1927-02-22

SELECT STANDING COMMITTEES

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved that the names of Messrs.
Blanchard, Ilsley and Sinclair (Queens) be substituted for those of Messrs. Rutherford, Lacroix and Fontaine, on the select standing committee on agriculture and colonization; that the names of Messrs. McRae and Telford be substituted for those of Messrs. Bouchard and Stevens on the select standing committee on marine and fisheries; that the names of Messrs. Cannon and Ralston be substituted for those of Messrs. Jacobs and Ilsley on the select standing committee of miscellaneous private bills; and that the name of Mr. Bradette, be substituted for that of Mr. Telford on the select standing committee of public accounts.
Motion agreed to.

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals):	During the discussion a few days ago on the Peace river matter, a number of members of the House requested that they be provided with copies of the engineers' report in connection with that proposal. I find that the committee on public printing is not likely to meet for some time, and in view of the fact that the resolution of my hon. friend from Peace River (Mr. Kennedy) was referred to the committee on railways and canals, it is very desirable that copies of the report in question be made available for the members of that committee. I therefore move:
That rule No. 74 be suspended and that five hundred copies of the report of the engineers of the Peace River railway project be printed in English, and that seventy-five copies be printed in French.
Mr. T. L. CHURCH (Toronto Northwest):: I should like to find out from the minister how this committee was appointed, and whether the forty-eight hours' notice which the rules require for such a resolution has been given.


Mr. SPEAKER:: I understand from the
Clerk that the committee has been properly constituted and that it will meet to-morrow.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Mr. PETER McGIBBON (Muskoka-
Ontario): I beg to present a number of petitions praying for the transfer to Alberta of its natural resources without restrictions or limitations as to its complete control of its educational or other affairs.
Civil Service Salaries

[Stage Direction]
Hon. J. H. KING (Minister of Health) moved for leave to introduce Bill No. 105 to amend the Food and Drugs Act, 1920.
Sir GEORGE PERLEY:: The minister
might give us an explanation of this bill.


Mr. KING (Kootenay):: The Food and
Drugs Act, as is well known, was enacted in 1920, its object being to protect the purchasing public from infractions of the law, and, more particularly, to prevent adulterations of food and drugs. It has been in operation since that year and has accomplished a very considerable amount of good. The members of the staff desire to have a few amendments made to certain clauses in order to strengthen the act and make it more useful. These sections can be discussed in committee and explanations given at the time.
Motion agreed to and bill read the first time.



PRIVATE BILL


[Stage Direction]
Bill No. 66 (from the Senate) to incorporate Gatineau Transmission Company.-Mr. Fontaine.

[Stage Direction]
On the Orders of the Day:
Mr. D. M. KENNEDY (Peace River):: I should like to ask the Minister of Agriculture when we may expect a new Live Stock Act to be introduced, an act providing amongst other things for facilities in connection with cooperative marketing.


Hon. W. R. MOTHERWELL (Minister of Agriculture):: Unless something quite unexpected occurs, we hope to introduce either a consolidated Live Stock Act or an amended one some time during the next two or three weeks.



CIVIL SERVICE SALARIES

[Stage Direction]
On the Orders of the Day:
Mr. L. J. LADNER (Vancouver South):: Is it the intention of the government at the present session to bring about a salary revision for the civil service? I ask this question because of insistent inquiries made in different parts of the country and an insistent rumour that it is likely that this revision may be carried over until a subsequent session.


Hon. FERNAND RINFRET (Secretary of State):: The matter is under consideration.



CANADA GRAIN ACT

[Stage Direction]
On the Orders of the Day:
Mr. M. N. CAMPBELL (Mackenzie):: I
should like to ask the Minister of Trade and Commerce if he can give the House any information as to when the bill to amend the Canada Grain Act may be .placed before parliament.


Hon. JAMES MALCOLM (Minister of Trade and Commerce):: The bill is receiving consideration and it will be introduced in plenty of time for full discussion before the end of the session.



FLAG OVER CANADIAN LEGATION- WASHINGTON

[Stage Direction]
On the Orders of the Day:
Thomas Langton Church: What flag does the government propose to have fly over the new separate Canadian embassy at Washington on account of Canada's new status as a nation?


Hon. ERNEST LAPOINTE (Minister of Justice):: The same flag as is flying over
the Canadian building in London.



RETURNED SOLDIERS' INSURANCE

[Stage Direction]
On the Orders of the Day:
Hon. J. H. KING (Minister of Health):: In reply to a question asked by the hon. member for Vancouver-Burmrd (Mr. Clark) on Friday last, I would inform him and the House that resolutions growing out of the Winnipeg convention of the British Empire Service League and some one hundred in number, including the resolution he spoke of, namely, insurance for returned soldiers, are under consideration in the department at the present time.



WASTE OF NATURAL GAS IN ALBERTA

[Stage Direction]
On the Orders of the Day:
Mr. D. F. KELLNER (Athabaska):: I should like to ask the Minister of the Interior if anything is being done to stop the wastage caused by the escape of natural gas from oil wells in Alberta.


Hon. CHARLES STEWART (Minister of the Interior):: A great deal has been done to stop it. It would take too long to answer a question of this character. If my hon. friend will put a question on the order paper, I shall be glad to give him full information.

The Budget-Mr. Young (Weybum)



THE BUDGET


[Stage Direction]
The House resumed from Monday, February 21, 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 Mr. Coote.
Mr. E. J. YOUNG (Weybum):: Mr. Speaker, I am not inclined to favour the amendment moved yesterday by the hon. member for Macleod (Mr. Coote). We have to-day a tariff board set up for the express purpose of examining into all applications for changes in tariff. We have been insistent and will continue to insist that no changes be made in the tariff until they are examined into and reported upon by that board. It would be a grave mistake on our part to begin now to make exceptions to that rule. If we should insist to-day on the Minister of Finance (Mr. Robb) making certain reductions in the tariff without reference to the board, where would we be if some future Minister of Finance taken from the other side of the House should begin to make increases in the tariff without reference to the board? What could we say to him? We would rot have a leg to stand on.
I am opposed to the amendment for another reason. I do not consider it good strategy. It may be a spectacular thing; it may be a heroic thing to undertake to demolish a fortress with a spattering fire of musketry, but it will not get one very far. I think Napoleon's great rule of warfare was: Always be stronger than the enemy at the point of attack. But the proposed amendment of my hon. friend reverses that rule and proposes to attack the tariff where it is strongest, to attack it at the point where it increases the cost of living. If he had undertaken to direct his attack at the point where it increases the cost of production, I think he could have made out a stronger case. I had the matter very aptly put in a letter which I received not long ago from a friend who said, The Canadian industrial coach is well able to bear the burden of taxation if you put the load on the axle where it belongs; but if you put the load on the tops of the wheels, it will act as a brake and tend to stop the coach. To my mind the greatest evil of the tariff to-day is that it puts the weight of taxation on the tops of the wheels and retards industrial progress. That is the point at which we should attack it. For these
reasons I say I am not in sympathy with the amendment moved by the hon. member for Macleod.
Perhaps the most notable feature of the budget is the complete absence of any changes in the tariff. All things considered, I believe this was a wise plan. The tariff board is now functioning. It is bringing to light much valuable information in regard to the tariff which has not hitherto been available, and because of the existence of the board we are learning many things about the tariff which we never knew before. It is the part of wisdom that we should wait for the findings of the board' before attempting to interfere with the tariff, for the most outstanding fact that has been revealed in the discussions before the board is this, that no changes, either upwards or downwards, can be made in the tariff, the effects of which changes can be confined to any one industry, but every such change will be felt by every industry in the country.
It is imperative that before we undertake to make any changes in the tariff we have the report of the board as to just how far-reaching those changes will be. Some men have argued that the board has already reported on a number of cases, and they ask: "Why does the government not act in regard to these cases?" The answer is very simple. It is true that the board has reported on some twelve or thirteen cases, but those reports have only recently been handed to the Minister of Finance. They have not yet reached members of this House. Any changes made in the tariff and based on these reports will have to be decided upon by this House. The tariff advisory board gathers the information and submits it to the minister. Based on that information, the minister will make recommendations to the House, but we the members of this House are the men who will have to decide whether or not those changes are to become law. We are the men who will have to defend those changes before the people of the country, and I for one do not purpose going before the electorate and defending any change in the tariff either upward or downward by saying: "We made this change because the minister recommended it on certain evidence that he received from the tariff board, but what it was, I do not know." Before we undertake to sanction or to make any changes in the tariff we must have before us the reports of the board and the evidence on which those reports are based. It would cost the government a little more money, I know, to print the evidence, but they have already gone to considerable expense in creating the board to gather this
540	COMMONS
The Budget-Mr. Young (Weybum)
information, and of keeping a Hansard reporter there to record the evidence, and the only additional expense would be the cost of printing and distributing the report to the members. To-day we are in receipt of printed copies of all the evidence taken before the Senate divorce committee. Nobody reads it: we all throw it into the waste paper basket as soon as we receive it. That is a service that could very well be dispensed with, and the money thus saved could be devoted to the cost of printing the evidence taken before the tariff board and putting it into the hands of the members of this House.
But while it is important that we refrain from making changes in the tariff until such time as we have these reports before us, it is of infinitely more importance that we see to it that nobody else makes any changes in our tariff without our knowledge and consent. It is infinitely more important that we so frame our tariff laws that no man or body of men other than this House shall have power to say what our tariff shall be. I wish to call attention for a moment to section 47 (a) of the Customs Act, which reads as follows:
If at any time it appears to the satisfaction of the Governor in Council on a report from the Minister of Customs and Excise, that natural products of a class or kind produced in Canada are being imported into Canada, either on sale or on consignment, under such conditions as prejudicially or injuriously to affect the interests of Canadian producers, the Governor in Council may, in any case or class of cases, authorize the minister to value such goods for duty, notwithstanding any other provisions of this act, and the value so determined shall he held to be the fair market value thereof. *
That is section 47 (a) of the Customs Act. In a word, it gives the Minister of Customs and Excise power to place an arbitrary valuation on certain classes of goods if, in his opinion, the importation of those goods is injurious to Canadian interests. I ask you to pause for just a moment to consider the full significance of these innocent sounding words. Let me read them again:
If at any time it appears to the satisfaction of the Governor in Council on a report from the Minister of Customs and Excise, that natural products of a class or kind produced in Canada are being imported into Canada, either on sale or on consignment, under such conditions as prejudicially or injuriously to affect the interests of Canadian producers

Last session I sat in this House day after day, week after week and month after month, from January to July, listening to hon. gentlemen opposite argue that all such importations were injurious to Canadian producers. Now let us suppose for a moment something that actually happened. Let us suppose that hon.

gentlemen opposite, who hold those views were to get into power, which they did, how hard would it be to persuade a minister chosen from their ranks that such importations were injurious to Canadian producers. All that it would be necessary to do would be to produce a customs return showing that imports were being made, and then what would follow? Read what the act says:
The Governor in Council may, in any case or class of cases, authorize the minister to value such goods for duty, notwithstanding any other provisions of this act.
In other words, the Minister of Customs is there given power to set aside the whole Customs Act and place the tariff as high as he likes. Those are the provisions of section 47a of the Canadian Customs Act, and that clause was inserted by the parliament of Canada in the session of 1922. Was there ever sulch an abject surrender of the powers of parliament? Parliament when it inserted that section in the act practically said to the minister: We are no longer capable of managing our own affairs; we are no longer worthy to be free; do you manage our affairs for us, and do with us as you will.
I wish to call attention to another section of another act, section 6 of the customs tariff, commonly known as the Dumping Act. It reads as follows:
In the ease of articles exported to Canada of a class or kind made or produced in Canada, if the export or actual selling price to an importer in Canada is less than the fair market value of the same article when sold for home consumption in the usual and ordinary course in the country whence exported to Canada at the time of its exportation to Canada, there shall, in addition to the duties otherwise established, be levied, collected and paid on such article, on its importation into Canada, a special duty (or dumping duty) equal to the difference between the said selling price of the article for export and the said fair market value thereof for home consumption; and such special duty (or dumping duty) shall be levied, collected and paid on such article, although it is not otherwise dutiable.
Provided that the said special duty shall not exceed fifteen per cent ad valorem in any case:
Then, further down, is a provision which says that such special duties shall not be imposed unless the Canadian producers are able to supply the market.
Now what happened. I have here a copy of order in council P.C. No. 1088, dated Government House, Ottawa, Tuesday, July 13, 1926, which reads as follows:



PRESENT

[Stage Direction]
His Excellency
The Governor General in Council-
Whereas the Acting Minister of Customs and Excise reports that, from information in his possession, it is established that fruit and

The Budget-Mr. Young (Weybum)
vegetables of a class or kind produced in Canada are being imported into Canada from glutted markets in the United States at values such as prejudicially or injuriously affect the interests of Canadian producers;
Therefore His Excellency the .Governor General in Council, under and in virtue of the provisions of section 47a of the Customs Act, is hereby pleased to authorize the Minister of Customs and Excise to value such fruit and vegetables for duty, notwithstanding any other provisions of the Customs Act; the values so determined to be held to be the fair market value thereof.
So section 47a of the Customs Act was set in motion, and let us see what happened. The order in council was passed on the 13th day of July, 1926, and I have here a letter dated July 29, 1926, some sixteen days after, from a wholesale fruit and vegetable dealer, who says:
Under the authority of section 47a of the Customs Act and by order in council No. 1088 July 13th, the hon. the Acting Minister of Customs and Excise values certain fruit and vegetable products when imported from the United States of America, as follows:
Then he gives a long list of vegetables, and the valuations per pound-tomatoes, cucumbers, cabbage, celery, onions, potatoes, asparagus, carrots, beets, lettuce, spinach, cauliflower, peaches, raspberries, and, a few days later, pears, prunes and plums. The letter goes on:
The Canadian jobbing trade, as well as the consumer, is always willing to give preference to Canadian-grown fruits and vegetables at reasonable prices. In the past we have often passed up American goods at cheaper prices owing to certain help being needed in British Columbia. I have never known of vegetables being imported into western Canada when Canadian-grown vegetables were able to fill the demand. To-day-
That is sixteeen days after the order in council was passed.
To-day Ontario is not yet shipping tomatoes and British Columbia is unable to take care of the demand at $1.75 per crate, yet American tomatoes which on July 13th only cost around 50 cents a crate f.o.b. Tennessee are raised to a value of 85 cents a crate when they could do no harm to Canadian-grown tomatoes nor help the Canadian farmers, and is a straight tax on the consuming public. This means that all the customs would have collected would be 30 per cent of 50 cents-
The duty on tomatoes is 30 per cent:
-or 15 cepts a crate. There are 1,000 crates in a car, which would make the duty $150.
Under the new regulations, the duty is raised to thirty per cent of 85 cents plus fifteen per cent of 85 cents as penalty or a total of 38 cents a crate or an addition of $230 per car.
Now, Mr. Speaker, what was done? An order in council was issued giving the minister, under the authority contained in clause 47a of the Customs Act, power to place an
arbitrary valuation on tomatoes. He did so, and placed the value at 85 cents a crate when tomatoes were being bought in the United States for 50 cents. In so doing he raised the duty from 30 per cent of 50 cents, which is 15 cents, to 30 per cent of 85 cents, which is 254 cents. But the minister did not stop there. On top of all that he imposed the dumping duty. Section 47a of the Customs Act gives him power to put on an arbitrary valuation. Where did he get the power to impose the dumping duty? Not in the statutes of Canada. The dumping duty section specifically states that it shall not be imposed unless dumping is -being practised. That is to say unless goods are being sold for importation into Canada at a lower price than the price at which they are being sold in the country from which they -come, and the minister, after increasing the duty, turned round and imposed this dumping duty. What was the effect? The regulations under 47a and the order in council No. 1088, gave him power to increase the duty to 254 cents. If dumping had been going on he could have increased the duty 15 per -cent ad valorem. That would -have been at the very most 274 cents. He actually increased it to 384 cents. He actually increased the duty on tomatoes from 30 per cent to 764 per cent a straight increase of 464 per cent. How did he do it? He did it by pyramiding section 6 of the customs tariff on top of section 47a of the Customs Act. I inquired of the Customs department why that extra fifteen per cent was imposed, and they said that that was penalty. Penalty for what? Penalty for having an arbitrary valuation placed on your goods by the Customs department. Who gave the customs officials of this country authority to impose a penalty on anybody who was not violating the laws? They told me that dumping was going on. I undertook to find out whether it was going on or not and to find out what evidence there was that it was being practised. I went to the Minister of Customs and asked him. He reminded me that the Liberal party was not in power at the time and that the Conservatives were responsible. He referred me to his private secretary. I went to the private secretary and he referred me to the deputy minister. I went to the deputy minister and he referred me to somebody else. I went to that somebody else, and he referred me to still another. I think I went to every man in the customs building, except perhaps the policeman and the janitor, and I put the same questions to everyone. "What evidence had you that dumping was being practised last July when you imposed
542	COMMONS
The Budget-Mr. Young (Weybum)
the dumping duty?" They all made the same answer:	"Plenty of evidence", but when I
asked further: "Might I see the evidence?" they all began with one accord to explain that the evidence would be found in some other office. At last I found a man who told me he thought the evidence could be found in the Department of Agriculture. I wended my way to the Department of Agriculture and asked them if they had any evidence that dumping was carried on last July, and they said no, they had no evidence, but that they thought they knew where I could get it, and they put me in touch with the paid secretary of a growers' association who has an office in this city. I got the gentleman on the telephone and asked if he had any evidence that dumping was going on at the time referred to. He replied that he had abundant evidence. I said I would like to see it. We arranged an interview for the next morning. The next morning I screwed -my courage to the sticking point and went to interview in his own den, the man who dictates to the people of Canada what taxes they shall pay. He vas not such a formidable looking man when l met him, but was a very genial unassuming looking fellow, apparently quite unconscious of the power that he wields. He said, "You want some evidence of dumping", and I said "Yes", and he laid before me a number of resolutions passed by Canadian fruit growers associations in different parts of the country, asking that the duty be increased, on their products, I read them over carefully and I said, "These are very interesting, but you promised me some evidence of dumping", He said, "Oh, yes", and handed me a lengthy telegram from some marketing agent out in British Columbia, stating that the United States that year expected to harvest a very large crop of fruit, and Canadian growers were afraid that some of this fruit might find its way into the Canadian market, the telegram asked that the government take some steps to keep it out. I said, "This is very interesting, but you promised me some evidence of dumping". Now, Mr. Speaker, he had not one shred, not one scintilla of evidence of dumping. There was not even a charge of dumping, and finally he said, "We did not need any evidence, for we knew it was going on". That was enlightening. I then- asked him how he proceeded in the matter. The procedure, was very simple. He went to the Acting Minister of Agriculture. I am sorry that the acting minister has left his seat. The acting minister made representations to the Acting Minister of Customs-I am sony he is not in his seat. The Acting Minister of Customs made represent-

ations to his acting colleagues. I do not think any of them are in their seats. The acting colleagues got busy, and acted quickly in the matter. They passed order in council 1088 and all the rest was done automatically. How they arrived at the figure of 85 cents a crate as the fair market value of tomatoes in Tennessee last July, I do not know, and it makes no difference. Under section 47a as it stands, he could have placed a value of $85 a crate and still have been within the law. There is no limit. I think probably he arrived at S5 cents on the same kind of evidence as that on which he arrived at the fact that dumping was going on. It was John Bourinot who made himself famous by writing that book How Canada is Governed. I believe he could make himself famous in heaven if he would come back now and write the sequel to it. Let us review now briefly what happened. Certain tomato growers in Canada who were receiving a good price for their early varieties of tomatoes, but whose main crop was not yet ready for the market, being unable to supply the early market, and realizing that as soon as the main crop of Canadian tomatoes came on the market the price would drop, as it should drop, conceived the idea if they could shut out American tomatoes from the early Canadian market, they could store up Canadian appetites for their future use, and that by so doing, when the main Canadian product did come on the market the people would be so hungry for tomatoes that they would snap it up regardless of price. I do not know how wealthy these people are, but they are wealthy enough to keep a paid secretary in Ottawa to convey their wishes to the government. This secretary whispered into the friendly ear of a sympathetic government and section 47a of the Customs Act and the order in council passed under it did all the rest, and they increased the duty on tomatoes from 30 to 76i per cent.
My hon. friend from Vancouver Centre (Mr. Stevens), who was Acting Minister of Customs at the time, had much to say last session about the people defrauding the Customs department. I wonder if he will have anything to say this session about the Customs department defrauding the people when he himself was at the head of it. To-morrow, Mr. Speaker, I intend to move for a return showing in how many cases the Customs department has been compelled to disgorge the dumping duty after collecting it.
It used to be charged that our tariff was made behind closed doors, that certain giants of rapacity would call on the Minister of Finance in his office and tell him what they required in the way of tariff protection; and

The Budget-Mr. Matthews
it was done. The Liberal government a year ago undertook to put a stop to all this and appointed the tariff advisory board. Henceforth all applications for changes in the tariff were to be made before the board and heard in broad daylight, and were to be passed on by the tariff board before being submitted to parliament. But "what boots it at one door to make defence and at another to let in the foe?" No sooner had my hon. friends opposite got into power than they discovered a secret door through which the enemy could be admitted. The hon. member for Vancouver Centre, at that time Acting Minister of Customs and Excise, opened this side door, which is No. 47a, and allowed the enemy to come in. I am not arguing, Mr. Speaker, for a higher tariff, I am not arguing for a lower tariff; I am arguing for parliamentary control of the tariff. Under such an arrangement as this by invoking section 47a of the Customs Act in conjunction with clause 6 of the customs tariff, it is possible for officials to do anything they like with the tariff. I am arguing for a return to parliament of the power which rightfully belongs to it-power to say what our customs duties shall be. It was never contemplated that under the dumping clause the special duty should be more than 15 per cent, but by pyramiding one on top of the other they have actually put on a special duty of 46i per cent.
I urge on this House and on the government the necessity, first, of repealing section 47a of the Customs Act and, secondly, of making provision that the dumping clause shall never again be applied until satisfactory evidence has been produced before the tariff board that dumping actually exists.
Mr. GOTT:: Mr. Speaker, will the hon.
gentleman disclose the author of the letter that he has read *to the House?


Edward James Young: The letter was
written by a wholesale dealer in western Canada, but I have not had time to get his permission to attach his name to it. However, the facts in it are all borne out by official documents to which my hon. friend can refer.


Eccles James Gott: In the course of his remarks
my hon. friend asked a question which I should be very pleased to answer with his permission.


Edward James Young: Yes, answer
anything.


Eccles James Gott: The hon. member asked what effect this order in council had. In the riding
which I have the honour to represent it meant the immediate consumption of Canadian-grown produce by Canadian people.


Edward James Young: I think we see
the effect before us.


Mr. R. C. MATTHEWS (Toronto East Centre):: Mr. Speaker, may I ask your indulgence for a brief space in order that I may make a few observations on the subject now before the House, namely, the budget speech delivered on Thursday last by the hon. Minister of Finance (Mr. Robb). I congratulate the minister on his review of our financial position. His deliverance has the great merit of brevity and lucidity. To deal with the finances of Canada with such completeness in a brief address is in itself an achievement, and one upon which I have much pleasure in offering him my congratulations.
The minister takes credit for the present indications of a revival in trade and commerce. It is quite natural perhaps that he should do so. I do not know, however, that in assuming that credit the minister can lay claim to very much originality. If he inquires carefully he may find that other ministers of finance in their day have not been too modest to suggest at least that similar credit belonged to them. It is probably true there is a feeling of optimism abroad, but I am not able to follow the logic that this has been brought about by governmental achievement. Every banker, every publicist and every other man of practical knowledge of affairs, knows that through the efflux of * time and through much tribulation on the part of our trading and manufacturing community we as a country have happily emerged at last from post-war deflation; that stocks of merchandise have been liquidated and that the writing off period has finally passed. The great merchant class is now buying commodities, carefully it is true, but new and fresh stocks are in demand, not because this government has brought about the condition, but because the slow process of liquidation is virtually complete and a new demand for merchandise has at last sprung up. This is a condition to be desired, and is the inevitable consequence of drastic writing down and of the unprofitable era of trade through which we have recently passed.
Our deflation period was a long and trying one, longer than that of our neighbours to the south. Our early entry into the war, and our loss in manhood, which was high in comparison with that of the United States, made it impossible for us to have the quick recovery

The Budget-Mr. Matthews
which they enjoyed. That the tide has not really more than set in is shown by the current loans of our chartered banks. Their current loans and discounts at the end of December, 1926, amounted to $970,000,000; at the end of December, 1925, they amounted to $903,000,000-an increase of $67,000,000. This increase, so far as it is an indication, shows that there is some expansion in business, a little over seven per cent. But it is to be observed that the United States consular offices are still crowded with applicants who desire to leave the Dominion. Our savings deposits on December 31, 1926, amounted to $1,372,000,000, and our deposits not bearing interest to $608,000,000. With this general condition facing the Dominion, the resumption of business on a scale not experienced in recent years, was the sure effect of a certain cause, and only governmental action of an alarming nature could have prevented it. Added to this was the gratifying fact that the country in 1926 enjoyed a harvest of unusual quantity and value.
Now, Mr. Speaker, I should like to say a few words on the question raised by the hon. member for West Calgary (Mr. Bennett) in regard to the liquidation of our national debt. I approach this subject with a good deal of respect because it is of such magnitude and importance to Canada. I think you will agree that it should be dealt with in the most comprehensive and, at the same time, the most careful way. The minister was good enough to make a statement in regard to his prospect of handling the capital obligations of the country maturing in 1927. He pointed out that he hoped to be able to redeem the $8,000,000 four per cent three-year notes in cash, and he stated further in regard to the $29,000,000 five and a half per cent renewal loan maturing on November 1 of the current year that our finances permitting, he would redeem at least a portion of this loan in cash and the balance would be refunded. The loan of $63,000,000, five and a half per cent tax-free victory bonds, maturing on December 1, 1927, he will refund at a lower rate of interest, the minister presuming of course, that the present ease in money will continue until such time as he makes his refunding loan.
But the minister stopped at that point. He did not take the House into his confidence as to what his intentions are, if he has any intentions, in respect of loans maturing within a measurable period, and which are of great magnitude. The government may say that the time is not yet at hand for any particular worry or action in this regard, but I would respectfully point out that 
in recent months inquiries have been general concerning this matter. Surely it is not the intention of the government to wait until the year of maturity of these important loans to outline to the House and to the country what its intentions are.
In order that the House may be apprised of the importance of this matter I may specify the amounts of the several loans and the dates of maturities:-
Year	Per cent	Amount1927	51	$ 29,068,4001927	51 Victory	63,437,2501928	5	53,000,0001931	5	52,931,5001932	5 1	73,325,1501933	51	446,658,8001934	51	511,910,6501936	41	40,000,0001937	5 War	90,166,9001937	51	236,298,850
These amounts total $1,596,797,600. Here we have this vast financing facing us, and there may be even further maturities within this period of which I have not the particulars. It is true that some of these bonds will not liratlire until 1937, but from 1931 to 1934 inclusive the amount that must be taken care of is $1,084,826,200. When you consider that within the next few years we shall have over one billion dollars coming due, with few if any sinking fund provisions operating to reduce the debt, and without any plan_ of amortization offered, the matter is certainly not one for congratulation.
A situation not altogether unlike this one, but of course of less magnitude, was found to exist three years ago in the province of Ontario. Not only were the annual deficits so large as to alarm the province, but the great bulk of the debt, which had been tremendously increased in recent years, was in a state somewhat similar to the condition of _ Canada's obligations of which I am now speaking. There were no sinking funds, nor was there any plan calculated to effect retirement. The then treasurer of the province, after consideration, decided to make a survey of the whole matter and he asked the Bankers' Association as well as the investment bankers to name an expert each. These gentlemen, together with the government accountant, made a survey of the whole debt of Ontario, with a view to its ultimate redemption, and they brought in proposals to retire the debt within forty years, which proposals the government adopted. The treasurer, speaking in the legislature, referred to the redemption plan in the following terms:-
I believe it is the most important thing that has ever come before this legislature, and will have a very large effect. It will enable the

The Budget-Mr. Matthews
province to save over $128,000,000 during the next forty years. It will be a positive, definite advantage in handling provincial finances.
If some such plan were important for the province of Ontario, surely it is equally important for the Dominion. In regard to future loans the provincial treasurer made this statement:
I have dealt with the present provincial debt. We are making provision to pay this off, but in the future all loans placed by the province must provide for a retirement on the instalment annuity basis, or on a sinking fund basis.
It will be apparent that the Dominion likewise must presently face its debt liquidation. Our financial and economic security and confidence demands the formation and the adoption of a policy covering the whole problem of debt retirement, and the question as to how this debt shall be met, and within what period. A knowledge of this matter would give to industry and finance a basis on which to formulate their own plans.
The Minister of Finance has spoken of retiring certain bonds in the present year. As to his proposals for 1927, I have no criticism to offer, because he anticipates the redemption out of a surplus of several million dollars. But the debt problem remains unsolved; it is not grappled with. I submit, it would be better financial policy to make a general arrangement for debt retirement, and announce as Ontario has done, than tc go on and overtax the people, retiring a little here and a little there from year to year as circumstances may warrant. Instead of formulating a policy of its own and grappling with the problem, the government has left it to this side of the House to crystallize this matter into definite proposals. The first proposal that has come forward has been from the financial critic of this side, the hon. member for West Galgary. He at least has given the question his close attention and has made a proposal that must appeal to the imagination of the country at large. Whether his plan is feasible in its entirety, or just as he outlined it even in general terms, I suppose few men in this country would be prepared at the moment to say. But there is a good deal of merit in it, and with modifications it may be capable of at least partial adoption. It does aim at a definite goal, namely, the complete retirement of Canada's national debt as it exists to-day, and on that basis alone, it is worthy of the most careful examination and consideration. It not only has a great national financial achievement in view, but it embodies a patriotic appeal, and if those institutions which are most directly concerned will view the matter in this light, it is possible that something may eventuate which will be of enormous advan-32649-35



REVISED

[Stage Direction]
tage to our whole financial fabric. At the moment, in comment with others who have heard of this plan only within the last few days, I am not prepared to give it full approval, but I am sure that the country will give the hon. gentleman who proposed it credit for a thoughtful and interesting proposal, and for a patriotic endeavour to deal with the great problem to which the government apparently has given little or no consideration. The outstanding fact is that the ultimate redemption of the national debt is a vital question. At least a billion dollars should be paid off in the next forty years, which would mean I am told a yearly payment of something like $10,000,000.
The government also point with pride to certain reductions in taxation. This relief as far as it goes is welcome. Other countries are following the same course, and the reductions now proposed are only an indication of the general tendency of government finance. The income tax was instituted as a war measure in 1917. The war is over but the capital debt remains, and the ministry feels obliged to proceed with caution in doing away with this plan of taxation. Whether we agree or do not agree that Canada's income tax is a wise and necessary form of extraction, there are one or two facts upon which there should not be much difference of opinion. The first one is, that if this tax is to remain it should be enforced. The act makes it obligatory upon certain persons to pay taxes. Every resident of Canada to whom its provisions apply should be under the necessity of complying with this act. The enforcement should make every citizen who is assessable contribute his share as laid down by the statute. If latitude is allowed to individual discretion it would seem that the revenues must suffer in consequence. Is it reasonable to suppose that all taxable persons on April 30 of every year will make to the government a full and complete statement of all items of income received from any source for the prior year ending December 31? If it is an assured fact that without exception those assessable will do so, well and good, but I do not know of any country where such scrupulous care would be used by the population who are called upon to perform what many describe as a very disagreeable function, that of paying taxes. Perhaps we can learn, in this as in other matters, something from Great Britain where many years of experience with the income tax has taught them not to leave this matter largely in the hands of those who are to pay income taxes, but to collect at the source. This withholding of the tax at the instance of the government assures the country

[Stage Direction]
The Budget-Mr. Matthews
[Stage Direction]
of its proper collection, and all persons are treated alike in so far as they are involved in the necessity of contributing to the government's finances in this way. The tax is made compulsory and evasion is practically impossible. Of course, Mr. Speaker, I am well aware that in many respects, as for instance in the case of the salaried man, and company directors and the shareholders, there is compulsion in Canada perhaps equal to that in England or in the United States, but in its broader application the tax is left in a large measure to the honesty of those making the returns. This is not a phase of the subject that one can reason to definite or accurate conclusions to be expressed in dollars and cents, but, nevertheless, one does feel that if there were no escape from the payment by those properly assessable the rates would not be as high as they are to-day to ensure the amount of money that is now collected.
Is it not a fact that in the collection of this tax the government follows the lines of least resistance, and confines its greatest efforts to those whose incomes are a matter of record? That is the impression that is abroad, for reading a quotation in the Ottawa Citizen, of February 21, I find the following statement copied from the Vancouver Province:
The federal income tax for the last fiscal year yielded $56,197,056, according to a report made by the Department of Finance at Ottawa. The various provinces paid as follows:
Ontario	 $26,539,342
Quebec	 18,281,878
British Columbia	 4,150,852
Manitoba	 3,423,623
Alberta	 1,445,075
Saskatchewan	 872,761
New Brunswick	 712,187
Nova Scotia	 693,403
Yukon	 40,503
Prince Edward Island	 37,428
n The returns show that Ontario paid nearly half the tax, and that Ontario and Quebec together paid four-fifths of it. British Columbia, the third province, paid something over six per cent. It is worth noting that British Columbia paid "nearly as much income tax as Manitoba and Saskatchewan together, although our population is not much more than half theirs, and that we paid three times as much as the three maritime provinces, whose population greatly exceeds ours.
If these figures mean that our prosperity here on the coast was proportionately greater than the prosperity of the prairie provinces, or the maritimes, we should have no complaint to make. But it scarcely means that. It means on the contrary, that we, being more highly industrialized, have larger payrolls and therefore more people who are shining marks for the shafts of the income tax collector. As a matter of fact, the income tax of Canada is paid almost entirely by the people of the cities whose incomes are easily ascertainable.

If this is true, if the tax lacks universal application, that application should either be put into force or the tax done away with. Canadians should be treated alike. I believe they do want to dhare their country's burden according to their ability to do so, if they feel they are getting a square deal.
Dr. J. C. Hemmeon of the Department of Economics of McGill university, speaking before the Professional Institute of the Civil Service in Ottawa last night, is reported in the Journal to have said:
It is a little strange, that when our income tax was the same as the United States', they raised thirty times as much from this tax as we did in Canada.
Moreover, in the United States, all municipal bonds, or debentures as we call them in this country, are exempt from federal taxation. What the total of such securities would be, I have no idea; it would be a very difficult thing to calculate; but certainly it runs into the billions, and all those securities issued anywhere in the United States are, I understand, free from federal income tax. Canada has the advantage in that incomes received from all bond or debenture issues are taxable with the exception of those received from several federal bond issues Which will mature within the next ten years.
In the second place, if the tax is to remain, the rates should be lowered. In comparison with other countries and particularly with our neighbour, the United States, our rates of taxation on medium incomes are very excessive. The adjustment of -rates in 1926 had the effect of increasing the exemption and lowering the tax on comparatively small incomes. The particular point- that I wish to make is that a general decrease in the income tax schedule and the enforcement of the provisions of the act, wtould not necessarily involve a diminution in the amount of money received. Rates would be lower, and >if the tax were collected at the source, every taxpayer would be treated the same as every other, according to his responsibility. I am sure the government would be surprised at the happy results to the federal treasury.
As an example of this, it is well known to the Minister of Finance that the Secretary of the Treasury of the United States made in 1926 very substantial reduction in income tax rates, on the assumption that a scientific revision would not only result in satisfaction to the people, but would induce many who had exercised every possible device to escape income tax, to change their attitude when they found that ithe government had made drastic reductions. They would discontinue evasion and make pajrments according to the revised provisions.

The Budget-Mr. Matthews
So, it was with very special interest that the outcome of Mr. Mellon's experiment was awaited, and on January 26, 1927, the results were announced. These proved that, as a prophet, the Secretary of the Treasury had been vindicated. The collections for the year increased from $1,825,000,000 in 1925 to $2,172,000,000 in 1926, although the rates of income tax had been substantially reduced. There are those who are always ready to say that if you reduce our very high income tax rates, you will necessarily reduce the amount Collected. The experiment in the United States has not justified such a belief. On the contrary, it has shown that as a result of the very drastic reduction made prior to the collection of 1926 taxes, $346,000,000 more was paid in income tax money in 1926 than in 1925. This, in the face of the reduction in rates by congress early last year, was considered to be a most remarkable result.
The Secretary of the Treasury had told congress, and had emphasized the fact, that within reasonable limits reduced rates upon scientific lines would produce greater revenue. If levies were cut down to a sensible, peacetime basis, the tendency to evade taxation would diminish and the result would be increased income to the government. The figures completely support that theory, and so, Mr. Speaker, I venture to say that the same result could be achieved in this country. If evasions were stopped and if the rates were reduced, you would find surprising results and a more general approval of this particular tax, because every man would feel that he and his neighbour were both obligated to pay according to the amount of income they received.
There is just one other matter to which I would like to refer, and that is relief from income taxes of those public-spirited citizens who are giving of their means for carrying on work to the advantage of those who are less fortunate financially and who need either government or private assistance. Such relief, it seems to me, might well be instituted to the extent of contributions to hospitals and educational institutions. This country should not be able to afford to place a specific fine on largeness of heart. There are thousands of our citizens who are in need of hospital treatment and who cannot pay for it, and their good-hearted neighbours are coming forward and placing at the disposal of hospitals and other institutions funds that make it possible for them to help the poor and needy. In some cases gifts are withheld or diminished in size because of dissatisfaction over the application of the income tax to such gifts. On this account it is becoming more difficult
32649-35i
to realize from taxpayers the necessary amounts to carry on educational and charitable work.
The purposes of relief work have such a human appeal that those who do not pay income tax could not make any objection to the relief of the taxpayer who is willing to make his contributions. It is a fact to-day that the beneficent work of hospitals cannot be carried on without enormous private contributions. The demand for relief from income tax on contributions made to charitable institutions is widespread throughout the country. Its application would be simple and easy of control and would be a wholesome recognition to men and women who are to-day concerned in giving, in many cases until it hurts, to services that are for the general public welfare.
The United States amended its revenue act in 1926 to permit deductions from incomes of contributions such as gifts to the state itself, or to charitable, scientific, literary, educational, and other specified purposes up to, I think, 15 per cent of the taxpayer's net income. McGill university six years ago made an appeal for several millions, and twenty-four hundred subscribers paid $100 or more. The Toronto General hospital is presently appealing for $2,500,000. The Sick Childrens' hospital is a most worthy institution and is truly national in scope, and those who support it by voluntary gifts, as in other such cases, are obliged to pay income taxes on their contributions.
I am informed that appeals for funds for large institutions in Toronto this year will be made to the extent of $4,500,000. The canvassers are met daily by income tax objections. Doubtless subscriptions would be greatly increased if donations, properly limited as to application by the department, were excepted. This matter was referred to earlier in the debate, and I hope that the Minister of Finance will see his way clear to make such amendments to the Income Tax Act as the United States has done, to cover the urgency of this situation.
These observations, I have tried to make, Mr. Speaker, in a helpful or constructive spirit. I have not criticised for the sake of criticism. We should address ourselves to Canada's great problems in a larger way, in the hope that good may accrue to the enduring benefit of all the people.
Mr. J. A. GLEN (Marquette):: Mr. Speaker, like most of the other speakers in this debate, I should like to congratulate the Minister of Finance (Mr. Robb) on the presentation of his budget. I should like to congratulate
The Budget-Mr. Glen

him, in the first instance, on something which I hope to emulate in my remarks, and that is his brevity. I cannot hope to emulate him in the importance of the subjects embraced in his address, but I think I have something to contribute which might also be of importance to this House.
During the course of this debate there have been a number of curious things said, but of all the things said. What struck me as the most curious was the remark of the hon. member for West Calgary (Mr. Bennett) when he advocated what, if it is not a capital levy, is certainly the commandeering of wealth. I little expected to hear from the Conservative side of the House a suggestion to any government for the commandeering of wealth, and although I have a sneaking regard for that particular form of levy, I do not think the hon. member has made out a case which is worthy of consideration at this time. I was more concerned with what the bon. member for West Calgary said when he congratulated the Minister of Finance on the provisions of his budget. I have always looked with suspicion upon any Conservative who was willing to support a Liberal budget. That to me is always a very suspicious circumstance.


Miss MACPHAIL:: For the Liberals, yes.


James Allison Glen: For the Liberals, yes. I have always been a Liberal, latterly a Progressive, and I always hated to see Conservatives supporting my policies. I remember long years ago, when Sir William Harcourt was going through the old country pleading on behalf of the Liberals, he landed in Edinburgh and made a wonderful speech. The next morning one of his friends said to him, "I see that you have obtained the congratulations of the Edinburgh Scotsman,"-the greatest Tory paper in the east in that day, and Sir William Harcourt replied, "If that is so, I fear I have failed in my duty in stating Liberal principles." And a curious thing, Mr. Speaker, is this: Not only has the benediction of the hon. member for West Calgary been placed on the head of the Minister of Finance, but the whole Tory press of this country, so far as I have read, are in like agreement. Not only that, but the hon. member for Fort William (Mr. Manion) went out of his way last night to throw bouquets at the Minister of Finance for the provisions in his budget. I fear there must be something wrong with that budget. I fear that there is something in the way of criticism that is needed from this side of the House, and I am going to examine for a short time some provisions in that budget, and give some reasons why the Tories should praise it.

In the first place, the income tax has been reduced. The unfortunate thing is that we have had no justification given to us from either side of the House for that particular reduction, but I am hopeful that before this debate closes we shall hear from this side of the House the reason why there was a reduction in the income tax at this particular juncture.


Agnes Campbell Macphail: Because the people who paid it put up a holler-that is the reason.


James Allison Glen: My hon. friend! says, " because the people who paid it put up a holler," and I am inclined to agree with her. I think those who wish reductions must necessarily make hollers, and it is an unfortunate state of affairs in our politics that in order to get what probably belongs to you you have to raise a holler, as it is called. If I read history aright, I know this, that when income fax was imposed in any country it was imposed at its inception as an emergency measure. But I also know this, that wherever an income tax has been imposed upon a country, at no time in the history of that country, so far as I know, has the tax been entirely abolished. At times it is reduced, as the circumstances of the country warrant, but there is no country that I know of in the world to-day where the income tax has been abolished in its entirety after having once been put upon the statute book. If that is so, Mr. Speaker, then why the reduction? Does this embody a new principle in Canada? Is it the intention of the government that this temporary decrease in the income tax is but the prelude to its abolition? I know that, from our point of view, the imposition of an income tax was one of the causes which made possible the adoption of the free trade movement in the old country, and I know that the immediate loss of revenue resulting from its adoption, was made up by the income tax. But the principle most commonly enunciated at the time when the income tax was imposed on this country was that it was not only a war measure, but that it was a tax that fell upon those who had the greatest ability to pay, and that principle is commonly accepted today, that the income tax shall be placed upon those who have the ability to pay.
A good deal of complaint has been made that the farmers in the west are not paying income tax. It is said that they are not paying income tax like the people in the cities and in the east. Well, Mr. Speaker, there is a mighty good reason why the farmers in the west are not paying income tax, and that reason is that they never have incomes sufficient to make them liable under the act.

The Budget-Mr. Glen


Mr. COTNAM:: What about the $500,000,000 they receive for their wheat crop?


James Allison Glen: The levying of taxation by
direct methods is a principle which we must support, and any attempt that is made to reduce the income tax, which is a direct method of taxation, must be viewed with a good deal of suspicion if no sufficient reason is given for its reduction. I submit, Mr. Speaker, that the levying of taxation by this direct method, and in accordance with the ability of the person to pay, is essential if the burden of the national expenditure is to be distributed equally and justly among all our taxpayers. I think the income tax should be maintained at its former level, and the surplus used, not to reduce the income tax, but to lessen the burden of taxation. The reduction of taxation, as it becomes possible, should take place by reducing and removing those protective duties on imports which increase the cost of living and the cosit of production.
Now, Mr. Speaker, last evening the Minister of Trade and Commerce gave an illustration of the reduction of the income tax in my own province of Manitoba. He gave that illustration as a trend of the time. But he omitted to make this statement also, that in Manitoba Premier Bracken has introduced a cut in the income tax to the extent of twenty per cent, but he has also introduced a cut of 37^ per cent in the municipal commissioner's levy. There is no tax in the province of Manitoba that can be compared with the customs tariff tax of the Dominion, except the municipal commissioner's levy. It is a form of indirect taxation and is analogous to our customs duty. They made a cut in the income tax, but cut the indirect tax by 37i per cent. The amendment of the hon. member for Macleod (Mr. Coote) states that the budget shows a further departure from the principle of direct and visible taxation. As I have already said, no evidence has been submitted to justify a departure from that principle, and we need further_light upon it. I would ask: Is it the intention of the government to declare their policy by this reduction, and is this the first step towards the abolition of the income tax? We should be informed as to what the policy is. I know that the Minister of Finance when on the hustings during the election, took the point of view that the income tax and sales tax, which he considered nuisance taxes, should be reduced. He has given this view sanction in his budget to-day and has implemented his promise.
Allied with and forming part of the amendment is also the large question of the tariff, and it seems necessary for those on this side of the House to state in absolute terms the
position of the group of which I am a member. I know of no departure from the principles which have been so well expressed by so many members of this group, not only in this House but in the country during the last election. If during the last election there was one issue that was before the people of western Canada it was the question of lower tariff. That is the paramount issue so far as western Canada is concerned. There might have been other issues having a particular appeal in different localities. Of these I do not speak, but I say that of all the issues raised during the election that of the lowering of the tariff was the paramount issue so far as western Canada is concerned. In particular the Robb budget of 1926 was discussed, analysed and approved ninety-nine per cent in western Canada, for, with the exception of one lone member from western Canada, they returned to this House members supporting lower tariffs and in particular the principles enunciated in the budget of the present Minister of Finance of 1926. In connection with lower tariffs I may say that we have always been told that there can be no prosperity in a country unless under a protectionist government, and if we were to believe the whispers of death that circulated throughout the whole of this Dominion some time ago, we would be led to believe that unless a protectionist Conservative government were returned to power the country would be in a bad way and that its condition would undoubtedly become worse. I should like to point out in passing that from my point of view, we can have just as prosperous conditions as were ever attained under a protectionist government. I will go further and say that we can have much better and more equitable conditions under low tariff than under high protection. The proposition that we must have a high tariff is now I think an exploded fallacy, because under the low tariff government-and I am assuming the present government is a low tariff government-we have obtained a considerable degree of prosperity. It has been stated on many occasions throughout Canada by different people that the low tariff is not the cause of the great prosperity. Well, I am not so foolish as to say that these things can only happen under a low tariff government, but I do say that the condition of the common people is much better, more equitable and the country is a better one to live in under a low tariff government than under a high tariff government. I have no reason to doubt that under the regime of the present government the conditions in the Dominion of Canada will be better for the common people than they have been in the past.
The Budget-Mr. Glen

I would remind this House that the conditions in western Canada have not materially changed since 1921, that period of economic depression, and we still have depression in the west. I will go further and say that we have a tremendous economic uncertainty so far as the farming industry is concerned. People speak of the stability of government and say that we can have no stability of government except by the retention of tariff duties. Is there to be no stability of the farming industry as well? Can we not have stability of government as far as farming is concerned? We do not hear that cry very often. Perhaps my hon. friend from Southeast Grey (Miss Mac-phail) will say it is because we have not raised a big enough holler. I know the conditions in the west are not what one would desire. The hon. member for West Calgary speaks of the amazing crops that we have had in the west recently. I speak whereof I know when I say that men in my own constituency are not able to pay their way, and generally speaking, most of the farmers in my constituency which I think is typical of most of those of western Canada, are finding difficulty in paying their way, and that despite the amazing crops of the past three years.
I wish to say a word with reference to the opinion expressed by the people in the last election. The people of western Canada, by their vote and the return of the members whom they sent to Ottawa, have shown where they stand. They have not altered one iota from the stand which they took years ago. They believe that protection is the embodiment of despotic government. They believe that the supreme condemnation of the tariff lies in this, that while it draws most of the taxes of the country from the poor, at the same time, it imposes upon the poor the heaviest burden of living, and it builds up the fortunes of the rich and fails to tax the rich even as much as the poor in the numerous cases where the poor have larger families than the rich. They still believe, as was expressed by the hon. member who represented Brome Mr. McMaster, in a farmer parliament, that free trade is the right of every man and every nation to buy in the cheapest and sell in the dearest market without the law intervening to help any given set of producers. They still believe that the building of tariff walls to keep out goods is bound to react disastrously on the consumers and purchasers. They know that their product represents the largest item of our exports and that they compete in the open markets of the world and buy in the protected. They have experienced in the west and have derived benefits from every reduc-
tion of tariff that has taken place and they cannot believe that further reductions are likely to be detrimental to Canadian industries. They cannot understand why, if the binder twine industry which produces a commodity that is essential to the farmers can compete successfully against outsiders, other industries cannot do likewise. They believe that, first, there should be a removal of the duties on foodstuffs and on implements of production, to be accompanied by the abolition of the duties on iron and steel-the raw materials of the manufacture of these implements and of many other of our products. They believe also in the abolition of the duties on boots and shoes and on articles of cotton and woollen clothing, and that this should be accompanied by the removal of the duties on the raw materials entering into their production. They believe that all duties should be removed from coal.
Now, Mr. Speaker, the people of western Canada cannot understand why the protectionists say that our industries cannot compete with the highly paid and highly skilled labour of the United States] and then the converse, that they are unable to compete against the low paid labour -of Europe and depreciated currency. The protectionists cannot have it both ways, and the people of western Canada do not understand why these arguments, so direetly contrary to each other, should continue to be advanced by our protectionist friends. Let me read something that was written iby an acknowledged authority sixty years ago, but which is just as opposite today. I am quoting from John Stuart Mills' Political Economy:
The only case in which a mere principle of political economy protecting duties can be defensible is when they are imposed "temporarily" (especially in a young and rising nation) in hope ol naturalising a foreign industry in itself perfectly suitable to the circumstances of the country. The superiority of one country over another in a branch of production often arises only from having begun it sooner. There may be no inherent advantage on one part or disadvantage on the other but only a present superiority of acquired skill and experience. A country which lias this skill and experience yet to acquire may in other respects be better adapted to the production than those which were earlier in the field.
But it cannot be expected that individuals should at their own risk or rather to their certain loss introduce a new manufacture and bear the burden of carrying it on until the producers have been educated up to the level of those with whom the processes are traditional. A protecting duty continued for a reasonable time will sometimes be the least inconvenient mode in which a nation can tax itself for the support of such an experiment. But the protection should be confined to eases in which there is good ground of assurance

The Budget-Mr. Glen
that the industry which it fosters will after a time be able to dispense with it. Nor should the domestic producers ever be allowed to expect that it will be continued to them beyond the time necessary for a fair trial of what they are capable of accomplishing.
We in the west know that the estimated agricultural wealth of this country is roughly seven and a half billion dollars. We also know that the capital invested in Canadian manufactures in 1923 was roughly a little over three and a third billion dollars. We cannot understand why equal terms cannot be given to those engaged in agriculture in which there is invested double the capital invested in our factories.
When we see the tremendous expenditures on public works in the east, so far in excess of similar expenditures in the west, we believe, rightly or wrongly, that we are being discriminated against. Take, for example, the following list, which was supplied to me a few days ago, of some of our great undertakings:
New Welland ship	canal..	..	$48,797,000
Trent canal	 2,733,000
Victoria dry dock	 9,000,000
Quebec harbour	 2,400,000
Montreal harbour	 11,110,000
Vancouver harbour	 9,595,000
Toronto harbour	 6,972,000
St. John harbour	 6,712,000
St. Lawrence ship	canal..	..	69,794,000
These expenditures were made between 1918 and 1925. Rightly or wrongly the people of the west feel that they are being discriminated against in some of these matters. And when they see the small estimate of $5,000,000 odd asked for the Hudson Bay railway, and hear criticism of the most adverse character coming from hon. members opposite and from the Conservative press with respect to this proposed expenditure, I think they have good reason to feel that they are being discriminated against. We believe that the Hudson Bay railway is necessary as an outlet for the products of the west, and the whole of the west resents the criticism which is being directed against the expenditure for the completion of that railway. We have to face that adverse criticism, but, Mr. Speaker, I think there is not the slightest doubt that we will raise a sufficient holler, if that is necessary, for the completion of the Hudson Bay railway, because we believe it is essential to the well-being of the west.
Now, the people of western Canada think that they are being discriminated against in the matter of freight rates, and it seems to me that they have good reason for so thinking.	Only the other day at
the hearing of the freight rates application before the railway commission one illuminating fact was brought out in cross-examinationthat the system of railways in the province of Manitoba gathered in the largest amount of revenue at the least expenditure of money of any other part of the system in the Dominion. If, then, the province of Manitoba and the other two prairie provinces are giving the railways the largest returns at the least cost of operation, is it any wonder that they make a demand for lower freight rates in order that their cost of production may be reduced? Can you wonder if the farmers of the west are asking for some relief? Can you wonder that they are dissatisfied, and that their dissatisfaction culminated in the birth of the Progressive party, which was formed some time ago? Do hon. gentlemen in the east believe for one moment that the spirit which animated that movement is dead? Let me say to the House that that spirit is just as much alive to-day as it ever was. It may be more or less passive at the present moment, but that quiescence, Mr. Speaker, is accounted for solely by the fact that they believe the fruition of their hopes is likely to be accomplished under a Liberal government, and that in the legislation to be presented to this House the government will give expression to those hopes of the Progressive party.
But that brings me to this viewpoint, and I wish the Minister of Finance to note carefully what I am about to say. The main issue raised by the amendment is the absence from the budget of such reductions in the tariff as would lessen the cost of living and of primary production in Canada. Colour is undoubtedly lent to the view that this omission marks the inauguration of a new policy of the government by the application of the large surplus of revenue to the reduction of the sales tax and the income tax in preference to the reduction of protective duties. The Liberal-Progressive members of this House are pledged to the reduction of the tariff in order to cheapen living and enable primary production to be profitably pursued. They are pledged to the maintenance of a reasonable measure of direet -taxation, based on ability to pay, through the medium of the income tax. They cannot but regard the apparent reversal of this dual policy in the budget of 1927 with misgivings and dissatisfaction. The reasons given by the government for the omission from the budget of a further instalment of tariff reduction may have, however, a sound basis in fact. The tariff board is at work. It is compiling information on many of the most important, and incidentally the most highly protected, Canadian industries. With the complete information at its command the government will be in a position to pursue the ]>olicy of tariff reduction. But, in view of the circumstances attending our
The Budget-Mr. Glen

election, we must be absolutely confident that this pursuit is (the intention and policy of the government. If we may assume with confidence that the omissions from the budget are temporary and accidental and that future budgets will both reduce the tariff and maintain the income itax as a permanent fiscal instrument we shall feel fully justified in voting with the government. If, on the contrary, we must assume that the government is inaugurating a new policy looking to the abolition of the income tax and making only such changes in the tariff as are dictated by expediency and not by low tariff principles, we should be compelled to vote for the amendment. Which of these courses we are to pursue can be decided in only one way-we must have from the government a categorical and ineontestaMe statement of its position in regard to future tariff reductions. Refusal to give such a statement must inevitably be construed as an admission by the government of a desire to depart from the policy of tariff reduction.


Mr. C. H. DICKIE (Nanaimo):: couver island very well, and I can assure ton. members that in two decades from now the fir forests will have absolutely disappeared from Vancouver island which at one time . possessed one of the finest stands of forest trees in the world.
As I said before, the greed of some people exceeds their patriotism, and we continue day by day cutting down those forests and in many instances shipping logs across to the United States to increase the prosperity of that country. I know of no reason why this government should not say that after the first of January, 1928, we will put an export tax of $2.50 or $5 a cord on pulpwood going out of the country. I know no reason why they should not put the same export tax on saw logs. But give those people who have their money embarked in this enterprise in Canada a chance to rearrange conditions so that they will not suffer loss; we should not act hastily. Even with that assurance it would be a good thing, and those of us Who love the forests and would like to see them conserved would welcome it.
There are other points in respect to our importations from the United States to which I wish to refer. Last year we imported from that country $307,000,000 of what are known as mineral products. That includes iron and its products. It includes non-ferrous metals, that is metals without iron. It includes also non-metallic minerals. We bought no less than $307,000,000 worth from that country. They bought from us only $83,000,000. Note the tremendous adverse balance in that connection. I have heard it said, and it has been stated even across the floor of the House during the present session, that we import a large amount of raw material. What amount of those materials do we import? We imported last year fifty or sixty million dollars worth of coal; we imported $28,000,000 worth of cotton; we imported a little wool. These are the principal imports of raw material; nevertheless we bought $666,000,000 worth of products from the United States.
It is amusing to hear the remarks of gentlemen, such as the hon. member who has just resumed his seat, with respect to free trade.
I would like to be as sure of anything as the hon. gentleman in question appears to be of everything witlh respect to the trade policies of the world. Where is there a nation of any consequence in the world that believes in free trade to-day? It is an absolutely exploded idea. We in Canada, perhaps more than the people of any other country require a protective tariff. We require a protective tariff like the one that has made the United States great. That protective tariff in the
I Mr. Dickie.]
United States has drained Canada of its best men.	Go into New York, Philadelphia, or Washington. Take a walk through the streets of these cities and see t'he calibre of the men you meet there. Go down through the streets of this delightful city of Ottawa and see the superior type of men compared to the type you meet in the cities enumerated. No better men in the world were ever bred than are bred in Canada in this climate of ours from a sturdy race of ancestors. The manner in which they have been leaving our country as long as I can remember, is a crime, a sin. In company with others many years ago I was forced to leave this country in order to make a living in the United States. Some of the best men I have ever known came from the county of Oxford, men reared on oatmeal and codfish, and educated on the Toronto Globe. Later on in life in the state of Michigan I met men from this Ottawa valley, men from around the Ottawa river, men from around the Mada-waska-wherever it is; I do not know but I remember the name-men from the county of Glengarry; men from the province of Quebec, cousins of Joe Monferrand. I could pick out from their ranks-wonderful men some of them, others you might term brutal-two hundred and fifty who could scale the walls of Troy before breakfast, throw Paris and Hector into the ash can, and send Helen back to her folks on the farm. Then you could throw a few drinks into them and you would have a fight worth while. Those are the men that left this country.
As I say, some of them may have been abysmal brutes, but what better foundation on which to build a great nation? Why should we let them go as they did? Colorado, northern California, are filled with them. You find them in Arizona, Texas, Mexico. Wherever you go you find Canadians, fine stalwart fellows, men who, as'I say, were brought up on the farm and had perhaps a little religious education, men who were taught in the country or village schools that honesty was the best policy. I remember many years ago when the best recommendation that any man could have in California was that he was a Canadian. If he was a Canadian they thought he was an honest man. He was resourceful, honest and faithful, and his services were valued. If. you cross over from British Columbia into those great cities of Seattle and Tacoma you will find many, perhaps the greater proportion, of positions of trust held by that class of Canadian. We see them go day after day out of this country. Why should we allow this? I hate to copy any-

The Budget-Mr. Dickie
body; but why should we not do as the people of the United States are doing? They have made their nation great simply by protecting their industrial population.
What did they do last year? Let me give the House one little instance. In 1925, we sent $1,400,000 worth of butter across the line to the United States side. The United States farmers immediately said: That is too much butter to be imported; we want greater protection. The United States government imposed an additional duty of four cents a pound on butter so that if butter went into 'the United States from Canada, it had to pay a duty of twelve cents a pound. Last year our export of butter to the United States amounted to only $101,000 worth, so that we lost the sale of $1,300,000 worth of butter to that country. That shows how they protect their agricultural interests. Our good friends -and good men they are-from the prairies, that country of wide horizons and sometimes, I think, of narrow visions, although I do not know why, want free trade. Had they any other idea than just their prosperity for the moment, free trade for them alone would no doubt be beneficial. But I know they will appreciate the fact that they are Canadians and I know they want to see this a great country. There is no reason Why even if these gentlemen are penalized because of our protective tariff, we cannot repay them in some other way by subventions or by lowering railway rates, because I should not like to see our protective tariff bear unfairly on any part of this great Dominion. But we must do something to stem this tide of Canadian people going across to the United States. The people of the United States are laughing at us. From time back as far as I can remember they came here; they took our money; they would dump their goods on us. In the early days when the period of deflation occurred in trade relations they practically gave us their wagons, agricultural implements and things of that kind, and it was impossible to maintain manufacturing establishments in Canada. That was before the wise policies of Sir John A. Macdonald were put into operation.
I remember when there was practically no money in that part of Ontario in which I lived. As an example to show how money was valued then, I remember a man telling this story, although I will not vouch for the truth of it. He said that he and a number of his friends were standing on the bank of the mill-pond idly skipping stones across the water, and that some man came along who wanted to show off. Having pulled a fifty cent piece out of his pocket-he must
have come from abroad or he would not have had it-he skipped it across the water and it went over to the deep part of the pond and sank. He said that they were diving for that fifty cent piece until the ice came on the pond. He said that he went to California, and on his return ten years afterwards there were old men with whiskers still diving for that fifty cent piece. I do not know why he said it, but he concluded by saying that it was a Scotch community.
I think I have pretty well run the gamut of what I intended to say. I do not know whether I have accomplished anything or not; but now that the tide has receded to its very lowest ebb, when there is no reduction in the tariff this year, I hope the tide will return; that waves of prosperity will return with it, and that we shall have from the government a political policy that will protect, a policy such as protects the furniture trade of Canada and others to-day. That is all we want. Let us build up an industrial Canada. Let us make of this a country in which our boys and girls who are educated on the farm will have some place to go. Last year a hundred thousand people left this country to go across to the United States and at least two thousand more I know left British Columbia without the immigration authorities having any knowledge of their going. It is no trouble at all for Canadians to step across the line and become residents of the United States. I know the quota lists for intending emigrants to the United States, men who happen to be born in the old country, are filled now. If a foreign bom person goes to an immigration office to make application for entrance to the United States they will put his name on a quota list and it will be eighteen months before he is allowed to go. But there are men in this country who are smuggling foreigners into the United States. Any man resourceful as Canadians are-and some of them are a little acquainted with the smuggling business-can get across the line at any time.
As I say, a hundred thousand of our good people went to the United States last year and we want to make some place for them in Canada. Why can this great Liberal government not accomplish this? Why can it not live up to the traditions of Sir Wilfrid Laurier who in his time lived up to the traditions of Sir John A. Macdonald? I would support with pleasure any government that would enforce a fiscal policy that would keep those good people from Quebec, Ontario, or further west, at home instead of having them make of the United States a great nation. They have drifted away from their homes,
The Budget-Mr. Dickie

from their association, from the church in which they were brought up, and they are making good citizens in the United States. As was pointed out so well yesterday by the hon. member for Fort William (Mr. Manion), we have in this country potentialities, possibilities, that would justify the expectation that we could make this a country with a population of thirty millions. It is the opinion of leading geologists that in the Laurentian plateau that the hon. member so well described we will have the greatest gold mines in the world.
We still have forests. Let us conserve them; let us spend more money on them; let us see that new forests are springing up although, at the present rate at which logging is being done they will not spring up in time to replace the old ones. We can, however, do something in that direction. Let us say to ourselves that we are going to be greater Canadians than we have been in the past. We want a greater Canadian spirit. I can quite understand that people coming here from the old land, do not perhaps have the same love of this country as those of us who were born here. We want to make Canada a great country and we can do it. All that is necessary is that we have sane, sound legislation, legislation along the line that is being adopted throughout the civilized world to-day. Where is there a nation in the world putting into practice the policy that was enunciated to us just before I started speaking by that eloquent and no doubt lovable gentleman, the hon. member for Marquette (Mr. Glen). No nation can succeed as a free trade nation when it is alongside a country that is so highly protected as is the United States.


Mr. B. W. FANSHER (East Lambton):: Mr. Speaker, in common with all members of the House I rejoice with the Minister of Finance (Mr. Robb) that he has been able to present to the House a financial statement which provides for a reduction in the national debt of some $31,000,000. I might add that I rejoice with the citizens of this country that in spite of the somewhat hectic session that was held in this House last year, the producers of this country, while the legislators were concerned perhaps more with party matters, were so intent on making Canada prosperous that the Minister of Finance is able to present the splendid financial statement he gave to us the other day.
The hon. Minister of Finance was very modest in claiming but little credit for governmental activity in producing a balance on the right side of the ledger. He attributed, as is nearly always the case, a great part of the 
credit to the splendid crops we have had in this Dominion. He also said that there was more of a buoyant spirit evident throughout Canada to-day than there had been at any time previous. I wish to develop that thought a little.
I believe that to-day in Canada there is more of a buoyant spirit, more of a determination on the part of our citizens to see that our heritage as citizens shall be guarded, rather than our heritage as partisans, and I am pleased that that is true. It has been quite evident since this House assembled that there is a desire on the part of the members to assist in a constructive way the legislation that is brought down. It has been our privilege to listen to the financial critic of the official opposition, and I have never before in this House heard criticism of such a constructive nature as was offered by the hon. member for West Calgary (Mr. Bennett). I congratulate him upon his speech the other day.
But there are other contributing factors to the present prosperity of this Dominion which have not been touched upon at all as yet since this debate began. It is true that the crop of 1925 is reflected in the receipts and revenues of this country this year. It is true that when more wealth is produced, the artisans, tradesmen, labourers and farmers generally throughout this country have a larger purchasing power, which is reflected in the revenues of this country, because our taxation is based upon the expenditures of the people; in other words, our taxes are applied nearly every time that we make a purchase, and if the purchasing power of the individual citizen is increased, that is reflected in the country's revenues.
One very great factor in the increased wealth of this country, in my opinion, has been the organization and development of the wheat pool in western Canada, To that perhaps more than to anything else has been due the increased purchasing power of the farmers of Canada. We produce in this country, as was stated by the Minister of Trade and Commerce (Mr. Malcolm) the great majority of our exports from the soil, and wheat is the one commodity above all others which is exported in great volume. By organization the farmers of western Canada have been able to market in an orderly manner the bulk of the wheat crop of that vast wheat-producing area. In the crop year just ended, the amount marketed by the wheat pool of western Canada was over 52 per cent of the entire crop- over 187,000,000 bushels. By controlling the marketing of that vast quantity of grain, and

The Budget-Mr. Fansher (Lambton)
carrying the world's price back to the producer, less only the handling charges and transportation costs, the price of wheat throughout the year to the.farmers has been increased to a higher level. If we look at the report of the Minister of Trade and Commerce for the average price of wheat to the farmer for the last five years, we find these figures:
Average
Year	Price
1921		81c.
1922		85c.
1923		67c.
1924	(wheat pool in operation).. .	1.22
1925	 1-12
The crop of 1926 has not yet been entirely sold, and we cannot tell yet what the price will be, but the operation of the wheat pool, I say, has done more to add to the purchasing power of the citizens of this country than anything that has been attempted before in the history of this or any other country, and we have immediateley reflected in the financial statement as presented to the House this year the result of such organization and of the adoption of such a marketing system.
Not only has the price of wheat been raised to the grower, but wheat being the stable commodity, the staff of life, its increased price has had a beneficial influence on all othei' grains to a greater or less extent. Not only has the wheat pool had an influence on the price of wheat in western Canada, but it has maintained the price of wheat in eastern Canada, in sympathy with the price in the west, to a level in the fall of the year, at harvest time, that we never reached before in the history of the province of Ontario except in war years.
Analysing the balance of trade for the last few years, we find that it has a direct relation to the production of wheat in the western provinces. If the production of wheat in the western provinces is large and the return from that crop to the farmer is good, we find that that is reflected in the following year in the financial statement that is brought down to this House. That is the case this year. The balance of trade for the year 192526 was $402,000,000 in our favour, and that balance of trade bears a direct ratio to the splendid crop and the price obtained for that crop in western Canada. While I am from the province of Ontario in eastern Canada, I cannot help but recognize the great benefit that this organization has been, not only to the farmers of this Canada of ours, but to all business in Canada east and west.
I wish to come more directly to the budget and the items contained therein; but before dealing with this year's budget I wish
to make a few remarks upon the budget as presented last year. In that budget we had taxation reduction in two departments of collection, the income tax and the customs tariff tax. Outside of that no material reductions were made, and I wish to trace the effect of these reductions. The reduction that was made in the income tax last year produced a deficit, or a reduction in the revenue from that source, of $8,671,000; in other words, it had a direct adverse bearing upon the amount of taxes gathered from that source. Quite the reverse was the case in connection with the customs tariff. Although we had substantial reductions on some items, especially on automobiles and on lighting plants, the apparatus to generate electricity, and on a large number of other articles, yet our income from that source was increased $14,000,060, and I was quite pleased yesterday when the hon. Minister of Railways (Mr. Dunning), commenting upon a speech of an hon. member in this House, made the observation that tariff reduction always acted that way, that it always brought about an increase in revenue, and I was somewhat at a loss to know why the policy of reduction in the customs tariff was not followed this year rather than the policy of reduction of direct taxation. Reduction of income tax, as I said before, resulted in decreased revenue to the extent of nearly $9,000,000. Reductions in the customs tariff, although substantial in a number of instances, did not bring about decreased revenue; on the contrary, we have an increased revenue of $14,000,000. If the Minister of Finance was viewing this situation purely from the standpoint of the treasury and from the lesson which last year's budget teaches, surely we should have expected this session further reductions in the customs tariff, and, therefore, increases in the revenue next year. Quite the contrary, as hon. members well know, has been the course pursued, and that is why we in this comer of the House take exception to the budget as presented this year. I am reminded of a passage in Scripture which says:
There is that scattereth, and yet increaseth; and there is that withholdeth more than is meet, but it tendeth to poverty.
And perhaps that may be so in this case. I was quite struck with the remarks of the hon. member who just addressed this House in his plea for higher tariff, for protection in this country, and I could not help observing that in the last fifty years our average tariff has never been below twenty per cent, and that it stands at over twenty-three per cent to-day. I got these figures from the aimual report of the trade of Canada for the fiscal
558	COMMONS
The Budget-Mr. Fansher (Lambton)
year ending March 31, 1925. Anybody can verify them. They are to be found on page 10, where the calculations are made. Yet under these circumstances the hon. gentleman who has just addressed the House (Mr. Dickie) says we have lost hundreds and thousands of our Canadians to the great republic to the south. It might be well for us to look about for some other reason why our Canadians go to the south, rather than say that the lack of tariff protection drives them away. Surely, an average of twenty per cent assistance to industry, one-fifth, is large enough inducement, from the conservative viewpoint, to retain the citizens of this country within Canada. Should we not look for another reason? In my opinion the reason why hundreds and thousands are leaving Canada is that they are taxed out. A very good example of that was placed before me a few years ago, just before I came to this House, in conversation with a citizen of this country who had spent four years at the war. He said, "I hope the members of this parliament will try to reduce the customs tariff. You are taxing us out of the country. I returned from the war and got a job as a traveller. I found that travelling conditions were different from what they were before the war, and I had to have a car." This was before the reduction of the duty on motor cars was made. He continued, "A car costs me a hundred dollars more in Canada than had I decided to travel in the state of Michigan," which is just across the river from my county. "I had to furnish my office with typewriters and other equipment, and I found I had to pay nineteen dollars and some cents more than if I had decided to start travelling just across the river in the state of Michigan." He further added, "I am just as good a Canadian as ever stepped in shoe leather. I spent four years at the war, but you are taxing me out of this country." Now I want to place before the Minister of Finance, before the government and before the members of the official opposition this thought, that they may be induced to look at the real reason why the citizens of this country are leaving and going to the United States. It is true we are trying to check this exodus by an immigration policy which brings in settlers from Europe to go upon the land not only in eastern Canada but in western Canada. But to my mind as long as economic conditions are not what they should be in this country our immigration policy will not bring forth much fruit. The machine, so to speak, may work all right to bring the settler into the country, but unless we provide him the opportunity to gain a livelihood after he arrives
I-Mr. B. W. Fansher.]
here, that is, to make a profit on his farming operations, our immigration policy is not functioning properly. I might give a practical illustration in this regard, I think it has been given before. If the knotter on a farmer's binder is not tying the sheaves regularly he does not attempt to correct the fault by putting a new driver on the machine and telling him to go ahead. He corrects the fault at its source-he puts the tying apparatus in proper order. I want to say to the government and to the Minister of immigration that I do not think our system of immigration can be perfected simply by placing a new driver in the seat-even if he does come from the Progressive party. The trouble lies deeper. We must make the basis of agriculture fundamentally and economically sound. We must so shape conditions in this country that immigrants can make a living on the land, otherwise our immigration policy is largely in vain.
There are a few other items in the budget with which I wish to deal. The Minister of Finance has announced that by the reduction in the stamp tax on cheques, bills and notes, 70 per cent of the nuisance taxes will be removed. I agree with him that 70 per cent of the revenue will be lost; but 100 per cent of the niusance will remain. The nuisance is still there; every cheque over ten dollars, every note, every bill, must still bear a stamp. It is no more trouble to lick a 20-cent stamp than to lick a 2-cent stamp and place it on a cheque. The result of the reduction of the stamp tax on cheques is simply to throw away that much revenue without removing the nuisance. Very largely the only fellow who will benefit by the reduction is he who can write a $10,000 cheque. Hereafter he will pay no more than the man who writes a $10 or $15 cheque-the workingman. I cannot see that any equality of taxation is brought about by this reduction. Surely some persons othei than our labouring men got the ear of the Finance minister before he made this reduction.
The sales tax is a form of direct taxation, and is a tax which I do not object to at all. It costs the least to levy of perhaps any tax outside the income tax. The reduction of 20 per cent in the sales tax will afford some small relief to the labourer and the commonplace citizen, but outside of that I do not see that this budget will afford much relief to the ordinary Canadian. To my mind it gives relief to those of our citizens who are in the best position to pay. I regret this reduction because it comes at a time when we can ill afford to reduce this form of direct taxation.

The Budget-Mr. Fansher (Lambton)
Now, Mr. Speaker, I am criticising the budget because I am a strong believer in tariff reduction. I believe if, instead of this $27,000,000 relief which the Minister of Finance says the reduction in the income tax, the sales tax and the stamp tax represents, a similar loss in revenue had been occasioned by a reduction of the customs tariff, the relief to our taxpayers would represent at least $100,000,000. I base that statement on the fact that a four per cent sales tax on the business of the country is estimated in this budget to bring in $104,000,000 in revenue, while the average tariff tax which is 23 per cent on our business is estimated to bring in a revenue of only $141,000,000, although that tariff tax is five times as great in percentage. Therefore I am led to believe that the customs tariff is not nearly as efficient a method of collecting revenue as is the income tax. If we figure out the ratio, we Shall find that while one dollar is gathered into the. treasury three times as much goes into the pockets of the interests protected under the customs tariff. It seems to me that this perhaps is one reason why Canadian industry has not been as prosperous as it should be. I do not believe it is possible to build up a strong, virile industry by a system of coddling any more than it is possible to build up a sturdy manhood and womanhood by such a system. I think that industry can be made strong and prosperous in this country by being in large measure thrown on its own resources. Surely after fifty years of assistance under a protective tariff, under which our manufacturers have never got a lower average protection than 20 per cent, we may well urge a party that year after year has promised tariff reductions to give us results. True, in the fourteenth parliament some reduction was made on agricultural implements, and a further reduction was made last year. But it seems to me extraordinary conditions must develop before we can effect a reduction in the customs tariff. I hope however that the government realizes the importance of implementing this plank of their platform, which apparently they are abandoning,-a plank which, by the way, had a good deal to do with the election of a considerable number of those who sit to the right of the Speaker. The tariff reduction afforded in the last budget, and the promise of further reductions, played no small part in returning an increased Liberal membership from the province of Ontario. Just so long as the government keeps faith with those electors, just so long will they retain their confidence in the future.
There never was a time in the history of Canada when the people were so free from party ties, and so eager to approach every question from the broad standpoint of Canadian citizenship as a whole, as they are today, and governments may well take warning that promises made by political parties will be expected to be carried out to the letter. This is the case to-day more than ever before in our history.
There is no doubt that there has been an alarming exodus in the last twenty years. Out of over 400 townships in old Ontario only 61 have increased in population in that time, according to the 1921 census, and these few have been close to cities or towns where there has been an overflow into the township. In some constituencies there has been a reduction of 5,000 in ten years. The rural citizens believe that the foundation of any nation is the soil, and that is why they are anxious that tariff relief shall be given the agriculturists. This is what the rural communities of Ontario want, so that they may rebuild this old province. There is homestead after homestead throughout the province unoccupied at the present time, and vast pasture lands waiting to be utilized. We must not forget that the foundation of the nation is agriculture. It is time, therefore, that we harked back to the welfare of the men on the soil; otherwise we may wake up some day and find ourselves in a very unenviable situation. We are this year commemorating the diamond jubilee of Canadian confederation. We have been sixty years a nation. I trust that when the celebration takes place due consideration will be given the pioneers of this country, those who laid its foundations and handed down to us the great heritage which we enjoy. The agriculturists of Canada for fifty years have contributed to the welfare of Canadian industry to the tune of over twenty per cent, and it was sincerely to be hoped that in this jubilee year we might have expected a budget that would give a substantial measure of tariff relief to the rural communities.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 4, for the relief of Alice Victoria McGibbon.-Mr. Garland (Carleton).
Bill No. 5, for the relief of John Jones.-Mr. Church.
Private Bills
[Stage Direction]
Bill No. 6, for the relief of Samuel Paveling. *-Mr. Edwards (Ottawa).
Bill No. 7, for the relief of Benjamin Rapp. -Mr. Anderson (Toronto).
Bill No. 8, for the relief of Bernard Thomas Graham.-Mr. Anderson (Toronto).
Bill No. 9, for Che relief of Robert Edward Greig.-Mr. Anderson (Toronto).
Bill No. 10, for the relief of Daisie Hawkey. -Mr. Speakman.
Bill No. 11, for the relief of Olive Mary Mead.-Mr. Garland (Carleton).
Bill No. 12, for the relief of Alice Elizabeth Blakely.-Mr. Geary.
Bill No. 13, for the relief of Ethel Maud Hargraft.-Mr. Young (Toronto).
Bill No. 14, for the relief of Frederic Vinet. -Mr. Geaiy.
Bill No. 15, for the relief of Gwendolen McLachlin.-Mr. McPhee.
Bill No. 16, for the relief of Jessie Evis.- Mr. Arthurs.
Bill No. 17, for the relief of Max Gertler.- Mr. Casselman.
Bill No. 18, for the relief of Florence May Hicks.-Mr. Anderson (Toronto).
Bill No. 19, for the relief of Ruth May Harrington.-Mr. Edwards (Waterloo).
Bill No. 20, for the relief of Edith Maude Bull.-Mr. Kaiser.
Bill No. 21, for the relief of Joseph Bernard Hoodless.-Mr. Garland (Carleton).
Bill No. 22, for the relief of Edward Barker. -Mr. Ross (Kingston).
Bill No. 23, for the relief of Joan Henderson.-Mr. Ladner.
Bill No. 24, for the relief of Yina Kennedy (otherwise known as Yina Dorothy Kennedy). Mr. Matthews (Toronto).
Bill No. 25, for the relief of Aimee Glen-holme Young.-Mr. Matthews (Toronto).
Bill No. 26, for the relief of Alberta Lutz.- Mr. Rennie.
Bill No. 27, for the relief of George Frederick Adams.-Mr. Anderson (Toronto).
Bill No. 28, for the relief of Edward Saville. -Mr. Anderson (Toronto).
Bill No. 29, for the relief of Robert Fisher.- Mr. Jacobs.
Bill No. 30, for the relief of Dorothy Terry. -Mr. Casselman.
Bill No. 31, for the relief of Lillie May Brown Nichols.-Mr. Garland (Carleton).
Bill No. 32, for the relief of Hazel Pearle Clarke Pearcy.-Mr. Garland (Carleton).
Bill No. 33, for the relief of Edith Swartz.- Mr. Hocken.
Bill No. 34, for the relief of James Gibb Erskine.-Mr. Garland (Carleton).

Bill No. 35, for the relief of Ernest Johnson.-Mr. Garland (Carleton).
Bill No. 36, for the relief of Maxime Demers. -Mr. Garland (Carleton).
Bill No. 37, for the relief of Ethel Clementina Craig-Williams.-Mr. Lennox.
Bill No. 38, for the relief of Ida Lula Dupuis Murchison.-Mr. Garland (Carleton).
Bill No. 39, for the relief of Gladys Andrea Boyle.-Mr. Young (Toronto).
Bill No. 40, for the relief of Leslie Ellis Noble.-Mr. Garland (Carleton).
Bill No. 67, respecting The Quebec, Montreal and Southern Railway Company.-Mr. Dubuc.
Bill No. 68, to incorporate The Detroit and Windsor Subway Company.-Mr. Odette.
Bill No. 71, respecting The Alberta Railway and Irrigation Company.-Mr. Jelliff.
Bill No. 72, respecting a certain patent of Enos Henry Briggs.-Mr. McDiarmid.
Bill No. 73, respecting the Canadian Pacific Railway Company.-Mr. Spencer.
Bill No. 74, respecting The Canadian Transit Company.-Mr. Odette.
Bill No. 75, respecting The Essex Terminal Railway Company.

Mr. Robinson.
Bill No. 76, respecting La 'Compagnie du chemin de fer de Colonisation du Nord.-Mr. Parent.
Bill No. 77, respecting The Manitoba and North Western Railway Company of Canada. -Mr. McPhee.
Bill No. 79, to incorporate Niagara Falls Memorial Bridge Company.-Mr. Pettit.


[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 on the proposed amendment thereto of Mr. Coote.
Mr. J. C. BRADY (Skeena):: Mr. Speaker, from time remote the introduction of the budget has been associated, not only in England, but in most European countries, with a ceremonial befitting the importance of the occasion. As hon. members know, the word comes from the French word bougette, a little bag, and it was customary in those days to have the budget brought into the House of Commons in a small blue bag. One can imagine the exciting interest that prevailed in the House when the bag or budget was opened. To-day in our parliament that ceremonial is not a part of the reading of the

The Budget-Mr. Brady
budget, but nevertheless the budget speech is a far-reaching and important document to the people of Canada, because on it will depend the knowledge which we have of the present status of the country's finances and the future prospects of the country.
I have heard that it is usual on the budget debate for hon. members to be given a certain liberty of speech and that any subject may be discussed. I do not intend this evening to discuss a variety of subjects, but I hope to bring to the attention of the government a few things that may be of importance when they come to consider their future policy in regard to Canada.
It was a source of gratification and perhaps more of a feeling of pride in Canada to learn from the budget that by the end of the present fiscal year we would have a favourable trade balance of probably $250,000,000. but there is to this, an aspect, which I think, is worthy of the consideration of every rightthinking man and woman in this broad Dominion. There may be a danger that in parting with our great natural resources, particularly of our forests and mines, we may go too far, because there is a limit even to those two great natural resources in Canada, just as in the case of the tower of Pisa, which has stood many centuries removed from the perpendicular, yet, we find that engineers are to-day engaged in endeavouring to save that ancient monument because it is now fourteen feet from the perpendicular and at any moment may topple. I bring in this illustration just to show that it is a dangerous path we tread, when steadily, year by year, we export a large volume of the two important natural resources of our country which demand the greatest care in order that they may be conserved for future generations.
I gleaned from the budget one or two things which it might be of value to bring before the government in connection with the particular resources to which I refer. We find in the budget that the export of gold bullion and quartz in 1925 amounted to $23,600,000, and in 1926 to $5,000,000, or a decrease of over $18,000,000. I am sure that those who advocate the development of our subsidiary industries will look upon it as a source of congratulation that we are adopting a measure which will meet with the satisfaction of all the people of Canada. I hope, Mr. Speaker, that the government will continue to work in that direction, and may we hope the same course will be adopted with other of our natural resources, because we believe-and I am sure that not only the members on this side but those on the government side hold the view-that our subsidiary industries must
keep pace with our growth and population. Our primary industries, like our great wheat fields, our forests and our mines must likewise be developed, but it must be done in connection with the development of our subsidiary industries. I regret to say that while we continue to increase our export of asbestos, copper, aluminum, iron, and pulpwood, we show a decrease in the export of wool and butter. That may seem to members of the government a mere trifle. I will endeavour to prove that it is a very important thing and worthy of notice. In 1925 Canada exported to the United States 4,397,232 pounds of butter, valued at $1,467,683 and, in 1926 the export was 353,808 pounds, valued at $101,744. Here we see a decrease which shows that something has happened that we should note particularly. What do we find as the cause of this great decrease? The United States on March 6, 1926, raised the duty on butter imported into that country from eight to twelve cents a pound, and that increase of four cents reduced the export of Canadian butter into the United States from 4,397,232 pounds to 353,808 pounds. Now I have heard, and we hear it repeatedly, that free trade is a necessity for Canada to-day, but let me remind those who believe in this policy that, although Bright and Cobden said that free trade was a good thing for England in the hungry forties of the nineteenth century, it is not a good thing for England and Canada in the second decade of the twentieth century. We know-and I am convinced that if hon. members on the government side declared what they believe in their hearts, they would say-that a tariff policy protecting our young industries is an absolute necessity.
Another matter that I think is worthy of notice is in reference to Canada's trade with the United States. For the twelve months ending November, 1926, Canada exported to the United States $470,149,366 worth of goods. That means that there was an increase over the 1925 export of $408,042. The imports from the United States into Canada for the same period in 1926 were $666,128,368, an increase of $95,747,527. Briefly, what does that mean? It means simply this; that we increased out exports to the United States in 1926 by less than one per cent over 1925, and we increased our imports from the United States in the same period sixteen per cent. I am not going to be an alarmist. I do not intend to say anything that would exaggerate or make foolish any of these statements, but I do say-and the people of Canada know it [DOT]-that there is a tendency to forget that the future of Canada and its progress are bound up with the development of



The Budget-Mr. Brady

these secondary industries which would enable us, instead of importing so much manufactured goods, to export our own goods. I believe that the government is anxious to do the best for Canada, and that it thoroughly understands the sacred duty which devolves upon a government. But this I do say, because I speak whait the heart of the people wishes to express: The government of Canada should not think of a particular class or a particular interest; rather they should do what is best for the interests of Canada as a whole and for the future progress of this country.
It may seem strange to the Prime Minister (Mr. Mackenzie King) and to the government as a body that although last year's budget was pronounced to be a great success, although Canada had enjoyed a year of great prosperity and substantial reductions were made in taxation, although an elevator was built by the government in the city of Prince Rupert and by all common logic it would seem that the constituency of Skeena should have returned to this House a government supporter, yet it did not do so. It may seem ingratitude on the part of the electors not to return to parliament a Liberal member because Prince Rupert was held in such affectionate regard by the late Sir Wilfrid Laurier, who looked with fond eyes upon its birth and pledged almost his political destiny that that port should be developed. My predecessor, I am sorry to say, is more to blame for my presence here than perhaps any act of mine during the last federal campaign. I tell the government to-day that I was sent here to do what he failed to do, to present facts, not fancies, to the government for their consideration. I think it is the duty of a member of parliament, Mr. Speaker, to represent, not a section of the people, but all the people; to be honest and straightforward in his presentation of matters political, and neither to exaggerate nor to minimize conditions as they exist in his constituency. My predecessor did not present to the government the facts as they existed. According to him, everything was well in the land of Skeena. Everything was flourishing, and the people were basking under the beneficent influence of the government. From Atlin in the north to Ocean Falls in the south Skeena was a land, according to him where everything was well. It is a great land, Mr. Speaker. It is rich beyond the bounds of imagination, but I say to this House to-night that the aspirations of its people, their wants and their legitimate demands, were not presented to the government in order that the conditions under which they were suffering might be ameli-

orated. When men come from contact with reality, and very often tragic reality, they are apt to have small patience with the ordinary conventions of speech which are sometimes used to conceal the truth. The people's representative should be a representative of all classes, of all occupations and of all interests, and he should voice the aspirations of the people before the tribunal of parliament, the highest and the greatest tribunal in a democratic country. But, Mr. Speaker, when we see in that land, endowed with all the riches of nature, whole countrysides in a stagnant and moribund condition, when we see men and women struggling for a living under conditions that are perhaps too severe, we are looking at sights that should not be seen in Canada to-day.


Mr. MacLEAN (Prince):: My hon. friend has stated that his predecessor fell down in his duty as a representative because he failed to present the facts as they existed. The late member for Skeena was a very highly respected member of this House, and we would like to hear the particular occasions on which he fell down and the particular matters which he failed to present to the House.


James Charles Brady: I shall enumerate them as
I proceed. The country population, Mr. Speaker, is the most vital element in any nation, and it should be given a better chance of continuance and growth. We are creating in Canada to-day, by our neglect in assisting the industrial centres throughout our rural districts, a parasitic state of existence, drawing our youth to the towns, veiy often to get little clerical jobs either in the banks or in the government, and thus breaking down the morale and the character of our young manhood and robbing them of those healing and beneficent influences which come from participating in the development of our resources-because, Mr. Speaker, tilling the soil and developing our great natural resources is the one great source of patriotism and love of country. So long as our youth are not given a chance to participate in the upbuilding of Canada, so long shall we have this exodus to the great republic.
Hon. members may smile and think that the opposition have nothing to do but attack whatever the government brings forward. That is not so. In my view, Sir, the duty of an opposition is an honourable and onerous one, and I believe that the government are always pleased to find in the ranks of the opposition men who will point out where legislation is weak and offer constructive criticism to make it better.

The Budget-Mr. Brady
Undoubtedly, Mr. Speaker, Canada's immigration problem is greater than the immigration problem of any of her sister dominions. The reason is that Australia and New Zealand, for instance, being far remote from a great industrial country such os the United States, their sons and daughters remain in the land where they were born, and likewise the immigrants to those dominions are content to remain in their adopted country. But we are in a very different position. Owing to the lack of employment for our youth commensurate with their ambition,, they go to the United States, where they meet with pronounced success. If any hon. gentleman here desires to secure concrete proof of what is happening in this regard to-day, it is easily obtained. There is not a high school in the Dominion but is pouring out every year scores of boys of brilliant attainments who go to assist in developing- a country that is the principal trade rival of their own.
To-day, Mr. Speaker, we are waiting for some statesman to solve the problem, not of bringing in more immigrants, but of keeping our sons and daughters in the land of their birth. It is no small problem and it is not to be passed over lightly. It strikes at the very vitals of our national life, and upon its solution hinges the future of Canada. We are told that Canada's one great need is more people, and we know that she is entitled to and can sustain a great population. But, Sir, before we invite more immigrants to make their homes with us we must make conditions such that those who have already settled here may be able to continue on their farms. We are not doing this at the present time, as I shall point out in regard to my own constituency. To-day, while Holland is spending large sums of money in reclaiming land from the sea, while Italy is spreading out to acquire new territory, and while in the eastern and southern countries the population increases as regularly as ocean wave follows ocean wave, we with an empire of fertile land are wondering how we shall fill up our great open spaces. That is something to be taken to heart by those who have an interest in the progress of their country.
Coming to my own constituency, by way of supplement to what I said regarding the reason for my being here, let me read a very short extract from the Province of September 17, 1926. This is a telegram sent by the Prime Minister of Canada to the Premier of British Columbia. After thanking Mr. Oliver for his congratulations on the result of the federal campaign, the right hon. Prime Minister said:
I will look to see British Columbia come gradually into line.
If I now read a quotation from the Daily News of Prince Rupert of the tenth of this month, I think the House will agree with me that the hopes of the government appear to -be bright and rosy. The late member for Skeena on this particular occasion, in addressing a public meeting, said:
There is no doubt in my mind that I am still the member for Skeena. The only difference is that I draw no salary and am privileged to stay at home and enjoy my family.
Is there any other constituency in Canada to-day that has the great privilege of being represented iby two members, one in the House on the opposition side, pleading the cause of that constituency, and one at home, the real member, who has the interests of the constituency at heart? I give to him whatever honour he deserves, and I add this, that if through his instrumentality the dream of Sir Wilfrid Laurier comes true and the port of Prince Rupert develops into one of the great ocean ports of the world, I shall not feel in the least envious. If my predecessor is still the member for Skeena, then surely this House as well as myself can support him in his demands for better transportation and greater development. And if, as the Prime Minister (Mr. Mackenzie King) declares, Skeena is to come into the fold, supposing that thereby the development of Skeena and the happiness of the people who live there will be furthered, I offer no objection.
I have here a little clipping from an American newspaper which is pregnant with meaning:
The government estimates that the present population of the United States is 118,628,000. The country has gained 12.917,380 people in the last six years, and 1,500.000 in the last year. All this is encouraging, although it is too slow, vv e need 50,000,000 more people now to eat up the surplus products of farms, buy new automobiles and our used ones likewise. The people are the real wealth of the country.
According to this editorial the United States requires fifty million more people to absorb its surplus products; yet at this very hour we find in various parts of Canada settlers of the finest type, who have made our empire what it is, struggling in despair and quite often ready to leave a country which should be to them a very paradise.
I am not here to-night to advance any adverse criticism. I do not blame the government for the fact that settlers to-day, in the most fertile valleys of the world, are suffering untold hardships through lack of the things they need. It is an old grievance. I do affirm, however, that it is the duty of the government to listen to the voice of a rep-
The Budget-Mr. Brady

resentative who submits to them matter for thought, and who states the facts, which they can easily verify as it is their duty to do.
I come now to the constituency which I represent. An hon. member asked me why it was that my predecessor was not here to-day. I can reply to him convincingly: the electorate of that constituency by their vote on September 14 gave the answer, namely, that he wa3 not satisfactory to them, because he was not placing their needs as they ought to be placed before the government of the country. You need go no further than that. If I thought for one moment that in coming to this House I might in any way interfere with the laudable ambitions and the future prosperity of Skeena I would not be here. I feel that the government of the country is endowed with a wisdom, or at least a judgment sufficiently grounded, to enable it to rise above party politics and to view Canada's needs in a non-partisan, national spirit.
I want to bring to the attention of the government now a few points in connection with the harbour of Prince Rupert and generally of the riding I represent. As this House knows, in 1911 Sir Wilfrid Laurier visited that port, taking a deep interest in its development. He prophesied that one day Prince Rupert would become one of the ocean ports of the world. To-night, it seems to me, this prophecy is well on the road to being fulfilled. To-day the port of Rupert is an ocean port, and before the next few months will have passed, over fifty tramp steamers from Britain and the orient will have loaded grain for every port in Europe, and for the orient as well, at the local elevator. This, Mr. Speaker, is the thing I would like to dwell on for a few minutes. I believe there were many members in this House who did not believe it was advisable1 that an elevator should be built in Prince Rupert. No one should find fault with a man if his convictions are honest and if he believes that it is not advisable to put a large sum of money into an elevator or into a new railway line. But now that the elevator is a success, now that it is functioning to the extent of one hundred per cent, now that wheat from Alberta is flowing into it steadily, the government must undertake to see to it that that port continues to function and to develop, not for the sake of Rupert but for the sake of Canada and the development of Canadian ports. In that port we have wonderful facilities of all descriptions for an ocean-going trade. When the port of Montreal and the great lakes were frozen up and scores of steamers were ice-locked round the Christmas season, there were

at the port of Prince Rupert-which never in the memory of man has been ice-bound, and I believe never will-five or six vessels ready to take grain to the orient or the old country. I would ask the government to remember that it is their duty now to interest capital in continuing the work that they commenced, and that other elevators should be built as well as the present one. For Prince Rupert is the natural outlet to the Peace river country. Rupert is 4S0 miles nearer the orient than any other port of Canada, and as the orient is annually increasing its imports of wheat, the evidence is conclusive that that port will become a great ocean port. But there is one thing, Mr. Speaker, I would urge the government to consider and it is this: The development of the hinterland of Prince Rupert has been sadly neglected. The transportation facilities are of the very worst. The great Buckley valley, which produced that timothy seed that won, I believe, the first prize at the Chicago exhibition, lies in the very place where to-day people find access to the market for -their products very difficult. I shall read a few words from a statement by the Lieutenant Governor of British Columbia regarding the hinterland of Prince Rupert, to which I am going to refer for a few minutes:	"A dominion within British
Columbia", is how the Hon. Randolph Bruce, Lieutenant Governor of British Columbia, described the interior of central British Columbia after taking a trip through it in the fall of this year. His words were:
I was amazed at the vastness of the rolling country. It is a wonderful mixed farming country, and the settlers are of the type that go to make a wonderful land.
Would you believe that for five years the people of Francois lake and the Ootsa lake country, one of the most fertile, one of the most beautiful and one of the richest both in its soil and in its mineral production, have asked this government to put in a little spur line of eight miles that would open up two thousand miles of country where a thousand British families could live in peace and comfort? The people of this country consider, perhaps unjustly, that the government of Canada are more concerned in building up hotels for the tourist trade than providing the necessary facilities to get their goods cheaper to market. I do not believe -the government are as hard-hearted as that. I believe that the government, when -these matters are placed before them, will be willing to do what is right, namely, give -those people these facilities which will permit of the development of a fine type of settler. In the north country

The Budget-Mr. Brady
of Atlin, where we have thirty-two producing mines, what do I find? An immense area, rich in its soil and in its mineral production, with thirty-two placer properties, including hydraulics, and a great prospect of further development. What assistance has this country received from the federal government for the last twelve months? None, except an increase in the postmaster's salary, although its people have for years asked federal aid through the provincial members and their federal member that they might get a very necessary thing-simply a road that would enable them to bring in their goods and not have to pay a rate of $65 a ton as they are paying to-day. It is no wonder that men turn aside and lose faith in governments when governments seem to be heedless of their wants. We have likewise in the south of that constituency a great valley rich in resources and in population; but what do we find? The same thing prevails there. The people there, just because there is no road, pay $60 a ton to bring their food supplies into the valley. Therefore I would urge the government to consider the advisability of reestablishing federal aid for highways. I believe that British Columbia exhausted its quota, but last year the federal government spent more than $18,000,000 in the upkeep of our highways.
Another matter that has caused annoyance and disappointment to the people of my constituency is the fact that from the port of Prince Rupert to Canada outside there is not a road nor even a pathway. You may search the geography of the world and you will not find a port as important as Prince Rupert that has not a highway leading from it. I know the government cannot do everything, but I do know that unless federal aid for highways is reestablished, the port of Prince Rupert will still wait for many years before those ninety miles of road are built to connect with the great Canadian highway.
It is all very well for bon. members from highly organized and artificial city life to look askance at pleas made by representatives from rural districts, but the happiness of those people, yes, their very future, depends upon things of this nature. When the Hudson Bay railway problem comes before this House it may give me far more thought and doubt than I had before to decide the question: Is the government doing right when so much necessary work is required in settled places and districts where the people are waiting for that little help?
Another matter that I would like to touch upon is this. I am no pessimist; I am not an extreme optimist; but I am one who believes that we are living in a great period
in the history of Canada, and that the one thing which we need to-day is a policy of development which will bring together and relate closely the maritime provinces, the industrial provinces of Ontario and Quebec, the prairie provinces, and British Columbia. There is no value in an isolation policy, and the government will be doing a great work if, in the diamond jubilee of confederation year, they inaugurate a policy whereby every place, every province, in Canada will participate justly and equitably in federal government.
The port of Prince Rupert is the greatest fish producing centre in Canada. Figures after all are very dry, and I notice that last week when members speaking began to cite figures, many took no notice. But nevertheless no one can realize the wonders of Canadian commerce if he does not take an interest in figures. In the season of 1926 just closed, what do I find as regards the port of Prince Rupert, which is district No. 2 of the three great fishing districts of British Columbia? I find that the wdiole salmon pack for British Columbia in 1926 was 2,605.000 cases of salmon, and of that the Prince Rupert district alone produced 1,376,300 cases-in other words, nearly 60 per cent of ihe total export of salmon. We have a great fishing industry; we have in the port of Prince Rupert alone nearly $2,000,000 invested in salmon boats and halibut boats. We have contiguous to Prince Rupert a district so rich in its mineral wealth that one mine fifty miles from Prince Rupert in the last six years paid in dividends alone the sum of $8,600,000. We had a new mine opened up a few months ago called the Topley mine. It is bonded for $200,000 cash, and it is the belief of those who understand mining properties that in a few years it will be a second Premier mine, and probably a rival of the great Trail smelter. Then we have within sixty miles of Prince Rupert the great Anyox Copper Smelting Company. We have everything in that district that the people of Canada should be proud of, and yet the people are disappointed at the way they have been treated. What they need is transportation. That is the outstanding need in central British Columbia to-day, and if the Canadian National management, who are so anxious to make their hne successful, would only realize that an expenditure in this territory would bring them a good return on their capital investment, I am sure they would not delay in coming to the aid of these people.
I have little further to say. I may have erred somewhat in my presentation of these matters, but I am a new member and perhaps I am not advanced enough to be able to cloak my thoughts. I say with Shakespeare
The Budget-Mr. Brady

in Macbeth that "Security is man's chiefest enemy." There is no government, I care not where they are or how strongly entrenched they may be, that can continue to turn a deaf ear to the aspirations of the people; for if they do the day will surely come for them, as it came for Macbeth, when the hopes they built upon will dwindle away. I am not saying this in any personal way, but it does seem to me that the hour has come, Mr. Speaker, when at least the two great parties in this House, though they may choose to differ on major questions, should at least agree on minor ones and unite in putting through good legislation and in giving good progressive government for the good of the people as a whole. Mr. Speaker, the people are thinking to-day, and they are wondering why it is that in an era of such great prosperity for Canada, many sections of this country are not participating in that prosperity. May I express the hope that 1927 will be for Canada a year of progress and prosperity in which every part of the country will share. May we see in our Dominion a great and a happy people without many problems, and leading the way in good, sane and progressive government.	t


Agnes Campbell Macphail: Mr. Speaker, I wish to comment
briefly upon the budget which was brought down this year on the 17th of February. It was an early, if not a promising, product of the new year. In that budget very much was said about the buoyant spirit that is prevalent in Canada to-day, about the good crops that we have been blessed with and the reduced debt, and I am glad to say that in a measure these things are true. Conditions are better than they were, possibly a good deal better than they were three or four years ago, but when the hon. Minister of Finance (Mr. Robbf goes further and says that all traces of war depression have disappeared, my personal opinion is that that is a misstatement of fact. Many papers have picked this up and are carrying it across Canada, but personally I think it is very far from the truth. Possibly the government feels it needs some excuse for already making preparations for the next conflict and increasing to such a great extent the estimates of the Department of National Defence. I want to speak on that subject for just a moment or two, and to quote from one whose name is familiar to the members of this House, the Hon., possibly the Right Hon. Arthur Ponsonby. He is a very respectable fellow. When he was a little chap he held the queen's train. He has blue blood, but he thinks. He has written many pamphlets and many books, one
fMr. Brady.]
recently, Now is the Time, from which I quote. At page 102, in speaking of war, he has this to say:
I maintain that by far the most tragic thing about war, is not its immorality, nor its cruelty, but its manifest and colossal futility and imbecility. I maintain that war achieves no single object of advantage in the high sense to anyone, nor does it attain any of the supposed aims for which it is waged.
The sight of the Allied Powers first making a supreme physical effort to destroy and annihilate their foe, and then making a far more prolonged, yet still unsuccessful effort to set that selfsame foe on his feet, in their own interest, is in itself a striking epitome of the inanity of war.
Again, at page 112, and I would refer this to the profound consideration of the government, he says:
As to the settlement of grave international disputes, war is obviously the very worst method. Agreement, not force, is the only possible method of settling any dispute.
It is evidently the one that has been arrived at by the two major parties in this House. He goes on to say, at page 114:
The spirit of militarism in governments is far more rampant now than before the war, although it may have shifted its abode. The expenditure on armaments in the victorious nations is far greater than it was before the war.
Just one other quotation, and I am through He comes, near the end of the book, at page 166, to this conclusion:
That the causes declared by the government for the declaration of any war are, and must be based on lies, and;	[DOT]
Second, that war however fiercely waged and however successfully terminated, can accomplish nothing at all.
If that is even in a measure true, surely we, in such a splendid country as ours, so very free from attack or the fear of attack, so very blest in being far removed from the conflicts of Europe, should consider very seriously the opinions of a man who has been so close to international affairs as the Undersecretary of State in the British government, led by Ramsay MacDonald. Here is a way money can be saved.
The Minister of Finance (Mr. Robb) stressed the fact that we had had good crops. Possibly he is so far removed from agriculture at the present time that he does not know that in the province of Ontario this year we did not have a good crop at all. In fact, I consider that the farmers in the northwestern part of Ontario, from which I come, have had this year one of the hardest years that they have passed through for some time. The crop was almost wholly a failure. The harvest season was very wet. The farmers are doing the best

The Budget-Miss Macphail
they can to tide themselves over until next year. Preceded as it was by several years of depression, they are finding it a most difficult year.
*Coming again to the budget, I observe that there is a twenty-five per cent reduction of the excise tax on matches. If you say it that way it sounds a good deal, but I have in my hand a little box of Eddy's matches, sold at two for five cents, I believe, and the tax on that wras one cent. If the full benefit of the tax is passed on to the consumer, they will have to charge four and three-quarter cents for these two boxes. I have never seen a retail merchant do business in that way, and I do not expect that he will. I do not expect that the cut in the excise tax on matches will make any difference to the consumer at all. I am not sure whether the manufacturer or the retailer will get the money. The federal treasury will lose it-of that we may be sure -the consumer will lose it; and therefore I am not enthusiastic in reference to the twenty-five per cent cut in the excise tax. I was reading in the Calgary Albertan to-day that the tax brought in last year produced a revenue of $2,403,924, and it will bring in one-quarter less next year.
The reduction in sales tax will be welcomed, but again there is little likelihood of the consumer getting the full benefit. I think all of us are glad of the Temoval of the excise tax on overdrafts. I approved of that reduction and do not mind saying so. To me it seems stupid to tax people who are in debt and unable to pay, and since I have been there I understand it very well.
I appreciate the provision in regard to the stamp tax, making everything below ten dollars free of tax and over that a uniform rate. I think that is a good thing and I commend the Minister of Finance for it.
Then we come to the income tax. There I must differ with the Minister of Finance. I believe that the income tax should be based on the ability to pay. That is a sound principle and I think it should be maintained. I never felt a bit badly about paying an income tax. I was thoroughly glad that I had an income on which to pay the tax, and there are so many people in Canada who have not an income on which they can pay a tax that I believe those who have incomes should pay income tax. I think I am right in saying that a man having a family of four children is entitled to an exemption up to $5,000. He would have to be receiving $6,000 before he would have to pay a tax, and if a man is receiving $6,000 I see no excuse for not paying the tax. If the government could have found a way to plug leaks and get the
higher up people, those with large incomes, to pay the income tax, it would be a much wiser step than the one they have taken, because inasmuch as we do not raise the revenue from direct taxation we will have to raise it from indirect taxation. But if the protective tariff is used for the thing it was instituted for it will raise no revenue at all, because in the protectionist heaven there would be no revenue; there would be nothing imported except the raw materials and they would come in free. Manufacturers are always keen about protecting everything but their raw material. I consider the move from direct to indirect taxation a reactionary one. It is no credit to any Liberal government, and it is not in the best interests of the Canadian people. Direct taxation is a splendid lesson in civics. It leads to better citizenship. People want to know what the government do with the money they get. The system leads to economy and to the elimination of pork barrel methods and campaign funds. In fact if direct taxation is persisted in long enough, until the people are bearing directly the whole taxation, it must lead to a very honest method of carrying on governmental affairs. Moreover it is a business-like method, I think all these things are good, and if for no other reason, this lax should be maintained at its previous level.
The hon. member for Marquette (Mr. Glen) asked why the income tax was lowered, I said it was because they who paid it raised a big enough holler. I should have said the people who pay control the government, or have a great share in controlling the government. In looking for the government when I come to this question of the tariff I find that I cannot see any of them; there are many big men there, but they are all hidden behind the tariff board. I recall that when the Canadian Council of Agriculture was asking for a tariff board the object of it was to have a method of preventing people from obtaining a higher tariff, or establishing tariff for the first time, until they had proved to the tariff board that there was an absolute necessity for the imposition of duties or the raising of the tariff. That, I think everybody in the House will agree, was the object of the tariff board, but it seems to me-I believe that most of the members on the government side will agree- that the tariff board is used as an excuse for the stagnation of the government in regard to this matter.
Has the government learned nothing from the experience of last year? In the face of a dire necessity for support they brought down a budget that was true to the alleged principles of the Liberal party, a budget that made at



S68 COMMONS

[Stage Direction]
The Budget-Miss Macphail
least some very substantial cuts in the tariff. It was called the Robb budget, but I think the man whose name it bears was the least enthusiastic in regard to it. Great disaster was predicted after this budget came down. The manufacturers were to leave the country, the workshops were to be closed and the people out of work. Everything disastrous was to follow. This year has proven what the results are, and the manufacturers have not suffered at all. Their sales have increased. The demand for their products has increased. The motor companies manufacture more cars and sell more cars. The best evidence of the effect of last year's budget is the fact that the price the consumer pays has been substantially lowered, yet the government has not the courage this year to take one more step along the path it set for itself last year. The people of Canada approved almost to an astounding degree the Robb budget of 1926. As a matter of fact the Robb budget of 1926 was so powerful in the country that even the customs scandal did not prevent the people from taking what they considered was the best chance of getting another budget of the same kind. Of course, the constitutional question had something to do with the result, but I do think that more than any other factor the Robb budget was responsible for sending the Liberal party back to power on September 14. You know, you got the low tariff west, you gained in the low tariff sections of Ontario -and now your answer to the low tariff people is that having got back you are not going to d'o a thing about it. Well, I am not worrying; it is your funeral. But it is poor tactics. The people ask for bread and the government gives them a stone.
Often I have heard people say of a certain man, "He is a nice man," or of a certain woman, "She is a sweet woman," and I always think that ends either as far as I am concerned. That is the way with this budget- it is a nice little budget. I consider that the government have missed a wonderful opportunity of expressing in action the alleged ideal- and principles of the Liberal party. But they say, "Oh, we could not reduce the tariff because the tariff board had not investigated the thing sufficiently, had not recommended it. Since we have a board we do not need to use our brains, we are resting them." When reading the speech delivered yesterday by the hon. member for Macleod (Mr. Coote) I notice he stated that bath tubs enjoyed a protection of 35 per cent; white lead, ground in oil, 37i per cent; wall paper, 35 per cent; window shades, 35 per cent; umbrellas, 35 per cent; door mats, 35 per cent; artificial silk fabrics, 35 per cent; silk fabrics, 
35 per cent. Well, one does not need a very powerful brain to know that the manufacturers of those articles are enjoying too much- protection, to know that they are not merely charging 35 per cent but even 37i per cent and more than that to the consumer, while they themselves are very comfortable, having summer homes where it is cool and winter homes where it is warm.
I am not one of those who think that the tariff is the only thing that makes the cost of living high. I think the control of credit, cost of transportation and international conditions also have something to do with the cost of living; but the tariff has a great deal to do with it, and those articles that I have enumerated are in everybody's household, everybody buys them. Everybody does not buy an automobile, nor does everybody buy a new automobile every year, but everybody does buy some of these things every year, and it was the business of the Liberal government to reduce the cost of living in so far as they were able to do so and thus acknowledge the confidence that the Canadian people reposed in them last September. This they could have done by reducing the tariff. If any proof is wanting that these articles can stand a reduction of tariff, even although the tariff board has not said so, let me recall to hon. members the speech delivered yesterday by the Minister of Trade and Commerce (Mr. Malcolm), when he was not speaking as Minister of Trade and Commerce, but as an apologist for enjoying 30 per cent protection on his very excellent furniture. He said, referring to the rapid rise in the value of stocks, that Penman's had risen from 152 to 186, Dominion Textile common stock from 68 to 107, Canada Cement from 92 to 131, and then he said he would not burden the House with further examples, of which he had a long list.
Mr. GARLAND (Bow River):: In which
his own company would have appeared.


Agnes Campbell Macphail: I suppose so. It would have been better had he not said that, but I am glad he did. It really does not need any argument at all to demonstrate the necessity of further tariff reductions. You do no' need a tariff board to tell you that, and if the tariff board is to be made an excuse for never reducing the tariff, why, the sooner we get rid of it the better for everybody concerned. In the course of his speech yesterday the member for Macleod (Mr. Coote) gave the proportions of our exports, 56 per cent being agricultural and 44 per cent representing other exports, partly manufactured goods.

The Budget-Mr. Lavigueur
Well, the policy of this government apparently-and the policy of both parties-is just the same so far as I can see, with the exception of last year; and honestly I take quite a bit of credit for people who were not in the government's party for last year's budget-the policy of the government I say is to impoverish the 56 per cent in order to make the 44 per cent prosperous. That is not a good national policy.
I do think that to-day Canada stands more in need of holding her people on the soil than of any other one thing. We want the people on the soil to stay there if they are getting a good return for their labour and investment, if they are having a satisfactory social, intellectual and economic life. If they are, then all is well with Canada. But that is not true. There is not any use our sitting in this comfortable chamber trying to fool ourselves with the idea that the people are staying on the land; they are not. I have not the figures under my hand, but I was reading yesterday that the public school population of Ontario in the last ten years has shifted almost wholly from rural to urban. It used to be that the vast majority of the public school children were in the country, the minority in the towns; it is the other way around now. To-day the educational system which we have in the province of Ontario- assisted by this government it is true-is draining the people from the land just as rapidly as possible, while the government spends a great deal of money on an immigration policy to bring in newcomers to settle on the land where the native born cannot o * will not stay. It is an insane policy, but I suppose one might as well save one's breath and say nothing about it.
We are simply put in the position where we cannot do anything else but move an amendment to the budget. As a matter of fact we are very glad to do so. Somebody must stand for liberal principles if the Liberal party will not. With all due respect, I would suggest that if the Liberal party really want to move along low tariff lines they had better put people in the cabinet who believe in low tariff. If they do not do that, and keep in the cabinet people who are high tariff-very excellent people, of course-it is equivalent to declaring, "We are not a low tariff party at all, we are just a branch of the Conservative party." And just now that looks to be exceedingly true. Why not say so during elections?
I want to quote what Mr. Bayard, at one time the United States ambassador to the
Court of St. James, said in regard to protection :
In my own country I have witnessed the insatiable growth of that form of state socialism styled "protection", which, I believe, has done more to foster class legislation and create inequality of fortune, to corrupt public life, to banish men of independent mind and character from the public councils, to lowrer the tone of national representation, blunt public conscience, create false standards in the public mind, to familiarize it with reliance on state aid and guardianship in private affairs, divorce ethics from politics, and place politics upon the low level of a mercenary scramble than any other single cause.
I regret that I am not able to stand in my place to-night and say that I agree with the whole budget. I am glad to be able to acknowledge that there are a few things in it that I do like, but they are so small as to be almost insignificant. When I remember that in this budget the Liberal party have departed from the sound basis of direct taxation for the unsound basis of indirect taxation, and that they have hidden themselves -with apparent success-behind the tariff board, I feel that I cannot give my voice in approval of the budget. Therefore, for those of us who believe in low tariff, there is nothing left for us to do but to fight for low tariff and the very many other reforms that go hand in hand with it, because, as I said before, I am not one of those who believe that low tariff is the cure-all. I think that when people get a single track mind like that-well, it seems to me they are off the track, if you know what I mean.


Mr. H. E. LAYIGUEUR (Quebec-Mont-morency):: First of all, Sir, I wish to congratulate you upon your reelection as Speaker for the third term. Your reelection by unanimous consent is certainly a great honour both to yourself and to thg House of Commons of Canada. This high position you have occupied since 1921 with such dignity and impartiality that in 1926 the House unanimously reelected you to the chair as it has done again in this the first session of another parliament.
I consider it an honour to follow the hon. member for Southeast Grey (Miss Maophail), the only lady in the House of Commons, although I do not share her views generally, and particularly so far as the tariff is concerned. She has told us she is absolutely in favour of a low tariff: let me assure her that neither the province from which I come nor I myself can sympathize with her in that regard. We are in favour of protection for industry; we do not believe in a low tariff.
The Budget-Mr. Lavigueur

I am glad to have an opportunity to-night to state my views on the tariff question. I am pleased to see that the budget this year contains no items of reduction.
Let me congratulate the Minister of Finance (Mr. Robb) on the splendid budget he has presented to parliament on this occasion. It is the. right sort of budget and every business man I have met, whether Liberal or Conservative, acknowledges this. Only the other day I was speaking with one of the chief organizers of the Conservative party in the province of Quebec, and before a large company he told me that in his opinion the Robb budget this year was in every way satisfactory. He did not find anything to complain about in it. It was, he said, undoubtedly a step in the right direction. The budget this year gives us a reduction in the debt of $31,000,000 and a reduction in taxation of $27,000,000. The reduction in income tax is not as considerable as we should like to see it, and the sooner this tax disappears the better. It is one means of retarding trade and industry in this country. Certainly, however, the improvements that were effected last year, and those that we have this year, give us every reason to believe that, as soon as the finances of the country will permit, the first thing the government will do will be to reduce the income tax still further. Reductions in other directions-the business tax, sales tax, tax on cheques and promissory notes- are also welcome, and it is encouraging to think that the government has been able to effect these reductions and at the same time administer the affairs of the country as economically as they have been administered
Just a word now about the Civil Service Commission. We have heard a good deal about the commission recently and this year's estimates include a sum of $318,525 for this body. The commission costs this country an enormous amount for upkeep, and I am bound to ask myself whether it has rendered the services which we have a right to expect from it. In many instances, it is felt, the commission has not done justice and has not exercised its powers in the way they ought to have been exercised. The Civil Service Commission has control over the appointment of employees and it controls patronage. I do not believe in patronage but I certainly do think that the member who represents a riding is the best judge of the fitness of a candidate. He ought to be allowed to nominate as postmaster this or that man in the village, because he is in a better position to make the selection than are the commissioners sitting here in Ottawa. Moreover, when a member recommends a candidate for appointment he is bound to take the responsi-]Miss Macphail.]
bility for his recommendation, and this being the case he must take care to see that the appointee is possessed of the proper qualifications. The function of the commission should be to examine candidates, and the head of the department, in conjunction with the representative elected by the people, should be responsible for the ultimate appointment. It seems to me that we could save three or four hundred thousand dollars by a reorganization of the Civil Service Commission, and the administration would be just as effective. I hope that steps will be taken to improve the commission by withdrawing from it certain powers which, in my opinion, experience proves the commission unfit to exercise.
I wish to place before the House once more some of the needs of the district, comprising the city of Quebec and the county of Montmorency, which I have had the honour to represent since 1917. The citizens of Quebec have been asking for some time for the construction of a roadway on the Quebec bridge, and I urge the government to grant substantial assistance towards the project. I hope they will take the question into consideration and vouchsafe that measure of assistance which the conditions justify.
I observe with -pleasure that a vote of $100,000 was placed in the estimates for repairing and putting in order the quarters of the Governor General at the Quebec citadel. That old citadel, as well as the old fortifications of Quebec city, to which so many historic memories are attached, should be placed in the best possible condition so that they may be objects of pride to future generations. I take this opportunity of asking the government to grant a substantial amount towards the worthy object of restoring the old fortifications.
A few days ago I had occasion to remind the government that while they were voting millions of dollars to take up bonds of the Grand Trunk Pacific Railway belonging to people in England, they should at the same time take up the bonds subscribed by the city of Quebec for the construction of the Lake St. John railway, and a portion of the Canadian Northern now merged in the Canadian National railways. I repeat my demand on the present occasion, and I ask the government to do for the citizens of Quebec what they have done for the citizens of London, England.
The government has adopted a very wise policy in providing for the building of post offices in different places. I notice that one of my hon. friends from Prince Edward island has obtained an appropriation for this purpose. May I ask the Minister of Public Works (Mr. FEBRUARY 22, 1927
The Budget-Mr. Lavigueur
Elliott) and the Postmaster General (Mr. Veniot) to grant the amount necessary to provide a post office in Beauportville, a municipality possessing a population of some six or seven thousand people? The necessary site for this purpose was acquired by the Public Works department some years ago. The time has now come when the money necessary to carry out this project should be made available, seeing that Beauportville is one of the most important parishes outside the limits of the city of Quebec. I would make the same demand for the municipality of Saint Gregoire de Montmorency, a rapidly growing municipality with a population of over five thousand.
I would suggest to the government that the election act be amended in some way in order that it may operate more satisfactorily than it does at present. The existing law was the cause of a great deal of misunderstanding at the last election. Everybody interpreted the act as they thought fit and great injustice was wrought. In my opinion the election law should be carefully amended so as to avoid a repetition of some of the mistakes which were witnessed in the fall of 1926.
I notice that the hon. Minister of Agriculture (Mr. Motherwell) is in his seat, and I would urge that he establish a demonstration farm on the island of Orleans. This island is situated only a few miles from Quebec but agriculture flourishes in its several parishes and the people there are producing fruits of all kinds in enormous quantities. They are asking for a demonstration farm on the island, and I would urge the Minister of Agriculture, who devotes so much time to the agriculture of this country and who is always so anxious to do anything he can for this class of people, to establish a demonstration farm on the island of Orleans.
During the last year everybody has heard about the customs investigation and enormous sums of money have been spent in endeavouring to find out if smuggling is going on in Canada. What has been found out, however, was known before the investigation began. To-day I ask this government, which is desirous of economizing and which very often refuses, on grounds of economy, to vote money for demands which are most reasonable for urgent public works, if the time has not come to stop this investigation and to endeavour to find some way of putting an end to smuggling in this country. We know that smuggling has been going on, not wholly in Quebec or the port of Montreal, but on an equal basis in all provinces of the Dominion. Let us stop this extravagant expenditure and use the money in satisfying the most legitimate demands which are from time to time made upon the government.
There are in this House seventy-one French-Canadian .members, including six ministers. I know that the French-Canadian element in Ontario has been asking for representation in the cabinet, and I would view with pleasure the nomination of one of our nationality to represent in the cabinet our people in Ontario. I would also like to see a seat in the Senate given to some one of French-Canadian nationality in Ontario. This would only be justice, on account of the six counties with a purely French-Canadian population in northern Ontario and six other counties the population of which is partly composed of French-Cana-dians. I hope that the government will take my suggestions in good part and that our brothers in Ontario may soon have the representation for which they have asked.
On motion of Mr. McGibbon the debate was adjourned.
On motion of Mr. Lapointe the House adjourned at 10.15 p.m.
Wednesday, February 23, 1927