000,000,000 and most of them have been funded. They may not be good debts.

The Budget-Mr. Donnelly
While some of them may be no good, some of them are all right, and therefore we must conclude, taking these figures, that the national debt of the United States at the present time is a little over $10,090,000,000. Their position therefore is much better than ours. Their debt is decreasing rapidly, while ours is decreasing slowly. All hon. members should assist the Minister of Finance in every possible way to guard the treasury thus making possible the reduction of taxation, and of the national obligation, hastening the time when our country will be in a better and a sounder financial position. Some hon. gentlemen opposite are always alarmed lest their income tax should exceed the American income tax and yet they are the people who are afraid that our tariff is not going to be as high as the American tariff. I feel that we, as Canadians, should look after our own business and should not worry about what they are doing across the line. It is all right to study their affairs and methods, and to see if we can gather any lessons from them, but that is the only way in which we should be bothered with their affairs. Let us look after our own affairs.
This, as I have briefly outlined it, has been the financial position of the country since this government came into power in 1921. We were carrying a large burden of taxation owing to the war on which very little taxes had been paid. Our revenue was not meeting our expenditures. If a private individual were to conduct a business or any concern where his revenue was not meeting the expenditures, what would he begin to do? Why, as a normal business man he would begin immediately to cut down expenses, look for the leakages and try to make both ends meet. Now I wish to show that that is what this government did when it came into power in 1921. It began to cut down expenditure and to try to make both ends meet. The legislation which this government has put through has been good and economical. Although the expenditures are large, the revenue for the year 1924-25 being $346,834,479 and the expenditure just a few dollars less, expenditures which were due to the war and the war alone amounted to $167,281,587. If we deduct expenditures due to the war we find that the ordinary running expenditure of the country amounted to only $179,000,000 for 1924-25. If we go back to 1914, we shall find that the ordinary disbursements of the country amounted to $186,000,000 so that our expenditures for 1924-25 really show a decrease over those of 1914. What business has done any better than that?
It is difficult to find any business concern that we can compare this country with; the only company we can compare it with is the Canadian Pacific. The ordinary operating expenses of the Canadian Pacific for the year 1914 amounted to $87,000,000, but for the year 1925 they amounted to $143,000,000. Their expenses have gone up while ours have gone down. I am not asserting that this comparison is complete in every respect; certain things must be taken into account; but one thing we must concede is that this government has not been lavish in the use of its money; it has been an economical government.
The second thing this government deserves credit for is the way in which it has handled the Canadian National Railways. When this government came into power the Canadian National Railways were yearly showing a great deficit. This government consolidated the railways under its control into a national system under one management, that of Sir Henry Thornton, and it took the railway entirely out of politics. The wisdom of that course of action has been evident in the improved condition of the Canadian National Railways ever since.
During the election there was a great deal of criticism of Sir Henry Thornton; we were told that he had added an enormous burden to our fixed charges. It is true that heavy charges were added to the road in connection with fixing up our right-of-way and improving our rolling stock; but I believe that expenditure has been justified by the improved financial condition of the road. An operating deficit has been turned into an operating surplus. What has been the financial condition of the road from the time it was taken over? If we look at Hansard, page 885 for the year 1922, we shall find that the Canadian National with the Grand Trunk had a deficit of $16,000,000 for the year 1921. On the other hand the report that we have received for the year 1925 for the Canadian National Railways shows net earnings amounting to $32,264,414.79, or an improvement of more than $48,000,000 in five years. Surely that is a good record and a step in the right direction.
Let us also compare the ratio of income to operating costs or, in other words, let us see what is costs to make $100, because that is the only way in which one can tell how a business is progressing. In the year 1924, for every $100 the Canadian National Railways made, it cost $92.68, and for the year 1925 it cost only $86.83 so that conditions are improving. This ratio compares

The Budget-Mr. Donnelly
very favourably with those of many other leading railways of the United States when all the facts are taken into account, because we must remember that the Canadian National railway system is only a union of several lines. It is not one large railway built as a unit; it is several railways brought into union. I have not the figures available for all the different leading railways on this continent, but I know the ratio is more than 80 per cent. The ratio of the Canadian National Railways is very slightly over that of the Great Northern, Northern Pacific and the Pennsylvania railway system, and two years ago their ratio was just about the same as the Canadian National is now. The average ratio of ten of the leading railways of the United States is in excess of 84 per cent. I claim that part of this success is due to this government, and the government and the management of the Canadian National Railways under Sir Henry Thornton deserves, the highest tribute for so greatly improving the financial condition of the road.
There are several other things for which this country owes this government a debt of gratitude. The government has reduced the tariff somewhat on the implements of production and several other things. Although the reduction is not as much as I would like, when other countries are going tariff mad, putting up their tariffs, it is encouraging to see our country following a sane and safe method by reducing the tariff on the implements of production. This government proposes to go a step further; it proposes to reduce the tariff on automobiles and light trucks. Hon. gentlemen opposite have moved an amendment in connection with this cut in the tariff on automobiles. I hardly like to call it an amendment; it does not suggest any real amendment to the budget at all. It does not come out clearly protesting against the reduction in the tariff on automobiles; all it says is that what the government is doing now it might do at a later date.
There is a good reason why hon. gentlemen opposite have taken this position. Last year some hon. gentlemen voted for a reduction in the tariff on automobiles. Where are they now'? Why do they not rise in their piace and speak in favour of the reduction this year? I think I know the reason. They feel that they can shelter behind this amendment; they feel that they can go back to their constituents and tell them: Oh, I was not voting against the reduction; I was voting only for a postponement of the reduction. Personally, all I would like to say about that is that I do not think the tariff on auto-

mobiles has been sufficiently reduced; I would like to see a still greater reduction.
Why should we have a tariff of 4 p.m. 35 per cent on automobiles and light trucks which are just as essential to farmers and other workers as any other implement of production; when the heavier implements of production receive a protection of only S to 10 per cent and the lighter ones only as high as 20 per cent, or an average protection of only 12 per cent? Why should the automobile industry be protected to the extent of 35 per cent? It is altogether out of reason. Twenty per cent is even too much; it should be cut down to fifteen-and there is where we would like to see it.


Mr. McGIBBON:: Cut it out altogether.


Thomas F. Donnelly: Yes, cut it out altogether. The western people look on the tariff as a sort of tax, and they believe that if the whole Dominion was the same as western Canada, a farming community, Canadians would be better off without any tariff at all. But the people in the east say they need a tariff. To that the western people reply: Well, this tariff is simply a tax on us, but if you need a tariff in order to keep the Dominion together, we are willing to put up with a little of it, but we do not want to have it any higher than we can possibly help; for heaven's sake make it as low as possible because it is a tax on us.


Mr. MULLINS:: What part of the west
is the hon. member referring to?


Thomas F. Donnelly: The whole of the west I have been over just as much of it as the hon. member has. .


Henry Alfred Mullins: Saskatchewan or Manitoba?


Thomas F. Donnelly: Saskatchewan, Manitoba, Alberta, British Columbia.


Henry Alfred Mullins: Not Manitoba.


Thomas F. Donnelly: I have been through
it all. The western people do not believe that any tariff on agricultural products can help them at all. One hon. member of the opposition has tried to show us during this debate that we could enhance the price of wheat by putting a duty on it, while another hon. member from the same quarter of the House expressed the contrary view. Evidently' our friends of the opposition are not agreed among themselves as to what a tariff will do. I find at page 2756 of Hansard that the

The Budget-Mr. Donnelly
hon. member for East Algoma (Mr. Nicholson) said:	[DOT]
This country would not import wheat anyway. I do not want to beg the question at all, and 1 will say that in my opinion we cannot enhance the price of wheat by a protective duty.
In other words, he sa3's a duty on wheat will not help us. Now let me give the House what the hon. member for Muskoka-Ontario (Mr. McGibbon) said in relation to this subject.	At page 2722 of Hansard I
find the following:
I have gone <through every branch of the farming industry in the United States from wheat to cotton, and in every case the tariff raised the price of the farm products of the United States.


Peter McGibbon: Quite true. too.


Thomas F. Donnelly: We will just see. At
page 2725 of Hansard he said:
-and I want them to take notice because under a condition of free trade the price of wheat normally would be greater in Winnipeg than it would be in Minneapolis.


Peter McGibbon: I said it would be
greater.


Thomas F. Donnelly: Well, this is from Hansard. I thought I was quoting it correctly, but I may have made a mistake. Then the hon. member proceeded to compare the prices of wheat in Minneapolis and Winnipeg respectively for the crop year 1920-21, and from those prices he argued that the tariff imposed by the United States caused the price of wheat there to be greater than in Canada. Now, these are the facts of the case. The only time to make a true comparison is when we had free trade in this commodity between Canada and the United States, which was in the years I am now going to give the figures for. These figures in each case are for the crop year ending August 31, and show the average price:
Crop Year	Winnipeg	Minneapolis1913-14	89.4	90.9A little	higher.	1914-15	132.3	133.4A little	higher there again.	1915-16	113.3	117.4Quite a	, bit higher in	Minneapolis that	year.	1916-17	205.6	218.4
In every one of those years the average price under free trade was higher in Minneapolis than in Winnipeg. In fact western farmers have often wondered why it was so. Practically it has always been so.


Peter McGibbon: Wrong.


Thomas F. Donnelly: I beg my hon. friend's pardon. I have the figures here for the different years, and can give them if he so desires. How far back does he want them?


Peter McGibbon: I do not want them at
all; I have them already.


Thomas F. Donnelly: All right. Now let us turn to the other side of the question. 1 think these figures show conclusively that when we had free trade the price was always higher in Minneapolis. But instead of quoting the crop year 1920-21 to show what the duty would do with regard to the prices of wheat in Minneapolis and Winnipeg respectively, let us take the crop year 1924-25. when the United States government raised the duty on wheat to 42 cents a bushel-higher than it ever had been before. Let us see how the prices compared under those conditions. Here are the comparative prices iD the two countries for the different months: Month	Winnipeg	MinneapolisAugust	143.5	141.3
Higher in Winnipeg, although the tariff duty on the American side was 42 cents a bushel.
September	142.2	138.6
It does not look as if the tariff		was sending
up the price	in Minneapolis.	
October	159.6	154.0November	164.0	159.4December	172.7	177.0A little hi.	gher in Minneapolis.	January	' 196.2	198.7February	196.4	195.4March	176.3	178.7April	155.9	160.1May	182.4	173.2June	171.3	168.6July	162.0	165.2
Why, the price in Winnipeg has been higher most of the time than in Minneapolis. The average price was 168.5 in Winnipeg as against 167.5 in Minneapolis-and they had a duty against us at that time of 42 cents. And yet the hon. member tells us that if we put a tariff duty on our wheat it would shoot the price upwards.


Peter McGibbon: Can the hon. member
give us the relative prices in Liverpool during that time?


Thomas F. Donnelly: I have not those figures at the moment.


Peter McGibbon: He should have.


Thomas F. Donnelly: My hon. friend made
the comparison between Winnipeg and Minneapolis.

The Budget-Mr. Donnelly


Peter McGibbon: I submit that my hon.
friend's argument is fallacious unless he gives those figures.


Thomas F. Donnelly: I shall be happy to
furnish them to my hon. friend if he will come to my room.


Peter McGibbon: If the hon. gentleman
quoted those figures he would find his argument would not hold.


Thomas F. Donnelly: I think I have shown,
Mr. Speaker, from these figures that the duty has nothing whatever to do with the price of wheat when we have an exportable surplus. It is simply a case of the working of the law of supply and demand, that is all. Wheat is a world commodity, and the price is governed by the world's market. The same is true of any article which meets world competition and of which we have an exportable surplus; we cannot enhance its price by placing a tariff duty on it.
I wish to take issue with the hon. member for East Algoma (Mr. Nicholson) on a couple of other points. He tells us that he was out in the west for some time and he found Minneapolis and St. Paul were thriving and people were flocking into the surrounding country. He contrasted this condition of affairs with our western country, which was not increasing in population, and he expressed the view that if we would only put on a protective tariff our country would go ahead and our cities would be built up. In reply to those statements I. would like to read an article taken from the Morning Chronicle of Halifax, under date of May 5:
Speaking in the House on April 23, 1926 (See unrevised Hansard, ipage 2863-column 2), Mr. G. B. Nicholson used these words:
''Why is it that while the two cities of Minneapolis and St. Paul have been adding a million to their papulation and furnishing a market for the people in the northern and northwestern states, the cities of Winnipeg, Brandon, Moose Jaw, Regina, Saskatoon, Prince Albert, Edmonton and Calgary have added less than 100,000"
He then goes on to attribute this marvellous increase in the United States to the policy of protection.
The last census of Canada was in 1921. The American census was taken in 1920. The American census figures give the population of these two cities as follows:-
1910	1920 Increase
Minneapolis	
301,408	380,528	79,174st- Paul	
214,744	234,698	19,954Total	
516,152	615,280	99,128
These are the facts, verify them if you care to do so. The Twin Cities could not have increased their population because their combined population is only 615,280. The increase during the census period was less than 100,000.
Now for the next step. St. Paul and Minneapolis are much older cities than Winnipeg. Population adds population. Because births are a factor in increase of population a city of 300,000 adds more to its poipula-
tion in a year than a city of 100,000. Winnipeg's population in 1910 was 136,035 in 1920 it was 179,087 an increase of 43,052. The United States in 1910 had eight cities with population ranging from 125,000 to 150,000. That is they were then comparable in population with Winnipeg, Only three show a greater increase than Winnipeg-they are Richmond, Virginia, Birmingham, Alabama (in these the increase is only slightly greater than Winnipeg) and Omaha, Nebraska -the latter increased in the census period named 67,505 that ,was the greatest of any city of its class. Meanwhile the northwestern statee which according to Mr. Nicholson felt the life giving impulse of protection increased in population in the ten years 295,311. (This includes North Dakota, South Dakota and Montana). Our three prairie provinces increased 627,961. So much for that section of Mr. Nicholson's story.
This, I think, sufficiently answers the question of what protection has done for the cities of the northern and northwestern United States, as compared with our own western cities. Then the hon. member for East Algoma (Mr. Nicholson) proceeded, at page 2756 of Hansard, to say that the western farmers must raise cattle, hogs, sheep, and other animals of this kind, predicting blue ruin if they continued the raising of wheat only as they have been doing. The hon. member for Toronto Northeast (Mr. Baker) said the same thing last night, and let me tell these gentlemen that this is an old cry in western Canada; we have heard it for the last twenty years. I have been living in western Canada for the past twenty-two years, and though we have raised enormous crops during that time, our supply of wheat has never been in excess of the needs of the world. We have always had a market for our wheat; sometimes it did not pay as much as we would have liked, but we have always found a market. The western farmer is disgusted with eastern bankers, railroad men, lumber men and business men of every kind who ride through western Canada on the back end of a Pullman, spending two or three weeks there, then return east to write an article telling him how to run his farm. He is sick of that idea. What would the eastern business man think if the western farmer came here and went to the bush, the mine or the bank and told him how to run his business?


An hon. MEMBER:: Is not that what,
they are doing?
M,r. DONNELLY: Let me tell hon. gentlemen that I have been farming in western Canada for the past twenty years, and I would hesitate to go to any one section and tell the farmer there how to work his land. Different sections of the country require different treatment; some are good for raising;

The Budget-Mr. Donnelly
wheat, others for oats and other products, while some districts are suited to the raising of cattle. One part of the country is not exactly the same as another.


Peter McGibbon: May I ask a question?


Thomas F. Donnelly: Just a moment till I get through. I know the hon. member wants to ask something; I can see it in his eye. Just keep cool and swallow this. As I have already said, while I think I know farming fairly well, having farmed in three different sections of Saskatchewan, I would hesitate to tell any farmer how to work his land. I believe we are here to look after the financial interests of this country, and not to dictate how the mines or stores or farms should be worked. If we look after our financial interests and leave the farmer alone, giving him a square deal, he will look after himself.
We have been told that this government has done nothing to assist the farmers in the west, and that our better times have come about through the workings of Providence. I do not think that statement is true. I know the government have helped western Canada by legislation, and I wish to refer to just one thing in order to show what has been done in my own constituency. I point to the retention of the Crowsnest pass agreement, which has meant millions of dollars to the people in my constituency. We ship out of the constituency of Willow Bunch from twenty-five to thirty million bushels of wheat each year, and the retention of this Crowsnest pass agreement has meant a saving of from 5 cents to 6 cents per bushel, or an average of at least 54 cents. Multiply that out; it is only a short example in arithmetic, and you will see that each year this has meant a saving in my constituency alone of from $1,000,000 to $1,500,000. And yet hon. gentlemen say this government have done nothing for the western farmers. Go to the people in my constituency and tell them that, and see what they say.
The improved condition of the country, especially in western Canada, is due, I claim, not only to Providence, but to some of the legislation to which I have referred which the government has put into effect during the past few years. But there is another factor which has helped to improve conditions. The farmers themselves of western Canada deserve some credit for the restoration of better times in Canada. I believe that the people of the Maritime provinces might do well to copy the example of the western farmers in this respect; it might help to better their condition. The farmers of western Canada faced their own problems
when they were up against hard times. By co-operative marketing, and by adopting better methods of agriculture, they have reconstructed their financial condition and rehabilitated to an amazing extent the agricultural industry. While the Canadian manufacturer has stood hat in hand asking the government for a handout, the western farmer has been helping himself. The western farmer may truly say, I think, to the manufacturing industry: We have saved ourselves by our own efforts; perhaps we may be permitted to save our manufacturing enterprises by the example we have given them in self-help and co-operative efficiency.
Let me refer for a moment to this great system of co-operation which we have formed in western Canada, known as the wheat pool. I believe the wheat pool has placed western Canada in a better financial condition and on a better footing than it has ever been in. I do not mean to say that the wheat pool has enhanced the price of wheat, that it is a monopoly that pushes up the price of wheat, but I do say this, that the wheat pool has encouraged among farmers a spirit of thrift that never existed before. Before we had the wheat pool, the farmer sold his grain in the fall, and after he had obtained his money he paid off his debts, and spent what was left; he was not content until it was gone. For two or three months in the year that made business good, collections were good, and the ordinary small business man had to hire extra help in order to handle the increased business. But immediately after the new year, the farmer would come in and ask for credit again; he would have to borrow money to see him through until the next harvest. But since the wheat pool was established, things are different. The farmer receives an initial payment in the fall when he markets his grain, and goes out and pays his debts; he has then little or nothing left over, and he saves what he has. He receives another payment later on in the spring, another in the summer, and another just before harvest. The payments are distributed over the four seasons of the year, and the result is that the farmer never gets very much money at one time, but he always has a little and he has become more thrifty, and has got on to a cash basis. The banks are not lending the same amount of money in the west that they did before, and our business men have not to carry so many farmers on their books as they did before. Conditions in western Canada are very much better than they were, due practically to the wheat pool. I repeat, it has taught thrift. Our merchants and small business men do
The Budget-Mr. Donnelly

not have to hire extra help now in the fall of the year, because business is good all the year round, instead of being exceptionally good at one time of the year and slack for the rest. This system is popular among our business men, who are loud in their praise of the wheat pool.
We have heard no objections from the other side of the House to the return of penny postage, nor to the reduction in the so-called nuisance taxes. Both of these steps seem to be in the right direction, and will help the farmer and the labouring man. They both seem to be popular throughout the country. The country seems to be well pleased with the budget as it is. Let me read a couple of telegrams which I have received from the constituency which I have the honour to represent:
Never was more proud of being a Liberal and a supporter of the Mackenzie King government than I am at the present time when I see the reduction of tariff duties on autos and general reduction of taxes. Wish there was an election to-morrow so I could speak again in the (interest of the government and yourself.
That is from one of the largest automobile handlers west of Winnipeg, not a member of parliament, but a business man. Here is another telegram-[DOT]


Mr. GOTT:: From the same man?


Thomas F. Donnelly: No, but they all feel
alike out there; they are all feeling good. It says:
The Agricultural Society-
This is not from one man only, but the views of a whole society:
-desires to express its appreciation of the reduction in tariff as provided for in the present budget, and to express the hope that the policy of downward revision of tariff will be continued, as it believes same to be in the best interests of western Canada.


Eccles James Gott: Are those telegrams dated 1926?


Thomas F. Donnelly: Yes. Does the hon. member want to read them for himself?
The legislation which this government proposes with regard to the revaluation of soldiers' land I believe to be a step in the right direction. We are practically all agreed that the soldiers' land should be revalued. There are some districts in which the valuation appears to have been done in a just and equitable manner, and where the cry is not so strong for a revaluation. In the constituency which I have the honour to represent I have the privilege of knowing many of these men who were valuing the land for the soldiers, and they have done their work efficiently and well. Though there may be 
cases here and there calling for revaluation, there are not many when we take into consideration how the price of land and everything else was enhanced at that time, but there are ether districts where there seems to be something wrong. When we learn from page 26S8 of Hansard, in reply to a question that out of forty-eight parcels of land sold to soldier settlers only nine are being held by the soldiers now, thirty-nine having been thrown up, evidently there is something wrong. The land must have been valued too high, and the soldier has been done an injustice. These men who have been crying ' out to help the soldier have apparently done him an injustice in some districts. The forty-eight parcels of land referred to are in one district only, and there are other districts possibly where conditions are equally bad. It is a necessity that the land should be revalued in such cases. This question should be tackled, and the soldiers given a square deal. To revalue the land in such cases would be only doing what is right and fair. Cases such as are mentioned on page 2688 of Hansard should be investigated, and if we find that any wrong has been done, then even at this late date those who committed the wrong should be brought to justice and be published.
In conclusion, let me say that we are going forward in this country; we are making progress. This country has a great capacity for progress; we have great natural resources to be developed. It needs work, however, and it needs vision. That vision, in the larger sense, I think the present government has shown. I by no means give servile service to any form of government, but let me ask this:	Is it not true that the government has
shown wisdom in respect to the tariff, the handling of the railway problem, the financing of this great country, the problem of the revaluation of soldiers' land, the aid for the extension of markets, the effort to broaden trade, and the help given during many years to agriculture-has it not in all these ways, and in many more, done well, and is it not entitled to the confidence of the members of this House and of the country at large?


Eccles James Gott: They are not.


Mr. J. E. ARMSTRONG (East Lambton):: Mr. Speaker, it is not my intention to follow very closely the remarks of the hon. member for Willow Bunch (Mr. Donnelly) but there are a few of his statements to which I will refer for a moment. The hon. gentleman said that we ought to look after our own affairs, and not the affairs of the coun-

The Budget-Mr. Armstrong (Lambton)
try to the south. I ask my hon. friend how can we look after our own affairs better than by giving reasonable protection to our farmers and to our industries.


Mr. SPENCE (Maple Creek):: How are
you going to do it?


Mr. ARMSTRONG (Lambton):: I will
show you later. The hon. gentleman went a little further. He said that other countries are going mad in their support of a protective tariff. He said that it was nice to see Canada lowering its tariff and advised that we should "cut the tariff out entirely." Those were the hon. gentleman's very words. My hon. friend admits that no other country in the world will trade with us on a free trade basis, but he is willing to open our markets so that other countries may dump their surplus products on our shores. That would be fatal, because we cannot compete with the products of the cheap labour and the lower standards of living of those countries.
The hon. gentleman tells us that this budget is a wonderful budget, and he euphemistically refers to it as the Robb budget. I am sorry that I cannot extend my congratulations to the Finance Minister on this budget. I come from a district that has suffered at the hands of this gentleman very greatly. Many people in my riding have had their investments wiped out, as a result of tariff changes, and many of them have been obliged to go to foreign lands to obtain a job. And while this has occurred in my constituency in a small way, I know of some cities and towns which have lost thousands of inhabitants who have been forced to leave their homes and country for a similar reason. Many of the recommendations contained in this budget are similar to the recommendations which have found a place in every budget this hon. gentleman has presented to parliament since taking office. I will be able to show that the Finance Minister has been tinkering and tampering with the tariff ever since he took charge of this department, and the sooner the people of Canada get him out of office, as well as a number of men by whom he is influenced, the better it will be for this country.


An hon. MEMBER:: Order.


Ernest Frederick Armstrong: This
government has shown evidence of folly, lack of foresight, lack of knowledge, lack of conception of the true Canadian outlook, and under the compulsion of a few members who have little at stake in this country, has been responsible for legislation that is not in the best interests of Canada.
The right hon. gentleman who leads the government (Mr. Mackenzie King) was the leader of a party in 1921 which had a majority of one in this House. He said when appealing to the country in 1925 that if he were not given a more substantial majority he would again appeal to the people. This year he came to this House with .his ranks depleted, and can only carry on by bargaining and dealing with the Progressives. Two or three men can compel him and his government to do their bidding and bring in any kind of legislation that suits them. The Prime Minister in his manifesto, announcing his appeal to the country at Richmond Hill, said that before further tariff changes Would be made an opportunity would be given industries affected thereby to be heard before an advisory board. His followers all over the country used that cry in the campaign. The Prime Minister in the Speech from the Throne in January last made the following announcement:
-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.
That is a plain statement from the Prime Minister. But why did he change his mind? What led him to ignore the promise he made? I wish that some of the enthusiastic followers of the Prime Minister and his government who sit opposite, or some of our Progressive friends, would give us some reasonable explanation for the change of mind on the part of the Prime Minister. If a public man, and especially the first minister of the country, can make promises in order to obtain office and then when in office can go back on pledges he made to the people and do the very opposite of what he promised, what confidence can the public put in him? The word of a man in business is supposed to be of value; the word of a man in public life should have even greater reliability. But promises are like piecrust to some of the members of this government who break their pledges with greater ease and facility as the days go by. This budget by its assault upon the accepted tariff of Canada will bring about more unsettled conditions and greater instability in business. The people of Canada will search in vain for anything in the Robb budget which will add one dollar to the
3200	COMMONS
The Budget-Mr. Armstrong (Lambton)
wealth of this country, or help to provide a job for one member of the army of unemployed.
I represent an industry in which over $3,000,000 have been invested, in which hundreds of men have been employed, in which hundreds of others in the allied industries have made a living. The industry I refer to is the oil industry, located in several counties in western Ontario, and also in the province of New Brunswick and to some extent in the western provinces. This industry has been in existence in my district for over fifty years, and many of us have spent, the best part of our lives in an effort to develop it. When the Hon. Alexander Mackenzie was Premier of Canada he realized that the flush production of the oil districts of the United States was liable to wipe out the oil industry in Canada. He therefore placed a duty on the crude oil and its refined products coming into this country in order to protect and develop the Canadian industry. This resulted in the building of refineries in Petrolia, London and Hamilton. We have now many large refineries in other cities east and west.
Our industry flourished under this protection. We had about ten thousand producing oil wells in that part of Canada and eight refineries. This protection continued for many years, but about twenty years ago the Hon. Mr. Fielding removed the duty and gave the industry a bonus. This bounty was granted in view of the fact that the industry was not able to carry on without some form of protection, and to recompense the oil producers for the amount of money they were compelled to pay into the public treasury by way of duty on the products used in the development of the industry, because the minister knew that machinery of all kinds, used in the production of crude oil, had to be purchased from protected industries _ in Canada, or, in the event of their importation from the United States, were liable to duty. This condition existed until 1924 when the Hon. Mr. Fielding was led to believe that enormous quantities of crude oil were likely to be produced in our northwest. In order to protect the people of Canada, therefore, as he claimed, from an undue expenditure which they might be called upon to make in the future, he gave notice that the bounty on crude petroleum would be reduced to one-half in June, 1924, and in June, 1925, would be discontinued entirely. Nothing was offered in lieu of the bounty, which was removed without warning or investigation. This legislation opened up the oil industry to world

competition, while producers had to buy all their supplies in a protected market. The producers of crude petroleum sent several deputations to wait on the Finance Minister.


Mr. YOUNG (Weybum):: Do I understand that the fact that they had to buy their raw material in a protected market raised the price to them?


Ernest Frederick Armstrong: 
Robert Forke: The point my hon. friend wanted to make was that the duty raised the price of the material used in the oil well; that the duty actually raised the price of the machinery? Is that the position? The aigument of my hon. friends to my right id that the duty does not raise the price, but my hon. friend from Lambton now states that it does.


Ernest Frederick Armstrong: The price
of the refined oil?


Robert Forke: No, the price of the
machinery.


Ernest Frederick Armstrong: I do not think anyone is going to argue that-


Robert Forke: Some hon. members do.


Ernest Frederick Armstrong: 
Edward James Young: You could open it up again if prices were high.


Ernest Frederick Armstrong: If they had a reasonable protection I have no doubt the factory could be opened up. In the case of the oil industry you cannot expect to close down the wells and open them up again like a factory or any other business; when you close them down they practically go out of business.


Mr. BROWN:: It all depends whose ox is gored.


Ernest Frederick Armstrong: Not
necessarily. We do not want any ox gored in this country; we want to pull together. Our friends in the west have been fairly well treated by the people of Ontario and of Canada generally; they cannot deny that. But on the other hand we ask the men of the west, who, like the hon. member who has just taken his seat (Mr. Donnelly), are prepared to wipe out every industry in our country in order that they may live-


Some hon. MEMBERS:: No, no.


Ernest Frederick Armstrong: -to pause and consider the rest of Canada. The hon, member said, "wipe out the tariff". What would you do?


Mr. EVANS:: Can the hon. gentleman tell us what special treatment the west has had at the hands of this House?


Ernest Frederick Armstrong: I have told the hon. member about that before. He t.nows full well that the railroads of this country are carrying wheat at from five to fifteen cents a bushel less than the railroads of the United States are carrying the same product.


Robert Forke: No.


Mr. HOW  DEN@: Does the hon. gentleman say the railroads do not cary wheat from western Canada at a profit?


Ernest Frederick Armstrong: No.


Mr. HOWDEN:: Where do they make their money when the wheat is moving?


Ernest Frederick Armstrong: Their own statement shows that those divisions are losing money right along.


Mr. ROSS (Moose Jaw):: If you ask the
railroads the cost of moving any commodities on their lines, they can produce figures to show that they lose money on any of them.


Ernest Frederick Armstrong: They
know and are not afraid to state that western divisions are losing money.
Since the present Finance Minister has been in charge of this department the strongest kind of representations have been placed before him, facts and figures without end, which prove that this industry has been placed in a position where it is impossible to carry on with a profit. While it is true that many of the producers of crude oil are still trying to carry on, they are simply producing oil at a loss. Hundreds of wells have been closed and abandoned, a number of properties have ceased operating, and were it not that the present producers believe that the day is near at hand when some kind of reasonable relief will come to this industry, many more of them would close.


Mr. McLEAN (Melfort):: Will the hon. member allow a question?


Ernest Frederick Armstrong: Yes.


Malcolm McLean: If these enterprises cannot carry on without a bonus, I should like to know how the hon. member explains the tremendous development in oil properties in Canada to-day as compared with the time when the bonus was paid.


Ernest Frederick Armstrong: That is
an entirely speculative development confined to the northwest.


Malcolm McLean: Not speculative.


Ernest Frederick Armstrong: Oh, yes. The oil industry is a speculative one.


Malcolm McLean: Does the hon.
member know that one single oil well developed in Alberta last year has more than doubled the production of crude petroleum?


Ernest Frederick Armstrong: I am not finding fault with the development, but I say it is a purely speculative development to a large extent. One of the ministers was asked to give a list of the charters in that northwestern district, and he gave a reply that simply meant that they were without number. I refer to charters under which men could speculate in the development of that industry. Here we are with an industry
3202	COMMONS
The Budget-Mr. Armstrong (Lamblon)
that has been established, that has been carrying on or trying to carry on, that has not a bit of protection of any kind, and that is under the disadvantage I have stated in the matter of the purchase of its machinery and equipment. We have asked the Minister of Finance, if he wants to help us, to take the duty off these products, but he will not do it. What can you do in such a case?


Mr. BEAUBIEN:: May I ask a question as a matter of information?


Ernest Frederick Armstrong: I do not wish to prolong this debate.


Charles-Philippe Beaubien: Does my hon. friend contend that if the duty was taken off the machinery that goes into these wells it would help the industry?


Ernest Frederick Armstrong: As far as that is concerned it simply means that we would be able to purchase these supplies in the open market. But I am quite satisfied that the Minister of Finance would say that if we take the duty off these products we will have to do the same in the case of other large industries such as the Page Hersey tubing concern, and so on, and where would you end?


Charles-Philippe Beaubien: The machinery that
you use is not made in Canada.


Ernest Frederick Armstrong: The products are largely made in Canada and they are very largely used in that field. This is a basic industry of the country and one of the industries that this government is pledged in its platform to protect. Hon. members must remember that all tubing, casing, pumps, rods, valves, boilers, engines, motors and machinery of all kinds used in the production of crude oil, if manufactured in Canada, carry a duty of from 27J to 30 per cent, and this duty with the added sales tax the producers of crude oil have to pay. On the other hand if they import their supplies from the United States they must pay into the treasury of this country from $30 to $35 on every $100 worth of goods they buy, while their industry is open to free competition with the flush productions of the world.
Let us compare the condition of the producer of crude oil in Canada with that of the producer of crude oil in the United States, with his flush production, who does not have' to pay duty on his tubing or oil-well supplies or on machinery of any kind, and who has no sales tax to pay, while we with our smaller production from each well are compelled to pay into the treasury of this country such

an amount of money as will materially help in paying a bounty. The Minister of Finance knows this. He has had statement after statement from large and small companies interested in this industry and those statements bear out what I have said, namely, that scarcely an oil property in that whole district is paying its way to-day.
When the budget was delivered in 1924 many drilling rigs were in operation, but since that time not one drilling rig that I know of has continued in operation in the territory. The drillers have been forced to leave the country and conditions in the oil industry are such that development is at a standstill. How can the Minister of Finance expect an industry to cany on that has to pay from $30 to $35 on every $100 worth of material it requires and that has no protection? It simply cannot be done. What industry could stand up under such conditions? What object has the Minister of Finance in singling out this industry or any industry for special attack? This is an important industry. Why wipe it out?
Our people have made representations to this government time and again, pleading with them to investigate the industry. This change was made without the slightest investigation and it is being continued although the minister is fully informed in regard to this industry. He promised at the last session of parliament to make an investigation, and Mr. Russell, of his own department, who as I understand is a tariff expert, came to our town for that purpose. He spent considerable time investigating the needs of the industry and the position it occupies, and in my presence and in the presence of other men in the town of Petrolia Mr. Russell stated that he had come to Petrolia to investigate the oil industry believing that he would be able to take the duty off practically everything we had! to .buy that went into the development and carrying on of the industry. We asked that the duty be removed on all products used in the production of crude petroleum, but this government for some reason have not given us any assistance.
When I asked at the beginning of this session for a copy of the report that Mr. Russell mffst have made to the Minister of Finance in connection with this industry, I was denied that report, and I am still denied it. Why should a government official at the country's expense go to the trouble of making an investigation and not be required to report to members of this House the result of that investigation? Surely the public are entitled to a copy of that report; it cannot be private or confidential. As regards the oil

The Budget-Mr. Armstrong (Lambton)
industry we have nothing to hide. The Minister of the Interior (Mr. Stewart) held the same view in regard to the Hume report on this industry last year, but when it was produced there was in it nothing whatever of a private nature. I respectfully ask that the Minister of Finance lay on the table of this House a copy of Mr. Russell's report. The Minister of Finance knows that if he dared lay it on the table of this House it would condemn the action of the minister in the matter, and that is why he will not bring it down.
In 1924 Mr. George S. Hume of the Geological Survey branch made an investigation into the oil industry for that department. The report of that investigation has been placed upon Hansard, and it contains the soundest possible arguments in favour of some assistance being granted to this industry. It is not my intention to read much from that report; I will read only the last paragraph. These are the words of Mr. Hume:
My conclusions from the investigations I have been able to make, lead me to believe a withdrawal of the bounty will cause almost wholly the abandonment of the Petrolia, Enniskillen township and Oil Springs fields.
He placed in his report the strongest possible arguments in favour of some form of relief being given to that industry, but nothing has been done.


John Livingstone Brown: Is there in that report anything showing the character of the wells as regards productiveness?


Ernest Frederick Armstrong: Yes; if
the hon. gentleman wishes to investigate, he will find in Hansard of last year-I am sorry I have not a copy of it with me-column after column of Mr. Hume's report, which was read into Hansard, taking separate and distinct instances that were most carefully examined. Their books and everything connected with them were examined and their statements appear in black and white in Hansard.


John Livingstone Brown: The hon. member did not
get my point. Is there any report as to how Canadian wells compare from the standpoint of productiveness with other oil wells in the United States?


Ernest Frederick Armstrong: There is
a great variety of wells not only in our territory but in the United States. In that country there are wells producing two, three, four, five hundred barrels a well per day and more, while ours produce a very small quantity. But this is a basic industry of the country; if it is the intention of the government to wipe it out they have only to continue along the lines they are now following and it cannot possibly live.
How much longer is the Minister of Finance going to continue this treatment which he is meting out to the oil industry? How much longer are the people of Canada going to stand by and see industry after industry wiped out? The minister is the one man in Canada who should have backbone enough to take a stand on these questions; but he is wiping out this industry, and if he continues in the course he is following he will be instrumental in driving tens of thousands of our people out of this country to seek work in other lands because of the closing down of their plants at home. He must know of the tens of thousands who have had to leave their homes and country in order to find work. How many men with their families will have to leave before this budget is dis-
5 p.m. posed of? The daily papers tell us already of men flocking to the emigration office preparing to obtain access to the United States. How much longer will the people of Canada have faith in a man who, while holding the most responsible position of any man in public life to-day, without investigation, without knowledge of the business that he interferes with, opens the door and drives that business to a foreign land? How much longer will the people of Canada stand for the mad lust for power on the part of this government?
"Back to the land" is the cry of a number of members of this government and the few who are dictating their policy. But I ask the minister or any other hon. gentleman opposite, how many men and women have gone back to the land since they started this cry. How many farmers, on the other hand, have been driven off their lands and compelled to make	homes in the country to the
south, and how many workmen in our factories have also been compelled to follow the same course. Let hon. members come into my part of the country and they will begin to realize what the policy of this government means not only to the industries there but to farming as well, because our farmers are being deprived of their home market. I sometimes wonder if the Minister of Finance realizes the extent of the injury he is doing to the industries of Canada.
Now, let me direct the attention of the House to another industry in my riding that has been practically wiped out. When this government came into office there were large machine shops manufacturing oil well supplies for oil and water wells in Petrolia. Many of their products were shipped abroad to foreign countries and their reputation was of an international character. This was about the only large industry of its kind in Canada.
3204	COMMONS
The Budget-Mr. Armstrong (Lambton)
It had been in existence for over fifty years. It had representatives in Australia, Borneo, India, East Africa, Persia, Russia and other countries. At the last session of parliament the government reduced the duty from 27^ per cent to 5 per cent on the products manufactured by them, and increased the duty on soft coal, the only kind which they were in the habit of using for all heating and welding purposes, from 14 cents per ton to 50 cenits per ton. This means that the government wiped out every bit of protection that was worth while to this industry, and by increasing the duty on the coal they cut the industry both ways. How could any group of business men expect an industry of this nature to carry on under conditions such as I have described? No investigation was made as to the justice of this change; no effort was made to see the effect it would have on the industry; it wa3 just wiped out. Not long ago this company was employing a large number of men with homes in my town and families to support, and many of those men had spent their lifetime in studying the business. To-day a few of them remain on short hours, with no prospect of bettered conditions so long as this government remains in power. I realize to the full what the present day conditions mean to these men, and what this government has done in the few short years it has been in office to destroy their industry. Mr. Speaker, this insane clamouring for free trade in Canada must cease or we must be prepared to sacrifice practically every established industry in this country.
Another industry in my riding is the woollen industry. Since this government took charge of the affairs of Canada fifty-five woollen mills have closed their doors. Thousands of people engaged in that industry have been thrown out of work and many of them have joined in the trek to the United States to find the work that has been denied them in Canada.


Charles-Philippe Beaubien: Does not my hon. friend think that fifty-five woollen mills are more than are necessary to supply our requirements?


Peter McGibbon: How were they able to keep going before?


Charles-Philippe Beaubien: Because of the war.


Ernest Frederick Armstrong: Does the hon. gentleman appreciate the fact that we do not begin to supply the woollen products used in this country? Before I get through with these remarks I hope he will realize the position in which even our farmers are placed

in regard to this industry. Two woollen mills in my district have closed since this government took office. One had been in operation continuously for over fifty years. Canadian employers pay to their help twice as much as is paid in Europe for similar work. The low wages and depreciated currency in foreign countries, together with our inadequate tariff, will soon wipe out all our woollen mills. This is only another breach of Mr. Fielding's promise of tariff stability, and another violation of the pledge of the Prime Minister. When will the government cease selecting special industries for attack? More than two thousand industries have closed their doors since this government took office, and over 600,000 Canadians have had to leave to get work elsewhere. That is equivalent to the population of six cities of
100,000	each, or 600,000 people. And this home market is transferred to the United States. Judging by the hundreds who have taken out papers since this budget was brought down, another 100,000 of our boys are on the move to the highest protected country in the world. Our free trade friends clamour to get into the United States market to buy cheap goods. Do they realize that when they go to the United States to buy cheap goods, they go to the highest protected country in the world?
What has made goods cheap in the United States? Simply the protection which the United States government gives to the farmer and manufacturer.


Mr. McINTOSH:: Would the hon. gentleman state what duty the United States charges on agricultural instruments?


Ernest Frederick Armstrong: I have not the schedule before me, and, anyway, I do not see that that has anything to do with the woollen industry.


Cameron Ross McIntosh: The hon. gentleman said that the United States was the highest protected country in the worid, especially for the farmers. Does the United States charge any duty on agricultural implements?


Ernest Frederick Armstrong: I have not the schedule before me, so I cannot answer my hon. friend's question.
I have under my hand, Mr. Speaker, two important statements in regard to the textile industry. I have no desire to take up the time of the House reading them, and with your permission I will place them on Hansard. One is a comparison of woollen imports into the United States and into Canada, and the other shows the effect of low duty rates under the French treaty.

The Budget-Mr. Armstrong (Lambton)
These are the statements referred to:
Size Of Textile Industry In Canada
The textile industry in Canada, including the woollen and knitting branch which comprises about one quarter of the whole, is greater than is generally known.
The textile industry directly employs 19 per cent of the total industrial workers, pays 15 per cent of the total industrial wages and salaries, produces 14 per cent of the total manufactured products made, and employs 9 per cent of the total industrial capital engaged in Canada.
The total value of the wheat crop in Canada in 1923 was less than the value of textile products manufactured in Canada; value total wheat crop, $316,934,700; textile products, same year, $334,439,196.
In 1922, the value of manufactured textiles made available for consumption in Canada, that is, the sum of production in Canada and the imports, less the exports, was $436,741,893. This is greater than the value of the products made available for consumption in Canada of any of the other seven groups into which the manufacturing industries are divided, in government statistics, except that of manufactured vegetable products.
In 1923, there were 1,817 textile establishments in Canada, representing an investment of $283,248,204, employing directly 92,669 workers, providing an annual payroll of $81,244,205, and producing goods valued at $334,439,196; the raw materials purchased by the industry amounted to $176,445,427, a large amount of which went to support the workers in other Canadian industries, such as soap making, starch making, 'paper box making, printing, wool growing, etc. In the fiscal year ended March, 1924, which approximates to the calendar year 1923, a total of $40,611,749 worth of raw textile fibres were imported into Canada and $129,183,911 worth of manufactured textiles.
Comparison Of Woollen Imports Into United States And Into Canada
The reason why Canada loses its population is illustrated by comparing the imports of woollen and knit goods into this country and into the United States.
United States figures are from the Monthly Summary of Foreign Commerce and Canadian figures from Monthly Reports of Trade of Canada, and are for calendar years:
Imports per Capita
Into	Into	Into	IntoImports	U.S.	Canada	U.S.	Canada1923	Cloth.. ..	.. $21,094,694	$23,688,991	$0 13	$2 78Carpets.. ..	. 13,952,227	1,732,055	0 11	0 20Knit goods	.. 4,729,376	8,039,228	0 04	0 94Yarns.. ..	.. 8.293,506	4,048,965	0 07	0 48Made-up ..	.. 4,397,256	2,903,087	0 03	0 34Felts .. ..	288,582	Total ..	.. $52,467,059	$40,700,908	$0 43	$4 791924	Cloth.. ..	.. $20,799,783	$25,030,674	$0 17	$2 95Carpets.. ..	. 15,152,643	1,732,150	0 13	0 21Knit goods	.. 4,512.869	6,858,974	0 05	0 80Yarns.. ..	.. 5,040,088	3,616,323	0 04	0 42Made-up ..	.. 4,160,737	2,406,603	0 03	0 28Felts .. ..	269,753	Total ..	.. $49,666,120	$39,914,477	$0 42	$4 69
Effect Of Low Duty Rates Under French Treaty
The low duty rates granted by Canada to France under the French treaty were put into effect in September, 1923.
The total imports of woollen and knit goods into Canada from France in the twelve months ending September, 1923, which preceded the putting into effect of the lower duties, amounted to $1,439,748. For the twelve month periods ending September, 1924 and 1925, the imports from France amounted to $3,246,813 in 1924 and $3,156,234 in 1925, or an average of $3,151,523 each year following the reductions in duties.
Invoices from France are still valued at the exchange value of the depreciated franc for assessing the duty. In other words, the reduction in the Canadian duties doubled the competition from France, the duties being lowered although the competition was already unfairly assisted by the progressive economic degradation of that country.
For fiscal years ended March the importations of woollen and knit goods from France were:
1922		 $ 699,838
1923		 1,020,122
1924		 2,061,935
1925		 3,284,976
It will also be remembered that Sir Henry Whitehead, president of the Bradford Chamber of Commerce, boasted that the low rates granted by Canada to France were the lever by which his chamber of commerce, and the Huddersfield Chamber of Commerce, were able to move the Canadian government to reduce the duties on similar goods coming from Great Britain by 10 per cent.
Now, Mr. Speaker, closely associated with the woollen industry of Canada is the sheepraising business. We have a lot of fine sheep in my riding, and many of the farmers are very proud of what they have accomplished in this regard. If the Minister of Agriculture (Mr. Motherwell) would pay less attention to wiping out the tariff and more attention to the development of the sheep industry as well as some of the other branches of industry that come under his jurisdiction, it might be better for his department and, incidentally, for the agricultural development of Canada.


Mr. MOTHERWELL:: What would my
hon. friend suggest should be done?


Ernest Frederick Armstrong: I will
make the suggestion before I close my remarks in regard to this item. That we can raise good sheep in Canada is shown by the fact that at the greatest show of live stock in the world, the Chicago International Stock Show, sheep bred in Canada swept the board of prizes last year, and every year they meet with similar success. This proves that Canadian sheep are right and that the wool is right. And yet we have only 2,600,000 sheep as compared with Great Britain with its small area, where there are 25,000,000 sheep. I wish the Minister of Agriculture to listen to this, for I am sure it will interest him. In the

3206	COMMONS
The Budget-Mr. Armstrong (Lambton)
United States there are over 40,000,000 sheep, an increase in one year of 1,358,000, while in Canada the number of our sheep decreased by
400,000	since this government took office.


An hon. MEMBER:: What was the reason?


Ernest Frederick Armstrong: It is up
to the Minister of Agriculture to say. In Australia there are 80,000,000 sheep while in Canada we have only 2,600,000.


Malcolm McLean: Mostly in
western Canada.


Ernest Frederick Armstrong: I wish to call another matter to the attention of the Minister of Agriculture. In Canada we raise only 15 per cent of the 70,000,000 pounds of wool that we use every year. Surely we can find some way whereby to increase our flocks and help fill that order for 70,000,000 pounds of wool per year.


William Richard Motherwell: My hon. friend
surely knows that the wool we import is not of the same quality as that which we grow.


Ernest Frederick Armstrong: The minister knows very well that 15 per cent of the 70,000,000 pounds of wool is an amount so small that it is hardly worth considering. Three quarters of that total amount of wool could easily be produced in Canada. This government has reduced the duty on Australian mutton and lamb to one-half cent per pound, thus flooding our markets with these products. Canadian mutton and lamb are second to none in quality and flavour for table use, and there is no necessity to import them. Yet the Canadian duties were recently lowered from three cents to one-half cent per pound to encourage the sale in Canada of lamb and mutton grown by the farmers of Australia.


Malcolm McLean: Would the hon.
member tell the House how the importation of mutton last year compares with that of 1921 and 1922?


Ernest Frederick Armstrong: I have
not those statistics at hand.


Malcolm McLean: They were in
the same book referred to by my hon. friend for his other figures.


Ernest Frederick Armstrong: I am
merely making statements which I am prepared to back up.
There is another industry in my riding in which the farmers are particularly interested, and that is the growing of sugar beets. I have already put on record my position in regard to this industry, which has received unfair treatment at the hands of this govern-lMx. J. E. Armstrong.]
ment, but I would like to add a few words to what I have already said. Without investigation or a word of warning this same Finance Minister reduced the duty on refined sugar one-half cent per pound. Owing to this reduction thousands of farmers whose livelihood depended on this industry were at once notified by the large sugar refineries of Wallaceburg and Chatham that the price they received would be reduced by 50 cents per ton. The hon. member for Kent, Ontario, (Mr. Chaplin) told the House only yesterday of the effect of this cut in his riding. He told how a few years ago, before this government tampered with the tariff, there were
40,000	acres of sugar beets under cultivation in his riding, from which the farmers received $4,000,000; $2,000,000 was paid for labour, making a total of $6,000,000 expended in his riding. Last year the acreage totalled 30,000, and he said this year it would probably amount to 20,000. My district is right alongside that of the hon. member for Kent. Ontario, and anything affecting his part of the western peninsula also affects my district. The loss to these farmers has been enormous, but on top of it all, as though the Finance Minister wanted to discourage further the Canadian beet producer and make it still more difficult for him to engage in the production of sugar beets at any profit, by the treaties with Australia and the West Indies he reduced the duty on raw sugar coming in from those countries one cent per pound. Australia sent in last year 26.000.000 pounds of raw sugar; the West Indies sent in last year 17,000,000 pounds of raw sugar, and they are now put in a position whereby they can pour in the raw sugar at an altogether lower cost, and undermine another great basic industry of our country.
Look for a moment at the position in which our sugar beet growers are placed and the competition they are up against. In the production of sugar beets practically the whole profit comes from the hard work of weeding, hoeing, planting and marketing the beets, which means months of work for everyone on the farm. If the sugar beet growers in Canada have to hire help, they are compelled to pay from $5 to $7 per da}' for men to do this kind of work. These men work with their backs bent close to the ground with a hoe, the handle of which is only a foot long; hour after, hour and day after day they work in that position. Compare their wages with the wages paid in the West Indies or Australia for similar labour. The help provided in the West Indies comes from the second lowest class of civilization in the world; the workers receive less than

The Budget-Mr. Armstrong (Lambton)
$1 per day and live on the cheapest possible food; a handful of rice is k good meal. Their clothing consists of a pair of overalls with a string for suspenders, and if sufficiently optimistic the string is not needed. By the action of the government in thus lowering the duty on raw sugar coming into Canada from these countries, Canadian raw sugar has had a proportionate drop in price, so the government has been wholly responsible for the reduced price paid to Canadian beet growers.
If farmers in the west can produce sugar beets successfully as the minister claims they can-and I am delighted to hear that statement-why not protect them and their market? There is no reason why we should not produce in Canada practically all the raw sugar we need, but to-day we only produce 10 per cent of our own requirements. Why not compel other countries to pay for access to our market? Why oblige Canadian growers to take less for their product and to compete with cheap labour in West Indies and Australia? -We protect the manufacturer against cheap labour; why not the beet grower?
Some weeks ago I asked for information in regard to the raw sugar coming from the West Indies, and the minister asked that it stand as an order for return. I sent away for the information and received a reply inside of three days, the accuracy of which I am prepared to vouch for. Field labourers in the West Indies are paid approximately $1 per day, which is probably the scale of wages paid in Australia as well. The freight rate on sugar from the British West Indies to St. John is 18 cents per hundred pounds net, and to Montreal 22 cents. The present c.i.f. price of British West Indies sugar is S3.25 to $3.30 at St. John, and 5 cents higher to Montreal; deduct 18 cents to 20 cents for the price at point of shipment. Under the present West Indies trade agreement now being discussed in this House the rate of duty on raw sugar from the British West Indies is to be 28.712 cents per hundred pounds, on a basis of 96 degrees polarization, as against a former rate of 45 cents. I would like hon. gentlemen to listen carefully to this next statement. This gives a preference in the duty on raw sugar produced in the British West Indies of 1 cent per pound. It is understood that the rate of duty on Australian raw sugar will be the same, although not specifically mentioned in the tariff. This will mean that the Canadian growers of sugar beets will receive $1 less per ton, and you can imagine how they will appreciate such a reduction.
Another very extensive industry in my riding is the dairy and cattle industry. The Finance minister, owing to the treaty arrangements entered into with Australia and New Zealand, has placed that industry in a most precarious position. Canada has imported over 5,000,000 pounds of butter this year from those countries, and the market of the Canadian farmer has been undermined. The Minister of Finance knows very well that if our farmers had been protected in this regard during the past few months hundreds of thousands of dollars which have gone to swell the profits of the cattle men and butter makers of Australia and New Zealand would have been in their pockets.


William Richard Motherwell: Where would the
butter have come from?


Ernest Frederick Armstrong: We can
produce plenty of butter in Canada to supply our home consumption.


William Richard Motherwell: Not at a moment's notice.


Ernest Frederick Armstrong: Canada exported 25,000,000 pounds. Let me go a little further and I will show where this butter will come from. The minister knows full well that he has opened our doors to the products of these countries, and has thereby compelled our people to accept less for their products than they otherwise would have received had the home market been kept for them.
During my address on the Speech from the Throne the Minister of Agriculture said that the importation of butter this year would not exceed 1,000,000 pounds. We told him then that he was mistaken. What does he think now, when our imports have amounted to more than 5,000,000 pounds of butter in four months of this year? Has he any idea when these shipments will cease, or is he in the least concerned? No! Let me just call his attention to a statement made by one of the largest creameries in western Ontario dated April 12 of this year, which statement could no doubt be duplicated in almost any creamery in Canada:
With the huge shipments of Australian and New Zealand butter pouring in, and with the butter exports of our nortJh-west out off from the United States by the new United States duty of 12 cents per pound, our market has crashed, as we have been expecting it to crash for the past month.
As an example, we sold to one firm last week 100 boxes of prints at 451 cents f.o.b. They called us up this .morning and stated that they could only pay 421 cents, and this afternoon they called again and advised us that they had been offered butter, as they stated, from the largest creamery in Toronto, at 41 cents delivered. We finally were compelled to sell them 80 boxes at 401 cents.
3208	COMMONS
The Budget-Mr. Armstrong (Lambton)
I am enclosing you a couple of letters we received this morning that wall show you how the Montreal and Toronto markets are.


Malcolm McLean: Then they have not sold 100 boxes at all? The hon. member said they had sold them.


Ernest Frederick Armstrong: How
could they sell them? The price was going down and down all the time.


William Richard Motherwell: Prices went up all January.


Ernest Frederick Armstrong: How much higher would they have been if it had not been for the millions of pounds of Australian and New Zealand butter coming into this country?


Mr. FOURNIER:: What is the production of butter in Canada?


Ernest Frederick Armstrong: I placed those figures on Hansard in the statement I made in the debate on the Speech from the Throne. The amount is 280,000,000 pounds, if I remember correctly. It is an ample supply to furnish the whole Canadian market during the whole year.


Edward James Young: What is the duty on butter coming in from Australia at present?


Ernest Frederick Armstrong: One cent a pound. But if you were to send Canadian butter to Australia you would have to pay a duty of 8 cents per pound, and if it was going to the United States you would have to pay a duty of 12 cents a pound, for they have raised their duty within the last few months from 8 to 12 cents a pound? Why? To protect their farmers.


Edward James Young: Was not the duty raised here also on butter coming in from Australia?


Ernest Frederick Armstrong: Not at all. The hon. gentleman has in mind the dumping clause. It is true that when the government found these enormous supplies of Australian butter coming in, they thought they would put a stop to it by applying the dumping clause, but even the dumping clause did not keep it out, as the hon. gentleman knows. Does not the hon. gentleman believe that if the Canadian market had been protected at a reasonable rate, Australian and New Zealand butter would not have come into this country in such large quantities?


Edward James Young: We were very glad to get their butter because we had only ten days' (supply on hand.


Ernest Frederick Armstrong: That is the hon. gentleman's way of putting it. Similar statements are made about the food supplies in the Motherland, that they have only sufficient for eight days or so. But how can the hon. gentleman say that?


Malcolm McLean: England's supplies keep on coming in to that country.


Ernest Frederick Armstrong: So does the butter keep on coming in here. I have a letter here from Alex. D. McGillis and Company, produce brokers, Montreal, who says in regard to butter:
This has been a disastrous week, with the disastrous decline entailing heavy losses on account of recent arrivals of Australian butter.
J. M. Ham, commission broker, Toronto, says:
Due to heavy arrivals of foreign butter, and liberal shipments of fresh made from western Canada on consignment, butter prices on all markets have sdmply collapsed this week. The decline started in Montreal on Monday, and each day, in fact several times during a day, prices have gone lower.


Malcolm McLean: Does the hon.
member want to keep out the western Canada butter as well as the Australian butter?


Ernest Frederick Armstrong: Not at all. I am as proud as the hon. member is that western Canada is producing butter in such large quantities. I am president of a creamery company that was in the habit of shipping to the northwest and to British Columbia car after car of butter, from our district in years gone by. I am glad to know that you are able to produce butter in the west to supply this market, but for the good of the farming community in old Ontario I ask you to help us protect our home market in order that we can carry on and give the farmers of this province a fair return.
While the Australian and New Zealand butter was pouring into this country by millions of pounds Arnold's of Toronto, the large distributors of groceries in that city, carried this half-page advertisement in a Toronto newspaper dated April 8, 1926:
Butter six cents a pound lower than last week.
30,000 pounds Cottage Brand Creamery Butter.
That was a drop of six cents a pound in a few days. This butter had come in from Australia and New Zealand, where the farmers did not have to keep their cattle in the bam in winter and feed them hay and chop.


William Richard Motherwell: Does not butter
always drop at that time of the year?


Ernest Frederick Armstrong: Why
should it drop in Canada? Our cows have to

be housed and fed and cared for, but in Australia and New Zealand they do not need to house their catttle and feed them as we have to do ours. That is one reason why out farmers should be protected.


Thomas F. Donnelly: What was the price of
butter last year?


Ernest Frederick Armstrong: I have
answered a lot of questions, but I am not a walking encyclopaedia.
Now just a word on the automobile industry. This is another industry that has been vitally affected since the present Minister of Finance took office. Not only has the automobile industry suffered at his hands, but the Canadian Manufacturers' Association have stated that one thousand other industries that supply parts to the automobile factories have been vitally affected. Millions of dollars' worth of orders that have been placed in these factories have been cancelled. I know of one factory alone that has had over a million dollars' worth of orders cancelled since this budget came down. You must remember, too that some 3,600 agents and garage men have already made their purchase of new cars for the year 1926, and their stock of old cars is only just beginning to move. The estimate of loss to these men, from a reliable source, is over five million dollars. Sales of Canadian-made automobiles in 1925 amounted to $107,000,000; at least 25,000 employees were engaged in the business of manufacturing motors, and 100.000 people were dependent on the industry and its allied industries. The tariff was changed without any warning, without a public investigation as promised in the Speech from the Throne and on the public platform by many of the members on the opposite side of the House. I am not going to argue that the duty on automobiles and trucks was too high or too low, because speaking frankly, I do not know, and I have no means of knowing, nor have the members on the opposite side of the House who are making hearsay arguments in regard to this industry. I do, however, condemn the action of this government, which after having appointed a tariff board for the purpose of getting just such information regarding industries, should deliberately cut the tariff on these goods over 40 per cent without consulting the tariff board.
The motor manufacturers have presented a reasonable request to this government, that before any definite action be taken in connection with this budget their industry should be investigated by the tariff board now appointed. Surely this is a reasonable request and should not be ignored by the govern-

The Budget-Mr. Armstrong (Lambton)
ment. The statement I make in this regard is borne out by an u appeal " which is to be found in The Labor Leader, Toronto, dated April 23, 1926. The statement is surmounted by heavy headlines and is published in black type, indicating the importance with which it is regarded. Surely hon. gentlemen opposite do not think this paper is influenced by any, but the best of motives. The statement reads, as follows:
An appeal to the members of House of Commons of Canada.
Representing, as you jdo, the citizens of this great Dominion, "The Labour Leader" on behalf of the men who work in the Canadian automoobile factories and the various factories that make parts and accessories, numbering about twenty-five thousand, with: about one hundred thousand women and childrens dependent upon them, earnestly request you to refer-' the clause in the budget that deals with the tariff on motor cars to the new tariff commission, so that these workers may have an opportunity of placing their views before them. Gentlemen, forget your political parties, and lend a hand to these hardworking toilers.
In closing let me say that one of the worst features of the action of the King government in its tinkering with the tariff is the fact that the existence of every industry is threatened and all business is made uncertain. Few manufacturing plants or large industries will spend money or invest capital in improvements or branching out. There is no certainty as to the future for them. The fact that a tariff commission was appointed led people to suppose there might be tariff changes. The people were more or less prepared for that. Eight days after a tariff commission was appointed the government, apparently ignoring the commission and without any investigation, made radical changes in the tariff regarding certain industries.


Thomas F. Donnelly: Cut out the tariff.


Ernest Frederick Armstrong: An hon.
gentleman from Saskatchewan says " cut out the tariff". That is the same old story. It means the adoption of a policy which will destroy our industries and drive our people from this country.


Malcolm McLean: Will the hon.
gentleman permit me a question? He has been very good-natured and very courteous and kind and I appreciate that very much. The question I desire to ask is this: How does he account for the enormous increase in production and in trade during the last four years if all the industries of the country have been ruined, as he and some of his friends have been arguing?


Sir HENRY DRAYTON:: There has been no increase.
3210	COMMONS
The Budget-Mr. Armstrong (Lambton)


Malcolm McLean: Yes, a tremendous increase.


Ernest Frederick Armstrong: The hon. gentleman who has just asked the question realizes to the full that the Minister of Finance in his budget speech distinctly gave credit to Providence for the wonderful development in this country during the past year-


Malcolm McLean: All of it.


Ernest Frederick Armstrong: -and if the hon. gentleman follows up the suggestion of the Finance minister he will know why it was that the farming industry in particular was able to accomplish what it did.
Now, to revert to what I was saying when I was interrupted, the fact that a tariff board was to exist gave some promise of business stability. But if that board is to be ignored in regard to certain industries, why ask its decision as to any industry at all? Why have a tariff board at all, with all the added expense it entails, if it is not to investigate and report on all industries?
The Minister of Finance, when addressing the automobile delegation at the Keith theatre recently, said he would " stick to his guns " before he even heard what the deputation had to say. Will he be equally as drastic with the tariff commission?
In conclusion may I say that there never was a time when there was greater need of tariff stability in this country? Canada requires capital to develop her mines and woodlands, her water powers and her industries, and to give employment to her people. But what incentive has foreign capital, or for that matter any capital, to invest in Canada while we have a government that will not give a reasonable stability to business and does not inspire confidence in business people? The King government, through the negotiation of foreign treaties and the tariffs, has struck a blow at the industries of Canada and at her basic industry, agriculture, at a most unfortunate time. As long as the present government is in office, our industries, if they live at all, will exist in a state of insecurity. The fate of the various industries which I have mentioned is likely to be the fate of other industries under the King government, and so long as this government holds sway we cannot hope for improved industrial conditions in Canada.


Mr. FRED STORK (Skeena):: Mr. Speaker, during the present debate, which has lasted now for about four weeks, we have been treated .to a discussion on almost every subject under the sun. The coal question has been debated, also matters pertaining to the

production of wheat, oil, motor cars, and sugar-beets, as well as that hardy annual the Australian treaty. In the few remarks which I propose to offer I desire to prescribe for the House a diet of fish. Fish, they say, i3 a brain food, and as the constituency which I represent is one of the great fish-producing areas of this Dominion I shall devote some little attention to that great basic industry.
At the outset I congratulate the Minister of Finance (Mr. Robb) on the splendid budget which he has presented. It is a most excellent budget, and I have received many letters, and some telegrams, from the people of my constituency expressing their approval of it. One of the outstanding features of the budget is its strength; it is a strong budget. We have been told by members of the House who are in a position to know, that this is the best budget that has been submitted in the last twenty-five years. The amendment offered to it is a relatively weak amendment.
Since last October we have heard a great deal from the Conservative party, and we have read much in the Conservative press, as to the hopeless and weak position of the King government. In the same quarters the present budget is referred to as an election budget. I think that is responsible for the uneasiness of hon. gentlemen opposite. The budget is a good election budget, it is one upon which we can win an election at. any time we appeal to the country. We have been told in the Conservative press and by speakers on Conservative platforms that this government is a very weak one. I ask how it is possible for a weak government to win all its by-elections?


Henry Lumley Drayton: Oh, oh.


Alfred Stork: I ask how it is possible for it to strengthen its position in the House of Commons-


Henry Lumley Drayton: It has not done so yet.


Alfred Stork: -and also to strengthen itself very materially in the country at large. If this is the weak, vaccilating government which our Conservative friends would have the people believe it is, how did it ever muster up sufficient strength and courage to apply the closure in this House? If it is such a weak government, how did it manage to negotiate treaties the operation of which is increasing our favourable trade balance and our standing in the financial world? We found when this government came into office in 1921 that there had been an adverse trade balance of $29,000,000. In 1922 we had a favourable trade balance of $6,000,000. In

The Budget-Mr. Stork
1923, it rose to $142,000,000, in 1924 to $165,000,000, in 1925,	$284,000,000, and
as disclosed in the Robb budget the favourable trade balance amounts to $401,000,000. Now, Mr. Speaker, bow can a claim be made that this is a weak government and the country is going to the dogs under Liberal administration, and at the same time how can the Conservative party lay such great claims to the strength of their own party and their position, when the best they can do is to submit to this House the weakest amendment that has ever been submitted to the House in the last thirty-five years? The reduction in taxation, the reduction in the postage, the splendid Canadian National statement and the treatment of automobile duties have all been dealt with at considerable length. The duty on automobiles has caused a great deal of discussion in this House. The Conservative party has always stood for a high tariff, but I feel that they must regard themselves as being in a most unfortunate position at this particular time. They have been telling the people of Canada, that industry was going to rack and ruin, that if we tampered with the duty on automobiles that industry would close up. The hon. member who has just addressed the House (Mr. Armstrong, Lambton) has made the usual complaint about the effect of tariff reduction on the industries of this country. The party which insists on saving the country by keeping the tariff high and by jacking up the duties has told us that these automobile industries will be ruined. Having appointed themselves the guardians of the country, they must feel very badly let down when they find the man who makes more motor cars than all the rest of the automobile manufacturers together-


Mr. NICHOLSON:: Where does he make
them.


Alfred Stork: A lot of them in Windsor.
This gentleman tells us he does not require the assistance of any tariff for his business. He says the industry does not require a tariff and he himself is in favour of free trade. That is going even one better than any of us. I have before me an item printed in the Toronto Globe of April 21, dated at Windsor, which reads:
Henry Ford, Detroit automobile magnate, to-day dealt a hefty blow at high tariff to protect his Canadian industry, when he told The Globe during a brief interview at the Walkervnlle ferry dock that the plant in Ford City would run*better under free trade.
'T am a free trader," Mr. Ford said. "It was not necessary for you to ask me that," he continued. "Mr. Campbell said the Canadian factory would continue to operate, and it is my belief the factory would

be better off under free trade, than protected by a high tariff. I am a free trader; 'that's all there is to say,"
Mr. Ford spent the best part of the day in conference with officials of the factory at Ford City. He inspected every department of the plant, halting at some parts of the huge factory to chat with the workmen.
"You can rest assured these men will be kept at work," he told one of the department superintendents.


Henry Lumley Drayton: Has the hon.
member the same idea as to duties on boots and shoes, furniture and so on?


Alfred Stork: I will deal with that later
on.


Arthur Meighen: How much later?


Alfred Stork: Evidently Mr. Ford has
decided to get along without the assistance of the high tariff saviours in this country. We find that a budget was presented to the House on Thursday, April 15, in which the announcement was made that duties on automobiles would be lowered. The Oshawa automobile factory closed on Friday, and we on this side of the House wonder whether or not the closing of the Oshawa factory was not advised by the famous board of strategy which has been operating in this House. I would imagine, judging from subsequent events, that the board of strategy had something to do with that. We saw a vast delegation parading through Ottawa carrying banners like an army, these banners describing e%]ery physical ill in the country, but there was one that I thought might very well have been carried in that parade, and that would be a banner stating that the Oshawa factory was closed on Friday for political reasons and would be opened on Monday for business reasons. We heard many prophecies in regard to what is going to happen to industries which were favoured by a reduction in tariff. In the last parliament a reduction of duties was made in regard to agricultural implements. I believe that reduction cost this government a seat in the city of Brantford. The election took place in the latter days of October. Strong statements were made in regard to the injury done to the manufacturer of agricultural implements, and yet I find that on January 28, a very few months after the election, the Massey-Harris Company held their annual meeting, and the report of the business year just closed was the best in the whole history of that company barring one particular year. We find that they had an increase of over $1,300,000 in net profits during the year ending November 30, 1925. The report reads:
An increase of $1,300,000 in the net profits of the company during the year ending November 30. 1925, is recorded in the financial statement. Current liabilities during the year were reduced by $5,000,000.
The Budget-Mr. Stork


Henry Alfred Mullins: Since the tariff has been taken off, how 'much cheaper can you buy a binder?


John Gordon Ross: Forty-four
dollars.


Henry Alfred Mullins: The price is higher now than before the change in the tariff.


John Gordon Ross: You can buy a binder in the city of Regina for $4.4 less.


Alfred Stork: One great benefit accruing
to the Dominion under the provisions of the present budget is the fact that, for all time to come it places in its grave the ghost of the whisper of death. A great deal of time has been spent ,and a great deal of newspaper ink has been used in trying to prove to the people of Canada that the whisper of death prevails in the whole of this great country. So far as the province of British Columbia is concerned there is no whisper of death west of the Rocky mountains. British Columbia does not swallow propaganda in regard to this country going to smash simply because the Tory party is not in power guiding the affairs of the great Dominion of Canada.
Even the hon. member for East Lambton, brought up again the claim of injury resulting from the Australian treaty. The Australian treaty has had a marvellous effect upon the prosperity of British Columbia. I wish to quote briefly from a newspaper which I think no one can accuse of being particularly favourable to the Liberal party in that province. I quote from the Vancouver Province of Tuesday, November 3, 1925, just a few days after the general election. I will not quote the whole extract. It goes on to outline what will happen in the way of development in British Columbia and it winds up with this statement:
The King government, during its four years in office, has not had many opportunities of serving the country in a Abroad and constructive way, but the negotiation of the treaty with Australia, is one good work which stands to its credit.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILL SECOND HEADING

[Stage Direction]
Bill No. 95, to incorporate the Red Lake and Northwestern Railway Company-Mr. Heenan.


[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 amendment thereto of Hon. R. J. Manion.
Alfred Stork: Mr. Speaker, when the House rose at six o'clock I was proceeding to say that this government has been largely responsible for the prosperity which the province of British Columbia is now enjoying. I have in my hand a newspaper to which I am sure our friends opposite will take no exception; it is the Mail and Empire. It contains a half page advertisement headed "A young giant still expanding." Appearing in such a paper, I am sure the House will agree with me that it should have the effect of knocking off the funeral plumes from that defunct Canada which the Tory party has been so eager to convey to its political graveyard. After setting forth the prosperity in the provinces of Manitoba, Saskatchewan and Alberta, it has this to say of British Columbia :
British Columbia is in the throes of the greatest development in iher history. The visitor of any of her cities or towns feels this the 'moment he steps off the train or steamboat. This great pulsating throb of new life is reflected in heavy investments in buildings and commercial enterprises arising out of her basic wealth in mines, forests, fisheries and the fruits of the Bodl.
That, I believe, is a fair statement of fact. British Columbia is enjoying a wonderful period of prosperity. The Toronto Globe of yesterday contains a short editorial headed, "How it helps the west," and I have no doubt the House will be interested to hear it. It reads:
Additional vindication of the Canadian-Australian preferential treaty, if such were needed, is seen in the impetus which it is giving <to the paper and pulp industry in British Columbia. Because of the Australian market two more newsprint mills are being established, doubling the production of the Pacific province.
Lack of markets has hampered development otf the immense resources of British Columbia. It is credited with having available more than 285,000,000 coTds of pulpwood, consisting chiefly of spruce, western hemlock and balsam. As recently as 1910 not a ton of pulp or paper was manufactured in the province. To-day it ranks next to Ontario and Quebec, with a capital investment of some $41,000,000, giving employment to more than 2,500 persons. The two existing mills are turning out 200 tons of newsprint per day, and this

The Budget-Mr. Stork
will be doubled when the two new mills are operating. It is estimated that the value of this product iwill shortly reach $20,000,000 a year, much of it finding its way to Australia.
This is further evidence of the beneficial effect of the Australian treaty on British Columbia. In the county of Skeena, which I have the honour to represent, there is one of the finest pulp and paper plants to be found anywhere on .the North American continent. It is located at Ocean Falls, and I am credibly informed that the proprietors intend still further to extend their buildings.
The Australian treaty also gives a market for the fish canned in British Columbia. I assert that this government has done more to promote the fishing industry of my province than any preceding government. The budget places sheet tin, which is used in the manufacture of cans, on the free list, thus giving further benefit to one of our basic industries. The county of Skeena is an extensive area and contains vast natural wealth, fishing being one of its basic industries. In this connection I wish to place on Hansard some statistics which I have received to-day from the Department of Marine and Fisheries, and from which it will be apparent that my constituency produces a great deal of the fish taken in the province. This is the statement respecting halibut:
Statement showing the quantity of halibut landed in the province of British Columbia and also District No. 2 during the past five years 1921-1925 inclusive.
Total landings for the Whole province
Cwt.
1921		 325,868
1922		 293,184
1923		 334,667
1924		 331,382
1925		 309,598
Landings for District No. 2
.	Cwt.
1921		 252,558
1922		 252,753
1923		 299,092
1924	  293,728
1925!'.	  287,415
This gives us some idea, Mr. Speaker, of the important part played by the county of Skeena in the halibut fishing industry of British Columbia. I would now like to read the figures, compiled in the same way, having to do with the salmon fishing industry. Statement showing the quantity of salmon landed in the province of British Columbia and also District No. 2 during the past five years 1921-1925 inclusive.
Total landings for the whole province
Cwt.
jg2i	 842,026
1922		 1,509,075
1923..	!!	.. [DOT]' .*.*	  1,514.765
1924	  1,965,159
ms/.;;;;	;;	1,711,369
Landings for District No. 2
Cwt.
1921		 414,773
1922	  828,396
1923'.'	 819,517
1924		 1,087,094
1925		 1,033,870
I have said, Mr. Speaker, that this government has done a great deal for the development of the fishing industry of British Columbia. In 1922 a commission was appointed to investigate the whole of the fishing industry, both halibut and salmon, and every phase of the question was investigated. It was felt that the industry was so important, that so many interests were involved and so many men required consideration, that in place of bringing them all to Ottawa a commission should tour the province and in that way consider every angle of the situation. That commission was very successful; sittings were held in every part of British Columbia, 191 witnesses were examined and a report brought in which was adopted by the government of the day. As a result, the tax on canneries was reduced from $500 to $20; the tax on purse seines was reduced from $300 to $20; the tax on drag seines was reduced from $50 to $20, and the tax of one-half cent per fish caught in seines was abolished. This one item alone meant a tremendous increase in revenue to those engaged in the fishing industry. The license fee was reduced from $5 to $1; the duty on gas engines used for fishing boats was reduced; nets, twine and gear were placed on the free list; the use of gas boats was authorized-


Mr. SHORT:: Might I ask a question?
Have not nets and fishing gear always been on the free list?


Alfred Stork: I think not.


Harry Bernard Short: I think so. You will find
that fishing gear of all kinds has been on the free list for many years.


Alfred Stork: I think I am correct. At
any rate, the use of gas boats was authorized for the first time on the Naas and Skeena rivers. Prior to to that the old method had been employed, while gas boats had been permitted on the Fraser river and in other parts ' of British Columbia. In the north they were still compelled to do their work by those methods which had obtained on the sea of Galilee some two thousand years ago. The fishermen of that country are now permitted to pursue their calling in safety by use of the modern gas boat. A policy was also adopted by the government placing the fishing industry solely in the hands of whites
The Budget-Mr. Stork

and native Indians. In 1923 there was a reduction of 40 per cent in fishing licenses granted to others than whites and native Indians; in the year following there was a further reduction of 15 per cent along that line, and now the total elimination of others than whites and native Indians is definitely in sight.
In the matter of old age pensions I know of no class of citizens which will hail the advent of such a bill with greater delight than will those fishermen who go down to the sea in ships and elce out a hard livelihood. They grow old quickly in the fishing game, esepecially on the stormy, rock-bound coast of the north Pacific, and those men will welcome the announcement that an old age pension system is to be brought into force.
In 1911, Mr. Speaker, we had an election in this country, held in connection with a reciprocity arrangement. The real issues of that election were lost sight of, and the slogan of our friends opposite became, "No truck or trade with the Yankees." Our American friends to the south naturally heard the people of Canada repeating that slogan, and said, "That is fair enough; we will have no truck or trade with the Canadians," and as a result we now have the Fordney tariff. We have heard a good deal recently about this "brick for brick" policy, but it seems to me to be a question of a brickbat for a brickbat, and the first brickbat thrown hit the fishermen on the Skeena river right in the eye. The high tariff has no supporters in the county of Skeena. I have just placed on Hansard a table showing the tremendous amount of halibut taken from the north Pacific, and the people who are catching halibut are free traders; the high tariff _ makes no hit with them. They are shipping this vast amount of halibut largely to the American market; it goes out over the Canadian National railways in refrigerators cars and contributes largely to the revenues of the Canadian National, since each refrigerator car earns about $1,000 in the transportation of fish.
But we are under a very grievous disadvantage ^ in connection with this market. Halibut is sold in the open market by auc- * fdon, and our Canadian fishermen receive two cents per pound less than do the American fishermen who market their catch in that port. All the fish are supposed to be destined for the American market; the buyer, anticipating that he will have to pay the two cent duty, deducts that amount from the price paid the fisherman. Thus this duty of two cents per pound has been for some time

a burning question with those people. Negotiations have been carried on and are still in progress, and we urgently and earnestly hope that they will result in the abolition of this duty.
As a result of the improvement in the fishing industry we find two new canneries being built in the northern part of the county of Skeena, and there is also a newly established biological station, put into operation by the Department of Marine and Fisheries for the study of fish life and the general advantage of the trade. At that station they are discovering new varieties and new species of fish. I have lived for a long time in the north country. I have been in the province of British Columbia for some thirty-seven years, and there are varieties of fish there of which I have never heard before. Only last fall, over on the north shore of Queen Charlotte islands, I found a brand new industry. At a little town called Tow Hill there has been established a new clam canning factory. When we speak of clams we all have in our mind's eye the old style of shell which litters the ocean beach, but this particular clam which they are developing at Tow Hill is a brand new variety, and I would imagine it to be the aristocrat of the clam tribe. It is enclosed in a case which looks very much like a spectacle case that a man might use, made of tortoise shell. The shells are as thin as paper, beautiful in finish and colour, about 7 inches long and If inches wide, with the ends rounded. They make a very beautiful looking shell. These clams are of such a quality that there is an unlimited market for them. It is something entirely new. This is just one instance of what can be procured by scientific research, by investment and by the far-sightedness of the people who live in that country.
I discovered while I was at Tow Hill that they have there one of the finest natural beaches, I should think, on the known globe to-day. It has been my good fortune to have visited the beaches in California, the sands at Blackpool and Ostend, and I say without hesitation that on the north shore of Queen Charlotte islands is a sand beach as hard as a cement floor, fifty miles in extent-the greatest natural speedway that one could find anywhere. Fifty, yes, one hundred, automobiles could race along this speedway for fifty miles, and I am sure that when Sir Henry Thornton gets his eye on this locality, with his desire to attract world tourists and build up the Canadian National railway, when he brings to bear his activity on that section of the country, we shall have an improved steamboat service from Prince

The Budget-Mr. Stork
Rupert to Alaska via the Queen Charlotte islands. This beach I speak of is one of the greatest natural advantages, I think, which the whole of the north country possesses. If Burns or Byron had visited such a spot, it would be interesting to see what they would have produced in the way of description of what I regard as one of the greatest wonders of the North American continent.
Seventeen years ago, in the town of Prince Rupert, Sir Charles Rivers Wilson, who was then the president of the Grand Trunk Railway Company and also of its subsidiary the Grand Trunk Pacific, made a speech in which he said he regretted the fact that he was an old man with not many more years to live, but that even at his age he hoped to see before he died the fulfilment of the project of the Grand Trunk Pacific. He said he hoped to see going out of the port of Prince Rupert the trade and traffic of the western prairies, and coming back through that port the wealth of the Orient. This grand old man has long since passed to his rest. The defeat of Sir Wilfrid Laurier in 1911, the death of Charles M. Hays, the change of government in 1911, the stress of war, the further fact that the Grand Trunk Pacific had its throat cut by Mackenzie and Mann,-due to all these things the development of that great country has been temporarily arrested. There was a period of stagnation between 1911 and 1921, but, Sir, under the present Prime Minister, and under the genius of Sir Henry Thornton, this country is now beginning to be developed, and with the tremendous improvement in the situation of the Canadian National Railways, as stated in the budget, and with the improvement of the Grand Trunk Pacific, we can look forward to the future as being bright and promising.
Before I resume my seat I wish to deal for one moment with a matter which received a great deal of adverse criticism and unfavourable advertisement during the last election campaign. From every Tory newspaper in the Dominion of Canada and from every Tory platform throughout this country there was hurled at the Prince Rupert elevator the charge that it was one of the crimes of the Mackenzie King government. Even in the recent by-election in Middlesex, if I am correctly informed, the hon. member for Fort William (Mr. Manion) took further occasion to refer to this matter. Our Conservative friends, who have had so much to say in denunciation of this proposition, ought to remember that within three months of the day they came into office in 1911 their first act in this despised town of Prince Rupert was
to expropriate from their own friends 100 feet of frontage on Third avenue, at a price, set by their own board of arbitrators, of $95,000. Then out of the native rock they chiselled a basement at an additional cost of $25,000. We have a very wet climate in that part of the country, and this post office site was so located that it acted as a drain pool for the surrounding land, with the result that this basement filled up with water. Then our loyal friends who think so much of Prince Rupert installed an electric pump, operated by one of their own friends. This pump would work night and day pumping out the water, and those of us in the north country who were doing what we could to keep up our courage during the dark days of the war had our courage renewed and our spirits revived by listening night and day to the patriotic heart throbs of the Tory pump working in the government cellar. When they criticize this Prince Rupert elevator they ought to say that they themselves in 1911 gave the people of that north country reason to hope that they had located in a place that would be advantageous. Let me say that this elevator at Prince Rupert has been completed now only a matter of seven or eight weeks. The sawdust and the shavings have scarcely been removed, but still things are moving. The elevator there will be used. The dream of Sir Wilfrid Laurier, the speech of Sir Charles Rivers Wilson, and the hope of Charles M. Hays will yet be realized. The elevator at Prince Rupert will hold grain that will be exported shortly to the Orient, and in return there will come back to the Canadian National railways for transportation to the east the silk of Japan and of China, and other oriental wealth. The prophecy of the grand old man who has gone to his rest is coming true. It is coming true rapidly, and it is heartening to pioneers of that northern country who have staked their all, and who are living in the hope of seeing the completion of the Grand Trunk Pacific Railway and of witnessing the prosperity that is bound to come in time to the whole of the northern part of the province of British Columbia.


Mr. T. L. CHURCH (Toronto Northwest):: Mr. Speaker, I believe that any tariff introduced into this House should be based on the principle of protection. In my opinion a proper application of the principle of protection will solve all the economic ills of every province in the Dominion from Vancouver to Halifax. I believe in protection as a principle, not as a privilege. I do not believe in
The Budget-Mr. Church

can prove anything by figures. Then fourth, is the stabilization of currency. They have not accomplished anything in that line. The fifth item is the reorganization of industry. They have accomplished nothing in this regard. There is no way of reversing the order of these steps or of skipping a step. Progress in each stage depends absolutely upon a complete fulfilment of the requirements of the stage preceding. By the application of this yardstick one may be aided in distinguishing between those disturbances Which strike at the foundations of the economic structure and those which represent merely some house cleaning in the upper stories. As I say they failed on all points.
Then I say that a safeguarding of industries act should be applied as a principle to our raw material instead of our exporting them to the United States, to have them manufactured there into the finished product and shipped back to this country for sale. As I said before, unemployment in this country is due to the fact that we have failed to develop our own natural resources and to conserve our own raw material. We are exporting in the raw and crude state to the United States various materials that we could manufacture at home. Take for example the case of asbestos; we are sending out $6,000,000 worth of raw asbestos taken from the bowels of the earth in Quebec, and that material when manufactured in the United States yields a return of some $75,000,000. We are exporting mica, nickel, pulpwood, power and coal. If we manufactured or utilized these articles in this country, it would provide work for tens of thousands of men. Canada supplied 85 per cent of the mica of the world, and 95 per cent to the United States. In 1924 Canada sold 112,000 tons of mica to the United States in the mill fibre state, only one degree removed from the crude. For that we received $5,546,000. When that was manufactured in the United States, it realized $70,000,000 worth of the finer products of asbestos, and another $10,000,000 worth of rough asbestos. Had we developed our own mica, $80,000,000 would have been distributed among Canadians.
Canada controls the world's supply of nickel. We need fear no competition in this particular article. We should develop nickel in our own country and help provide employment here. Canada's great nickel deposits give the United States all its supply and the world 85 per cent of its supply. Canada is limping along on a low tariff while the United States grows prosperous on a high tariff, three times as high as ours. The United States controls seventy-

five per cent of the silk business of the world and seventy-five per cent of the rubber manufacturing, and yet not an ounce of rubber oi silk raw materials is produced in that country. A proper protective tariff would induce growth and expansion here as nothing else in the world could.
No one knows better than the grain growers in the west what need there is for some change in our system. Their grain is being taken across the line to Buffalo where there are now twenty-eight elevators, and it is being milled there, mixed with American wheat and exported overseas, while the identity of Canada's fine hard wheat is destroyed. All the employment that is furnished by those twenty-eight elevators in Buffalo would give work to
15.000	men at Port 'Colborne and other lake Ontario points, if a duty and embargo were placed up to 45 per cent on wheat, having it milled in Canada and exported entirely through Canadian channels. I am glad that we are getting some converts in this regard, one hon. member to my left having advocated this policy.
We are certainly not developing our natural resources in this country as we should, for if we manufactured our mica and utilized our power and our coal in this country we could provide work for tens of thousands of men. Last year Canada sold 4,350,000 cords of pulp-wood to the United States, receiving $13,000,000 for it, while this raw pulpwood was converted in the United States into a value of $67,000,000. We sent one-third as cordwood, one-third as pulp, and one-third as paper. We are also sending $100,000,000 every year to the mine owners in Pennsylvania. We could use $56,000,000 of that sum to provide work and wages in the Maritime provinces, in Alberta and in central Canada. And do not forget that Canada on the other side of the account buys back the manufactured products of these raw mineral materials which are manufactured in other countries. Do not forget that copper, as a raw material, is being exported in bulk and is being manufactured in the United States into articles worth millions of dollars. For example, I know a large firm in Toronto which last Christmas purchased
30.000	radio machines made in New York, Boston and Providence, and the best parts of these sets were manufactured from Canadian copper. Last year Great Britain purchased about 145,000 tons of copper, and Germany took three times that amount.
The Liberal government have done everything by fits and starts; they have not ac-

The Budget-Mr. Church
complished anything with the tariff. The hon. member for Skeena (Mr. Stork) did not approach the subject from the standpoint of the Liberal platform of 1893, because not one of the planks of that platform has been carried out. Hon. Alexander Mackenzie said:
There is no .policy more consistent with what we call the dark ages of the world than that of protection as a principle.
I would apply protection as a principle all over the country. He says further:
There is no principle more consistent with the advance of human freedom, no principle more in accordance with the great prosperity which prevails in our time, than that of absolute freedom of commerce.
Here is a quotation from a speech of Sir Wilfrid Laurier at the Liberal convention in Winnipeg. He said:
If the National Policy had any basis at all it was that the bread of the peopile should be taxed. It was an inhuman policy that would make bread and fuel dearer. It as always easy to increase the tariff because by so doing you increase the private fortunes of certain individuals.
We stand for freedom. I denounce the policy of protection as bondage-yes bondage; and I refer to bondage in the same manner in which American slavery was bondage; not in the same degree, perhaps, but in the same manner. In the same manner the people of Canada, the inhabitants of the city of Winnipeg especially, are toiling for a master who takes away not every cent of profit but a very large percentage, a very large portion of your earnings for which you sweat and toil.
I will not quote any further regarding that particular convention, but on the tariff issue the Liberals of this country have never had a settled policy since Sir Wilfrid Laurier was their leader in 1897. The principles of Liberalism of which we hear so much from! the hon. member for Prince Albert (Mr. Mackenzie King) produced this state of affairs. It has been a disturbance in the economic life of the nation. The principles of Liberalism, so often on the lips of Mackenzie King, were faithfully applied by him to the tariff question and produced a bluff designed solely to fool a sufficient number of the electors to get into office. There was never any real concern in the mind of Mr. King, as there was never any in the mind of Sir Wilfrid Laurier, of a stable tariff for Canada. The Progressive movement in western Canada has been betrayed by its leaders, who are Liberals first. The sincere Progressives backed the movement in protest against Sir Wilfrid Laurier's failure to carry out his promises of free trade. But the leaders who came to the front in the Progressive party were men with feet of clay. They fell quite readily into the traps set by the Liberals. Instead of punishing the Liberal party, which
furnished the sole reason for starting the Progressive movement, the Progressives have proved themselves a prop and a stay to give the Liberal party a longer lease on life. The only difference between the two is the difference between tweedledum and tweedledee.
I believe the National Policy should further be applied to the patent law of this country. If j'ou look over the Dominion patent office records you will find that a vast number of patents are held by Americans; they come over here Monday, leave on Tuesday with a patent, and go home to the United States and manufacture under the patent. That applies to patents for engines and motor cars. I w:sh to draw the attention of the House to a great grievance in this connection, to an evil that is wrought in any country against its labour and which is every day working in Canada. Our patent laws are absurd. They are pro-American and anti-Canadian; that is all they are. They are very injurious to the labour interests of Canada and have the effect of sending our workmen to the United States. The patent law is framed in a way to give the benefit to all those outside of Canada rvhile our labourers in Canada are suffering. In the majority of the patents granted in the Dominion patent protection is given to persons outside of this country, and the products to which they relate are made or manufactured and shipped in to Canada, giving no labour in the making or manufacturing of the same to the workers of this country-just a case of dump, dump, dump under the protection of the so-called patent law. That is a nice kind of patent law for a national policy country like Canada. Books, periodicals, magazines and a host of other printed matter printed in other countries and having copyright protection in this country are shipped here involving no more labour in Canada than transportation and distribution. A number of automobile manufacturers with patents are only assembling the cars here, giving the labour of making the parts to workmen in other countries.
Machinery of all descriptions, household articles, wearing apparel and other articles toe numerous to mention are patented here and made elsewhere. In regard to chemical processes for the refining of minerals, the raw material is shipped from Canada to the United States to be refined and the finished product is shipped back to this country. Why can that refining not be done in Canada? There is direct and indirect labour involved in the manufacture of all these articles and other countries are reaping the full benefit of
The Budget-Mr. Church

having the labour done by their workmen. I understand that ninety per cent of the patents, trade marks and copyrights that are granted in Canada are granted to persons outside of Canada who manufacture these articles and ship them to this country. This is not a square deal to either our labour or our industries, and as long as this state of thing continues we shall have a large number of our workmen out of employment involving in labour and business a loss of thousands of millions of dollars annually to the Dominion.
These patent laws should provide that if any person applies for patent protection on any article and receives a patent, he must manufacture the article and all the parts leading up to the finished article in Canada, and if the manufacture of the article in Canada is not commenced within six months from the date of the issue of the patent, it shall become void. This will give the person a reasonable time within which to manufacture the article. I firmly believe . that if these patent laws were framed as I have pointed out they would be the means of giving proper and greater protection to our labour and industries, they would encourage new industries to establish here, and in time they would make Canada a much more prosperous nation than she otherwise would be. Those are my views on the question of patents and protection as a principle applied to patents.
I am of opinion that it is just as fair and honourable and we have just the same right for national reasons to use the weapon of the tariff to save, defend and protect our country from the dumping of foreign goods as to call out the militia in our hour of peril to defend our land against the attacks and invasion of an armed foreign foe. The war taught Canada a lesson. If we can carry into peace the lessons learned in war all will be well. A national policy is as essential in peace as in war, and the basis of that policy is protection for the people, diversified and suited to the needs of every province as the local \pircumstances, customs and economic requirements of each province demands; in other words, a national policy brought up to date, a living national policy that will live and move and have its being for the upbuilding of a united Canada. Such a principle of protection alone can make in all the provinces for a united Canada for the Canadians. Such a policy would stop the exodus and bring our boys back from the United States. It would eliminate the deficits on our National railways; it would enable us to promote migration within the empire, solve the unem-

ployment problem, take care of our raw materials and conserve and preserve the magnificent heritage this country has.
I believe in such a tariff, a maximum tariff, not a minimum one, as will prevent Canada from being as it is now the home and happy hunting ground of United States millionaires who are grabbing up our timber, mineral and water power wealth, such a tariff as will stop the exodus, prevent the foolish export of our raw materials and cause them to be manufactured in Canada thus creating employment and keeping our people in this country.
As protection has been attacked so much during the course of this debate, I wish to say a word or two about it. Such attacks are enough to make a Canadian disown his country. Will this never stop? Is it not possible to create an industry of any kind in Canada? Apparently it is not on account of the uncertainty of the tariff. We are fast becoming the five, ten and fifteen cent country of the world the way things are going on at the present time.
During this debate one of the speakers referred to the Mother Country and free trade. I would like to read this article which appeared in one of the British papers which shows how a "little child shall lead them":
London, England, Jan. 21.-A small boy, recently admitted to a local hospital, was weak and near death from hunger. He was one of a family of twelve and his father's wages amounted to about $20 a week.
When the nurse gave the boy a cup of warm milk he asked appealingly, "How far down can I drink?" The crowds that cheered for Gladstone,
The mobs that roared for Bright In tariff-hating Manchester,
Home of the Cobdenite-
They never saw the guerdon won Nor glimpsed the accolade-
A little child has led them To the triumph of free trade.
He never studied theories Nor read the master's rule;
He never heard in high debate The great Manchester school;
The harder school in which he learned Had whips that racked and flayed Where hunger taught the meaning And the glory of free trade.
'Neath their high domes, in lofty halls Where well-fed thousands sat,
To cheer the self-sufficient fools Prating of this and that,
They set no limit to the tongue No boundary to mood-
And now the London urchin Must*set limits to his food!
My lords and gentlemen whose pride The great Gladstone hath fed,
Ye high and mighty doctrinaires,
By Cobden always led,
Doff all your gorgeous uniforms,
Your tinsel and parade;
Learn ye from this lone youngster's plight 'Hie glory of free trade.

The Budget-Mr. Church
Has free trade solved the unemployment situation in the Old Country, where more than a million men are receiving the dole? Has it made unemployment insurance unnecessary? Has it prevented England from becoming the dumping ground of continental Europe for cheap, shoddy German goods? Has it made the poor laws unnecessary? No. England is fast coming round to protection. Even Lloyd George's land bill of the other day is a protectionist bill all along the line.
Coming from an industrial district in which there is much unemployment, I deem it my duty to-day to bring before the House the question of additional protection for the industries of the country, and to urge that what Canada needs at the present time is a proper Safeguarding of Industries Act. The subject of protection is many-sided and should be brought up to date to meet the changed conditions that have taken place since the inception of this great fiscal public boon in 1878. I support it. not for its own sake, but because it is essential for Canada's sake. No one needs to apologize for what protection has done for Canada. I support it for principle's sake, and on the grounds of patriotism.
Canada must choose between protection and free trade, and the difference between them is as wide as the poles. Protection is not and should not be thought of solely as a manufacturers' or bankers' question, or that it exists for the sole benefit of manufacturers. Protection is a great economic question of principle and of patriotism, and of life and death to Canadians. The big interests, who seek to grab all the benefits of protection for themselves, are its worst friends, and do the great movement little good. It should not be a manufacturers' question; or a banking question; or a grain growers' question; or a combine question; or a monopoly question at all. Protection should be brought up to date to meet changed conditions, and extended. Protection will make for a better Canada, and a happier and more contented people, with work plentiful; it will make Canada a country fit for heroes who have fought for Canada to live and die in, instead of being driven to join the exodus.
I am tired of those who, for their own selfish ends, sometimes seek to apologize for protection as a question of expediency. If protection is solely a question of a manufacturer's or banker's profits, it is sure to die. As an honest protectionist, the great question of protection is one which I support, not for the manufacturers' or bankers' sake, but for Canada's sake. It is with me a question of 14011-205
both patriotism and principle, for the building up of a united Canada; and the principle should be extended and maintained so as to extend, conserve, build up, develop, and preserve all the provinces of Canada from coast to coast. I propose later to show how protection, adequate protection, should be developed and built up by additions and conservation, to further develop each of the provinces according to its needs, resources and economic development, and the pyschol-ogy of protection as applied to Canada.
Some forty-seven years have now passed since the dead hero of protection in this country, Sir John Alexander Macdonald1, first placed on the statute books of this country the old National Policy, and Canada can say of Sir John Macdonald as Rudyard Kipling said of the great John Bunyan: "The wisdom that he taught us is proven prophecy." We heard something in this debate about reciprocity.	It was part of the Liberal platform
once; it was part of the platform of the Progressives and the Canadian Council of Agriculture. All I can say in reference to that is that free trade and reciprocity with the United States would make a Lazarus out of a country that Sir Wilfrid Laurier professed to have made a nation. That pro-
9 p.m. posal would exhibit the Canada of Queenston Heights, or St. Julien, of Vimy Ridge, or Passchendaele, of Amiens and many other fields of glory, as a beggar for the poor favour of reciprocity and free trade. Canada cannot prosper on the growth and export of wheat alone. This was shown in the case of the United States. Protection was the path of glory to prosperity for the United States. Those are my views on that particular question.
As I said last year in discussing this subject, free trade kills industry, destroys the young rival, then puts up prices. There is no doubt whatever that the United States imports are a deadly menace to Canada. This was proved beyond any dispute in 1925. High tariffs have saved the United States, the whole prosperity of that country having been built up on that policy. Perhaps I may be allowed to quote briefly from what I said on this subject last year:
These are the facts from the fiscal history of that country. England's imports never menaced in 1844 the native industries of the United States the way American imports are menacing the native industries in Canada in 1925.
The free trade assumption is always false that manufactures are eternally and especially in want of protection, while agriculture and commerce need none. The assumption is false in any sense; our commerce and navigation cannot live without protection, never

The Budget-Mr. Church

did live. It is the interest of the whole eoimtrv which demands that that portion of its industry which is most exposed to ruinous foreign rivalry should be cherished and sustained. The wheat grower, the grazier, is protected now by ocean and land, by the fact that no foreign article can be introduced to rival his except at a cost for transportation of some thirty to one hundred per cent on its value; while our manufactures can be inundated by foreign competition at a cost of some two to ten per cent. It is the grain grower, the cattle raiser, who is protected by a duty on foreign manufactures quite as much as the spinner or shoemaker. He who talks of manufactures and nothing else being protected, might just as sensibly complain that we fortify Halifax and Quebec, but not London or Ottawa.
The United States draws the life blood of Canada in 1925 the wray Britain was in economic history charged with drawing the life blood of Portugal in 1844, industrially. Our low tariff is a boon and aid to the United States. Canada suffers at the hands of the United States, the latter taking advantage of our low tariff, Canada is the happy hunting ground of the American millionaire, who is getting the title deeds of our timber, forests, pulpwood and mines.
There never was a time in the industrial history of Canada when the business men of the country and the producing power stood more in need of sympathetic consideration at the hands of the financial administration of the government than to-day. The crushing burdens and taxes on industry to-day constitute a loss and handicap for business men at a period when every nerve is being strained to develop stability and ensure expansion of production on economical lines.
Last year the minister introduced dumping legislation which would have helped business materially, but he yielded to the importunities of the free traders in the House and finally withdrew it. It is heartrending to go into our departmental stores and see all the cheap German and American goods displayed to the exclusion of our own Canadian products. The fact of the matter is that this country is simply a dumping ground for the excess production of foreign manufacturers. The dumping provision was a good enough Liberal doctrine for Laurier and for Fielding, who recognzed how essential it was in order to protect our manufacturers from altogether unfair competition. German goods are produced under such conditions as make it possible for the manufacturers of that country to undersell the Canadian. Labour is cheaper there, hours of work are longer and there is a depreciation in currency that discriminates against the Canadian manufacturer. Is there any wonder, therefore, that industry is languishing in Canada and that factories are being closed up? It is altogether beyond my comprehension why there should be no dumping regulations in Canada just as there are in every other country on the face of the globe.
IMr. Church.]	. .	.1 : 5
We are said to have a Labour party in this country but the fact of the matter is that the gentlemen composing that party do not represent labour at all. Mr. Gompers was one of the most astute labour leaders this continent has ever seen. He believed in labour working within the two old parties and was a strong protectionist, not only in principle but in practice, and you could not find a single labour union in the United States to-day that would vote for any resolution which had for its object a reduction of the tariff of that country whether as it affects manufactured products or agriculture. The result is that in the United States to-day labour is a real and effective force and gets a real show. The Labour party in the United States is not a political party. I do not believe in the principles of the hon. gentlemen of the Labour party. Here we have two gentlemen who say they represent labour, yet they vote for reductions in the tariff and for instability and for free trade, instead of voting for labour they vote Grit first, last and all the time. Sir Oliver Mowat was a distinguished Liberal and a friend to labour. His successors, Sir William Meredith and Sir James Whitney, were also strong supporters of Labour. The hydro-electric movement, which has meant so much to labour in Ontario, was introduced by the Conservative party. The country always sends for the Conservative party when it is in trouble. I would not call these hon. gentlemen from Winnipeg viceroys, but perhaps they could properly be termed deputy prime ministers, and I would like to see them quote one labour union in the United States to pass a resolution condemning a high tariff. The late Mr. Gompers was always a protectionist, and not one single state legislature has ever asked for the modification of existing duties. The tendency is to go higher all the time.
Then, Mr. Speaker, I would like to refer to the question of industrial research. No department of the government is more important to the development of this country than is an up-to-date department of scientific research. Canada has*to-day some of the finest scientists in the world; an outstanding man in the world of medicine is Dr. Banting, the discoverer of the cure for diabetes. The export of raw material is a mere nothing, in my opinion, to the export of brains. Go to any American university, any faculty of medicine, and you will find it largely composed of Canadians. I believe we should have a student policy in this country for the summer; instead of our students seeking work as cooks and waiters we should provide them with

The Budget-Mr. Church
employment in the different departments of government, in industrial and scientific research and in that way hold that student class in Canada. This exportation of brains, our most valuable manufactured product, is going on all the time. The class in electrical engineering at the university of Toronto last year went almost entirely to the United States.
As Premier Baldwin of England says, "shock absorbers" are necessary in industry. Premier Baldwin said that while science might not save industry in England, it could act as a shock absorber to carry the country through. I have been looking over the record of scientific research in Canada, England, the United States and in other countries, and it is extraordinary to find how industrial research can help everyone. I am sorry to see the Minister of the Interior (Mr. Stewart), leaving the chamber; I am afraid he may think I am saying too much about scientific research, which is carried out in his department, but I hope there will be an increased vote to cover this item in the estimates. I was speaking of shock absorbers; let us take the radio. It almost ousted the phonograph, but the makers of the latter instrument were forced to make a better product, and it kept its place. Gas illumination was almost ruined by electric light, and the gas mantle saved it. Nickel companies were satisfied to produce for warfare purposes only, but now they are turning to many useful domestic lines. Coal fuel is in a bad way; this industry had iio shock absorbers because it was of the opinion that it had a perpetual monopoly, when along came petroleum and gasoline. Great Britain, United States, Germany and Canada are countries where the coal business is in a bad way. The by-products of coal can and should be utilized, and will give larger profits than the raw product itself; I predict that in twenty years every coal mine in the country will make liquid fuel at the mine. According to the Montreal papers the Canadian Pacific Railway have placed orders for more coal burning locomotives, but the oil burning car has. come to stay. A new type of gasoline which is now being put on the market will revolutionize the type of motors used in automobiles. The vast future of nitrogen will cause a great upheaval in agriculture. Every industry is being revolutionized by new scientific discoveries. If business is not associated with scientific men, business will go to the wall. The National Research Council is doing good work, and can keep industry informed of what is going on. It can show the time to draw in on one business and expand on another, and any banker should know how that information will affect industry.
Now, let me read one paragraph from the report of the Grain Inquiry Commission:
At the present time, the duty on Canadian wheatentering the United States-is 42 cents per bushel. On wheat flour, semolina, 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 Canadian 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 the 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 the 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. While, as a general thing, export duties are to be deprecated, the exceptional situation that arises in this instance might warrant such an impost.
I believe there should be 3uch an embargo. It would put the milling industry in this country on its feet. Buffalo has twentyjeight mills bootlegging our Canadian wheat, turning it into flour, and shipping it across the water as the Canadian product. I have looked over the situation in Buffalo, Baltimore and New A ork and seen this bootlegging going on. Canada is losing this export trade, and if we imposed an embargo it would put the grain and the milling industry in this country on its feet. Canadian grain would then go through Canadian channels and through Canadian ports and be milled here, and it would be doing the fair thing by the farmer of the west.
I want to say a word on the automobile question. I believe in protection for the automobile industry as a princjiplet-not as a privilege, but as a principle. I would turn the automobile industry in this country into a native key industry,, and have every unit that enters into the automobile manufactured in this country. I refer you to the Patent office where dozens of Canadian patents for engines are owned by Americans. I would apply the proper policy of protection to the Patent office of this country. I believe in the gospel of protection to make the automobile industry a key and native industry in this country, and not a place to assemble cars; so that we would make in Canada everything that goes into the car from A to Z, from Genesis to Revelations,
The Budget-Mr. Church

so that Canada would cease to be an assembling plant for American parts on which the bulk of the labour is done in the United States.
Then after the car is ready to be shipped out of the factory to the retail store, what principle of protection would I apply? I would have somebody attached to the Department of Finance or the Inland Revenue department who would ascertain what that make of car cost to produce in Canada, and what it cost to produce in the United States. Then eliminating the difference in cost of production, owing to differences! in labour costs and local conditions, I would say: Here is ten, fifteen, or eighteen per cent profit for the manufacturer, and the balance goes to the Inland Revenue office to help run the country. That is the principle of protection I would apply as a principle, not as a privilege to the manufacturer. That policy would develop industries in this country that would turn out every kind of motor car, motor truck and motor bus, and bring down prices to the consumer for every car 'and (motor truck purchased.
I regretted very much to see the deputation that came here from Oshawa the other day treated in the manner it was by the government. The government told them that they would not be intimidated by numbers. But there is such a thing as the liberty of the subject in this country, which is sometimes treated too lightly. We have the British constitution in this country, and it has been the right of British subjects to deputize right from the days of King John and Magna Charta down to the present day.
1 am not an enthusiast on the subject of [DOT]deputations. There is one place where men and women who want to keep Canada Canadian, can deputize to advantage, and that is the polling booth. The men and women of Oshawa will not fail in their duty in this respect. The returned soldiers and civilian Workers and their wives imagined that their presence in Ottawa would produce results. Their presence in Ottawa did produce results. The great result the deputation produced was exhibited in the reply of the right hon. Prime Minister. The principles of Liberalism were laid down in the platform at Winnipeg by Sir Wilfrid Laurier, but if any of those planks have been carried out, I have not heard of it.	Hon. J. Israel
Tarte said that platforms were -made to get-in on, not to stand on, but, Mr. Speaker, I respect Liberal principles. I believe the pioneer Liberal men of this country were good Liberals, reformers and radicals. I believe they did a great deal for Canada in the days

of the Family Compact. On the grounds on which these buildings stand I saw to-day the statues erected to the memory of two of Canada's greatest men, Baldwin and Lafon-1 taine, standing side by side in a peaceful way, as the men to whose memory they are erected stood in the legislature to discuss problems of importance to Upper and Lower Canada with a view to getting some good results for the country.
The deputation from the motor car workers had this great effect that it caused the right hon. gentleman who received them as Prime Minister to repudiate one of the greatest traditions of historic Liberalism. The right hon. gentleman has not a sliver from any plank in that Liberal platform of 1893 to show as proof of his loyalty to the traditions of Liberalism, which abounded in that platform. The right hon. gentleman's association with politics has contributed much to Liberalism going back on the principles of its platform. There is a Liberalism that goes back beyond the Liberal platform of 1893, the Liberalism that rejoiced in that great Liberal tradition of a party that always insisted on the right of petition and the right to send a deputation into the very presence of enthroned tyranny.
I am not in love with the nature of Liberalism as we have it in Canada. As I said before, the word Liberalism no more implies love of liberality in the souls of present day Liberals than the w'ord Progressive implies progess in the souls of Progressives. I am in love with, and never cease to love, the nature of the Liberalism that inspired the freeholders of Buckinghamshire to mount their horses and ride to London to defend John Hampden against the tyranny of Charles Stuart. Macauley has taught us to love the nature of the Liberalism that brought miners from Cornwall on a deputation to defend Trelawney against the tyranny of James II.
The right hon. viceroy of King Robert Forke denied civilian workers and returned soldiers from Oshawa and their wives the opportunity to exercise the great Liberal right of deputation. The right hon. gentleman proceeded to go back on the Liberal principles of his illustrious grandfather. because history tells us that in the dark hour of William Lyon Mackenzie's fortune, a deputation of 1,100 voters in York county insisted on the right to meet the government in Toronto and protest against the injustice inflicted on the grandfather of the present Prime Minister. The right hon. gentleman does not believe in deputations. Why? The freeholders who rode from Buckinghamshire to aid John Hampden, the

The Budget-Mr. Church
miners who marched from Cornwall to the help of Bishop Trelawney, never had to fear a more legalized tyranny than the tyranny that spoke in the words of the Liberal leader who tried to rebuke British subjects for seeking help in their hour of need. Some of the voters who rode to Toronto to join the deputation to protest against what they called the destruction of their liberties at the hands of the Family Compact had their homes a few miles from Oshawa. It was from Oshawa that the great deputation came to protest against the destruction of their jobs at the hands of the modern family compact of today, that is to say the farmers' compact. The so-called tyranny that rebuked the deputation sent to Toronto on behalf of the right hon. gentleman's grandfather was dubbed with the name "Toryism." The actual tyranny that dared to rebuke a deputation that came to Ottawa in defence of jobs that keep Canadians in their own country wears the so called name of "Liberalism." The right hon. gentleman, not content with his denial that speaks in the great Liberal tradition of deputations, went back on his grandfather's principles when he suggested to the Oshawa deputation that he was not to be intimidated by numbers. That is what the Family Compact informed the York county deputation when they insisted that William Lyon Mackenzie be given the seat to which the deputation and its supporters had elected him. The right hon. gentleman said and suggested that he did not care for numbers. But he does care for numbers when a vote is on, and the numbers that he cares for are the telephone numbers of the hon. member for Brandon (Mr. Forke), the hon. member for Southeast Grey (Miss Macphail), and the honourable array of "comrades" from Winnipeg. It is an outrage that returned soldiers and civilian workers-Canadian men and women-should be rebuked for coming to Ottawa by right hon. gentlemen whose policy is driving the best men in Canada to the United States, because that policy has taken away their chance of a job in the land that they defended at the hazard of their lives.
We have heard something about vested rights in this country. Does the great British doctrine of vested rights exist on the statute books of this country only for the Canadian Bankers' Association, the Canadian Manufacturers' Association, the trust and combines, the railway corporations and the United States millionaires who come into Canada and grab our resources? These interests have vested rights; on the other hand, labour 'has absolutely no vested rights in this country. The
small savings of these workingmen in Oshawa, their modest furniture and their homes; are not all these things vested rights? Is Canada going to become like British Honduras, where under the constitution labour has no vested rights or privileges whatever? The answer to that question, so far as the present government is concerned, is in the affirmative as was evidenced the other day when an important deputation came down here to interview the Minister of Finance in regard to the reduction in the duties on automobiles. When the government intends to expropriate property belonging to any corporation or company in this country it must serve six months' notice, but here the sole means of livelihood of all these workingmen in Oshawa are ruthlessly taken away without any notice or compensation or investigation, and vested rights are denied to Labour. And parliament now decides that Canadian citizens may not petition it! Fortunately, however, there is one recourse left to labour, and that is the ballot box. Our workingmen can still force the hands of a government that will not give them a fair show, as this government will find out some day.
I want to be absolutely fair. I believe in protection and vested rights not only for the capitalist but for labour as well. I believe in equal rights to all and special privileges to none, but I certainly do object to a one-sided protection that leaves the ordinary workingman at the mercy of capitalists abroad who may throw him out into the street whenever it- suits their convenience to do so.
The hon. member for Southeast Grey received a deputation from the women of Oshawa who came and pleaded so that they might save their husbands' jobs. The men for whom they interceded are labouring men. They have the same vested rights as the capitalist, the Canadian Bankers' Association, the Canadian Manufacturers' Association, and the railway corporations that are flourishing like the green bay tree. But their vested rights can be taken away from them. They can be deprived of their homes, and t'heir goods and chattels pitched into the streets. The hon. member for Southeast Grey told these women-I am not in a position to quote the hon. member's exact words, but in effect this is what she said-"go home and try it for a year; see how your husbands get along without jobs; come back later and tell us about it." The hon. member for Southeast Grey holds a seat in parliament thanks to the Conservative men and women who went to the polls on election day and forgot partyism in their votes on behalf of a professed independent who never forgets partyism for five
The Budget-Mr. Church

minutes in her vote. He who wrote about man's inhumanity to man should have had a successor with that Oshawa deputation, and he might have found a new theme for tears in the truth disclosed in woman's answer to woman. The answer that the hon. member for Southeast Grey offered to those women from Oshawa was a hardhearted performance, disclosing a sad lack of knowledge and a sadder lack of sympathy with the problems of women who are anxious about their husbands' jobs and with good reason. The trouble is that the anxiety of these men and women, like the anxiety of the Conservative men and women in Southeast Grey, was too long delayed. The Conservative men and women of Southeast Grey are not free traders. They are not anxious to make Ontario a land of empty pay envelopes, and to send the sons and daughters of Ontario to seek homes in Michigan and pay envelopes in Detroit. The hon. member for Southeast Grey seems anxious to produce that position, but the Conservatives who sent her to Ottawa do not share that anxiety. The Conservative men and women of Southeast Grey were fooled when they voted for the free trade fanaticism, the Liberal-first bigotry of the hon. member for the constituency. They imagined that they were voting for a new kind of Independent, instead of voting for the same kind of Grit.
The men and women of Oshawa might not have had to come here on a deputation if they had not given their support to the Toronto Star in its campaign for the destruction of Canadian towns and Canadian tariff. Oshawa depends for life on the motor industry. Oshawa has supported the Toronto Star, and in every election the Star and Hon. W. E. Raney have vied with the de facto prime minister of this country, the successor to the Hon. T. A. Crerar, and his "assistant prime minister" from Winnipeg, in their policy of preaching a doctrine of hatred for the factory under the Union Jack and of love for the country under the stars and stripes. That is the sad feature of this whole attempt to bring about the wreck and ruin of the very foundations of Canada's industrial life.
The hon. member for Southeast Grey suggested that the motor industry would get along all right. Al'l the motor industry needed was three years' trial of this tariff; all the women from Oshawa needed was jobs for their husbands. This tariff degrades Canada and puts Canada out of the running for the prizes for industrial growth. It is a sad thing that a parliament at Ottawa should isolate Canada, not only from the possibilities of growth but from the chances of continued

existence in one of the world's great industries, present and future, the motor industry. There is not an hon. member in this House who would put a dollar in the extension of an old industry or in the establishment of a new industry in a country that supports the doctrines of the Toronto Star and the Hon. W. E. Raneys, Hon. T. A. Crerars, and all branches of their following in this House. These doctrines teach the people to believe, and have too largely succeeded in making the people believe, that a factory in Canada is a source of plunder to the consumers of Canada, and that a factory in the United States is a source of deliverance to the people of Canada; that the manufacturer who employs aliens in an alien land is a benefactor of Canada, and that the manufacturer who employs British subjects in a British land is the oppressor of Canada.
This tariff iniquity puts the United States in the most favoured nation position as against Canada. The Canadian who wants to start an industry can go to the United States and manufacture for two markets. If the Canadian stays in Canada the Canadian will not even be given a fair chance for one market. The people of Oshawa and the people of Toronto have supported such features as hatred of Canadian industry and love of American industry as the Toronto Star, Hon. W. E. Raney and their followers or dupes in this House. Oshawa may be greatly comforted by the Toronto Star's interview in which Henry Ford says he likes to see the faces of the Canadian workmen. The Toronto Star, and the bosses of this government here at Ottawa compel Canadian workmen to leave this country. The enemies of Canada never saw the backs of the returned soldiers who are being driven out of Canada by this tariff. This government are permitting their own fellow countrymen to be driven from the land they love to_the land in which they are forced to seek a living. I have just this to say to the people of Oshawa who have been reading the Star and the people of Toronto who have been reading the Star and thereby helping the Star to wreck Oshawa: If the Toronto Star were published in Detroit and the United States had a government as bad as Canada's govern-' ment, that government might introduce a policy to close factories in Michigan and open factories in Ontario. If a paper published in Detroit, as the Toronto Star is published in Toronto, dared to quote a Canadian manufacturer, as the Toronto Star quotes a Yankee manufacturer, in support of a policy

The Budget-Mr. Parent
that drove American citizens from Detroit to seek a living in Toronto, as the Toronto Star's policy is driving British subjects to seek a living in Detroit, what would happen? The Toronto Star would cease publication, either because support was withdrawn by the merchants whose custom was being driven from Toronto, or because there would not be enough policemen in Detroit to protect the Star's place of publication against the women who sought a reckoning with the sheet that had served as champion of a policy that took the jobs away from their husbands and drove them into a foreign land.
I regret, Mr. Speaker, that in the face of the economic ills of this country to-day, a condition attributable to the ill-advised policies of the Liberal party, the government has failed to bring down in the budget such a tariff as would cure those ills and safeguard the industries of Canada, including the great agricultural industry.


Mr. GEORGES PARENT (Quebec West):: Since the beginning of the present debate, Mr. Speaker, I have listened to many speeches, and I find that we are now in the very same situation as that in which we have found ourselves for several days. One member will advance the views of his own party, and another will answer and represent the views of the party to which he belongs. The speech just delivered by the hon. member for Toronto Northwest (Mr. Church) does not differ from other speeches we have heard, except to the extent that he was possibly more prolific, and if I should attempt to follow him in all the details of his address it would probably take me as long as it took him, namely about two hours and a half. The hon. member dealt with many subjects, going from doctors to coal mines, from coal mines to lawyers and other professional men, and so on, in such a way that it would be impossible for me to answer him in a short time. I hope, however, in the course of my remarks to express in a general way my own views in the matter and generally to answer what he said during the course of his speech.
My remarks will be very brief, and they would be much shorter were it not for the fact that I have a few quotations to make in respect to the general situation, and especially with reference to railway conditions affecting the city of Quebec, coupled with Maritime rights; for to my mind these two are one and the same.
I am not in the habit of paying useless compliments to anyone, and I do not intend
to do so on the present occasion. However, we have to face the proposals as presented by the government in the budget and either accept or reject them.


Mr. BENNETT:: Without changes?


Georges Parent: to point, to an unusually large expansion of foreign commerce during the recently ended fiscal year. There was a surplus of revenue over expenditure of nearly $34,000,000 in the year's operations, a reduction of net debt of $22,353,000, and a marked increase in the operating profits of the Canadian National Railways, these having amounted to $30,443,000 in the calendar year of 1925 or about $13,000,000 more than in the preceding year.
The foreign trade of Canada continues to mount both in volume and value. In the year ended March 31, this commerce reached the very considerable sum of $2,258,500,000, of which $1,330,000,000 was made up of exports and $927,000,000 of imports, the favourable balance thus being $402,695,000. So large a credit in the external trade of the year has been a potential factor in restoring Canadian currency to par.
Domestic business has not presented any novel factors durihg the current month, but the condition remains more satisfactory than in recent years and the spirit of confidence in the future appears to grow. Commodity prices are fairly steady and would appear to have been pegged about 60 per cent over a pre-war average, with inevitable fluctuation in price of one or other commodity. Railway car loadings and railway earnings are in excess of last year. Business mortality in the first quarter of 1926 was substantially less than in the corresponding quarter of the previous year, the number of failures declining from 669 to 593, with aggregate liabilities down from $10,683,000 to $7,566,000.
The estimated quantity of Canadian wheat remaining in Canada at April 1st was 161,376,000 bushels or 40,000,000 bushels greater than on the corresponding date in 1925, which fact gives promise of an active shipping season, and continued expansion of export trade. Building operations the Dominion over are much in excess of last year. It is too early in the season to forecast agricultural production but the acreage to be sown in the three western provinces this year will be practically the same as last. Live stock has wintered well and expectation as that the steady growth in the cattle export trade since the removal of the British embargo will not be interrupted. Cold weather has somewhat delayed farming operations in the eastern provinces. Immigration gives indication of reaching a larger volume than for a considerable time past. Taken as a whole, it *can be said that the bright spots in the business situation greatly predominate.
The article is fair to all, and covers every one of the provinces. Speaking of Quebec, it uses these words:
Quebec-Winter logging operations, which have been generally on a reduced scale, are finished and logs are ready for the drive. The lumber market remains quiet, Pacific coast stocks dominating the situation. The price and demand for pulpwood continues to hold up well and it is anticipated that the increased production in newsprint this year will easily be absorbed. There has not been any appreciable change in the price of staple commodities, apart from butter and eggs, which show seasonal declines, and potato prices, which are unusually strong. Trade, both wholesale and retail, has been adversely affected by the lateness of spring. The manufacturing situation indicates improvement. Orders generally are in excess of last year and a number of plants formerly only partially operating are now running on full time. Collections are moderately satisfactory.
What about Ontario?
Ontario.-Wholesale houses are enjoying a slightly improved volume of trade compared with last year.

Retail sales of seasonable Easter goods, however, were retarded by inclement weather. Collections are being satisfactorily met. Work on the land will commence a fortnight later than a year ago. There is an abundance of moisture, fall wheat has wintered well, and conditions from the agricultural viewpoint are propitious. Farmers' dispersal sales are marked by good attendance and good prices, and milch cows are in special demand. Industry as a whole is more active. Pulp and paper companies continue to produce at capacity. Agricultural implement manufacturers are busy, and finished steel companies are well employed. Recent reductions in the tariff on motor cars make it necessary for manufacturers to submit the changes embodied in the budget to an intensive study before they are able to gauge the full effects. With the advent of open weather, activity in the northern mining camps is increasing.
This article gives a fairly comprehensive view of the situation. It contains similar paragraphs in regard to the prairie provinces, the Maritime provinces and British Columbia, showing that conditions to-day under the present government are very good.


Mr. FAFARD:: What is the date of the report?


Georges Parent: April 22, 1926, published
by the Bank of Montreal.
That paper was published in Montreal. I tried to find one published in another province, in a city-Toronto-which is probably the business rival of Montreal. This is what the Monetary Times has to say under date April 23, one day after the publication of the article which 1 have just quoted:
1926 Budget Is Popular. Is It Wise?
That the tax changes proposed by the Dominion government are popular is quite evident. Whether they are sound depends upon future developments.
The country demanded a reduction in taxes, and it has got at. Every one has felt the pinch of Dominion government taxation, and the immediate effect of the changes is a saving to nearly every one. The government could scarcely have taken a more popular course. The income tax is o-f direct interest to a large proportion of the thinking citizens of Canada, and the reductions mean a great saving to the middle classes on the support of which any party in this country depends. The repeal of the stamp tax on receipts, the return to penny postage and the reductions in the sales tax are also of widespread interest.
While there promises to be some debate about the income tax, the one important snag in the programme seems to be the reductions in automobile duties. The other tariff changes are by no means negligible, but apparently only one vital spot in industry has been touched. We are being told that the industry cannot subsist with only 20 per cent protection It is difficult ito believe that in an industry of such proportions, where even in Canada benefits of large scale operations can be realized, it is not possible to do business here (with this margin. But some of the statements issued by manufacturers are quite definite, and while sales should be enlarged through the reductions in prices there is no doubt but that the volume of production in Canada will be lower. It is evident that automobile duties are a crucial point in the

The Budget-Mr. Parent
government's podicy, and it will have to see its proposals through or forever hold its peace on tariff reduction.
The serious aspect is that of national revenue. Tax reduction at the present time does not augur well for tax reduction in the future. It is only through a steady surplus of revenue over expenditure that we can reduce debt, strengthen our national balance sheet and reduce taxes with safety later on. With revenue keeping up, expenditure cut down, and the National railways doing better, the government had just got into a comfortable position. But the contest between the parties is so keen at the present time that the government has evidently felt the necessity of immediately capitalizing its savings. The 1926 budget is one which will probably ,be of great political import, it certainly is going to be a weighty factor in our national finances.
I cannot be accused of having quoted any papers with partisan views. I have quoted two of the most serious publications that have dealt with the situation.
Coming to the details mentioned in these articles, I have no doubt that the people of Canada will be satisfied with the news that a reduction of taxation to the extent of $25,000,000 will be spread over the country generally. The reduction in the postal rate, bringing us back to the days of Sir William Mulock, brings pleasant memories to the Liberals who were in the House at that time. The reduction then made was so well accepted that I have no doubt the present reduction will be popular and well received throughout the Dominion. The stamp tax on receipts was an annoying tax for everyone, from the humblest to the highest, and its abolition will no doubt be appreciated by the community at large.
The changes in the income tax law should perhaps be the subject of some more lengthy remarks. I fully realize that the men who have been working on this particular question have given it a good deal of attention and study. At the same time, even the best men that Canada can produce may not have at first seen all the trouble that such a tax involves, and I intend to put before the government for further study these few considerations. Let us take the case of a close corporation where a man has been spending ten or fifteen years of his life in establishing an industry. He may have been working under a company name, although the owner of the whole business. What is the result under the tax as proposed in the budget? That man will be taxed first nine per cent on the income of the company; that is a reduction of one per cent from what it was previously. On his own income or dividend from the operation of the company he will be taxed a second time. Perhaps he and two or three of his companions who have invested
money in that company will be in receipt of dividends therefrom; and in that case they will be taxed a further sum on that amount. I do not think the government had in view the taxing of a person twice under those conditions, as the present budget proposes. That is a point to which I wanted to draw the attention of the government, because it touches more people than one might think at first sight. I can understand that the law might apply with good results to many companies listed on the stock exchange where a man can buy and sell without caring whether he gets a dividend or not, but I hardly think it is fair for a man who has invested his money in a company which ho built up himself should be taxed twice when others are taxed only once.


Eccles James Gott: In view of those statements does the hon. gentleman propose to support the budget?


Georges Parent: The hon. member can wait until I vote and then he will find out. Take the case of a mining company: every time jou take anything out of the mine the capital is reduced. Under the law as it stands an allowance is made for depreciation by reason of the fact that in operating the mine you draw upon your capital. If you happen to be part owner of the mine the company first pays the income tax, and as shareholder or part owner you must also pay, so that whereas you are given consideration for depreciation onfy once you must pay the tax twice. I am putting these facts before the House simply to point out to the government that it is always rather dangerous to make changes in tariff matters. If we can maintain a certain stability I think it will be better for all concerned. I have no doubt that the government is keeping this in mind and that in the creation of the tariff board it means to protect industry in Canada to a reasonable extent, without enabling fictitious industries to exist at the expense of the consuming public.
The budget refers to the fact that the Canadian National Railways are this year submitting a satisfactory report which discloses some $30,000,000 to the good after operating expenses have been taken into account. I do not intend to discuss the railway situation in detail but I want to refer to the pledges given by previous governments to the city from which I come in regard to the Transcontinental railway and its terminal. May I in passing offer my hearty congratulations to the hon. member for Mackenzie (Mr. Campbell) upon the motion which he

The Budget-Mr. Parent
submitted to the House the other day? That motion was in the interests of the Dominion as a whole and particularly of the ports of Quebec, Halifax and St. John. In my opinion the surplus money in the hands of the Canadian National Railways could, if properly spent, provide Quebec with a suitable terminal. I dislike very much going back to the election of 1904 and discussing the campaign that was fought then. The whole issue was the construction of the Transcontinental railway. Two companies were trying to secure the right to build a line from the Atlantic to the Pacific, one company being known as the Transcona and the other the Transcontinental. The Transcontinental was the one whose terms Sir Wilfrid Laurier accepted, and the whole question was thoroughly discussed in the session of 1903, when all the facts were clearly laid before the Canadian people. It was stated over and over again in 1903 that the main purpose of constructing that line was to transport the grain of the western provinces through Canadian territory to the Canadian ports of Quebec, Halifax and St. John. No considerable opposition was offered at the time, but of course in a matter of this kind, as in any similar matter, the moment some people saw that there was a possibility of their own interests being affected, politics was introduced, with the result that criticism was indulged in throughout the country. This criticism went on for a few years while the construction work was in progress, until the election of 1908, when the issue was again the wisdom or unwisdom of constructing the Transcontinental railway. In that election the people of Canada declared it to be their will that this railwas' should be built for the purpose, as had always been understood, of transporting the grain of the west through Canadian territory to the ports I have mentioned. Then came the election of 1911 when unfortunately there was a change of government. There were those who could not see eye to eye with Sir Wilfrid Laurier and who condemned the undertaking. They uesd every possible means at their disposal to prevent the construction of that line, and if there is one city in Canada which more than any other resented the stand which was then taken by the opponents of this railway it was the city which I have the honour to represent, the city of Quebec. Anyone who looks down from the Chateau Frontenac to-day upon the present station, which was put up in place of one that should have cost in the neighbourhood of 1800,000, cannot help feeling that this unsightly structure is nothing if not an insult to a government which had the courage to

carry through so stupendous an undertaking as the Transcontinental railway. Quebec was induced, on the strength of promises solemnly given that city, to tear down a building valued at some $250,000 and to hand over to the Dominion of Canada a site worth $2,000,000 for the purpose of erecting thereon a station which was to cost, as I have said, about $800,000. What did the city get as a matter of fact? A building that is not worth $20,000 and which moreover is so ugly that in my opinion the Canadian National Railways would be doing the people of Quebec, and for that matter of the Dominion, a real service by tearing it down.


Richard Bedford Bennett: Does my hon. friend
mean the depot?


Georges Parent: I am not referring to the
Canadian Pacific Railway. If the House will bear with me a short while, I desire to put on record some of the details of thi3 matter. I have here the deed entered into between the city of Quebec and the Trans continental railway, and I may observe that a memorandum in respect to this matter was submitted by the city of Quebec to the right hon. the leader of the opposition (Mr. Meighen) when he was prime minister. Here is an extract from the preamble to the contract of 1910:
Considering that for the useful and effective operation of the said (Transcontinental) railway, the commission intends to build one or several branches of the said railway from the great bridge now building on the river St. Lawrence to connect with the harbour and in the city of Quebec, to receive or expedite by waterways the general traffic of the said railroad or other railroads, and that for the said purpose railway tracks will have to be laid along the river St. Lawrence, in the said Champlain ward, in order to utilize the wharvSs, docks, buildings, elevators and other accessories, already built or to be built later.
Considering that for the purposes above mentioned, the commission is going to build in the said Champlain ward, a station, sheds, warehouses for merchandise, workshops, and other buildings, and to acquire for that purpose lands and rights of way, necessary for the road and for the construction of said buildings.
Here now follows a summary of the engagements undertaken by the government:
1.	The commission undertakes to spend a sum of at least two millions of dollars (apart from the cost of the land to'be purchased or expropriated for the railway) to build on the said land or in the vicinity thereof a station, sheds, warehouses, workshops, et cetera. Said workshops to be the most considerable of the Transcontinental railway in the province of Quebec;
Everyone understands, Mr. Speaker, that certain of these works had to be delayed on account of the war period, and the people of the city of Quebec realized quite well that during that period immense works of im-

The Budget-Mr. Parent
portance could not be proceeded with. But now, if the railways can find money elsewhere to do work similar to this, I think it would be . in their interests to carry out those pledges already given.
It has been stated that the .province of Quebec as a whole was very much against the nationalization of railways. Part of this statement is true and part of it has no foundation of truth whatever. As a matter of fact it has always been an open question in the province of Quebec as elsewhere, but certain persons who were against the nationalization of railways seem to have arrived at other conclusions, and I am glad to 'be able to read an article from L'Action Sociale Catholique of May 3 of this year:
(Translation): Aoconding to the Hast Dominion budget as well as to the monthflv reports of the Canadian Nationail Railway Board, our State railways are in a better financial situation. We are fled to hope that before flonig the while elephant will no more be a drag on the country's Treasury.
No one will, for a moment, douibt that the greatest share in this success belongs to Sir Henry Thornton. He .placed at the disposal of our National Raiilways bis great ability, a training very seldom encountered, a great knowledge of railway matters, an unquestionable good will.
And ill is efforts have been crowned by success. Those who selected him had a very happy thought. There is no doubt about it.

If Sir Henry Thornton has really endeavoured to obtain the co-operation of the Canadian people, as he would be expected to do so as to attain success, we must say that this co-operation was not denied to him.
The French Canadian people were opposed to State ownership of railways known, to-day, by the name of Canadian National Raff ways, as they woiild be opposed to-morrow to any scheme of State ownership which would include the Canadian Pacific Railway. They have no faith in the efficiency of such a system, they are rather convinced of its dangers. Experience, pointing out, to the little success, generally of State ownership undertakings, sides with them.
They were therefore opposed to State ownership. This State ownership for reasons of irretrievable errors or otherwise was decided upon anyway. It has been for the last few years an accomplished fact.
We possess certain quadifications not understood by a great number of Canadians of different origin. Among them there is one which urges us on to begin a contest long before the others because we never lose sight of the principles upon which everything rests. Others who think themesdlves more practical, do not bother much about these principfles; facts control their actions. And as facts always proceed from applied principles, often, if they make a move, it is only long after us.

In any case, State ownership having been agreed upon, there either remained for us to make the best of it *or let the country go into bankruptcy. We unhesitatingly put our shoulder to -the wheel, and this [DOT]the mor6 willingly because of the great ability of the man appointed as head of the National Railways.
The French Canadians gave to the Board of National -Railways their full support, they put their trust in
its President. Their efforts were of some account in the improvement obtained; no douibt Should exist in that connection in the minds of the members of the National Railway Board.
We therefore have reason to expect that our cooperation will be appreciated in a still more practical way, and that if they are willing to accept our "lending a hand" at the bottom of the ladder, we shall expect also, when the opportunity presents itself to cooperate in the higher spheres.
The Canadian National railways, in 1924, had a staff of 101 officers. Out of that number, there are but two Frertdh Canadians. Moreover, if the latter hold posi tions of some importance, we have yet no one to represent us on the Board of Directors. Our numerical importance, the unhesitating co-operation we Send in the improvement of our National railways, is deserving of better treatment.

It is not a question of removals or of asking for dismissals of officials. The higher officials of the National Railways are jflaced there, no doubt, owing to their personal merits and the eminent services they render. Moreover, we do not stoop to such means.
We simply ask that when the next vacancy occurs- we have no idea when-in the Board of the C.N.R., it be filled by a representative of the French Canadian element. As no indications exist that such a thing may happen to-day or to-morrow, we have no name to suggest. If it is the intention to act fairly towards us to-morrow, it is easy to start paving the way immediately.
This is the request we address to Sir Henry Thornton. Perhaps, the thing has already been done, we have no knowledge of it. If not, it is more than time to think of it.
We would feel wounded if we were to be kept out forever from the higher spheres of the C.N.R. Board of directors.
We have a right to be there and we are able to fill the position.
With the exception of a few corrections this article represents my views very well, but the article is not well informed when it states that the board of directors of the Canadian National Railways has no French Canadian representative. For the information of this newspaper I may say that I believe both Mr. Decary and Colonel Talbot, of the board of directors of the Canadian National Railways, are French Canadians. But the remarks of this article might be amplified, and I think in fairness to my compatriots I may fairly say without fear of contradiction that, since the French Canadians represent about one quarter of the total population of Canada, the number of representatives in various offices and positions on the Canadian National Railways does not represent a fair proportion. I suggest to the government that in considering future appointments, qualified French Canadians-and we have many such- be considered. I might go further, Mr. Speaker, and apply the same remarks to the civil service. I was looking over the telephone book of the House of Commons the other day, comprising all the departments; I take it for granted that those who have
3232	COMMONS
The Budget-Mr. Maloney
telephones for their own use are those who have acquired the highest positions. Take the whole telephone book; look it over from beginning to end and see how many French names are contained therein; then compare that proportion with the population of Canada. I do not say this to raise any question of prejudice: that never entered my mind, and I hope never will.
With these remarks, Mr. Speaker, I repeat that on the whole I am quite satisfied with the proposals as presented by the government to-day, and I shall have no hesitation at all in supporting the budget. It is indeed a fact that certain industries may suffer for the present. The automobile industry may suffer temporarily, but if we consider the situation in a broad-minded way; if we realize that these industries have been over-capitalized -though it is possible that the younger men who are in charge of the industry to-day may find it harder to make that capital valuable than those who started the industry-when we take into consideration the fact that Canada is rapidly increasing in prosperity and that we are receiving immigrants in largely increasing numbers, we believe, and we think we are right in our contention, that in a short time these younger men in charge to-day, with their courage and their optimism, will find that their industries are doing better perhaps than they have ever done before. In a word, to sum up, circumstances are such that the budget means co-operation of the west with the east, Ontario being the connecting link to sell its manufactured products from the Atlantic to the Pacific.


Mr. M. J. MALONEY (South Renfrew):: Mr. Speaker, I am glad indeed of this opportunity to say a word of very hearty congratulation to my hon. friend the Minister of Finance (M!r. Robb) for the excellent manner in which he presented his budget speech of some three weeks ago. Delivered with all the urbanity which is so characteristic of the hon. minister, his speech was marked by brevity and clarity to an extent that made it indeed a treat to hear. To listen to such a clear and concise presentation was indeed a treat to me, and one which I shall long remember. Those of us who have not been in this House before, but who have followed, from without, public doings and parliamentary procedure, will remember well the budget speeches of former days which occupied, not less than an hour, as did the present one, but often two, three, four or even five hours. The present distinguished Minister of Finance has set an example to the members of this House, an example which in the interest of

time and the despatch of public business should be scrupulously followed. I have always felt that apart from the leaders of the parties, the ministers, and those directly interested in some particular matter of importance, the speeches of individual members should be curtailed, for the result would be a contraction of the altogether too prolonged sessions of this House of Commons.
On motion of Mr. Maloney the debate was adj ourned.
On motion of Mr. Motherwell the House adjourned at 10.28 p.m.
Monday, May 10, 1926