1927-02-23

MANITOBA PAPER COMPANY

Hon. CHARLES STEWART (Minister of the Interior):: In compliance with the request of the hon. member for South Toronto (Mr. Geary), I am laying on the table of the House the agreement between the Department of the Interior and the Manitoba Paper Company.



COMMITTEE ON MISCELLANEOUS PRIVATE BILLS

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved that the name of Mr. Cayley be substituted for that of Mr. Young (Saskatoon) on the select standing committee on miscellaneous private bills.
Motion agreed to.

Mr. H. C. HOCKEN (Toronto West Centre):: I desire to present the following
petitions asking for the transfer to the prairie provinces of their natural resources without restriction: from Alberta, 2,470 signatures; from Saskatchewan, 1,510 signatures; from Ontario, 990 signatures; from Manitoba, 445 signatures; and from British Columbia, 98 signatures.
Private Bills



PRIVATE BILLS


[Stage Direction]
Bill No. S2 (from the Senate) for tihe relief of Erik Herman Delling.-Mr. Young (Toronto Northeast).
Bill No. S3 (from the Senate) for the relief of Samuel Stanley McNeely.-Mr. Lang.
Bill No. 84 (from the Senate) for the relief of Edna May Stevens.-Mr. Jacobs.
Bill No. 85 (from the Senate) for the relief of Beatrice Maude Cammed.-Mr. Ryerson.
Bill No. 87 (from the Senate) for the relief of Blanche Evelyn Parkinson.-Mr. Jacobs.
Bill No. 88 (from the Senate) for the'relief of Lillian Franklin Boddy.-Mr. Stinson.
Bill No. 89 (from the Senate) for the relief of Ninna Louise Bryant-Mr. Edwards (Ottawa).
Bill No. 90 (from the Senate) for the relief of John Thomas Fray.-Mr. Casselman.
Bill No. 91 (from the Senate for the relief of Cornelia Mosca. Cristoforetfci.-Mr. Anderson (Toronto-High Park).
Bill No. 92 (from the Senate) for the relief of Florence Emaline Hind.-Mr. Edwards (Ottawa) .
Bill No. 93 (from the Senate) for the relief of Dorothy Helen Elliott.-Mr. Church.
Bill No. 94 (from the Senate) for the relief of Myrtle Blanche Weeks.-Mr. Casselman.
Bill No. 95 (from the Senate) for the relief of Dorothy Olinda Tew Phillips Lawson.-Mr. Edwards (Ottawa).
Bill No. 96 (from the Senate) for the relief of Nelson Douglas Longfield.-Mr. Preston.
Bill No. 97 (from the Senate) for the relief of Susanah Ivy Y. Cave.-Mr. Harris.
Bill No. 100 (from the Senate) for the relief of Agnes Seeds.-Mr. Casselman.
Bill No. 101 (from the Senate) for the relief of James Sharkey.-Mr. Edwards (Ottawa).
Bill No. 132 (from the Senate) for the relief of Lawrence Raymond Sinclair, otherwise known as Lawrence Reginald Sinclair.-M:\ McPhee.
Bill No. 103 (from the Senate) for the relief of Ruby Pearl Northam.-Mr. Young (Toronto Northeast).
Bill No. 104 (from the Senate) for the relief of Leila Beecher Smith Kerman.-Mr. Young (Toronto Northeast).
Bill No. 106, to incorporate The Premier Guarantee and' Accident Insurance Company of Canada.-Mr. Smith (Stormont).
Bill No. 107, respecting the Sun Life Assurance Company of Canada.-Mr. Cahan.

[Stage Direction]
(Questions answered orally are indicated by an asterisk).

Mr. GEARY:: 1.	Has the government made a contract for the sale of pulpwood in the province of Manitoba, with the Manitoba Paper Company?
2.	Does such contract contain a clause permitting selection of wood by the company?
3.	May the contract, all papers and eoire-spondence therewith be tabled?


Hon. Mr. STEWART:: 1.	Yes.
2.	Wood selection by the Forestry branch of the Department of the Interior.
3.	Copy of contract tabled.


POST OFFICE SITES
Mr. SPENCER:: 1.	How many lots were bought for post office sites by the government of Canada during 1913?
2.	In what cities, towns or villages were these purchased ?
3.	What price was paid for each parcel of land?


Hon. Mr. ELLIOTT:: 1. Forty-five.
2 and 3. Place	Price
Amherst, N.S			. ..$ 30.000 00
Halifax North, N-.S.. .		,. .. 7,000 00
Milltown, N.B			. .. 2.000 00
Sackville, N.B			. .. 8,000 00
Shediac, N.B			. .. 1,100 00
St. George, N.B			. .. 1,600 00
Beauport, P.Q			. .. 2,500 00
East Angus, P.Q			. .. 5,000 00
Jeune Lorette, P.Q... .		... 2,250 00
Jonquieres, P.Q			. .. 3,500 00
Montreal, P.Q., Postal Station		"G" 36,102 00
Stanstead, P.Q			. .. 1,500 00
St. Ours, P.Q	: .		. .. 2,400 00
Verdun. P.Q			. .. 17.949 75
Waterville, P.Q			. .. 1.500 00
Aurora, Ont			. .. 4 000 00
Burk's Falls, Ont			. .. 1,100 00
Burford, Ont			. .. 2,000 00
Durham, Ont			. .. 4,600 00
Georgetown, Ont.. ..		. .. 1,200 00
Gravenhurst, Ont.. ..		. .. 1.200 00
Hespler, Ont			. .. 3,000 00
London, Ont., Carling	Block.	. .. 130.000 00Millbrook, Ont	i..	. .. 1,000 00Perth, Ont	. .. 10,850 00Toronto, Ont., Postal	Station	"E" 65,476 14Watford, Ont	. .. 2,600 00Carman, Man	:	. .. 7,500 00Gretna, Man	. .. 3,000 00Manitou, Man	. .. 1,150 00
Questions
Melita, Man	
1,400	00Stonewall, Man	
2,500	00Winnipeg, Man., Postal Station "C" 18,500	00Winnipeg, Man., Postal Station "D" 35,000	00North Battleford, Sask	
25,281	68Calgary, Alta	
312,465	00High River, Alta	
2,000	00Vermilion	
10,000	00Kelowna, B.C	
20,000	00Merritt, B.C	
3,900	00Mission City, B.C	
6,000	00Nanaimo, B.C	
24,500	00Prince Rupert, B.C	
95,000	00Soda Creek, B.C	
125	00Union Bay	
1,275	00


CUSTODIAN OF ENEMY PROPERTY
Sir GEORGE PERLEY:: 1.	Is there a custodian of enemy property in Canada?
2.	If so, who acts in that capacity?
3.	Briefly, what are his powers and duties?
4.	What is the amount of the funds in his hands at the present time in this connection?
5.	Is any report available regarding the same?


Hon. Mr. LAPOINTE:: 1.	Yes.
2.	The Secretary of State of Canada.
3.	To collect, control, administer and ultimately liquidate all property, rights and interests in Canada of former enemy nationals.
4.	$11,577,768.59.
5.	Annual audits and reports thereon have been made but the custodian has not issued a report.


SECRETARY OF STATE-CLEARING OFFICE
Sir GEORGE PERLEY:: 1.	Briefly, what are the powers and duties of the "Clearing Oftice" which is in connection with the Department of the Secretary of State?
2.	When is it expected that this office will be no longer required?
3.	Is any report of its work available?


Hon. Mr. LAPOINTE:: 1.	The clearing office was established to settle pecuniary obligations existing between British nationals resident in Canada on the one hand, and ex-enemy nationals on the other hand.
2.	The answer to this question depends upon the conclusion of certain actions both by and against British nationals resident in Canada and ex-enemy nationals, which actions are now pending before the Mixed Arbitral Tribunal in London, England, and as there are over three thousand cases pending before that tribunal it is impossible to say when the Canadian cases will be disposed of.
3.	A report of the operations of the clearing office has not been issued.


PRINCE EDWARD ISLAND-PORT IMPROVEMENTS
Mr. MACDONALD (Kings):: 1.	Have representations been made to the Department of Public Works or other departments of the government regarding the need of a frost proof warehouse at Georgetown, Prince Edward Island, for the purpose of assembling for export cargoes of potatoes or other perishable products?
2.	Has the Department of Public Works made any investigations or prepared any plans in connection with this proposal?
3.	Having regard to recommendation No. 18 in the report of the Royal Commission on Maritime Claims regarding necessary improvements at the ports of Summerside, Charlottetown, and Georgetown, what is the intention of the government respecting the latter port?


Hon. Mr. ELLIOTT:: 1.	Yes.
2.	Yes.
3.	Question of making improvements at the ports of Summerside, Charlottetown and Georgetown now receiving the attention of this department.


QUESTION PASSED AS ORDER FOR RETURN
Mr. CHURCH:: Regarding Bill No. 57, to legalize purchase of Grand Trunk Railway and Grand Trunk Pacific securities by the Canadian National Railways;
1.	What proportion of these securities are held in Canada?
2.	Are any of the holdings in Canada by persons who purchased the same when originally issued?
3.	What proportion of these securities are held in Canada by speculators?
4.	If by speculators, what were the prices that were paid, the highest and the lowest?
5.	What proportion of these securities have passed into the hands of present owners during the last three years or during the last twelve months?
6.	What proportion of these securities are held under option by Canadians at present?
7.	What were the quotations of the selling value of these securities on the first day of January of each year 1917 to 1927?
8.	Under whose instructions were the final negotiations carried for the National railway assuming obligations for the payment of these securities?
9.	Were these negotiations authorized by order in council, and when ?
10.	Who have personally negotiated with members of the government on this question, and also Sir Henry Thornton or financial officials of the railway, and who conducted these negotiations on each side?


UNOPPOSED MOTION FOR PAPERS
Mr. MACDONALD (Kings):: For a copy of all letters, telegrams, reports of engineers or other officers, with regard to the
Importation of Scotch Miners

improvements required at the ports of Sum-merside, Charlottetown, and Georgetown, and as to the need of a frost proof warehouse at the latter port for the purpose of assembling cargoes of potatoes or other perishable products for export.


IMPORTATION OF SCOTCH MINERS
[Stage Direction]
On the Orders of the Day:
Mr. A. A. HEAPS (North Winnipeg):: I
should like to ask the Minister of Labour or the Minister of Immigration a question along the lines of the one which I asked on Monday last in reference to the importation of miners from Scotland into Nova Scotia by the British Empire Steel Corporation. I read in this morning's papers that the men who have come here are now asking to be returned to their country because they have been brought out here evidently under false pretences. Has the minister made any inquiries and, if so, what is the result?


Hon. PETER HEENAN (Minister of Labour):: No direct grievance from the men
has been brought to our attention, but from inquiries I have made through the employment bureau, I find that we have plenty of labour available in Canada for mining, and I have asked the Minister of Immigration to notify our immigration agents in the British Isles to that effect. Other than that, we have no information except what we read in the newspapers.
Mr. J. S. WOC'DSWORTH (Winnipeg North Centre):	Along that very line, may
I ask if the Labour department has no way of protecting, on the one hand, the workers who are already in this country and are in danger of having their work taken away from them by a new supply of labour, and, on the ' other hand, the workers who are being induced to come to this country under false pretences?
Some lion. MEMBERS:	Order.


Mr. WOODSWORTH:: Do I understand
hat question is out of order, Mr. Speaker.


Mr. LAPOINTE:: Surely. It is an argument.


Mr. SPEAKER:: It is a question which
requires consideration, and the minister is entitled to notice. The question should be put on the order paper.


GERMAN REPARATIONS
[Stage Direction]
On the Orders of the Day:
Hon. H. H. STEVENS (Vancouver Centre):: About ten days ago-I cannot find the exact date at the moment-'the Secretary of State (Mr. Rinfret) promised that within a week he would lay on the table a complete state-

ment of reparation claims, and so forth. He is not in his seat, but would the leader of the House be good enough to make inquiries and expedite the tabling of this return?


Ernest Lapointe: I will bring my hon. friend's request to his attention.


DISTRIBUTION OF CIGARS
[Stage Direction]
On the Orders of the Day:
Horatio Clarence Hocken: May I ask the Minister of Justice
whether all these cigars that are laid on thp tables are a contribution to the bonne entente with Quebec?


Ernest Lapointe: All I know is that we owe these
cigars to the generosity of a colleague of my hon. friend on the other side of .the House.


THE BUDGET
[Stage Direction]
The House resumed from Tuesday, February 22, the debate on the motion of Hon. J. A. Rohb (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. PETER McGIBBON (Muskoka-Ontario):: Mr. Speaker, I think that in common with many other members on this side of the House I can congratulate the hon. Minister of Finance (Mr. Robb) on the fact that he has been able to present his fourth budget to the House of Commons of Canada. I would also like to congratulate him upon his method of presentation of that budget.
As to the contents of the budget, I think I can also say that I very heartily agree with some of the minor changes he has made. The reduction of the sales tax from five to four per cent is something which will be welcomed in this country; it is something which is long overdue. Had the Minister of Finance been looking after the interests of thi9 country he would have removed the sales tax altogether from many articles, such as clothing, which contribute very materially to the high cost of living in Canada to-day. I am very sorry to say, however, that in my judgment the budget is not what the countiy was looking for. My greatest criticism of it, and I think this would be the criticism of the country, is that in this budget the Minister of Finance is shelv-

The Budget-Mr. McGibbon
ing his responsibility as a minister. To-day the people of this country are looking for tariff revisions in many items. There are no less than fifty-two applications, I think, before the tariff board, seeking a revision of the tariff. Of these, thirteen have been reported on to the government, yet in his budget, brought down nine or ten days after the House reassembled, he has not considered even one of those applications. I say that it is a hardship to make these industries carry on for another ten or twelve months, and probably longer, without having the redress to which they are entitled.
But unsatisfactory as these things may be, when I look behind the Minister of Finance and see gathered there high protectionists, low protectionists, free traders and independents, I feel like adding a prayer of thankfulness to heaven for the budget we did not get. When we see behind the Minister of Finance men like the Minister of Agriculture (Mr. Motherwell), the Minister of Immigration (Mr. Forke), and the Minister of Trade and Commerce (Mr. Malcolm), all gathered into the fold of the present government and bestowing on this foster child their blessing, I wonder what state governments are coming to in this country. It may be, as Mr. Harry Sifton said a few weeks after this government was formed, in an interview which appeared in one of the Toronto papers, that the Liberal party had the halter upon nearly all the Progressive members and would have it on the remainder in a little while. I remember how, one year ago, when the late leader of this party accused the present Minister of Immigration of being a Liberal, and said he would not even shoot a rat if it was labelled Grit, the hon. gentleman rose and, white with rage, repudiated the suggestion; yet to-day what do we find? We find him sitting serenely upon the treasury benches, swallowing a policy which for years he and his party have denounced, and giving his calm support to a budget which is protectionist in principle at least. When I look at this great change that has come over the Minister of Immigration I cannot help but wonder whether the flesh pots of Egypt have had anything to do with it.
I criticise this budget under a number of heads. In the first place I say to the Minister of Finance that this budget is an evasion of his responsibilities to the people of Canada. The Minister of Finance, 1 want to emphasize, has been derelict in his duty to the people, especially to the industries of this country, which are looking and have been daily looking for some tariff revision at this
time. I would refer him particularly to the woollen industry, which is now and has been for a number of years in dire straits due to the lack of adequate protection. I would refer him also to the boot and shoe industry, toy industry, and many others. I say that it was his duty as Minister of Finance of this country to take the needs of these industries into consideration, and provide some redress before he brought down his budget to the House.
The government have, first of all, failed to give this country proper markets, which is the great need of to-day. Wider markets is our pressing need, and the government have failed in every effort they have made to get a fair bargain for the people of Canada.
Under another head, I criticise this government for having failed to get into this country the people that we must have if we are to make progress. The immigration policy of the government, in the past and up to the present, has been and is absolutely sterile in results. W e have not been able even to keep our natural increase in population. So I say to the government that they have failed in their immigration policy
I say that they have failed also because they have made no adequate provision for retiring the national debt, and it is something that must be done before we can have real prosperity.
They have failed also in that they have done nothing to bring down the cost of living in this country, which is now at the highest point it has attained for a number of years. They have done nothing to relieve this burden upon the poor. I am going to point out to the government, and I hope they will take these facts into their consideration, the methods and means that have been employed along these lines in other countries, and the results that have been achieved. I am going to refer the Finance minister to the American republic to the south. Whether we like it or not, an easy comparison can be made between Canada and the United States. We have a larger territory than they have. We have similar lands, similar climate, similar natural resources, water-ipowers and everything of that description, and when we study their methods and see their results we get a fair idea and can make a proper comparison. I am going to quote, for the benefit of the Minister of Finance, a sentence from President Coolidge's address to congress in 1925, as follows:
The collection of any taxes which are not absolutely required, which do not beyond reasonable doubt contribute to the public welfare is only a species of legalized larceny.
The Budget-Mr. McGibbon

Along with that hypothesis I am going to tell him what the United States has done towards reducing the debt and the expenses of the republic, which is of more importance. I have in my hand statistics given by the president in an address which he made a short time ago. I find that the budget in the United States in 1919 showed $6,000,000,000 as the receipts. In 1921 that amount was reduced to $5,538,000,000, with an expenditure of $5,624,000,000. In 1922 the receipts dropped from $5,538,000,000 to $3,795.,000,000 while the expenditure had dropped from $5,624,000,000 to $4,109,000,000. In 1923 there was a further reduction to $3,697,000,000; the expenditure had also dropped, and it has dropped until in 1926 the expenditure is only $3,529,000,000, almost half of what it was six years ago. Looking up the figures of the expenditure in Canada, I find that in 1922 the first year this government came into power, they collected in taxes $381,952,387, the next year $394,614,900, the following year $396,837,682, and the year following that $346,834,479. This year the minister tells us that in spite of his reductions he is going to take out of the pockets of the people of Canada some. $390,000,000. Then we have the further fact, which is more significant, that the expenditure has run almost hand in hand with the taxes. As I pointed out, not only have they decreased taxation in the American republic, but the expenditure has decreased along with it. Then I point out a further fact which to my mind is going to be of considerable significance to this continent in the future. After the war, in the year 1923, the United States had a debt of $23,000,000,000, and it has been reduced yearly until twenty-five per cent of it has been paid off. The taxation has been reduced from $50 to $30 per head. The taxation in the American republic to-day is $6,000,000 a day less than at the close of the war. That is the record, and that is the example that I point out to the government to-day to follow. To my mind, before we can have real prosperity in this country the debt of the country must be reduced, and taxation must be lifted off the shoulders of the people in order that their purchasing power may be increased.
I want now to show what we have done compared with what they have done in the American republic in regard to agriculture. I find that out of $1,550,000,000 worth of goods on which duties are levied more than half are levied for the protection of agriculture. The United States farmer is protected on imports of over $700,000,000, or over fifty per cent of the imports of that country. What has been the effect of that? One effect has been to in-

crease the prices of farm products in the American republic. I do not wish to cumber the record with the figures, because one year ago I placed on Hansard the results that were obtained after an investigation by a special committee appointed by the President of the United States into the workings of the Ford-ney-McCumber tariff. I placed figures on Hansard showing that practically every article of produce on the farm, including live stock, had gone up in value in a few months after the Fordney-McCumber tariff had gone into operation. I have to-day the figures of the net increase in the agricultural products of the American republic in the last five years, and I find that in 1920-1921 the net value was only something like $375,000,000, and in 19251926 it had risen from $375,000,000 to $2,665,000,000. I do not say that that was all due to the working of the Fordney tariff, because it was not, but I do say that it helped to increase the value of farm products for the American farmer, and it put hundreds of millions into their pockets that would not have been there if that law had not been placed on their statute books.
What has this government done for the farmers of Canada? They have left them alone with their markets almost wide open to the world. We have a duty of twelve cents on wheat where the American republic has a duty of 42 cents. We have a duty of $2 a ton on hay, where the Americans have a .duty of $4, and a duty of 50 cents a barrel on flour where the United States has a duty of $2.04. Hon. members know the Australian figures as well as I do. They export their butter to Canada under a duty of a cent a pound, and let eggs come in free; whereas Australia charges 18 cents on butter, and my hon. friend tells me that twenty-five thousand boxes of butter from New Zealand arrived in Halifax this week. That is the way this government is attending to the wants of the Canadian farmer.
Now, Sir, I make this further charge-and I have proof here of it and can back it up if necessary-that this government has not made a treaty that has not been detrimental to the markets of Canada. I have the figures here from the Bureau of Statistics. I put them on Hansard last year, and my hon. friend from West Calgary (Mr. Bennett) placed them on Hansard the other day. The government has failed to retain the population in Canada, and has failed to provide the people with markets or to reduce their taxation in order to build up the country. Why have we not been able to retain our population in this country? Why, Sir, when we look over this

The Budget-Mr. McMillan
Dominion, when we realize that we have the largest water-powers and the greatest mineral resources in the world, and that our wheat belt, our forests and our pulpwood are among the greatest in the world; and when we think of the advertising that we got during the war, Canada to-day should have a population of at least 15,000,000 or 20,000,000. Why has it not? Simply because this government has been derelict in its duty to give such protection to our industries as would allow our workingmen to earn their living at home. So I say that in every major operation this government has been found wanting; it has failed to reduce the national debt, it has failed to reduce taxation, it has failed to secure markets for our products, and it has failed not only in attracting new population but in retaining our native born. Until this condition of affairs is changed, until we get greater population, until we get wider markets and until adequate protection is given to our manufacturers and our farmers so that we can utilize our great water-powers and turn our natural resources into finished products, thus providing ample employment for our workingmen,-I say, until we do that our people are not going to reap the reward to which they are entitled.
I wish, Mr. Speaker, to compliment the Minister of Finance on the stand he has taken in providing another $500,000 for the Home Bank depositors. I think he has been fair and just in this regard, because two sessions ago, whether rightly or wrongly, parliament decided to contribute up to 35 per cent of what was needed to reimburse those unfortunate people. If I understand the matter aright, the Exchequer court has passed favourably upon a number of claims, but the amount originally granted is not sufficient to meet them.
I want to say in as forcible language as I can that the action of the Postmaster General (Mr. Veniot) who in dismissing postmasters who have been giving satisfactory public service at practically no cost should be severely censured. Some of these postmasters I know have been dismissed although they were drawing less than $100 a year and were giving good service to the public. Why were they dismissed? Simply because some party heeler asked for their dismissal. To my mind, whether such a course is taken by Grit or Tory, it is beneath the dignity of any man who is supposed to be big enough to be the Postmaster General of Canada. But presumably the Postmaster General was too intimately and too long associated with Moses Aziz to be capable of a national viewpoint.
So far as I am concerned I want to register my emphatic condemnation of his conduct.
In conclusion, Sir, now that the Minister of Finance is freed from the shackles that hampered him and his government in the preceding parliament by the substantial majority now seated on your right, I am going to ask him to bring down, not this session because it is too late, but next session, a policy that will give the people of the Dominion a chance to remain here. If a proper policy is formulated, a policy that will enable our people to use our great water-powers and develop our immense natural resources to the fullest extent, I believe that in the next few years Canada will become one of the greatest countries upon which the sun ever shone.


Mr. THOMAS McMILLAN (South Huron):: Mr. Speaker, my first expression must be one of congratulation to the hon. Minister of Finance upon his tact and shrewdness in bringing down his budget within ten days after the reassembling of parliament. This shows that he, at least, has no desire to prolong the session to any undue length. I congratulate him also on the clear, concise and optimistic statement which he has presented to this House and to the country.


Horatio Clarence Hocken: And a stable tariff.


Thomas McMillan: We have heard a good deal about a stable tariff from across the way. Before I get through possibly my friends of the Progressive party may exclaim, "Why don't you come across here! We are the only Simon-pure representatives of agriculture in this country." Allow me to say, as I have often said, I do not believe any great political party can ever be successfully estab^ lished and permanently maintained in this Dominion on any class or sectional foundation. And it is not in the public interest that it should be so. While farmers should organize and cooperate socially, economically and otherwise, as other classes do, yet, Sir, when we enter the political field I believe we should enter it as citizens of our country, rather than as members of any particular class. I may be told by my friends that they are not a party and have no intention of becoming a party; that they are only a group and believe in group government. Well, I am not going to discuss that matter at present further than to say if we cannot agree, we must agree to differ. I am not in favour of group government. Not because such a system may not contain men and women of probity, of wisdom and of character, but because I know-if I have read history aright, and if we are to be guided by



The Budget-Mr. McMillan
the teachings of history-that we have long since passed that stage in the onward march of 'human progress.
I may tell hon. gentlemen opposite when I hear them harping continually, for high and higher protection, that that is not the mandate which the electorate gave on September 14 last. We hear much respecting industry and as to what ought to be done to protect it. When we speak of industry I would ask you, Mr. Speaker, and through you the members of this House, to consider what is our greatest industry. Is it not the pursuit of agriculture? In the full sense of the term farmers are more than a class of our population; farming is more than an industry. The significance of agriculture in the life of this nation is far deeper than this. Employing as it does about one-third of our gainfully occupied population, it touches something really vital and fundamental in the national existence. It involves the national prosperity, the economic welfare, the racial character and the social progress of the Canadian people. We must as a people determine deliberately and wisely the role which we wish to have agriculture play in our national economic life. As city population has grown and its economic life has become centered in the factory, the office, the store, and the bank, public opinion has become somewhat urbanized and popular attention concentrated more and more upon problems of city industry, trade and finance. This has been so to the comparative neglect and the comparative detriment of the requirements of agriculture.
It has been said that as agriculture is the oldest of the arts, so it is one of the most .recent of the sciences. A perfect agriculture is the true foundation of trade and commerce; the foundation of the riches of the state. It is more, it is the one great uncontaminated seed bed of our population. It is therefore the business of public men to see to it that agriculture receives just consideration at the hands of the governments of this country. You may ask me, wherein is agriculture not receiving economic justice? I refer you at once to a study of the customs tariff in which we find that at almost every convenient turn those engaged in other lines of industry are able to obtain their requirements either free or at the lowest possible rates of duty. That is right; we have no fault whatever to find with that provision. But why should agriculturists be deprived of this privilege which producers in various other industries are allowed to enjoy? Farming is largely a domestic industry in that it produces many of the requirements of the home. It is
TMr. McMillan.]
peculiarly situated in this country. While those engaged in other lines of industrial activity are enabled largely to buy wholesale and sell retail, the farmer in many instances is compelled to buy retail and sell wholesale, and the tariff does not do justice to him. Take agricultural implements, machinery, building materials, food, clothing and other household requirements: these comprise over 60 per cent of the entire cost of our agricultural life. It is to the credit of the government of the day that in regard to implements and machinery we have been enabled to get some of our requirements down so low that the tariff is no longer a great consideration in the price of these necessities. But, Sir, when we have some of the industries which are vital to the success of the country, such as those represented by my hon. friend from West Lambton (Mr. Goodison), down to from 6 to 10 per cent, and when men like Henry Ford are crying out and telling us that they would be satisfied with free trade, why should the people of Canada be compelled to submit to a tariff of from 25 to 35 per cent which bears down on the primary producers as well as upon the consumers? Why are such regulations so drawn? Mark you, this is not to be attributed to the government of the day; it is due to the fact that all through the years, to too great a degree, the favoured industries of the country have enjoyed a special privilege and have had the ear of the governments which have been in office from time to time. Why is it that these regulations are so drawn, I ask? Simply to benefit special industries at the expense of the primary producers and the great body of the country's consumers. If agriculture is ever to prosper as it should, and as I believe it can be made to prosper, this sort of thing must stop; if not, then the efforts of the Minister of Agriculture (Mr. Motherwell) and of the Minister of Immigration (Mr. Forke) in their respective departments will be futile. They may work their heads off for the comparative economic welfare of the farmer on the one hand, and for the retention of the people on the soil on the other, and it will be all of little avail. The great bulk of the people of Canada are beginning to realize this: they are no longer terrified by the bunk which we have heard all through the years from our high protectionist friends. Well may we pray, "Let in the light." And that is what this tariff board is doing. As the result of its investigation the light is beginning to shine to such a degree that it is piercing the true situation and exposing it.


Mr. CHAPLIN:: It has not reached the
government yet.

The Budget-Mr. McMillan


Thomas McMillan: It is, I say, exposing
the situation, so much so that I believe in the near future there will be a general demand to have this economic evil hit and hit hard. It is a species of economic slavery which we have had to endure too long. My hon. friend (Mr. Chaplin) says that the light has not yet reached the government. Why does he make such a remark? Does he think that this government, in a year in which it has been making history, in a year in which liberalism has been doing things which will go down to posterity as constituting one of the brightest pages in our political life,-does he think that in the strenuous life of our honoured leader (Mr. Mackenzie King) and his first lieutenant, the government should be expected to turn its attention to player piano rolls, epsom salts, and blue foxes? That is the only inference possible from his remarks. When I said that this high tariff was a species of economic slavery, it calls to mind the resolution made by Abraham Lincoln when standing on the banks of the southern Mississippi and viewing the dreadful conditions of human slavery. He then made a vow that if he ever had the chance to hit that kind of thing he would hit it hard.


Horatio Clarence Hocken: But he was a protectionist.


Thomas McMillan: This tariff burden which was placed on the primary producers by our Conservative friends and their friends in the days gone by is the result, and should be done away with. We hear much talk of the condition of the people of the United States; I was rather glad to hear that mentioned this afternoon, because wrhile agriculture in this country does not approach the condition of American agriculture which is largely due to the high tariff system of that country over a long period of years, yet we should do everything humanly possible to save Canadian agriculture from any such condition.
Last year I made some startling statements regarding American agriculture, so startling that in the interval I decided I would either substantiate them or make amends by withdrawing them this year. I hold in my hand the latest publication on the agricultural problem of the United States, issued in April, 1926, and published as the result of the findings of the National Industrial Conference Board of that country. In as few words as possible I would like to place the condition of American agriculture before this House, as it is recorded in this report. The American farm population in 1920 is placed at 31,614,000, in round figures; five years later, the Board of Agriculture places it at 30,655,000, or a decline
of almost 1,000,000 in that period; during the same time the entire population of the United States increased by over 10.000,000. The personal indebtedness of American farmers has risen from one thousand million dollars in 1910 to 3,250 millions in 1925, including only bank indebtedness; in addition to this, the miscellaneous indebtedness of farm operators as of July, 1925 is put at an additional $500,000,000. During that same period, from 1920 to 1925, the entire capital invested in American agriculture, including land, implements, buildings and live stock, dropped from $79,607,000,000, to $59,154,000,000, while the total indebtedness including mortgage, bank and miscellaneous, remained at the figure of $12,250,000,000, or 20.7 per cent of the entire agricultural value, and it takes 6.2 per cent of the entire gross income of the American farmer to pay the interest. During these five years the interest charged upon the owner-operators' debt not only required 1.2 per cent more of the gross income, but his equity in his .property declined from 47 billions to 32 billions; during the same time the owners of rented farms appear to have lost five and three-quarter billions of the equities in their property. The final result is that forty per cent of the land in the American republic is now in the hands of renters, a most unsatisfactory condition, while the other 60 per cent is mortgaged to over forty per cent of its value. Of young farmers twenty-five years of age and under only ten per cent own their own farms free from encumbrance.


Some hon. MEMBERS:: Oh, oh.


Thomas McMillan: My friends laugh at
that; that is what they think of agriculture, and that is the reason they have tried to laugh at it all during the years they were in power. More than that, when their friends were in power they continually tried to get more favours and then walked away in all their manhood and called this a scientific tariff. Of the farmers sixty-five years of age and over, only 64 per cent own their farms free from encumbrance. What are the reasons for this condition and for the wholesale desertion of American farms? Another interesting fact is that the per capita production of crops in the United States, which during 1910-14 stood at the index figure of 100, in 1921-25 dropped to 93.2, or a reduction of 6.8 per cent. The report presents figures to show that the real net annual earnings of American farmers in 1925 were 3 per cent below the level of 1914, while those engaged in other lines of employment earned 22 per cent more. In 1924-25, the most favourable year of the

The Budget-Mr. McMillan
five year period, the net earnings of the average farm operators, including owners and tenants, is placed at $804. This figure includes food, fuel and shelter, which the Department of Agriculture values at $63-4, leaving only $170 for other requirements. The report goes on further to say that the owner-farmer appears to have been in a less favourable position than the average; his net return was only $573, or less than the value of his food, fuel and shelter, in fact only about the amount they are paying their hired labour and less than one-half the amount earned by ordinary workers in other occupations. These figures are the most favourable that can be secured from the available data, and they go far to explain the exodus from United States farms since 1920 and the unrest of the American agricultural community. They show that the average owner operator is able to earn less than two per cent on his investment. He is receiving for labour and superintendence about the wages of the average office boy, less than one-half of the wages of railway workers and less than one-third of the wages of skilled mechanics such as plumbers and electricians. During the last fifteen years farm bankruptcies in that country have increased over 1,000 per cent. In spite of the much vaunted era of prosperity there which my hon. friend (Mr. McGibbon) told us about, the plight of the United States farmer is much as it was when the post-war depression set in. So serious is the situation that in the language of Mr. Evans Clark, writing in the New York Times:
It constitutes a serious menace to the future economic welfare of the country. In the midst of an era of prosperity for trade and industry which has made the United States a c-roesus among nations, says the writer, the American farmer stands on the edge of bankruptcy, the bubble of his values burst. The manufacturers, the bankers, the railroad men, the mine owners of America, have reached a dizzy pinnacle of financial well-being. The industrial and transportation wage workers never had more money to spend. But the American farmer, one-third of the country's population, is worse off than he ever was before. Not only is be unable to make a decent living on the farm, but he cannot sell his property without serious financial loss. Farm failures have reached record breaking levels and the general collapse of agricultural values has brought down with it a growing number of banks in the middle west.
That is the history of United States farm conditions in a highly protected country, and I say again, as I said at the commencement of these figures, that while Canadian agriculture does not approach such a condition, it is the duty of every government to do everything possible to save it from any such calamity.


Horatio Clarence Hocken: Why are United States
farmers protectionists?


Thomas McMillan: I am glad my hon.
friend brought up that point. Just a few days ago the McNary-Haugen bill received its final reading in the United States Senate, setting apart amongst other things $250,000,000 to purchase the surplus of six staple farm products in that country in order to stabilize the price. It was carried by a majority of either seven or eight, about the same majority as it was defeated by last year.


Horatio Clarence Hocken: That does not answer my question.


Thomas McMillan: Just wait. Take your
time. A few of the men who defeated the bill last year voted for it this year, and I believe in my heart there is method in their madness. They see a presidential election two yearn ahead, and feel that this is the last straw in the last effort of the high protectionists of that country to hand out a sop as a recompense for the miseries of the farmers as a result of the highly protective system in that country. If you are watching conditions throughout the United States republic you cannot say that the farmers of that country are strongly in favour of a high protective system. Although I happened to say to my desk-mate the other day that I believe the McNary-Haugen bill would be passed anc it would foe the last straw, the latest reports are that President Coolidge will refuse to sign it. I understand it has not come before him yet.


Horatio Clarence Hocken: Why is it that the farmers in the United States, suffering as my hon. friend says they are, because of protection, are not asking for free trade?


Thomas McMillan: Let my hon. friend take my word for this. I am neither a prophet nor the son of a prophet, but if in two years we do not see the most strenuous fight in the United States republic for a reduced tariff, I am very far mistaken; and that will show the wisdom of which they are possessed.


Horatio Clarence Hocken: That is a prophecy, not
a fact.


Thomas McMillan: My hon. friend has often been in the habit of making prophecies and he has many times made prophecies that have not turned out true.


Horatio Clarence Hocken: Well, we are both in the
same boat.


Thomas McMillan: It is now realized that
the great requirement of this country is to get more people, and particularly to obtain

The Budget-Mr. McMillan
and retain more people on the soil. Our government insists that only agriculturists and domestics shall be encouraged to come to this country. To too great a degree under present conditions the farm has -been only a roundabout way for them to get into the towns and cities. Do not think for one moment that it was the efforts of the Liberal government that sent the people of this country to the United States between 1878 and 1891.


Horatio Clarence Hocken: That is a long time ago.


Thomas McMillan: Yes, but that was when the trek started, as a result of high protection being put into force. One or two elections went by; but when the first ten-year period came between 1881 and 1891, what did it record? It recorded that although 860,000 people had come to this country as immigrants, only 36,000 of them remained, and that over and above that, 980,000 of our Canadians had found their homes across the line.


Mr. BIRD:: Would the hon. gentleman go
a little further in regard to the scope of the McNary-Haugen bill?


Thomas McMillan: Not at this time. Those figures are the result of a highly protective system, and when the people of this country began to realize what effect it had, in 1896 they consigned the Conservative government to the oblivion from which it should never have emerged. Even at the present time we are suffering from the effects of its having so emerged.


Horatio Clarence Hocken: Were things better under Sir Wilfrid Laurier?


Thomas McMillan: My hon. friend does
not seem to realize that the period under the Laurier government was the golden period of development in this country, and that when Laurier went out of power in 1911 after fifteen years of rule he increased the ordinary expenditure of this country by less than $4,000,000 per annum, whereas the political friends of my hon. friend opposite had not been in power for three years before they had increased the ordinary expenditure by $37,500,000-to such a degree that even the press of their own party all over this country were crying out, "Extravagance! Extravagance!" That was even before the war. God help the administration during the war.
If the government and the people of this country can only cause the farm boy and people generally to realize that there is a sufficient margin of profit on the farm, you will not be able to keep the people off the farm; they will be falling over each other
to get there. High protection will never keep them on the farm. High protection to too great a degree is what has taken them off the farm. It took the people off the American farms to the number of 479,000 in 1925 alone.


Mr. IRVINE:: Why do you not lower the tariff then?


Thomas McMillan: This government, since it came into power in 1921, under the conditions it has had to face has done everything that any government could be expected to do along that line. It did everything it could to get us free access into the world's best market for our surplus agricultural production. True, we have not been able to secure satisfactory access to the American market, although that is to-day, and will continue to be, the world's best market for our agricultural production, but there is this satisfaction: we have at all events completed the first milestone by the establishment of the position, and the appointment of the Hon. Vincent Massey thereto, as representative of this government to the government of the United States. I believe I voice the sentiments of the great majority of the people of this country when I say that that was a wise appointment, like the appointment of the Hon. P. C. Larkin to the post of Canadian High Commissioner in London, and I believe the Hon. Vincent Massey will make a record for himself of which this country may well be proud. He has the opportunity, and more than that, he has a friendly government behind him to back him up in any efforts which he may make. We know that if Canada only had the benefit of freer trade relations with the United States it would be of wonderful assistance to the farmers of this country, not only to the live stock men, but to all sections of our country. While we defeated the reciprocity agreement in 1911, yet during that same year the American government put cattle on the free list with a nominal tax of one-quarter of a cent a pound on fresh beef, and that continued for eleven years. In 1915 they opened their markets to our Canadian cattle and to our fresh beef. As the result of free access into that great market our trade grew to such an extent that it reached a wonderful volume during the last two years, 1919 and 1920.
In 1919 we shipped 303,000 cattle, valued at $29,857,000; in 1920, 500,000 head, valued at $42,995,000. Compare those figures with our trade to the British market, of which we were all so proud. For the year ending March 31, 1926, we shipped to Britain 117,000
5S2

The Budget-Mr. McMillan
cattle, valued at $12,432,000. During that same year, in the face of the high tariff wall when it cost two cents a pound to get into the American market, we sent 290,000 cattle, valued at $17,813,000. If we had only been able to hold that market up to the present time it would have made a wonderful difference to the live stock farmers of Canada. Consider the prices-and these are taken from the official returns, the Canadian Monthly Bulletin of Agricultural Statistics. It shows that the prices in July, 1926, were as follows: Toronto, $7.96 per hundred pounds; Chicago, $10,13. Now I will just give you the spread during the different months: July, S2.17; August, $2.34; September, $3.57; October, $4.06; November, $5.52. I have not the figures for December. The figures for January, 1927, taken from the daily press, show a spread of from $4.50 to $5 per hundred pounds. In those five years, between 1915 and 1920, I was able to get in my own barnyard within fifty cents per hundred pounds of the highest quotations on the Chicago market. If we were able to get a spread of only $2 per hundred pounds, and it averages between $3 and $4, it would be a godsend to the live stock industry of Canada.
We are often told-we were told by the new leader of the opposition, in the debate on the address in December last-that the United State would not take from Canada her annually recurring agricultural crops. What are the facts? During the two months, October and November, 1926, the total export of our agricultural products over the high tariff wall of the United States amounted in value to $17,390,000, and for November and December, $24,000,000, even jumping over that high tariff wall. During the twelve months ending March 31, 1926, Canada exported to the United States agricultural and vegetable products, animal and animal products to the value of $129,000,000. During the same twelve months we imported from the United States $131,000,000 worth, showing a mutually beneficial trade. During the same twelve months our imports from the United States of a kind grown in Canada amounted to $65,000,000. During the same period our exports of farm products of the same kind to the United States amounted to $105,000,000. In other words, we exported $40,000,000 more than we imported. Of farm products of a kind not grown in Canada, during the financial year ending March 31, 1926-and these figures were put on Hansard yesterday-we imported from the United States $131,826,562. When such a business is done in the face of a high tariff wall we might well imagine what the trade would be if those 
handicaps were removed. In the face of such figures, when the hon. member talks about no trade and that they will not take any of our products, we do not take him seriously. I am sorry the hon. member has left the chamber, but I can well remember, and it is not so long ago, when the hon. gentleman came up to my own constituency and held forth in eloquent terms in favour of reciprocal relations with the American people, I can well remember also that at the close of that particular meeting he grew so enthusiastic over the argument which he considered that I as a humble citizen was able to put up, that he fairly pleaded with me to come down to his constituency and help him in his campaign. I went and he was elected, but it was Liberals who elected him then. It is Tories now. Since that, time I have not changed my opinion regarding reciprocal trade relations with those two coun tries. Neither have I changed my opinior with respect to the principles of Liberalism, or as to the duty which Liberals owe to this young country. Therefore you will be surprised when I tell you that I was amazed to hear that on a more recent occasion he returned and told his audience that he could not understand what kind of conscience the member for Huron had when he would come down to Ottawa and support the Right Hon. W. L. Mackenzie King the way he was doing. Seeing it has become a matter of conscience, Mr. Speaker, the time is now ripe for a full and free confession, and if I might make a suggestion, we might possibly be able to bring in some sort of revival budget. The hon. member might inform us just how and why his radical change of mind and heart has come about.
I am sorry the hon. member for West Calgary (Mr. Bennett) is not in his seat, but hon. gentlemen will remember what he told us the other day, that we must not establish a channel of trade with the American people; they are our commercial enemies. What is the situation? The great advantage of more favourable trade relations with that country are so clear, so apparent, so selfevident, that it is a surprise that any reasonable individual would take any other stand. Let us analyse the conditions between these two countries. Here we are, two friendly nations, not commercial enemies but commercial friends.


Mr. GARLAND (Bow River):: Hear, hear.


Thomas McMillan: Trade is not an enemy, but a friend. Here are two friendly nations, lying beside each other, with not a barrier, not a military obstruction over the

The Budget-Mr. McMillan
whole course of the boundary line. Nor is there any financial barrier between us. There is invested in this country upwards of
83,000,000,000 of American capital, which is flowing into Canada at the rate of $200,000,000 a year; we are told that upwards of $150,000,000 came in last year by way of American tourist traffic alone. And yet the hon. member for West Calgary tells us we must not establish a channel of communication in trade with the American people. In the face of the fact that out of an entire trade for the twelve months ended November, 1926, of $2,324,000,000, almost one-half, or $1,148,000,000, is done with our friends across the American boundary line. When that is the case, with two high tariff walls built up by these respective governments, what would be the situation if those walls were lowered to a very reasonable height? So that I feel it is the duty of this government, more particularly in view of the report of the maritime claims commission, which has urged the government to institute trade agreements with the American government in the matter of forest products from New Brunswick and fisheries products from Nova Scotia and the Atlantic coast, to include the whole farm products of Canada. It would not only be of benefit in live stock, but it would be a boon to the Canadian fruit and vegetable growers. It would be the means of solving the maritime problem overnight. The same benefit would accrue to British Columbia. It would break down one barrier to their success which is the absence of a sufficient market.
We know that Canadian fruit and vegetables are comparatively late in maturing. The market opens in cities like New York and Boston early in the season, with vegetables coming from Florida. As the months go by they are supplied from nearer sources. In June and July they are supplied from their own locality and there is no competition to speak of. The trade is complimentary rather than competitive. It would be the same if these economic restrictions were removed. Canada is in the situation of being able to produce better products, because we know it is a maxim in every country that the further north you can mature products the better their quality,1 and we would be able in the latter part of the season to supply the American market, which would give higher prices to our fruit and vegetable growers. The vegetable growers are now sending much more to the American market than we are bringing from that country, sc that I say it would be a benefit all round.


Mr. GOTT:: I ask the hon. member his
authority for the statement that the Canadian farmer is sending more goods to the United States than we are importing from the United States?


Thomas McMillan: The following are the figures for the year ending March 31, 1926: On fresh vegetables the imports from the United States were $3,815,159 and the exports were $6,193,518. With respect, not only to fruit and vegetables but also live stock we should have free access to that market, and if a democratic president were elected in the American republic the door would be open to us. With a Conservative government, we could not expect the door to be open to us for the establishing of favourable trade relations from which this country would benefit. We cannot reasonably expect that a Conservative government would really consider the true interests of Canadian agriculture. Conservative governments and leaders of the Conservative party in the past have never shown any pronounced desire to take care of the basic industry of agriculture. They have always been too busy looking after their friends, the representatives of the big interests, and on each recurring appeal to the electorate they counted on the lack of interest and of information among the people and the heat of party feeling to tide them over. That day has gone by. They can no longer terrify the electors with their high-protectionist arguments. Our people are beginning to think for themselves, and they feel as they expressed themselves on September 14 last, that so long as the Liberal party manifests a real, live, vigorous, progressive policy, this young country cannot afford to drop back under Conservative domination.
The Liberal party was returned to power at the recent general election for two reasons. First, because the people know that the Liberal party has as its leader one who is a real friend of the common people, a leader who in the face of all the epithet, slander and falsehood which was hurled against him and his brilliant leading lieutenant was able to conduct his compaign and place the public issues before the country in such a convincing and masterly way as not only to arrest the attention but to command the confidence and support of the electorate. Secondly, the Liberal party was returned to power because during its brief regime in the last parliament it did not forget the primary producers and

The Budget-Mr. McMillan
the general consumers-the men and women who do not importune tariff boards and ministers with deputations, not because they are not vitally interested, but because in the general nature of affairs they cannot afford to do that kind of thing; it must be done for them. I am satisfied from the record of the past that I voice the feeling of the government of the day when I say they are entitled, more particularly after two years of such strenuous conditions, to receive reasonable consideration, and in due time when the information can be presented the government will carry out the mandate given by the people last September. The golden opportunity for the government to act has come.
The Dominion enjoys comparatively good times. This is the only occasion when tariff adjustments can be properly made, and if that is done-as I believe it will be- agriculture will be given simple justice under our tariff laws. Agriculture asks no favours, it asks no protection. All it wants is a fair field and no favour, and if given that the cost of production of the necessaries of life will be substantially reduced, the purchasing power of the people will be correspondingly enlarged, and as a consequence they will enjoy a degree of prosperity such as they have never experienced.
Now I have under my hand the information which the hon. member for South Essex (Mr. Gott) asked me for:
Total value of exports to the United States of Farm Products such as are produced on Canadian Farms
1924	1925	1926$83,000,000	$76,000,000	$105,000,000
Total Imports of these Products from the United States
1924	1925	1926$63,000,000	$57,000,000	$61,000,000Favourable Canadian Balance of Trade 1924	1925	1926$19,000,000	$18,000,000	$43,000,000
I have given the round figures. But I think this is not entirely the question which the hon. gentleman asked. He inquired particularly about vegetable products, did he not?


Eccles James Gott: That is what the hon. gentleman was speaking of. I hold in my hand a return in reference to that, which is the reason why I put my question.


Thomas McMillan: For vegetables?


Eccles James Gott: All kinds of farm products.


Thomas McMillan: These figures relate to all kinds and are already on Hansard. The information was given to-day.

In conclusion, Mr. Speaker, allow me to say that I, believe the Liberal government will in the future as it has in the past do its duty not only to the great producing classes of this country and to the general consumers, but also will endeavour in so far as possible to do justice to all sections of the people.


Mr. H. E. SPENCER (Battle River):: Mr. Speaker, when I came into the House I was interested to hear the hon. member who has just taken his seat (Mr. McMillan) make some criticisms of group organization. His remarks, I believe, were pointed towards the group to which I have the honour to belong. His speech has been made very largely, if not entirely, in support of the agricultural interests of Canada. He no doubt has the honour of representing an agricultural constituency, and therefore he is absolutely in order in taking that stand. That is also the stand we take; we believe in representing the viewpoint of our respective constituencies. But he criticises the stand we take in regard to our organization. I do not suppose there has been presented to this House since 1921 a budget that will give as little relief to * the agricultural interests as this particular budget does. That being so, I cannot imagine how the hon. member will be able to stand in his place- probably to-morrow night-and support this budget. Yet when the vote comes I have not the slightest doubt that he will do so.


Thomas McMillan: There is no question of it. If I did not make it clear enough I want to do so now.


Henry Elvins Spencer: If the hon. gentleman,
whom I hold in the highest esteem, cares to come across to this side we will at least give him his freedom.
The budget, Mr. Speaker, is one over which there will be very little controversy as far as the two larger groups in this House are concerned, mainly because it is a very conservative budget and naturally will be supported by the members of the group holding that name. It is not a liberal budget, with a small "1", and yet no doubt it will be supported by every single member to your right, Sir, because it reflects the government's policy. I wish, however, to congratulate the Minister of Finance (Mr. Robb) on the very businesslike and concise way in which he presented the budget to the House. As the hon. member for Macleod (Mr. Coote) remarked the other day, however, the budget probably was a little too concise as there were many things that should have been mentioned in it which were not referred to at all. The

The Budget-Mr. Spencer
minister is to be congratulated upon being in office at a time when Canadian trade happens to be on the upward trend. I say that, because I contend that governments have very little to do with trade; trade will boom or be depressed irrespective of the government which is in power. I was glad to see that the Minister of Trade and Commerce (Mr. Malcolm) made a similar statement the other day. This would not be the case, however, if. the government exercised its prerogative in regard to our monetary system.
I want to refer for a moment to the Finance Act of 1923, section 2 of which reads:
The Minister of Finance may make advances to the chartered banks, and to the savings banks, to which the Quebec Savings Bank Act of 1913 applies, by the issue of Dominion notes upon the pledge of securities hereinafter mentioned:	, ,
(a) Treasury bills, bonds), debentures, or stocks of the Dominion government, the United Kingdom, any province of Canada, and of any British possession.
And so forth. This discounting by the Canadian banks is carried on to-day to such an extent that the banks have discounted securities through the Treasury board since July 1 last to the amount of $123,850,000. For these services the government makes a charge of 4J per cent. You will notice that some of the securities that can be lodged with the Treasury board are treasury bills, bonds, debentures or stocks of the Dominion of Canada. If the Treasury board can discount these securities for private institutions, the Canadian banks, why cannot they do the same for the Dominion?
I am one of a growing number who believe that inasmuch as the government has supreme power over all assets of the country on which credit or money is based it should be its own banker. The government should loan and not borrow. In other words, we should be master in our own house. At present we do not exercise that function.
The Minister of Finance early in his remarks on the budget mentioned the fact that money was plentiful. That being so, and in view of the fact that we have been fortunate enough to have a surplus, I should like to submit certain suggestions to the government with regard to federal assistance of highways. This is of particular interest to the province of Alberta for various reasons. We have as you know, a big development in southern Alberta in the oil field, in regard to which I have a few particulars, which, because of their importance I should like to bring to the attention of the government and of the House. I refer to the case of the Turner Valley oil field which is
situated twenty miles west of Okotoks, which is the nearest point on the railway. Over two years ago, what is known as the Royalite well No. 4 was brought in with such a high pressure of wet gas that the well could not be capped. This well has been producing ever since, averaging nearly 600 barrels of naphtha per day. At that time all this naphtha had to be handled in steel drums and hauled over a country road twenty miles to Okotoks. The mineral rights in Alberta are not taxable owing to the fact that the federal government about three years ago disallowed the Alberta Mineral Tax Act. I want the government to note this particularly, because it was through the action of this House that the province of Alberta was prevented from securing a revenue in this direction. I would remind the House therefore of the expenditures that have been forced upon that province. ,
The assessment roll of the rural municipality in which this district is situated was not increased by a dollar as a result of this oil discovery, although there was immediately thrust upon the municipality the burden of keeping this road in repair. Not only was this quantity of oil hauled out, but all the material for about fifty new oil derricks and well drilling rigs had to be hauled over this road. When application was made to the federal government for assistance for this municipality, their reply was to this effect:
The building and maintenance of provincial highways is altogether the responsibility of the provincial government. The granting of federal assistance in any one case would create a precedent that would be bound to prove embarrassing and costly.
The provincial government received no revenue from this oil discovery and yet they had finally to come to the assistance of the municipality. I would call the attention of the government to the fact that we have great prospects of a similar oil industry being developed in the constituency of Battle River north of Wainwright and Ribstone, which industry in a very few years will, we trust, attain equal proportions. We shall then be faced with exactly the same problem of this huge cost of road making.
The Canada Highways Act was passed in 1919 for the following purposes: (1) To encourage the construction and improvement of highways; (2) it provided for the payment of grants to the provinces to an amount of $20,000,000 over a period of five years; (3) it was extended to 1927. The sums paid or authorized to be paid totalled $18,429,107.73, of which Alberta received $625,959.94. Alberta, Saskatchewan, Manitoba, and I believe, one
The Budget-Mr. Spencer


Mr. ROBB:: The policy is that bond issues will be taxable.


Henry Elvins Spencer: I am glad to hear the
minister make that statement. I was also pleased to hear the minister's observation in connection with the statement that had been offered to the public, regarding governor general's warrants, and that there was in this way no saving in government financing.
I have heard some criticism from our friends to the right of the fact that our imports have increased at a greater rate than our exports. In my opinion that is nothing to be worried about. Imports, when all is said and done, are payments for our exports. The fact that we have $228,000,000 of a favourable balance means, if I understand it, that we owe large amounts in interest, etc., to other countries. Some hon. members would encourage exports to get rid of our goods. Others would bring in settlers to consume our surplus goods. Neither of these schemes is essentially correct. If the present population had the proper consuming power which, I hope, some day it will be made possible for it to have, we could, in this country, as we are, consume huge quantities more than we can purchase at the present time.
We were told that some fifty-two cases had been brought before the tariff board. The minister, however, did not say how many of those cases were asking for a higher tariff and how many for a lower tariff, or whether they were all asking for a higher tariff. He also did not tell us whether the criticisms were so great against an increase in the tariff that the government had seen fit not to grant it. At the same time we would like to know why there is not some reduction in the tariff.
Towards the end of his speech the minister referred to the fact, as he understood it, that " Canada to-day was enjoying wholesale
58S
The Budget-Mr. Spencer

prosperity." I only wish I could agree with him in this respect; but any one who has his hand upon the pulse of the great agricultural industry knows full well that this is, to say the least, a very exaggerated statement. A like criticism might be made of the use of another expression, namely " that all traces of depression have disappeared Again I would say: If you want to see a contradiction of that you have only to look at agriculture. You have only to look at the efforts we have been making for the last six years to bring people into this country and settle them on the land. From 1922 to 1925 we spent no less than $11,200,000 in endeavouring to people the land, with the result that in those four years we actually lost some of our population. We lost all the settlers who came in and a certain percentage besides. That in my opinion is a proof that what the minister says, namely, "that all traces of depression have disappeared,"'cannot be true. We have to do more than just make flowery statements in budget speeches to bring agriculture back to the standard where it belongs. Everybody in this House knows that if agriculture were placed on a paying footing there would be no need to spend a single dollar on immigration to bring people to this country, because you could hardly keep them out. Everybody knows that if agriculture were on a paying basis, every other industry would also be successful. Therefore I am sorry that this budget does not give more relief to that great industry.
In looking over the balance sheet that the Minister of Finance placed on Hansard, I was particularly drawn to the one entitled " Principal expenditure attributable to the war."
It reads:
Interest on public debt-
I would like to emphasize the fact that this is interest and not principal.
Interest on public debt (increase
over 1914)	$116,607,000
War pensions	 36,650,000
Soldiers' civil re-establishment....	7,200,000
Soldier land settlemant (administration)	 1,300,000
Imperial War Graves Commission.	810,000
Battlefields memorials	 200,000
Adjustment of war claims	 155'000

Or more than 45 per cent of our annual expenditure. I think every hon. member is against war from a humanitarian point of view, but here is an economic reason why we should do every single thing we can to remove the causes of war. When it costs a

young country, with a small population such as Canada has, the huge sum of more than $162,000,000 a year for the last war alone, let alone previous wars, it is about time we faced this problem in earnest and endeavoured to find out the real causes of war and to eliminate them.
The hon. member for Macleod, before taking his seat, moved an amendment to the budget, in which he regretted-
-that the budget as presented by the hon Minister of Finance contains no effective provi sion for the reduction in the high cost of living in so far as such is due to the protective tariff.
I think he was perfectly justified in making that statement, because if there was one thing more than another that helped to elect this government it was the expectation that they would reduce the tariff. He says further:
That the budget shows a further departure from the principle of direct and visible taxation based on the ability to pay.
I think that statement is more than justified. With the huge war debt that we have and the slow rate at which it is being eliminated, the one tax that should be kept on is the income tax. Several hon. members have said that the war was paid for as it proceeded. It was to this extent, that the cost of the war eventually found its way into the pockets of a very small minority of the people of this country. That wealth should be 'taxed to-day to help pay for the war. It. should not be allowed to be passed on from generation to generation, with accrued interest, when the wealth is there for us to tax.. The amendment continues:
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 am very glad to see that clause put in the amendment. We have not faced our liabilities represented by our national debt as any commercial institution would be expected to face its debts, and I say that we should make a definite start to pay off this debt. We are probably not agreed on the various methods by Which the debt might be reduced, but at -the same time I would like to see the government make a start and bring down any recommendations they like, Which could be discussed in this House, and as a result of our deliberations we should no doubt be able to find some means of making a proper start to reduce this great liability. I shall therefore take pleasure in supporting the amendment.

The Budget

Mr. MacDonald (Cape Breton)


Mr. FINLAY MacDONALD (Cape Breton South):: Mr. Speaker, I shall take up the time of the House but a very few minutes; in fact,
I would not have taken up any time at all were it for the belief that we in the maritime provinces might be considered as approving this budget if we allowed it to pass in silence.
We have before this parliament the Duncan report, which we in the maritime provinces regard as a maritime bill of rights. It is the most important document from our point of view that has ever been laid before this parliament. It contains a number of recommendations, some of which must be fulfilled by tariff legislation. One recommendation in particular has reference to an industry in the constituency which I have the honour to represent, and that recommendation, if implemented at all, will have to be implemented by tariff legislation. The Duncan report will come up for special discussion after we have closed this budget debate, and therefore I do not propose to discuss the report at any length now. I wish simply to refer to one recommendation in that report that should be implemented in the budget if the government of the day honestly desire to carry out these recommendations.
The recommendation to which I refer is found on page 37 of the Duncan report, and has reference to steel and the customs tariff. It says:
It was submitted that the tendency of the tariff, as affected by successive alterations, has been to lessen the protection upon the primary products of iron and steel and to encourage their importation from other countries as being the raw materials of iron and steel-fabricating and finishing industries in Canada. .
In respect of this matter, we do not conceive it to be our duty to express any opinion, since the question is, as we were informed by the chairman of the Tariff Advisory Board, who met us at our request, at the present moment under the consideration of that board. But we do regard it as our duty to record that the significance of this industry to the maritime provinces was forcibly brought home to us, not only in the manufacturing towns we visited in the maritimes, but also throughout the agricultural districts of the maritimes. We record this in order to emphasize the need for prompt action.
I call the attention of the government to those words-"prompt action." There are a number of other recommendations in that report that will require considerable time if they are to be brought into force as they should be, and we are not unreasonable in that respect. There are a lot of matters brought up in the report that will repuire to be discussed in the House, and as a result some legislation may have to be brought in this session, but there is none of the same urgency
as this question of a tariff on steel. The matter has been before the tariff board. I think we are all agreed on the wisdom of having a tariff board, but if the tariff board is to serve simply as a wall behind which the government of the day can hide itself, if it is to serve simply as an excuse for the government taking no action at all, the tariff board is not going to serve the purpose for which it was created.


Mr. YOUNG (Weyburn):: Has the hearing been completed before the board?


Finlay MacDonald: If it has not, it should have been completed. There has been ample opportunity to have the hearing completed. That is the point I am making. The urgency of the case calls for an early hearing and an early determination. This concern down there is on the brink of bankruptcy, and it is bound to go into bankruptcy unless it gets some tariff protection. It is now in the hands of the trustees for the bondholders, who have been carrying the industry on for the last eight or nine months, hoping from day to day that some assurance would be given that they would get from this government what the industry has been seeking, some reasonable protection in the Canadian market. The matter was brought to the attention of the government last year and again this year, and the board have had ample opportunity to gain all the knowledge that was necessary- if it was necessary to relegate this matter to the tariff board at all. That is the only recommendation in this report that I intend taking up at this time, because the report will come up later for discussion. The question now is this:	Is the government going to do
anything to save this industry or not? If it waits another year it will be too late, and that is the reason why I say this question is urgent now, if the government of the day intend to act on this recommendation and not let the industry go down. They must remember that this is the only industry of the kind that draws all its raw materials from a purely British source. All other industries in Canada of a similar kind draw their materials from outside sources, either from the United States or from countries outside of Canada and the empire. This concern in the event of war or anything of that kind, is purely within the British Empire and can be depended upon. It is an imperial necessity. I am not going to enlarge on the matter at all. As one of the members from the maritime provinces, I simply express my disappointment at the budget. The budget may be very good in some respects; I have

The Budget-Mr. Adshead
not the least doubt that it is, but from a maritime viewpoint it is a distinct disappointment, and I for one will raise my protest against it.


Mr. H. B. ADSHEAD (East Calgary):: Mr. Speaker, the question of the budget and various other matters have been discussed almost ad nauseam during the course of this debate, and I do not intend to take up the time of the House at any considerable length. I propose, however, to review briefly the addresses that have been given by two or three 'hon. members as they relate to our policy and to the questions on which I was elected, and as they relate to the Liberal and Conservative policies.
I was elected myself on a policy of low tariff. On account of my platform the Liberals in the constituency that I contested refrained from putting a man in the field, because they believed I would be true to what I had stated and that as a member of this House I would support a low tariff. I was amazed, Sir, when I listened to the speech of the hon. member for Quebec-Montmorency (Mr. Lavigueur). He said he was a protectionist, and that not only was he a protectionist but that all of his party in the province of Quebec were protectionists. That statement is in Hansard to-day, and as I listened to it I wondered what Sir Richard Cartwright would have said upon hearing a statement of that kind. I came to this country when I was fifteen years of age. I heard public addresses by Sir John A. Macdonald and Sir Richard Cartwright, and my hon. friend from Toronto West Centre (Mr. Hocken) will know that I am one of the "imported" kind; I am not what he would term a real Canadian. I happen to have done fairly well in this country but I do not assume self-righteousness and say that I am better than other men. However, I winder what Sir Richard Cartwright would have thought upon hearing a speech of that sort coming from a Liberal member? What would Edward Blake or Sir Wilfrid Laurier have thought of it? I wonder what Doctor Michael Clark, whose funeral I attended last year, would have thought of a statement from the Liberal side of the House that the -hon. member and his colleagues of Quebec were protectionists, and not low tariff men? Well, if the Liberals want to stick to their policy they must follow the principles laid down by Sir Richard Cartwright. or they must come over and join the Conservative party. One thing in the speech of the hon. member reminded me

of what took place a few years ago. I know now exactly what happened to Sir Wilfrid Laurier m 1911. At that time there were numbers of members in the Liberal party who were high protectionists, and when Sir Wilfrid attempted to put in force the principles for which he stood so long, they deserted him and crucified him on the cross of protection.


Ernest Lapointe: My hon. friend is making a sad mistake.


Herbert Bealey Adshead: In what way?


Ernest Lapointe: In making the assumption he has.


Herbert Bealey Adshead: What is the assumption? I do not wish to assume anything.


Ernest Lapointe: That some of the members from the province of Quebec were elected in 1911 against the policy of Sir Wilfrid Laurier in reference to reciprocity. It was not the point at issue at all in that province.


Herbert Bealey Adshead: I made the statement
that when I heard the speech of the hon. member for Quebec-Montmorency I knew the reason for the defeat of Sir Wilfrid, and it was just this; that there were inside the Liberal party, men who were strong protectionists as well as low tariff men, and the strong protectionists defeated him. Their policy was high protection and they left him when he tried to put into effect the policy for which the Liberal party had stood for so long. So far as I am concerned I stand by the low tariff policy, and I hope my friends on the other side of the House also will stand by their colours and support it.
The effect of the low tariff policy in the west was very clearly seen last year. Throughout the length and breadth of the province of Alberta there were no Liberal speakers who did not advocate a low tariff policy, amounting almost to free trade. I do not know what my hon. friend from Quebec did, but I think he must have advocated a high tariff policy, because he is a protectionist. There is an old maxim that you cannot run with the hares and hunt with the hounds. It is also said that you cannot serve God and mammon. You must either redeem the promises which have been made and become a low tariff man, or ally yourself with the side which advocates a high tariff policy. The west stands for a low tariff policy, and last year when the government announced a reduction in the duty on motor cars, it was largely due to my hon. friend from Macleod

The Budget-Mr. Adshead
(Mr. Coote). Last September I happened to stray into an automobile shop and talk to the proprietor. Looking over bis files I got two letters which were not written with a political object in view. I will put them on Hansard if the House will permit me. The first letter reads as follows:
To Chevrolet Dealers:-
Owing to existing conditions caused by the tariff reduction proposals on finished cars in the recent budget, the following new retail delivery prices will apply for Chevrolet cars in your territory, at the opening of business April 16th, 1926, and including all charges, taxes, full Canadian catalogue equipment, motorstat, dealers handling charge, full tank of gazoline and freight to your territory:
Retail Delivery Price Your
Model	Territory
Roadster	 $ 844
Touring	 844
Coupe	 1,058
Coach	 1,058
Sedan	 1,178
Landau Sedan	 1,238
Commercial Chassis	 664
Utility Express Chassis	 924
Dealers will be protected as per contract on new undelivered cars in stock, not demonstrators, as of the close of business April 15th, 1926. Complete new price lists showing billing prices, etc., together writh affidavit forms covering such stock will be forwarded within the course of a few days time.
That was not written with any idea of an election; it had nothing at all to do with an election. It should satisfy my friends on this side of the House that a reduction of the tariff means a reduction of the price, and that as you increase the tariff you increase your price. The prophecy was made at that time that we were going to ruin the automobile industry. The hon. member for West Calgary (Mr. Bennett) repeated the statement time and again, and said that he had seen four thousand men out of work. I suppose they were the men who came here protesting against the reduction of the tariff on automobiles. Later on this same gentleman got another letter, as follows:
Dear Sirs,
We received yours of the 28th ult. in connection with your order for carload of Chevrolet cars.
Beg to advise that we are doing everything in our power to hurry along your shipment of cars but so far have not been successful, although expect same will be shipped any day. We appreciate very much that our dealers are losing a certain amount of business this year but you are no doubt aware our factory is operating at capacity at the present time and during the past few weeks we have not been able to keep up with our orders, however, we hope that within the next week or ten days to
get entirely caught up with our shipments and you may rest assured we will do everything in our power to rush this load along to you.
That should be sufficient evidence, Mr. Speaker, of the fact that when you lower the tariff you lower the price and you increase the purchasing power of the people; and increasing the purchasing power results in greater sales, and business in that particular industry is stimulated all along the line. That applies to other things exactly in the same way.
With regard to the income tax, the 10 per cent straight reduction affords the greatest relief to those who are most able to bear the tax and the least relief to those who are least able to pay. In other words, it is a direct inversion of the true principle of taxation- that the tax burden should be in proportion to the ability to pay.
With the permission of the House I will place the following statement on Hansard:
Federal Budget 1927
Who will benefit by the reduction in the income tax rate of ten per cent? Mr. P. H. Veale, assessment commissioner of the city of Ottawa, made public a report of income taxes paid in Ottawa for the year 1926. This was pubished in the Ottawa Journal of January 25, 1927. The following table is taken from the report:'-*
Amount of	Number of	Average assessableassessable	of income	income ofincome	tax payers	each classi	2	3Under $1,000	4.972	$ 354$ 1.000 to $2,000	975	1,3982.000 to 3,000	399	2,4543,000 to 4,000	202	3,4714.000 to 5.000	99	4,0165,000 to 10,000	216	6,76110.000 to 15,000	60	12,38315,000 to 20,000	29	17,38420.000 to 25,000	19	22,43025,000 to 30,000	10	29,82130.000 to 35,000	6	31,80935.000 to 40.000	3	36,39640.000 to 45.000	3	42,93345.000 to 50.000	1	45,870Over $50,000	20	132,4267,013 It will be noted that 20 taxpayers pay on an	
average income of $132,426 and Mr. Veale remarks:-"It will also be noticed that 4,972 income taxpayers equal 14 per cent of the total income assessment, while 20 income taxpayers equal 23 per cent of the total income assessment." He might have added that there are thousands who have not enough income to qualify them to pay income tax and they get no relief as there is no reduction in the tariff.
According to the last Income War Tax Amending Act chap. 10, 1926, an income of $130,000 is assessed at the rate of 40 per cent or $52,000. 10 per cent reduction on $52,000 is $5,200. This answers the query as to who will benefit by the reduction in the income tax rate of 10 per cent.

The Budget-Mr. Adshead
Number of	Percentage of all	Percent-Amount of age of	income tax	income	assessed	all assessedpayers	tax payei-s	income	incomei	2	3	44.972	70.8	1.760.088	14,1,674	23.9	3,437,451	29.216	3.1	1,460,376	13.131	1.9	2,446,207	21.20	0.3	2,648,520	23.7,013	100.%	11,752,642	100.%
There are over 36,000 wage earners, male and female, in the city of Ottawa. Of these only 7,013 have sufficient income to qualify them to pay income tax. Thus 28,987-or 80.52 per cent-of Ottawa wage earners are not living hut merely existing on a pittance.
My hon. friend from Quebec-Montmorency (Mr. Lavigueur) said, if I remember correctly, that he would do away with the Civil Service Commission and return to the old discredited system of political patronage, under which he and other members would have in their hands the appointing of postmasters and other civil servants. Speaking as a labour man, I say that my party will support the continuance of the Civil Service Commission and endeavour to have all civil servants kept free from political interference and rewarded on merit alone.
Let me refer for a couple of minutes to what the hon. member for Nanaimo (Mr. Dickie) said yesterday. After expressing his confidence that the men of the prairies appreciate the fact that they are Canadians, he continued:
There is no reason why, even if those gentlemen are penalized because of our protective tariff, we cannot repay them in some other way by subventions or by lowering railway rates.
I want to tell the hon. gentleman that we do not desire any subventions or freight rate reductions in repayment of the penalties we are subjected to by the tariff. We simply want our own particular rights.


Mr. DICKIE:: Don't you care for the rights of the rest of Canada at all?


Herbert Bealey Adshead: You acknowledged that
the west was penalized. I say you shall not sit on our backs.


Charles Herbert Dickie: You will penalize the east?


Herbert Bealey Adshead: We do not wish to penalize any section of the country. All we ask for is fair treatment and no favours. We are going to see that these penalizing effects are removed, and then we shall be able to pay our freight rates. We do not ask for charity from anybody. That is the view of the west. My hon. friend said that he knew of some shanty men who were good Canadians, who could scale the walls of Troy before break-
fast, throw Paris and Hector into the ash can, and send Helen back to her folks on the farm, and that they could put up a good stiff fight if they only bad a couple of glasses of whiskey in them. So far as we in the west are concerned, we are good Canadians and we are going to put up a good stiff fight for our rights, for the removal of tariff duties, and we shall not need a couple of glasses of whiskey to do it either.


Mr. BELL (Hamilton):: Would you like
it, though?


Herbert Bealey Adshead: Well, I do not need a
couple of glasses of .whiskey anyway. The hon. member for Weyburn (Mr. Young) in the course of his speech yesterday commented upon the amendment and said he did not agree with it. Well, Mr. Speaker, I want to say to him that we in this quarter of the House will uphold him in everything else he said yesterday. He asked that the tariff board have a Hansard report of its proceedings. He asked that all the information given to that board be laid before every member of this House. When my friend from Winnipeg North Centre (Mr. Woodsworth) asked the hon. Minister of Finance for reports of the evidence that was given-not only copies of the briefs submitted by the manufacturers who wanted more protection, but reports of all the evidence submitted for and against their applications, the minister said that it would be too costly to have the proceedings reported fully, and that if my hon. friend wanted certain evidence he would have to ask for it specially. That is not the position we take. That is not the position the hon. member for Weyburn takes. He urges that this House should decide tariff questions and should be in possession of all the evidence upon which the tariff board bases its recommendations. I support my hon. friend in that request, and I hope he will have sufficient influence with his party so that the members of this House and the country at large may know exactly what goes on before the tariff board by being supplied with a Hansard report of all the evidence upon which that board bases its recommendations.


Edward James Young: Hear, hear.


Herbert Bealey Adshead: I have been present at several sittings of the tariff board, and I want to say that no gentleman was more carefully prepared and more thoroughly looked after the interests of the consumers of this country than the hon. member for Wey-bum, absolutely to his own loss. Unlike the boot manufacturers for instance, he was not concerned in the few thousand people

The Budget-Mr. Hocken
that make shoes; he was interested in the nine million people that wear those shoes. I am of the opinion, Mr. Speaker, that the suggestion of my hon. friend from Weyburn ought to be put into effect, and I can assure him that he will receive all the help we are capable of to that end.
Mr. H. C. HOCIvEN (Toronto West Centre):	Mr. Speaker, my hon. friend who
has just taken his seat (Mr. Adshead) says you cannot inn with the hare and hunt with the hounds. If he sits in this House for any length of time he will discover that that is quite possible, because the government of the day is running with the free trade hare and hunting with the protectionist hounds of Quebec. My hon. friend is surprised that a man should get up on that side of the House and say he is a protectionist. It gives him a shock. Why, Sir, we have had members from all parts of Quebec stand in their places and over and over again declare themselves protectionists. We had a member from that province condemn the Prime Minister, his leader, because he reduced the tariff duties on that celebrated occasion which was "the first crack out of the box." Mr. Marler stood in his place representing a constituency in Quebec


An hon. MEMBER:: Where is he now?


Horatio Clarence Hocken: He is now replaced by a
rather superior man. He stated on the floor of the House that he had been authorized by the leaders of his party to go to the manufacturers of Quebec and tell them that the tariff would not be reduced, notwithstanding the free trade clause in the platform of 1919. AVell, the tariff was reduced afterwards because the free trade hares had-


An hon. MEMBER:: Scared the hounds.


Horatio Clarence Hocken: -a little more influence with the government than the protectionists, and the government stood up most bravely and declared they were going to reduce tariff duties. My hon. friend the Minister of the Interior (Mr. Stewart) said "This is the death-knell of protection". My hon. friend the Minister of Agriculture (Mr. Motherwell) said, "This is the first crack out of the box". There was loud applause from our Progressive friends all of whom were then on this side of the House. But that was the only time it ever was done. The government discovered that that policy was not going to get them support in the province of Quebec.


Henry Herbert Stevens: The hounds caught up
with the hares.


Horatio Clarence Hocken: Yes. The death-knell of
protection was not sounded. My hon. friend
need not be surprised if he finds men getting up on that side of the House and declaring themselves for protection. Quebec needs protection as much as any part of the Dominion -perhaps a little more-and she is not going to submit to any radical reduction in duties. True, Quebec did consent most cheerfully to the reduction in the automobile duties because her manufacturers do not make automobiles.


Ernest Lapointe: They do not want to.


Mr. MERCIER (Laurier-Outremont):: Does my hon. friend presume to be the spokesman of Quebec?


Horatio Clarence Hocken: I have been charged with a great many things but I hope Providence will preserve me from that. I want to tell my hon. friend from East Calgary what the truth is about the automobile duty. The duty was reduced but the sales tax was taken off and other advantages were given to the automobile industry that left it as fully protected as before the duty was reduced. That is the fact.


Herbert Bealey Adshead: Did not automobiles cost less to the consumer?


Horatio Clarence Hocken: The reduction materially affected the revenues of the country.


Herbert Bealey Adshead: Did it not affect the purchaser?


Horatio Clarence Hocken: It affected the revenues of the country, which is pretty much the same thing.


Mr. BROWN:: Has my hon. friend the
figures from the Bureau of Statistics to show in what way the revenues were affected?


Horatio Clarence Hocken: I do not think we need to get the statistics to prove this fact, that if there is a sales tax of five per cent on a certain article

which five per cent goes into the coffers of the country-if that sales tax is removed, that much revenue is cut off. The reduction in the sales tax to that extent necessarily means a reduction in the revenue.


John Livingstone Brown: Is the hon. member aware that the revenue from passenger cars was $570,000 greater in the period of nine months ending in January than it was the year before?


Horatio Clarence Hocken: I am talking about the sales tax; my hon. friend is talking about the volume of trade.


James Alexander Robb: There was no change whatever in the sales tax. My hon. friend is conflicting the sales tax with the excise tax. As a result of taking the excise tax off cars-

The Budget-Mr. Hocken


Mr. MANION:: Canadian cars.


James Alexander Robb: Yes, Canadian cars. As a
result of taking off that tax, more cars were sold and we got more revenue from the sales tax.


Horatio Clarence Hocken: I did get twisted on the
sales tax and the excise tax, but there are so many taxes under this government that it is pretty hard to keep track of them.


James Alexander Robb: These taxes were imposed by the previous government.


Horatio Clarence Hocken: My hon. friend from East Calgary is very much opposed to the reduction of the income tax. We had some figures given to us recently which would make it quite reasonable to understand this opposition. The west does not pay any income tax that is worth while. The two provinces of Saskatchewan and Alberta pay $2,317,000 in income tax and this amount is all paid by the cities. On the other hand, the province of Ontario paid last year $26,539,000 in income tax and the province of Quebec, in round figures, $18,000,000. So that these two central provinces pay the vast bulk of the tax, and it is noit to be wondered at that my hon. friend should want to have the tax maintained. The farmers of Saskatchewan and Alberta who pay no income tax naturally say, " Certainly, let us soak the provinces of Ontario and Quebec and make them pay the revenues of the country." There is therefore no reason why my hon. friend should rejoice particularly in any reduction of the income tax.
On motion of Mr. Hocken the debate was adj oumed.
At six o'clock the House adjourned, without question being put, pursuant to rule.
Thursday, February 24, 1927