1927-03-01

RAILWAYS, CANALS AND TELEGRAPH LINES

[Stage Direction]
Mr. A. M. YOUNG (Saskatoon) presented the first report of the select standing committee on railways, canals and telegraph lines as follows:
Your committee have considered Bill No. 75, an Act respecting the Essex Terminal Railway Company, and have agreed to report the same without amendment.
Your committee have also considered the following bills, and have agreed to report the same with amendments, viz:
Bill No. 74, an Act respecting the Canadian Transit Company.
Bill No. 68 (Letter Q-2 of the Senate) an Act to incorporate The Detroit and Windsor Subway Company.
Mr. SPENCER:: I do not know whether I am in order or not, but I understood that at the first meeting of the railway committee a request was made that the minutes be kept of information obtained with regard to the Peace River railway. I did not observe that anything was mentioned to that effect in the report just read.


Mr. YOUNG (Saskatoon):: That matter
has not yet been disposed of. As soom as it is it will be incorporated in the report.
Surplus Goods



PRIVATE BILL


[Stage Direction]
Bill No. 110, to incorporate the President of the Lethbridge Stake.-Mr. Jelliff.

Mr. H. B. ADSHEAD (East Calgary):: With the leave of the House, and for the information of hon. members, I beg to table a number of photographs in connection with the development of the Spray lakes power project.



DOMICILE OF MARRIED WOMEN IN DIVORCE PROCEEDINGS

[Stage Direction]
Mr. W. J. WARD (Dauphin) moved for leave to introduce Bill No. Ill respecting the domicile of married women in proceedings for divorce. .
He said:	The House will recall that this
identical bill was presented a year ago, but owing to the turmoil of the session it did not receive its first reading. In spite of all our social legislation of the last twenty-five or thirty years there is one phase of the status of women that still remains somewhat antiquated. The legislation governing the domicile of married women in Canada is based on a 'bill which passed the British House of Commons in 1856, and that in itself should be evidence that something further is required in Canada to place women more on an equality, in the matter of divorce proceedings, with the rights they enjoy in other respects. If the House will allow the bill to get its first reading it can be fully explained on the second reading.
Motion agreed to and bill read the first time.

[Stage Direction]
Mr. W. J. WARD (Dauphin) moved for leave to introduce a bill respecting the purchasing and disposal of departmental and other supplies and surplus goods.
He said:	I have prepared a short statement respecting this bill which will give the House sufficient information for the first reading. The purpose of the bill is to provide machinery for central purchasing of all supplies, materials, goods, stores, and] articles required by the government throughout the country, and for the disposal of surplus goods and junk, the property of the government. This bill simply proposes the re-grouping in a special department of all personnel engaged in this work now under the control of the several departments. There will be no increase in the present cost of performing the duties concerned. On the contrary, there will be a saving, which, it is estimated, will 
be ultimately about 40 per cent on the aggregate amount of the salaries at piesent paid. Under the present system each department has an organization to attend to purchasing, and I submit that the number of employees engaged in this work is too large. By bringing them all together, and by not filling vacancies occurring in the process of time the suggested saving of 40 per cent will be accomplished. Therefore, the usual objection of expense in the formation of a new department has no weight in this case, as there will be a decrease and not an increase in the * amount chargeable to civil government. Moreover, in addition to the estimated saving in the payroll, office space, and so forth, a greater economic benefit will result from the obtaining of more advantageous prices because of the fact of centralization.
After careful consideration of conditions prevailing before the war, the salutary effect of the operation of the War Purchasing Commission and' its successors, I am convinced that there is a general difference of 20 per cent in favour of centralized purchasing to the best possible advantage, as against independent departmental purchasing under political patronage.
With this short statement, Mr. Speaker I hope the House will be willing to allow this bill to pass and I will endeavour more fully to explain its value when its second reading comes up.
Motion agreed to.
On motion of Mr. Ward that the bill be read the first time:
Hon. HUGH GUTHRIE (Leader of the Opposition):: I do not know what the bill
contains, Mr. Speaker, but judging by the title and the explanation just given I would like to point out that it may be in conflict with the rules of this House.


Mr. SPEAKER:: Will the hon. gentleman
state why? Is it because it involves expenditure?


Hugh Guthrie: And the disposal of government property as well.


Hewitt Bostock: Under the supervision of the departments. There is certainly a doubt, however, which I had in mind when the hon. gentleman was giving his explanation. We will let the matter stand.
Motion stands.



GERMAN REPARATIONS

[Stage Direction]
On the Orders of the Day:
Sir GEORGE PERLEY (Argenteuil):: Referring to an answer given yesterday to a

Post Office Box Rentals
question of mine regarding claims for losses sustained by the civilian population in the war, and to an article on the same subject which appeared in the newspapers this morning, I would like to ask the government when we may expect a declaration of the policy they intend to submit for the consideration of the House in dealing with these claims.


Hon. FERNAND R INFRET (Secretary of State):: I am only responsible, of course,
for the answer given in the House yesterday, and can accept no responsibility for the article appearing in the press this morning. I regret that I cannot satisfy my hon. friend with a definite reply until I receive the final report of the commissioner.



POST OFFICE BOX RENTALS

[Stage Direction]
On the Orders of the Day:
Mr. F. WELLINGTON HAY (North Perth):: Might I ask the Postmaster General
whether throughout Canada or Ontario or any particular sedtion of the country he has increased the jgntals of post office boxes in public buildings? I may say that when I was home on Saturday I found on my desk a notice that the rental of my box in the post office had been increased 100 per cent over night, and I was wondering if that was generally effective throughout Canada?
Hon. P. .1. VENIOT (Postmaster General): In answer to the hon. gentleman I would say that the rates in some sections have been raised in order to establish uniformity. In grades 4, 5 and 6 west of the great lakes the rate was higher than in those grades east of the great lakes, and to ensure uniformity the rates east of the great lakes have now been raised to equal those in the west. In large offices, grades 7 to 11, the maximum has not been raised but there has been a slight increase in the minimum rate according to the sizes of the boxes, which are graded A, B, C and D. In grades 2 and 3 there has been a slight increase where the free delivery system is in practice in order to discourage as much as possible the double service which we are compelled to carry on, but in no case does the increase reach the cost of administration in keeping up that service.


Francis Wellington Hay: Will the minister say whether
that applies to all rentals or just to public buildings owned by the government?


Hewitt Bostock: There can be no discussion in matters of this kind.


Mr. VENIOT:: That applies to public
buildings owned by the government, not to
buildings the rentals of w'hich are paid by the postmasters.


Mr. WOODSWORTII:: Would the Postmaster General say whether any steps are being taken-


Hewitt Bostock: No discussion may ensue.


James Shaver Woodsworth: This is another
question. Are any steps being taken to collect the arrears due from the people of the east?


Peter John Veniot: There are no arrears due from the people of the east.


Mr. McGIBBON:: I would like to ask the Postmaster General if it is the policy of his department to dismiss postmasters throughout the country without notice?


Peter John Veniot: An answer will be given to that in good time.



SOLDIER SETTLEMENT LOANS

[Stage Direction]
On the Orders of the Day:
Mr. H. J. BARBER (Fraser Valley):: I
would like to direct a question to the government and more particularly to the Minister of Immigration (Mr. Forke). I received a letter to-day from a returned man in the Fraser valley in which he states that he is the owner of thirty acres of land, to which he has a clear title. He applied to the local supervisor of the Soldier Settlement Board for a loan of $2,000 for the purpose of building a barn on his property, and was advised that no further loans -would be granted. 1 would like to ask the minister if it has been decided to grant no further loans to the returned men, and if so, when that decision was made?


Hon. ROBERT FORKE (Minister of Immigration) :: I am not exactly sure, but I think all loans have been stopped. However, I will make inquiries and will be prepared to give a definite answer to-morrow if my hon. friend will repeat his question.



RURAL MAIL BOXES

[Stage Direction]
On the Orders of the Day:
Henry Elvins Spencer: I
would like to ask the Postmaster General if he can give the House any idea as to when his department will secure a new supply of boxes for rural mail routes, as several routes are being held up at present?


Peter John Veniot: There are no routes being held up at present, because even if we had a supply of boxes we would not undertake to distribute them in winter. I expect to have the supply of boxes in ample time to establish whatever routes may be agreed upon in the proper season.
The Budget-Mr. Guthrie



THE BUDGET


[Stage Direction]
The House resumed from Monday, February 28, the debate on the motion* of Hon. J. A. Robfo (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.
Hugh Guthrie: Mr. Speaker, in rising to offer
a few observations on the motion of my hon. friend the Minister of Finance (Mr. Robb) that you do now leave -the chair, may I observe at the outset that the discussion in which this House has been engaged during the past ten or twelve days is always considered one of the important debates of a session of parliament. I think the House will agree that in the present instance the debate so far has been maintained upon a high level of excellence. Much information has been given, much information has been received, and the discussion which has taken place will prove profitable to all sections of the House, and I trust also to all sections of the country. I am glad to say also, that during this debate the amenities of public life and the amenities of parliamentary debate have been well maintained. It is a good thing for the House and a good thing for parliament that this should be so. But having said so much I must point out that when we tender to hon. members opposite our felicitations, or our congratulations upon their efforts, it must not be taken that in so doing we commit ourselves in any degree to their proposals or acquiesce in their program. I state this because during the course of the present debate observations have been made on several occasions from various sections in the House to the effect that as we do not more vigorously attack our opponents there must be something in the nature of cooperation between the two old, long established parties in regard -to the present budget proposals of the Finance minister. That idea seems to have become prevalent in some sections of the House. Now our regard for the amenities of parliamentary debate must not be taken as acquiescence, nor must our congratulations to our opponents upon a clear business statement or a finished oratorical performance be considered as an endorsement of their proposals. My desire is to make this point as clear as possible because, on more than one occasion the suggestion has been made by hon. members who should know better, that in some way or other the official opposi-

tion was intriguing with the government in regard to the present budget proposals. I fancy that when my remarks this afternoon have been concluded hon. members in all sections of the House will agree that one matter is clear, and that is that His Majesty's loyal opposition in this House does not countenance, does not approve, and does not endorse the budget presented by the Finance minister.
But before entering upon a discussion of the question raised by the speech of my hon. friend the Finance minister, may I look for a moment at the amendment which has been offered to the House by the hon. member for Macleod (Mr. Coote) representing a section of this House, called, I think, the Progressives of Alberta. My hon. friend from Alberta has moved an amendment to the motion that you, Mr. Speaker, do now leave the chair which amendment is in some respects a sort of curiosity. Let me read -the first clause of that amendment in order that my remarks in regard to it may be understood. The first clause reads:
That all the words after the word "that" be struck out and the following substituted therefor :
Whilst recognising the advisability of certain minor changes proposed, this House regrets that the budget as presented by the hon. Minister of Finance contains no effective provision for the reduction in the high cost of living, in so far as such is due to the protective tariff.
The House will note that there is no direct averment in the amendment that the protective tariff has anything to do with the high cost of living. At most there is only an implication or a suggestion that possibly it may have or might have such an effeet. The draughtsman of the amendment had no confidence in it himself or his resolution would not have been framed in such uncertain, almost meaningless language. I shall I think be able to demonstrate as I proceed with my remarks, that the present high cost of living in this country is not attributable in any degree to the protective policy in Canada, but is attributable to three main causes:	First, to the
burden of taxation; second, to high freight costs; thirdly, to the profits and commissions of middlemen, wholesalers and retailers. These are the three controlling factors in regard to the high cost of living, and the question of a customs tariff enters into the matter very, very little, if at all. Now as soon as I noticed that particular clause in the amendment of my hon. friend from Macleod the thought at once struck me that it was probably put there to prevent the official opposition agreeing with his party and himself in this amendment. With that clause we

The Budget-Mr. Guthrie
express our dissent, our positive dissent. We believe that it is not a genuine assertion of political principle by the hon. member who moved it. At most it is only a gesture, it is not a positive declaration on the part of his colleagues and himself. But if it were such we would equally reject it.
In regard to the other clauses of the amendment I have not very much to say, but what I have to say may be gathered as I proceed with my remarks upon the main motion. We as an opposition, Mr. Speaker, do not object to everything that is contained in the budget statement. We are able to congratulate the government and the minister upon some things. We congratulate him upon his lucidity, and upon his conciseness. We join with the government in rejoicing that Providence has once more blessed this country with an abundant crop. We join with them, and with others, in rejoicing that the financial effect of that crop has been reflected in every corner of this Dominion and in the trade of this country. These are matters upon which we can all agree, but there are other important matters in the budget to which we offer substantial and formidable objection, and I will try to deal with them this afternoon as briefly as possible.
In the first place we nave a most unsatisfactory statement in regard to the finances of the Dominion. We have again it is true the perennial claim of the present Finance minister that this government has greatly reduced taxation in Canada. When speaking of it as a perennial claim I do so in light of the facts laid before the House in the very able speech of my hon. friend from Vancouver Centre (Mr. Stevens) a few days ago, and my desire is if possible to emphasize the contentions of my hon. friend for the purpose of drawing them as forcibly to the attention of the House and the attention of the people of Canada as is possible, and particularly for the purpose of inviting the Minister of Finance, before thi3 debate closes, to give this House some explanation of the apparent irreconcilability between the various statements in his budget address and the statements contained in the Public Accounts of Canada which have been laid before this parliament as true statements of our national finances.
The Minister of Finance announced a day or two ago that he had had the pleasure of delivering four budget speeches in this House. That is so, and I have under my hand now the four budget speeches which he delivered. It is my intention to read an extract from each of them in order to give the House exact knowledge of what the minister said and of the impression which the minister, by
his statement, created upon parliament and the country. Take his statement as delivered in 1924 in regard to the finances of this country. The minister said:
These two amounts, totalling $9,622,760.37, together with $20,786,349 surplus of revenue over total expenditures, reduce our net public debt as of March 31, 1923, by the amount of $30,409,109.37.
That was the statement made by the minister in his first budget speech. I pass now to his budget speech of 1925 and find the following language:
The public debt was decreased by the amount of $35,993,593.86. Since confederation decreases of debt have occurred in only nine of the fifty-seven years completed; $35,993,593.80 is the largest decrease of any of those nine years, being $10,375,758.83 greater than that for any previous year since confederation.
Those are two reductions. Before passing from this last budget let me refer to that part of his speech where the minister indulges in what one may call another prophecy. He predicts that for the next year, that is for 1925, he will have a deficit of $13,703,000. Actually that deficit did not occur because the public accounts show that he closed that year with a bare surplus of $353,000. I now take the third speech of the minister delivered on the 15th April, 1926, and quote from it as follows:
To obtain the net debt as of March 31, 1926, of $2,395,084,685.59, the excess of $11,557,000 of these special expenditures over these special revenues should be deducted from the surplus of $33,910,000 mentioned above, which will give a reduction of debt during the year of $22,353,000. May I again emphasize, Mr. Speaker, that this reduction of debt is net, clear of everything?
That is the third reduction announced by the Minister of Finance. The last, of course, was announced in the budget speech delivered a few days ago, as reported at page 387 of Hansard, where he said:
We estimate that at the close of this year there will be a further reduction of some $31,000,000 in our net debt.
As that is merely an estimate, I am not going to hold my hon. friend closely to the figure stated because the present financial year will not be closed until the 31st March next. I will therefore deal with his statements in regard to the other three years. What do we find? This government entered office originally on Decemer 29, 192-1, so that for the year ended 31st March, 1922, it could not be fairly held responsible for more than three months of the financial operations. Therefore we will take the first year of operation by the present government, not the year ending 31st March, 1922, but the year commencing 31st
The Budget-Mr. Guthrie

March, 1922. According to the Public Accounts, page 46, we find that the net debt of Canada then amounted in round figures to 82,422,000,000. From the Finance department we find a statement issued showing that on the 31st December last, the net debt stood at $2,343,000,000. By the simple process of subtracting one from the other we find that there has been a reduction of $79,000,000 in the net debt as between the 31st March, 1922, and the 1st January last. This is what the public accounts of Canada disclose.
But there is another side to the story. As pointed out by the hon. member for Vancouver Centre (Mr. Stevens) a few days ago, we have in this country another debt, a debt which is secured by the bonds of the Dominion of Canada, a debt which is always set forth in the balance sheet of the Dominion of Canada. If hon. members will turn to page 3 of the Public Accounts, they will find the balance sheet as it stood on the 31st March last, and it-shows on the liability side of the ledger:
Funded debt, per schedule T, $2,471,000,000, in round figures.
If hon. members will turn to the public accounts for the year 1922, they will find that the funded debt of this country at that time stood at 82,420,000,000 odd. There has therefore been, during the last five years, an increase of $51,000,000 in the funded debt of Canada, that is the debt for which we have bound ourselves to the purchasers of our bonds and securities, a debt which at maturity we must pay, principal and interest. It stands on the government books as of 31st March, 1926, at precisely $51,000,000 more than it was when this government took power in 1922.
Let us take the $79,000,000 reduction in the debt of Canada shown by the public accounts and then let us see how the balance really stands in regard to the issue of treasury notes in this Dominion. We know that the treasury of Canada from time to time issues large amounts of Dominion notes. This is done for the convenience of banking and commerce.
It is done upon the principle of the operation of the federal reserve banks in the United States in order to assist the financial trade requirements of Canada. Every Dominion note issued is a debit obligation of this country. True, that note can be handed about from bank to bank and from person to person, but it is merely a promissory note of the Dominion of Canada unless that note is backed to the extent of one hundred per cent by gold or specie in the vaults of the Dominion of Canada. Now what was the

circulation of our Dominion notes, and what was our cash reserve, in the year 1922?
In March, 1922, the circulation of Dominion notes-a debt of this country-was $241,000,000. Against this amount we held in gold and specie, $85,000,000, only, or 35 per cent of our note circulation. The other 65 per cent of that circulation was a direct debt of this country. Now turn to the present time. In the year 1926 the note issue of the Dominion was $182,800,000, against which we -held in gold and specie $99,000,000, or a reserve of 54 per cent. The other 46 per cent of the issue of Dominion notes was a debt of this country, just as much as the bonds and other securities of the country are a debt. The government in the intervening years had withdrawn from our note circulation $58,000,000, which consequently disappeared from the indebtedness of Canada Of the $79,000,000 reduction in our net debt, $58,000,000 of that reduction was achieved simply by recalling Dominion notes. Now $58,000,000 from $79,000,000 leaves 821,000,000 as the net reduction of debt at the hands of the government of this country during a period of five years. What then becomes of the announcements of the Finance minister in his four budget speeches? Where has that money been applied? Let us take his announcements again.
On April 10, 1924, he announced a reduction to March 31, 1923, of $30,409,000; on March 24, 1925, a reduction from March 31, 1924, of $35,993,000; on April 15, 1926, an estimated reduction of $22,353,000, which actually became $27,706,000. Leaving out altogether the announcement made in February this year, the payments on the -public debt announced by the Minister of Finance for those three years totaled $94,108,000. Yet this government has actually reduced the debt of this country by a sum of only $21,000,000. It has been instrumental in paying off only $21,000,000 of net debt and during the same period has increased our funded debt by $51,000,000.
What I request of the Minister of Finance, in closing this debate to-day, is that he explain to this House what we cannot explain to ourselves, why his budget statements do not agree with -the financial statements of his department placed upon the table of the House. I cannot reconcile the two, nor do I believe any one in the House can, and I therefore think it is the duty of the Minister of Finance to give a clear and definite statement as to what has become of these payments which he says have been made in reduction of the debt. Any one can take this volume of

The Budget-Mr. Guthrie
Public Accounts and figure it out as we have figured it out; and he will come to the same conclusion. I do not suggest for one moment that the money has been misappropriated or misapplied. What I say is that it never existed, that it was mythical, that the debt reductions were purely mythical, purely imaginary, the purest kind of sham. But these mythical reductions have been announced for electioneering purposes throughout the length and breadth of the Dominion of Canada upon many occasions, although as a matter of fact there has been little actual reduction in the national debt of Canada in five years of Liberal rule, nor in the four years of Liberal rule during which the Finance department has been in charge of my hon. friend the Minister of Finance.
Take another instance of these misleading announcements which have been heralded throughout the country and have been imposed upon this House of Commons from time to time-the so-called reductions in taxation. Let us look at them for a minute. In his budget speech in 1924 the Minister of Finance announced a reduction in taxation of $24,000,000. In 1925 he was much more wary. On that occasion he said there would be a "substantial reduction." In 1926 he announced a reduction in taxation of $25,000,000, but he said that was only "estimated". In 1927, that is this year, he announced a further reduction of $27,000,000. Now why is it that these reductions are not reflected in the taxes paid by the people of this country. Why are these reductions not shown in the public accounts of this country?


Mr. ROBB:: They are.


Hugh Guthrie: I submit they are not, and anyone can take the public accounts and satisfy himself in regard to the matter. On page 44 of the Public Accounts you will find a statement showing all the receipts of the Dominion government from every source from the year 1868. I will grant, Mr. Speaker, that the total receipts mentioned in this table do not represent the actual taxation of the people. All one can say is that the great bulk of these total receipts on page 44 represent actual taxation. Now turning to the statement of receipts and expenditures for the last year, 1926, the total revenue for that year, as shown on page 45, was $382,000,000, and 95 per cent of that amount was made up of taxes imposed upon the people of Canada. I am assuming for the purposes of argument that the House will agree that the customs tariff is a tax, and if you will agree to that, then 95 per cent of the whole amount
contributed to our treasury through the revenues of the country was made up of taxation. Now what do the figures show in these interesting accounts?
Let us take the last five years of this government's operations, and we find the average return from taxation to this government in the last five years to be $387,786,000. Was that great or was it not? We can judge only by comparing this statement with the figures in the five years preceding, under another government. You will find that the average taxation for the five years previous was $348,-
500,000.	So during the last five years this government has raised by taxation from the people of this country $39,280,000 more per year than was raised by its predecessors. Now what becomes of these wild statements of the Minister of Finance made annually in his budget speeches to the effect that ho has reduced the taxation by $24,000,000, $25,000,000 and $27,000,000, when the truth is, according to the public accounts laid before this House by his own department, he has taken well nigh $40,000,000 more per annum out of the pockets of the people by taxation than did his predecessors in the previous five years? What does that mean to the people of Canada? It is the burden of taxation that counts in regard to government financing; it is not the bulk amount of the tax, but the burden which that tax imposes upon the individual, that counts.
Now I take for the purposes of this illustration the statement made in this House by the Minister of Trade and Commerce (Mr Malcolm), in a very excellent speech whic! he delivered here last week, and for which he is to be complimented by the whole House of Commons. I take his statement of population for the year 1926, because he gets it from the officials of his own department. The population in that year was 9,390,000, and 1 find that the increased taxation during the last five years was $39,280,000 per annum Divide one by the other, and you find that for every man, woman and child in this country there has been a positive increase of taxation to the extent of $4.18 per annum For a family of five it would mean $20.90 per annum of increased taxation imposed by this government on the people of this coun try, over and above the taxation which was imposed for the five years before this government came into power. In making that statement I must make the further reservation, that five per cent of the amounts I have mentioned should come off, because S per cent does not represent taxation, but 9a per cent of the amounts which I have stated is derived from and represents actual taxation
The Budget-Mr. Guthrie

So that, instead of saying 34.18 per head, I should possibly say $3.98 per head. However the burden is enormous whichever way you take it, and these annual announcements of the Minister of Finance that he has greatly reduced the taxes of the people of this country are again purely imaginary. I object on the part of those who sit around me in this section of the House, to financial methods of this kind. We object that the financial statement laid before this House by the Finance minister in his budget speech was not a clear, fair and open presentation of the actual finances of the country. Where the minister's statement does not agree with the public accounts, we are bound to accept the statement contained in the public accounts, and I ask the Finance minister, before this debate closes, to explain to the House thpse very evident and serious discrepancies. We object to this budget because it has positively increased the burden of taxation on the people of the Dominion. These burdens should be lower, and they should have been lowered years ago. I have never yet heard a minister in this House, nor a Liberal speaker on a political platform in this Dominion, admit that the Liberal government itself has been the cause of much of the increased taxation. The other day a cheer went up in this chamber by government supporters when the minister announced a 20 per cent cut in the sales tax. Now it sounds as if he had done something substantial when he says, "I have reduced the sales tax by 20 per cent." The sales tax was five per cent, and he has taken one per cent from it, but for years he retained that sales tax upon the necessities of life at the rate of five per cent in spite of our protests. What Liberal speaker in parliament or out of parliament ever told the people that Liberal government had increased the sales tax? The Liberals placed that burdensome imposition on the people of Canada. When my hon. friend and his government took office in December, 1921, it is true we had the sales tax. It was a war measure imposed as a war tax, but it was only a tax of three per cent. At once upon taking office this government increased it to four and a half per cent; then they increased it to six per cent, despite our protests and objections. Then they found what we pointed out they would find, that they had actually created a hindrance to the commercial business of the country and they had to reduce it to five per cent. Now, with a great flourish of trumpets, the announcement, is made that the sales tax has been reduced to four per cent. That sale tax forms one of the heavy burdens upon the

common people of this country. It is one of the direct causes of the high cost of living in Canada. Does the government not realize that when the ordinary citizen of Canada goes out to buy a hundred dollars worth of the necessaries of life for himself, his wife and children, on every hundred dollars worth which he purchases-I do not mean foodstuffs but other necessaries-the treasury of Canada exacts five dollars from him or did so last year? This year it is going to exact from him four dollars on every hundred dollars' worth of purchases. In future when he buys a hundred dollars' worth of goods he can say to himself, "Well, I saved a dollar this time because this good Liberal government has taken one dollar tax off every hundred dollars' worth of purchases." He will now pay $4 of taxes instead of $5 upon every hundred dollars of purchases. That is the only relief the ordinary citizen of Canada has obtained through the budget. It has been called a rich man's budget, and so it is in every sense of the word.
I do not offer objection to the cut which has been made in the income tax. I say this reduction has been long delayed. This government has taken a long time to make up its mind to reduce taxation, but having decided to do something, it has certainly had regard for those who are best able to pay money into the treasury, and has had little regard for the ordinary man or woman, the ordinary citizen of Canada. To the ordinary citizen it hands back one dollar on every purchase of one hundred dollars' worth of the necessaries of life, while to the rich man it says again this year, as it said last year, "There is a plum for you in the budget reduction."
I had this matter figured out in the government department of taxation, and I find that in the case of the man with an income of $60,000 a year-and there are many in that class-the government has granted a reduction of $1107 on income tax, to the man with an income of $40,000 a year there is a reduction of $589; to the man enjoying an income of $20,000 a year, the government has granted relief to the extent of $154; to the man enjoying an income of $10,000 a year the reduction is $29, but to the great mass of the people of Canada the reduction is a single dollar on every purchase of a hundred dollars' worth of the necessaries of life.


Mr. MacLEAN (Prince):: I think it would be only fair to state that the business profits tax has been abolished.


Mr. STEVENS:: That is not the question.

The Budget-Mr. Guthrie


Hugh Guthrie: I have not discussed the business profits tax. That was a war tax put on for the purposes of the war. I think it was taken off by the government that preceded the present Liberal government.


An hon. MEMBER:: No.


Hugh Guthrie: My recollection is that
it was, and there are some accumulation and arrears still to be collected, but the tax was taken off some years ago. However, it was a war tax when it was put on and was not intended to be permanent. The sales tax was similarly put on as a war burden and not intended to be permanent. It should at least have been cut in two this year and wiped out entirely next year. I can assure hon. members that the people of this country would have appreciated such a reduction although the rich men might possibly have had to wait a year or two longer for their relief. There is a tremendous number of people in this country who would have been cheered by the news that five dollars had been taken off every hundred dollars' worth of purchases of the necessaries of life which they might purchase from month to month throughout the year 1927. We object to the principle upon which this reduction of taxation has been arranged by the government. We do not think it is a proper one. We do not think the government has followed the principle of the greatest good to the greatest number. These reductions emphasize much more than any words of mine the fact that the present budget is in reality a rich man's budget and not a budget in the interests of the whole people of the Dominion.
Something has been said about the high cost of living; I think I said something myself at the beginning of my remarks on that subject. Is it not astounding, as pointed out by my hon. friend from West Calgary (Mr. Bennett), that the cost of living in this country in the month of December last, 1926, was higher than it has been since the year 1922 when this government came into power? The figures submitted to the House by the hon. member for West Calgary are not such as the government can quarrel with, for they are prepared by this government itself for the information of the House and the .people of Canada. The officials of this government have established that the cost of living to-day is almost at the peak since the year 1922. It costs the average family of five to-day, for the supply of the actual necessaries of life, $21.41 a week. If taxation has been reduced, if conditions have in any way been made easier,
why is the reduction not reflected in the cost of living in Canada? Why has the cost of living almost reached its maximum to-day? With a knowledge of the fact that the cost of living was about at its peak before the Prime Minister (Mr. Mackenzie King) and before the Minister of Finance, why could not the minister have been sufficiently courageous to relieve the situation by abolishing the 5 per cent sales tax altogether and so give the ordinary people a chance?
Another thing to which we object is the fact that the budget gives no intimation whatever that the government is disposed in any way to economize in the management of the affairs of the country. This year in the main estimates the government proposes to spend $6,500,000 more than it did last year. We have not yet had the supplementary estimates, but no doubt [DOT] they will be very substantial. But, as I say, in the main estimates alone we have a proposed expenditure of six and a half millions more than we spent last year. What I have to say about the estimates is this. If the government had any real desire to economize they could take that blue volume of. estimates and, sitting around a table with the Minister of Finance and a blue pencil, they could go over the estimates page by page. If this were done it would be found that large items on every page could be blue pencilled. A vast sum of money could be saved this very year and no public service in the country would in any way be hindered or embarrassed.


An hon. MEMBER:: Militia?


Hugh Guthrie: Yes, I have a word to
say about the militia. If there is one respect in which this government has been tardy- yes, careless-in the performance of its duties, if there is one respect in which it has absolutely failed, it is in the maintenance of a proper militia force in Canada. The most hopeful sign I have seen in regard to the present government in many a long day is the fact that to-day we have a gallant soldier (Mr. Ralston) at the head of the Department of National Defence, and his presence in the government must mean something, for we see a very substantial increase in the vote for national defence this year. We have been a long time waiting for this, and we are not here either to challenge or to criticise the increase, but to support the government in respect of it. But apart from that there are many other things in this blue book of estimates for 1927 that might still receive the attention of the government. Go over the
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harbours and rivers vote; go over the public buildings vote; take the estimates page by page, and you. can eliminate millions upon millions of dollars. If that were done the government would have some money to spend on some real development work in the Dominion.
I went over the estimates the other night, and I found what I have found in .them every year since this government took office. One thing they have never failed to do, is to increase the public service of Canada. There has never been a year that has not shown a substantial increase in the number of civil servants, with a correspondingly large increase in the amount of taxation thereby necessary. Save only three departments every department shows an increase of civil servants this year. I have them all tabulated, and I think there are only three departments that do not show an increase. The total number of new civil servants for whom salaries will have to be provided, if these estimates go through, will be 168, and the additional salary list amounts to $317,000, including, of course, statutory increases. But it has been so every year since this government assumed office. In regard to one thing, I think, we are all of one mind: the public service of Canada is overmanned. That being so, why further increase the number of civil servants? Those hon. members who were in the House when the late Frank McCrea was here must at that time have been convinced that the departments of the civil service were overmanned, not only the inside service but the outside service as well. Frank McCrea made it very clear. Why, therefore, increase the number? I am not asking the government to displace people who are now in the service, but there is no reason why the list should be increased every year by new appointments, when the government must know in its heart that the departments are overstaffed, as they have been for the last twenty-five years. Can we not call a halt in this matter? Can not a large sum of money be saved in this respect as well as in other respects in the present estimates?
In one respect the Minister of Finance has been fairly cautious in his predictions in regard to his financing during the current year 1927. This, I think, is the only occasion on which he has presented a budget when he has not given a fairly good forecast, based of course on estimate, of what would happen financially during the ensuing twelve months. For some reason only a very slight reference is made to such matters in the speech the minister delivered cm February 17, although he did say that he estimated that the revenues

for the next twelve months would be equal to those of the last twelve months, placing the revenue of the last twelve months at $393,006,000. But in announcing his reduction of taxation he had to point out that the figure just quoted would have to be reduced by $27,000,000, leaving him an estimated revenue of only $366,000,000 for the 'ensuing twelve months. Now the government has brought down estimates for $354,000,000 odd, besides railway estimates for $22,518,000 odd, making a total of some $376,000,000. Then we will have to deal with the supplementaries as well. I assume the supplementaries will be fairly substantial this year. Would I be right in placing them at $20,000,000, or is that too high? This year we expect that something will be done in the estimates for old age pensions, and we anticipate as well an inclusion in the supplementaries of a substantial sum to take care of maritime rights legislation. Is it therefore too much to say that the supplementaries will amount to $20,000,000? I do not think so. Well, if they do, then we have a program for expenditures in the next twelve months amounting to $396,000,000, while we have an estimated revenue of only $366,000,000.
In face of these facts the Minister of Finance comes to the House and declares that he expects to finance a good deal of the maturing obligations of the country next year out of ordinary revenue. The thing is impossible on the face of it. His estimates may be wrong, and I must say that they have been very vaguely placed on Hansard in the budget speech; this is the first time he has not given us a really concise statement as to the future financial operations of the government. What is next year's financing to be? On November 1 next, we have bonds maturing to the extent of over $29,000,000; these should be met. On November 15 next we have more maturing bonds amounting to about $S,000,000, which should be paid. Then again on December 1, we have further obligations maturing amounting to over $63,000,000 making in all, as the minister says, about $100,000,000. His statement in this House a few days ago of his expectations in regard to government financing this year, if it means anything at all, means that he will be met with a deficit flf from $20,000,000 to $30,000,000 on the program which has been laid before parliament, and will have nothing on hand out of which to pay maturing loans.
Is it not time, as suggested on this side of the House, for some settled policy to be adopted by this government in regard to the national debt of Canada? Some very con-

The Budget-Mr. Guthrie
structive suggestions have been made during this debate. The hon. member for West Calgary (Mr. Bennett) elaborated a plan which will require grave consideration and examination; he has offered a most constructive suggestion to this government, but will they do anything in regard to it? The hon. member for Toronto East Centre (Mr. Matthews) also brought this matter definitely to the attention of the government in a very carefully considered proposal; hon. members in other quarters of the House have made constructive suggestions also, but will the government act upon any of them or will they continue this go-as-you-please sort of financing in which they have indulged for the last five years? Will they continue this happy-go-lucky policy in regard to these maturing obligations, or will they themselves suggest some definite scheme, either by the annual appropriation of a fixed amount, or by some manner of conversion, or by some device of a sinking fund, or by some other definite plan, whereby we may take care of the enormous national debt of Canada as it matures and whereby this debt may not be spread over too many future generations? Why, Sir, if this government had shown the least anxiety; if within the past three years it had displayed a little business sagacity and had prevented that raid upon the treasury which robbed us of anywhere from $50,000,000 to $100,000,000 as disclosed in the customs and excise scandal, we might have had something substantial with which to discharge our obligations. We could probably have taken care of the whole one hundred million dollars maturing this year. These are some of the reasons why we who sit to your left, Sir, are opposed to this budget, but there are other matters, and if I do not weary the House too much I would like to dwell upon some of these.
We object that during its whole career the Liberal government has failed to initiate or suggest any real progressive policy for the development of Canada. For nearly six years this government has simply rested upon its oars; it has closed its ears to the appeals of our citizens east, west and centre, and we stand to-day after six years of rule by this Liberal government so far as the development of Canada is concerned practically where we started. Does the government realize that for four or five years at least appeals have been made year by year and almost month by month by the people of the three maritime provinces, asking for the redress of their grievances and for the righting of the injustices under which they are suffering? Does this government realize that year after year
it has turned a deaf ear to these appeals? Never a hand turned, and never an action of any kind until on the eve of a general election, Sir Andrew Duncan was called upon to make an investigation. Why did not the government act of its own motion in these intervening years? Simply because of its supineness, its lack of initiative, its incapacity to deal with the big problems which confront this Dominion. This lack of initiative has had just as baneful an effect in western Canada as in eastern Canada. Why, Sir, let me refer to a famous speech made by the leader of the government in the constituency of North York in September, 1925, when he acknowledged to the electors that the country was practically stagnating. He said, "I cannot go on any longer in this way; I am not able to deal with the great problems which confront the government of this country." He made that confession to the people of Canada, and said, "This is the time to march forward." The people have given him a new lease of power and have placed him firmly in control of the government of this country, and the people will expect from now on that he and this government will do something substantial towards the development of Canada.
We hear criticism from the west in regard to railway rates. I listened very attentively to a very able speech on that subject delivered last night by the hon. member for Saskatoon (Mr. Young). The situation in western Canada with regard to railway rates is a disgrace to this country, and has been for some time past. Cannot the government suggest a remedy for the existing situation in that regard? Parliament declared in June 1925 that a certain line of action should be taken in regard to railway rates, but nothing has been concluded in the interval. The whole of northern Saskatchewan and northern Alberta are suffering from an unjust discrimination in connection with grain rates. Until yesterday my impression was that this discrimination had been removed a month or two ago, but I learned from the speech of the hon. member for Saskatoon last night that discrimination still exists. What is the government going to do? We have a Board of Railway Commissioners; are they not capable of dealing with this problem? I make no reflection upon the members of the board; they are human and one man can only do the work of one man. The applications which have come 'before the board are applications requiring very grave consideration; they have great ramifications, but if we have not enough railway commissioners to promptly deal with these important questions, let us change the system; either let us have more commissioners
The Budget-Mr. Guthrie

or let us make two boards out of the commissioners we now have. I never could understand why it was necessary to have six commissioners dealing with one case. In the province of Ontario we suffered in the same way in the appellate division of the Supreme court, and there we simply divided the judges into two courts, which removed the difficulty at once. Could this not be done in regard to the railway board? It is a scandal that in this country a great question like that of the freight rates of western Canada should be held up for a year and a half-yes, well on to two years-that it is still under consideration, still under argument, and the people of northern Alberta, northern Saskatchewan and northern Manitoba still overcharged two cents per hundred in respect of their grain shipments. Can the government do nothing with respect to that Situation? We can bring it to their attention, we can force it to their notice, but we as an opposition have no power to move in the matter. I said that the government have little of initiation about them. I am afraid it is too true. I have suggested a solution; will the government even examine my suggestion, or will they be content simply to twirl their thumbs, to pursue their happy-go-lucky course-the course they have pursued up to now-dreaming away their time, neglecting their opportunities, enjoying the sweets and emoluments of office, and allowing the people of the three prairie provinces -at least in the northern sections-to pay two cents a hundred extra on the grain that goes out of that country? This is a sleepy government. I suggest a motto for this government; it occurs to me now. I do not suppose any members of the government will recognize this motto save my hon. friend the Minister of Immigration (Mr. Forke) as it occurs in the Book of Proverbs. The motto of this government should be:
Yet a little sleep, a little slumber, a little folding of the hands to sleep.
If we can, we are going to awaken the government with respect to various questions. One question is the freight rates question. Another question is the development of the new territory in that western country. To most of us it is a revelation to know that we have still a perfect western empire ready for settlement. All we require is railway facilities and people to settle that country. I regret to say that I feel humiliated when I come to the question of settlement in western Canada. I believe the government will feel humiliated also. I do not blame, I cannot blame, the present Minister of Im-

migration for the sad condition that now exists. He is not responsible for it, nor can the staff of the Immigration department be blamed; it is a well-run department, well staffed with capable men. But I blame the government. The whole policy of the government with regard to immigration has been a policy of exclusion. There is nothing we want in Canada so much as people, and the government has done nothing so definitely as excluding people from Canada.
What, Mr. Speaker, is the result of the efforts of this government in regard to immigration in the three prairie provinces? It is a sad commentary on the efforts of this government to settle these great provinces. We know that a census is taken in the three prairie provinces every five years. One was taken in June, of last year. What does it disclose? It discloses that the five year effort of the Liberal government to bring settlers to the province of Manitoba has resulted in an increase of population in the province of 28,938, or a four and a half per cent increase in five years. We know that the natural increase is one per cent per annum. That increase is obtained by reason of the fact that there are more births than deaths. In five years we should have had an increase in population in Manitoba of about 32,000 people, the natural increase without a single immigrant coming into that province. We have an increase shown by the census returns of only 28,938 all told. What has become of our natural increase? What has become of the eighty or ninety thousand people which this government has brought into that country annually? At the opening of this session I said that I thought there was a considerable exodus from western Canada to the United States, but I was checked up by the Minister of Immigration who said such people were only going away to spend the winter in California or the like.


Robert Forke: I said they might be going there.


Hugh Guthrie: I think on hearing these figures my hon. friend will revise that statement. What have the former increases been in Manitoba? In 1906, the population of Manitoba was 365,000. In 1911, it had risen to 461,000, an increase in five years of 94,000 From 1911 to 1916 it rose to 553,000, an increase in the five year period of 92,000. From 1916 to 1921-war years too-it rose to 610,000, an increase of 57,000; and from 1921 down to 1926, the increase was 28,938 souls, some three or four thousand less than the natural increase

The Budget-Mr. Guthrie
should have shown. I am sorry to say that the figures disclose something else. Four of the constituencies in that province have actually lost population. I do not know that I had better name them; anybody who gets this return from the Bureau of Statistics, the preliminary report of the census of Manitoba for 1926, can find these things out for himself. Take the province of Saskatchewan, a great province offering such fine opportunities for settlement. The increase during five years was 63,532, or nine per cent. They evidently retained their natural increase and got four per cent more. But listen to the figures: In 1906, Saskatchewan had 257,000 people; by 1911 the population had jumped to 492,000, an increase in five years of 235.000. From 1911 to 1916, under the Conservative regime, the population jumped to 647,000, an increase of 155,000 in five years. Under the Liberal government during the last five years the population has increased from 757,000 to 821,000, a paltry increase of 63,000 or nine per cent. And some of the constituencies in Saskatchewan have actually been reduced in population since the census of 1921.


Robert Forke: I do not want to interrupt, but my hon. friend will remember that during that period the great question of re-establishing the returned men was dealt with, and those figures were included.


Hugh Guthrie: That ought to make the population greater.


Robert Forke: I thought my hon. friend was counting the returned soldiers as immigrants.


Hugh Guthrie: I am not talking of immigrants, I am talking of the total population. The point I am seeking to make is that the population is not by any means what it should be.
Now, take the province of Alberta. In 1906, that province had a population of 185,000. By 1911 it had jumped by 179,000 and reached 374,000. Then under the Conservative government from 1911 to 1916 it jumped again to 496,000, an increase in five years of 122,000. From 1916 to 1921, even in the war years, it jumped again by 92,000. For the last five years, under the present government, it has gone from 588,000 to 607,000, an increase of only 19,000 in the population in the great province of Alberta in five years. That is an increase of just 3^ per cent, or 1J per cent less than the natural increase in that province. Where, we ask, have the people gone? We hope they have come to eastern Canada or gone to British Columbia. Certainly they are not to be found in the prairie provinces. The statement issued by the government itself through the Dominion Bureau of Statistics is a sad commentary on the efforts of this Liberal government to develop western Canada in the way of bringing in new population.
Before concluding my remarks I desire to touch on only one or two other matters. This House was pleased the other evening to hear a new declaration of policy uttered by the Minister of Railways (Mr. Dunning) on behalf of the government. It was not an utterance made upon the spur of the moment; it was a carefully considered statement in writing said to have been prepared by the Minister of Finance himself and handed to the Minister of Railways for delivery to the House of Commons. We on this side noticed that my hon. friend was somewhat nervous during the delivery of that statement to the House. He seemed to be out of place, to be very nervous. At times he seemed almost to choke over it. Perhaps he found that he had some hard swallowing; but nevertheless he got through it, and now we have reason to know, if we can place any dependence upon the formal pronouncements of this government that we have in power, a government favourable to the policy of protection, favourable to the policy which since 1879 has been the established fiscal policy of the Dominion of Canada, notwithstanding the efforts of this present Liberal administration during the last five years to render that policy useless and innocuous by continually tinkering and tampering with it. We take some satisfaction from the statement that has been delivered by the Minister of Railways upon behalf of the government, upon that subject
There never has been a moment's doubt as to the position of the Conservative party upon the question of protection. We look upon it as one of the corner stones in the foundation of our national structure. We believe that when the policy of protection was established in 1879 by the great Conservative leader of that time, it actually saved this country from bankruptcy, and from that day down to the advent of the present government in 1922 the policy of protection has remained practically intact in this country as the guiding principle of fiscal policy under every government. I have heard many a Liberal speak of the prosperity of Canada under the Laurier-Fielding regime. I have heard many a Liberal speak of the Laurier-Fielding tariff and praise it to the skies. I was one of its supporters. In its day it was a good tariff; and it was the tariff of the Conservative party inaugurated by Sir John A. Macdonald in 1879, and the moment the
The Budget-Mr. Guthrie

present Prime Minister of Canada, the head of this government, undertook to interfere with the principle of protection in the customs tariff his interference was immediately reflected most adversely in the trade and industry of this Dominion.
It is some relief to know that further assaults on the system of protection will not be made in the future. It is some relief to know from the lips of the Minister of Finance and his colleague, the Minister of Railways, that they too believe in the stability of the customs tariff founded upon protective principles. This principle is now and will continue to be an outstanding plank in the policy of the Conservative party. There is no mistaking that statement. We do not advocate the policy of high protection which is attributed to us by ministers in this government. We are not high protectionists; we do not seek "higher and higher and higher protection." Nobody in the Conservative party seeks or desires any such thing-nobody suggests it. We ask for reasonable, adequate protection, protection that will protect, protection that will give fair and equal advantage and opportunity to every class and condition in this country, bearing equally and fairly upon all and harshly upon none.


Mr. MILLAR:: May I ask a question?


Hugh Guthrie: If my hon. friend is asking for information, yes. If it is only a catch question, I prefer not.


John Millar: If the hon. member were
returned to power, would he increase the present tariff?


Hugh Guthrie: I cannot answer that
question without first making a full examination of the whole situation.


Some hon. MEMBERS:: Oh, oh.


Hugh Guthrie: Anything like an examination of a situation or a considered judgment upon an intricate question always raises a laugh on the other side. I am sorry to say that this government is lacking in many respects. In the first place, it lacks in examination and consideration; in the second place, it lacks in initiation, .and in the third place, it lacks courage. During one of the hectic days of last session, one of those occasions when the Minister of Finance thought his government was in danger, although it actually pulled through, he said while shaking his fist at that corner of the House: You know what it means if you defeat this government; it means "protection and higher and higher and higher protection." I know the Minister of Railways deals in

language of that kind, both in the House and on the platform out west, and I know moreover he uses it simply as a bogey to frighten and to threaten the people of those western provinces. He uses it as the nurse did to the children in the old nursery rhyme, Which says:
The goblins will get you if you don't watch out.
I believe enlightenment will come to those provinces in the near future as to the real attitude of the Conservative party, upon the question of protection. I believe the time will come when they will appreciate and endorse our attitude. We are not selfish in regard to the policy of protection. We do not ask for any "brick for brick" tariff. We do not ask for higher and higher protection as attributed to us by our opponents. We ask merely for a reasonable, adequate tariff measure, and if we get it, we believe it will redound to the advantage of every class and of every part of the Dominion.
I can appreciate just as clearly as can the Minister of Railways that with an agricultural community such as we have in the western provinces, who produce mostly grain and cattle, it is difficult, if not impossible, to confer any direct benefit by a customs tariff. I realize that; it needs no demonstration; but I realize just as fully that it is absolutely necessary to the life of industry in eastern Canada that protection be maintained. Under such circumstances is it beyond the realm of statesmanship to equalize conditions in a country such as this? We have to recognize either now or some day in the future that we have a long straggling country, of great length and narrow breadth. We have many different interests and different communities. Our activities in life are greatly diversified, and some day we shall have to meet upon common ground in order that equal benefit and advantage shall be conferred by this Dominion of Canada upon all sections and classes of the people. The proposal of the Right Hon. Arthur Meighen last fall, when he was leader of the Conservative party met the situation better than any other proposal I have heard. He proposed to meet it on the basis of preferential freight rates.
One thing we must realize is the question of transportation costs in Canada. We cannot settle that question upon the basis of a single rate for all parts of Canada. Such a plan will not work out; it will disrupt this country. We have to recognize the special claims of the maritimes, so well pointed out by Sir Andrew Duncan, in respect of railway

The Budget-Mr. Guthrie
rates, and we on this side of the House are prepared to meet that recommendation.
But we shall have to apply the very same reasoning to the people in other sections of Canada. The raising of grain, the raising of those wonderful crops in the three prairie provinces, is a matter of the greatest interest to the people of Canada; it is a matter of interest to our trade and commerce, it is a matter of great national concern and if the present railway rates bear too heavily upon those basic commodities, then it is in the national interest that relief be given. Such in brief was the doctrine enunciated by the Right Hon. Arthur Meighen, and I am sorry to say that the west did not respond to his proposal. We shall have to come to it in the near future. Will the government initiate some policy of that kind? Is it utterly devoid of any power of initiation? Does it not realize that the question of preferential freight rates has to be settled? We in this country must learn to offset geographical conditions in the matter of freight charges. Already in our railway tariff mileage is disregarded, and we shall likewise have to disregard geography. We have done so in many cases already. We have given special rates over our railways to special industries to enable them to market their goods profitably, and so we shall have to do in regard to the grain and cattle growers of the west, and the time to do it is now, not to wait. We invite the government to make suggestions, and to propound a policy in regard to this great question. Grain and cattle being the staple productions of those three prairie provinces, and being vitally essential to the success and prosperity of the Dominion of Canada, can we not afford to give a preferential rate on the transportation of these products in the general interest of Canada. And I say the same with regard to coal, fish lumber and the like, from the maritime provinces. Already we have established a preferential rate in regard to certain products of British Columbia. Salmon has a preferential rate. Apples from the Okanagan come to the city of Montreal almost as cheaply as apples from the city of Toronto, because of the preferential rate they enjoy. Pulp and newsprint have preferential rates. Why not adopt that principle in regard to grain and in regard to live stock in the west, in regard practically to all the basic productions of this country, which by reason of geographical conditions are now too remote for profitable marketing? That brings me to another point.
It is an odd thing to me that from the city of Calgary to the city of Vancouver, which is so near at hand, only 642 miles distant, the farmers should be called upon to pay a



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rate of 21 cents for transporting their grain, while all they are charged if they ship it to Fort William is 26 cents. The distance from Calgary to Fort William is 1,251 miles, and the rate is 26 cents; the distance from Calgary to Vancouver is 642 miles, and the rate is 21 cents. Why cannot that rate be placed upon a fair basis in order to give the farmers who ship from Calgary or Edmonton the advantage which should be theirs by reason of their proximity to Vancouver? Why impose upon them a higher rate than is imposed upon the traffic that goes eastward? For my part, I cannot see any reason in it. That is another matter which this government will have to settle, and it should be settled when the question of preferential rates is being settled in this country. I am satisfied it will have to be done at some time in the near future.
Then look at the coal problem, so dependent upon that very question. The coal problem has been pressed upon this government for the last five years, session after session, time and time again. The Minister of the Interior (Mr. Stewart) who is in charge of the coal matter is not at present in his seat. It Was said of him in this House by my hon. friend from Fort William (Mr. Manion) the other night that no man could be as honest as the Minister of the Interior looked. I say that no minister should be as dilatory as the Minister of the Interior has been for the last five years in regard to this coal problem. Now he seems to take the ground that the matter cannot be settled at all, that it is economically impossible. Why, Mr. Speaker, if our coal supply was cut off to-morrow by the authorities of the United States, we would settle the coal question in Canada in twenty-four hours. But again, this government lacks initiative. Again, it lacks resolution. Again, it lacks courage. It has failed in every development scheme that it has undertaken. The Peace river scheme is as dead now almost as Julius Caesar. The settlement of the railway rate question has not been advanced since 1925. Immigration and settlement in the west has been a complete failure during the last five years. The question of transporting Alberta and Nova Scotia coal .to central Canada is just where it was five years ago, except for the effort of the Honourable Howard Ferguson, Conservative Premier of Ontario. These great questions all await a solution, and yet all my hon. friend, the Minister of Finance, says in his budget speech in regard to them, is: We must have faith. I will refer him to the Second Epistle of James, to look up a text for him-

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[Stage Direction]
self: "But wilt thou know, 0 vain man, that faith without works is dead?" This government protests that it has faith, but it does nothing to justify that faith. It has been deplorably lacking in works. We have had no progressive action in the past and we want action in Canada in all these respects. Your financial program has resulted in nothing. Your efforts to reduce taxation have resulted in increasing it. Your efforts to reduce the cost of living have brought the cost of living to the highest peak to-day that we have reached since 1922. Your theory that tinkering and tampering with the tariff would reduce prices is the purest kind of fallacy. Just apply a test now and see what has been accomplished in regard to prices under your tariff tinkering propensities.
It has been argued in this House that if you reduce the tariff, you decrease the price to the consumer. A greater fallacy was never uttered. Let me premise my remarks with this statement: The government did not touch the customs tariff on furniture, and the price of furniture in the last six years has been reduced from 25 to 30 per cent. How? The reduction in price has been brought about by internal competition among furniture manufacturers. You allowed the furniture men reasonable protection, and competition among themselves has reduced the price from 25 to 30 per cent below the price of six years ago.
This government did not alter the customs tariff on boots and shoes, and the price of boots and shoes to-day is 40 per cent lower than it was six years ago. Internal competition, again, has reduced the price.
You did tamper with the woollen schedule, and with baneful results. The duty was 30 per cent net on woollens when you took power and you reduced it to 27J and subsequently cut off another 10 per cent more on the British preference. What happened to the woollens? There was little or no reduction in price. In some cases there was an increase in the price of woollen goods in Canada over six years ago. You took the duty off fertilizers, I think 10 per cent, and the price of fertilizers has been increased appreciably since. Twenty years ago you experimented and took the duty off binder twine and it has been doubled in price ever since.	*
But the outstanding feature in tariff tinker-ng is your operation in regard to agricultural mplements. That was a major operation on he part of the King government when it took rower in this country. Agricultural implements had a modest protective duty. The duty on binders was 12i per cent, and it was cut down to six per cent by this government. All

kinds of special privileges were granted to manufacturers of agricultural implements in regard to free material. Sales taxes were taken off and the like, and the government proclaimed to the farmers of this country that, a reduction in price would follow. The cut was wiped out and every advantage was given them. What was the result? I am speaking according to the book. Take binders and mowers. First I will give the prices of McCormick, Deering and International binders and then I will give the Massey-Harris prices afterwards. A six-foot binder with carrier in the year 1921, the last year of the Meighen government, sold at S235. In 1927, effective now, the price for the same six-foot binder with carrier is $239.
Mr. YOUNG (Weybum):: Any improvement?


Hugh Guthrie: None, none of a major
character. I have this from a reliable authority; the tariff was taken off and free materials given them. The sales tax of five per cent was taken off, and a binder to-day is just four dollars higher than in 1921. Then take a six-foot binder with carrier and a tongue truck. These are the net cash prices. In December 1921 the price was $252. The price to-day is $254, and the country is out the revenue and the workmen have had to leave Canada. The price of a seven-foot binder with carrier and tongue truck in December 1921 was $258, and the price to-day is $260. The price of an eight-foot binder with carrier and tongue truck in December 1921 was $266, and to-day it is $268.50.
Let us try Massey-Harris prices and see how they agree.


Mr. McLEAN (Melfort):: What point does my hon. friend take when he gives the prices?


Hugh Guthrie: These prices were all
based on Ontario. In the case of Winnipeg it would be the same price but the freight would have to be added.


Malcolm McLean: The retail price?


Hugh Guthrie: I am quoting from the
retail price lists.


Malcolm McLean: At the factory?


Hugh Guthrie: I do not know whether it is at the factory or at the station, but I am giving enough information to let the House know that prices have not been decreased but have been increased. I have not the 1921 prices for the Massey-Harris, but the 1919 prices. The 1919 price of No. 5 seven-foot binder, three-horse, was $233, truck, $9, sheaf-

The Budget-Mr. Guthrie
carrier, $8, total $250. The cash price to-day of a seven-foot three-horse binder is $260, truck $11, sheaf-carrier $9, total price 8280. The difference between the 1919 price and the price to-day is $30, and in the interval the tariff has been reduced and sales tax cut off, and the market thrown open for the free importation of raw materials. The farmers of Canada are paying an increased price for binders to-day and the treasury has lost all the revenue. Now I go a step further.


Alexander MacGillivray Young: Would my hon. friend be good enough to give the House the cost of binders and mowers and that class of goods immediately prior to the last reduction of taxation?


Hugh Guthrie: Tell me the year you
want.


Alexander MacGillivray Young: Immediately
prior to the last reduction of taxation.


Hugh Guthrie: Tell me the year you want and I will give you the price.


Alexander MacGillivray Young: I want the
years 1923 and 1924.


Hugh Guthrie: I have the years 1923 and 1924, but not in my hand. I will get them.


Alexander MacGillivray Young: Will you be
good enough to let us have them?


Hugh Guthrie: What has been the effect of that reduction in duty upon the trade of Canada, the industry of Canada, and the employment in Canada? Why some of us were shocked in the years 1918 and 1919 to know that the importation of agricultural implements into this country was between three and a half and four million dollars. We believed then, and believe now, that practically all of these goods could have been made just as well by Canadian workmen in .Canadian factories, but when the customs tariff on agricultural implements was reduced by the King government when it came into power our friends in the republic to the south of us were not slow to take advantage of the situation. The trade figures received yesterday from the Minister of Trade and Commerce (Mr. Malcolm) are very illuminating on that point. They show the importation of agricultural implements for the years ending January 31st, 1925, 1926 and 1927. In the year 1925, which would be the first full year under the operation of the cut in the tariff, the imports of agricultural implements rose to $6,367,877. In 1926 that figure had risen to $11,632,231, and during the last twelve months it has risen to $17,731,516, almost all
of which goods could have been made in this country, and a large percentage of which are now being made at Buffalo and Chicago by Canadian workmen who formerly had employment in Canada. That is a serious matter for the industry of this Dominion. It is a serious loss in implements and wages, and it is a serious loss to the treasury of Canada. We have lost the revenue which would have been received under the higher rate of duty and from sales tax but that perhaps is the least of our losses. All of this time our farmers have been dreaming away in a sort of charmed slumber, imagining they were getting cheaper implements. They have been deceived by the idea throughout eastern Canada and western Canada that the reduction in the tariff on agricultural implements was actually giving them cheaper implements. They will awaken from that slumber some day, and realize the real situation. The day will come when this protection bogey cannot be paraded by the Minister of Railways in the west against the Conservative party. I hope that when the hon. minister goes west next time he will tell the people the actual situation, and I hope he will tell the people of the western provinces that the Conservative party is not a high protectionist party.


Mr. DUNNING:: I certainly will not.


Hugh Guthrie: Well, then, if I am for the time being the leader of this party, I state it on my responsibility as leader that high protection is not the policy of the Conservative party of Canada. Although I have no doubt the Minister of Railways (Mr. Dunning) will stick to his statement that he will not so admit. However, that is only one of the planks of our platform.
I read the other day, or someone told me, that about seventy or eighty years ago Benjamin Disraeli, at that time leader of the Tory party in England-I use the word "Tory" out of deference to the Minister of Railways, and because we are proud of the name-had but one motto, namely, that the Tory party would always resist revolution and assist progress- one of those neat, epigrammatic statements for which the late Benjamin Disraeli was famous. And, Mr. Speaker, the Tory party in Canada is a party that will always resist revolution. We stand, Sir, for the maintenance of law and order in every corner of the Dominion; and we stand also to assist any progressive movement even though a Liberal government may initiate it. Anything which contributes to the progress and development of eastern or western or central Canada will have our full support. I do not mean, of course,
The Budget-Mr. Guthrie

that we are prepared to support everything without examination or consideration, as my hon. friends over there would seek to have us do. We will examine and investigate, but every meritorious proposal for the development or the advancement of the country, whether in the west, in the east or in the' central part of the country, will have our support. That is a leading principle of this party.
This party has a record for progressive legislation second to none. It is a party whose record goes back to confederation year and beyond it; a party which was the first to establish and maintain the fiscal policy of this country upon a sound basis, under which policy Canada has made great measure of progress; a party Which first started settlement and development in the west; a party which aided the construction of the first transportation line, in spite of opposition from every quarter of the Liberal ranks; a party which in the dark days of railroading in Canada had in the Right Hon. Arthur Meighen a leader bold enough, courageous enough, confident enough to grapple with that mighty problem which was bequeathed as a legacy from a former Liberal administration-a man who took hold of scattered lines of railway in Canada which were on the point of bankruptcy, some of Which indeed were actually bankrupt, and who so arranged matters that we have to-day evolved a great national transcontinental railway system under the ownership of the people of Canada. These are steps in the record of the Conservative party so far as the progress and development of the country are concerned. And we propose to go ahead. We propose to insist that this government shall do likewise and that there shall be no lagging behind in the next few years during which the government may be in office. The last five or six years, so far as any real progress has been concerned, have been nothing short of a disgrace to any government. Hon. gentlemen opposite have done nothing; they have got nowhere. The country to all intents and purposes is just where it was six years ago. We intend to see to it that in the future there shall be no more standing idle, but that the march forward, heralded by the Prime Minister (Mr! Mackenzie King) at Richmond Hill in 1925, shall now begin. The command to march is going to be given and the trumpets are going to sound, and we shall insist on going forward. And if the government goes forward on reasonable, logical and progressive grounds it will have our assistance at every step.


James Alexander Robb: The budget delivered on February 17 was so well received in this House and throughout the country, by the press friendly to the government as well as by the opposing press, that I had made up my mind not to offer any further observations upon the motion and the amendment thereto, and this not out of any disrespect to my hon. friend from Macleod (Mr. Coote) who presented the amendment, but simply because I felt that hon. members were anxious to get on with the business of the House and also because I knew that every Monday and Wednesday occupied in debating the budget were so many days lost to private members who had certain resolutions which they desired to have discussed. Not until yesterday did I come to the conclusion that I should add a word or two to what I have already said on the motion now before the House; and I wish to assure hon. gentlemen who are anxious to speak before the debate close's that I shall take up but a very few moments of their time.
The official leader of the opposition (Mr. Guthrie) has this afternoon maintained his reputation for eloquence as well as for adroitly skating round the question. I have been associated in public life with my hon. friend for many years. Listening to him this afternoon, I could recall one day down in the old museum where he and I conspired to make some trouble for the then government, and he was, if anything, more eloquent then than he was to-day. The hon. gentleman has said that the debate has been worth while inasmuch as it has brought out some new ideas. With that I agree. Indeed, early in his speech, I had made some notes of points on which I felt inclined to agree with him; I was prepared to agree with him on most of the questions he was discussing, apart from the balance sheet. But as he proceeded to his peroration it occurred to me that my hon. friend should this afternoon be clothed in sackcloth and ashes and should be weeping for his own attacks on that great Conservative party which he has been so loudly praising; because in former days we had no more violent champion in the Liberal ranks than my good friend the official leader of the opposition. I remember how sound he was in 1911 when we appealed to the country on the question of larger and wider markets for western Canada.
I shall not enter into any lengthy discussion of the remarks of the hon. member for Vancouver Centre (Mr. Stevens) and the leader of the opposition regarding the balance

The Budget-Mr. Robb
sheet. The budget as presented to the House calls for no defence. In 1924, as I remember, I was subject to attacks of the same nature as those that have been made in this debate, and they did not come from that side of the House either, but from gentlemen on this side who, the following year or two years afterwards, admitted that I had been right. I fancy that when the public accounts come down a year from now my hon. friend from Vancouver Centre and the leader of the opposition will have to admit that on this occasion too I have been in the right. After listening to the speech of my hon. friend from Vancouver Centre I sent word to the department inquiring how it was that Mr. Stevens had arrived at the figures he had presented to the House. The reply came back, "The member for Vancouver Centre has made the mistake of adding together your estimated surpluses with an actual reduction." That would be all right to an ordinary layman like myself, but not to a well posted chartered accountant, so I will have to ask my hon. friend to come down and talk it over with the Auditor General.


Henry Herbert Stevens: Of course that is not
what he did.


James Alexander Robb: Both my hon. friends have
also, I believe quite sincerely, overlooked in their calculations the fact that in 1922 we had $144,000,000 of temporary loans which since then have either been paid off or entered in the funded debt.
With the observations of the last speaker in regard to the reduction of expenditure in carrying on the affairs of the country I am quite prepared to agree. The Minister of Finance is never in favour of additional expenditures, but my hon. friend has had experience as a member of a government, and indeed showed this afternoon that in one particular department with which he was once associated, he was not very much in favour of economy. That is the experience of the Minister of Finance; every day for weeks before the presentation of the budget deputations from all parts of Canada come to see him; they come from as far east as Halifax and Prince Edward Island and from as far west as Vancouver. These deputations are about evenly divided between those who desire increased expenditure and those who want economy or a reduction in taxation, and in that way it is rather hard to balance your budget. My hon. friend the leader of the opposition in criticizing our expenditure was very careful not to say what particular expenditure he would reduce. I submit it to the judgment of every hon. member of this House who took part in the 'last campaign, that while my hon. friends were always in favour of economy they wanted that economy practised in the other fellow's country. Will any person say that the official leader of the great Conservative party in the last campaign was opposed to the construction of the Hudson Bay railway, or that his party opposed the continued deepening of the Welland canal? Those are the two large expenditures which enter into our increase in the estimates as presented.
Before I proceed, Mr. Speaker, if I may be allowed a personal word I would like to thank all hon. members of this House, my hon. friends opposite and hon. gentlemen in the far corner as well as those who sit behind me, for the altogether too kind words used towards myself. I desire particularly to thank my friend who immediately preceded me, speaking as official critic of the opposition.
My friend the former Minister of Finance (Mr. Bennett) tried to represent to the country that our reductions in taxation were pure myths, that they only existed in the imagination of the Minister of Finance, and he submitted a well thought out and carefully prepared statement of percentages to show that the taxes were actually greater than they had been prior to the reductions; he built up a story to show that these reductions, so stated, were but will-o'-the-wisps, to lead the people along. But, Mr. Speaker, the reductions presented to this House in the budget for the year 1926, when a long list of reductions in the income tax was introduced, were not myths to those who had to pay. The man who was called upon to pay $100 in 1925 but who discovered the day after the budget was presented that he only had to pay $30 did not consider it a myth; he had enough money left to buy an additional suit of clothes for himself or for some member of his family. The man with a revenue of $3,000, who formerly had to pay $40 but who in 1926 did not have to pay one cent, did not consider these reductions a myth. The reductions in taxation presented last year gave a wide measure of relief to a large section of Canada. Hon. gentlemen have complained that in some cases the income tax was increased, and I admit frankly to-day as I did last year that in preparing these revisions in the income tax the policy was to make it easier for people with earned incomes rather than for those with unearned
The Budget-Mr. Robb

incomes, and I admit that the latter class have to pay a little more. I will deal with that in a moment, however.
My hon. friend said that the reductions in the sales tax did not amount to anything, and he submitted a list of percentages to show that there was an increase this year as compared with last year. No person knows better than does the ex-Minister of Finance that the reductions in the sales tax were very real. As a matter of fact the reductions in that tax this year are not the only reductions which have been made by this government since it assumed office. In 1924 we made sweeping reductions in the sales tax, exempting altogether most of the agricultural machinery and the implements required for the other basic industries of mining, lumbering and fisheries. At that time hon. gentlemen opposite opposed those reductions, which in that year amounted to $24,725,000, in round figures. In 1925 we made further reductions in the sales tax amount ing to $400,000 and in 1926 we again reduced that tax either by exempting certain articles altogether or by reductions which brought about a loss of $300,000, while this year it is estimated that the reduction will amount to about $16,000,000. Altogether since this government has been entrusted with the responsibilities of office we have made reductions in the sales tax totalling over $41,000,000.
My friend the leader of the opposition (Mr. Guthrie) said, "Yes, it is very true that you have made certain reductions in the sales tax but you increased the sales tax," and he quotes certain figures to show that that sales tax at a certain period of 1922 was 2J per cent, and that we had increased it to 6 per cent. What are the facts? In 1923 that tax was increased by Mr. Fielding to a maximum of 6 per cent. The average under the old tax enacted by my friends the Conservatives when Sir Henry Drayton was Minister of Finance was 2J per cent. But that tax was capable of pyramiding; in many cases, notably boots and shoes, it was pyramided until the actual tax was 8i per cent. Boots and shoes were taxed from the hide right through the leather and from the wholesaler to the retailer, and instead of that tax amounting to 2 per cent, as is the case this year, it was 8i per cent under the administration of my friends opposite.
The same statement would apply to clothing; the leader of the opposition found some fault with me because I did not altogether wipe out the sales tax on clothing. That is not original with my hon. friend; we had delegations coming to the office representing different industries, among them gentlemen who said they represented the clothing indus-

try, but at the same time we had letters warning us to be careful of these representatives, who were urging that we altogether remove the sales tax from clothing. Now I had an experience of that in 1924, when I reduced the sales tax on boots and shoes from six per cent to three per cent. And what was that experience? There are widely scattered throughout this country, for instance, many clothing merdhants with small capital. At the present they buy a stock; they pay the sales tax. But the next day the Minister of Finance presents his budget, and he wipes out the five per cent sales tax. Well, when that is done it takes away five per cent of that merchant's capital. That is a hardship upon him, and I say frankly to my hon. friends opposite -as I said to this delegation, and they agreed with me-that the proper method of reducing this sales tax-and I agree with my hon. friends that as fast as possible the sales tax should be taken off-is to take it off gradually so that it will do no harm to anyone.
I said a moment ago that I was not going to follow my hon. friend in his attack on the balance sheet as presented, but one conclusive proof that this government has reduced the funded public debt of this country and reduced also the charges which the people are compelled to pay for carrying that funded debt, is the fact that the interest charges upon that funded debt have been considerably reduced. If a man with a mortgage on his farm pays $100 in interest this year and only has to pay $80 next year, he knows that the mortgage has been reduced to that extent.


Mr. BENNETT:: Or the interest rate.


James Alexander Robb: But the reduction in the interest does not account for all the reductions that I would show here. In 1921-22 the total interest charges amounted to over $135,000,000. In 1922-23 the interest charges amounted to $137,000,000. My hon. friend made a reference to the public accounts. Well hon. gentlemen opposite can refer to the volume for themselves and on page 46 they will find additions that were made to the public debt during their administration. What was the total interest on the public funded debt last year? It amounted to $124,000,000, as compared with $137,000,000 in 1922-23. That, Sir, is the answer I give to my hon. friend.
Now let me deal briefly with the amendment of my hon. friend from Macleod (Mr. Coote). I can quite understand the necessity of keeping a party together by proposing an amendment that they can all get together on and vote for, but I think my hon. friend will find himself in rather an embarrassing position

The Budget-Mr. Robb
when he goes back to his electors, because I wonder if he will not find on the platform opposed to him-none of us are elected by acclamation; I have never had that experience and I imagine my hon. friend will be no better off-some person who will get up on the platform and quote Hansard to show where this hon. gentleman asked me to do some of the very things that I am doing today, that is, making reductions in the taxation. Now my hon. friend in his attempt to defeat the government-because the motion if carried can have no other effect-will be accused of putting into power a gentleman who this afternoon made a speech indicating that if he and his friends got into office the tariff on some articles in this country will be so high-as said by one of their supporters in my hearing in the last election-that the sun could not shine over it on St. James street, Montreal, until half past eleven in the morning.


Richard Bedford Bennett: I am sure the minister will agree that is not what the leader of the opposition said this aftemoi


James Alexander Robb: I admit that my hon. friend the official leader of the oppi sition, speaking this afternoon, made, with his customary ability, a speech that could be r ad both ways. I thought at first that he was go ng to enunciate a new policy and that we w 're not going to be so very far away on quest, ons of tariff policy. I thought that when ne was advocating a policy for the great west he was recanting somewhat his own attitude in 1924 when we brought in a tariff policy we thought was of great advantage to the west.


Richard Bedford Bennett: Let the hon. gentleman
speak for the Liberal party, not for the Conservative party.


James Alexander Robb: I discovered that my hon.
friend had not introduced any new tariff policy, but simply the old tariff policy of 1908 -adequate protection with a new turn to it, so that hon. gentlemen opposite could use it in any part of the country.
Now I come to the observations of the hon. member for Macleod regarding the income tax, and I am going to remind my hon. friends again of the reductions that were made last year as applied to the earned, income, the reductions that wiped out the income tax altogether as regards many people throughout this country. My hon. friend was in the House and he will recall that I was attacked, as I have been in some degree this year, for having increased the taxes on many; and it is true we did. But my hon. friend
argues that the income tax in all oases is a direct tax. I admit that to a considerable degree the income tax is a direct tax, that impression prevails throughout the country; but when you look carefully into the figures, as I have had the opportunity of doing, and look carefully into the sources from which we get this taxation, it will be discovered that it is not altogether direct tax. When I say that I want hon. gentlemen to keep in mind that what I am going to say now applies to all the provinces of Canada. In the year I am quoting we received something over $55,000,000 of income tax. Hon. gentlemen may be surprised to know that of that $55,000,000 over $31,000,000 was paid in by 5,738 corporations. Now you may argue as you like, but the corporations will pass that tax back to the consumers somewhere. In Prince Edward Island there were 42. of these corporations, in Nova Scotia, 220, in New Brunswick, 220, in Quebec, 1,159, in Ontario, 2,397, in Manitoba, 481, in Saskatchewan, 226, in Alberta, 282, in British Columbia, 702, and in Yukon, 5. These corporations contributed in the aggregate oveT $31,000,000 of the $55,000,000 collected.


Mr. MATTHEWS:: Will the minister
permit a question?


James Alexander Robb: Yes.


Robert Charles Matthews: I presume the tax of
which he is speaking, namely, the income tax upon corporations, is a tax imposed on profits that have been earned and declared.


James Alexander Robb: Yes.


Robert Charles Matthews: Will the minister
kindly explain how such a corporation, paying that tax after its profits have been made and declared, passes that tax on to the consumer?


James Alexander Robb: Every corporation, like every business man, plays safe, and takes profits enough to provide for insurance, wear and tear, and the general conduct of the business. That is my answer.


Robert Charles Matthews: Is not that answer
based on theory and not on practice?


James Alexander Robb: I am not disposed to enter
into an argument with my hon. friend. I have simply stated the fact that out of the $55,000,000 of income tax collected more than half of it was paid by corporations and not by individuals.


Robert Charles Matthews: Should not the minister be careful not to make the statement that a corporation necessarily passes that tax on to the consumer without knowing the facts?
The Budget-Mr. Robb


James Alexander Robb: If my hon. friend thinks that the corporations are philanthropists he entertains a different view from what I do.
Now, my hon. friend the official leader of the opposition did give some reasons this afternoon for the opposition which he and his party presented to the budget brought down in 1924 when we made such sweeping reductions, particularly on agricultural implements and on the implements and tools required by the farmer, the lumberman, and oie miner. He told us this afternoon that there were many members on that side who were now astonished at the size of the west. We on this side were not astonished at the size of the west. We knew of the size of the west, and it was because we believed that a really national policy for Canada was one that would appeal to western Canada, that in 1924 we braved the opposition of hon. gentlemen opposite and reduced the duties to such an extent on agricultural implements. This afternoon my hon. friend argued first that there should be greater immigration into this country. Then he proceeded to tell us of the great harm we had done to the producers on the land because we reduced the duties on agricultural implements. The inference was that if he was returned to power, he would increase the duties and so he would induce people to come to Canada by charging them more for the agricultural implements which they required to purchase.


Richard Bedford Bennett: Surely the minister will
agree that the leader of the opposition pointed out that before this government reduced the duties, the prices of agricultural implements were lowered.


James Alexander Robb: I know the hon. gentleman
argued that by our reducing the tariff the price of implements was increased. The only conclusion possible is that if you want cheaper implements, you must put the tariff up higher.


Mr. ROWE:: As a purchaser of farm implements I would ask the minister if he can name one implement of the farm to-day that can be purchased cheaper because of the minister's reduction in the duty on farm implements?


James Alexander Robb: That proves that my hon.
friend was voicing the sentiment of his subordinates in that they desire a higher tariff in order to get cheaper implements.


Mr. CLARK:: A tariff that will protect.


James Alexander Robb: My hon. friend said that we
took good care not to reduce the duty on boots and shoes-


Mr. LADNER:: Mr. Speaker,-
	i ,	; J


Some hon. MEMBERS:: Sit down.


Some hon. MEMBERS:: Order.


Leon Johnson Ladner: An hon. gentleman who is held in such high esteem in this House as the Minister of Finance is expected to answer questions so as to enable members to understand the situation. Is it not a fact that the real argument of the leader of the opposition was that the tariff was not the determining factor in the fixing of prices, but that prices were fixed by other factors? Is the minister fair in stating the matter in the way he did?


James Alexander Robb: Why then should my hon.
friend have devoted, as he did, twenty minutes of his speech to attacking this government for having reduced tariffs? The official speaker for the opposition said that we took good care not to reduce the duty on boots and shoes. Was that intended as a preparation for the next campaign, or was it an attack on his former leader and on all speeches made on that side of the House during the past two years? Because we have been accused in this House by hon. members opposite of having ruined the boot and shoe industry of Canada. I can recall when we spent long days and nights here listening to speeches of hon. gentlemen opposite who accused us of having reduced the duty on boots and shoes and of having thereby ruined the boot and shoe industry of this country.
I must keep my promise not to detain the House at any great length.


Henry Herbert Stevens: Will the minister, before
he concludes, be good enough to allow me. a question?


James Alexander Robb: Yes.


Henry Herbert Stevens: Will the minister kindly
explain his announcements: first, of April. 1924, of $20,000,000; second, of March, 1925, of $35,000,000; third, of April 15, 1926, of $22,000,000, and fourth, of February 7, 1927, of $31,000,000, a total of about $110,000,000, in each case announced as a reduction in the public debt? Will he be good enough to explain how he harmonizes those officially announced reductions in the public debt with this fact that the funded debt in 1926, as officially reported in the public accounts, was $2,471,000,000 and, in 1922, was $2,420,000,000, in other words $51,000,000 higher in 1926 than in 1922, from which must be taken the reduction of $35,000,000 that was not shown in these figures, there being left a net increase in the funded debt of $16,000,000?


James Alexander Robb: My hon. friend has very
skilfully put into Hansard alongside of my speech a part of his own speech. That is my

Private Bills-Expiry of Hour
hon. friend's own statement. I answered my hon. friend when I rose by saying that in the department they had said that Mr. Stevens had made the error of adding estimated surpluses to actual reductions, and I leave him to settle that with them.


Henry Herbert Stevens: Mr. Speaker-


Some hon. MEMBERS:: Order.


Henry Herbert Stevens: I rise to a question of
privilege, and I will state the question of privilege well within the rules. My hon. friend, for whom I have a high regard and who usually is absolutely fair, has stated that in my speech I have wrongfully added certain figures, and he has also intimated that I have wrongfully presented them to the House now. The question of privilege is this, that I have quoted precisely from the Finance Minister's previous budget speeches officially given in this House and not from any other records. I have not wrongfully added those figures. I have quoted them precisely as he gave them to the House.


James Alexander Robb: My hon. friend will adm't
that I did not say that he had wrongfully done so. I said the department claimed that he had made the mistake of adding the surpluses to the actual reductions.


Henry Herbert Stevens: I state again that I did
nothing of the kind.


James Alexander Robb: I leave it to my hon. friend
and the Auditor General, who audits the public accounts, to straighten this out. This is not the first attack I have had as to balances. I had the same attack in 1921 from an hon. gentleman on this side. I am accustomed to that and my hon. friend will probably next year make the same admission as my other hon. friend made, namely that he had been in error in his calculations.


Henry Herbert Stevens: That is not a fair representation.


James Alexander Robb: Maybe not, but I am concluding. The issue before us now, if I understand it aright, is that my hon. friends opposite will be able to vote for this amendment along with my hon. friends in yonder corner, because my hon. friends in that corner say that we have not gone far enough in tariff reductions. Surely they have short memories. Surely this ministry has been attacked often enough and loud enough for them to know where we stand on the tariff. We are recognized throughout Canada, and we are proud of it, as the low tariff party. We ran the risk of taking our political lives in our hand3 in 1925 to go to the country and appeal on
our policy-a real national policy that would appeal to all the provinces of Canada, not merely to any one particular section, and knowing, Mr. Speaker, that we are right and sound in our policy, and knowing that the people back in the concessions are with us, we await this vote without any fear.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
On the order being called:
Further consideration of the motion of Mr. Clievrier for the second reading of Bill No. 78, an act respecting the Montreal, Ottawa and Georgian Bay Canal Company.
Mr. C. H. CAHAN (St. Lawrence-St. George):: I wish to raise a point of order.
I have no objection, so far as I know, to bill 78 or its discussion in this House, but I wish to call Your Honour's attention to the fact that the votes and proceedings in this House on Friday the 25th contain the following:
Mr. Chevrier moved,-That the bill No. 78, an Act respecting the Montreal, Ottawa and Georgian Bay Canal company, be now read the second time.
And a debate arising thereon;
The hour devoted to private bills having expired; ; [DOT]
The House resumed the Debate on the proposed motion of Mr. Robb: That Mr. Speaker do now leave the chair for the House to resolve itself again into committee of ways and means, and the proposed motion of Mr. Coote in amendment thereto.
, I desire to point out to Your Honour that the debate was not adjourned. No motion for adjournment was put to the House by the Speaker. I further call Your Honour's attention to rule No. 25, which reads:
Fridays.
(From eight o'clock p.m.)
Private bills for the first hour.
, Then I refer to rule No. 33, which reads:
Motions not disposed of.
If at the hour of six o'clock, p.m., on a Wednesday, or at the time of the adjournment of the House, a motion on the notice paper be under consideration, that question shall stand first on the order paper of the following day, next after orders to which a special precedence has been assigned by rule or order of the House.
That rule applies solely to motions not disposed of at six o'clock p.m. on a Wednesday. With respect to a motion not disposed of at
Private Bills-Expiry of Hour

nine o'clock, on Tuesdays and Fridays, dealing with a private bill, there is no rule of the House to the same effect, namely, that if it is not disposed of it shall have preference on the order paper of a following day, and I submit to Your Honour that in order that it may continue to have precedence a special rule is necessary. Paragraph 322, discussing rule No. 33, provides:
It is more favorable to the progress of a motion on the order paper that the debate should not be adjourned on Wednesday at six o'clock, because the motion shall then stand on the order paper for the next day as stated in this rule; if debate is adjourned, the motion goes to the foot of the orders.
That is on Wednesday, but a further note under rule No. 33, paragraph 323, in the last Sentence, says:
On other days,-
That is other than Wednesday.
-if debate is not adjourned, the question is 'uperseded.
The debate not having been adjourned on a Tuesday at nine o'clock, the question is whether the order that this particular bill, No. 78, should be moved' a second time and go to the standing committee, was superseded, and the bill improperly placed by an official of the House on the order paper in the position in which it now stands; the official not being authorized to place it on the order paper in that position except by resolution of or by consent of the whole House. I am aware, Mr. Speaker, that there are precedents where a private bill has been discussed on the second reading up to nine o'clock, and resumed on a following evening at eight o'clock, but I have looked through these precedents one after the other and in no case was the objection ever raised. I submit that when the objection is raised the ruling must be in accordance with what I suggest is the proper 'nterpretation of the rule.
{ disclaim any desire to interfere with this Bill. I have my own opinion as to the procedure sometimes taken to talk out bills until nine o'clock, but if the preference with reference to this bill is to be continued on Tuesdays and Fridays for one hour, as now seems likely, it precludes the orderly progress of the business of the House and prevents other private bills from going before the proper committees where they can be disposed of in due course. It is with a view simply and solely of facilitating the business of the House and the business 'before the committee on private bills that I raise this objection.

Mr. E. R. E, CHEVRIER (Ottawa): I quite appreciate the position in which the hon. member finds himself. During the afternoon the hon. member asked me if I would consent to this bill standing over. I pointed out that it would have been with the greatest pleasure-


Charles Hazlitt Cahan: Only for fifteen minutes or
half an hour.


Mr. CHEVRIER:: -that I would have met his desire, but the situation in which I find myself now is not of my making. When I introduced this bill last Friday I was particular, Sir, in pointing out to the House the advisability of allowing it to go to the committee to which it should have gone, namely, the committee on railways and canals. For some reason best known to the hon. member for Argenteuil (Sir George Perley) the discussion was protracted past nine o'clock. At this moment I cannot say whether it is the desire of those who oppose the bill to make use of the usual tactics, reprehensible as I believe them to be, of talking the subject out. I have never had any use for such a practice. Possibly it is well within the rules of the House and it may be in accordance with British practice; but I do not think, Sir, that it is in keeping with British fair play. Since Friday evening last I have been interviewed by a number of gentlemen who practise at the Ottawa bar and who have represented that a large number of bills were being tied up. But I cannot recede from the position in which I find myself, through no wish on my own part. If the hon. gentlemen who desire to talk the bill out intend to continue doing so, those who come after us must suffer.
It is for you, Sir, to decide the point of order. But the practice of the House as I have always understood it is that when a bill of this kind has been discussed until the hour of nine, then automatically, without any motion to adjourn the debate or otherwise dispose of the subject, the debate stands adjourned until the next hour for the consideration of private bills. So well understood is this practice that the hon. gentleman most interested in talking the bill out, the member for Argenteuil, who evidently is anxious to have the discussion postponed, failed to make the motion himself. And no one in this House will tax the hon. member for Argenteuil with a lack of knowledge of the rules. The hon.

Private Bills-Expiry oj Hour
member has mentioned two rules. First he has referred to rule 25, which provides:
The ordinary daily routine of business in the House shall be as follows:-
Presenting reports by standing and special committess.
Motions.
Introduction of bills.
First reading of Senate bills.
That rule may apply to what the hon. member has said, but I would refer the House to rule 33. If my hon. friend (Mr. Cahan) will read that rule I think that with his long training at the bar he will admit that he was skating on thin ice. The rule reads:
If at the hour of six o'clock, p.m. on a Wednesday, or at the time of the adjournment of the House-
The day in this case was not one of those contemplated in this rule, and nothing that the hon. gentleman has said is relevant. It was not six o'clock, nor was it a Wednesday. -a motion on the notice paper be under consideration-*
This was not a motion in the ordinary sense of the word; the bill in question simply came up for second reading in the ordinary course of procedure. No one can possibly construe the motion for the second reading of this bill as a motion in the ordinary sense, such as is to be found on the order paper. In the event of such a motion being made, the rule provides that the debate shall be superseded.
I submit that the point of order is not well taken. I understand that there are a numbet of hon. gentlemen who have bills that are to come up subsequently to this; there are probably between thirty and forty such bills. If the disposition of this particular bill is to be retarded in the manner threatened I am sorry for other hon. gentlemen. I submit, Mr. Speaker, that in this particular instance it was not necessary that a motion to adjourn the debate should have been made. Following the practice which has always prevailed in this House, I contend that the discussion of Friday night was automatically continued over today. If not, why should the hon. gentleman complain? I submit, Sir, that Bill 78 should be again considered.


Hewitt Bostock: On Friday evening at
nine o'clock the hon. member for Argenteuil (Sir George Perley) was discussing the bill respecting the Montreal, Ottawa and Georgian Bay Canal Company, and the hour for the consideration of private bills expiring then, he resumed his seat without making a motion to adjourn the debate. Nothing in the rules of the House, nor in the precedents, usages and customs of parliament, required him to
make such a motion. My attention on that evening was directed to the fact that the hon. member had made no motion to adjourn the debate. I thereupon consulted Bourinot and the precedents cited by him at the foot of page 227 of the fourth edition. I discovered to my great surprise that many years ago, possibly twenty-five years since, I piloted a bill through the House when the same situation arose. That bill related to the Hull Electric Railway, and on the hour for the discussion of private bills expiring, it automatically went over to the next day allotted to such bills, no motion having been necessary for the adjournment of the debate in that case. The circumstance is cited by Bourinot at the page I have mentioned. Bourinot says:
If a private bill is under consideration on Tuesday and Fridays, after eight o'clock and the debate is not concluded thereon at nine, a member may call the attention of the Speaker to the fact that the hour allotted to such subjects under the rules has expired, and the question will thereupon go over until another day, when it will be taken up at the same stage where its progress was interrupted.
The cases cited under that dictum of Bourinot are to be found in Canadian Commons Journals, 1896, second session, 105, 112, Hull Electric Railway, and also in the year 1899, 106, 118 and 119, Ontario and Rainy River Railway. The same point presented itself in the year 1898.
Of course, I perceive the anomaly of the situation, and I cannot help wishing that there were a positive rule governing such cases. Every hon. member will readily understand that one contentious bill arising in this way might obstruct the passage of a whole series of others following it, and that is what is happening in this instance. The only thing I see to be done, as has been done to my knowledge before, is for the House to favour an agreement between the contending factions in order to let the business of the House proceed regularly, or take upon itself to let unopposed bills pass first. When there is a conflict of opinion as between the various parliamentary authorities, the Speaker may seek the judgment of the House. In the present instance there is on one side Bourinot and the precedents cited by the hon. member for St. Lawrence-St. George (Mr. Cahan) when the question was not raised in the House but was decided by the Clerk. Then, as against Bourinot, there is the present Clerk of the House of Commons, who, in paragraph 323 under rule 33, says:
This rule seems to apply to Wednesday only, the words "or at the time of the adjournment of the House" referring to that day, according
Private Bills-Expiry of Hour

to the interpretation given by Bonrinot, third edition, pages 336-337. Its purpose is to keep the motion on the order paper though on Wednesday the House may rise without debate being adjourned because at six o'clock on that day the Speaker adjourns the House without question put. On other days, if debate is not adjourned the question is superseded.
That is to say, according to Beauchesne, the question under discussion loses its place and goes to the bottom of the list. In the present case I think I am only doing justice to all parties in asking an expression of opinion from the House as to whether or not, in view of the conflicting circumstances, the bill should not head the bills which are opposed. In view of the opposition raised, this bill will block the whole list of private bills. If the House thinks it proper the unopposed bills might be called first. Is it the pleasure of the House that Bill No. 78 should give way to unopposed bills and should take precedence over all other opposed bills? I will judge the consensus of opinion of the House by the yeas and nays.


Hon. LUCIEN CANNON (Solicitor General) :: Before the question is put, Mr. Speaker, I would like to understand it as it is placed before the House. How are we to know which bills are unopposed? We do not know in advance.


Hewitt Bostock: From my experience, generally the bills are called and those who have some opposition to voice do so.


Lucien Cannon: When should that opposition be voiced? Supposing we should decide to give way to other bills, and find the first bill called to be an opposed bill?


Hewitt Bostock: In the present instance
I do not propose to put this bill at the bottom of the list. I suggest that the House first deal with the unopposed bills, of which I believe there are a great many. Otherwise the situation will be as has been very clearly pointed out by the senior member for Ottawa (Mr. Chevrier); the whole hour will be taken up in the discussion of this present bill, and the same will apply on Friday. Under the circumstances I believe that the House should express its opinion and thus declare if this bill shall have precedence. Is it the pleasure of the House that Bill No. 78 should give way to unopposed bills?
Upon the yeas and nays being taken:


Hewitt Bostock: In my judgment the
nays have it and the present bill must keep its precedence.

MONTREAL, OTTAWA AND GEORGL\N BAY CANAL COMPANY
The House resumed from Friday, February 25, consideration of the motion of Mr. Chevrier for the seicond reading of Bill No. 78, respecting the Montreal, Ottawa and Georgian Bay Canal Company.


George Halsey Perley: May I say in opening that the hon. member for Ottawa (Mr. Chevrier) is an old friend of mine, and I am rather surprised to have him accuse me of not playing fair. I do not suppose he really meant it in the strict sense of the word, but it seems to me that those promoting the bills which follow this might accuse even my hon. friend of a lack of fair play. I do not consider this a private bill in the ordinary sense of the word. Private bills come here in large numbers at every session, and in most cases they deal with incorporations or alterations of charters of companies really of a private nature, but in actual practice this is a public affair having to do with the building of the Georgian Bay canal. Although it is classified as a private bill, my reason for speaking now is because I consider this actually a bill having very much to do with the public. I therefore think it only right that hon. members of thi3 House who live far away should be informed of the facts in regard to this matter. So far as I am concerned I have no expectation or idea of trying to keep this bill from going to committee; we all know very well that cannot be done and we have no wish to do so. We do wish, however, to have it fully discussed here before going to committee in order that it may be thoroughly understood by everyone.
When speaking the other evening I gave the House a brief history of the Georgian Bay canal according to my memory, and I was in Ottawa during that time and in the House for many years when this was then under discussion. I desire to say now, Mr. Speaker, that conditions in Canada have changed tremendously in the last thirty years; we have a new generation, and in many ways it is not *the same world at all that it was in 1894. At that time the first bill having to do with this canal was promoted and passed in this House, and at that time very few of us had any idea that wateir-power would become of such great value. I know more or less about the various waterfalls of the Ottawa river, and it is fifty years since I saw some of those above Pembroke, and at that time the only thing in our minds was how difficult these waterfalls made the bringing down of

Georgian Bay Canal Company
our logs and timber. No one had any idea whatever, and there was no suggestion, that these water-powers would some day become a vast source not only of wealth but of comfort to the people of Canada. Now everything is different. There has been a tremendous development in water-power since discoveries have been made as to how best to use electricity or the power that is generated. In fact I may say without exaggeration that water power and the electricity generated from it constitute really the lifeblood of this country. We have many industries here that could not exist without water-power, and it is specially valuable in this northern country where we have a cold winter, and particularly in the centre of Canada where there are no visible supplies of coal. These water-powers provide us with our white coal, and I do not think I am exaggerating when I express my honest belief, in view of the progress of electrical development, that we or our children will see the time when we shall use it not only for power but for heating our houses thus taking the place of those vast quantities of coal that we import from the United States every year and pay for with our good money
Now the Georgian Bay canal charter gives to the compaSy certain water rights. I am not a lawyer but I find these rights ill defined and their meaning very difficult to grasp, and there are certain contingent rights provided for. The question of the relationship of the Dominion and the provinces with regard to water and water-powers has been under discussion off and on during all the years since confederation. I believe it is generally conceded now, that the provinces own the land under the water and the water that run3 down the streams, with the sole exception that the Dominion has a paramount right for navigation purposes and for navigation purposes only. In building a canal, which the Dominion government has the right to do, they have to use a certain amount of water, and they are entitled to take that amount of water but no more. I think that if this charter is to be continued it should be made perfectly plain what water rights it purports to grant, and to confine them entirely and strictly to water that is required for canal purposes.
I notice that when the newspapers and individuals also have discussed this question of late they are apt to refer to Carillon power; they talk about the Carillon problem and the Carillon question as if that were the only one at issue. I have heard people say: Why this is a matter between a company in Montreal and the Georgian Bay Canal Company. As a matter of fact, Mr. Speaker, the site of
the Carillon water-power is in the county of Argenteuil which I have the honour to represent, and we want that power developed as soon as possible. People down there have been looking forward for years to the development of this power in order to bring industry there and to afford employment to the residents. They are tired of waiting for its realization, and I do not blame them. I may say that to my surprise in the election of 1925 one of the gentlemen from Montreal who was interested in the lease of the Carillon power given to them by the Department of Railways and Canals came into the county of Argenteuil and opposed me very strongly on the ground that I had not done enough to help on the development of this water-power. Now that all originated from the fact that at that time there was a lot of discussion as to whether the power, after being developed, could be exported or not. I am not going to go all over that question because it has nothing to do with the point I am trying to make this evening, but I want +' ^ay that people down there are not much interested as to what company develops the Carillon waterpower. They simply wish the development to be carried out and carried out as quickly as possible, but on the distinct understanding that there shall be no authority to export the power after it has been developed. I mention this because the reference in the newspapers, and by individuals, to the Carillon waterpower is very misleading.
I want the House to understand that although the Carillon water-power is a large one it is only one of many. There are a dozen or more water-powers on the Ottawa river as large or nearly as large as the Carillon water-power. So that the Georgian Bay canal project, although discussed as having reference solely to the Carillon waterpower, really refers to all these water-powers on the Ottawa river and on the Mattawa and French rivers as well. The Ottawa river has an immense capacity for water-power; It has been estimated at well over a million horse-power. That is the quantity of power which we are considering to-night if the Georgian Bay Canal Company has any authority in regard to developing the same. The Ottawa river is practically a succession of lakes and rapids, so that a good head can be obtained at eight or ten different points on that river at each of which a very large quantity of horse-power can be developed. In addition to the Ottawa river there are the Mattawa river and the French river. They are not as large streams as the Ottawa but still up towards the height of land the fall is great and consequently they are valuable
Georgian Bay Canal Company

also from the point of view of power development. I only mention these facts to show to you that in considering this question we are not considering merely one water-power, or any dispute there may be between two companies. As to the latter point I have nothing to do whatever, but I do say that if the charter of the Georgian Bay Canal Company is going to be extended it should be definitely stated in it that the company have no right to any water except what is required for canal purposes.
Some people say: Why, we can get the canal without any cost if the power rights go with it. The canal can be built and the water-powers developed without any cost to anybody if these rights go together. I claim that that is a confusion of ideas: it is not a fair way to put it, and the argument cannot be maintained. No one can build a canal without cost, and if the power rights are to be used for that purpose, and the value of the power is to be used to pay for the cost of building a canal it means that the power developed will bear the cost of the canal and the power users will have to pay for it. If this canal is going to be built, either by this company or by any other company, the project should be considered on its merits. If the canal is still required in the interests of the trade of this country, it should not be mixed up with the power development, nor should users of power in Ontario and Quebec be called upon practically to pay for the canal. Moreover, if the idea, could be carried out, that is if the power development and the canal scheme were combined, and the profit on the power used to build the canal, that would to my mind infringe upon provincial rights and deprive the people of those provinces of the cheap light, heat and power which they so much need. If the water^powers were developed on their merits without any reference to the canal, our peotple would secure this cheap light, heat and power which, as I said before, is so vital to their prosperity and comfort.
If the power and the canal scheme were to be developed each on its own merits, this could he done only with the cooperation of the provinces and by arrangement with them. Last Friday evening, when I was discussing this matter, I said that I had no objection to any group of men spending their money to build the Georgian Bay canal if they saw fit to do so. I did not mean- by that that they should use the profits from the power development to build the -canal. If they are going to build the canal they should build it at their own cost, and my contention is that under present conditions this is something they will never do.

I said the other evening and I reiterate that I do not consider this in any sense a party question, and I hope it will not be taken up in any such spirit. As a matter of fact I have looked over the list of -directors, the last named in this series of fourteen different bills renewing the charter of this company, and I find there are five gentlemen, two of whom are old friends of mine and Conservatives, one is a Liberal and I do not know what the politics of the other two are. Those are the men who are put down as directors. As to who at present controls the charter, I do not know and I have not been informed. Rumour is busy regarding this and perhaps I may be allowed to read an extract from an article in the Citizen of the 7th September last, dealing with this subject. The article reads:
The situation must be frankly recognized, however: there would be no economic justification for building the Georgian bay canal at this time. There is no lack of transportation lines for the grain movement. There is congestion in the port of Montreal when the harvest begins to pour down from the west, but another canal would contribute nothing towards the solution of Montreal's problem.
The Canadian people own a magnificent railway line from Winnipeg to the port of Quebec, the National Transcontinental, which is far from being adequately used. It would he more economical to fix a rate for grain transportation on the National Transcontinental to compete with lake shipping rates, than to build another competitive canal.
There is no remote likelihood that the interests behind Mr. Sifton would put money into the construction of any such canal. But it is quite likely that money would be forthcoming to set up a great hydro-electric power monopoly, privately controlled, along the route of the Georgian bay canal.
Mr. Sifton might as well realize that the day has gone by in Canada when public opinion would allow that monopoly to be established. The people of Ontario have reason to know the value of hydro-electric power resources. Public ownership has given this province an unrivalled electric service. People in other parts of Canada are similarly awakening to the advantages of public ownership of public utilities.
Private enterprise on the Georgian hay canal is just about twenty years behind the times. The canal may he built some day. It would contribute to the industrial development of the country of which Ottawa is the commercial hub. But no government could long survive the storm which would properly rise in Canada if it were to fall in with the plans of Mr. Sifton.
That is from the Ottawa Citizen of September 7, 1926, a paper that is certainly not considered as supporting the Conservative side of politics. I am sorry the Minister of the Interior (Mr. Stewart) is not in his seat. Last year the question of the St. Lawrence canal project was being discussed in this House for quite a length of time, and I was pleased at

Georgian Bay Canal Company
that time to find t'he Minister of the Interior so frank in his statement of the situation. If I may be permitted, I wish to read a couple of extracts from what he said on that occasion. This is what the minister said in April, 1926, as reported on page 2192 of the revised Hansard:
May I say that there is no dispute so far as this government is concerned with respect to the ownership of the water-powers, or no dispute as to the ownership of the bed of the streams out to the point where the international boundary intervenes. So far as I know this government have never raised any question as to ownership. Nor does this government raise any question as to the right of Ontario to develop that particular power or any power along that reach.
That acknowledges the right of Ontario in the water as fully as anybody could acknowledge it, but there is more. On page 2194 of the revised Hansard the Minister of the Interior says further:
I wish again to emphasize the fact that we are in entire agreement -with the Ontario government. There is no dispute about their ownership of the power or the land to the international boundary. If they want to develop there would be no holdup, so far as the federal government is concerned. I should like to see the hydro development on the Ottawa river.
Mark you, the Ottawa river.
It seems to me there is a great opportunity for such development there. However, they have set their hearts on the development of the St. Lawrence, and it is the business of this government to do everything they can to facilitate that development.
From that I take it that it would be impossible for the Minister of the Interior to support this Georgian Bay canal bill. I appeal to him on the basis of his words of last year to support those of us who do not think the Georgian Bay Canal Company should receive any rights to water except what they require for canal purposes. The other day the minister waxed quite indignant with the hon. member for Vancouver Centre (Mr. Stevens) when the old problem about the export of Carillon power was under discussion. Therefore, if the minister were in his seat, I would say to him: I take it for granted that you will support those who are opposed to the renewal of this charter in its present form. Further than that, I take it that the government cannot support this bill without violating the resolution Which they agreed to last year. This is the resolution which was being debated and regarding which the minister made the remarks that I have quoted:
That in the opinion of this House, the government of Ontario and the Hydro Electric Power Commission of Ontario should be given leave
forthwith to develop and generate power on the St. Lawrence river at what is known as the Morrisburg dam, and should also be given power to use an increased flow of water from the Niagara river-
And so forth. That will be found in Hansard of 1926 on page 2182. The resolution goes on to say:
-and that this House will support the government in taking such immediate action as herein proposed without further delays in accordance with the application of the Ontario government.
I am very happy to find, Sir, these quotations of what was said by the minister, and also the views of the government as expressed in this resolution. But, Mr. Speaker, I would like to know whether the promoters of this bill really intend to build a canal or not. The reason I ask that is that I find at the end of the first section of the proposed bill the following words:
-or if the said canals are not completed and put in operation within the said periods respectively, the powers granted to the company by parliament shall cease and be null and void, as respects so much of the said canals and works as then remains uncompleted.
In other words, if the government were dissatisfied with the way the company was carried on they might develop a water-power and not build a canal at all, and all the government could do would be to say: Well, that is not satisfactory; it is not in accordance with your contract. Under the clause as it is worded here the company would then claim that they had a right to keep the works they had already developed. I cannot see the object of putting that in at all. It seems to me a most dangerous clause, and I think it should be altered when the bill is taken up in committee.
But that is not all. Apart from the important question of water and water powers, I would ask this House, what about public ownership? In 1894 public ownership was not a vital question in Canada, but it is today. We have embarked upon two of the greatest public ownership enterprises in any country in the world. We have our national railways, and we have a free system of canals. Thirty years ago tolls were charged on the canals, but there are none now on the government canals. Is there any member of this House who is a believer in public ownership who could vote to renew this charter for the Georgian Bay Canal Company, which is empowered to charge tolls on the canal on the Ottawa river? Is that consistent with the feeling of those who are in favour of public ownership? Are we going to have the Do-
Georgian Bay Canal Company

minion government canals, built by the people of Canada, free, and at the same time have tolls charged on the Georgian Bay canal, built by a private company? It would simply mean that our railways would have a competing water system, run by a private company, and authorized to charge tolls. If this matter of building a canal is going to be considered, it seems to me that the work ought to be undertaken by the Dominion government itself. They ought to consider the question on its own merits.
Furthermore, if this charter is going to be renewed I submit to hon. members that it should be entirely redrafted to suit modern conditions. Here is a charter thirty-three years old which has been amended fourteen times, so much so that it is very difficult for anybody to go through it and find out just what powers are being granted. I take it, in view of the development of water-powers and of public ownership at the present time, that parliament would not consider the granting of a charter such as this, giving the company control of an enterprise of this huge size with all the water-power on the Ottawa river. Why should they suggest that we renew a charter by means of this simple bill? If the company think they should have their charter extended, why do they not bring in a new bill, with clauses to meet present-day conditions, so that parliament may consider it as it would the bill of any other company that comes here for legislation?
This Georgian Bay Canal Company has no rights on account of what they have done, for they have done nothing. They spent some money on surveys and so on, but they have not done any work for all these thirty-three years, and my own feeling is that this charter should not be renewed at all. But if it is going to be renewed, care should be taken to see that it is brought up to date, and particularly that clauses are inserted confining the use of water to canal purposes alone.
There is a clause in the charter, which will be found in chapter 128 of 6 Edward VII, assented to on July 13, 1906, under which the ivorks may be taken over by the government. It reads as follows:
His Majesty, his heirs and successors, may at any time assume the possession of, and the property in, the said canals and works, and of and in all the rights, privileges and advantages of the company on giving to the company one week's notice of intention to do so; and thereupon all property in the said canals, works, rights, privileges and advantages shall become, and thenceforward shall be, vested in His Majesty, his heirs and successors, and by way of compensation His Majesty shall pay to the company the value of the work actually done by
[Sir George Perley.j
the company up to the time of the giving of such notice in surveying, and in the making of plans, and otherwise upon the ground, together with the value of all tangible property of the company of which possession may be so taken,- such values to be fixed by three valuators, or the majority of them, one valuator to be chosen by His Majesty, another by the company, and the third by the two so chosen.
In my judgment the proper way to deal with this question is for the government to allow the charter to lapse and then deal with the matter under this clause. I cannot see that it would do any harm to the shareholders, and it would give the government a free hand to work together with the provinces in this matter on a reasonable basis. I may say-


Hewitt Bostock: I am afraid the hon. gentleman will have to say it on Friday, as the hour for private bills has been exhausted.


Mr. LAPIERRE:: May I ask the hon.
gentleman if he desires to continue this debate on Friday night? If not, I wish to move the adjournment of the debate.


George Halsey Perley: I have not quite finished.



THE BUDGET


[Stage Direction]
The House resumed the debate on the motion of Hon. J. A. Robb (Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of ways and means, and the proposed amendment thereto of Mr. Coote.
Mr. L. G. BELL (St. Antoine):: Mr. Speaker, when the House rose at six o'clock I was about to bring to its attention a case of discriminatory taxation which has prevailed in the province of Quebec for now some ten years. A great number of the citizens, not only of the province of Quebec, but undoubtedly many others throughout Canada who have the interests of just taxation at heart, desire that a remedy should be provided in this case. I have reference to section 5 (c) of the Income Tax Act of 1917, which provides that:
The income of any company, commission or association not less than ninety per cent of the stock or capital of which is owned by a province or a municipality,
-shall not be liable to taxation under the act. It so happens, Mr. Speaker, that in the province of Quebec we have followed the rule of having our public utilities conducted by private companies. In that regard we differ

The Budget-Mr. Bell (St. Antoine)
to a great extent from the other provinces, and it is a well-known fact that ninety-five per cent of the public utilities in the province of Quebec are private corporations. In order that this matter may be brought to the attention of the government and that the government may have a full record of the campaign that has been taking place for a number of years, I intend to burden the House to-night by putting on record extracts from different newspapers in that province, Liberal, Conservative and Independent, and also from different associations which have no politics, such as boards of trade and chambers of commerce, in order to bear out the assertion that some remedy is required immediately regarding this unjust taxation.
It was stated by the Minister of Finance (Mr. Robb) this afternoon that the corporations of this country pay some fifty-five per cent of the income tax, and it was further stated that a great amount of the income tax is in the final stages paid by the consumer. On that point especially as to public utilities, I think the facts will bear him out and will prove that that assertion is correct. For instance, the Montreal Light, Heat and Power Company, which owns the public utilities of heat and power in the city of Montreal paid an income tax last year of $783,000, and also the Montreal Tramways Company, another public utility paying a tax of almost $125,000, all of which in the end is a burden upon the consumers of gas and electricity and in the second instance, upon those who use the street cars in the city of Montreal.
I quote first of all from La Presse, which is well known to be a French newspaper, independent in politics, and having one of the largest circulations of any newspaper in Canada. La Presse of February 10 publishes the following:
A flagrant injustice is committed in the distinction that is drawn by the federal treasury in the matter of the income tax levy between private corporations that produce electric light and energy and companies of the same kind that operate under provincial and municipal control. This difference of treatment creates a prejudice against the customers of the private companies and concedes a favour to consumers who obtain their service from government-controlled concerns. If a company has to pay $700,000 or $800,000 a year in income tax, the price of the products of that company must necessarily be calculated in a manner that will repay that sum. The customers, therefore, will be charged from $700,000 to $800,000 a year more for what they buy than they would otherwise have to pay, whilst the clients of companies under government control are liberated from this surcharge. In the province of Quebec we have refused to submit to the municipalization system which has infatuated certain other provinces, and all things considered there is no
need to regret our attitude. In any event, it is our incontestable right to prefer the system of private ownership of our electric light and power services, and the federal government has no right to favor one system more than another. Its absolute and strict duty is to put everybody, every enterprise and every province on one and the same fiscal footing. At the present time, however, as regards the income tax, the federal administration, ceding to strange considerations, has failed to obey this rule of elementary justice. Well, let us leave out the past. Let us pass the sponge over the influences or considerations that have been responsible for this denial of fiscal justice, insupportable by the consumers in the province of Quebec who have been obliged to pay into the Dominion treasury for electric light, and energy surcharge, which their neighbors in Ontario do not have to pay. Let us overlook what is past and simply say that this denial of justice cannot continue. The government ought to apply the remedy without further delay; and we hope that parliament will take up the question.
We pass now to the Montreal Gazette, a leading English daily, and it also calls for redress of this unjust taxation. In its issue of February 11 that paper says:
The inequitable incidence of the income tax as between publicly and privately owned public utilities is again a subject of discussion, and the consideration that is being given to it is timely and proper. It would be a good thing for the Dominion, and by no means a bad thing for the government, if this tax were abolished altogether; but, if that is not to be done, there should at least be such revision as will prevent discrimination as between one group of citizens and another, or between one province and another. Equity is, or ought to be, a first principle in all taxation measures, and economists have always agreed that a tax which is not levied impartially is vicious and cannot be successfully defended.
Under the present system, the income tax is collected from private companies which sell electrical energy for lighting and power purposes, while similar services, when provided under government or municipal ownership or control, are not taxed. The tax, when imposed, is collected from the companies, but is paid in the last instance by their customers, the consumers of light and power. It so happens that this discrimination places the Ontario consumer in one class and the Quebec consumer in another, power and light services being publicly owned in Ontario and privately owned in this province. Parliament did not set out to differentiate in this way as between one province and another, but that is the way it works out, and it is a matter of some importance in considering the principle involved. The consumer in Quebec is affected adversely in that the income tax, when added to the actual price of power and light, lessens the advantage which private enterprise and efficiency confers upon its customers. This is a matter of first-rate importance from the standpoint of the community as well as from that of the individual, since cheap power and cheap light have become determining factors in the field of industrial expansion. Light and power costs, nowadays, attract new industries or encourage the extension of existing industries, when these



The Budget-Mr. Bell (St. Antoine)
costs are low; and, this being so, it is clearly necessary to the economic progress of Montreal that light and power costs should not be burdened with charges that are not imposed upon similar services in other parts of Canada.
The remedy is simple. Either parliament should tax all light and power services equally, whether they be publicly or privately owned, or all should be exempted. Consumers in Quebec ask for no favors in this respect, but they are entitled to fair treatment and should have it. If the government and parliament come to the conclusion that the tax cannot be collected from publicly-owned services, owing to the conditions of financing and bookkeeping that are peculiar to this field of public ownership, there is still the alternative method of making the exemption general. The existing situation is grossly unfair to consumers and consuming communities in this province, and it calls for redress.
La Presse of about the same date again
states:
We consider it to be of urgent importance that public opinion should be couvinccd of the disadvantages which, economically, result from this vicious practice. We have already called attention to its evident consequences to the consumers, clients of the private companies, who must necessarily reimburse the amount levied upon the corporations. In this way the consumers lose part of the natural benefit that otherwise would come to them from the economic results of private administration, which assures the lowest cost price. But this is not the only disadvantage that is caused by this fiscal injustice, particularly in Montreal. However important may be the private interest of each consumer, we must not forget to take into account the general interest as well, the higher interest of the community. Indeed the one canuot be separated from the other. Everybody knows that whatever will aid the industrial and commercial development of a city, will also advance the welfare of the citizens. The question of the cost of light and power is one of capital importance in all industrial and commercial matters. Whoever proposes to set up a new industrial installation must calculate with great care the expenses that will have to be incurred under this head, and, all other things being equal, he will instal his industry in the city where light, heat and power are to be obtained at the lowest rates. Consequently, we all, as citizens of Montreal, have the greatest interest to protest against a fiscal injustice which risks injury to the economic development of the city.
We suggested the other day that, as a means to end the actual inequality of treatment, the government should either tax the municipalized and provincial government-controlled enterprises . on the same basis as the private companies, or else exempt the latter as the others are already exempted. But, as a matter of fact, the first alternative does not appear to be practicable, for the good and sufficient reason that the municipalized and government-controlled enterprises, having either the province or the municipality as their money-lenders, and consequently not having to trouble about meeting the interest charges on the capital-the people pay this piper-matters can be so arranged that there is no apparent balance at the end of the fiscal year. Having, therefore, no

apparent revenue they as it were, automatically find themselves exempt from the tax on revenue. It is a piece of legerdemain too easy to perform. The only practical solution, then, would be to exempt private corporations from the income tax just as the municipalized, government-controlled enterprises are exempted to-day.-
I also quote an extract from La Patrie another French Conservative newspaper in Montreal, in its leading editorial of February 14 last, complaining of this million dollars taken unjustly in the way of income tax from public utilities privately owned in the province of Quebec. It says:
A tax which is unjust because of the inequality of its application is the income tax on private companies of public.utility whilst similar enterprises under municipal or provincial government control are allowed to go scot free. In this way the distribution of electric light and power in Montreal, and the tramways service in the same city are heavily taxed-the amount being about $1,000,000 a year-but Toronto and towns and cities in Ontario pay no contribution under this head. Montrealers are not opposed to the tax, but they do protest against its inequality: The government at Ottawa has for several years past remained deaf to the supplications from Montreal and the province of Quebec asking that this injustice shall come to an end.
I also direct the attention of the government to a letter addressed to the Prime Minister (Mr. Mackenzie King) by the Montreal Board of Trade under date of March 22 last, as follows:
The council of this board has the honour to remind you of the injustice involved in the present application to Public Utilities of the Income Tax Act in that citizens served by privately owned utilities are made subject to a federal tax from which citizens served by publicly owned utilities are free.
The council wrote you on this subject on 25th September, 1924, but we have heard of no action to remove the grievance. That letter made special reference to the discrimination against the citizens of Montreal, customers of the Montreal Light, Heat and Power Company. That company will pay into the federal exchequer as income tax on its profits for 1925 the sum of $783,000, all taken out of the pockets of its customers. All other citizens of the Dominion served by privately owned utilities are similarly penalized but, since about 95 per cent of electrical energy in the province of Quebec is produced by privately owned companies, the discrimination against the citizens of this province, and in favour of those of provinces where public ownership is the rule, is as serious as it is indefensible.
The council realizes the need for federal revenues and does not ask relief for the citizens of this province, but it does wish to renew its protest against the existing discrimination.
The council respectfully renews its suggestion that the income tax on public utilities be based in future, not on profits but on gross revenue, and that it be applicable alike to all utilities, whether publicly or privately owned.

The Budget-Mr. Bell (St. Antoine)


Mr. HEAPS:: Can the hon. member assure us that the privately owned companies charge no more than the publicly owned concerns do?


Leslie Gordon Bell: I will cpme to that in a moment.
The council ventures to urge that this matter is of sufficient importance to call for remedial legislation at the present session of parliament.
I have the honour to be, Sir,
Your obedient servant,
J. Stanley Cook,
Secretary.
That is from the Montreal Board of Trade, a body composed of representative business men of that city, without any political axes to grind, and who take a very lively interest in the progress of the city. Naturally they want to see Montreal given equal treatment with any other city in the Dominion.
I come now to the Chambre de Commerce, a body similar to the board of trade but composed principally of French citizens from every walk of life in Montreal. On February 23 these representative men accepted the following resolution from the legislation committee:
Whereas public utilities in some provinces are directed by private companies;
Whereas those companies pay high income tax;
Whereas those taxes always fall ultimately upon the consumer;
Whereas public utilities in other provinces are not taxed because they are publicly owned;
Whereas this discrimination is an encouragement for the installation of new industries in sister provinces, but is a hindrance to Quebec;
Whereas, if more equally applied, tlie tax would bring greater returns;
It is resolved that the federal government be asked to refrain from imposing income tax on public utility companies and that, if need be, the tax in question be replaced by another tax which would be applicable to all public utilities without discrimination for any province.
Next I have here a resolution passed at the fourth annual convention of the Canadian Tax and Civil Service Research Conference of the Citizens' Research Institute of Canada, held in Winnipeg <xn September 28 and 29, 1926. This is a Dominion-wide institution with head offices in Toronto and branches in all the important cities in Canada from coast to coast. Resolution No. 5 as passed by them reads:
Be it resolved that this convention urges the taxation of all public utilities on the same basis, irrespective of ownership, public or private.
I come now to the question asked by the hon. member for North Winnipeg (Mr. Heaps).as to whether privately owned utility companies charge the same rates as those charged by publicly owned companies. Let
me quote from the ninth annual report of Montreal Light, Heat and Power Consolidated :	*
The taxation of your company is excessively heavy and openly discriminatory, as our operations are subject to heavy federal income taxes, whereas the provincial and municipal undertakings of Ontario and other provinces, although on a similar commercial basis, not only enjoy immunity from provincial and municipal taxation. but under the federal law are exempted entirely from income taxation.
Incidentally your company will this year pay the federal exchequer approximately $783,000 for income tax on its business for 1925, which, of course, is included in our rates for service and suggests if there were no income tax to pay our present retail rate of 3J cents per k.w.h. for electricity could be reduced to 2.88 cents per k.w.h., or, if applied to our gas business, the present retail rate of $1.10 per thousand cubic feet could be reduced to 91 cents per thousand feet.
It is significant, as stated, that consumers of electricity in Ontario and other provinces where utilities are publicly owned are exempt from this taxation. Our consumers, we are sure, do not object to paying their proportion of the running expenses of the country; they do, however, object (and rightly so) to paying the proportion of Toronto, Winnipeg and other cities where the utilities are publicly owned and operated. Our protestations, as well as the able and well defined representations of the Montreal Board of Trade to tlie federal government, anent this question have so far been without avail, and your directors feel that the consumers of electricity in this province should take some more effectual steps to correct this discrimination. Meantime this open discrimination in taxation undoubtedly handicaps Montreal and the province of Quebec.
The continued increase in the disbursements for taxes-municipal, provincial t '	-
reflect the national situation with rt the present habit of lavish expenditures by governmental agencies. It is a question that calls for serious individual thought when a business such as yours, furnishing public necessities, is called upon to disburse in taxes the sum of $1,274,655.56, upwards of 19 per cent of the company's net income.
These are the points I wished to bring to the attention of the House with reference to the taxation of public utilities in the province of Quebec and particularly in the city of Montreal. As I have already pointed out there is an extra charge levied on the consumers of both gas and electricity which would be considerably reduced if it were not necessary to pay th'is federal tax.
There is an even more serious aspect than that, however; in the development of the province we must at all costs be protected from competition with cur sister provinces, particularly in the securing of industries. As the public utilities are at present discriminated against, we often find that we have lost industries from our provinces because of the fact that cheaper power can be obtained in
772	COMMONS
The Budget-Mr. Bell (St. Antoine)
neighbouring provinces. I wish it made perfectly clear that we in Quebec and in the city of Montreal are not asking that taxation be increased in any other province; we are only asking for fair play to the public utilities in our own province. For example, it has been pointed out by some of these newspaper reports that there should be a tax levied upon the gross revenue. That appears practically impossible in regard to the public utilities of Ontario, and therefore we would ask for the same treatment accorded to other municipalized and government controlled utility companies; that this tax be removed and the income tax be not applied.
It may seem rather strange that a member of the opposition should take up this matter on behalf of the public utilities of Quebec, because one would think that the interests of that province would be well looked after by those on the government benches. We on this side of the House from Quebec number only four as compared with sixty-one on the opposite side, including a number of outstanding ministers of the crown who know of this unjust taxation. One might have expected them to pass some remedial legislation to correct this abuse, which has undoubtedly been drawn to their attention in different ways, but that has not yet been done. I hope it is not too late for this corrective legislation to be passed this session and I trust that the Minister of Finance (Mr. Robb) whom we know to be a native of Quebec, will take the course which is undoubtedly open to him in order to remedy this grievance. I am sure those from other provinces are fairminded in these matters, and that they wish taxation to be at least fair; I do not think they want to see one province discriminated against in the matter of taxation or placed at a disadvantage in the securing of industries.
That, Mr. Speaker, is all I had intended to say, except to mention the fact that I am sorry that it was not possible in the present budget to make some amendment to the '.ncome tax laws in favour of those who contribute to charities. In the very large cities as well as in the towns there is a constant call for funds for charitable purposes, and I trust that in the next budget some consideration will be given to this question. We find it extremely difficult to finance our great charitable institutions which relieve distressed people; people are continually asked for contributions, and I think they might well be exempted for the amount they contribute in that way.
[Mr. L. G. Bell.l
Before closing I would like to refer to the remarks of the hon. member for Saskatoon (Mr. Young), who unfortunately is not in his seat, having particular reference to his remarks regarding the tariff board. I trust that whatever may be the personal views of different members of this House, we can all take a large national view of this matter, more so than the view I understood the hon. member to express. I will repeat what he stated:
I wish, however, to be on record as saying that if at any time that board is to be used as an instrument or agent to hide behind in order to increase the tariff, I would say: Get thee gone and give way to honest men. We can never give the functions of this House over to that tariff board or to any other tariff board that may be created. I want to be perfectly frank in that regard.
I think it would be of very little use, as an hon. member urged the day following, for any of us to attend the meetings of this board if that is to be the attitude of the board; we might as well stay at home and not try to present the case for an increase ol the tariff. I am sure the hon. member was not in earnest wThen he stated that- the tariff board has been created by this government to decrease the tariff only; we would rather look at it as a board which will see to it in all cases that justice is done, whatever the issue.
I also wish to refer to the remarks of the hon. member for Maple Creek (Mr. Spence) in which he says:
We believe in freedom of trade as a principle because we know that the whole trend of modern times is towards the great field of internationalism-not nationalism, not narrow provincialism, but a magnificent economic union of the whole world.
I wonder if the hon. member for Maple Creek was quite in earnest when he made 1-hat statement. I am sure he is a close student of economics and of the tariff, and I fail to see personally where this trend towards internationalism is taking place, so far as the tariff is concerned. In the matter of freer trade, of which he speaks, when we look to England we find the Safeguarding of Industries Act. If we look to the example of our neighbours to the south and study the Fordnev-McCumber tariff which was enacted there, or if we refer to the German tariff, or to the tariff brought into force in any other country in the world since the conclusion of the war, we will find that all these countries -including England in the matter of her Safeguarding of Industries Act-are increasing

The Budget-Mr. Jacobs
their tariff. Therefore I hope the hon. member for Maple Creek will do us the favour of showing at another time where this trend of internationalism or freer trade is taking place.
Speaking of the visit of the Saskatchewan members to the Dominion Textile plants at Montreal, I only hope that these gentlemen, coming as they do from the west, have been enlightened as to the true industrial situation. I trust that as Canadians, looking over those plants and seeing the number of men employed, they realized then, if they had not realized before, that in the interests of our industrial life the manufacturers of this country must be protected. I was rather nonplussed at the attitude of the hon. member for Maple Creek. I was surprised that after seeing what the industrial life of Canada meant he should come back and immediately upon taking his seat start on the rampage with respect to free trade and this movement towards internationalism which he says is taking place, but which is not taking place; free trade, he knows, is a myth. I trust that these Liberal members not only visited the factories and saw the industrial life there, but that they also took occasion to visit some of the men who were not at their places in the factories but were out of employment. I hope they felt in their visits to those homes that these men are patrons of Canadian industry and Canadians at heart even as the hon. gentlemen themselves are. I hope that the hon. gentlemen will also bear in mind that even if the farmers of the west have had hard times at intervals, there are times in the industrial life of our cities, especially when men are out of work and cannot get employment in the factories, that we look for some consideration in the matter of a protective tariff, and that they will see their way clear to cooperate with us and not be so scared, as they seemingly appear to be on that side of the House, of the word "protection." There is nothing to justify the view that there is anything to be afraid of in that connection.


Herbert Bealey Adshead: Was the trip to Montreal planned with the idea of having us give more protection to the textile industry?


Charles Hazlitt Cahan: It was planned by one of
the leading Liberals of the city, who is identified with the factories you visited.


Leslie Gordon Bell: If it was so
planned I am sure nothing was known of it as far as this side of the House was concerned, as we only read about it in the newspapers the following day. We are only complimenting my hon. friends on seeing that industrial life for the maintenance of which we are fighting.
I believe these are the only remarks I have to make with reference to the budget, and I have only this to say in closing. Many comments have emanated from this side <of the House with respect to the hon. Minister of Immigration (Mr. Forke). If there is one member of the government who carries a burden on his shoulders and upon whom I should like to pin the rose of hope, it is the Minister of Immigration. I sincerely trust that in the exercise of his duties and the discharge of the responsibility that rests upon him he will do his share in bringing to this country a great number of immigrants who will find in Canada a country worth while and who will remain here. I hope the minister will be able to stop the migration out of this country which has been so often debated here and which I will not weary the House by referring to at the present time. I think if one minister in the government deserves some consideration and some praise, dr it may be, help from the opposition, we should at least give that minister the preference. In closing may I express the wish that he will be able to show us in the near future that he is meeting success in his arduous duties and accomplishing all that the situation demands.


Mr. S. W. JACOBS (Cartier):: Mr. Speaker, the observations which I have to offer to the House this evening will be of the briefest kind. The country is waiting for the vote which will decide the fate of this government, and I do not want to keep it in suspense a moment longer than I can help. In order to relieve their minds, my remarks will be noted for their brevity if for nothing else.
The hon. member for Macleod (Mr. Coote) introduced an amendment to the budget which if carried will mean the defeat of the Liberal party. I wonder if the hon. member when he drafted his motion thought what that would mean for the party to which he belonged. Does he not believe like every sensible man that "half a loaf is better than no bread?" We are standing between him and this awful, wicked Conservative party. He does not give us credit for that. I wonder if he has read the history of Charles II? When the king's brother, the Duke of York, counselled His Majesty not to expose himself so freely on the street as it might entail his assassination, Charles II, who was a very wise and very witty monarch replied:	The
people of England are too sensible to murder me in order to put you in my place.
The Budget-Mr. Jacobs

The amendment of the hon. gentleman is what is known technically as "eye-wash." It is not to be taken seriously, yet here it is and we have to deal with it. But within the next few minutes we shall be all out of our troubles when the vote is taken.
'The hon. leader of the opposition to-day delivered a most eloquent and instructive address. It, was noted for its eloquence, for his abnegation of Liberal principles, and was in effect a bid for the leadership of the Tory party of which he is now one of the shining ornaments. Within the last few days we have had the spectacle in parliament of three or four aspirants to the leadership of the Tory party, standing up, saying what they had to say eloquently, and well, and leaving it to, their party to indicate who is to be selected. It reminded me of the judgment of Paris. There were three ladies who presented themselves to Paris. He examined them as to their beauty-and there was a great deal to be seen-and after he had given his decision in favour of one-because there was only one to be selected, provoked the great Trojan war, and you know1 the catastrophe that happened after that. Well, I hone no such event will happen after the leader of the Tory party has been permanently named. I admire the leader of the opposition. I remember when I heard him first on May 29, 1912, in the city of Montreal. The bloom of youth was then on his cheek, and I remember well the florid complexion of the young man who sat close to the great chief of the Liberal party. He thundered in tones so eloquent against the Tories that I thought to myself: "Me-thinks the lady doth protest too much." I could not at that time believe that he was making a bid for the vacancy which has been occasioned on the other side by the retirement of Mr. Meighen.
We spoke yesterday in this House about the exportable surplus of wheat. We have an exportable surplus of Liberalism. We have so much of that commodity on this side of the House that our cup of joy is overflowing and we are willing to divide it with our friends on the other side. Some wit in this House remarked last fall after the election and after the appointment of the leader of the opposition to his present position:	"Well,
this is a great year for the Liberal party. We have a Liberal Prime Minister; we have a Liberal leader of the opposition, and we have a Liberal leader oif the Progressive party. Everything seems to !be coming our way." How true is the saying of the Psalmist:
The stone which the builders rejected, the same is become the head of the corner.

The hon. gentleman is a great lawyer. He would have made his mark had he remained at the bar. After listening to his eloquence to-day and after comparing it with his eloquence before 1917, I can see what a great lawyer he is. He talks on both sides with equal facility, I wish the time would come when I could do likewise. Perhaps if a vacancy on the other side occurred, I might-
. An hon. MEMBER:	Consider it.


Samuel William Jacobs: -consider it. He argued
to-day that there is no surplus; that it is all camouflage; that it does not exist. Notwithstanding the fact that there is no surplus, the Minister of Finance is in a position to cut down the sales tax by 20 per cent, to cut down the income tax, to make a substantial reduction in the national debt and so on, all, mark you, without any surplus. I ask myself: If the Minister of Finance is able to do that, what could he really do if he had a surplus? He is a miracle worker and as such we want him. Moses struck the rock and produced water. It flowed freely. Moses is not a patch or circumstance on the present Minister of Finance who is able to do these wonderful things.
Altogether I think the Conservative party is very fortunate in having a man of the ability of the leader of the opposition. He talks intelligently, cogently, with lucidity, and he has tasted of the tree of knowledge and of good and evil-he knows both sides. The old saying is true:
And still they gazed, and still the wonder
grew,
That one small head should carry all he knew.
I wonder where all these apologies of Conservatism, all these high-minded utterances which we heard to-day respecting the Tory party and its glories, were hidden during the years from 1900 to 1917 when the hon. gentleman was one of the ornaments of this side of the House. He disguised them very well, but I am glad now that he has scope for his abilities and I hope the Tory party will keep on with the hon. gentleman as its head.
We had some discussion in this House a little while ago about the appointment to Washington. The appointment has at last been made and the Hon. Mr. Massey is the first minister from Canada accredited to any country. I think this country is to be congratulated on the appointment of Mr. Massey to that high and honourable position. Mr. Massey fits the position admirably. He is a man of education, of culture, with the neces^ sary resources to keep up a position of that

The Budget-Mr. Jacobs
kind, and he is bound to make good. It is only right that we should have a representative at Washington. After all $1,000,000,000 or one-half of the entire trade of this country is with the United States. We have 115,000,000 people on one side of the border and
10,000,000 people on the other side, with tens of thousands of people crossing this border every day. Every possible kind of trade is transacted daily between the two countries. We have questions to diiscuss as regards railway bonding privileges, smuggling, narcotic drug traffic, white slave traffic, and matters of all kinds, which are of the highest importance, and the surprise to me is that we have remained so long without a representative at Washington.
There are many things that the Hon. Mr. Massey can do while he is at Washington. For instance, he can point out to the authorities there that we resent the discrimination that exists with regard to Canadian citizens who go to the United States. As hon. members know, the United States divides the Canadian people into two classes; those who were born in Canada and those who came to Canada from foreign parts. Those who were bom in Canada can go freely into the United States either to visit or to reside permanently. Those who were born outside of this Dominion are permitted to enter the United States only on what is known as the two per cent quota of the country of their origin. What has been the result? Within the first six months of last year 50,000 Canadian citizens crossed the border by the highroad. I have not the figures for the last six months, but I fancy that an equal number left here for that country. Therefore we have 100,000 Canadian-born citizens who went to the United States within one year. I know what hon. gentlemen on the other side are thinking, namely, that if we had a high protective tariff, they would not have gone. But that is not the point I wish to make. The point I wish to make is that the United States of America is discriminating between native-born citizens and foreign-born citizens of this country, both British subjects, mark you. They take the certificate of naturalization of a foreign-bom citizen who wishes to enter their country and pay no attention to it; they treat it as a scrap of paper. They discriminate. We do not. After all, when we give a certificate of naturalization to a foreign-bom- after he has remained here for a certain period, after he has behaved himself like a respectable citizen, he is treated by us in the same way as if he were bom in this country. But when he goes to the United States bc-undary, they, forsooth, would
make a distinction. Why is that? I will tell the House why it is. The United States for some time have put into force this immigration quota because they want in that country people coming from what they call the Nordic portions of Europe. They do not want anybody except the Nordics. The basis of the population in Canada is Nordic. Consequently they insist upon having what they -call the best element in this .community 

the -Canadian-born, the man who understands American conditions, and who does not require to become Americanized, and so on. They are draining this country of the best element we have, and -are leaving us the foreign^born. Mark you, I am mot making any objection to the foreign-bom. We welcome them -and are glad to have them, -but, everything -being equal, I think it will be admitted -by everyone here that the Canadian born citizen is perhaps the better for this country than the fo-reign-bom. He is not obliged to unlearn anything and -adjust -himself to -a different environment.
Why is it that so many of our people are going to the United States? The -reason is this:	That under -their -quota law, they take
in between 100,000 and 150,000 immigrants every year, and n-o more. Before this quota law went into effect, they were taking in f-rom
1,000,000 to 1,500,000. How are they going to make good the wastage in their -country? By draining off our native-born Canadian citizens, -bringing them to the United States and absorbing them with their own people. I ask you, M-r. Speaker, is it right -that -we should stand by and see a -thing of that kind done without making some protest .to -the American -government? Is it -right? I do not think it is. When we give a person a certificate of naturalization, we have to protect him in every way -possible in which a government can protect its people, but as soon as he begins to use his certificate of naturalization, he is told that it is of no use to him at all in the United States.
The United States claim to be a country of freedom, of liberty, and so on. In -the year 1910 discrimination was made by -the empire of Russi-a against American citizens entering that country. Russia declared that people of a certain religious persuasion could not enter the empire of Russia although -they were American citizens; I have reference to Jewish people. There were only two classes who were allowed to enter. They had either to -be bankers-I -ask my friends -of the Progressive movement to listen to that-or they had to be people of high social standing.
The Budget-Mr. Jacobs

After all, all the people of the limited States who travel are not bankers or people of high social standing, and it was the Russian police who had to decide whether they were bankers or people of high social standing. If the American citizen desiring to enter Russia handed over a sum which was sufficient to indicate that he was a banker, he entered freely, and no doubt the same was true with regard to people of high social standing. President Taft took this matter up with Russia. There was a treaty between these countries which was entered into in 1832, and representations were made to the Russian government, through the American ambassador in St. Petersburg. The Russian government was then tottering to its fall, and no action was taken. The treaty was denounced, and since 1910 there has been no treaty between Russia and the United States, because they felt, and rightly so, that no such discrimination should be made against United States citizens. When a United States citizen presented his certificate he was able to say "Civis Americanus sum", and that was sufficient- To-day the United States are practising the same thing which Russia practised up to 1910, and it seems to me the part of wisdom for ouir government, through our minister, to point out to the American government that they are not giving us a square deal. If they want our people, we cannot hold them back, but at least we ought to ask the American government to take What is known in Nova Scotia as rum-of-mine.
I suppose a good many members of the Progressive party are unaware of the fact that they could not enter the United States except under the quota law. My good friend from Red Deer (Mr. Speakman), the member for Peace River (Mr. Kennedy), the member for Bow River (Mr. Garland), and the members for other creeks and rivers-I cannot remember them all-would not be permitted, not one O'f them, to enter the United States except under the quota law, and in some cases they would have to wait ten years, and in other cases fifteen, before they could get in. So what can these poor people do? They have to run for parliament and !be elected to this House.
Although we have not got a quota law in this country, we have something which is so near unto it that it would take a Philadelphia lawyer to decide what the difference is. We do not put a quota law into effect, but we have drawn a line across the map of Europe and we say: These people from the northern part may come in, but these people from the south and

southeastern part shall not come in. I do not suppose that it is generally known-I do not think the Minister of Immigration is aware that he is keeping out the entire Latin race from entering this country, with the exception of the French. Naturally they could not keep the French out, because they would hear about it in this House. The French are permitted to come in, but no other members of the Latin race, except under special permit and privilege. Now that is- a rather serious thing. After all, there are decent people among the Latin race who make good citizens. The test of a man's ability to make good in this country is not the country fr6m which he comes; it is the character of the man. The whole of southeastern Europe is in what is known as the non-preferred class. Asia Minor is in the non-preferred class.
I am going to say' something which will probably surprise my friend the Minister of Immigration, and that is that under the rules of the Immigration department the founder of Christianity would be debarred from coming into this country. He could not come in, and none of the apostles could enter this country. None of the founders of the early Christian church could enter Canada under the present regulations of the department. There are in the case of Jesus of Nazareth,-I am saying it with all respect-four orders in council which would prohibit him from coming in here. There would be first, the order relating to the non-agriculturist class. Carpenters are not permitted to enter this country coming from that district. And then he would not have a proper passport; he wrould not be travelling by a continuous journey; and he would have no relatives in this country. Those are four orders in council which would prevent him from coming in. Michael Angelo, although he built St. Peter's at Rome, could not enter this country, because we do not want architects or carpenters from Latin countries. If he came from Iceland and could build an icehouse, we could use him. If Mr. Mussolini wished to come over and make a bid for the leadership of the Tory party, he would be debarred by the Minister of Immigration from coming in. We heard it stated in the last election: Canada wants a Mussolini. But my friend the Minister of Immigration stands like an angel with flaming sword at the gate, and would not permit him to enter. And so all along the line.
It seems to me, Mr. Speaker, that this country is not in a position now to make distinctions between people as to the countries

from which they come. A man may be a scoundrel and come from Scandinavia; a man may be a genius and come from Italy. I have dinned this thing into the ears of the Department of Immigration for the last ten years.
I have been a voice crying in the wilderness.
I have not been able to make them see the light. My friend the Minister of Immigration made some very interesting and satisfactory speeches before he came down here to take the department in hand. In Winnipeg I remember he made a speech which made us believe that at last there was a Daniel come to judgment; he was going to do wonderful things. He pointed out that hitherto the department, unfortunately, had had so many temporary ministers and so many ministers who had not had time to get acquainted with conditions before they moved on that they were unable to do justice to themselves and to the department. He was going to do it justice. Well I hope he will. He is a new man and certainly is not lacking in intelligence and has many qualities which go to make a splendid administrator, and I hope that when he takes hold of things, all this red tape which seems to embarrass the immigration department will be cut away and flung into the waste paper basket. It will be a good thing for the department, a good thing for the minister and, best of all, it will be a good thing for the country.
May I say a word or two about the question of the maritime rights which will be before the House very shortly? It would appear that the maritimes have rights. I have not read the report yet, but I have no doubt they have rights. A commission was appointed by the government to investigate and ascertain what those rights were and are. The commission sat during last summer and the early part of the autumn. They made their final report. A curious thing about the commission, which I think should be brought to the attention of the House, is the fact that although the commission consisted of three worthy members, men who are looked upon as of first class ability in their respective avocations, no counsel was appointed to represent the Dominion government. Do hon. members not think that an extraordinary thing? Here were gentlemen from the maritimes who were interested in seeing that adjustments were made of conditions in the maritimes which they thought had been brought about by forces over which they had no control. They were making claims for tens of millions of dollars. They were to have adjustment of freight rates, and they
The Budget-Mr. Jacobs
were to have coking plants to stimulate the coal business in Nova Scotia, and dozens of other things which involved large expenditures on the part of the Dominion government. Can hon. members tell me why no person was there to represent the government, to cross-examine them and find out the basis of their claims? In the customs inquiry, which is being conducted so efficiently, we find two legal gentlemen who are drawing, in addition to their breath, $300 a day from the coffers of this country. There never was a commission in which the party who is going to have money extracted from him is not represented in some way. After all, there must be some person to see that they do not walk away with the parliament buildings. And yet the fact remains that in this case nothing was done. The report was prepared and handed in without any examination at all of the witnesses by the federal authorities. The reason of it was, I think, that when the commission began its1 sittings we were in the throes of a general election. Both parties-and I may say the three parties-were so busy saving their own political lives that they had not time to consider the way in which this thing was being conducted, and the result is the maritimes walked away with practically everything they asked. I think that when the case comes before the House we should bear in mind that this was what is known as an ex parte judgment. The Dominion government was not represented, and we should scrutinize very carefully indeed any sums of money we pay in a case where we are not represented. In Quebec certain proceedings are taken in cases where the party is not represented. We make an opposition to judgment. We take out a petition in revocation of judgment. We say we have not been justly treated, and the case is thereupon opened upon the necessary affidavit being made, and the party who complains has an opportunity of placing his case before the court. I cannot absolve the Meighen government from responsibility in this matter. After all, the commission functioned at the time the Meighen government _ was functioning. They were both functioning concurrently. Surely there must have been in the Tory party, who had been out of office for such a long period of time, some lawyer who could take up the brief for the Dominion government, and yet nothing was done. We are now faced with a situation of that kind, and I think the people of this country will demand some accountability from the parties responsible for what I would call a denial of justice.
The Budget-Mr. Jacobs

With regard to the suggestion made by the hon. member for West Calgary (Mr. Bennett) I say that to my mind it was the most constructive suggestion that has been made in the House this session. It seeks to reduce the interest charges on our public debt; and with a sinking fund, it seeks also eventually to abolish our debt altogether. Of course that will not come in my day or in the day of any gentleman listening to the sound of my voice to-night. But it seems to me to be a step in the proper direction, and it would be Well if this suggestion were sent to the banking and commerce committee and thrown to the young lions of the Progressive party so that we could see what they would make of it. It is something well worth considering, and the fact that it is not taken very seriously by the banking community of this country is proof to my mind that it is a pretty good thing. I think the bankers can be induced to see that it is in their interest to have something of that kind done. It is proposed to let them have four per cent upon their money, and as the hon. member for West Calgary said they have hundreds of millions lying idle, in some cases bearing not more than two or two and a half per cent, when they are helping the government they are helping themselves, because after all they are the largest taxpayers in the country. They are the people who will benefit first when we get our finances on an even keel, and I think it is only necessary for us to charge the hon. member for West Calgary, not professionally of course but what is known as amicus curise, to go down and visit his friends in the Sodom and Gomorrah of unrighteousness in Toronto and Montreal, pointing out to them the feasibility of the project and that it would enure as much to their benefit as to the people at large; something tangible would come of it.
I am always very wary of suggestions from my friends on the other side. Beware of the Greeks bringing gifts. Something good may come out of Nazareth, and the hon. member for West Calgary is too big a man to put forward something of this ldnd as a cat's paw, and I know he would be able to convince other people that the scheme is workable and would bring to the country tens of millions of dollars ' in due course.
I have no feeling that the government is going to be defeated. I do not think they will be, but if they are we will meet again at Philippi. We have trounced the Tory party successively three times now, and I think we are able to do it a fourth. At any rate, we are willing to try and let the best man win. I think the Minister of Finance 
ought to be congratulated upon this splendid budget of his. I think he deserves a great deal of credit for the brevity of the budget speech. In the olden days budget speeches used to take three and four hours and one could not understand what was being said because of the abundance of words. This is a business man's speech delivered by a business man in thirty-five minutes, a speech which everybody could understand and which raised the parliament of Canada in the estimation of the whole country. I only hope that we shall have the present Minister (Mr. Robb) for many years to direct the finances of the country. I support the main motion.
M:r. R. K. SMITH (Cumberland): It is not my intention to unduly delay the House this evening. I did not intend making any reference to the Duncan report at this time, but after listening to the hon. gentleman who has just concluded (Mr. Jacobs) I am bound to say that we are surprised to learn that any hon. member of this House could have been tempted to treat that subject in the humorous manner in which that hon. member has. The order in council creating the Duncan commission was passed last year when the present Prime Minister (Mr. Mackenzie King) was m office, and the instructions conveyed in the right hon. gentleman's letter to the commission were given during the month of April last. I understand that my hon. friend who has just sat down is a man of outstanding ability, learned in the law, and I should think that the Prime Minister, if he wanted to appoint counsel to assist the commission, could not have made any better choice than the hon. gentleman himself. But there was no necessity for counsel in connection with that investigation for the reason that there was not involved any question of law of a technical character such as would warrant the employment of a legal man. The matter for investigation had reference to certain unfair conditions there, and the object was to ascertain what remedies could be applied to alleviate those conditions, which have existed in the maritime provinces ever since confederation. I trust that the .party opposite will not generally treat the subject as humourously as my hon. friend has.


Samuel William Jacobs: In what sense did I treat the report humorously? I pointed out that there was no counsel, and that is no laughing matter.


Mr. SMITH (Cumberland):: I listened carefully to the hon. gentleman's whole speech, which was full of a delicate humour at the expense of the report, and the tone he adopted

The Budget-Mr. Smith (Cumberland)
in relation to the investigation is in keeping with the rest of his remarks. His reference to the fact that no counsel had been appointed was presumably ironical; it was altogether unnecessary.
I want to put myself on record as being disappointed, as all of us from eastern Canada are bitterly disappointed, and indeed properly perturbed, that the budget contains no relief for the two basic industries of Nova Scotia. We are particularly disconcerted at this, in view of the information which we gave this House and the present Minister of Finance (Mr. Robb) during the last session of parliament. If our words, our pleas and our testimony have no weight with the minister, if he is inclined to be sceptical of the seriousness of the situation and if he takes this position because of the policy of ' the party to which he belongs, surely there is reason for him to have some regard not only for the pleas of the .people generally, and of all political parties in Nova Scotia, but also for the recommendations of the royal commissions appointed by this government and by the province as well. The royal commission appointed by Nova Scotia in 1925, in an addendum, to its report, suggested an increased duty on coal and steel, and the royal commission appointed last year by this very government also recommended, at least by implication, further protection on coal. Let me read from the Duncan report the paragraph regarding the customs tariff on coal.
Several phases of the customs tariff in its relation to coal were brought to our attention both by the government of Nova Scotia and by the operators of the coal mines. These we feel ourselves precluded from dealing with since they are a matter properly to be considered by the Tariff Advisory Board, but we may be permitted to say that we are impressed with the need for reconsideration of the customs tariff in its relation to coal and anthracite coke and recommend that the Tariff Advisory Board should be asked to give immediate consideration to the subject.
Let me stress some words of that paragraph: "We are impressed with the need for reconsideration of the customs tariff in its relation to coal." There can be no reconsideration of the customs tariff on coal in a downward direction; such reconsideration must have an upward trend. Still, notwithstanding the fact that an application was presented to the government in 1924 by a delegation 'headed by the then Premier of Nova Scotia, Mr. Armstrong, asking for increased protection on coal; notwithstanding that in an addendum to its report the royal commission appointed by the government of Nova Scotia in 1925 recommended the same thing; and notwithstanding
that the royal commission appointed by this government itself now urges a higher protection in this direction, we 'have in the year 1927 a budget brought down by the Minister of Finance in which this important industry and all the recommendations are totally ignored.


James Alexander Robb: How will increased protection on coal improve the steel industry in Canada?


Robert Knowlton Smith: The steel industry is linked up with the coal industry, particularly in eastern Canada, to such an extent that it is almost impossible to separate the two. We have information to the effect that in Nova Scotia-and this applies to the rest of Canada-it takes four tons of coal to produce a ton of steel, so that whatever you do for the benefit of coal will assist steel, and vice versa.


Mr. ILSLEY:: Is the hon. member aware
that the member for Cape Breton South (Mr. MacDonald) at a meeting in Sydney a few weeks ago said that his experience on committees of the House and in the House itself had convinced him that the members representing central Canadian constituencies were solidly against an increase in the duty on coal?


Robert Knowlton Smith: I am not aware of that; I am surprised to hear it.


James Lorimer Ilsley: He was so reported.


Robert Knowlton Smith: People are
often misreported. The hon. gentleman is here in person and can correct the statement if it is wrong.


Mr. MacDONALD (Cape Breton):: What I said was that it was doubtful whether we could hope for an increased duty on coal, as Ontario and the west would probably be against it, but it was not at all hopeless.


Robert Knowlton Smith: That is quite a different construction ^rom the one placed on those words by the hon. member for Kings-Hants (Mr. Ilsley). I was going to say, Mr. Speaker, that possibly the Minister of Finance might say that this is properly a question for reference to the Tariff Advisory Board, and in connection with that board let me say a few words. I know nothing of its personnel but I do know that it has no power; in my opinion it has not even enough power to be self-respecting. There is a saying which I used in the House last year which seems to me particularly applicable to this board; it has powder in its canister but no shot in its locker. It has no power to make a finding, can only make a recommendation, and it appears to me to be a vehicle for the shelving
780	COMMONS
The Budget-Mr. Smith (Cumberland)
of troublesome questions when they are such. Last year, however, after the Tariff Advisory Board was constituted, a tariff matter was absolutely taken out of its hands in connection with the reduction of duty on automobiles. If this board is to be something worth while is it the policy of the government to place before it questions of a troublesome nature in order to escape responsiblity, and on the other hand to take any political advantage possible through a popular reduction in the tariff by using their own judgment without referring the matter to the board at all?


Herbert Bealey Adshead: Was the tariff board inaugurated at the- time the automobile duty was removed?


Robert Knowlton Smith: The tariff
board was properly constituted before the duty on automobiles was dealt with last year, and I do not believe that to be a fair proposal to the industries of this country. If the board is to be made something worth while and something which will function properly, certainly it must be used in a proper way and not as a means of sidetracking troublesome questions. It should be used to secure all the information available and forward it in their findings to this House.
The question has arisen, Mr. Speaker, as to whether or not the coal industry in Canada is worth while. Last year in Nova Scotia we produced 6,300,000 tons of coal, slightly more than in the year previous; one-fifth of the population of that province is directly dependent upon the coal and steel industries and one-twelfth of the revenue of Nova Scotia is secured from royalities on coal. In the Dominion of Canada we have invested about $150,000,000 in coal mining, and1 the coal business in Canada has attained a value of as high as $80,000,000 in one year. I say, Mr. Speaker, that it is an industry which we must protect. If the coal industry in Nova Scotia is allowed to go by the board and disappear, there will also disappear from the province of Nova Scotia one-fifth of its population and one-twelfth of its revenue, and chaos will be created in the business of that province. But someone will say that there is no danger of the coal industry in Canada disappearing; I say there is a very grave danger unless something is done to properly protect it. Last year we imported from the United States about 17,000,000 tons of coal, of which 13,000,000 tons were of the very grade we produce in Nova Scotia. It has been said that some day anthracite coal in the United States will be exhausted, and when that time comes we must look elsewhere for our hard coal, or for 
a substitute. We should be independent of the United States with regard to bituminous coal as well as anthracite, because we do not know when we may be cut off from this supply. A war, a strike, or any other contingency may at any time stop the importation of American coal into Canada, and we have no way of looking ahead and guarding against these things, except by developing our own industries. We should be prepared to meet such conditions, and that can only be done by becoming independent of that country in relation to coal.
On the Canadian National railways last year we used 5,000,000 tons of coal, 3,000,000 tons of which came from the United States. It does not seem to me that we are treating our coal industry fairly; it certainly deserves something better than that. We are not asking for high protection, as some hon. gentlemen opposite would like to make people believe; we are asking for a moderate, adequate protection, something that should be granted readily because the duty to-day is practically the same as it was in the eighties while the protection is less than half as much, for obvious reasons which need no elaboration. We are asking for an adequate duty to protect this industry, and as soon as it is found that proper protection is given, the duty if need be may be very readily lessened. Some may say that this will have a tendency to increase the price of coal in Canada; in that connection I have here some of the remarks of Mr. Cronyn, which are very pertinent, but with which I will not weary the House. It does seem to me, however, that if the output of coal could be doubled in Canada there would be an appreciable difference in the cost of production, more than enough, I believe, to offset the increased duty. I believe that duty should be $1 per ton, and I believe if that duty is granted, with the coking plants which we hope to see established and with the freight reductions which are promised, we can establish an all-Canadian coal supply for an all-Canadian market.


James Lorimer Ilsley: Has the hon. gentleman
given consideration to the statement of the fuel board that it would take a duty of $6 instead of a duty of $1 to make us independent of foreign supplies?


Robert Knowlton Smith: The other'
evening I listened to the Minister of the Interior (Mr. Stewart) when he read the report of the fuel board. It appeared to me then that it was a theoretical treatise, a sort of historical document dealing with the deposits of coal in the world, with no practical application to the coal trade of Canada. The
question was not treated in a practical way, and I am not aware of the information which the hon. member has just stated, whether it came from the fuel committee or whatever its source; and it sounds absurd.
Another thing, Mr. Speaker, is that we have a reserve of' coal in the province of Nova Scotia to the extent of ten billion tons. It seems to me that this government should protect this basic industry in one of the old struggling provinces of this Dominion.


Mr. NEILL:: May I ask the hon. gentleman a question?


Robert Knowlton Smith: Yes.


Alan Webster Neill: Is he aware that a duty of
a dollar a ton, which is double the present duty, would practically put out of operation ail the coal mines in British Columbia?


Robert Knowlton Smith: Put out of
operation all the coal mines in British Columbia?


Alan Webster Neill: Yes.


Robert Knowlton Smith: Why^ the
total Canadian export of coal to the United States and to all foreign countries is only slightly over ia million tons annually. Does the hon. gentleman mean to say it will work hardship to the coalfields, or the coal miners or coal operators of British Columbia? It may work hardship to the extent of a million tons but the rest of Canada would be relieved to the extent of the hardship represented by sixteen million tons.


Alan Webster Neill: I hope the hon. gentleman's
Conservative friends from British Columbia will note that statement of policy on their behalf.


Robert Knowlton Smith: It is not a
statement of policy. I am not claiming that action taken to properly equalize things might not result in some slight disadvantage 'to the rest of the Dominion. There might perhaps be a slight increase in the cost of coal until the question could be properly adjusted and worked out on a fair business basis. It might work some hardship to the coalfields of British Columbia-I am not maintaining that, nor am I admitting that it would-but I say the question is one which will have to be further developed by those who are more familiar with the coal trade in British Columbia than I happen to be.	.
Now, Mr. Speaker, I am going to leave the question of coal and speak about two other industries in the province of Nova Scotia that are Very severely affected by the customs tariff. Last year I brought to the
1, 1927	781
The Budget-Mr. Smith (Cumberland)
attention of the House and of the Minister of Finance a languishing shoe industry which happens to be located in the town from which I come. That shoe industry was languishing last year. This year it is dead. It has gone into liquidation and is now in the hands of a receiver, due to unfair competition coming mostly from the old country. That industry was established away back in the year 1867. It has progressed almost^ every year down until about 1921. But to-day it is in the hands of a receiver. Why we should allow unfair competition to interfere with any legitimate industry in this country is more than I can understand. The Prime Minister has made the statement in this House and out of it, that no legitimate industry in Canada would suffer through his fiscal policy. This industry is certainly legitimate and it is surely suffering from the policy of inadequate protection. This applies not only to the shoe industry in the. province from which I come but to the industry all over the Dominion to a very marked degree. Why, Mr. Speaker, the boot and shoe manufacturers have to pay from fifteen to thirty-five per cent duty on the raw material that goes into the manufacture of some of our boots and shoes in this country, whereas in the old country, they get their raw material free. Last year there were imported into the Dominion 809,483 pairs of shoes to the value of two million odd dollars. We exported from Canada during the same period -these are figures for the year ending January, 1927-110,337 pairs. I have a lot of figures here but I am not going to weary the House with them. It is sufficient to note that we are steadily increasing the importations of boots and shoes,-and leather goods manufactured and unmanufactured, into the Dominion. It certainly is not a healthy sign. It shows very positively that there is something radically wrong with the tariff and its application to this business, and the government at least should recognize the fact that it requires a little more consideration and a higher degree of protection.
I spoke also last year with regard to the woollen industry. We have a woollen mill in the' town whence I come which is boarded up, due to unfair competition from abroad. The textiles and fibres which were imported into this country during the year ending January, 1927, amounted to a little uader $200,000,000-1184,000,000 odd. We imported in 1926, $181,000,000 odd, and in 1925, $163,000,000 odd, showing a steady increase in the importations of textiles and fibres into Canada. Look at our exports. During the same period of

The Budget-Mr. Smith (Cumberland)
1925 when we imported $163,000,000 odd, we exported nine millions odd. In 1928 we exported but nine millions odd, and in 1927, a lesser amount of seven million dollars odd. We imported from the United Kingdom last year to the extent of $72,000,000 odd, but we exported to that country only $844,000 odd. These figures are for the year ending January, 1927. We imported from the United States $69,000,000 odd, and exported to that country $3,000,000 odd. I think these figures speak in no uncertain tones as to the position of the textile industry in this country and what it requires. It has been said in this chamber that Penman's are doing much more business than they did previously, that their bonds are high. Penman's may be progressing, but the smaller mills in the Dominion are the ones that are suffering. The smaller mills all over the Dominion are unable to meet that unfair competition; they are unable to compete with the wage rate, lower to the extent of one-half, that is paid in the old land, and with other unfair conditions. They certainly cannot meet that competition on anything like a fair basis unless some further tariff protection is granted.
I am going to conclude by stating that in the maritimes to-day there is one matter transcending all others in importance, and that is the implementing by legislation by this government of all the recommendations contained in the Duncan report. We have passed the stage of trifling in connection with this matter. We will discuss the issues dealt with in the report later. It will not be amiss, however, for me to state now that all the people of the maritime provinces are of one mind on this report, namely, that it should be speedily implemented in toto by legislation by this parliament.at this session. Anything short of that-any delay, amendment or mutilation-will meet with such hostility from eastern Canada that I hesitate to mention in this House what sort of revolution will take place.


John Millar: We
have listened, Mr. Speaker, during this debate to a great flow of oratory, and a great many figures which would lead to the conclusion that one could prove almost, anything from figures. Some of the arguments which I have heard do not seem to be very sound-in fact there were a number which appeared to me to be very absurd.
I take the Hansard of yesterday and I find in the remarks of the hon. member for Frontenac-Addington (Mr. Edlwardb) as reported on two pages not very far apart, an argument in one place that the imposition of a duty increases the price of wheat, and in

another that the effect of the imposition of a duty is not to raise the price of a protected article. On page 736 of Hansard the hon. member is reported as saying:
The purpose of protection is not to raise prices but to defend and develop the purchasing power of the nation.	,
Those are very plain words. On the next page the hon. member for Moose Jaw made this statement:
Mr. Ross (Moose Jaw) : The hon. gentleman will admit that a duty of 42 cents a bushel on wheat does not raise the price of wheat in the United States for the simple reason that they have an exportable surplus.
The hon. member for Frontenac-Addington proceeded to demonstrate that in the United States they have a duty on wheat, a duty,on eggs, and a duty on butter, and he asked: Are the legislators of the United States all deceived? No other conclusion can be drawn from that than that he believes and they believe that the imposition of a duty raises the price of those goods in the United States. Thus we find contradictory remarks on two pages, one immediately following the other. The hon. member for Frontenac-Addington is entirely wrong in regard to wheat. He stated that if the imposition of a duty on manufactured goods raises the price, it must follow that the imposition of a duty on wheat in Canadb. raises the price, because he said, as we have a duty of 12 cents a bushel on wheat -I think he is wrong in that; I think the duty is 8 cents a bushel-the farmers must have reaped, because of that duty, a profit of $10,000,000.
This is what really takes place. He made the statement-and on the other side of the House a goodly number of members applauded it-that if it were true that the imposition of a protective duty raised the price of manufactured articles, it would also have the same effect on wheat. Why does it not? On the surface it seems rational that it should. This is the reason: The price of our Wheat is fixed in the old country market. You have to bring your competition to bear on the governing market and our governing market for wheat is in the old country. I think the hon. member for Moose Jaw (Mr. Ross) was partly right and partly wrong when he stated that the duty placed by the United States government on Canadian and other wheat going into that country did not raise the price of the wheat in the United States. In the United States they have an area that grows strong, hard wheat, of which they have not sufficient, of which they are very short. The imposition of a duty against Canadian wheat does protect that wheat and does raise the

The Budget-Mr. Millar
price of it. On the other hand they have also large areas that grow soft wheat of which they have a surplus. That wheat is not greatly in demand. They require perhaps more of it than they do of hard wheat; but still they do not require all of it, and they export part of it. Thus we have an example in the one country, the United States, of a protective tariff raising the price of a part of a commodity and not affecting the other part. The governing market for the soft wheat is the old country, the same as is the case with us. The governing market for the hard wheat is in their own country, and that is where you can protect and where you can raise the price. But you cannot do that with Canadian wheat. Our price is governed by the price in Liverpool.
The hon. member for Vancouver Centre (Mr. Stevens), who is not in his seat at present, and a few other hon. members have directed some attention to the group that sit in this row of benches where I sit, and I wish to make some comment upon their remarks. If one is charged in a court of justice one wants to know what the charge is and what is the proof of his guilt. There were others in this row who were elected on an arrangement somewhat similar to the one on which I was elected. I was elected as a Liberal-Progressive, and I wonder if the charge is made because I have joined up with another group that has a very similar platform. I would not mind being accused of that. In fact if I were to be charged with anything of that nature, joining another party, crossing the floor to or linking up in any way with another party, I would suggest to the hon. member for Vancouver Centre that two of the judges might be the leader of the opposition (Mr. Guthrie) and the hon. member for Fort William (Mr. Manion). Perhaps they would know as much about how it felt whether or not they were apostates, whether they were criminals, whether they deserved to be treated as the Minister of Immigration (Mr. Forke) has been treated. Some have laughed because the Liberal-Progressives have taken their seats on this side of the House.


An hon. MEMBER:: Hear, hear.


John Millar: An hon. member says:
" hear, hear." To go back at little, let me ask: Is there any disgrace in being elected as a Progressive with Liberal support or as a Conservative with Progressive support? I do not think there is any reason whjr I should be ashamed when two groups in my constituency, whose views on the tariff and on other matters are almost identical, agreed to come
together and to choose a candidate as they did, and I was elected. And when I come to this House, where is the logical place for me to sit?' There are only two: one with the Progressives, and the other on this side of the House. I do not think there is any blame whatever attaching to me, no matter which I choose; I could be damned for doing either. Is there any good reason why the hon. member for Vancouver Centre, who perhaps has been dealing a little to much in mud of late and has become too handy at throwing it, should point to this group and say we have betrayed our principles? While his attention was directed chiefly towards the Minister of Immigration, it certainly must have included others as well. Is there any reason to believe that we are not doing our best to get what we consider to be in the interests of the country? Is there any reason to believe that we uphold evil? Is there any reason to believe that we are not as true as when we were elected in 1921? I do not think so.
The farmers' platfonn spoken of by the hon. member for Vancouver Centre was drawn up about 1912 and I believe it was revised in 1917. The hon. member for Vancouver Centre read over this platform and, referring then to the Minister of Immigration, he used the word " apostate ", stating that there were those who had betrayed the people who trusted' them. I would point out that many changes have taken place since then. We have had many reductions in the tariff. There have been very many changes that would cause one to take a different view. Besides, since I have been here I have not been standing still. I do not think one is necessarily to blame if he should change his views as he listens to arguments, comes into contact with other members, and hears them discuss their problems. If there is any member on the other side of the House who has not changed his mind in five years, I would like to see him stand up. The implication of the hon. member for Vancouver Centre was that because one did not act exactly as he did when that platform was drawn up, he was an apostate and a traitor. Well, if there is any member on the other side of the House who has not changed his mind in five years, though he may think he liveth, I think he is dead,
I am going to direct my attention now to some measures that it seems to me might help to improve the condition of Canada. I am inclined to think that perhaps too much attention has been paid to the tariff question. It is good fighting ground, and I suppose that is
The Budget-Mr. Millar

the reason why it is discussed at great length every session. But the tariff question is not all. I freely say that I am not entirely satisfied with the present budget so far as the tariff is concerned. I was elected, 'as many other hon. members were, on a low tariff platform, and I hope tQ get that low tariff as quickly as possible. I believe in a low tariff, but since listening to the remarks of other members I confess that I have changed my mind slightly in some particulars, though on the whole I am of the same opinion regarding the tariff as I was when I came here in 1921. We have had. changes made in the tariff since 1921, some in 1924, but I would like to see the Minister of Finance (Mr. Robb) go a little further.
I might have had reason to vote against the budget if it were not for the fact that we have had a tariff board appointed. I thought this matter over very fully. Last session was a very hectic one, and it was followed immediately by an election. Then came the conference of the premiers in London. I know that private members are very, very busy, and ministers are much more so, and I cannot see how it would be possible for the government to have the time necessary to weigh carefully all the data gathered by the tariff board in the short time that elapsed before the opening of the session. You know what it means to peruse the evidence taken down by a shorthand writer covering the proceedings of only one day. To sift that evidence and study it in relation to other matters is no small task, and I do not think any member who desired to be fair would say that it was possible for the government to consider that data properly and bring down any important tariff changes based upon it at this session. I have no hesitation in saying, however, that when next session rolls around I shall expect, if I am here, very radical changes in the tariff. I hope there will be reductions all along the line, but for the present I cannot severely criticise the government for not doing that which I feel it was physically impossible for them to do.	,*
The hon. member for Toronto West Centre (Mr. Hocken) referred to the income tax, as he does almost every session, and he pointed out that the farmers are paying very little income tax. I have been struck more than once with the nerve of those who, after they have grasped what belongs to themselves and three or four others will then stand back and pour ridicule and scorn on those who have not paid the income tax. If I have my share of the goods of this world and the share of
(Mr. Millar.]	.
three or four others as well, I have no right to ridicule the others if they do not pay their share of the income tax, and that is exactly what has taken place. The farmers are not paying income tax simply because they are not earning sufficient income.
A suggestion I would like to make is this. Looking into the future, I think what ought to be done is to endeavour to eliminate waste. During the years that have passed many blunders have been made. Going back as far as 1912, I think a gigantic blunder was made when the Welland canal was started. The first estimate of cost made by the engineers on this work was $50,000,000, but it has already cost more than $62,000,000, and the last estimate of the engineers is that the cost will reach $114,500,000. This with interest will bring the cost when completed to approximately $140,000,000. If you take a pencil and reckon the interest on that at four per cent you find that it amounts to $5,600,000 a year. This canal was built ostensibly for the three prairie provinces. We will suppose, just for the sake of getting an approximate reckoning, that each province pays its share of the interest. That would leave one-third, or $1,866,000 to be paid by the three prairie provinces in interest alone. In view of that charge, where are they going to make a gain after the Welland canal is completed? All the benefit they will get from the completion of the canal is that the larger ships carrying their grain will be able to go through the Welland canal, and about 150 miles further. If they save one cent a bushel -I think that is about the highest estimate one can make-and if 100,000,000 bushels passed down the canal each year, which I think is about the most we have reason to expect will pass eastward, that will mean a saving of $1,000,000 a year, so that the benefit to the three prairie provinces would be less than their share of the interest. If that is the case with the three prairie provinces, for whose benefit the canal was supposed in the main to be built, what is to be the experience of Ontario? What is to be the experience of Quebec? What is to be the experience of the maritime provinces and of British Columbia? I think a very great mistake was made in starting to build the Welland canal. We do not get any benefit from it until we have invested $114,000,000, and I, omitted to mention that the interest on that would amount to probably $20,000,000, making a total of approximately $140,000,000.
Let me mention some other mistakes we have made in the past. We are considering at the present time various huge projects involving a large expenditure of money, such

The Budget-Mr. Millar
as the St. Lawrence waterway development, the building of the Georgian bay canal, and other enterprises, and in view of that I thought it might not be out of the way to refer back to some of the mistakes that have been made in the past. I have already mentioned the Welland canal.
The second mistake was the building of paralleling railway lines-wasteful duplication. We have in western Canada, and in some places in eastern Canada, railway lines paralleling each other for fifty, sixty or a hundred miles, only a mile to three miles apart, while in other districts the people are drawing their grain long distances to the railroad, in some cases doing their marketing forty miles away. That was one blunder for which we are paying dearly now.
Another costly error was the building at enormous cost of the National Transcontinental to Quebec, and then the raising of freight rates to such an extent that very little freight travels on that line. If hon. members would refer to the arguments advanced at that time they would see that the road was built to carry our grain to Quebec, to keep it in Canadian channels. For a short time after the road was built the rate was low, six cents a bushel, but I believe it is now about twenty-one cents. The result is that after an expenditure of hundreds of millions of dollars the railway is not used for the purpose for which it was built. Hon. members may think lightly of that, but as a matter of fact Canada is paying for that blunder.


Mr. HARRIS:: Would the hon. member
be good enough to tell us what administration was responsible for the construction of the Grand Trunk Pacific?


John Millar: We spend too much time
quibbling as to which party was responsible for this or for that. While important business of the country is to be transacted, and while we are here to transact it the best way we can, we have whiled away hour after hour and day after day quibbling as to who is responsible. I am sure my hon. friends on the other side have been guilty of blunders enough; for instance, the building of a dry dock at Victoria, where it Should not have been built, in order to elect one of their members; and they have tried to build an hotel at Vancouver. That is another blunder.


Mr. McMILLAN:: Was there a board of
trade between Quebec and Vancouver that was not in favour of it?


John Millar: This may seem irrelevant,
but after thinking it over, I believe it is quite to the point to draw to the attention
3264D-50
of hon. members what may be gained by watchfulness in this House. We sit here day by day and sometimes appear to take matters lightly, but there is a great amount of work being done, and large saving can be made by hon. members if they are watching. I am going to mention two circumstances. In 1923 Mr. Wallace, a member of the Progressive group and an electrical engineer, rose when the then hon. member for St. Lawrence-St. George proposed a private bill for the renewing of a patent, and opposed the measure. I do not think there was another member in this House who knew there was anything dangerous being put through, and I do not think the member for St. Lawrence-St. George knew it himself. He probably had been requested to put this private bill through and was proceeding to do it. Mr. Wallace, whose constituency I have forgotten-


An hon. MEMBER:: Elgin.


John Millar: -arose in his .place and in a twenty minute speech saved to this country $15,000,000 in six years. It was done in this way: He pointed out that this company had received a charter in Great Britain in about 1904, a charter in the United States about 1906 and one in Canada about the same year. They enjoyed the privilege in one country for seventeen years and in another country a little less, and they had applied in Great Britain to have the patent renewed and had been refused. They had applied in the United States, and had been refused, and this time they were before the Canadian parliament. It was all new to us. He pointed out that during the time they were protected in their patent, the price of a little tube used in the radio was $9, then it dropped to $6, and after the expiration of the patent it dropped to $4. He said, "I believe that if this patent is renewed for seven years"-that was the time asked for-"the price will rise $2 on * each tube." An estimate was made of the number of tubes used in Canada, and it figured out $15,060,000 in six years-one year had then expired. That is just one example of what can be saved by watchfulness. Probably not one person in Canada out of a thousand knew that this saving had been made, or how it was made, or anything about it.
I desire to refer to another instance. Those who sat in this House in 1921 will remember that a request was made for the renewal of a coal lease in Alberta which was known as the Hoppe Isenberg lease. I am not going fully into the details of it, but that bill passed through the House and everybody seemed to take it as a matter of fact. It went to the Senate and was checked up there. A confer-

The Budget-Mr. Millar

ertce took place between members of the Senate and members of the House of Commons, and the lease was refused. A later discussion in this House revealed the fact that the lease of that property, if my memory serves me rightly, was worth from two hundred million to three hundred million dollars. I believe the then leader of the opposition, Right Hon. Arthur Meighen, made the statement that a provisional sale had been made to English capitalists for that amount. That shows the importance of watchfulness and care.
I desire to make another suggestion. We have been discussing the tariff, and sometimes one is a little in doubt-I frankly confess that at times I am in doubt-whether we will ever be able to reach the point where we can do away entirely with the tariff, and, if you will, with protection. What I believe should be done is to lower the tariff all round, because it is a great inconvenience-injustice is the word I wanted to use-to those manufacturing in one line if the protection they enjoy is removed while other products are protected. It places them in the same position as that in which the farmer finds himself at the present time. The Canadian farmer cannot be protected, but he must buy in a protected market. If after we have thoroughly studied this matter, and after the data has been received from the tariff board, those of us who believe we should eventually have free trade 'find we must compromise with other parts of Canada, that we must carry a certain part of the burden of the cost of that protective tariff, then I think even in western Canada we could do so, provided the government would do more to help us in connection with agriculture.
Let me give hon. gentlemen some figures to show what has been the result of this assistance the government has already given. They have - been fostering agriculture in all its branches. I need only refer to what has been done in the way of growing earlier and stronger varieties of wheat. Marquis wheat has revolutionized the industry in the west and is now being used largely in the United States and even in South America. Where would Canada be to-day as a wheat growing country but for that fostering care on the part of the government? No individual farmer could do that experimenting himself, for it is expensive work; but as a result of the assistance of the government we are very well to the front in the wheat growing industry. Perhaps it would be surprising to some if I were to say, what is a fact, that in sixteen years at the Chicago exposition Canada won the grand championship in wheat fourteen times. In the

forefront among the provinces is Saskatchewan, but we are pleased to see that our sister province of Alberta has won the championship in the last two years; and as wheat growing is moving westward and northward, Alberta will probably become the banner wheat province of Canada.
What about oats? Twelve times out of sixteen Canada has taken the grand championship for oats at Chicago, and when it comes to another department of agriculture, horses, in nine years the Clvesdale horses of Canada have taken thirty championships at Chicago. There will come a time when we will ask for greater assistance for agriculture, and I point out these Canadian successes in order to show that the money ls by no means wasted. Canada would not occupy the position she does to-day in regard to grain, cattle, hogs and poultry if it were not for the fostering care of the Canadian government. Perhaps the Minister of Agriculture (Mr. Motherwell) may suggest that I am overlooking the fact thatlthe business of production is really a provincial matter. I do not forget that fact, but I have in mind also that while that is true the Dominion government has been doing a considerable amount of work along this line and there is no reason why it should not continue to do so.
We are sometimes advised to take up mixed farming in the west. In order that hon. gentlemen who have not had the privilege of visiting that part of Canada, and Who therefore are not familiar with western conditions, may learn something about the west, I want to point out that we are rapidly following this advice. We are going into mixed farming more 3nd more. I will give you the figures for Manitoba, and I take that province because it is in the lead in taking up mixed farming. You will be surprised to know that the wheat acreage in 1903 and the wheat acreage in 1926 were just about the same in Manitoba. But what about other industries? In four points in Manitoba they are shipping honey by the carload, and from forty to forty-eight per cent of the barley grown in Canada is produced in Manitoba. Last year that province produced $450,000 worth of turkeys while the vegetable crop in 1926 totalled $3,000,000 exclusive of potatoes. Here are some interesting figures: agricultural products in 1917, 1918 and 1919 in that province, amounted to $2,000,000; in the following three years they fell to $100,000,000 and in the next succeeding three years tiny went up 'to $150,000,000.
I intend to touch on one more matter before I sit down. I will pick out one department and discuss it in detail in order to show what progress is possible, and I am taking,

The Budget-Mr. Millar
not the grain industry, not cattle, horses, piga and sheep, but one of the smaller activities. I do this for two reasons: first, because it has been most neglected, and secondly, because we are going to hold a poultry congress in Ottawa this coming summer. The industry to which I refer is of course poultry raising. It may seem like a small thing, but as a matter of fact it is not. One gathers a dozen eggs here and a dozen there, and this may appear insignificant. But when it is pointed out that the egg production of Canada in 1926 represented the sum of $66,000,000, and this from the farms alone, you will see that the industry is of some magnitude. Here is a remarkable fact about the poultry industry: Canada does not produce sufficient eggs to supply her own market. We exported in 1926 2,501,000 dozen eggs and imported 3,341,000 dozen. It is only some eight or ten years ago that the government of Canada took any serious steps towards improving the poultry industry. Now see where Canada stands in this regard. A year ago I listened to an address by a gentleman who stands at the head of the poultry work at the experimental farm and I heard him make this statement. He said, "we thought at one time that Canada's cold climate was a handicap to the poultry industry of the country, but instead of that it has proved an asset." This man took pens of poultry over , to Spain last j'ear and of twenty-five countries represented the Canadian exhibit stood up best, surprising the poultry raisers from abroad. Sixty-four countries hold egg-laying contests, and there is an opportunity of bringing them together and making comparisons between the achievements of Canadian hens and those of other countries. What has been the result? In 1925, out of 64 countries in which these contests are held, 39 hens laid 300 eggs or more each in one year, and of those 39 hens 19 were from Canada. Is not that a record? In 1926 the results were equally good. The pen that took the lead was also Canadian, giving an average of 296 eggs, while one Canadian hen laid the largest number of eggs of any bird recorded in any country since contests have been known-351 eggs. We do not know what hens may have done of which there is no record, but of those of which any record has been kept the Canadian hens have been foremost. The hen that laid these 351 eggs was owned by the university of British Columbia. The eggs from that hen are selling to-day not for 25 cents each but for $25 each, and the demand cannot be supplied. During that year that hen laid her weight in eggs each month, approximately.
32649-50'
I would like to say a word about the poultry congress before taking my seat. This year this congress is to be held in Ottawa; forty countries will be represented, and I fear that unless it receives more publicity and encouragement the benefit to our poultry industry and the advertising Canada may get from it will be lost. Last year this congress was held in Spain and there was a great fight between Canada and the United States to secure the meeting for this year; Canada won, and Ottawa has been chosen as the place of meeting. There will be present 8,000 delegates; on the program will be representatives from Japan, Russia, Germany, France and Persia, as well as a large number from the United States, from which country I believe 3,000 delegates are coming. This is a wonderful opportunity to advertise Canada. Why are they coming to this country? They are coming here because Canada has taken the lead in the poultry industry, and it has taken that lead simply because it has been given encouragement by the government. One of our representatives addressed a gathering in New Jersey some time ago; that state is well in advance in the poultry industry, and after his address was finished the gentleman at the head of that industry in New Jersey said, "Everything we have done in this state has been copied from Canada." Canada is now looked upon by the poultry raisers of other countries as the country which will supply the breeding stock of the future, because of our registration system, which I have not had time to deal with. It just comes to my mind now that recently a gentleman in Ontario sold a bird to someone in the United States for $125.
In order to point out just what progress is possible in this industry let me say that the poultry branch discovered that by mating one breed of laying hens with an excellent laying strain they were able to increase the egg production by forty per cent in one season. A short time ago I had occasion to go into the poultry department of the experimental farm near my home. It was thought that the cold in that part of the country would be such that the hens would not lay during the winter, but there I found that a pen of 95 pullets were laying 60 eggs per day with the thermometer between 40 and 47 below zero. So there is no reason why enormous strides should not be made in this industry. We have talked sometimes of subsidizing industries. We on this side of the House are not much in favour of that, but here is a way in which the agricultural industry could be assisted and enabled to lighten the farmers' burden. I think it would
The Budget-Mr. Miller

be well if, when grants are asked for agricultural purposes, those who are engaged in manufacturing and as merchants were very-generous in these expenditures.


Leon Johnson Ladner: May I ask the hon. gentleman a question? In connection with the data he has given, does he not think that the application of the Egg Marking Act, as it exists in British Columbia, would be advantageous to the industry throughout Canada without bringing any ill effects upon the consumers?


John Millar: I am not familiar with that act and cannot answer the question.
In closing may I say that we who reside in the western provinces and who are engaged in farming are sometimes urged to be broadminded and to look at things from a national viewpoint. So far as I am concerned, and I believe others take the same attitude, I realize that there is a place in Canada for industries, and we do not want to crush them out. All we ask is that we have a fair chance also. Together we can develop Canada; together we should endeavour to strengthen the weak spots which are continually being found. The maritime provinces will and no doubt should receive some assistance, and it is well that we should take a national view in considering all parts of Canada. We ask no protection as growers of grain or stock but an opportunity to make a fair living; we do not want to carry the burdens of others and neither do we desire to load our burdens on anyone else. We are willing to listen to those from, other parts of Canada who are engaged in industries of which we know little; we can learn from them and we want to understand them; we want to do the fair thing and to be generous when they ask for assistance, but we do ask the same consideration from other partis of Canada.


Mr. J. L. BROWN (Lisgar):: Mr. Speaker, the observations I shall make at this time will be much more brief than I had at one time intended; the debate is dragging along and I do not think it would be wise to take a very great deal of time now.
As I approach a discussion of the budget proposals let me say that I feel something like the Scotchman who was going to get married. As the time for the ceremony drew near it was observed that he was looking somewhat downcast, and he was asked by a friend if he had lost the ring. To this he replied, " No, but I have lost my enthusiasm." I say very frankly, Mr. Speaker, that I do not accept the budget as presented with a great deal of enthusiasm. In its two major parts, those re-
IMr. Millar.]
ferring to the tariff and to the reduction in the income tax, it is not my idea of what a budget should be. The reduction in the income tax, in so far as that might seem to indicate the intention or the disposition to further reduction with a view to the total elimination of the tax, meets with my entire disapproval.
The tariff has been discussed year after year, session after session, and it would seem to be maintained by some that there is no difference between those on different sides of the House. The hon. leader of the opposition (Mr. Guthrie) in an address this afternoon that was listened to, I am sure, with a great deal of interest by every person in the House-and the hon. gentleman is to be congratulated upon the way in which that speech was delivered, in spite of the fact that as he proceeded we could here and there detect fallacies in the argument-maintained that the Conservative party is not a high tariff party. I think, however, we have reason to suspect that it is at least a higher tariff party. During the course of the election campaign I got hold of a certain document which I do not think was intended by those who circulated it to get into the hands of the antiConservative candidates. However, I got it; it was given to me by one of the retail merchants in my constituency. It was a circular letter issued by Bates and Innes of Garleton Place who, I understand, have close relations with the Hawthorne Woollen Mills. The Hawthorne Woollen Mills, which were the subject of discussion some two or three years ago, are located, as those of you who were here then will remember, in Carleton Place, a short distance from Ottawa. In this circular letter there were three interesting paragraphs. One was to the effect that a protectionist government was going to be elected. That was a prophecy and, as it proved, a false one. It went on to urge the argument upon the retail merchants that when this protectionist government came in the tariff would be increased, that in consequence of the tariff prices would be higher-that was the effect of the argument-and consequently they urged upon customers that this would be a good time to buy. I think you may be sure, Mr. Speaker, that I did not neglect to make use of that circular letter in the course of my election campaign in trying to prove that hon. gentlemen opposite were in favour at least of a higher tariff, if not what they are pleased to call a high tariff. That I think affords us some justification for at least trying to distinguish between the two.
I may say frankly in regard to the income tax that there are some respects in which I

The Budget-Mr. Brown
recognize that there are anomalies. Is there any system of taxation that has been or can be proposed that can meet all the requirements laid down by Adam Smith, or those who have sought to add to the principles which he has formulated? There is no system of taxation that can be applied with absolute equity. We recognize some anomalies in the income tax system. I listened with a good deal of interest to the argument put forward by the member for St. Antoine (Mr. Bell) this evening; it is a speech worthy of the consideration of every member of the House. But speaking generally the income tax, to my mind, is the fairest tax in principle, for the principle of it is that it is levied upon those who are able to bear the burden. Now, as I have said, there may be anomalies in its application; there may be inconsistencies; at times it may not be equitably applied, but in principle the tax is sound.
Unfortunately we have in politics, as we have in theology, men who are not able to distinguish between fundamentals and incidentals, and the evils or the anomalies of the income tax are incidentals. The principle is that men shall bear the burden in proportion to their ability to bear it, and that is a principle which we must maintain. That principle does not hold in connection with the customs tariff tax, or in connection with the proposal of the hon. member for West Calgary (Mr. Bennett), a tax on turnovers. Those taxes are laid not upon those who are best able to bear the burden but upon those who cannnot escape from the burden and must bear it. You will remember that the hon. member for Fort William (Mr. Manion) a year ago introduced into the debate a hypothetical widow who was getting an income of three or four thousand dollars a year from shares that her husband had left her, and he professed great sympathy for women in that position. I also have sympathy with widows, but I have a good deal more sympathy for the widow who has to rear a family of children and provide them with food and clothing, and has not the amount of income on which she can claim exemption-a good deal more sympathy for those who are placed in that position.
I submit, Mr. -Speaker, that though in some respects the income tax as applied may be open to objection, it is in principle the fairest tax that we have. The objection is raised that it is not fair because the farmers do not pay it. Well, they do not pay it, as has been asserted again and again, because they have not the income upon which to pay. I know it is hard to convince hon. members opposite, some of them at least, that the farmer is not
in a position to pay his income tax. One hon. member opposite made a remark about the 400,000,000 bushels of wheat that was raised in the west. Four hundred million bushels of wheat is an immense amount, but those who are acquainted with the facts know that the overhead cost of raising that wheat is enormous, and that the amount in the hands of the farmer after he has paid all the costs is a very small proportion of what that wheat brought upon the world's markets.
The hon. member for St. Lawrence-St. George (Mr. Cahan) seemed to be under some misapprehension in regard to the farmer and the income tax, but I want to point out to him one feature that he did not consider, and it ds this: the place of the farm woman in the production of revenue. The hon. member for Qu'Appelle (Mr. Millar) has been dealing with the poultry industry. He referred to the fact that some $450,000 worth of turkeys had been raised in Manitoba during the last year. I believe the total amount of poultry produced in Manitoba during the year 1926 would run very close to $5,000,000. That amount of wealth, Mr. Speaker, was contributed to Canada by the work of the women, in very large measure, and when we farmers make our returns to the income tax branch we are not allowed to take account of the work that ds done by the women-it all goes into the one pot. I want to say further that the woman on the farm is doing much more in contributing to the wealth of the country than the woman in other walks of life. I am not speaking of those women who are engaged in industry, I am not speaking of the wives of those men who are in a position to claim an exemption, we will say, to the extent of $3,000. Those women may be doing their work and doing it well. I have no criticism to make against what they they are doing, but they are not contributing to the wealth of the country in the same way that the farmers' wives are contributing. The latter are doing the work of their household just as other women are doing it, and besides, they are adding to the wealth of the country; yet there is no recognition of that when we make our income tax returns. That is a feature that I think ought to be considered by the hon. member for St. Uawrence-St. George, and I think it is a feature that has been very frequently overlooked.
The hon. member for Toronto West Centre (Mr. Hocken) had something to say on this question. He spoke of the farmers of the United States being protectionists, and instanced the McNary-Haugen bill as a proof
The Budget-Mr. Brown

of that fact. The hon. member for Bow River (Mr. Garland), commenting on that statement, said that the McNary-Haugen bill is a bribe of the -worst type; that it is a bribe to agriculturists in the United States to accept protection; it cannot be interpreted as anything else-a bribe of the worst type, and the farmers there will suffer for it if they accept it. I do not take exception to what was said by the hon. member for Bow River, but I should like to put it in another form. The McNary-Haugen bill, which has been vetoed by the President in the last few days, was the result of the conviction that had grown up in the minds of the United States farmers that they could not be benefited by a protective tariff. They had for many years been deceived by a sham tariff; they found out that it was giving them no real protection, and they came foiward with the demand that they should be given real protection in the shape of the McNary

Haugen bill just as the other industries were given protection. What did they meet with? They met with the most intense opposition from the interests which had benefited by protection. It was said to them: Oh, but if that bill passes, then the cost of living will go up. The cost of manufacture will go up and we will not be able to compete in the markets of the world. So the cost of living would go up and the farmers would not find themselves in any better position than they were in before. In the interest of the experiment I would perhaps like to have seen the McNary-Haugen bill tried out, but on the other hand in the interests of sound economics, it is well that the President of the United States saw fit to veto it.
I have been amazed at some of the fallacies to which utterance has been given during the debate by some hon. members opposite, from the first hon. member who spoke, the hon. member for West Calgary (Mr. Bennett), almost down to the last. It was urged upon us that taxation had not been reduced and elaborate figures were produced to show that such was the case. Large numbers of percentages of taxation were brought to our notice. The one thing that hon. members seem to forget-and this is the fallacy that runs all through their arguments-is that a reduction in the rate of taxation does not necessarily mean a reduction in the total revenue. So long as our revenue is raised by a system of indirect taxation by a tax on the goods that we consume, just so long will it be impossible for any government to determine exactly what the revenue will be at the end of any year. All that any government can do is to fix the rate of taxation and LMr. Brown.]
to estimate on the basis of the last year's business that the revenue will be so and so. Therefore all that any government can do is to reduce the rate of taxation. When we went before tariff commissions, we used to uige a reduction in the tariff and we would be met by the Objection: Yes, but where are you going to get the revenue? We would give the very obvious retort that it was quite possible to reduce the tariff and yet increase the revenue. Nevertheless hon. gentlemen opposite have not been able to grasp that very simple proposition and the fallacy appears all through the debate.
Let me give an illustration of that. A good deal has been said about the reduction in the duty on automobiles, and it has even been urged that the taxation on the people has been increased by the action of the government last session. W'hat are the facts? More was collected in customs duties during the nine months ended December 31, 1926, than during the corresponding period in the previous year. I will give the House the figures From April 1 to December 31, 1925, there were imported into Canada 853 commercial trucks at a value of $1,245,654 and the duty collected amounted to $429,392. During the corresponding period in 1926 there were imported 1,863 commercial trucks at a value of $2,291,674, and the duty collected amounted to $447,951. That is. the number of cars more than doubled; the duty was lower, but there was an increase in the total revenue in that particular line of cars of more than $20,000.
Let me doal now with the question of percentages. I am speaking of the nine-month period, because we have not yet had a whole year under which the new duties have been in force, and indeed it should be said that only part of the nine-month period was under the lower scale of duty. In the nine months ended December 31, 1925, there were imported 11,494 passenger cars at a value of $10,847,171, and the duty collected amounted to $3,776,665. In 1926 for -the same nine-month period, 22,904 cars were imported, or practically double the number, at a value of $18,387,615, and the duty collected amounted to $4,346,869, or an increase in customs revenue from the importation of cars of $570,204. According to the logic of hon. gentlemen opposite the government increased taxation upon those cars because, as they argued, the total revenue from that trade was increased by $570,204. Yet the fact is-we well know it and every person throughout -the country will -testify to it-that a car could be bought cheaper during that period than during the {corresponding period of the preceding year. These are facts of which the

Hie Budget-Mr. Brown
public is well aware, and yet hon. members opposite will confuse the issue by these fallacies.
The same is true in regard to the references made by the hon. member for Vancouver Centre (Mr. Stevens) to percentages of duty, the taxation being higher at one time than at another, because the percentage of the tariff was higher. When I heard the hon. member speaking of percentages in that way, I was reminded of the story of the darky porter. A traveller asked him what was the average tip that was given to him by people who travelled with him. The darky said: "A dollar". Well, the man wanted to be up to the average and so he handed the porter a dollar. "Thank you, sir," said the darky, "thank you, you are the first man that has come up to the average." Here again the same fallacy creeps in. There is nothing more midleading than averages. When we talk about average duties, we must remember that they will vary as the amount of free goods varies with the amount of taxable goods, and according as the amount coming in under a high duty varies in relation to that coming in under a low duty. One is almost ashamed to give utterance to platitudes and to discuss these very obvious things, but one is forced to do it.
Let us suppose that we have coming in $1,000 worth of free goods and $1,000 worth of dutiable goods, bearing twenty-five per cent. The revenue collected from that $2,000 worth of imports will be $250. Let us suppose that the next year there is still only $1,000 worth of free goods coming in, and that the duty on the dutiable goods has been reduced to twenty per cent. It would be quite possible to show by the change from one figure to another that the average on the whole had been increased, and yet the fallacy there is perfectly evident. I do not pretend, Mr. Speaker, to be an expert accountant. There are some realms into which I would not presume to enter, but when I hear hon. gentlemen giving utterance to these very obvious fallacies, though I would not presume to have any expert opinion, I cannot allow them to pass unchallenged.
The hon. member for Frontenac-Addington (Mr. Edwards) also I think merits a little attention. He gave us one of his characteristic speeches last night, in the course of which he referred to the reciprocity pact of 1911. He wanted to know if any member on this side of the House would put that pact into force if he had the power to do it. He was not satisfied to take an answer from private
members, and finally he got his answer from some members of the cabinet. Then he pointed out that in that pact provision was made for certain duties on certain lines of machinery, and then he asked: Would you put those rates into force to-day? I went to the library to-day to look at the pamphlet containing the terms of that pact, and I find that while the hon. member stated the facts correctly, his inferences were all wrong. It is true that the duties were as he stated, but there was nothing in that pact that would render it obligatory upon Canada to maintain those duties at those rates. Those were maximum rates, not minimum rates. The theory of the protectionist is that it is a bad thing for us to import goods, that we are doing a particular favour to our neighbour when we lower the tariff against his goods. In view of that theory held by protectionists, is it not absurd for the hon. member for Frontenac-Addington to say that we would be under any obligation to maintain the tariff on these imports at the rates that were agreed upon by those who devised the reciprocity pact? Were we to put that agreement into force to-day there would be absolutely nothing in it that would require us to raise our tariff on this list of imports to the level of the United States tariff. The whole argument as advanced by the hon. member was, like some of the: other arguments, so absurd that it is not worthy of serious consideration.
There are many things that I might have said, Mr. Speaker, but I shall forbear at this time. The natural question is: How do we regard this budget, speaking of it in general terms? I have said already that we have no particular enthusiasm for the budget in itself. While the answer given by the Minister of Railways (Mr. Dunning) to the hon. member for Marquette (Mr. Glen) is by no means as plain and specific as we would desire, yet we feel that we have possibly no warrant for assuming that the action taken in the Robb budget of 1926 is the last step to ]pe taken in the direction of lower tariffs. On the contrary, we would like to assume that the minister intended to convey to us the idea that there was still to be a progress in that direction. That impression is, of course, confirmed by the statement of the Finance minister this afternoon, that the present government is a low tariff government, and is proud of it. With that in mind, Mr. Speaker, we have felt that we can give our support to the budget, notwithstanding the fact that in itself there is nothing that arouses any particular enthusiasm. I would like to add
792	COMMONS
The Budget-Mr. McLean (Meljort)
that the Minister of Finance must not assume that any support we may give the present budget will warrant his concluding that if next year's budget should not show some further inclination to go in the direction of the principles we have advocated, our support will be continued.
I do not know, Mr. Speaker, that I have anything further to say at this time. The hour is rapidly approaching when we are likely to take a vote, and in view of that fact I shall give way to those who are to follow.


Malcolm McLean: Mr. Speaker, the hour is getting late and I do not intend to take up very much time, but there are a few things I wish to say before a vote is taken.
In the first place, I think this House will agree with me that this is a budget to which there is no real, strong, sustained opposition. On the other hand, it may be that it does not arouse in some of us the enthusiasm that last year's budget did, but I think that throughout the country, from coast to coast, it has been received with a good deal of satisfaction. I have received many letters from western Canada, from my own constituency in particular, and in them there has been no word of disapproval or of criticism of the budget as it is. That is sometimes as a fair test of a budget, as it is of the work of a government official in any office when there is no great enthusiasm about what he does and no great objection to what he does. The Minister of Finance (Mr. Robb) is to be congratulated that he has under all the circumstances produced a balance sheet such as the one we have before us.
There is one thing I do know, Sir, and that is that the people of Canada are able to-day to congratulate themselves upon having emerged from the position they were in five years ago to a much higher and safer ground financially. This budget is of value and is satisfactory to the country because it shows ah undoubted financial strength. It is satisfactory because of the psychological effect of the reduction in the national debt. That is something worth while not only in Canada, but throughout other parts of the empire and other countries of the world, particularly those from which we expect in the future to get immigrants to fill our vacant spaces and develop the resources of this Dominion. We heard a great deal about immigration to-day from the hon. leader of the apposition (Mr. Guthrie). I would remind you, Sir, and this House, that five years ago it was pretty hard to find anyone here advocating that the gov-
IMr. Brown.]
ernment should hasten the work of encouraging immigrants to come to Canada. The sentiment against encouraging immigration has died down to a great extent since then, although it is not altogether extinct. But the fact that Canada is reducing its debt and its taxation, that Canada's financial position has been strengthened, and that employment is better, will help to bring to our shores the immigrants that we need.
I said a moment ago that this budget does not arouse in some of us the enthusiasm that the last budget did. A critic of the budget said the other day that it is referred to as the Robb budget, and he qualified that by saying that he did not use the word in the sense of r-o-b. I wish to tell hon. gentlemen that some of his friends were not so particular; they were fond of calling it a "rob" budget instead of the proper name, but the people of Canada did not pay much attention to that. After going home last year we found that the budget had occasioned great enthusiasm throughout the country. I found in western Canada that possibly the budget had a good deal to do with the progress being made in that country at the time. In nearly a quarter of a century in the west I had not seen so much new land cleared and broken and being got ready for crop in any one year, and I had never seen so many people flocking into the north country, so much new building in the towns and rural districts, and so much genuine progress in that part of the country with which I am most familiar.
I am glad that to-day we do not hear very much of the pessimistic talk we heard last year. I am not going to refer to it now because it would be unkind to do so. After the last election a good friend of mine said to me, "If you had power to inflict some punishment upon your opponents in the last election, what is the worst thing you could think of?" I said I did not feel inclined to do anything. He said, the worst thing * you could do would be to ask them to read their speeches of last session in parliament, and I would not consider doing that. There is reasonable prosperity in Canada everywhere to-day, not perhaps as much as the people would like, but as compared with any other country there is reasonable prosperity. That did not come about solely on account of the good crop of last year. It came about as a result of careful work on the part of the producers for the past five years, and as a result of the extent to which the government took care of the financial resources of the country. But it is not all due to the past year. We are told that last year the crop was one of the largest on record.

The Budget-Mr. McLean (Meljort)
Well, it was a fair crop but not particularly large. Last year Canada produced 406,000,000 bushels of wheat as against 411,000,000 bushels the year before. The figures are as follows: the total yield of wheat in Canada for the year 1926 is estimated at 406,269,000 bushels from 22,768,449 acres, as compared with 411,375,700 bushels from 21,972,732 acres in 1925 and with 386,864,525 bushels from 22,084,320 acres, the annual averages for the four years 1922-25. When it comes to oats we find the crop amounted in 1926 to only 404,000,000 bushels as against 513,000,000 bushels in 1925, and an average of 493,000,000 bushels in the four years. So that it was not entirely due to the good crop last year, because we had crops just as good previously, and sometimes a little better, and we had not the same prosperity in the country. Other products, such as pulp and paper, forest products, and the products of the mine and the waters had a great deal to do with the restoration of prosperity. The farmers of western Canada I am sure were helped by the crop of 1925. The crop of 1926 was a fair one and the prices received were also fair, but the crop was harvested under tremendous difficulties, and still the 1926 crop helped the country somewhat further on the way to better times.
In the past we have been told a great deal of the wonderful wealth in the country to the south of us. Some of us have been of the opinion that those gentlemen, whether they were hon. members of this House or outside of this House, who continuously told of the prosperity of the United States on account of higher tariff protection were not doing a service to Canada. I find that the great country to the south of us is not uniformly prosperous and is not growing very fast in population in certain states.
Referring to the statement of the hon. leader of the opposition that the prairie provinces had not increased in population in the last few years as much as they might have, I desire to read an item in an American paper which says:
The Borough of Queens, one of the five divisions of greater New York, having doubled its population in the last six years-
Very encouraging, but it is the city population that has doubled in that time.
-this means that 483,000 persons have settled in Queens since January 1, 1921. The growth in population of this one section of New York in that short period is greater than the population of many a state. At the last census, there were nine states-Arizona, Delaware, Idaho, Nevada, New Hampshire, New Mexico, Utah, Vermont and Wyoming-each of which had a population of less than 483,000. Delaware. Nevada and AVyoming all together have less than that number.
Nine states in that rich country, each of them with a population less than that of any one of eight provinces in the Dominion!
I have some figures which I am going to give to Hansard dealing with the question of prices of farm implements. I had thought that the discussion in regard to the price of implements in 1924 and other years had come to an end, and I was surprised to hear the leader of the opposition, in that otherwise very admirable speech, give us some figures on farm implements to show that prices had increased as a result of tariff reductions. I hold in my hand a statement with regard to the prices of implements sold by the International Harvester Company, dated October 16, 1925, showing prices of Deering and McCormick machinery at that time. The figures are as follows:
Eight foot Deering & McCormick binders	
Four foot six inch mowers.
Twelve foot rakes	
20 disc seeders	
Fourteen inch gang plows.. 16 disc (16") harrow .. ..
1921		1925	
326	00	283	00112	00	98	0067	50	64	50292	50	251	00192	50	155	0091	00	76	00
Last year in Saskatchewan we did not have to discuss any of these figures during the general election, because the people of that province were satisfied that the steps taken by the government had been in the right direction; and they expect confidently-and I am sure they will not be disappointed-that further steps along the same lines will be taken in due course.


Mr. CAMPBELL:: Could the hon. gentleman give us the reductions between 1924 and 1926, not between 1921 and 1926? Because a lot of those reductions came voluntarily from the companies before any reduction in duty was made.


Malcolm McLean: I have not the figures. I think the hon. member for Mackenzie would be in a better position to supply the information. I am prepared to take his word for it that reductions were made prior to that time. When the policy of the government cutting the tariff on such implements was introduced, we remember the wail that went up from hon. members in this House about the ruination of the agricultural implement industry. I am glad my hon. friend asked me that question, because it reminds me that a few days ago we read in the newspapers about the great rise in value of the stock of a Canadian implement company, sale prices running up to $110 a share. This stock a few years ago was worth between $50 and $60. I am not sure of the exact figures,
794	COMMONS
The Budget-Mr. McLean (Melfort)
and I do not want to exaggerate, but it was a low figure a few years ago. They made those reductions; they stood for the cut in the tariff, and the farmers were placed in a better position to patronize them than they had been previously.
I wish to devote a little time to a speech delivered in this House last Friday evening and which in my opinion was very unfair in some respects. The speech referred to was delivered by the bon. member for Vancouver Centre (Mr. Stevens), and I am glad to see him in his place to-night. To my mind it was studded with unfair statements-probably worse than that, but we will come to that point later. The first thing I take exception to in this speech is the propagating of the idea that, the budget having come down so early, the people of this country have been more or less relieved of their apprehension lest the tariff be reduced. The hon. member referred to the statement of the Bank of Montreal in their official bulletin of February 23, as follows:
The early delivery of the budget speech by the Dominion Minister of Finance, and the announcement that no tariff changes are to be made, should be helpful to business by removing that uncertainty and hesitancy in mercantile transactions which sometimes wait upon the late pronouncement of government fiscal policy.
I agree with the bank in that regard, but I do not think that, rightly understood, the statement necessarily conveys the meaning which the hon. member for Vancouver Centre (Mr. Stevens) apparently was anxious to infer from it. He seemed to suppose that there was some fear that there would be reductions in the customs tariff, whereas it is just as likely that the country might be afraid that a long delayed budget statement might propose increases in that direction.
I come to the next point on which I disagree with the hon. gentleman. I will quote his own words:
Yes, the budget was welcomed for what it did not do, not for anything that it did. We welcome it in so far as in it the government has stayed its hand in further reductions of the tariff. The government announces

This is the point I want to emphasize.
-in the budget that it is not its intention this year utterly to destroy the remaining fragment of a protective principle in the tariff.
Yet further on in the same address the hon. gentleman tells us that there has been no change in the tariff; it is the same as it was before. Here is what he says:
There is exactly the same protection in the tariff to-day as there was prior to 1921; in fact a little more.
[Mr. McI.ean.1
I will go beyond the hon. member for Vancouver Centre (Mr. Stevens) and quote the words of one who, many of us regret, is not with us to-night, the late leader of the opposition, Mr. Meighen. Let me quote what he had to say last year. Of course, there was an election at that time and he was appealing to the people for support, as we all do. Speaking at Owen-tSound on September 8, he is reported as follows:
He pressed his tariff views, declaring his intention to revise the tariff basis of protection. The principle governing every schedule of the tariff would be the principle of protection. "That is the principle," he declared, "we intend to restablish in our country".
If it had not been disestablished how could it be reestablished? However, I will not press that point. I will now consider some of the financial criticisms of the budget. I would not have undertaken to discuss the budget from this standpoint because I do not profess to be a skilled accountant, but as I listened to the speech of the hon. member for Vancouver Centre the other night it occurred to me that he made certain statements which obviously were altogether erroneous. In particular he made a statement to which I shall refer later on regarding the resources of Saskatchewan, a statement so utterly absurd to me that I got the hon. gentleman's speech next day in Hansard and read it carefully to make sure that I had followed him. The more carefully I read that speech the greater the number of absurdities I discovered in it, and therefore decided to devote some time to a fuller consideration of it. Discussing the public debt the hon. member, after declaring that he was not criticising the Minister of Finance personally, made the following statement:
On April 10, 1924, he said our surplus would be $20,750,000, to be applied to the reduction of the public debt. On March 24, 1925, he said that the public debt had been decreased by $35,900,000. On April 15, 1926, the minister informed the House, there had been a reduction in the debt of $22,350,000. On February 17, 1927, at page 387 of Hansard the minister made the statement that there would be a reduction of $31,000,000 in our debt. The individual reductions indicated in these four announcements total $110,000,000 so that there should be a reduction in the debt to that extent from the year 1922.
The hon. member then goes on to complain that there is no evidence of that $110,000,000 of a reduction. On the next page of the report of his speech he refers to the funded debt. He finds that the funded debt at the present time amounts to $2,471,000,000. Then he sets out the difference between the funded

The Budget-Mr. McLean (Meljort)
debt and the net debt. The net debt on March 31, 1922, according to the hon. gentleman, was $2,422,000,000, and on December 31, 1926, including the amount paid off last fall it was $2,343,000,000. To quote his words:
That is to say, we have a reduction in the net debt of $79,000,000 in a period of five years. That is nothing for this country to be proud of. I ask, where is the $110,000,000 of a reduction in the debt as announced by the Minister of Finance officially year by year.
I do not know whether the House or the hon. gentleman has been able to follow these quotations from the speech in question, but certainly I could not understand, nor do I understand now, what relation the $2,422,000,000 in the shape of a net debt as of March 31,
1922,	has to the funded debt of $2,471,000,000. I therefore made inquiries. I recollected that between 1922 and the year which the hon. member for Vancouver Centre took as his starting point there was another fiscal year,
1923,	and in that period there was not a surplus but a deficit which had to be added to the debt. That was a reasonable deficit and not one of which we need be ashamed1. It was not incurred during the regime of the present minister, but while his predecessor was in office. Instead however of a deficit of $91,000,000 or $92,000,000 as we had in 1921, and $S1.000.000 as in 1922, we had in 1923 a deficit of $31,000,000. As the hon. member for Vancouver Centre strove to discover where the missing milions were, I thought this must be the money he had in mind. As he progressed' in his speech and linked up the $2,422,000,000 of a net debt with the funded debt of $2,471,000,000 I felt it time to cry for help. Digging info one book after another, and asking those who knew more about the matter than mysellf for some explanation of the difficulty which the hon. gentleman had created. I found that on April 10, 1924, the estimated surplus for the year 1923-24 was put at $20,750,000 but that the following year it was announced in the House that the actual decrease in the net debt for that year 1923-24 was not $20,000,000 odd but $35,900,000, or $15,000,000 more than bad been estimated the year before. The following year 1924-25 there was a surplus of only $345,589. Hon. gentlemen will remember-because the country recalls it-that in the year 1924 the minister brought in the first of those budgets that have made his name famous, and the reductions of various taxes in that budget were responsible for a decline in the revenue to such an extent that there was only the surplus of $345,000 odd just mentioned. In 1926 there was an estimated reduction in the net debt for that year of $22,350,000, but time afterwards showed that estimated reduction to be actually $27,706,586. That was the reduction last year. On February 17, 1927, the estimated reduction in the net debt for the year 192627 wias placed by the minister at $31,366,260. These actual reductions totalled $95,412,029 and the various estimates in addition to the actual decreases made $110,000,000, it is quite true. But it is absurd to take the estimated surplus to-day, and six or twelve months from now add to that the actual reduction in the figures of the debt. You will notice, Mr. Speaker, that when the deficit for the year 1922-23 is deducted' from the correct figures, $64,000,000 is left, and that is the amount of the reduction in the net debt between March 1922 and the present time. So far as the present Minister of Finance is concerned, his budgets have shown a reduction in the net debt of $95,412,029.
Then we come to another set of figures, and I am going to try to keep them apart because I have already admitted that I was somewhat confused in trying to study the speech of my hon. friend. He confused the $2,422,000,000 net debt and the $2,471,000,000 funded debt, and then deducted the annual surpluses from that funded debt. What do I find here? The funded debt as of March 31, 1922, was given by the hon. member for Vancouver Centre (Mr. Stevens), as $2,420,000,000, which is so close to the amount of the net debt that one may be excused for finding difficulty in understanding what was intended. He told us that on March 31, 1926, the funded debt amounted to $2,471,000,000, an increase in four years of $51,000,000, and giving the minister credit for the amount paid off during last year, $35,000,- [DOT] 000, would leave an increase in the funded debt of $16,000,000. But what do we find? In addition to the funded debt of $2,420,791,260 on March 31, 1922, there were temporaiy loans outstanding to the extent of $144,535,000, a grand total of $2,565,326,260 due to the public. These temporary loans the colleagues of the hon. gentleman must have known to be outstanding at the time they left office. That $145,000,000 was left entirely out of the calculations of the hon. member for Vancouver Centre. On March 31, 1926, the funded debt of Canada amounted to $2,471,965,018, with temporary loans outstanding of $201,000, giving a total of $2,472,166,018, a reduction in funded debt in four years of $93,166,018. In addition to that reduction there must be added the figures quoted by the hon. member for Vancouver Centre, the reduction during 192627 amounting to $43,000,000, so that at the end of December last year the total reduction of debt as between 1922 and 1927 was $136,106,242. It would not be a fair argument to say
796	.	COMMONS
The Budget-Mr. McLean (Meljort)
that this should be shown, because doubtless the treasury had bills coming due on January 1, February 1, and March 1, 1927, possibly amounting to more than the revenue at its disposal and the reduction in the funded debt at the end of the fiscal year may not be so great. But I think, Sir, that the hon. member for Vancouver Centre should have been a little more careful in compiling his figures before giving the impression contained in his speech the other day, when he overlooked the fact that there were $144,536,000 of temporary loans outstanding at the time his government went out of office.
The hon. member was asked if he would admit that Canadian currency was on a much sounder basis now than it was five years ago, and he passed the question off very lightly. I wish to tell him, Sir, that those people who had liabilities coming due and moneys to pay in the United States or any other country whose currency was higher than ours, did not consider it so. Those who had to go to foreign hospitals for treatment, mostly in the United States, or who had to pay money for any reason in that country and had to pay it with our depreciated currency, knew that it was not a mere incidental thing to be passed off lightly. I noticed in that same connection that the hon. member for Vancouver Centre was rather critical of the fact that our gold reserve is about 54 per cent of our Dominion note circulation as compared with 35 per cent in 1922. He did not have the figures at hand, but we will accept his statement as correct. He said there was no excuse for that, that it would be easy to increase our Dominion note circulation without the slightest chance of jeopardizing the stability of our currency. Apparently the banks and the financial institutions generally have shown that they have sufficient funds to carry on the business of the country at present, so there is no advantage to be gained by reducing our gold reserve. It is true that a few years ago there were many demands for schemes of monetary reform of one kind and another, and I was very much interested the other day to read an extract from a speech by Mr. Henry Wise Wood of Alberta which bears on this point, I am not going to repeat much of it, but in part Mr. Wood said1:
I don't rvant to lambaste anybody's dogma, because I know how dearly we love dogma, and I hate to take anybody's beloved children from their parents, but one hour's operation of the wheat pool has done more towards the ultimate accomplishment of the right relationship of prices than all the resolutions regarding any kind of magic money systems that wo have passed since the beginning.

I think we can quite agree with that, and .1 think it a good thing that our currency should have enough value behind it so that one dollar of Canadian money is worth one dollar or a little more of any other money in the world. On the question of taxation the hon. member for Vancouver Centre was rather critical1; he told us a great deal about taxation and compared the five years from 1923 to 1927 with the five years previously, during which 'his party was in power. He said that in the last five years the average imposition of taxes by this government amounted to $387,000,000 in round figures, while the average in the previous five years amounted to $348,500,000, suggesting that this government had collected an average increase of $39,280,000 per year during the last five years. I think, Sir, if there is any one thing in the fiscal policy of this government for which they can take credit to themselves more than for anything else it is the fact that immediately they came into office they began to put the finances of the country on a sound basis. By increasing revenue they hastened the time when they might begin to pay off the debt or at least keep it from growing any larger. In addition to keeping the debt from growing and the fact as illustrated by the increase in revenue that the country was beginning to get more prosperous, there is something further to bear in mind. Deficits had continued to 1923; these had to be met by this government, and the only way they could be met was by an increase in revenue and reduction in expenditure.
The hon. member for Vancouver Centre (Mr. Stevens) said that the government had not reduced taxation but had merely shifted it. There was a gentleman in my office the other day whose business is to sell, among other things, farm lighting plants. We have not heard very much about farm lighting plants, but last year the duty on them was reduced from 35 per cent to 10 per cent, and we heard considerable complaint at that time from hon. gentlemen opposite. The dealer in question assured me, and I have no reason to doubt his word, that the reduction in duty had effected a reduction of $127 in the price of popular sized farm lighting plants on an expenditure of something like $600. That is not a tax wdiieh has been shifted; that is a real reduction, and the people have benefited by it. The national revenues have increased, by reason of these reductions. It has always been true, that a lower duty on a larger volume of business would increase the gross revenue. It is for that reason that I am confident that the Minister of Finance will see his way clear to give us further substantial re-

The Budget-Mr. McLean (Meljort)
ductions in duty, and make his name still more respected and loved by the producers and consumers of this Dominion.
One statement made by the hon. member for Vancouver Centre that I wish most decidedly to protest against is that respecting the Minister of Immigration and Colonization (Mr. Forke) and the Deputy Speaker of the House. I am quite aware, Sir, that there is no reason why another member should stand up in his place and defend the Minister of Immigration; he is perfectly capable of defending himself. But the name of the province of Saskatchewan was linked up with the accusation levelled at the minister. I can assure you, Sir, that the Minister of Immigration was always respected by his political opponents in the province from which I come, even when they were fighting him polifically. As the leader of a party the minister was respected and his sincerity acknowledged. There never was a time when he was more highly regarded in the prairie provinces than he is to-day. I ask you what there is wrong in a member of this House, having been nominated at a Liberal convention in the city of Brandon, being afterwards nominated by a Progressive convention in full possession of the facts? An hon. member near me says that the procedure followed was the reverse of that-that the. Progressive convention was held first and the Liberal convention followed. However, the order followed is immaterial: these two conventions supported the same gentleman with a full knowledge of what had happened. It was well known that in all likelihood the government of Mr. Mackenzie King would be restored to office, and in that case the province of Manitoba would be represented by the hon. member for Brandon if he cared to take a portfolio in that government. The hon. member for Vancouver Centre, referring to the Minister of Immigration said, "My hon. friend sitting in a fourteen thousand dollar seat has had a change of heart." I ask hon. members if the Prime Minister of Canada could offer a $14,000 seat to anyone in this House? Not if I know anything about the remuneration of the cabinet ministers. The hon. member for Brandon was offered and accepted a portfolio in this government. The people of Brandon endorsed his action, and I think it is mighty small potatoes for the hon. member for Vancouver Centre to indulge in such insinuations against the minister. I would not have expected such comment from a gentleman who was unfortunate enough himself to occupy one of these elevated positions for so short a period and without the endorsement of the people of Canada..
The insinuation directed against the Deputy Speaker is even meaner. He occupies a position where it is impossible for him to answer charges of this kind He was not placed in that position by the Prime Minister. Surely parliament has not yet got to the stage where it can have no say in the election of a Deputy Speaker, especially when the gentleman elected is the unanimous choice of the members of the House! I am reminded of an old Conservative friend of mine who made an admission to me. He had sat in this House and was a highly respected member of it. I met him not very long ago and he said: "Was I not foolish? If I had only voted for the Robb budget I could have been oyer with you fellows to-day, but I listened to that blank tragedy board and that is what defeated me." I may say that he did not use the word "blank".
Just at this moment and in this connection I should like to quote one sentence from a speech by the Right Hon. Arthur Meighen at a meeting at Owen Sound. It has a bearing on the accusations or insinuations made against hon. members of the House, that they were in a position to exact rewards for improper services to the government of the day -I think it is safe to use the word "improper" in view of the attacks upon these members. This is what the Conservative leader of that day said:
"Don't believe for a moment," Mr. Meighen proceeded, "that there is any difference between tbe Saskatchewan Liberal and the Manitoba Progressive. Not a particle. No man in the last House could see the least."
I did not disagree with Mr. Meighen at all on this one point at least. As far as I am concerned personally I may say that I came down to the House anxious to cooperate with other members of like mind in promoting the interests of the people I represent, and found the Progressive members from Manitoba and a majority of the members from Alberta just as willing to cooperate as I was. What objection can there be to cooperation amongst members representing like-minded people, whose cooperation has been so valuable to the country?
I am reminded at this stage that the hon. member for Weyburn (Mr. Young) asked the member for Vancouver Centre, during the course of his speech, a question to this effect: If the statement he had been making that afternoon was a fair one, would he be good enough to explain the arguments he used last year. He promised to do so in a little while, but I found in his speech no explanation of the arguments so often advanced by hon. gentlemen opposite at the time referred to.
79S

The Budget-Mr. McLean (Meljort)
Like the hon. member for Lisgar (Mr. Brown), I received a circular during the election last year. I do not think it was intended for me; it came from a friend who is a merchant. The circular to which I refer was not sent out by the Hawthorne Woollen Mills but by a firm called Bates & Innes Limited, also of Carleton Place, Ontario. This is what they say in that circular:


Henry Herbert Stevens: That is for copper content. It is a trade term.


Malcolm McLean: The statement is that it
is shipped in the raw in the form of rock and paid for at the rate of 12i cents a pound. .


Henry Herbert Stevens: Copper content.


Malcolm McLean: I take it that the hon.
member for Vancouver Centre was (just a little careless in this as he was later on as well as earlier in his speech.


Henry Herbert Stevens: I was not careless. It is
all right; it is a mining term.


Malcolm McLean: The Budget-Mr. McLean (Melfort)
vestment for anyone to take much stock in locating or developing these aluminum clays of Saskatchewan, and I take it that the same reasoning applies to Alberta.
We were told a lot about exports, in regard to which there was an attempt to show an equally startling situation. A certain group of exports from 1918 to 1922 amounted to 81,185,000,000, and the same group of exports, shown under the same headings by government officials, and very properly so, from 1923 to 1927 amounted to only $1,125,000,000, and this was used as an argument against the fiscal policy of this government. I would have you note, Sir, that not until the last day of this month does the fiscal year of this government end, and it will be some time after that before complete figures are available. The five years that the hon. member for Vancouver Centre took included two years that were almost entirely war years, a third that was practically a war year, and the fourth was very much affected by war and war conditions, with wealth being shipped from Canada in the form of loans. He took those years with their inflated prices as against the years from 1923 to 1927, when prices, part of the time, were very low and crops not very large, and he found that there was a reduction in our exports during those years of $60,000,000. I think that a fairer way than that could be found in which to discuss this question. The same argument was used in connection with iron and steel, but as the hour is late, I shall not use the figures I have before me in that connection.
We were also told that we are selling $7,000,000 worth of asbestos to the United States, to be converted there into $70,000,000 worth of finished products. It is lamentable if we are doing that, if any of that money could be kept at home under any fair fiscal policy. If our raw product worth $7,000,000 is finished in the United States into products worth $70,000,000, that means an increase of one thousand per icent in value. But a minute later we were told that this material, worth something like $7 per ton, was being turned into material in the United States worth $100 to $200 a ton. One minute it was $7,000,000 worth of raw material being converted into $70,c00,000, an increase of 1,000 per cent, and a moment later it was an increase of 1,400 to 2,800 per cent.
In view of these mistakes that I have pointed out, I think that the House will agree with me that the statements made by the Minister of the Interior (Mr. Stewart) and by the Minister of Finance (Mr. Robb) with respect to the proposed export of power to

the United States from Carillon falls are more likely to be reliable than the statements of the hon. member for Vancouver Centre.
There are one or two matters that I would like to bring to the attention of the Minister of Finance.


An hon. MEMBER:: Write him a letter.


Malcolm McLean: When I wish to
deal with the Minister of Finance I generally talk with him, and I want to talk to the House as well on this occasion. I noted that something was said about research, and somehow I got the idea-doubtless the hon. member did not intend it at all-that research was something to look down upon. I wish to say that the money that the government has spent in the extension of research and the results achieved are highly valued in western Canada. If it had not been for men like Doctor Saunders and other scientists, western Canada would not be in the position in which it finds itself to-day. I have in my hand an editorial from the Saskatoon Daily Star, a paper representing farmers, townspeople and all classes dealing with the need for further research. It says in part that some of the duties of the Research-Council are:
To promote the utilization of Canada's natural resources; to undertake researches with the object of improving the technical processes and methods used in Canadian industry; to investigate and determine standards and methods of measurement: to undertake the standardization and certification of scientific and technical apparatus; to investigate and standardize, at the request of industry, the materials or products of that industry.
It concludes by saying:
Some inquiries under the Council's auspices have already been completed and with great profit to industry. A McGill professor discovered a way to prevent the spoilage of lobsters in cans, and thus saved the lobster packing industry of Canada $700,000 a year.
This paper points out that the Research, Council does not get nearly a sufficiently large grant to carry on, and points out that the United States is spending $200,000,000 annually on applied science research, and an additional $10,000,000 on pure science research. In addition to that, a number of large American industries are spending their own money and time in research work. In comparison with what the United States is doing-of course, in view of its wealth it is very much better able to deal liberally with this question than we are-the $150,000 spent on the Research Council in Canada looks pretty small. This paper goes on to say:
The Canadian Research Council's $150,000 a year looks pretty meagre when compared to

The Budget-Mr. McLean (Meljort)
sums like these. It is not, of course, the total amount being spent on industrial research in the Dominion. But it is the federal government's contribution, and as such it is a joke or a disgrace, or both.
Anyone who has read To-day and Tomorrow, that great book of Henry Ford's- I admit that many of my hon. friends opposite do not think much of Henry Ford as a political economist, but they surely respect him as a money-making machine par excellence-will have noticed how much of the Ford estate and his prosperity and the quality and cheapness of his car are due to research work, by studying the best methods to get the best results from the material at his disposal, and to eliminate waste.
I have in my hand a press despatch telling of a new process by which a ton of straw may be burned to extract $250 worth of useful products from the smoke. This chemist has obtained 1,600 pounds of products from each ton of wheat or oat straw, the products including a new germicide favourably reported on by -the Mayo Brothers of Rochester, a roofing and damp-proofing paint, and a fly spray. This scientist happened to be a Canadian who left this country and is now in New York carrying on research work. I am sure that for any money we spend in research work we shall be repaid manyfold.
Before taking my seat, I should like to refer for a moment or two to a sentiment I have heard expressed on one or two occasions in this House. I heard it during the past session also, and I have heard it throughout the country. It is the- sentiment that hon. members from the province of Quebec are opposed to hon. members from other provinces sitting on this side of the House in matters of fiscal policy. I wish to say to any bon. member who has not been long in this House-I have not been long he-re myself and am not going to put on any -airs-but I heard one hon. member on the other side of the House suggest that some of us to y-out right do not agree very well with the members from the province of Quebec in fiscal matters. I heard a new member on the other side of the House speak of Quebec. Because one hon. member here had given voice Ito a protec-t-itonist sentiment he took it that that was -the opinion of the whole province of Quebec. Speaking of the members from that province I have been able to assure the constituents who elected me, and other audiences in western Canada, that they have been most fair, most reasonable, and generous to us, and all that we members could ask for. The position they took-and I think it was natural they 32649-51
should take that position-was that they were Canadians first, last and all the time, that they and their ancestors had made a living and had prospered to some extent in this great country for some three hundred years, and at a time when it was harder to make money than it is at present. In common with all Canadians they like to make money, yet making money through a high protective tariff was going to interfere with the amity and unity of Canada, .and they were going to sacrifice some of that prospective money and do as their forefathers bad done, namely, make a good square living and work for the interests of the Dominion.
In closing, I would say that the province of Saskatchewan is not desirous of injuring any legitimate industry in any other part of this Dominion, but is willing to co-operate with all other provinces which are willing to meet us half way and co-operate with us. The Dominion -of Canada was referred to the other day as being one of great length and little width. I think the leader of the opposition in his splendid speech to-day referred to it in these terms. Canada to-day is widening and developing from south to north. We do not now hear the cry, " Go west and grow up with the country." The saying in Saskatchewan, and I assume in other provinces, is " Go north and grow up with the country." We are getting further' away from the American line and from the influences of our friends over there. We are carrying civilization further, making Canada a wider, broader and deeper country, and Saskatchewan wants to do her part in development for the future.
I picked u,p a magazine and read in it the statement that an old philosopher said, " The thing that I feared most came upon me," In listening to some of the pessimistic remarks last year I thought of this saying. I do not think I should give the advice to anyone, but draw this to the attention of some hon. members in the hope -that they will avoid fearing anything in this Dominion that is not likely -to come upon them.
With the soil of Canada as fertile as it is, with a favourable climate and extensive natural resources, with those two great races side by side which have carried civilization forward, the French and the Celtic-Saxon races augmented by the Teutonic, the Slavonic and the Scandinavian; with the laws and the security of Canada what they are, there is no reason why we should be pessimistic; rather we should take the advice of the Right Hon. Prime Minister (Mr. Mackenzie King) and step out with greater faith and more assured

802	COMMONS
The Budget-Division (Amendment)
confidence than we ever had before. I am satisfied that the people of Canada are at peace to-night regarding affairs of state, knowing that the budget of the hon. Minister of Finance reflects a sound state of affairs throughout the country, indicating as it does the tremendous improvement that has taken place in a period of five years.	*


Mr. ODETTE:: Perley
(Sir George),
Perras,
Pettit,
Preston,
Prevost,
Quinn,
Ralston,
Raymond,
Rheaume,
Rinfret,
Robb,
Roberge,
Robitailie,
Ross	_
(Kingston City), Ross
(Moose Jaw), Rutherford,
Ryckman,
Ryerson,
St-Pere.
Sanderson,
Seguin,
Senn,
Short,
Simpson.
Sinclair (Queens),
Sinclair
(Wellington North),. Smith
(Cumberland),
Smith
(Stormont),
Smoke,
Spence
(Parkdale),
Spence
(Maple Creek), Steedsman,
Stevens,
Stewart	.
(Edmonton West), Stewart (Leeds),
Stinson,
Stirling,
Sylvestre,
Taylor,
Telford,
Thorson,
Tolmie,
Totzke.
Tummon,
Vallance,
Veniot,
Vervil'le,
Ward,
White
(Mount Royal), Wilson
(Wentworth),
Wilson
(Vaudreuil-Soulanges),
Young
(Saskatoon),
Young (Toronto Northeast),
Young
(Weyburn).-182.
I was paired with the hon.
member for West Essex (Mr. Robinson). Had I voted I would have voted against the amendment.

The Budget-Division (Main Motion)


Mr. BOWMAN:: I was paired with the
hon. member for East Middlesex (Mr. Hod-gins). Had I voted I would have voted against the amendment.	.


Mr. GERSHAW:: I was paired with the
hon. member for London (Mr. White). Had I voted I would have voted against the amendment.


Alfred Edgar MacLean: I was paired with the hon. member for Westmorland (Mr. Price). Had I voted I would have voted against the amendment.


Hewitt Bostock: The question is now on
the main motion. Shall I say carried on the same division?
Perras,
Prevost,
Ralston.
Raymond,
Rinfret,
Robb,
Roberge,
Robitaille,
Ross (Moose Jaw), Rutherford,
St-Pere,
Sanderson,
Seguin,
Sinclair (Queens), Smith (Stormont), Spence (Maple Cree Steedsman,
Stewart
(Edmonton West), Sylvestre,
Taylor,
Telford,
Thorson,
Totzke,
Yallance, .
V eniot,
Verville,
Ward,
Wilson (Vaudreuil-Soulanges),
Young (Saskatoon), Young
, (Weyburn).-111.
NAYS:
Messrs:
Some non. MEMBERS: No.


Mr. GARDINER:: I understand that in the first vote Mr. Speaker announced twenty members as having voted for the amendment. I want to call the attention of the House to the fact that that is a mistake. There were twenty-one who voted for the amendment.


An hon. MEMBER:: You are right.


Mr. MERCIER (St. Henri):: I was paired with the hon. member for Hamilton (Mr. Bell). Had I voted I would have voted for the motion.


Mr. RHEAUME (Translation):: I was
paired with the hon. member for South Essex (Mr. Gott). Had I voted I would have voted for the motion.


Richard Bedford Bennett: I was paired with the
Minister of Justice (Mr. Lapointe). Had I voted I would have voted against the motion.


William Earl Rowe: I was paired with the hon.
member for Beauce (Mr. Lacroix). Had I voted I wrould have voted against the motion.


Robert Knowlton Smith: I was paired with the hon. member for Antigonish-Guys-borough (Mr. Duff). Had I voted I would have voted against the motion.


Edmond George Odette: I was paired with the hon. member for West Essex (Mr. Robinson). Had I voted I would have voted for the motion.


Mr. EULER:: I was paired with the hon. member for Fort William (Mr. Manion). Had I voted I would have voted for the motion.


Frederick William Gershaw: I was paired with the hon. member for London (Mr. White). Had I voted I would have voted for the motion.
[Mr. Speaker.)


Mr. PARENT:: I was paired with the hon. member for North Simcoe (Mr. Boys). Had I voted I would have voted for the motion.
' Mr. BOWMAN: I was paired with the hon. member for East Middlesex (Mr. Hodgins). Had I voted I would have voted for the motion.


Alfred Edgar MacLean: I was paired with the hon. member for Westmorland (Mr. Price). Had I voted I would have voted for the motion.



WAYS AND MEANS

[Stage Direction]
The House in committee of ways and means, Mr. Johnston in the chair.
Progress reported.
On motion of Mr. Robb the House adjourned at 1.55 a.m. (Wednesday).
Wednesday, March 2, 1927