1927-02-25

COMMITTEE ON RAILWAYS AND SHIPPING

[Stage Direction]
Mr. W. T. GOODISON (West Lambton) presented the first report of the select standing committee on railways and shipping owned, operated and controlled by the government.
On motion of Mr. Goodison t'he report was concurred in.


[Stage Direction]
Bill No. 81 (from the Senate), for the relief of Amy Humphrey Lowe.-Mr. Rennie.
Bill No. 86 (from the Senate), for the relief of Stanley Moorhouse.-Mr. Casselman.
Bill No. 98 (from the Senate), for the relief of James Arthur McNish.-Mr. Garland (Carleton).
Bill No. 99 (from the Senate), for the relief of Elizabeth Maud Maitland.-Mr. Hepburn.

Hon. J. A. ROBB (Minister of Finance) moved:: That the order of the House referring the estimates for 1927-1928, respecting loans to the Canadian National Railway Company and the Canadian Government Merchant Marine Limited, laid on the table on Tuesday 15th, February, 1927, to the committee of supply, be discharged, and that the said estimates be referred to the select standing committee on railways and shipping owned, operated and controlled by the government.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The House resumed from Thursday, February 24, the debate on the motion of Hon.
32649-41J
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.
Hon. H. H. STEVENS (Vancouver Centre):: Just a moment or two prior to the opening of the House, we, the members of the House and others, were favoured with a very brief, all too brief, exhibition of singing, a rendering of the sweetest of music by the visiting choir from the old land, and I thought that, as the first member of the House to speak following that interesting occasion, it would not be out of place to express my personal appreciation of the splendid manner in which they rendered the various numbers on their program an expression which I am sure will be shared by others, and to extend to Mr. Sydney H. Nicholson, the organist, and the Rev. Edmund
H.	Fellowes, the director of the choir, our sincere and cordial felicitations.
It might properly be hinted to me that the atmosphere created by that pleasing incident is not quite fitting to a debate upon the hard and material facts which are supposed to be dealt with in a budget. Indeed one of my very good friends from the other side of the House, knowing that I was about to speak, intimated to me very kindly that there should be no bitterness left in my soul. I wish to assure the House that there is no bitterness in my soul now or on any other occasion when I am dealing with subjects such as we have before us this afternoon pertaining to the business of the country. After all, it is the business of members of the opposition to take up government measures or proposals and subject them to the most critical analysis that we are capable of, and if there are weaknesses in them to expose those weaknesses. On the other hand it is our privilege, if not our duty, to differ from those who differ from us, and, in so far as the views we hold are honest and honourable, to advance those views with all the vigour and force of which we are capable, and to-day I intend to follow the course which I have followed in the seventeen sessions I have been in this House by dealing with this subject, I hope fairly, but with that degree of energy with which a kind Providence may have blest me.
We have immediately before us a resolution that this House shall resolve itself into a committee of ways and means, with an amendment thereto moved1 by my hon. friend from Macleod (Mr. Coote), making one or two suggestions. With this amendment I find myself able very largely to agree. I certainly do not agree with all of it. I would not hare worded it in exactly this manner, but
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with much of the sentiment in the resolution I find myself in accord. I will just briefly deal with the amendment, but as the major part of my remarks will be directed to other subjects, I shall not spend more than a moment or two on the amendment. I may say that the last clause of the amendment is the only explicit and clear statement. The balance of the amendment is more or less of an expedient, a grouping of words, calculated, I think, to embarrass some, and to give expression to certain views not too clearly, indeed somewhat ambiguously. But the last clause reads as follows:
And further that no systematic effort is being made to reduce our national debt, the interest on which absorbs so large a proportion of the revenues of the Dominion.
I	intend to deal with that question in a moment, and I find myself entirely in accord with this: that the government should be brought to task for not having dealt with the question of the public debt in a little more definite and efficient manner than they have done. In regard to the balance of the resolution, it refers to the reduction in the high cost of living. This is a term that is used very, very frequently in this House, on the hustings and elsewhere. It is a popular cry, it has a strong appeal on the hustings, politicians like to use it, and I have no particular criticism of it. But I would point out to the House that the high cost of living, according to our view, is not merely the price of goods. It involves also whether or not a man can make a living at all, whether or not he has an opportunity to work. It is of infinitely greater importance to our people that they shall have an opportunity to earn rather than to be given the cost of living figures of to-day as compared with those of a month or a year ago. So I find no great difficulty in facing that clause, because the policy I stand .behind to-day and have been standing behind for years is a policy calculated to give Canadians a maximum of employment within the bounds of their own country and the highest standard of living. So I repeat, I have no difficulty in satisfying myself that we are able to offer to the people a policy which will give them the maximum of comfort in so far as it refers to the cost of living.
Now, Mr. Speaker, I wish to turn my attention to the main subject, namely, the committee of ways and means. I think it was Sir Robert Peel who, on one occasion when facing an exceedingly difficult and perplexing crisis in the financial affairs of the old land, said that half of the task was accomplished when you frankly faced the question. That is, if this House will consider and study the problems

with which the country is faced and frankly look them in the eye, half the solution is arrived at. And so this afternoon I shall address myself very largely to bringing to the atten-ion of the House three major problems. These major problems I intend to analyze in some degree, and for this purpose I am going to take five-year periods. The Minister of Railways (Mr. Dunning) is not in his seat. Last night he invited us to consider the five years of Liberal rule, and in doing so he suggested that there had been a progression of events leading to some definite conclusion. I propose to examine this five-year period, and tq place it in juxtaposition with the five-year period preceding, so that we may get a clear vision whether or not this country is progressing, as some claim, and to what degree that progress is of value or may be measured.
Among the institutions that we have inherited from the old land is the parliamentary system of government. A subdivision of that is the budget system, generally, I think, admitted by all to be the most effective method of dealing with the financial, trade and other affairs of the nation. This budget system is supposed to give to parliament certain information. For instance, it is supposed to deal with our financial condition, that is, our debts to our own people and to other nations; it is supposed also to deal with the question of taxation, that is, the revenues secured during the past year and the proposed methods of raising those revenues in the future, together with whatever taxation changes may be contemplated; in addition to that, it usually outlines for the information of the people the conditions of industry and trade, both internal and external. It is my intention to deal with these three phases of our country's affairs.
In the first place, I wish to say to the Minister of Finance that much as I appreciate his geniality and all those fine qualities that we so much admire in him, in my opinion his budget fails adequately to reflect the real conditions of the country. This budget does not budget for the future; it offers no new ideas; it is a static budget, it is dormant, it is stationary; it shows no progress, it offers no hope, it does not look into the future or give to us any idea that the government has the slightest appreciation of the rapidly changing world conditions, or that there are certain conditions in this country calling for new or different treatment from that of the past; it offers nothing in the way of suggestion as to the replacement of our depleted natural resources; it does not indicate that the government is giving that problem the slightest consideration, the necessity of which I hope to demonstrate in the course of my

The Budget-Mr. Stevens
remarks. I say to the minister also that it is a misleading budget. It is full of equivocations. It announces, for instance, a reduced duty-there is no reduction in duty; it announces lower taxation-there is an increase of taxatisn; it announces a surplus-this surplus is a myth; it also states that there is abounding business-this is only partially true. '
The budget, however, is consistent in one respect-it reflects a complete abandonment of the pre-election pledges of the Liberal party. I have only to call the attention of the Minister of Finance and his colleagues to the remarks of the hon. member for La-belle (Mr. Bourassa) yesterday afternoon, when he unfolded the inside secrets of the Liberal party and reminded us that ?omc years ago when that party went to the country with certain views that it persuaded the people to adopt, it carried on the old fiscal policy, slightly modified here and there, but in principle the policy of Sir John Macdonald, and that secret assurances prior to the election were given to the business interests of the country that the public utterances of the party would not be given effect to afterwards should it be successful at the polls. And so I say now we come to a very similar condition: the pre-election pledges of the Liberal party are not reflected in the budget. Not that we ask that they should be; but we do ask, Mr. Speaker, with some degree of right, that a party which led the people to believe that a given set of results would follow from a given set of actions should at least carry out its pledges on the faith of which it has received a mandate from the electorate, whether those principles are right, or whether other principles adopted in the place of those abandoned are not really the right principles.
Last night the Minister of Railways was very fulsome in his praise of the Minister of Finance for having brought down his budget so early. To my mind this suggests just a little clever political strategy. The Minister of Finance smiles, but he knows it is true. He had the Duncan report on the maritime provinces before him. The government had it in their sanctum over in the east block. They studied it and they divided on it, and they are divided on it to-day, as everybody knows. They are in a dilemma regarding that report. It calls for certain things which ought to be in this budget but the government dare not put them in this budget.


James Alexander Robb: What, for instance?


Henry Herbert Stevens: Amendments to the tariff
to give effect to certain recommendations of the report. The government do not dare ta
deal with that report, Mr. Speaker, because they are divided on it. So they said: Here, let us get this budget in, and then after it is out of the way we can make some promises to overcome the demands of the maritime provinces.


Mr. FCRKE:: The hon. gentleman is as
good as the Ottawa Journal.


Henry Herbert Stevens: If the Minister of Immigration (Mr. Forke) will possess his soul in patience I will deal with him in a few moments. This budget	has been	heralded
throughout the country as highly satisfactory.


Mr. RINFRET:: Hear,	hear.


Henry Herbert Stevens: The	Secretary	of	State
says "hear, hear".


An hon. MEMBER:: Hear, hear.


Henry Herbert Stevens: Another minister	says
"hear, hear." You will observe they are ministers who say that. Well, the budget has been welcomed throughout the country, because it was feared that following on the preelection declarations of the government, particularly in western Canada, there would be drastic changes in the tariff when the budget was brought down. But that apprehension has been allayed, for there are no great changes in the tariff, and so a sigh of relief has gone up from one end of the country to the other. A safe hand, it is felt, is at the throttle. There is no danger to industry. Everything is promising because the tariff has not been tampered with. Let me read the words of the Bank of Montreal issued in their official private bulletin of February 23:
The early delivery of the budget speech by the Dominion Minister of Finance, and the announcement that no tariff changes are to be made, should be helpful to business by removing that uncertainty and hesitancy in mercantile transactions which sometimes wait upon the late pronouncement of government fiscal policy.
Yes, the budget was welcomed for what it did not do, not for anything that it did. We welcome it in so far as in it the government has stayed its hand in further reductions of the tariff. The government announces in the budget that it is not its intention this year utterly to destroy the remaining fragment of a protective principle in the tariff. In other words, they have given the protective policy a tentative reprieve from the hangman's noose.
This is called a Robb budget, and I use that term without any personal reference to the minister. It is indeed a rob budget in the sense that it robs Peter to pay Paul. It is a budget which announces a reduction of taxation while as a matter of fact there is just
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a slight shifting of the burden of taxation. The taxation may be lowered in some small respects here and there, but the net result is an increase, as I shall well demonstrate in a moment. Let me deal with the budget, or rather the budget subject, because the budget itself would not require very much treatment. I pointed out a moment ago that the ways and means committee would have under its consideration normally the question of debt, the question of revenue, or the levying of taxation, and the question of trade conditions; and I intend to examine the whole subjeot in that order.
In the first place, I will discuss the debt. The minister announced that there would be a reduction in the debt, and in this connection I desire to bring to the attention of the House a singular fact. I have here the figures from each of four speeches delivered by the present Minister of Finance, and I will read them all to the House. On April 10, 1924, he said our surplus would be $20,750,000, to be applied to the reduction of the public debt. On March 24, 1925, he said that the public debt had been decreased by $35,900,000. On April 15, 1926, the minister informed the House, there had been a reduction in the debt of $22,350,000. On February 17, 1927, at page 387 of Hansard . the minister made the statement that there would be a reduction of $31,000,000 in our debt.
The individual reductions indicated iin these four announcements total $110,000,000, so that there should be a reduction in the debt to that extent from the year 1922. Each year this government has officially announced a reduction to the amount I have quoted, the total being $110,000,000; and bearing that in mind I would ask hon. members to follow me in an analysis of the public debt. There are two terms used in referring to the debt: one, the net debt, is the popular expression; the other is the funded debt, or, as my hon. friend from West Calgary (Mr. Bennett) described it, the dead weight debt. I myself prefer to call it the mortgage debt of the country. Now, the term "net debt" is a misnomer; it is meaningless. I hold in my hands the Public Accounts of the years between 1922 and 1926.
I take for purposes of illustration the latter year. In the Public Accounts, on page 3, will be found the balance sheet of the Dominion of Canada, and I would invite every hon. gentleman who has any knowledge of accountancy to examine that statement. What do we find in it? We find among the assets certain sums mentioned under various headings. For example, there

is "cash on hand." What does that represent? It means simply current cash that happens to be in the hands of scores of the representatives of the government throughout the Dominion, and so far as it has any relation to the reduction of the debt, it does not amount to the snap of the finger. It may be needed to-morrow; it is simply cash in the till carried from day to day, and represents no resources from which the funded debt may be paid. We might term it "petty cash " Then there is "specie reserve;" that is the gold reserve kept in the treasury in Ottawa against Dominion notes. That is something that cannot very well be used for the reduction of the fixed debt. Again, there are advances to the banks under the Finance Act; that merely refers to the fluctuating loans to the banks under that act to help the business of the country.
On the other side you have a certain amount of liabilities, including various items such as trust funds, post office money orders, outstanding Dominion notes in circulation, and so forth. The point I make is this: after subtracting the liabilities from the assets there is a net balance shown which is referred to as the net debt of the country, but which I submit has no relation whatsoever to the real debt. It is merely a balance between your assets and your liabilities, merely a bookkeeping sum; it is nothing more nor less than, a means of keeping a double entry set of books in order. Now I take the funded debt, schedule (t), which gives the sum of $2,471,000,000. However, before I discuss the funded debt I will make a further reference or two to what is called the net debt. I find that the net debt on March 31, 1922, was $2,422,000,000 and on December 31, 1926, including the amount paid off last fall, it was $2,343,000,000; that is to say, we have a reduction in the net debt of $79,000,000, in a period of five years. That' is nothing for this country to be proud of. I ask, where is the $110,000,000 of a reduction in the debt as announced by the Minister of.Finance officially year by year? It is not reflected in these figures; it cannot be found in the blue books; it is not there. It is a myth. But stranger still, I find that as between the 1922 reports and the Public Accounts of 1926, there has been a reduction in the circulation of Dominion notes of $58,880,000, which forms a part of this $79,000,000 reduction in the net debt. Let me put a question to my friends from the west who for the last ten years have been quite serious in their economic studies. Do they consider that a re-

The Budget-Mr. Stevens
duction in the circulation of Dominion notes is of any great advantage to the Business of this country?


Some hon. MEMBERS:: No.


Henry Herbert Stevens: Here are the figures, and this is part of the $79,000,000 of which they boast; I will come to the funded debt in a moment and show an even more deplorable condition there. In 1922 the Dominion notes in circulation amounted to $241,000,000 in round figures, while in 1926 they amounted to something over $182,000,000, or a reduction of $58,880,000. What does this mean? We have a Finance Act which in Canada corresponds to the federal reserve system of the United States, in a somewhat modified form, and hon. members will recall that in the revision of the Bank Act in 1923 this point was advanced as the reason why we should not establish a federal reserve bank in Canada.
I took that view then and I still hold to it, but I ask that the Finance Act should function; I ask that the advantages and powers of that Finance Act be put into operation, and the figures to which I have just referred indicate that under the Finance Aot the circulation of Dominion notes is less by $58,880,000 than it was in 1922, with a corresponding retardation of current business in the country.


Mr. GARLAND (Bow River):: Might I ask a question, just for information? Does the hon. gentleman attribute that decrease to the disposition on the part of the banks to refrain from offering for discount their own particular securities?


Henry Herbert Stevens: Perhaps that may be so, but I claim that it is the duty of a government to influence the movement of business and trade; I do not say the government should get into business and control it, but I do say the government should influence the movement of business and trade for the benefit of the whole country. They can very readily attract attention to this facility and encourage the banks and others to utilize this accommodation which is at their disposal.


James Alexander Robb: Before my friend leaves that point, I suppose he will admit now that Canadian currency is on a sounder basis than it was during the earlier period to which he was referring, when Canadian funds in New York were at a 16 per cent discount?


Henry Herbert Stevens: No one has more regard
for the minister than myself, but with all due respect to him that is not an intelligent interjection, and the minister knows that it is
not; he is simply drawing a red herring across the trail. The discount to which our money was subjected was due to extraordinary world causes entirely, and not to Canadian causes. Now I will give the minister a further answer:
I was just looking for further figures when he interrupted me. The situation is that we needed this money to bolster up our credit. In 1922 we had $241,000,000 of Dominion notes in circulation, with a specie reserve of $85,000,000; to-day we have a specie reserve of $99,000,000 with a Dominion note circulation of $182,000,000. In other words, we have now a specie reserve of about 54 per cent as against about 35 per cent in 1922; I had the figures here somewhere but they have been mislaid. There is no excuse for that; we could very easily increase our Dominion note circulation without the slightest chance of jeopardizing the stability of our currency.
Now I turn to the funded debt, which is the real debt of the country, our inescapable obligations. These are the obligations this country has signed, sealed and delivered to the public of Canada or to the public of the world, and I want the House to examine this question for a moment with me. I have the figures from 1922 to 1926, varying from $2,420,000,000, in 1922, to $2,471,000,000 in 1926, or an increase in our funded debt in that period of $51,000,000. If you deduct from that the amount of $35,000,000 paid off last year, you have a net increase to date in our funded debt of $16,000,000. Where is the $110,000,000 which was announced as a reduction of the public debt? I saw great headlines in newspaper all over the country; I had not time to dig them up and bring them here, but they would have made interesting pictures: "Robb reduces the public debt $20,000,000," or $35,000,000, $22,000,000, $31,000,000! Every year this has been heralded throughout the country as a great accomplishment of this government, but nere are the figures taken from the government's own books, the report of the Auditor General, showing a net increase in that five year period in our mortgage debt of $16,000,-
000.
That is not all; in addition to that amount of $2,471,000,000 there are the railway guarantees of $658,000,000. But someone will say, "Oh, we have great assets to offset that." Let us see if that is so. What are our obligations to the National railways, or let me put it in another way; what have we put into the railways of this country? According to the annual report of this government, Mr. Speaker, we have put into the railways no less than $1,113,590,000 in cash, plus the guarantees of $658,000,000 or a total of about
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$1,770,000,000. Do not say to me that in connection with this railway obligation we have a magnificent asset. It is true that we have an asset, but we also have an investment of $1,770,000,000. Now I will return to my starting point; in addition to the ordinary funded debt we have these railway guarantees of $658,000,000, just as serious an obligation on this country as any other. And what if it came to a revaluation? Where is the Minister of Immigration (Mr. Forke) now, he who was so anxious to interrupt me a moment ago? He has fled the chamber. Where is the policy of the Minister of Immigration, which he announced year after year when he sat to my left; where is his policy of revaluation of the National railways, now that he is on the other side of the House? I say to him and to this House that if the National railways were revalued the result would in all probability show a difference between our investment and the revaluation of a sum approximating this item of guarantees, namely $658,000,000. So for all practical purposes this amount should be added to the funded debt of this country, which would give a total of $3,129,000,000 as our real debt, instead of $2,400,000,000 as given by the Minister of Finance.
Now I wish to turn my attention to the question of taxation, and before commencing I may say that I wish to address myself in some measure to the Minister of Immigration, who is not in his seat. I may say that I advised him a few moments ago before he ieft the House that I was going to do so, so that he has no excuse for saying later on that I attacked him in his absence.


An hon. MEMBER:: He is the minister of migration.


Henry Herbert Stevens: I said a little while ago that one of the subjects that should have been discussed in this budget, as in all budgets, is the question of taxation. I hold in my hand certain announced surpluses claimed by this government. My hon. friends opposite in 1924 announced a surplus of $35,990,000; in 1925', they announced a surplus of $24,300,000; in 1926, they announced a surplus of $33,910,000; and in 1927, they announced a surplus of $34,200,000, or a total of $128,400,000. I ask again, as I have asked in the case of that mythical reduction of the public debt, where are these surpluses? Oh, someone will say, they are applied to the reduction of the national debt. No, they were not. These are accountancy terms, bookkeepers' terms, to balance current accounts, and for the life of me I cannot see the justification of it. But the minister told 
us the other day-and he did it in that quiet, gentle way, which is peculiar to him and which I think won the hearts of a great many people in the last election; I hope they will have awakened from their sleep, the result of his seductive terms-"I am pleased to announce a further reduction in taxation of $27,000,000." He said the same thing before; he said it last year. My bon. friends from the extreme left to the right on the other side of the House have used this as one of the strongest arguments to support this government-" reduction in taxation ".
Well now, what are taxes? Taxes are simply the various returns from certain sources of revenue which we have. My hon. friends from the west, who are of strong free trade tendencies, always refer to the customs duty as a tax. No one will deny that the sales tax is a tax; no one will for a moment say that the income tax is not a tax; no one will say that the various stamp impositions are not taxes. All of these are taxes. Indeed our revenue from top to bottom, and from one side to the other, is taxation. Now let us see what reductions we have had in taxation. I take the five years just past, from 1923 to 1927, and the average imposition of taxes of this kind by this government was $387,7SO.OOO. In the previous years under the Conservative government the average was $348,500,000, or an increase of $39,280,000 in the average of the last five years over the previous five years. In other words, it is a ten per cent increase of taxation taking the average of the last five years as against the average for the previous five years. Now what I want to say is this: We have been told year by year that taxes are being reduced.
I said at the opening of my remarks that the Minister of Finance had not reduced taxes, he had merely shifted them, and that is precisely what has occurred. What did he do last year? Oh, they say, he lowered the tax on automobiles. Let us see if he did. He reduced the tax on automobiles when he introduced liia budget. Then came three thousand workers from Oshawa to make representations to this parliament, and my hon. friend and his colleagues prayed earnestly day by day that the debate might be carried on, and they carried it on for five weeks. In the interim they revamped their budget, they changed the whole business. They shifted the burden of taxation round a bit first so as to drive certain industries out of business and save the industry which at first was threatened by the reduction of the tariff, and the automobile industry at the conclusion of the deal that was made, was better off than

The Budget-Mr. Stevens
it was before. With what results? There was an increase in revenue from goods coming in from the other side whereas hundreds of persons in Canada were thrown out of business. But the point I am making is that the taxes imposed during the last five years are ten per cent higher than the taxes codlected in the five years preceding their accession to office.
Now the Minister of Railways (Mr. Dunning) said last night "They say this is a Tory budget. Does anybody doubt which is the high tariff party and which the low tariff party?" I did not hear very much noise on the other side in response to that. I think there was a good deal of doubt in their minds as to the wisdom of the Minister of Railways making that statement. The minister said, "No one doubts which is the high tariff party and which is the low tariff party." I purpose discovering this afternoon something regarding this high tariff party. The Minister of Railways said also that since 1921 the tariff has been lowered in many important particulars. There was a certain lowering here and a certain lowering there which I shall deal with, but these changes certainly did not result in a lowering of the taxation on the people of Canada. There have been three major changes in the tariff since this government took office in 1921. There was a change in 1922-23 in the woollen schedule; there was a change in 1923-24 in the iron and steel schedule, chiefly regarding agricultural implements and subsidiary industries; and the change last year in regard to the automobile industry. I intend to examine briefly the exact effects these changes have had on the industry of Canada, and I wish the House to follow my analysis with some care because I believe it will offer rather startling results.
Before doing that, however, I wish to deal with this hi^h tariff-low tariff bogy. My hon. friend, the Minister of Agriculture, trots out the bogy of high tariff every once in a while. How he fulminated against this party a few years ago on account, as he said, of our high tariff tendencies, and how he declared, "Why, the Liberal party, the Mackenzie King government, were just making a beginning." But along came some skilful hand that turned aside his mad charge against protection, the skilful hand of the Minister of Finance, and left my hon. friend bellowing up a blind alley. Then we come to the Minister of the Interior (Mr. Stewart). He had hold of the rope attached to the bell to toll it. He said, "I am sounding the death knell of protection," and he yanked away on this rope. Suddenly he woke up with the frayed end of the rope in his hand, and the bell stopped tolling. He
found also that some mysterious hand had slipped in and cut the rope. It was the hand of the Minister of Finance that turned aside this other doughty warrior from carrying on his assaults. And then we have the Minister of Immigration. The Minister of Immigration came into this House after attending -he may not have attended but he approved their findings-^a gathering which designed the farmer platform of the west. My hon. friend entered this House after subscribing to the solemn league and covenant of the Farmers party. He came here with tears in his eyes, assuring the House of the one Simon-pure object of the attendance here of himself and his followers, namely, to destroy this terrible thing known as protection. We still have them with us. I look yonder and I see my hon. friend from South Huron-


Mr. McMILLAN:: I am listening. The
hon. gentleman complains- of the lack of noise on this side of the House. He is making sufficient noise himself.


Henry Herbert Stevens: We still have one Simon-pure free trader with us. But the Minister of Immigration came into this House pledged that:

the protective tariff has been and is a chief corrupting influence in our national life because the protected interests, in order to maintain their unjust privileges, have contributed lavishly to political fundsand so on. Then he goes on to say:
Therefore be it resolved that the Canadian Council of Agriculture, representing the organized farmers of Canada, urges. ... an immediate and substantial, all-round reduction of the customs tariff.
Then he goes on to say:
By reducing the customs duty on goods imported from Great Britain to one-half the rates charged under the general tariff, and that further gradual, uniform reductions be made in the remaining tariff on British imports that will ensure complete free trade between Great Britain and Canada-


Robert Forke: Mr. Speaker-


Henry Herbert Stevens: Wait a minute.

in five years.


Robert Forke: As a matter of privilege, may I say that the hon. member in speaking is continually repeating: "He goes on to say." I would ask him to give his authority before he goes any further.


An hon. MEMBER:: Does the minister object?


Robert Forke: No, I do not object.
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Henry Herbert Stevens: I am referring to, and quoting verbatim from the Farmers' platform.


Robert Forke: The hon. member says: " He goes on to say." I do not say so.


Henry Herbert Stevens: Well, this is a sad spectacle-


Robert Forke: Be fair.


Henry Herbert Stevens: It is a sorry spectacle that the Minister of Immigration, who came into this House and salt for five years on this side, pledged to this platform, now says that he did not say it. I suppose he did not write it. Let my hon. friend go back to his farmer electors in Brandon. Let him go through Manitoba. Let him go through Saskatchewan where he went last election, and the previous elections too. Let him tell the doctors there that he had nothing to do with this. Let him repudiate this platform before the electors who sent him here to carry it out. No apostate ever found the road afterwards a bed of roses. But I have the words of my hon. friend himself. He repudiates the Farmers' platform.


Robert Forke: I did not repudiate it.


Henry Herbert Stevens: He repudiates it. Very good. I find this reported in Hansard of May 14, 1923, at pages 2718 and 2719:
Moved by Mr. Forke seconded by Mr. J ohnston.


Some hon. MEMBERS:: Who is he?


Henry Herbert Stevens: Both of whom led their followers year after year into the support of the government, both of whom led a contingent over there who are surrounded to the left and the right, behind and in front, by Grits but who are there nevertheless, one of whom received a seat in the cabinet and the other the Deputy Speakership of this House for the valuable services they rendered. These are the men who moved this:
Whereas the tariS policy of the government, as indicated by the Minister of Finance in his budget speech, and particularly his pronouncement in favour of tariff's stability at existing rates, and the consequent intimation that the government contemplates no further appreciable tariff reduction, constitutes a repudiation of the tariff planks in the Liberal platform of 1919 and is inconsistent with the Finance Minister's statement last session that the changes then made were a step in the right direction.
He condemns the Minister of Finance for not carrying out his preelection pledges. He himself stands condemned out of his own mouth for being an apostate to his own pledges. The resolution continues:
[Mr. Forked
And whereas the fiscal policy of the government as now brought down is based on the principle of protection,. . . .
Therefore, be it resolved: That. . . . this House is of the opinion that the principle of protection as a basis for fiscal policy in Canada is unsound.


Robert Forke: Hear, hear.


Henry Herbert Stevens: Let him applaud this:
And, further, that the best interests of Canada will be served by an immediate and substantial reduction in the tariff.


Robert Forke: We got it.


Mr. GASGRAIN:: It was made.


Henry Herbert Stevens: My hon. friend sitting in a $14,000 seat has a change of heart. I imagine that this minister will not be very long in his office, and while I hope physically he will be long with us, I expect politically he will not be very long. Over his political grave will be this epitaph:
Here lies the body-
Political body, of course,
-of one who pledged to his electors his plighted word, entered into a solemn league and covenant with them to carry out some high principles, who, having attained office, later found that the attractions and emoluments of office conflicted so with his preelection pledges that his conscience, strained to the breaking point, cracked and broke, and thus ended this illustrious political career.
My hon. friend a moment ago thumped his desk vigorously when I referred to that part of his resolution which dealt with the protective principles ^of the tariff. Will he say, or will any other hon. member on that side, say that there is any less protection in the tariff than there was six years ago or five years ago?
I	am going to examine, for the benefit of this House, the figures and facts in regard to this matter, and in this regard I take them from the government's own productions, which I have on my desk. I am not going to read all the figures, but I have a table showing the dutiable and the free imports, with the totals, the amounts collected, and the per cent dutiable and the per cent free. I have it over a period of ten years and it shows the following result. I will give the two five-year periods first.
The average rate of duty during the last five years of Conservative rule, 1918 to 1922 inclusive, was on dutiable goods, 22.1 per cent, and on dutiable and free goods, 13.2 per cent. During the last five years under Liberal rule, 1923 to 1927, the percentage of duty on dutiable goods was 24 per cent and the percentage on dutiable and free goods, 15.5 per cent.

The Budget-Mr. Stevens
In other words, during the last five years the rate of duty on dutiable goods was 2 per cent higher than it was during the previous five years, and the rate on dutiable and free goods was 2.3 per cent higher. But someone will say to me: Oh, but during the last year or two we have been lowering the tariff. Let us see. Let the House bear in mind the observation I have already made on two occasions, that there has been going on, not a lowering, but a shifting of taxation. In 1921 the percentage on dutiable goods was 20.6 per cent; in 1926 the percentage of duty on dutiable goods was 24.7 per cent; or in other words, it is higher this year than it has been in any single year in the last ten years with the exception of 1923. In other words the rate of duty charged by the tariff of this country has not been reduced at all. We do not quarrel with that. What we do quarrel with is that this government and its followers, the Minister of Immigration, the Minister of the Interior, the Minister of Agriculture, and others, when it suits their purposes, go to the country and declare that they have lowered the tariff, the customs duties, whereas as a matter of fact the cold figures show that if there has been any change at all, there has been a slight increase. Then they say that the Tories maintain a protective tariff but they eschew protection. There is exactly the same protection in the tariff to-day as there was prior to 1921; in fact a little more.


Mr. MacLEAN (Prince):: Will you admit that the general percentage of duties proves anything as to the actual duties paid on our most important imports?


Henry Herbert Stevens: I will admit to my hon. friend that if you want to escape from a dilemma the tariff and the trade returns will probably offer to you as many avenues of escape as you can find anywhere. I will agree to that, but I say now that in order to show in the main, general, broad perspective the trend of things, these figures are accurate and fair.
I turn now to another phase of my subject, and that is the question of trade.


Mr. YOUNG (Weyburn):: If the statement you have made this afternoon be a fair one, will you explain to the House all of the
arguments that your party presented here last year about the ruining of industry by the reduction of the tariff?


Henry Herbert Stevens: I will deal with that if you will give me your attention. I have five or six pages of argument on that point which I think is very cogent. I turn now to an analysis of our trade, imports and exports.
I will deal first with the imports, and I will ask the House to follow me and get the general trend of our business, for after all it is only by getting a broad perspective of affairs that we can properly judge the drift of the country's business. It is not an important subdivision, but it is a subdivision worked out by the officers of the statistical branches of the different departments. This trade is divided up under certain headings.
I am going to give them very briefly, and I am going to compare the imports of 1922 with those of 1926 and give the various increases. Taking agriculture first, the imports in 1922 amounted to $173,000,000, increased in 1926 to $203,000,000, an increase of thirty million or eighteen per cent. Then the imports of animals was $46,600,000 in 1922 and $41,000,000 in 1926, an increase of $2,500000, or five per cent.
Then I turn to textiles. Hon. gentlemen will remember that there were three main reductions in the tariff, one on textiles, one on iron and steel products in 1924, and one on automobiles and vehicles. The import of textiles was $139,000,000 in 1922 and $184,000,000 in 1926, an increase of $44,000,000 or 32 per cent. Then wood and paper is practically stationary. I observe there is an increase of 13 per cent. Then the imports of iron in 1922 were $110,000,000 and in 1926 $181,000,000, an increase of $70,000,000 or 64 per cent. Then I take non-ferrous metals which are largely composed of manufactured goods, copper, electrical apparatus, brass goods, tubing and wiring, and such like, and I find the imports were $29,000,000 in 1922 and $47,000,000 in 1926, an increase of $17,000,000 or 60 per cent, and non-metallic metals imports in 1922 were $137,000,000 and in 1926 were $139,000,000, an increase of over a million, or one per cent. Then we imported in 1922 $24,000,000 worth of chemicals and in 1926 $28,000,000, an increase of $3,000,000 or fifteen per cent. The complete table is as follows:
The Budget-Mr. Stevens

Analysis of Imports
Description	1922
Agriculture		.. .. $173,665,000
Animal		.. .. 46,645,000
Textiles		.. .. 139,997,000
Wood and paper.. ..	.. .. 35,791.000
Iron		.. .. 110,210,000
Non-ferrous		.. . 29,773,000
Non-metallic		. . . 137,604,000
Chemicals		.. .. 24,630,000
Miscellaneous		.. .. 50,485,000
Total		.. .. $747,800,000
1926	Increase	Per cent$203,417,000	$30,742,000	+ 1849,185.000	2,540,000	+ 5184,761,000	44,764,000	+3240,403.000	4.612.000	+ 13181.196,000	70,986,000	+6447,692,000	17,919,000	+ 60139,033.000	1.429,000	+ 128,404.000	3,774.000	+ 1553,232,000	2,747,000	+ 5$927,323,000	all imports	24
I desire to bring to the attention of the House the fact that there are three classes where there has been a substantial increase; one was textiles where the increase was thirty-two per cent, and another was iron where the increase was sixty-four per cent. In nonferrous metals the increase was sixty per cent, and it should be remembered that the average increase in imports is about twenty-four per cent. So that under these three
headings we have an abnormal increase in imports. These are the items in which reductions were made in -the tariff. I am going to sub-analyse these and bring them under three headings. Under textiles I find that cottons are about stationary-8 per cent, which is very small. The importation of silk is increased about 35 per cent, hemp and flax about 94 per cent and woollens 40 per cent. The complete table is as follows:
Textiles-[DOT] Imports
Cottons.. .
Silk	
Hemp, flax Woollens. .
The chief increases are in lines produced in Canada. We have been trying to develop hemp -and flax in this country for many years. Certain government assistance was given, to a factory in Guelph if I recollect correctly, and there is a general desire to stimulate and increase the production of hemp and flax.


Mr. BROWN:: Can you tell us the duty
on those items?


Henry Herbert Stevens: I cannot give the duty. I will deal with the question of woollens now. In 1923 the duty on woollens was reduced, and following the reduction of the tax on woollens several mills closed down and many thousands of workers were thrown out of work, and furthermore that industry has not yet recovered. The other day one industry was picked out in the rise of stock, I -think Penmans, and desks were thumped as a complete vindication of the government's policy, but as everybody knows, Penmans produce an article which is peculiar or unique in itself. They have developed a class of underwear against which there is very little competition and in which they excel, and everybody is glad of it. We would like to see all other industries as prosperous. But the knitting

1922	1926	Per cent$52,500,000	$56,500,000	+ 8.21.900.000	29,600,000	+ 35.8,060.000	15.640,000	+94.35,200,000	49.350,000	+ 40.
industry is only a branch of the woollen industry. Hon. gentlemen might follow me in some references to an address presented to the Minister of Finance (Mr. Robb) on February 1, 1927, just before the budget was brought down, by the Canadian Woollen and Knit Goods Manufacturers' Association. I am not going to read this statement of their views but I will give some of the facts brought out by them. For instance, this manufacturing industry affects some 446 mills and factories in Canada employing 33,000 people with salaries of 830,000,000 annually. Included in these are the woollen goods industry which has 276 spinning, weaving and knitting mills, situated in 140 municipalities and employing some 22,000 workmen. This is an industry indigenous to Canada, one of the industries looked upon as the backbone of Canadian industrial life fifty, seventy-five or a hundred years ago, one of the basic industries of the country, superseded by iron and steel, but it is the industry which gave Great Britain her greatness. It is the industry upon which, prior to the introduction of iron and steel, other industries rested and it is now really a secondary industry, but very important. Now this is where it affects other branches of industry.

The Budget-Mr. Stevens


Edward James Young: Can my hon.
friend explain how it is that in spite of the fact that the tariff provides a duty on raw wool those same manufacturers import raw wool without paying duty?


Henry Herbert Stevens: That is the drawback
system for export business.


Edward James Young: Do they export
all they manufacture?


Henry Herbert Stevens: I will give you the figures. In our system of customs duties we give all industries a rebate on export business, and properly so. Here are some figures which will answer my hon. friend's question. In the year 1922 there were imported into Canada 12,000,000 pounds of wool. There was a domestic production of 20,000,000 pounds, and there was retained in Canada 32,000,000 pounds. That is the amount of domestic and imported wool retained in Canada. In 1926 there was imported and retained a volume of 13,000,000 pounds; there was raised and retained 9,000,000 pounds-a total of only 22,000,000 pounds. In other words, owing to the reduction in the duty on goods comprised in the woollen schedule there was a reduction in the use of wool in Canada, imported and domestic, of over 10,000,000 pounds. The use of Canadian wool in these manufactures dropped from 20,000,000 to 9,000.000 pounds.
I have held the view for many years that our agricultural industry would be infinitely better off if wool production was added to its general activities. It is admitted by all expert agriculturists, I think, that this is sound policy. And yet we have in vogue a tariff policy which i3 discouraging the production of domestic wool-a policy indeed which has resulted in a drop of the production of domestic wool for weaving in Canada of over 10,000,000 pounds, or more than 55 per cent.
Now I want to show another phase of this subject-wages. This affects the workers of Canada. My hon. friend asked: Why cannot Canada produce just as cheaply as Great Britain or any other country? And they add: If our manufacturers cannot do so then they are not entitled to any consideration. That, I admit, is a bald, crude statement, but it is really the argument that is advanced. I will give the House now the reason why our manufacturers cannot produce as cheaply as the manufacturers of Great Britain, and I challenge any hon. member seriously to attempt to controvert these facts as far as they relate to Canada. I have under my hand the whole list of labour engaged in the woollen spinning trade. Let me give the average percentages for the information of hon. members.
For this class of workers the average wage paid in England is $8.65 per week, in Canada it is $16.35. Fifty-five per cent of the cost of a woollen article is in wages. That being the case, it requires a duty of at least 27+ per cent before you put the Canadian spinner on an equal footing with the British spinner.
In other words, if you put aside the tariff altogether you would give to the British spinner a premium of 27i per cent. Someone wilj say: Well, cannot you lower the wages of the Canadian spinner? There are certain reasons why we cannot. First, we do not wish to lower the standard of living. I do not think anyone will challenge that. But there is another reason, which is obligatory in its character. The main provinces that are affected, Ontario principally, have what they call a minimum wage law. This law has been placed on the statute books of the provinces as the result of public opinion that the workers in these factories are entitled to a certain minimum wage. That minimum wage corresponds very closely to this $16.35-not exactly. But I say, if you reduce wages in Canada to a point equivalent to the wages of their competitors in Europe, then you would go below the scale provided by the minimum wage law.


Mr. HEAPS:: Does the hon. member
imply that the minimum wage in effect in our provinces applies to both male and female workers?


Henry Herbert Stevens: In some of the provinces it applies to 'both.


Abraham Albert Heaps: It does not affect the woollen industry at all.


Henry Herbert Stevens: I will follow my friend's
argument. Those engaged in this industry are very largely women workers. But as a representative of labour will my hon. friend suggest to me for one moment that we should lower our wages simply because the law does not. happen to protect these workers?


Abraham Albert Heaps: Absolutely not.


Henry Herbert Stevens: Certainly not. My hon.
friend, I think will follow me in every step I take. We have an average wage in Canada of $16.35, in Great Britain of $8.65. Let my hon. friend follow me a step further, and he will see the absolute justice of our tariff- or the injustice at present; its justice before. Fifty-five per cent of the cost of production of goods is wages. Therefore in order that the Canadian workman may produce these goods and maintain his wages at $16.35, he
6S4
The Budget-Mr. Stevens

must have a tariff of at least 27i per cent. That is the point I am making. Canadian workers are placed under a handicap when you go below that figure-without giving to the manufacturer one atom of protection. Do not let us forget that.


Mr. WARD:: Would the hon. member
state that the Canadian tariff on woollen goods is less all round than 27^ per cent?


Henry Herbert Stevens: Yes.


William John Ward: Has he the figures? *


Henry Herbert Stevens: Yes. My hon. friend has in his mind the general tariff against the United States. But these goods do not come from the United States; they come from Great Britain and Germany. The German wages are more startling still. Italy pays $3.15, France $4.05, Germany-I thought I had the German figures, but I have not. The German wage is about half that of Great Britain.


Abraham Albert Heaps: Is the average wage which the hon. gentleman is now giving-$16.35- the average wage for both male and female workers in Canada?


Henry Herbert Stevens: Yes.


Abraham Albert Heaps: What about the English
average?


Henry Herbert Stevens: The same thing.


Abraham Albert Heaps: Does not the average for
Great Britain cover both male and female workers?


Henry Herbert Stevens: I did not wish
the Bouse by giving these figures for I notice that overmuch detail make hon. members lose interest in
Second drawer.. ., Rovers and reduce:
Twisters	
Winders	
Reelers	
Spinners	
Doffers	
Gill box minders.. Weavers men.. .. Weavers women. ..
Firemen.
to weary in detail, tends to the trend
But here they		are:
	England	Canada
	$7 21	$13 92
	6 99	13 92
rs. .	6 76	12 96
	6 99	13 44
	6 53	14 64
	7 21	14 40
	5 76	13 44
	6 38	13 44
	6 73	9 28
	8 75	17 88
	12 70	24 98
use-	8 75	16 80
	11 18	19 50
	13 58	19 50
	14 01	27 09
In other words, nearly the whole schedule is uniformly double, but the average, as I say, is $8.65 and $16.35.


Mr. ADSHEAD:: Is the hon. member taking into consideration the increased efficiency of the Canadian workman with the machines at his command?


Henry Herbert Stevens: Electric apparatus	
Copper, chiefly mfg	
Talk about the development of industry in Canada! Why, Mr. Speaker, all we are doing is acting as quarrymen for the United States. The Minister of Trade and Commerce (Mr. Malcolm) the other day made a passing reference to this matter, skating over it very lightly in a speech which in other respects was admirable. He referred to aluminum and declared that our imports were going up. Where are my Saskatchewan friends while we are discussing this particular question? Do they know that in the province of Saskatchewan there are the finest beds of aluminum clay that are to be found anywhere in the world? Does that signify nothing to them? Do they know that most of the aluminum on the continent is taken from certain beds in Kansas? Do they know that nearly all the aluminum manufactured in Canada is imported alumina, the metal form of the product, which we purchase to the extent of 95 per cent? Our imports of aluminum, the finished product, have increased 225 per cent in the last five years, nothwithstanding that in the province of Saskatchewan, lying dormant, there are millions upon millions of tons of alumina, or aluminum in clay form, which could be developed. I appeal to the Saskatchewan Cooperative Dairy, that splendid organization which is producing millions of pounds of butter a year. Would it not help them to have an industry giving employment to several thousand men right in their own province? Would it not be better to have these men working in the province and consuming their dairy products rather than having to compete in the markets of the world for the disposal of their butteT? Is that not of some value? And in northern Alberta sodium and aluminum clay lie side by side, yielding all the ingredients requisite for the manufacture of the finished aluminum product-. Yet we have increased our imports 225 per cent. In face of all this the government declares complacently that
it back in the shape of electrical wire, radio apparatus and electrical fittings of various descriptions, paying 36, 40, 50 and 70 cents a pound, although we sell it at 12J cents a pound in the raw in the form of rock. The complete table of imports of non-ferrous metals is as follows:
Value
1922	1926	P.C.
111,400,000	15,600,000	
109,100,000	13,500,000	
$11,000,000	$16,700,000	522,800,000	7,600,000	171
there is no problem; everything is lovely; business is prospering. Are these not problems which this House should be dealing with? Should we not look them in the eye and try to find some solution for them?
I come now to what I call the tragedy of the iron industry. If these figures do not bring the blush of shame to the face^ of every Canadian, then I say that Canadian is lacking in some appreciation of the possibilities of his country. Our imports of iron and steel products in the five years preceding the war -I take these five years because they represent a normal period, the interval during the war having been abnormal-amounted to $95 500,000 per annum. The average for the last five years is $169,000,000, or an increase of eighty per cent per annum. In other words, in the last five years, our average imports have exceeded by eighty per cent a corresponding period before the war.


John Livingstone Brown: What would be the figures
in tons instead of dollars?


Henry Herbert Stevens: I will give -the figures
in a moment, and I would ask the hon. gentleman to be good enough to study them carefully. Our imports in 1922' were $138,000,000 and in 1925, $166,000,000. It will be recalled that between these years there was a revision of the 'tariff downward on iron and steel products which ruined certain subsidiary industries. In 1926 our imports were $2191000,000, that is for the calendar year Now, what about the production of pig iron? In 1913, the last normal year before the war, we produced 1,008,000 tons of pig iron.


John Livingstone Brown: My question related to
imports.


Henry Herbert Stevens: This is more germane to
the question, if my hon. friend will be good enough to follow the analysis. In 1913, I say, we produced l,0OS,000 tons of pig iron
The Budget-Mr. Stevens

while the average for the last five years has been 632,600 tons, or a decrease in production of 37 per cent. Just contrast the figures I have given. Our increase in imports has been 80 per cent, while our production has been 37 per cent lower. Will anyone tell me as a Canadian that this is sound business?
My hon. friends opposite shouted from the housetops their wonderful policy of lowering the cost of the implements of production. Those were attractive words. But I ask hon. gentlemen now, has it paid? No, Mr. Speaker; far from that it has been a tragedy, for this country. Our imports of manufactures in iron include all rolled mill products, something which Canada can and does produce in every province, comprising bars, rods and so forth, and in 1922 the total was $20,000,000. There was a lowering of the tariff with the result that in 1926 this amount had increased to $47,000,000, or 135 per cent. Take machinery, not agricultural but implements generally. In 1922 our imports amounted to $24,000,000 and in 1926, $38,000,000, or an increase of 60 per cent. Imports of agricultural machinery, amounted in 1922, to $7,700,000 and in 1926 to $17,500,000, or an increase of 129 per cent
engines and boilers, in 1922 $4,800,000 and in 1926 $13,900,000, or an increase of 190 per cent. Follow me again; rolling mill products show an increase of 135 per cent; machinery not agricultural shows an increase of 60 per cent: agricultural machinery an increase of 129 per cent and engines and boilers an increase of 190 per cent, and mark you the average increase of imports over the same period was 24 per cent. Do not tell me that this is healthy; we have a normal increase of 24 per cent in all our imports, but in these things which mean bread and butter to tens, yes, hundreds of thousands of Canadians there are increases of 135 per cent, 60 per cent, 129 per cent and 190 per cent respectively. There is something wrong. Sir, these things alone should command the attention of parliament; we could well afford to cast to -the winds practically all the business of this session and turn our attention to these matters. Parliament should face these facts.
Now let us turn to the exports, and we will see an equally startling situation. Our exports under the same -headings, which are fixed by the government officials and very wisely so, show the following:
Agricultural	
Animal	
Fibres and textiles.. Wood and paper.. .
Iron products	
Non-ferrous	
Non-metallic	
Chemicals	
Miscellaneous

59.000.	000
28.000.	000 32,000,000
1923-1927	Per cent
$404,000,000	*11.
156,000,000	+28.
8,700,000	+67.
265.000,000	*39.
65.000,000	+ 1.5
76,000,000	*30.
25,000,000	+11.
16,000,000	+50.
Total	
* Increase.	f Decrease.
$1,185,000,000	$1,125,000,000


Mr. STEWART (Edmonton):: My hon.
friend is using war years now, is he not?


Henry Herbert Stevens: The minister very properly ealls attention to the fact that about six months of the year 1918 was during the war.


Charles A. Stewart: The years
preceding the war were quite as important.


Henry Herbert Stevens: What is the point?


Charles A. Stewart: I am not
making any point; I merely asked the question.


Henry Herbert Stevens: My point is this, Mr. Speaker; those who now -argue* that the way to get prosperity is to trade with the world willy-nilly should look at the fact that our imports of textiles have increased by 32 per cent while our exports decreased 67 per cent; there must be something wrong which should

be corrected, and that wrong was done in 1923 when the woollen schedules were tampered with. And, Sir, the thing that is wrong is writ in the blood and in the tears of thousands of workers who were driven out of their homes in this country. The Minister of Immigration (Mr. Forke) smiles, but it is no smiling matter any more than the tragedy of the iron and steel industry in Nova Scotia is a smiling matter. Let us look at the exports of wood fibre and paper; these show an increase of 39 per cent, with which I shall deal a little later. It will be noticed that there is an increase in our exports of agricultural products of 11 per cent, which is a very small item in view of the crops we have had in the last three years, but it is all to the good. The other two increases are, in wood fibre and non-ferrous metals, and in connection with non-ferrous metals our ex-

The Budget*-Mr. Stevens
ports are raw materials, chiefly ore. Take asbestos; we are selling $7,000,000 worth of asbestos to the United States to be turned into $70,000,000 worth of products. We are told that in Canada we have the asbestos of the world, but all we are doing with it is digging it out of the ground and sending it out of the country, most of it in rock form, with some worked up into the first process only. I think it is sold at something like $7 per ton, or some such ridiculous figure, instead of being turned into material worth from $100 to $200 a ton, which work oan be done here just as well as it is done south of the line.
Then, Mr. Speaker, the Minister of Finance referred to abounding business, and I am going to tell the House very briefly where the abounding business comes in. It emanates from three sources almost entirely; pulp and paper, in which there has been a tremendous increase; the development of electrical energy and in northern Ontario and Quebec the mining boom. Outside of these three, Mr. Speaker, I will show the House that in practically every line not directly dependent upon these you have a retardation of business instead of expansion. Of course, in the export of grain there has also been a huge increase in the last few years, but let us get a broad view of the situation. The Minister of Trade and Commerce referred to the way business was growing, so let us take the last four years of the Conservative regime, the calendar years 1918 to 1921 inclusive. The bank clearings for that period averaged $16,600,000,000 per year, with which we may contrast the last four years of the Liberal rule, with an average of $16,800,000,000. The difference is very small, in fact hardly worth mentioning. The point I am making is that business generally in Canada, other than in these three branches to which I have referred, is not progressing as it should. I believe, Mr. Speaker, that Canada has the greatest opportunity of any country in the world to advance; I believe that to-day Canada should be in a better condition than any other country in the world, but the facts do not bear this out, with the exception of these three branches to which I have referred, and which I will analyse briefly. Let us consider the development of electrical energy. Has it not been for the merely accidental discovery of a contract which this government was entering into with certain United States interests, the Carillon power would have been in the hands of those interests and delivered to the United States.


James Alexander Robb: Mr. Speaker, last year the
Prime Minister denied that statement, and on behalf of the government I again deny it to-day.


Henry Herbert Stevens: I myself brought the
question to the attention of the House about two years ago, and the whole question was discussed on the floor of the House. It was found then that the government, through certain powers it had under the act which did not make it obligatory for them to report to parliament, had a contract with American interests, and that contract was not completed simply because-


Charles A. Stewart: Do not let
him get away with that.


Henry Herbert Stevens: I can get away with it,
simply because it is true. That contract was not completed simply because it was exposed in the House.


Charles A. Stewart: That is not true.


Henry Herbert Stevens: I say it is true, and I say further that after I drew it to the attention of the House I went to Toronto and informed Mr. Howard Ferguson, Premier of Ontario. Mr. Ferguson took the matter up with Mr. TascheTeau, Premier of Quebec, and between them these two gentlemen stopped the completion of that contract.


Some hon. MEMBERS:: Hear, hear.


Charles A. Stewart: If my hon. friend will permit, and if hon. gentlemen opposite will get through clapping, I may say that I do not make a practice of denying statements made by the hon. gentleman, but this is an occasion on which the statement is absolutely untrue. There never was any such agreement entered into. I do not say that there were not plenty of offers, but this government never entered into any such agreement.


Henry Herbert Stevens: The agreement was laid on the table of the House. I admit that the deal was not completed.


Charles A. Stewart: Ah! That is very nice of my hon. friend but he should apologize.


Henry Herbert Stevens: I will apologize to no one. What? Apologize for having stopped a deal of that kind? Never!


Charles A. Stewart: My hon.
friend cannot get away with a statement of that kind-

The Budget-Mr Stevens


Some hon. MEMBERS:: Order.


Charles A. Stewart: -at least it cannot go unchallenged.


Some hon. MEMBERS:: Order.


Charles A. Stewart: Order? I
cannot understand why it is that when an hon. gentleman makes a statement of that kind and when one wants to put the truth before the House some one calls "order". Do hon. gentlemen not want to hear the truth? There was no agreement laid on the table of the House. If my hon. friend will ask for an order I will be glad to see it when it comes down.


Henry Herbert Stevens: Bring it down.


Charles A. Stewart: All right,
have the agreement that my hon. friend speaks of brought down.


Henry Herbert Stevens: I make the statement now, Mr. Speaker-


Charles A. Stewart: The signing of such an agreement was never even contemplated by the government.


Some hon. MEMBERS:: Order, order.


Henry Herbert Stevens: I make the statement
again, Mr. Speaker, that an agreement was drafted and negotiated. It was aired in the House. It was fought by Mr. Ferguson, it was fought by Mr. Taschereau.


Charles A. Stewart: I take exception to the word "negotiated". It was never negotiated.


Henry Herbert Stevens: Oh tut!


Charles A. Stewart: My hon.
friend is perfectly right when he states there were offers made to the government. There were offers made, innumerable ones, but no agreement was ever negotiated or ever signed.


An hon. MEMBER:: By anybody?


Charles A. Stewart: By anybody, or signed, or even the signing considered.


Some hon. MEMBERS:: Take it back.


Henry Herbert Stevens: Take nothing back. Why, Mr. Speaker, the government were ready to permit the export and the then Minister of Railways now in the Senate, the Right Hon. George Graham, stood up in this House and defended it. They were ready to export this power to the United States, but Mr. Taschereau and Mr. Ferguson stood between them and the export of this power from Canada.


Charles A. Stewart: I should just like to ask my hon. friend this question: Does he now state that the Right Hon. George Graham stated from his place in this House that he was prepared to sign an agreement and defend it, for the export of power from Carillon?


Henry Herbert Stevens: I did not say that.


Charles A. Stewart: That is the inference my hon. friend is leaving. What did he say?


James Alexander Robb: If my hon. friend will allow me we will come back to the question. The hon. member for Vancouver Centre declared that an agreement was laid on the table of the House.


Henry Herbert Stevens: A draft agreement.


James Alexander Robb: That a contract had been made to send power-


Henry Herbert Stevens: A draft agreement.


James Alexander Robb: A draft agreement or an alleged draft agreement. I say now, Mr. Speaker, on behalf of the government, and I have been a member of the government of Right Hon. Mr. Mackenzie King since 1921, that there never was a contract signed. The government had always refused offers, had always refused representations made to us on behalf of Carillon. I say more than that. My hon. friend declares that Mr. Taschereau opposed to it. I say that a member of Mr. Taschereau's government attempted to get the government to put a contract through.


Mr. BENNETT:: But not Mr. Taschereau.


Henry Herbert Stevens: Net Mr. Taschereau.
Furthermore, all that is very nice but it is a case of making apologies after the facts.


Charles A. Stewart: No apologies at all.


Some hon. MEMBERS:: Take your medicine.


Charles A. Stewart: I will make my statement when the hon. member gets through.


Henry Herbert Stevens: Had it not been for the fact that the thing was discovered and exposed on the floor of the House it would have been completed. That is my statement, and I say further


Charles A. Stewart: May I say to my hon. friend-


Some hon. MEMBERS:: Order.

The Budget-Mr. McIntosh


Charles A. Stewart: I do not propose to allow my hon. friend to make statements of that kind. I do not propose to allow such statements to go unchallenged.


Some hon. MEMBERS:: Order.


Charles A. Stewart: It is an absolute misstatement. of facts.


Mr. McLEAN (Melfont):: Mr. Speaker-


Some hon. MEMBERS:: Order, order.


Mr. DEPUTY SPEAKER:: Order.


John McLean: I rise to a point of order. When the hon. Minister of the Interior rises to correct a misstatement, hon. gentlemen opposite shout " order ". They object to any noise being made by members on this side but they make all the noise possible themselves. I appeal to you, Mr. Speaker, to control the noise which hon. gentlemen opposite are making.


John Frederick Johnston: There is a well known rule that when an hon. member has the floor he may not be interrupted without his consent. Is the hon. gentleman raising a point of order?


Mr. McLEAN (Melfort):: As a member of this House I am appealing to you to prevent disorder here.


Henry Herbert Stevens: I wanted to discuss briefly the three points upon which I claimed there has been activity. One has to do with water powers. I have intimated already that there was an effort made to secure the export of Canadian power to the United States and this is what I desired to say further:	The
development of electrical energy is one of the most vital needs of the country to-day, in view of the modern methods of manufacture, when Canada is peculiarly blest with great water powers, and the one thing which Canada ought to address itself to is to safeguard these great water powers for Canadian use. Furthermore, I asserted a moment ago, and I reaffirm it now, that as a result of a discussion in this House a few years ago we prevented the export of power and (that, in my estimation, is a very vital thing to this country. I say this House ought to put beyond all peradventure the danger of a government entering into an agreement with large interests south of the line for the export of our power for the purpose of developing industry there. There should go out from Canada this declaration of Canadian policy: Bring your factories to Canadian power if you want to utilize that power for the use of those factories.
Now, Mr. Speaker, I have spoken long enough, altogether too long, much longer than I had contemplated. When the chief whip asked me how long I was going to speak I said I would speak about an hour if I were not interrupted, but that if I were interrupted I would probably take longer. These interruptions, which I welcome, usually result in the lengthening of one's speech. I will conclude wiit-h this statement:	I have endeavoured to bring into survey before this House the actions of this government, deliberate actions which they affirm. I have endeavoured to show the effect of these actions upon the trade of Canada, and I have sought to impress upon the House that it was desirable and necessary that parliament should take cognizance of these things to, as far as possible, direct the policy of this country for the development of Canada, for the expansion of our industries within Canada, and the use of our resources for the benefit of Canadians, and not develop a foreign trade or foreign industries for the benefit of other countries.


Mt. C. R. McINTOSH (North Battleford):: Mr. Speaker, I listened with a great deal of attention this afternoon to the hon. member for Vancouver Centre (Mr. Stevens) while he dealt with tlhe budget as presented by the Minister of Finance a few days ago, and I noticed) that he was labouring under special difficulties. The hon. member stated that the present budget was a static or Stationary budget. A static or stationary budget can come only from a static or stationary party such as the one we have across the floor of the House. A budget brought down by the Liberal party is something different from a stationary or static proposition. It is a live-wire project. There is no doubt that at the present time in Canada the Liberal party, fundamentally speaking, stands for the same policy as the Liberal party has stood for in history. It stands for a policy of peace, retrenchment and reform; peace between one province and another in Canada fiscally, financially and every other way; retrenchment when it is possible to cut down the public expenditure and pay off the national debt, and reform- not stagnation. The party that stands for these three great principles of peace, retrenchment and reform in order to make a great Dominion, is the party that stands for a policy of action and not a policy of inaction such as that which has been handed down to us since confederation by the Tory party.
The hon. member tried to prove that our policy was one of inaction, of non-development. In 1868 the Tories were in power in Canada and our imports amounted to $37,000,000 and our exports to $17,000,000. How

The Budget-Mr. McIntosh
is that for inactivity, for a stationary condition of trade? In 1878 our imports were $37,000,000, practically "stationary," the same as in 1868, and our exports amounted to only $45,000,000, or an increase of only $8,000,000 over our imports for the same year to the motherland, as regards which our Tory friends are always fond of saying how loyal they are, how they stand for a greater empire, for greater imperial' relationships and trade. That was the condition under their rule in 1868 and 1878. These are facts and I defy anyone to contradict them.
In 1883 our imports from Great Britain amounted to $51,000,000 and our exports to $47,000,000. How is that for tying up Canada with the mother country from a commercial point of view? Not very much connection there. In 1896 our imports amounted to $32,000,000 and our exports to $47,000,000. After that we get the value of the imperial preference. In 1911 our imports amounted to $109,000,000 and our exports to $136,000,000. They go over the $100,000,000 mark for the first time in the history of Canada. In 1922 our imports amounted to $117,000,000 and our exports to $300,000,000. In 1925 our imports amounted to $151,000,GOO and our exports to $397,000,000, or nearly the $400,000,000 mark. That is action; that is not a stationary condition of trade; that is not inactivity. There is nothing static about that. That happened during Liberal rule under the leadership of Sir Wilfrid Laurier. The British preference was introduced by the Liberal party in 1897. The Tories talked about it for twenty-five years, and yet after all their talk about loyalty, patriotism and imperialism, they were afraid to concede the preference on certain goods in order to link up Canada with the empire.
The bon. member made another statement as regards which the facts are absolutely against him. He said that the Liberal party was divided on the Duncan report. I characterize that as an absolute falsehood. That is not true. No hon. member should rise in this House and make such statements. A member ought to size up his office honourably from the point of view of his riding, his province and the Dominion. When a man gets up and makes a statement of that kind that he knows to be untrue, that he cannot back up with the facts, he is doing something altogether out of place. The fact is that the Liberal party, when that question comes up in the House, will stand undivided; it will stand united. The hon. member in discussing this question before it comes up in the House, is endeavouring to make political capital out of a matter that deeply concerns the Dominion. I would deprecate

that on the part of any hon. member, I care not whether he be on this side or the other, or from one group or another group.
He further stated that there was in the Duncan report a reference to dealing with the tariff. This is the way in which the Duncan report handled the tariff question. The hon. gentleman's statement was altogether out of place. On page 32 of the report there is an item dealing with a trade treaty that was asked for as regards forest products. The Duncan report is not asking anything as regards raising or lowering the tariff on forest products. It asks for a trade treaty to be arranged on those products between the maritime provinces and the states to the south. Our maritime friends know that is true. Further we must remember that that trade treaty will be a sort of reciprocity. My hon. friend opposite belongs to the party that in 1911 went out and defeated reciprocity, lost this country millions of dollars and tore it practically asunder from coaat to coast. Yet he has the temerity, the audacity, to get up in parliament this afternoon and tell us that the Duncan report wants the matter dealt with in a tariff way when that report makes no reference to the tariff on those products. It speaks entirely about a commercial treaty which we can negotiate internationally and as regards which we shall get down to rock bottom facts and endeavour to heal the maritime situation as far as possible.
On page 33 as regards the fish trade, the maritime report is asking for a trade treaty between the maritimes and the republic to the south of us. That is practically the same proposition. If we go further we shall see just how foolish the hon. member's statements are. On page 36 we find something about coal, a customs tariff on coal, of which we have heard a great deal in this House. The Duncan report states that the coal question ought to be brought before the tariff board. When it is brought before the tariff board we shall get all the facts; .they will investigate the proposition fully and lay the facts before parliament, and we as representatives of the Canadian people will decide on a policy in regard to the question of coal. What is wrong about that? I do not think there is anything wrong. On page 37 we get what the Duncan report says in regard to steel. The statement there is to the effect that the whole question of steel-and. that is an important question in Canada and particularly important in the maritimes-in all its fulness should be placed before this commission. We should get the facts in regard to it as well as the facts in regard to coal

The Budget-Mr. McIntosh
and act accordingly. So that as fa<r as the statement of the hon. member with reference to the Duncan report is concerned, that it deals entirely with the raising or the lowering of the tariff on certain materials, the truth is that the report makes no statement. There is to be no raising or lowering of the tariff on coal or steel until there has been investigation. On the other two items, forest products and fish, nothing is said about the tariff; it aims at simply dealing internationally with these difficulties.
My hon. friend admits that throughout Canada the Robb budget has attracted a great deal of attention east and west. The publications in this country, province by province and district by district, have told the people that this is a splendid budget. What are the facts? Will hon. gentlemen tell me that the average publisher of a daily or a weekly newspaper, after reading the budget, sizing it up and analysing the effect of it, will publish in his paper anything that he does not think is true? He wants to place before his readers the facts. If the budget is an encouraging one he will say so, and if it is not encouraging he will ktate to the contrary. I believe our newspaper publishers, irrespective of politics or irrespective of whether they are weeklies or dailies, take a presentation of this kind and analyse it carefully; after it is analysed they reach certain conclusions, and that is what they have done in this instance. That being the case we have positive proof that the budget is a proper one. It has received a splendid reception from east to west, and the Robb budget of this year is known throughout Canada, as was the one of last year, as a good budget, a budget that will be not only a cementing factor between east and west but a solidifying factor so far as the various provinces of the Dominion are concerned.
My hon. friend says that although there has been tax reduction we are taking more taxes from the people. The fact is that we have reduced taxation, and if we have taken more in taxation from the people it is not because the rates of taxation are higher; in fact they are lower, but we have done more business. It is a question in simple mathematics, and our friends cannot see through it. Last year the provisions of the Robb budget were presented to nine million people; the people went to the polls not long afterward, and we see the result in this House to-day. It is positive proof that so far as the people are concerned they know a good thing when they see it, and they know the 1927 budget is a good thing.
My hon. friend also, dealing with the national debt, states that we have not paid the amount we say we have paid; and he goes into a complicated discussion on the question of public accounting. The public accounts show us that last year we paid $27,000,000 off the national debt. I do not doubt that. We -are going to pay off thirty or forty millions this year. Now what have we paid off since confederation? I have the figures here. Our Conservative friends are always anxious to make out that they are wonderful financiers, that they have done the right thing by Canada, and that if returned to office they will do it again. Since confederation the national debt of Canada has been a big question for finance ministers and parties to handle; it has been an even bigger question since the war and is going to be a big question in the future. What were the reductions of the national debt made by the party to which my hon. friend belongs, about which he waxed so eloquent this afternoon when referring to the national debt? In 1871 the Tories were in power and what did they do? They cut the national debt about half a million dollars. In 1882 they cut the national debt one million and three quarters-and at the same time they added ten million dollars to it. In 1912 they were in power and they cut the national debt $125,000. The public accounts show that, and I am taking the public accounts for one party as well as for the other. What is sauce for the goose is sauce for the gander. In 1913 what did they do? They paid $25,000,000 off the national debt. In other words, they have been in power for over thirty years since confederation and all they have paid off the national debt on the whole is $27,000,000. What about the Liberal administrations? In 1900 the Liberals paid off half a million; in 1904 they paid off another half million; in 1903 they paid off $10,000,000; in 1907, $3,250,000; in 1924, $36,000,000; in 1925, $343,000; in 1926, $27,000,000, and in 1927, this year, we expect a payment of $31,000,000. In other words, since confederation the Conservatives, who have been in power longer than we were, paid $27,000,000 off the national debt as compared with a payment by the Liberals of over $100,000,000. There is the record, and I will leave it to anyone to say whether the record of the Conservative party can be characterized as an active one, or whether it should be regarded as "stationary". I would say it was a "stationary" policy and not designed for the benefit of Canada.
The hon. member for West Calgary (Mr. Bennett) suggested that we ought to conscript

The Budget-Mr. McIntosh
the money of the insurance companies and the banks to pay off the national debt. Following that up he made this statement:
I am of course only elaborating a plan that has grown in my mind after some consideration.
We a.re glad he gave it some consideration.
And it does not follow that the plan is at all sound in detail.
Did hon. members ever hear such a confession before a national House of Commons -a man rising and claiming that he has a splendid scheme for paying off the national debt of Canada, and after he has told us his objective he says it does not follow that the plan is sound in detail! We all know that a plan or a policy that is not sound in detail is absolutely worthless; consequently he might as well have saved his breath, and if that is all he has to offer we had better go on as we are. The cutting down of the national debt is a splendid work for any party or any finance minister, and I believe our hon. Minister oif Finance is entitled to the respect and admiration of the House of Commons as well as of all Canada for the introduction of his budget and the determination he haa shown in trying to lower this debt from year to year since 1923.
Further, as a Liberal I have absolute confidence in the Prime Minister and in the Minister of Finance that during the next fifteen years-and we are going to be in power that long by the way things are going now-during the next fifteen years if we continue to reduce the national debt at the present rate-and I have faith that our Minister of Finance will enable us to do this-we shall have paid off about six or seven hundred million dollars. Then should our Tory friends get into office-


An hon. MEMBER:: No.


Cameron Ross McIntosh: I do not believe they
will, of course; but suppose fate should so decree, we ought to pass legislation to compel them to pay off annually $40,000,000. That is the only way we shall ever be able to get them to reduce the national debt, otherwise they will never pay off a dollar if they can help it. Dur'ng all their terms of office since 1867 they have paid off only a paltry $27,000,000, they have run the country into debt by billions of dollars, and then they boast that they are great financiers, great Canadians, great imperialists, and that they stand for the old flag, the old emlpire and a greater Canada.
This budget is a surplus budget. The hon. Minister of Finance shows a surplus of $31,000,000, last year he had a surplus of $33,000,000. That is conclusive proof that he and his colleagues are looking after national affairs pretty
fMr. McIntosh.]
well. These recurring surpluses clearly indicate that trade is flourishing and that prudence is being exercised in the conduct of the country's affairs. If a man doses his books at the end of the year with a balance on the wrong side he is drifting towards bankruptcy, and the very fact that When the Minister of Finance closes our books at the end of the year he can show a surplus of $31,000,000 is ample evidence that Canadian trade is developing, that a buoyant spirit is abroad com-merieally and financially, that crops have been bountiful, that our transportation systems have been busy, that credit is good, that money is cheaper and easier to get, and that Canadians are awakening to the possibilities of imperial and foreign trade.
But, Mr. Speaker, we have not only a surplus budget, we have a favourable balance of trade. One of the great financial apostles of the Tory party in days gone by-it might be well if they had his peer to-day-was Sir Leonard Tilley, Sir John A. Macdonald's Minister of Finance. He was always telling his party:	If you cannot show a favourable
balance of trade you are no good; you will never get anywhere, you will never impress the people that you can govern the country, and you will not be returned to power for decades. His words are just as true to-day as when he uttered them-and the Tory party believes them, but it will not admit its belief. We have been going on from year to year showing a favourable balance of trade: this year $250,000,000; last year $401,000,COO; the year before $284,000,000-an average for the last three years of over $300,000,000 annually. That is another reason why I am glad as a citizen of Canada to stand up in this House to-day and declare that I shall vote against the amendment and for the resolution. I believe this is a popular budget, I believe it is an accurate statement of facts, I believe that the country is satisfied with it, and considering what we have gone through politically during the last two years I believe that the people as a Whole will say that the Minister of Finance has presented another outstanding budget that will demonstrate to the world that Canada is on the upgrade, and that in the years to come we are going to make history.
Some hon. members on the opposite side of the House find fault with this budget and ask:	Why not reduce the tariff? According
to their view the tariff board is an excuse for the government to delay action on the tariff.


An hon. MEMBER:: Hear, hear.


Cameron Ross McIntosh: That is not true. Last
year in this House I declared that we should give the tariff board a square deal before we

The Budget-Mr. McIntosh
passed judgment on it. I say the same to-day. Every industry in all Canada that feels it has a grievance must bring that grievance before the board to be thoroughly analysed. Then let the members of this House from all Canada consider the facts on which the tariff board bases its report and act according to their best judgment. Let us do by every industry what in our opinion is honest and right. In that way alone shall we bring about a united Canada enjoying a constantly expanding trade from coast to coast. If we are going to continue our tariff, let it be a tariff fair to all. Do not let the impression go abroad that any industry can at any time go to the Minister of Finance and get the tariff raised or lowered without this House deciding exactly what that raising or lowering shall be. I still have confidence in the tariff board. I say, give it a chance to demonstrate its usefulness. Left the tariff board get busy and deal with every application that comes before it on its merits. Then we in turn will decide what ought to be done for the good of Canada as a whole.
I repeat, Mr. Speaker, that in my estimation this is one of the best budgets ever presented to the country. It will show the world that we have another surplus, that we have reduced our national debt, that public revenues are buoyant, that trade is active, and that our people from coast to coast are piling uip big trade returns year by year. That is important from the standpoint of western and eastern Canada. It will be an important factor, a magnet, in bringing the right class of immigrants to this country, and I believe we want population. It is the general feeling throughout the country that we must have more people; we need more men on the land to increase agricultural production. It is the opinion on all sides that what .is required is an intelligent colonization and agricultural development policy. We have a great opportunity now to develop the wonderful heritage which is ours, and we should do so rationally, with the interests of the people in view as well as for the benefit of those who are to come.
What about our population? In 1871 we had a population of 3,370,000; in 1900 this had increased to a little over 5,000,000 and in 1921 it was 8,800.000. In other words, we have brought into the country since 1870, 4,500,000 people. Taking the population of 1870 and working out the natural increase at two and a quarter per cent per annum we find, with a total increase of 4.500,000 freer abroad that our population in 1921 instead of being about 9,000.000 ought to have been
over 16,000,000. For that 4,500,000 people whom we brought into Canada, the government spent $24,000,000 or $6 per head. That seems to me to be rather cheap. Economists tell us that the capital productive value to the state of the average individual is $3,000, and we have brought in over 4,500,000 at $6 a head and have not been able to hold them. The natural increase has not been what it should have been. We have lost many of our people and our problem is twofold: we must first get the people, and in the second place we have to retain them. That is a vital question.
It seems to me that we have a lop-sided-development in Canada so far as our population is concerned. The people are rushing off the land into the urban centres and to a large extent they are going to the United States. In 1925, in one month, over 8.000 Canadians crossed the border. That works out at the rate of 100,000 a year. During the last nine months 48,000 Canadians have come back, and with good times and increased prosperity in trade, together with a forward-looking policy on the part of this government, thousands more will return. These people will probably go on the land, and we should do our best to hold them with a view to increasing our agricultural production. In Russia 85 per cent of the people are on the land and 15 per cent in the urban centres; in the United States 72 per cent dwell in the cities and 28 per cent on the land; in Canada in the year 1870 we had 69 per cent of the population on the land. In 1901 our rural population was 63 per cent, but in 1921 it had gone down to 50 per cent. This proves beyond question that we need more people; there is no overproduction on the land. It proves further, as I say, that we have a lop-sided policy which we must rectify, and the problem for Canadians to grapple with to-day is to obtain the right class of people to go on the land, to balance agricultural production with our industrial activities and so bring about that happiness in the rural communities which will make for a unified industrial and agricultural life in Canada. The very basis of this problem lies in arriving at the proper equilibrium or normal balance between the country and the urban population, and with that end in view we should devise a policy whereby we may be able to develop our agricultural areas to their utmost, at the same time maintaining urban development. We have 358,000.000 acres of arable land in Canada. In 1870, 36.000.000 acres were occupied, in 1901. 63.000,000 acres and in 1921, 145,000,000. But what about cultivation? In 1870 we had 10,000,000 acres under cultivation: in 1901, 20,000,000 acres, and in


Mr. WOODSWORTH:: May I ask a question? If the immigrant is worth so much to the railways why should it 'be necessary for the Dominion government to subsidize the railways to bring immigrants to Canada?


Cameron Ross McIntosh: The Minister of Immigration (Mr. Forke) tells me there is no subsidization.


James Shaver Woodsworth: As I understand it, a certain grant is made for certain classes of immigrants; that is, a lower fare is granted, which is equivalent to a subsidy to the railways.


Cameron Ross McIntosh: The railways are supposed to pay that difference, as I understand it. There is cooperation between the government, the department, the railway companies and the British government.


Robert Forke: 
Cameron Ross McIntosh: The railways would appear to be doing their share.


James Shaver Woodsworth: But my objection
still stands; the effect is to assist the railways to bring in these immigrants, and my point is that if the immigrant is worth so much to the railways why should we go out of our way to assist the railways to lower their rates to bring immigrants here?


Cameron Ross McIntosh: I think the railways are assisting us; it is a straight business proposition and they are cooperating with us and with the British government in order to get more men on the land. In Canada wo have the land and in Great Britain they have the men, and the proposition is to bring the two together for the good of both countries.
I diid not intend to speak so long, Mr. Speaker, but in closing I would like to repeat that I think this budget is important to every riding in Canada, and for the life of me I cannot see why there should be much opposition to it in the House. I know that the budget is already popular in my riding; I am satisfied it is popular all over Saskatchewan; I know it is popular in Manitoba and I am sure that the rank and file of the people of Alberta will accept it if they are given the facts in a clear and straightforward manner. I believe this budget is popular across the mountains as well as in Ontario and throughout the east, and for that reason I feel that it will have
a unifying effect in bringing about a greater nation. I am going to support it not only as a representative of my own riding but because I am a western member and because of the fact that not only am I supposed to do my best for my own riding in this House but I am Supposed to consider the interests of Canada, and I think this budget will link the sections of this country into a more splendid and united whole. I believe it will be a factor in bringing to Canada the people we want and in making our agricultural and colonization policy more successful than ever. For these reasons and many others, Mr. Speaker, I intend to support the resolution of the Minister of Finance.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
The House in committee on Bill No. 42, respecting certain patents owned by Albert P. Frigon-Mr. Mercier (St. Henri)-Mr. Johnston in the chair.
On section 1-Term of duration extended.
Mr. GUTHRIE:: Is there anybody here
promoting the bill who can explain it to us?


Mr. MARCIL:: In the absence of the member who is sponsor for the bill, I notice there is only one clause which permits the term of duration extended. The bill has been reported by the private bills committee with one amendment.


Sir GEORGE PERLEY:: What is the
amendment.


John Frederick Johnston: The amendment is
clause 2, which reads as follows:
If any person has, since the thirty-first day of May, one thousand nine hundred and twenty-two or before the seventh day of November, one thousand nine hundred and twenty-six, commenced to construct, manufacture, use or sell in Canada the inventions covered by the said letters patent, such person may continue to construct, manufacture, use or sell such inventions in as full and ample manner as if this act had not been passed.


Charles Marcil: I think that provision protects the rights of parties who may be affected by this legislation.
Private Bills


James Alexander Robb: I am not sure whether this bill has been examined by the Commissioner of Patents. It seems to me that on general principles we should be very careful in granting patents of this kind which might add materially to the cost of construction in Canada. I think it would be well before proceeding further to have a report from the Commissioner of Patents.


Hugh Guthrie: Seeing that the promoter of the bill is not here, let it stand until the next sitting.


John Frederick Johnston: Shall I report progress on the bill?


Mr. MacLAREN:: I think the committee will find there is a clause in the bill which safeguards anyone who has made any preparation for carrying on work with which the bill may interfere. The private bills committee went into this matter very carefully.


Herbert Bealey Adshead: The bill has been considerably changed from the form in which it was introduced. I do not know, Mr. Chairman,, that the bill as you have it there is the bill as it was amended. How are we to judge of what the bill contains if it is not before us in an amended form? The bill was to be reprinted and submitted to the House as amended. We do not happen to have it.


John Frederick Johnston: The Minister of Finance suggests that we report progress on the bill. Does that commend itself to the committee?


George Halsey Perley: I think we ought to have a report from the Commissioner of Patents, as the Minister of Finance has suggested.


Murray MacLaren: Mr. Chairman, have you the amended bill, and if so will you read the amendment?


John Frederick Johnston: I have already read the amendment.


Herbert Bealey Adshead: I am a new member of the House and I am not objecting on frivolous grounds. But is it the custom of the House to proceed with an amended bill when it has not been distributed to the members? I think the committee should have the bill before it in its amended form.


Mr. RYCKMAN:: I support the suggestion of the Minister of Finance. In the preamble of this bill there is a long recital which gives to the patentee a valid patent on reinforced concrete beams. This is a peculiar bill in that there is so much predicated in the preamble. It would not hurt

at all if the bill stood over until we had a report from the Commissioner of Patents, and if the commissioner reports in favour of the bill I shall be very glad to facilitate its passage through the House.


John Livingstone Brown: In the committee the
preamble was amended more than any other part of the bill, and I think the faon. gentleman has made the same mistake as most of us made in the committee, in supposing that the patent referred to steel and concrete beams. From the explanation that was given to us, it would seem that that is not the case, but that this is a special machine made in Switzerland, and imported into Canada, and designed for the manufacture of Steel and concrete beams.


Edmond Baird Ryckman: That is all the more
reason why the 'bill should stand.


John Livingstone Brown: In my judgment it is a
matter that should not be dealt with hurriedly. We did give the bill a great deal of consideration in the committee, and it passed through the committee by a considerable majority, although there was some questioning in the minds of many of the members whether a bill of this nature was sound in principle. While I would not like myself to offer any particular objection to the passing of the bill, I agree that it is one that should be considered very carefully.


Charles Marcil: Was the Commissioner of
Patents or his representative heard before the committee?


John Livingstone Brown: A representative of the
patent office appeared before the committee, and while he did not express any opinion as to the merits, he stated clearly to us the general custom of the patent office.


Herbert Bealey Adshead: How does the hon. member know that the bill now before us is the same as the bill as it came amended from the committee?


John Livingstone Brown: I think the objection is
well taken. There should be a reprint of the bill before us because the amendments made in the committee were very important.


Mr. PETTIT:: I was present at the meeting of the committee, and I may say that all the words after the words "Canadian patents" down to the word "numbered" in line 17 were deleted and the term was fixed at December 31, 1936. The amendment was very thoroughly discussed in the committee and unanimously agreed upon.

Private Bills


Hugh Guthrie: But when a minister
requests that a hill stand until he shall have consulted the officers of the department, I do not think we have ever refused such a request.


James Alexander Robb: In the absence of the Minister of Trade and Commerce, who administers the Copyright branch, I think it would be well to let the matter stand.
Progress reported.



CONSIDERED IN COMMITTEE-THIRD READINGS

[Stage Direction]
Bill Xo. 4, for the reilief of Alice Victoria McGibbon.-Mr. Garland (Carleton).
Bill No. 5, for the relief of John Jones.- Mr. Church.
Bill Xo. 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 the relief of Robert Edward Greig.-Mr. Anderson (Toronto).
Bill No. 10, for the relief of Daiisie Hawkey. -Mr. Speakman.
Bill Xo. 11, for the relief of Olive Mary Mead.-Mr. Garland (Carleton).
Bill NTo. 12, for the relief of Alice Elizabeth Biakely.-Mr. Geary.
Bill Xo. 13, for the rdlief of Ethel Maud Hargraft.-Mr. Young (Toronto).
Bill No. 14, for the relief of Frederic Vinet. -Mr. Geary.
Bill No. 15, for the relief of Gwendolen McLaehlin.-Mr. McPhee.
Bill No. 16, for the relief of Jessie Evis.- Mr. Arthurs.
Bill No. 17, for the relief of Max Gertler. -Mr. Casselnian.
Bill Xo. 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 Xo. 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 Vina Kennedy (otherwise known as Vina 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 <?f Maxime Demers. -Mr. Garland (Carleton).
Bill No. 37, for the relief of Ethel Clementina Craig-Williams.-Mr. Lennox.
Bill NTo. 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 Northeast).
Bill No. 49, for the relief of Leslie Ellis Noble.-Mr. Garland (Carleton).
Bills reported.
On the motion for third readings:
Mr. SPEAKER:: In order to save time, if the House does not object I will give simply the numbers of	these bills.	They	are: BillsNos. 4, 5,	6, 7, 8, 9,	10,	11,	12,	13,	14,	15,16. 17, 18,	19,	20, 21,	22,	23,	24,	25,	26,	27,28, 29, 30,	31,	32, 33 ,	34,	35,	36,	37,	38,	39,
40.


Charles Marcil: When first I came to this
House none of these bills was ever passed except on division for the reason that a minority of the members did not favour them. Bills of this nature have been becoming gradually more numerous until we find at the present time some sixty on one order paper. I think we should return to the practice which obtained for many years after confederation and register the fact that they are allowed to go through on division. I ask that in this case this proviso be inserted in the proceedings.


[Stage Direction]
Motion agreed to, on division, and bills read the third time, and passed.

[Stage Direction]
House in committee on Bill No. 41 to incorporate the Columbia Life Assurance Company (as amended)-Mr. Stevens-Mr. Johnston in the chair.
[Stage Direction]
Georgian Bay Canal Company
George Halsey Perley: Mr. Chairman,
what are the amendments?


John Frederick Johnston: Clause 5 has been
deleted, and in clause 9 the words "except as herein otherwise provided for" have been struck out.


Mr. GARDINER:: And clause 3 was
amended by deleting "two" and substituting "one" therefor.


Henry Herbert Stevens: That is right.
Sections 1 to 4 and 6 to 8 agreed to.
On section 9-1917, c.29 to apply.


Robert Gardiner: As amended, Mr. Chairman.


Henry Herbert Stevens: With the amendments.


Abraham Albert Heaps: Is anything in this bill
contrary to the law of the province of British Columbia, where evidently the 'head office is to be located?


Henry Herbert Stevens: Certainly not. The bill
of course is under the provisions of the federal Insurance Act in all respects.


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

[Stage Direction]
Mr. E. R. E. CHEVRIER (Ottawa) moved the second reading of Bill No. 78 respecting the Montreal, Ottawa and Georgian Bay Company.
Hugh Guthrie: I would ask the promoter of this bill to let it stand. It is only a few minutes now before the time for discussion of private bills expires and there are some members on this side who would like to discuss the bill.


Mr. CHEVRIER:: I should like to oblige
the hon. member although of course, Mr. Speaker, I am entirely in your hands. I admit that there are quite a number of members on both sides of the House who would like to take part in the discussion of the bill, but I submit that the proper place for the discussion would be in the railway committee to which the bill would be referred after its second reading here. No harm could result. The discussion would take place there as freely as in this committee, and as I have observed on both sides of the House a desire to expedite the business of the session I think considerable time would be saved if my hon. friend would allow the second reading.


George Halsey Perley: I know it is not customary to speak at any length on private bills, but this is one occasion on which I certainly think we should discuss the principle of the measure before us. If we pass the second reading of the bill the House will be virtually assenting to the principle involved. It is true the bill will be referred to the committee on railways and canals, where its details will be discussed, and will then come back to this House for further consideration in our own committee. But, I repeat, the second reading of the bill is tantamount to an approval of its principle.
The project of a canal on the Ottawa and French rivers has been before the public for many years, the original bill for the canal having been passed in the year 1894, long before any of us were members of the House. One of the first things that came up for discussion in the House after I had the honour of becoming one of its members was this same Georgian Bay canal bill. At that time the whole of the Ottawa valley was very much interested in the project, from which we hoped many things. Many elections, if they were not run solely on the question of the Georgian Bay canal, had at any rate a substantial relation to it; the subject was a factor in all of the elections in this Ottawa valley during a number of years. We all hoped and expected that the canal would be built. What has happened, however? The charter has been renewed fourteen times. The matter has been on the statute books since 1894, some thirty-two years, and so far nothing practical has been done.
I want it distinctly understood that I am not in any way opposed to the building of this canal, if those who are behind it actually want to build the canal and are not asking for a renewal of the charter for any other purpose. I do not think we need this canal as much as it was needed years ago, because in the meantime we have enlarged the Welland canal and some day we may enlarge the St. Lawrence canal. While years ago we felt that this would be a new outlet for grain from the northwest, vessels now carrying grain on the great lakes have become so much larger and the depth of water provided by the Welland canal so much greater that as a practical matter it does not seem to me that this Georgian bay canal is quite as essential as formerly. At the same time, if any body of gentlemen are willing to put up their money for this canal I would not suggest that they be not allowed to do so, and I am quite sure no member of this House would not be happy to have this canal built for the benefit

The Budget-Mr. Evans
of the interior navigation of this country in bringing grain from the northwest and also in distributing the various products of the Ottawa valley. This is a rich valley and its resources have hardly been scratched as yet; not only is there timber and pulpwood, but minerals are being discovered continually, and it is possible that the Georgian bay canal might pay. So if any gentlemen wish to build it I have no objection whatever.
With regard to the promoters of this bill, I notice that in the copy on my file no promoters are mentioned, so I take it that the promoters are those named in the last renewal. My memory takes me back to the time when McLeod1 Stewart, who was a valued citizen of Ottawa, took up this idea with enthusiasm and tried to interest people in it. He did not have sufficient means to undertake the enterprise, and after some years Sir Robert Perks took up the matter. He was and still is a prominent English contractor who had built large works in various parts of the world and had made a success of his business, and a prominent man in the commercial life of London whom I often met when I had the honour of representing Canada there. Sir Robert Perks and his associates took hold of this charter and had it renewed, then employed a staff of engineers to make plans for the canal. I am not sure that they carried those plans all the way through, but certain sections of the Ottawa river were plotted out by a small staff engaged for that purpose. Then what happened? The money was not forthcoming, and they could not build the canall. They came to this House asking for a renewal of the charter time and time again; in fact this charter has become a hardy perennial. I think Sir Robert Perks came to Ottawa every year in those days to interview first Sir Wilfrid Laurier during his years of office and then Sir Robert Borden, and his energetic endeavours were only interrupted by the war. He wanted the Dominion government to guarantee the bonds of this canal, arguinig that this was really a public work for the public advantage, and that therefore the Dominion government should guarantee the bonds of the company. The promoters claimed that if the government did that they would never have to pay a cent because the revenues would be sufficient to pay the cost of operation and also to cover the interest on the bonds issued.
My reason for stating these facts is that even Sir Robert Perks, who was known in London as the head of a powerful group of financiers and who had built with his associates large works in various parts of the world, did not find himself in a position to provide the money necessary to build this canal without a government guarantee. If that was the case with this powerful group of financiers in England1, in the first place I would like to know where the money is to come from to build this canal now, because it is going to cost twice as much as it would have then cost. That is the first question I would like to bring forward for the consideration of the House, but it is by no means my main reason for bringing up these matters on the second reading of this bill. This is not a party question in any sense of the word, but we have three or more groups in this House and if a few businesslike words from me on the. question of this renewal would enable those members from different parts of Canada to give careful consideration to this whole question, when the matter comes up in committee I will try my best to impart that information.
Now, Mr. Speaker, I have to go into the matter of water power in connection with this bill and I would therefore call your attention to the fact that it is 9 o'clock. I would like to continue, however, when the matter comes up again.



THE BUDGET


[Stage Direction]
The House resumed the debate on the motion of Hon. J .A. Robb (Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of ways and means, and the proposed amendment thereto of Mr. Coote.
Mr. JOHN EVANS (Rosetown):: Mr. Speaker, the budget has each year come to be looked upon as a register of progress, or otherwise, regarding trade. It is also an indication of the policy of the government, and looking at it from this standpoint the government has evidently been careful in the present budget about one thing only. Its one concern has been for the payment of dividends on capital investments, rather than for easing the burden of the high cost of living on the worker of the nation.
In this connection I wish to say a word regarding a statement made by the hon. member for Vancouver Centre (Mr. Stevens) this afternoon. He says that the policy he stands for would maintain the very highest standard of living possible. But he would put the whole burden of the high cost of living and the decent standard of living on the
The Budget-Mr. Evans


Mr. CHAPLIN:: We shall have to go back to flints.
The Budget-Mr. Evans


John Evans: I had hoped, as time went
on, with the splendid opportunity that this government had of restoring its party to principle, that a greater proportion of taxes would eadh year be collected by the direct method; but the primary producer is still to be the beast of burden and the whole farm is to be directed from Ottawa.
I do not think I would have spoken on the budget to-night, but for one or two reasons. I want to voice my surprise and indignation that both in the budget speech and in the reply of the hon. member for West Calgary (Mr. Bennett) there is the boasted prosperity of the city and urban industries, while the great basic industry, agriculture, is simply bankrupt. I am mortified at the contempt with which the agriculturist of the Dominion is treated year after year. It is true there is some $380,000 increase in the estimates for agriculture this year. What will that be for? To create some white collar jobs and to duplicate the work of the provinces in research and so on. It will go for the winter fair in Toronto too.


Mr. MOTHERWELL:: The vote is not increased.


John Evans: But as to the man on the
land, who finds the price of his product against the competition of all the world, there is nothing in this budget for him. Nothing is done to bring the cost of production in line with world's prices. I want to say to-day that manufacturing in Canada as it is carried on under a system of protection is a national canker which is eating at the vitals of true industry. It cannot either supply the home market or manufacture for export except as it leans on the politician. Politics is a screaming farce, behind which the legalized robbery is carried on. John Charlton, a member of this House a good many years ago, speaking in this chamber on March 18, 1879, said:
I venture to say. . . that these monopolies which the government is now aiding to build up will not be easily removed.
He went further and said:
It will perhaps take more than one verdict of the people of this country to unloosen that grip which will fasten on them with a death-like tenacity.
And now, after nearly fifty years have passed, the government in the presentation of this budget has thrown out a distinct challenge to the primary producers of this country and to everybody who has still left a little sense of liberty and justice.


Edward Joseph Garland: Hear, hear.


John Evans: The Minister of Railways
(Mr. Dunning) surprised me last night.


Edward Joseph Garland: Surprised
me too.


John Evans: It is not many years since
I sat with the Minister of Railways on the board of the Grain Growers' Association of Saskatchewan. He and I together, and others helped to draft that clause in the Canadian Council of Agriculture platform calling for freer trade, demanding an increase in the British preference to bring about complete free trade with England in five years. What now? I want to say to this House that besides the economic feature of this question there is also another side to it, the moral side, and I want to quote no less an authority than George Brown, who many years ago founded the Toronto Globe. He used these words:
If a public man avows certain principles, agitates those principles and seeks to establish those principles and when he attains power laughs at his professions and casts his principles to the winds, he is aiming a blow at political morality.
The Minister of Railways made an authoritative statement last night as coming from the government. They are going to work for free trade, but they are going to do it in a cautious way. He made exactly the same statement last night that Sir Wilfrid Laurier made in 1896. They proceeded cautiously. By 1904 the Liberal government had succeeded so far that they placed soft soap and false teeth on the free list.


James Dew Chaplin: And last year they put
angostura bitters on the free list.


John Evans: And the same year they
placed on the statute book of this country What is known as the anti-dumping act, the most diabolical legislation that had hitherto been thought of in any country. We were the first to enact that law. Canada has led the way in special privilege. She is still leading it, and I say this: that even in the United States alongside of us, with her high tariff, a country we are exhorted by a part of this House to emulate or to attain to the same privileged position, their people are not burdened by class privilege to-day as much as the worker and primary producer in Canada is. I hope that western Canada at least will take particular notice of the retrograde step the government has taken this year. Because of the reform which was foreshadowed in the fatal session of last year, and the promises of the Liberal government, only one protectionist was elected in the three prairie provinces, a fact that the government has treated

The Budget-Mr. Evans
entirely with contempt. Then, as if it were not enough to maintain the duties on the necessaries of life at the old rate, an order in council was passed on the 25th of November, 1926, which legalized the application of 47a of the Customs "Act, which allowed a valuation on certain natural products in keeping with the seasonal and the regional importation, at the instigation of the fruit and vegetable dealers. The Minister of Railways (Mr. Dunning) last night did not know anything about 47a. I wonder who passed this order in council. It was placed on the statute book on June 22, 1922, during the first session that the Liberal party came into power aftei the war. Even the leader of the opposition at that time was startled by it; protectionist as he was, he was shocked.


James Dew Chaplin: Protection gone mad.


John Evans: Let me quote his words. He said:
I do not know whether this is fully understood or not by the hon. gentlemen to my left,-
meaning the Progressives.
-but I admit that it is fully understood by me. This provision is protection personified. This is the last emanation from the government that denounced protection two or three days ago. For purposes of valuation the minister can fix the value where he likes, and any basis he likes, on any principle he likes, to suit any interest he likes, as low as he likes, as high as he likes, and when he likes. In a word, this simply puts into the power of the minister the whole elevation of the tariff of this country.


An hon. MEMBER:: Whom are you quoting?


John Evans: The Right Hon. Arthur Meighen, speaking in this House on the sight of June 22, 1922. It is more than likely that 47a is applied according to the wishes of the Canadian packers and the needs of political parties. In fact I have looked on 47a during all these years as simply an advertisement for tenders. I say to you gentlemen of the House of Commons to-night that otherwise it is not conceivable that the duty would be increased by a false valuation on these natural products to as high as 156f per cent as was the case this past summer.


Miss MACPHAIL:: Adequate protection 1


John Evans: The duty on a carload of
tomatoes was raised from $150 to $385 by a false valuation. As I have said before in this House, I cannot understand even a protectionist trading on the rights of the consumers of Canada in this way without some consideration. I cannot. I have always
spoken frankly on this question, and I cannot look on this in any other way. An increase of 156-f per cent by a false valuation! Just consider what it means on an article of diet that ought to be on everybody's table all the year around if possible. And there was no indication at the time that fruit was being dumped in Canada from the United States. No one could say there was. No evidence has ever been adduced to show that there was any dumping of fruit or vegetables at that time..
When the member for Weyburn (Mr. Young) was speaking a couple of days ago he informed1 the House that he took some trouble to get evidence regarding dumping, and went from one department to another. He is still minus the evidence. I knew he could not get it, I had been on the same rounds before. I say to-night, it is strange that even a protectionist would want to increase the cost of living to the worker in this way, seeing that it must inevitably entail a demand for higher wages. Why has it been done so long? Because the whole burden has been passed on to the farmers of this country, who are now bankrupt.
One of the chief arguments for protection is the necessity of preserving a high standard of living. But in this budget the government has retained all the taxes on the necessaries of life. Surely when the drop in revenue has been used to make the rich richer, we cannot be deceived as to the policy of import penalties and the purpose of those who control industry and politics throughout the Dominion. This 47a is one of the most pernicious pieces of legislation that has ever been enacted. I assert, Sir, that it is nothing but fraud and graft and intrigue and injustice. Yes, it was first invoked when two elections were called within one year. What does it mean?
There is another feature regarding this dumping clause. I say it is particularly annoying at this time when we are sending the Hon. Vincent Massey to Washington to bring about better trade relations with the United States. Especially is that better feeling desirable by reason of the live stock condition all over Canada to-day. But the Minister of Customs has seen fit to pin-prick Uncle Sam in this way, and thus he has forestalled for many years to come any good that we may expect from the Hon. Vincent Massey's ambassadorship.
I have said th-at manufacturing, as it is carried on in this country to-day, is a canker on our national progress, and I am wondering how long that part of the population engaged

The Budget-Mr. Evans

in primary production will see fit to pay tribute to a privileged class to concentrate the earnings of the workers and create an aristocracy in our cities. Manufacture is a canker for the reason that the manufacturing class admit that a protective tariff is needed to keep out foreign competition. This tariff is maintained chiefly for two reasons: The manufacturer must have the privilege of naming the price to the home consumer; and that price must be high enough to ensure a profit on the whole of his output, both domestic and export. And the tariff is being used for that purpose. Is it any wonder, then, that the farmers of this country at last are in rebellion against such a system? I have said before in this House, and it will not do any harm to repeat it, that the farmer is exploited on the finished products from the very farm itself. For example, the very grade of Hour that we are buying to-day in Saskatoon, where the wheat is hauled into the hoppers of the big mills, and no tariff or freight rates are involved, is dearer by 20 to 30 cents for a 98-pound sack than it is on the other side of the Atlantic. That is what protection is doing for us.


Mr. SPENCER:: On the same flour?


John Evans: On the same flour, yes. They tell us that it is not the same quality. I know that they do not ship poor flour to Britain; Britain gets the best flour that can be procured in the world. They cannot sell poor stuff there.


Mr. YOUNG (Saskatoon):: Nor in Saskatoon either.


John Evans: Perhaps not. Our manufacturers to-day will sell against all competitors in foreign markets the very goods for which they charge us so much higher prices, and the fallacy of protection was never better illustrated than it is in the fact that goods made in Canada are sold cheaper in the markets of the world than they are at home. When the Minister of Trade and Commerce (Mr. Malcolm) was speaking the other day, he undertook to contradict what he considered a wrong impression. He referred to a list of goods quoted, I think, by the Minister of Finance (Mr. Robb) at page 393 of Hansard'. These things coming into Canada "for further manufacture" and on which no duty is paid represented a total value last year of $224,000,060. I want to point out in this connection what constitutes a real injustice. All raw material for manufacture, of the same nature produced on the farms of Canada, comes into this country free of duty. Not only have we to meet the competition of the

world's markets in the sale of hides, but on the finished article, harness, boots, shoes and so forth, and all manufactures of leather, the farmer must pay an enhanced price because of the import penalty on these goods amounting in some cases to over one-third of their value. Wool, for example, is on the free list for manufacturers' use; but the primary producer, who has no protection for himself on anything he produces, pays at least 35 per cent of a duty in the way of enhanced price because of the import penalty on all woollen clothing. The same is true of other articles. Rubber, for instance, is free for the manufacturer. I have a list oif such goods here, but I will not take the trouble of reading it to the House. All these things come in free for the manufacturers' use, and we do not get any advantage in the way of reduced prices. We are charged, I repeat, an enhanced price as a result of the penalty imposed on the imports.
It is impossible for things to go on much longer in this way. Under this system of class privilege in the United States agriculture has been reduced to a state of bankruptcy, and both here and across the border the one great problem for the agriculturist to-day is how to free himself from the compact that exists -between the politicians and the manufacturers and distributors. This compact is responsible for the present impoverished condition of the maritime provinces, which must shortly be dealt with. Unless, therefore, the trade policy of the Dominion is rectified, no relief given in a direct way to those provinces will make them any better off than they are now. A feature of this system which is worthy of notice at this time, seeing that the maritimes are before us for redress, is that the concentration of wealth and industry is regional. Our problems and our grievances are regional. The density of population is a problem to-day in our cities, and the concentration of wealth and industry has eliminated the m-an whose capital is a little money and plenty of brawn and muscle. This type of man is reduced to the position of a wage earner. That is why I say that enterprise is being destroyed under the present system.
The hon. member for Fort William (Mr. Manion), speaking the other day, cited the fact that we have already invested in life insurance $4,500,000,000; and he mentioned this to show how prosperous we are. I say that this -is no sign of prosperity. It is simply the result of the concentration of wealth and industry. When the -man in a small way is forced out of his little business and becomes a wage earner, all he cares to do is to keep up a life policy, thereby further forging the

The Budget-Mr. Odette
fetters in which he is labouring at present- the concentration of wealth and industry. Even life insurance to-day has become an evil in this way, and I want to warn the workers, who are using their earnings to concentrate wealth thus, that there will come a point rvhere even this will be unsafe. Why? Because the base on which privilege to-day rests is giving way. The primary producer, who has to bring in most of the income of the nation, by marketing his products in competition with the rest of the world is facing ruin. Our capitalists to-day are seeking investments in foreign countries. Their surplus profits are going abroad instead of being kept at home to develop our own natural resources and to provide work for our own workmen.
One great sign of the times is seen in the fact that one of our leading economists, Professor Goforth of McGill University, the other day advocated the importation of some thousands of Chinese under a system of indentured labour for the purpose of developing our natural resources because the wages of our workingmen cannot be made commensurate with the cost of living, which has been steadily driven up. Whose fault is it? It is the fault of the system; and the professor's remedy, I know, is uneconomic and inhuman. But it is significant as showing that even the capitalists of the Dominion to-day are up against it. They are up against the problem which the agriculturist has felt for several years back.


James Dew Chaplin: Everybody is broke.


John Evans: The hon. gentleman says everybody is broke. His remark is intended to be sarcastic. Surely there is no need for us to have any great economist tell us the simple rules of economy. I tell the hon. gentleman we are digging our own grave. They say that protection is high in the United States and is a tremendous price fixing power for the manufacturer there. If that is so, why has smuggling from that high protectionist country become so popular? It is a most profitable business to-day to go to the United States and load up with silks and woollens for Canada.


An hon. MEMBER:: Tell us how it is
done.


John Evans: Perhaps if the hon. gentleman got on his feet sometimes he would know more about it than I do. I know what he is hinting at, that the smuggling is made possible by the nefarious trade in liquor from this Dominion into that friendly country, and 32649-43J
I say again that therein we are defying the laws of the United States and also violating the spirit of the treaty entered into last year in regard to this matter. Senator Smith, of South Carolina, speaking in the United States Senate the other day, showed that agriculturists in the United States are in exactly the same condition as those in Canada. He said there had been much talk about prosperity, which members of the "old guard" were sure was unparalleled and due entirely to the Coolidge economy. When Senator Smith claimed the floor he spoke with much feeling, and after calling attention to the tremendous prosperity of Wall street and the huge volume of collateral loans of the federal reserve banks, he said that the prosperity of Wall street meant foreclosures on the farms of the United States. I have here a clipping from the Saskatoon Star of December 10, 1926, in which it is said:
Herbert Hoover, Secretary of Commerce in President Coolidge's cabinet, issued a report recently in which lie declares that the United States is enjoying a standard of living "far above that in most other countries of the world at this or any other time."
The clipping refers to a remark by Senator Brookhart, and goes on to say:
According to the Senator, who is one of the insurgent party at Washington, one million farmers in the United States have lost their homes during the Harding and Coolidge administrations, which is to say, since 1920. An independent New York weekly, The Nation, commenting on his statement says the United States is "now seeing the fine flowering of the protective tariff system which has exalted manufacturing at the expense of agriculture." This is the system which has been advocated for Canada. The object lesson of the United States should not be lost on Canadians.
We are in exactly the same condition today, and these conditions are Dominionwide. We have a beautiful country here, but equality of status as between classes and between provinces must be brought about. It does not take anyone with a gift of prophecy to say that it will not be long until confederation itself will go to pieces under this great syetem of class privilege.


Mr. E. G. ODETTE (East Essex):: Mr. Speaker, I rise with considerable trepidation to make my first speech, if it may be so termed, on the floor of this House, and I crave the indulgence of Your Honour and of hon. members if I violate the rules of the House in any way. I can assure you that if I do transgress, my transgressions will not be wilful but due to my lack of knowledge of the time-honoured customs of this body.
The Budget-Mr. Odette

At the outset of my remarks, which I will endeavour to make brief, I desire to compliment the Minister of Finance (Mr. Robb) on the budget introduced into this House last week. To be able to reduce taxation and at the same time announce a reduction in the net debt of this country is, I submit, no mean accomplishment. This afternoon the hon. member for Vancouver Centre (Mr. Stevens) argued that the reduction in the net debt meant nothing and that the only thing which counted was the funded indebtedness or, as he put it, the mortgage debt. Looking at it from a business point of view may I submit that if a manufacturing industry finds it necessary to build an addition to take care of increased business and finds it necessary to issue bonds or place a mortgage on the new addition, and if at the end of the year the financial statement shows that the profits have been increased by virtue of this addition, although the mortgage placed on the assets may have made the funded indebtedness higher, the common stockholders will benefit because these increased profits are divided among the common stockholders of that company. So, Sir, I submit that when the net debt of this country is lowered and a reduction in taxation follows, the stockholders of this country, who are the people of the country, are given dividends in the shape of reduced taxation.
While on the matter of business, some of the hon. gentlemen across the floor expressed great fear of American domination through American investments in this country. I have no such fear. I hold in my hand a copy of the Detroit Free Press dated September 22, 1926, in which appears an advertisement which I did not see in any of the newspapers in Canada. This advertisement reads as follows:
You insure your life, your house, furniture, automobile. Here is an opportunity to buy an insured investment.
This company is called the Manufacturers' Finance Corporation Limited, incorporated under the laws of the Dominion of Canada. May I ask the hon. member for Vancouver Centre, with his well known business ability and his knowledge of finance, what constitutes an insured investment? The hon. member is silent; he is a director of this company and his name appears in the directorate as Hon. H. H. Stevens, Minister of Trade and Commerce, Canadian government. Apparently that is thought insufficient and his name appears again as Hon. H. H. Stevens, ex-Minister of Trade and Commerce-and still he cannot answer what is an insured investment.
rMr. Odette.]


Henry Herbert Stevens: As you, Mr. Speaker, know very well, I have no right to make replies to questions across the floor of the House, but I can -certainly tell my bon. friend all about insured investments if it would be of any interest to give that information.


Edmond George Odette: I believe the time is
opportune when this House should introduce and pass some legislation that would prohibit hon. members of this House from using thedr positions as members of parliament to go to the United States or to other foreign countries and solicit funds there for wildcat oil schemes in Canada.
Dealing with the reductions in taxation announced by the Minister of Finance, I believe that the abolition of the graded tax on cheques, bills of exchange and notes has been received with favour by all business men of Canada. My hon. friends in the southeast corner of the House argue that this *reduction in taxation does not benefit the mass of people. Well, let me say this to them-that when the burden of taxation is removed from the shoulders of a business man, and when the cost of doing business is lessened, that man is enabled to sell his products to the consumer for a lower price, and when the price is lowered naturally the people in general benefit.
Coming to the reduction in the taxation on matches, I disagree with the hon. member who has just taken his seat (Mr. Evans) when he says that the people of Canada do not complain about the price of matches. I know that in my part of the country they do complain of the price of matches. In Detroit, Michigan, six boxes of matches, that is of the large size containing five hundred matches each, can be purchased for the sum of twenty-five cents, while across the river in the city of Windsor, two boxes of matches cost twenty-five cents. Now the lumber from which these matches are made comes to a very large degree from the forests of Canada, and the containers that hold these matches are made from Canadian pulp. Then why should we in Canada pay three times as much for our matches as do the people of the United States? I submit that if the manufacturers of the matches are hiding behind this tax, the tax should be removed in its entirety.


John Evans: Will the hon. gentleman
permit a remark?


Edmond George Odette: Yes.

The Budget-Mr. Odette
Mr. EVAiN&:	I did not say the cost of
matches was sufficiently low. What I objected to was that the tax was lowered in such a way that the reduction would not be passed on to the consumer.


Edmond George Odette: Well, I think time will
show whether that is true or not. I sincerely hope that time will show that this reduction has been passed on to the .purchasers of matches.
Certainly no one can find fault with the removal of the tax on bank overdrafts o,r advances by banks. It has always seemed to me somewhat of an injustice to tax the man or the industry that was forced to borrow money.
Mr. RY'CKMAN:	Your own party put it
on.


Edmond George Odette: Then I presume our party will take it off, because I believe they will be here for some time to come.
Referring to the reduction in the sales tax, I desire to compliment the Minister of Finance. I believe it is a step in the right direction, but I should like to suggest to the minister that the sales tax on all Canadian-made goods be removed in its entirety, but that the sales tax on imported articles be retained.


Some hon. MEMBERS:: Oh, oh.


An hon. MEMBER:: Come over and join
us.


Edmond George Odette: Hon. gentlemen opposite
applaud that suggestion. They may hurl at me the epithet that was hurled at the hon. Minister of Trade and Commerce-that I am a protectionist. Well, if that enunciation proclaims me a protectionist I am willing to be called a protectionist or any other name that my hon. friends may devise. If, by the removal of this sales tax on Canadian made goods, the citizens of Canada would be enabled to buy goods at a lower price, provided they were Canadian made and would, at the same time be able to buy the imported article without having the price increased one cent, then I say it is a good policy.
Let me go further. I sat in the gallery when the Minister of Finance told hon. gentlemen opposite that he proposed removing the excise tax of five per cent on motor cars costing $1,200 or less, and that if the manufacturers did not pass that saving on to the buyers of motor cars he would immediately remove the five per cent excise tax on cars imported from the United States or other countries. By removing the sales tax on
all Canadian made goods, but leaving it on the imported articles the Minister of Finance would have a dub with which he could force the Canadian manufacturer to pass that saving on to the consumers in Canada.
The hon. member for West Calgary (Mr. Bennett), speaking the other afternoon, said this:
My hon. friends opposite are more concerned with foreign trade, and we are more concerned with domestic trade.
As to that I would say this: In the year 1921, when the Meighen government was in power, the imports of manufactured goods into Canada exceeded our exports by $264,000,000, and in 1926 the exports of Canadian manufactured goods exceeded our imports by $23,864,000. So that in 1921 we did a foreign business but it was on the wrong side of the ledger. To-day that foreign business has been increased but the balance is on the right side of the ledger. Even if the Canadian manufacturers had the entire Canadian field to themselves they would still be behind according to these figures. Let me give you an instance of how this would work. The Ford Motor Company of Canada sell every Ford car they possibly can in Canada. Their arrangement with the American Ford company gives them the entire Canadian field, and so the potential demand here for Ford cars is filled by the Canadian Ford company. At the present moment the Ford Motor Company of Canada are employing 6,130 men, and 40 per cent of their production is exported. I ask hon. gentlemen opposite where 2,452 men would find employment if it were not for the export trade of that one company?


An hon. MEMBER:: What is the argument?


Edmond George Odette: The argument is this, that by making reciprocal trade agreements with other countries that are beneficial to Canada, but in a spirit of give and take, industry will be built up in Canada, and I submit that one of the most beneficial things to Canada at the present moment would be a reciprocal trade agreement with the United States. If hon. members across the floor of the House would only devise ways and means of convincing the Canadian people that they should buy nothing but Canadian-made goods, and should buy no imported goods whatsoever, I am sure the manufacturers of Canada would be very thankful to them indeed. Why, in the galleries of this House we find angle iron stamped "Carnegie, Pittsburg." I do not think this government was responsible for
The Budget-Mr. Odette

the construction of this building. I believe that any Canadian government, no matter whether it be Liberal, Conservative or Progressive, should set an example and buy nothing but Canadian-made goods wherever possible, buying imported goods only when Canadian made goods are not procurable.
The hon. member for West Calgary spoke of unemployment in Vancouver.


Mr. KELLNER:: Just before the hon.
member proceeds, I would point out that the pens on the members' desks were purchased in the United States. I believe the Liberal government is responsible for that.


Edmond George Odette: If there are pens manufactured in Canada, I think this government or any other government should buy Canadian-made pens.
I was about to remark that I am not very conversant with industrial conditions in Vancouver, but I am conversant with employment and industrial conditions in my own constituency, and I desire to say that on December 31, 1926, there were 574 more men employed in the border cities than there were on the corresponding date in 1925-and that in the face of the employment situation in the city of Detroit, dynamic Detroit, a city famous the world over for its industrial activity. Let me give you the employment figures in the city of Detroit on the same dates. On December 31, 1926, there were 41,262 fewer men employed by the manufacturers and other employers in the city of Detroit than on the corresponding date in 1925. I have heard hon. gentlemen quote in this debate Adam Smith and Stephen Leacock, and I venture to say that if this debate continues long enough, some hon. gentlemen will be quoting King Tut. Allow me to quote an industrial leader in Canada, W. R. Campbell, vice-president and general manager of the Ford Motor Company of Canada. Speaking at a dinner given by the border chambers of commerce at Windsor on January 6, 1927, he said:
I am most optimistic over the outlook for 1927. Having recently returned from an extensive tour of the Dominion, I find that financial, economic and industrial conditions throughout the country to-day are very encouraging. In every province there are indications of expanding business and prosperity. After completing this tour I am amazed at the potential buying power of Canada to-day. I have been through Canada on previous occasions, but was none too enthusiastic. This time, however, I saw- improved buying and absorption power.
The industrial situation in Canada shows a decided improvement. It is on the headv'ay made last year, and from our internal research, that we are contemplating a 20 per cent increase in our production during 1927.

I have given you the employment figures of the border cities. They speak for themselves.


Mr. PRICE:: Is this not in your opinion
simply a matter of advertising? This firm is in competition with other concerns selling automobiles in this country.


Edmond George Odette: All right. The Willys-
Overland Company of Toronto have increased their production by 30 per cent.


Otto Baird Price: Is that not advertising too?


Edmond George Odette: I do not know that this
is advertising particularly.


Otto Baird Price: Why, certainly, it is advertising.


Edmond George Odette: All right. There are 574
more men employed in the border cities today than there were a year ago, so if advertising brings business to my constituency, I say let the advertising continue.
In conclusion, may I say to the hon. Minister of Finance that if he is able to bring down similar budgets providing for a reduction in taxation during the succeeding years of this parliament, he will have an augmented following behind him when the people of Canada are called upon for a pronouncement.
On motion of Mr. Young (Saskatoon) the debate was adjourned.
On motion of Mr. Robb the House adjourned at 10.20 p.m.
Monday, February 28, 1927