1927-02-21

PRIVATE BILLS


[Stage Direction]
Bill No. 67 (from the Senate), respecting The Quebec, Montreal and Southern Railway Company.-Mr. Dubuc.
Bill No. 68 (from the Senate), to incorporate The Detroit and Windsor Subway Company.-Mr. Odette.
Bill No. 69 (from the Senate), respecting Dominion Electric Protection Company.-Mr. Marcil.
Bill No. 71, respecting The Alberta Railway and Irrigation Company.-Mr. Jelliff.
Bill No. 72, respecting a certain patent of Enos Henry Briggs.-Mr. McDiarmid.
Bill No. 73, respecting the Canadian Facific Railway Company.-Mr. Spencer.
Bill No. 74, respecting The Canadian Transit Company.-Mr. Odette.
Bill No. 75, respecting The Essex Terminal Railway Company.-Mr. Robinson.
Bill No. 76, respecting La compagnie du chemin de fer de Colonisation du Nord.-Mr. Parent.
Bill No. 77, respecting The Manitoba and North Western Railway Company of Canada. -Mr. McPhee.
Bill No. 78, respecting The Montreal, Ottawa and Georgian Bay Canal Company.-Mr. Chevrier.
Bill No. 79, to incorporate Niagara Falls Memorial Bridge Company.-Mr. Pettit.


[Stage Direction]
Mr. E. J. GARLAND (Bow River! moved
for leave to introduce Bill No. 80, respecting the Civil Service.
Hon. ERNEST LAPOINTE (Minister of Justice):: Explain.


Mr. GARLAND:: This bill proposes to
place under the operation of the Civil Service Act and under the jurisdiction of the Civil Service Commission those particular departments now excluded, such as the Department of Soldiers' Civil Re-establishment. It also proposes to restore to the jurisdiction of the commission the majority of the 13,000 or more positions excluded by orders in council of recent years.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. CHURCH:: 1.	In view of the vote in Ontario against the Ontario Temperance Act and the introduction of a new act will the government introduce any legislation this session to repeal what is commonly known as The Doherty Act, Revised Statutes of Canada, 1916, chapter 19, as amended in 1917, c. 30-1919, chapter 66, and 1919-2nd session, chapter 21?
2.	If no legislation will be introduced by the government, will the government name a time when a short discussion of this matter can take place before the House prorogues?


Ernest Lapointe: In answer to question No. 1, the matter has not been considered. In reply to the next question the matter may be discussed on the initiative of any member of parliament in conformity with the rules of the House.



CENSOR OF PUBLICATIONS

Mr. IRVINE:: 1.	Is there an official whose duty it is to censor publications circulated in Canada?
2.	If so: (a) what is his name; (b) what
is his title of office; (c) under what authority does he act?	_
3.	What are the standards under which publications are banned?
4.	What publications have been banned since 1920?


Hon. Mr. EULER:: 1.	No, but certain publications are prohibited transmission in the mails under paragraph (d) sub-section 1 of section 9 of the Post Office Act as amended in 1913. Under item 1201, schedule "C" of the customs tariff which reads as follows:
Books, printed paper, drawings, paintings, prints, photographs or representations of any kind of a treasonable or seditious, or of an immoral or indecent character.
2.	& 3. Answered by No. 1.
4. It is not deemed desirable to publish lists of prohibited works as :.t would give them undue publicity.



CUSTOMS COMMISSION-DAILY EXPENDITURE

Mr. POWER:: What is the approximate daily expenditure of the commission appointed to inquire into Customs and Excise department including travelling expenses, hotel expenses, fees, salaries, clerical or accounting assistance?


Hon. Mr. ROBB:: 



$1,500. CUSTOMS COMMISSION-COST TO DATE

Mr. POWER:: 1.	What has been the cost to date of the special commission to inquire into the Customs and Excise department?
Questions

2.	What fees and expenses are being paid to Honourable N. W. Rowell, and how much has been paid to him to date?
3.	What fees and expenses are being paid to Mr. Calder, and how much has been paid him to date?
4.	What fees and expenses have been paid to any other attorney?


Hon. Mr. ROBB:: 1.	$58,607.65 to December 31st, 1926.
2.	$200 a day, $20 a day living allowance and actual transportation expenses; $11,503.51 paid to date.
3.	$100 a day, $15 a day living allowance and actual transportation expenses; $905.32 paid to date' and $10,000 bv way of advance.
4.	W. F. O'Connor, $6,288.71; R. B. Law, $3,.500,92; Gordon Lindsay, $634.63.



FRUIT AND VEGETABLE COMBINE

Hon. Mr. STEVENS:: 1.	Having reference to the statement of the honourable the Minister of Labour on February 10th, page 175 of Hansard, "with respect to the fines imposed in connection with the combine in the distribution of fruit and vegetables in western Canada".
2.	Has the government or any minister or department of the government been approached by any representative of the Nash interests or any of the parties fined, requesting a remission of the whole or any part of the fines imposed by the courts?
3.	If so, will the government entertain such request, and if so, on what principle would such remission be considered?


Hon. Mr. HEENAN:: 2.	No.
3.	Answered by the reply to No. 2.



CANADIAN NAVY

Mr. BLACK (Yukon):: 1.	Of what ships does the Canadian navy consist?
2.	Where is the Canadian navy?


Hon. Mr. RALSTON:: 1.	Destroyers:	H.M.C.S. "Patriot," H.M.
C.S. "Patrician;" minesweepers:	H.M.C.S.
"Thiepval," "Armentieres," "Ypres" and "Festubert."
2.	"Patriot," "Ypres" and "Festubert" based at Halifax, N.S.; "Patrician," "Armentieres" and "Thiepval" based at Esquimalt, B.C.



* SALE OF SHARES ACT

Mr. ADSHEAD:: Has the government any intention or are they making any arrangement whereby companies receiving their charters under the Dominion government will come under the "Sales of Shares Act" or be subject to the Utilities Commission in the province of Alberta?


Ernest Lapointe: Representations
have been made to the government with re-

gard to this matter and they are being considered.



* SENDING TROOPS TO CHINA

Herbert Bealey Adshead: Was the Canadian government in any way consulted before the British government had decided to send troops to China or was our government just notified that military action was going to be taken?


Ernest Lapointe: The action of the British government in this connection was taken on its own initiative and without consultation with this government.



ADVANCES TO CANADIAN BANKS

Mr. SPENCER:: 1.	How much was advanced since July 1926, against securities by the Treasury Board of Canada to the Canadian banks under the Finance Act of 1923?
2.	What percentage was charged for this service by the Treasury board?


Hon. Mr. ROBB:: 1.	Total advances since July 1, 1926, $123,-
850,000.
2.	41% per annum.



IMPORTS AND EXPORTS

Mr. GOTT:: 1.	What were the total Canadian imports from the United States of America during the year 1926?
2.	What were the total exports to the United States of America from Canada during the year 1926?
3.	What were the total Canadian agriculture imports from the United States of America during 1926?
4.	What were the total Canadian agriculture exports to the United States during the year 1926?


Hon. Mr. MALCOLM:: 1.	During the fiscal year ended March 31, 1926, total imports into Canada for consumption from' the United States were $609,719,637.
2.	During the fiscal year ended March 31, 1926, exports from Canada to the United States were:
Canadian produce	$ 474,987.367
Foreign produce	 10,964,868
Total	$ 485,952,235
3. During the fiscal year ended March 31, 1926, imports into Canada for consumption from the United States, of articles such as are produced on Canadian farms were:
Field crops-
Raw materials	$ 26,105,373
Partly manufactured articles.. 2,016,308 Fully or chiefly manufactured
articles	 8,795,374
Total	$ 36,917,055

Questions
Animal husbandry-
Raw materials	$	14,133.327
Partly manufactured articles. .	5,192,852
Fully or chiefly manufactured
articles	 8,812,247
Total	$	28,138,426
During the same period imports from the United States of farm products such as are not produced in Canada were:
Field crops-
Raw materials	$	75,560,037
Partly manufactured articles.. 12,592,115 Fully or chiefly manufactured
articles	 35,441,111
Total	$ 123,593.263
Animal husbandry

Raw materials	$	3,214.475
Partly manufactured articles.. 127,233 Fully or chiefly manufactured
articles	 4,891,591
Total	$	8,233,299
4. During the fiscal year ended March 31, 1926, exports of Canadian produce to the United States of articles which, in their original
state, were produced on Canadian farms were: Field crops-
Raw materials	$ 42,028,356
Partly manufactured articles. .	85,137
Fully or chiefly manufactured
articles	 23,186,262
Total	$ 65,299,755
Animal busbandry-
Raw materials	$ 30,672,093
Partly manufactured articles. .	6,502,684
Fully or chiefly manufactured
articles	 3,093,011
Total	$ 40,267,821
During the same period, exports to the United
States of articles based on farm products not such as are produced in Canada were:
Field crops

Raw materials	8	2,121
Partly manufactured articles. .	542,827
Fully or chiefly manufactured
articles	 1,067,747
Total	$	1,612,695
Animal husbandry-
Raw materials	
Partly manufactured articles.. Fully or chiefly manufactured
articles	$	20,679Total	$	20,679



PELEE ISLAND CABLE

Mr. GOTT:: 1. What expenditure was made for repairs for the Pelee island cable during the year 1926?
2.	How many times was the cable repaired in 1926?
3.	What was the cost on each occasion?
4.	II as there ever been representation made to the department to run the Pelee island cable from Kingsville to the island? If so, by whom ?
5.	What consideration did the proposal receive?
6.	How much would it cost to run a cable from Kingsville to Pelee island-approximate?
[DOT] 7. If this change would insure the islanders better service the year round, would the department be adverse to laying same?
8.	Has the department had under advisement plans to improve communication between Pelee island and the mainland?
9.	If not, why not?
10.	If so, what proposal and plans are under
way ?	I


Hon. Mr. ELLIOTT:: 1.	81,165.20.
2.	Three times.
3.	$456.90; $88.65; $619.65.
4.	Yes.
(a)	By Mr. Thomas Rowley.
(b)	Pelee Island Municipal Telephone
Company forwarded by Mr. Eccles J. Gott, M.P.
5.	Ko action taken.
6.	$5,000.00.
7.	Advisability of new cable route under consideration.
8.	Yes.
9.	Answered by No. S.
10.	Improvements either by using wireless or by additional cable under consideration on suggestion of Mr. Thomas Rowley.



STEAMSHIP MADELINE A.

Mr. ERNST:: 1.	Does the customs service own or charter the steamship Madeline A, employed in the customs preventive service on the coast of Nova Scotia?
2.	If this steamship was purchased, what was the amount of the purchase price and to whom was it paid?
3.	If chartered, who is the owner and what are the terms of the charter party?
4.	What amount has been paid to such owner to date?
5.	When did the Madeline A enter the customs preventive service and upon whose recommendation?
6.	Were tenders called for before the purchase or charter of the Madeline A?
7.	What are the type, size, tonnage and maximum speed of the Madeline A?
8.	What seizures have been made by the said steamship to date?
9.	Is the Madeline A suitable for employment in the customs preventive service and seaworthy ?

Unopposed Motions for Papers


Hon. Mr. EULER:: 1.	Madeline A. is chartered by the Department of Customs and Excise.
2.	Answered by No. 1.
3.	The vessel is chartered from Dennis D. LeBlanc, Wedgeport, N.S., at $12.00 per day for each day in commission for Department of Customs and Excise.
4.	$4,677.00.
5.	September 21, 1925-The Hon. the Minister of Customs and Excise.
6.	No.	,
7.	Length 64 feet; breadth 18.2 feet; depth
7	feet, tonnage, gross 39, registered 27, speed
8	knots per hour.
8.	Preventive service customs seizures
numbers:	6917-1 five gallon keg of rum;
6961-A Sfudebaker automobile and a five gallon keg of rum; 7449-Auxiliary schooner R. L. McKenzie, detained; 7761-19 bottles of liquor; 7813-1 bottle of rum; 7830-1 bottle of liquor.
In addition to the above seizures effected by the master of this vessel he instituted prosecution proceedings in four instances.
9.	Yes, for the work upon which she has been engaged.



INDIAN RESERVE-COUNTY OP LUNENBURG

Mr. ERNST:: 1.	Is there an Indian reserve at Searsdale or New Germany, in the county of Lunenburg, Nov-a Scotia?
2.	If so, how many persons reside on the reserve and how many such persons are Indians?
3.	What are the names of the Indians residing thereon, if any?
4.	What sums have been expended during the fiscal year 1925-26 and 1926-27 upon persons living on such reserve for, (a) medical attention; (b) schools; and (c) other purposes?


Hon. Mr. STEWART:: 1.	Yes.
2.	Thirty. It is reported that no persons who can legally be classed as Indians reside on the reserve.
3.	Answered by No. 2.
4.	1925-26: Schools, $700.00; relief, $143.85;
medical, $50.00-1926-27:	Schools, $590.19;
relief, $72.37; medical, $37.50; roads, $49.85.



UNOPPOSED MOTIONS FOR PAPERS


Mr. SMOKE:: 1. For a copy of the original treaty concluded between his late Majesty King George III and the band of Indians commonly known as the Six Nations, providing for a transfer to Canada of the said Six Nations Indians, and the allotment to them of certain lands in what is now the province of Ontario.

2.	If not included in the original treaty, a copy of all subsequent treaties or other documents, showing the terms upon which said lands were to be held by or for the Indians and the particulars of the location and extent of said lands.
3.	A copy of all treaties or other documents altering or modifying the terms of the original treaty.
4.	A financial statement showing all moneys received from time to time by the Dominion of Canada, or by the former province of Canada, on account of the Six Nations, the dates of receipt, the considerations for which the same were received, and the disposition made of such moneys from time to time.
5.	A statement showing what moneys or other properties the Dominion of Canada or the government or any department thereof now holds in trust for or on account of the Six Nations Indians, how these moneys are invested and for what purposes the same are held.
Hon. CHARLES A. STEWART (Minister of the Interior):	The "motion is quite in
order and quite acceptable, with the exception that we may not be able to furnish the information requested from provincial government. We will, however, furnish everything that is in the hands of the Dominion government.



APPOINTMENT TO BABINE INDIAN AGENCY

Mr. BRADY:: For a copy of all letters, telegrams, reports, and other correspondence or communications between the government of Canada or any member thereof or their deputies or the Civil Service Commission or the officials thereof or any other person or persons or political organizations relating to the appointment of a farm instructor and Dominion constable for Babine Indian agency in 1926.



VANCOUVER HARBOUR-DISMISSAL OF WALTER H. KIRCHNER

Mr. SPENCER:: For a copy of all letters, telegrams, reports and other correspondence or communications between the government of Canada or any member thereof or their deputies, or the Civil Service Commission or the officials thereof, or any other person or persons, or the Vancouver harbour commissioners, relating to the dismissal of Walter H. Kirehner from the employ of the Vancouver harbour commissioners.



CANADIAN NATIONAL RAILWAYS-OPERATING POSITION

Hon. Mr. MANION (For Hon. Mr. St-even*):: For a return showing decision of the railway commission made in reply to the application of H. J. Symington on behalf of the Manitoba government as to whether the operating position of the Canadian National Railway system

Revision of Statutes
was to be considered in the present general rates investigation now going on before the Board of Railway Commissioners, said decision having been made during the last summer months.



RETURNED SOLDIERS-CIVIL SERVICE APPOINTMENTS

[Stage Direction]
On the Orders of the Day:
Mr. W. K. ESLING (West Kootenay):: I desire to ask the Minister of Soldiers' Civil Re-establishment two questions. First, is the minister aware that the preference clause for returned men is being disregarded in West Kootenay?


Hon. J. H. KING (Minister of Soldiers' Civil Re-establishment):: I should be glad
to have more information on the subject of the question asked. If my hon. friend has information of that kind and will bring it to my attention, I will be glad to have it inquired into.


William Kemble Esling: If I hand the minister two specific cases of such disregard in writing will he see that the disregard is remedied?


Mr. KING (Kootenay):: I will be glad to make inquiry into the matter.


William Kemble Esling: And see that it is remedied?


John Warwick King: Yes.



IMPORTATION OF SCOTCH MINERS

[Stage Direction]
On the Orders of the Day:
Mr. A. A. HEAPS (North Winnipeg):: I
wish to ask the Minister of Labour or the Minister of Immigration and Colonization if the attention of either has been drawn to the fact that on the 14th of this month a carload of miners from Scotland were imported into the Glace bay district to work in the mines there, although a large number of miners in that neighbourhood are already out of work.


Hon. ROBERT FORKE (Minister of Immigration and Colonization):: I may say that
I have no knowledge of any such occurrence as stated by the hon. member.


Abraham Albert Heaps: I did not hear what the
minister said.


Robert Forke: I have no information in
regard to that matter.


Abraham Albert Heaps: I wonder if the minister will be good enough to look into the matter and let us have a statement?


Robert Forke: I think, possibly, that is
a lnatter that the Minister of Labour might look into and see what is being done. However, I will be prepared to do the best I can.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: May I ask the Minister of
Labour whether it is the policy of the government to permit industrial workers to be brought into Canada when there are idle men in this country?


Hon. PETER HEENAN (Minister of Labour):: I think the hon. member is in the
right church but in the wrong pew. I should like to have more information as to whether the government is lending any assistance to bringing these men over.


Edward Joseph Garland: Do
you not know what the government is doing?


An hon. MEMBER:: Who can answer?


Peter Heenan: If these men are coming
over from the British Isles and paying their own fares, I do not know what the government has to do with it.



REVISION OF THE STATUTES

[Stage Direction]
On the Orders of the Day:
Mr. W. G. McQUARRIE (New Westminster) :: May I ask the Minister of Justice
whether the revision of the statutes has been completed, and if not whether there has been any change in the personnel of the commission having that matter in hand?


Ernest Lapointe: There has been no change in the
personnel of the commission. The work of the commission has been extended in order to include the legislation which will be passed by parliament at the present session. My hon. friend knows that many laws would have been placed on the statutes last year had not parliament been dissolved in July. It was suggested to me the other day by the hon. member for West Calgary (Mr. Bennett) that the legislation of this as well as of last session should be inserted in the revised statutes to be distributed and published. It would not be advisable to pursue any other course and we are hoping-as a matter of fact I know- that the revised statutes will be completed and given to the public after this session is over.



RETURNED SOLDIERS' INSURANCE

[Stage Direction]
On the Orders of the Day:
Mr. J. A. CLARK (Vancouver-Burrard):: On Friday I asked a question in regard to a recommendation made by the convention of the Canadian Legion, presided over by Sir Percy Lake, at a recent meeting at Winnipeg, in which they recommended that the returned
Rural Mail

soldiers' insurance be re-opened for a period of one year. The Prime Minister on that occasion promised to bring the matter to the attention of the Minister of Soldiers Civil Re-establishment and give the information to-day.


John Warwick King: I regret that the matter was not brought to my attention, but I will make inquiry and give the information to-morrow.



RURAL MAIL ROUTES AND BOXES

[Stage Direction]
On the Orders of the Day:
Mr. GROTE STIRLING (Yale):: Can the Postmaster General inform the House as to whether there is any immediate prospect of a supply of mail boxes being available for rural routes?


Hon. P. J. VENIOT (Postmaster General):: Has my hon. friend any particular route in mind or is he speaking generally?


Grote Stirling: I have one route in
mind. I have seen the Postmaster General about it.


Peter John Veniot: I may say there has been
a call for tenders for rural mail boxes but the contracts have not yet been let. The department has received several applications for rural routes on which no definite action has yet been taken. Those applications are being considered by the department.


Grote Stirling: If I may go further,
Mr. Speaker, I would point out that the rural route to which I refer, East Kelowna, as the Postmaster General will remember, has been agreed to.


Peter John Veniot: I cannot hear my hon.
friend.


Grote Stirling: I say that the rural
route at East Kelowna, as the Postmaster General will remember, has been accepted, but it is still waiting for boxes and has been for months. My question was whether the Postmaster General sees any immediate prospect of these boxes being available?


Peter John Veniot: The rural route of East
Kelowna was not accepted by the present Postmaster General. I believe it was accepted, and we will be prepared to carry on just as soon as the contract for the boxes has been let and we can obtain them from the contractor. I expect to be able to let these contracts some time this week.


Mr. R. B. HANSON (York-Sunbury):: While we are on this subject, may I ask the Postmaster General a question as to the 
policy of the government with regard to the extension of the system of rural mail service throughout the country. Is it the intention of the department to extend the system?


Ernest Lapointe: Surely this is not the
class of questions that should be asked before the orders of the day are called.


Henry Elvins Spencer: With regard to the shortage of mail boxes for rural routes, I am given to understand by the department that that was the reason why many mail routes that had been passed by the department were held up. I would be glad to know7 if we can get some relief from the situation as w?e find it to-day with regard to promised rural routes.


Peter John Veniot: I am sorry that I did not
hear the whole of the question.


Henry Elvins Spencer: The question was somewhat answered by the promise of the minister a short time ago, but I would be glad to know when the various rural routes that have been promised by the department can be put into operation because I understand they are being held up on account of lack of boxes.


Peter John Veniot: I will not say that all the
routes to which reference has been made have been promised by the department, because I have not that information. Since I have been head of the department I have promised no mail routes, and those that have been promised and reported upon as feasible will likely be put into operation as soon as we can secure the mail boxes.



THE BUDGET


[Stage Direction]
The House resumed from Thursday, February 17, 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.
Mr. G. G. COOTE (Macleod):: Mr. Speaker, in his opening remarks on Thursday last the Minister of Finance (Mr. Robb) made a very brief reference to the post-war depression which had been so evident in Canada in 1920 and 1921, and the gradual improvement in each budget brought down since he had been acting as Minister of Finance. He was becomingly modest in that he did not as usual give to his budgets the credit for all the improvements that had taken place. It is fortunate for the minister that he has held the portfolio of finance during the years in which the country

The Budget-Mr. Coote
has been recovering from the effects of its postwar deflation, and in which an improvement has been taking place.
I feel that if we were to analyse the matter we would find that credit for the improvement must be given largely to the primary producers of this country. Canada is primarily an agricultural country; agriculture is her basic industry, and the agricultural class were the worst sufferers from the deflation in 1920 and 1921. The purchasing power of the farmers' dollar, in many cases, dropped below fifty cents as compared with pre-war times, yet our farmers never stopped producing. The acreage which they sowed to wheat would be an indication of the way in which they tackled their . problem. Let me quote the acreage for a few years during this period:
Year	Acres
1921		23,000,000
1922		 22,400,000
1923		 22,671,000
It is true that a large number of farmers were forced off the land, but the acreage sown to wheat shows the spirit in which they tackled their problem. They did not rush to the government for relief or for a higher tariff. They tackled their problem in their own way.
I might remark in passing that the improved condition in which the Canadian National Railways stand to-day is largely attributable to the same cause. The credit for that should be given to the producers of this country who went ahead and produced, not knowing whether there would be a market for their product or at what price it might be sold. They were willing to take a chance on the world price. I am reminded of a statement made by Sir Thomas White when, as Minister of Finance he was floating one of our victory loans. He said that if this debt were ever to be repaid it would be from the top six inches of Canadian soil. The improved condition of our farmers, due largely to their own efforts, is responsible, to a considerable extent for the easy financing which the Minister of Finance referred to in his opening remarks. When the farmers are prosperous, business is good and government financing is made easy.
Many compliments have been handed to the Minister of Finance because of his brief and plain statement in the budget speech. It certainly is a very brief statement; it has every appearance of having been prepared in a hurry and with the idea of getting it through the House of Commons in a hurry. The minister neglected to tell us what the net debt of Canada is. There is no statement whatever in regard to our railway financing, and it seems to me that the budget is not complete without some reference to it. The minister should also have included in his statement details of the revenues from the different war taxes, such as sales tax, stamp tax and transportation tax, some of which he proposes to reduce. How is the House to know just what our revenue is likely to be next year unless we have some details? A statement of revenue showing an increase in our receipts of $11,900,000 is certainly an indication of improved conditions generally. The customs revenue shows an increase of $14,000,000. We do not know how much of this is due to increased valuation of goods for duty purposes and how much to a larger importation of dutiable goods.
I am certainly pleased that there is a reduction in our net debt and that in four years we have had a net reduction of $95,000,000. I am advised by the Department of Finance that our net debt to the end of the present fiscal year is estimated at $2,358,364,000. At the average rate of reduction which we have had for four years we may be able in the next one hundred years to retire our national debt, but it is hardly to be expected that that will be done if the present proposals are put into effect. It is the duty of the minister to consider and to present to parliament some definite plan for the systematic retirement of our national debt.
In comparing our revenue and expenditure, we should note that expenditure attributable to war is $162,922,000, or 45 per cent of our total expenditure. Revenue from war taxes amounts to $154,000,000. or $8,000,000 less than the expenditure attributable to war, or only 39.17 per cent of our revenue. The only changes which the minister proposes in this budget are reductions in war taxes, and these reductions are estimated at $27 000,000. The reductions in expenditure attributable to war are estimated at not more than $2,000,000, thus leaving our war charges at $160,000,000 with estimated revenue from war taxes of only $127,000,000, or 32 per cent of our estimated total revenue. I believe our war tax revenue should be sufficient to take care of expenditure attributable to war, but in this coming year apparently they will fall short by $33,000,000. If our former sources of revenue, namely customs duties and excise taxes, are sufficient to take care of ordinary and capital expenditures, and to reduce the national debt by $25,000,000, that is all that should be expected from them, and a reduction of five per cent in our customs tariff would afford more relief to business than the reduction which is proposed in the income tax.
The Budget-Mr. Coote

So far as the minister's proposals for reduction of taxation are concerned, I congratulate him upon his action in removing the tax from notes and overdrafts particularly. I believe his cut in the sales tax is a good move, and that it will help business generally, but I do not know yet whether we can afford to make the reduction.
As to the income tax reduction, I cannot agree with the minister that the income tax should be reduced at all. I think the reduction which was made in our income tax last year was quite sufficient, and I would urge that the income tax be maintained at least at its present level. The proposal of a reduction of ten per cent appears to me to be the first move in the elimination of this tax. I remarked a moment ago that it would take, at the present rate, one hundred years to pay off our war debt, but at the present rate of reduction in the income tax, it will take only ten years for that tax to disappear. Personally I would like to see the income tax maintained until all the war debt is paid. [DOT]
Just a few words in regard to the redemption of our debt. The minister shows a surplus on operations for the present fiscal year of $34,269,260. In another part of his address he states that the cash on hand from the previous year was $27,068,121, or a total of $61,337,381. Out of this amount he redeemed bonds in the present fiscal year amounting to $43,000,000, so it would appear that we will have on hand in cash at the end of this year $18,337,381. This is my own calculation; it is not mentioned in the minister's statement, Now there are maturing this year notes totalling $8,000,000, bonds due on November 1, 1927, amounting to $29,068,400, and bonds due on December 1, 1927, amounting to $63,437,250, or a total indebtedness maturing this year of $100,505,650. As I said before, we should have a cash surplus from the year 1926-1927 of $18,337,381 to apply on this amount, leaving the amount of $82,168,269 which may have to be refunded this year.
The proposal of the hon. member for West Calgary (Mr. Bennett) for refunding loans during the coming year at 4 per cent per annum is at least a very interesting one, and I think it should receive the careful consideration of the Minister of Finance and of the government. The speech of the hon. member for West Calgary was a very welcome change from the budget speeches which we have been in the habit of hearing from the front benches of the opposition during the last five years. His speech contained at least a new idea. My own suggestion for lowering the interest 
rate on the loans maturing this year would be to open a government savings bank at every money order post office in Canada, and to advertise that we will receive deposits bearing, if necessary, 3i per cent interest, and that these deposits will have the full guarantee of the Dominion behind them. I am sure that if that were done the minister would have no difficulty in securing enough deposits at 3J per cent to retire the bonds which mature this year.


James Alexander Robb: 1 am quite interested in my hon. friend's remarks, and I want to assure him that I am asking this question just for information because I know he is a student ' of economics. Would my hon. friend be good enough to favour the House with his own opinion of the proposals of the hon. member for West Calgary regarding insurance bonds.


George Gibson Coote: Not at the present moment. I have been busy enough trying to get up a budget speech of my own, without going very deeply into the proposal of my hon. friend for West Calgary.
The minister gives us no definite statement of the revenue he anticipates for the year 1927-28, except to say that the tax reductions will reduce the revenue as compared with this year by S27,000,000. The revenue for 1926-27 is estimated at $394,870,000. If that is decreased next year by the $27,000,000 which the minister suggests, that will leave his revenue for 1927-28 at $367,870,000. There is no estimate of expenditure, except the opinion that it will be slightly larger than that of the present year. The main estimates as tabled are larger by the amount of $6,634,087. The expenditure for 1926-27 is estimated at $360,600,740, I think we are warranted in saying that the estimated expenditure for 1927-28 would be $6,634,087 more, which would make the amount $367,234,827, as compared with an estimated revenue of $367,780,000. That is, there would be an apparent surplus estimated for the coming year of approximately $500,000. I would like to ask the House where is there here any provision for the reduction of the debt next year? There is nothing contained in the minister's speech which would lead us to believe that there can be any reduction in the debt for the coming year if these budget proposals are carried out. There is only the pious wish that business conditions will be better next year, and therefore, that there will be a little more revenue with which to reduce the debt. I do not think any business house in Canada budgets in that manner, and I think this House and

The Budget-Mr. Coote
the government should budget so as to be prepared to reduce the national debt by some amount next year.
So far as western Canada is concerned, there is no indication that the coming year will be any better than the one we have just passed through. As a matter of fact our wheat is not grading as high, and we are not receiving as good a price. There is no indication there of any change for the better, and if for any reason we should have a poor crop the chances are that business conditions will not be so good and the revenue may not be quite as large as is now anticipated.
There is current talk in the newspapers and around the House of Commons that the government will this year have to provide some amount for increasing the subsidies to the maritime provinces. They may have to provide an amount to subsidize freight rates to the maritime provinces. I cannot see in this budget any provision for taking care of any such expenditure. I think it is only fair to say that if assistance in this manner is given to the maritime provinces there is bound to be a demand from the other provinces for increased subsidies, from provinces perhaps that can show just as good reasons why their subsidies should be increased. May I point out. to the House that the subsidies which the provinces are now receiving have a purchasing power of only a little over sixty cents on the dollar as compared with the time when they were granted, and I think there is no doubt in the world that the House will have to consider the question of whether the provincial subsidies generally will not have to be increased.
We have been discussing here for two days a bill to grant old age pensions in this country. If the government are sincere in their expressed belief that the provinces will pass the necessary legislation and come in under this old age pension scheme, we shall have to find some money to pay for our share of the old age pensions. I cannot see that there is any provision made in the budget for these old age pensions. I think that matter should be taken care of. It is quite possible the minister may have to pay some amount under the old age pension scheme in the coming fiscal year, because we are told that the British Columbia government at the present time is putting an old age pension bill through their legislature.
In view of all these circumstances, I doubt very much whether we are justified in giving effect to all the proposals for tax reduction which the minister has made, and it seems to
me there is no doubt in the world that the minister is making a mistake in proposing a reduction in the income tax, at any rate. The bonds which were issued for our war debt, which are such a millstone round this country's neck financially at the present time, are chiefly held by the class of people who pay a large share of this income tax. If this income tax is done away with you are going to entirely relieve this wealth from taxation.
The hon. member for West Calgary, seems to be in favour of replacing the income tax with a turnover tax, which I assume would be a direct tax on every business transaction. Surely a turnover tax must retard business more than the present income tax. We are told that the income tax retards the inflow of foreign capital. I cannot find anything in our history to confirm this view. Mr. Fiske of New York, a prominent authority on financial matters, estimates that the investment of American capital in Canada increased from $750,000,000 before the war to about $3,000,000,000 at the present time, and our income tax has been in force practically all that time.
In 1924 the Department of Commerce of the United States issued an estimate of British and American capital invested in Canada which showed a total of $1,890,000,000 British, $2,425,000,000 United States and $348,000,000 for other countries; or a total of $4,403,000,000 as of December 31st, 1923. Our own Bureau of Statistics issued a'statement last year showing a known new investment of American capital in Canadian securities amounting to $483,000,000 in the past four years.
In the face of these figures, I do not see how it can be contended that the income tax retards the investment of foreign capital in Canada. As a matter of fact what our industries need is not an increase of capital but an increased market for their products. In most manufacturing lines we are well supplied with factories, and in very few lines are our factories working to anything like full capacity. A reduction in income tax will not increase consumption, although it might release a very small amount for investment.
One of the difficulties of Canadian industry to-day is over-capitalization, and the capital is badly water-logged. I have before me a copy of a speech delivered by Colonel Arthur Hatch at the annual general meeting and dinner of the Canadian Manufacturers' Association, held at the Windsor hotel, Montreal, June 1924, and at this dinner Colonel Hatch, discussing the development of Canadian industry during the fifty y7ear period from 1870
The Budget-Mr. Coote

to 1921, gave the following figures of the amount of capital invested, the employees' wages and the products:
Capital invested increased from $80,000,000 to $3,200,000,000.
Employees engaged increased from 188,000 to 517,000.
Salaries and wages increased from $40,000,000 to $581,000,000.
The value of their products increased from $222,000,000 to $2,748,000,000.
In other words-and this is Colonel Hatch's own statement-in the interval between 1870 and 1921 capital invested multiplied forty times; employees engaged three times; wages and salaries paid fourteen times and value of products, twelve times. I think there is evidence in that statement of the president of the Canadian Manufacturers' Association that Canadian industries are very heavily overcapitalized. Any hon. member who was in this House tw'o years ago when we discussed the resolution moved by the hon. member for Mackenzie (Mr. Campbell) in connection with watered stock in Canadian companies does not need to be told of the vast amount of water there is in the stock of some of our manufacturing industries.
One advantage of the income tax is that it is inexpensive to collect. Last year we received from this source $55,571,000. at a collection cost of $1,724,000. We collected through the customs tariff last year $171,375000, which cost us to collect approximately $7,000,000. It is generally estimated that for every dollar the government collects in customs revenue from two to three times the amount is taken from the pockets of the people. A protective tariff is a tax on consumers, not for government purposes, but for private purposes, although incidentally it does bring in some revenue to the government. The best feature of the income tax, and one that I would like to commend to the attention of the House is that it is taken only from those who are able to pay. If it is replaced by a tax on commodities which people must purchase it' will have the effect of wholly releasing from taxation large amounts of capital which have been accumulated in the hands of a small number of men who are in control of our manufacturing industries and our financial institutions, and men who have accumulated fortunes out of the exploitation of our natural resources. Surely it would be unfair to allow the incomes from those large amounts which have been accumulated in the hands of a comparatively small number.of men, and in many cases through favours handed them by the

government, to escape taxation. The service rendered by the state to the citizen is largely the protection of his property. We even protect his property after he is dead, and see that it is handed over to the heirs whom he names. If this is so, why should not the citizen who has a larger share of wealth or income contribute according to the share which he has? Trade is restricted by taxation; this is especially true of customs, sales and turnover tax, all of which are a direct tax on commodities. The hon. member for West Calgary complained that the cost of living was too high, but if we are to replace the income tax with a turnover tax I do not think there is any doubt that the cost of living will be still higher. The income tax retards trade the least of any tax which we are imposing to-day. I do not think that statement can be challenged. The turnover tax, the sales tax and all consumption taxes, compel married men to pay more taxes than bachelors. They compel the man who has a family and children to pay more taxes than the couple who simply raise a poodle dog or a persian cat. If taxes are collected on consumption one man may have to contribute ten per cent of his income, while another may contribute only a fraction of one per cent, without any regard whatever to their ability to pay. I think that under an ideal system of government each citizen should contribute to the state an equal share of his time. Today each contributes his money, not time. If one man has an earning power much greater than another, why should he object to paying to the state a little more in the way of taxation?
The hon. member for West Calgary referred to certain principles of taxation laid down by Adam Smith. I have taken the trouble to again read certain portions of the Wealth of Nations and I should like to quote three or four of the requirements which Adam Smith thought should be met in levying taxation. This is the first requirement:
The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.
Surely income tax meets that requirement. Then he says:
Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it.
The income tax meets that requirement, because the taxpayer does not have to pay the tax until he has earned it, and he does not

The Budget-Mr. Coote
have to pay it unless he has earned it. Adam Smith's next requirement is that:
Every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible, over and above what it brings into the public treasury of the state.
I think the income tax meets that requirement; it is as inexpensive to collect as any tax we have. His final requirement is:
The tax which each individual is bound to pay ought to be certain as to the time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor and to every other person.
I think the income tax also meets that requirement. If it does not, it is simply because the income tax law itself is not properly worded or properly administered. But I was so interested in reading the Wealth of Nations that I perused over twenty pages and came to this statement, which I believe may have a little bearing even to-day:
In the disorderly state of Europe during the prevalence of the feudal government, the sovereign *was obliged to content himself with taxing those who were too weak to refuse to pay taxes.
When I read that passage I naturally wondered whether in this present ease the government were following the line of least resistance and because there is much objection from these wealthy and powerful individuals and corporations they decided to reduce the income tax.
But Adam Smith is dead. I want to quote very briefly from a living political economist -Professor Stephen Leacock, of Montreal. Coming from such an authority as Professor Leacock, I think this should command the attention of the House.


James Shaver Woodsworth: Will the hon. gentleman say whether Professor Leacock is writing as an economist or a humorist?


George Gibson Coote: tariff rates on Canada's imports, 1926.-Concluded.
504	Lumber	
505	Partly manuf. lumber planed on one
side	
Raw wool	
554	Wool, noils and tops	
555	Wool per lb	
Raw sugar	
539	Manila and sisal grass	
Tariff rates on 1926 imports 9 mos.
ended Dec. 31-[DOT]
348 (d) Copper bars and rods, impt. by man. 778	'
576 Raw silk	
540	Hemp dressed or undressed	
211 Alumina	
278 Oil for soap industry	
208 Sulphur	
748 Cotton seed oil, crude	
329 Iron ore	
77a Raw cocoa (beans) per 100 lbs.. ..
616 Rubber recovered	
742 Rubber hard	
616 Raw rubber	
278 Peanut oil edible	
278a Peanut oil (crude) (soap)	
? Rolling mill products.
335 Manganese, oxide of	
Grease for soap and leather	
Tin in blocks, etc	
Pigs of iron, per ton	
Ingots of iron	
Auto parts n. o. p	
Raw furs	
Axles for vehicles	
Silk cloth to be dyed	
Celluloid in lamps, sheets, etc.. ..
Gums and resin	
Silver in bars	
Leather unmanufactured	
In this House we are very often reminded that we are importing too much goods from the United States. It worries all my hon. friends who sit to my right. But may I point-out to them that the Canadian manufacturers are the largest importers of United States goods? The list which the minister dealt with in his speech aggregates $224,000,000 out of total imports valued at $513,000,000. If you add to that list coal and other commodities which these manufacturers imported last year, I am sure you will see that they imported over half of the goods which appear as imports from the United States. The customs tariff allows our manufacturers to buy in a free market and to sell in a protected market; while the rest of the people, the farmers particularly, buy in a protected market and sell in a free trade market.
The collection of income tax is only a small attempt to remove some of the inequalities in the wealth of our citizens-inequalities caused, at least in part, by the operations of the tariff. The minister said that his aim has been to lighten the burden of taxation generally, that is on every taxpayer, rather than afford relief to special groups. But by reducing the in-
[Mr. Coote. 1
Free	Free	Freem	22J	25Free	Free	Freett	it	it2c.	2 1/2	3Free	Free	FreeFree	Free	Freett	it	ttit	it	itit	it	Uit	tt	itit	tt	itit	tt	itit	tt	tttt	ifft	$1.00	$1.50Free	Free5	7 1/2	10%Free tt	Free if	FreeFree	Free	Freeit	if	((1.50	2.50	2.501.50	2.25	2.50Free	Free	Free22 1/2	30	3512 1/2	22 1/2	353	5 %	5Free	Free	Freett	it	it10	12 1/2	15
come tax he is really intensifying the difference between the manufacturers and capitalists on the one hand and the great body of wage-earners and farmers of this country on the other. It is reduction in taxation affecting only about 10 per cent of our people-and the most highly favoured class at that. As the minister said last week, in reply to a speech from the hon. member for Toronto Northwest (Mr. Church):
The war is over, but it is not yet paid for.
The income tax should remain until it is paid for. With the exemptions from income tax now allowed, I cannot see that any hardship whatever is caused by this tax. The tax which to-day restricts trade more than any other form of taxation is the customs tariff. The situation in Europe became so acute that in October last a manifesto was published in London, signed by hundreds of the most prominent business men and bankers in Europe, as well as a large number of prominent bankers in the United States. It is worth noting that the manifesto was signed by the leading men in the countries which took part on either side in the Great war, it was signed bv men in

The Budget-Mr. Coote
England, France, Italy and Belgium as well as by men in Germany, Austria and Hungary. It is one of the most important documents given to the business world for a long time, and is well worth incorporating in Hansard. It is too long to read here, but if I have the permission of the House it may appear in Hansard without being read, as it will only take about a page. It should be remembered also that this statement is not made by Adam Smith or by any other man who lived a hundred years ago, when conditions were very different; it was written by men living today, some of the most astute business men in the world, speaking from their own personal' experience and observation. The statement is as follows.
The manifesto printed below, called A Plea for the Removal of Restrictions upon European Trade, was published in London on October 19.
We desire, as business men, to draw attention to certain grave and disquieting conditions which, in our judgment, are retarding the return to prosperity.
It is difficult to view without dismay the extent to which tariff barriers, special licenses, and prohibitions since the war have been allowed to interfere with international trade and to prevent it from flowing in its natural channels. At no period in recent history has freedom from such restrictions been more needed to enable traders to adapt themselves to new and difficult conditions. And at no period have impediments to trading been more perilously multiplied without a true appreciation of the economic consequences involved.
The break-up of great political units in Europe dealt a heavy blow to international trade. Across large areas in which the inhabitants had been allowed to exchange their products freely, a number of new frontiers were erected and jealously guarded by customs barriers. Old markets disappeared. Racial animosities were permitted to divide communities whose interests were inseparably connected. The situation is not unlike that which would be created if a confederation of states were to dissolve the ties which bind them, and to proceed to penalize and hamper, instead of encouraging, each other's trade. Few will doubt that under such conditions the prosperity of such a country would rapidly decline.
To mark and defend these new frontiers in Europe, licences, tariffs, and prohibitions were imposed, with results which experience shows already to have been unfortunate for all concerned. One state lost its supplies of cheap food, another its supplies of cheap manufactures. Industries suffered for want of coal, factories for want of raw materials. Behind the customs barriers new local industries were started, with no real economic foundation, which could only be kept alive in the face of competition by raising the barriers higher still. Railway rates, dictated by political considerations, have made transit and freights difficult and costly. Prices have risen, artificial dearness has been created. Production as a whole has been diminished. Credit has contracted and currencies have depreciated. Too many states, in pursuit of false ideals of national interest, have imperiled their own welfare and
22649-32J
lost sight of the common interests of the world, by basing their commercial relations on the economic folly which treats all trading as a form of war.
There can be no recovery in Europe till politicians in all territories, old and new, realize that trade is not war but a process of exchange, that in time of peace our neighbours are our customers, and that their prosperity is a condition of our own well-being. If we check their dealings, their power to pay their debts diminishes and their power to purchase our goods is reduced. Restricted imports involve restricted exports, and no nation can afford to lose its export trade. Dependent as we all are upon imports and exports, and upon the processes of international exchange, we cannot view without grave concern a policy which means the impoverishment of Europe.
Happily there are signs that opinion in all countries is awaking at last to the dangers ahead. The League of Nations and the International Chamber of Commerce have been labouring to reduce to a minimum all formalities, prohibitions, and restrictions, to remove inequalities of treatment in other matters than tariffs, to facilitate the transport of passengers and goods. In some countries powerful voices are pleading for the suspension of tariffs altogether. Others have suggested the conclusion for long periods of commercial agreements embodying in every case the most favoured-nation clause. Some states have recognized in recent treaties the necessity of freeing trade from the restrictions which depress it. And experience is slowly teaching others that the breaking-down .of the economic barriers between them may prove the surest remedy for the stagnation which exists. On the valuable political results which might flow from such a Policy, from the substitution of good-will for ill-will, of co-operation for exclusiveness we will not dwell. But we wish to place on record our conviction that the establishment of economic freedom is the best hope of restoring the commerce and the credit of the world.
A reduction in the taxation on consumption helps to increase business and encourages the producer to increase his volume, which can scarcely be said of a reduction in income tax. A reduction in the customs tariff or in the sales tax would undoubtedly have the effect of increasing business. Last year the minister reduced the tariff on automobiles, and we were warned by the Conservatives that the automobile industry would be ruined. The condition of the industry to-day proves that it has been greatly benefited by those reductions. I have here an advertisement which I took from the Calgary Albertan last August; it was inserted by Dodge Brothers of Canada Limited, and states that for the three weeks ending July 17, 89 per cent more cars and trucks were delivered to customers than during the same period in the previous year. Then I also have a statement made by Mr. R. S. McLaughlin, president of General Motors of Canada, Limited, whom I presume to be a good authority. This is taken from the
The Budget-Mr. Coote



DOMINION BUREAU OF STATISTICS-INTERNAL TRADE BRANCH

[Stage Direction]
Wheat
Crop of	World Production	Canada	Acreage	Production	Price received by farmer	Exports*	Quantity	ValueBush.	No.	Bush.	$ c.	Bush.	s1921	3,396,591,222	23,261,224	300,858,100	0 81	158,549,757	196,168,7711922	3,560,905,565	22,422,693	399,786,400	0 85	229,681,814	263,819,4301923	3,835,661,737	22,671,864	474,199,000	0 67	281,006,148	1282,595,1481924	3,569,324,790	22,055,710	262,097,000	1 22	146.958,158	226,979,5711925	4,002,061,067	21,972,732	411,375,700	1 12	275,557,078	401,306,8271926 (preliminary)	3,346,373,000	22,987,048	409,811,000	1 09	152,086,152	1211,250,855
"Crop year basis. til months-September, 1923 to July, 1924. f6 months-August, 1926 to January, 1927.
I simply mention the extent of our exportation of wheat to remind the House that our farmers, in many lines, are producing largely for export trade. They have to meet the competition of the world in prices, and the export price of their products largely determine the price at which their products are sold at home. We must, if farmers are to co-tinue to export, have as low a cost of production as it is possible to get in Canada.
Mr. Speaker, it has been customary in Canada for many years for parties in this House to outline to 'the country their policy on
economic matters at the time the budget is before the House. It is a rare thing, so far as I know, for budgets to be brought down without an amendment being presented by some party.
I may say that our group have given very careful consideration to this budget. There are some things in it that we approve of; there are some things that we disapprove of. There are proposals contained in the budget that should not be there, and things which it ought to contain are not there. Under the circumstances we have to decide whether the
The Budget-Mr. Coote
[Stage Direction]
omissions are important enough to warrant the moving of an amendment to the budget. So far as the present budget is concerned, we have come to the conclusion that the principle of direct taxation, consciously or unconsciously, is being attacked in favour of indirect taxation. We believe this is a backward step in our taxation policy, and that the question is of such importance that the members of the House should have the opportunity of placing themselves on record in regard to this principle.
We believe the Finance minister has no good excuse for refusing to suggest some reductions in the tariff simply because the tariff board has a number of applications before it on which it has not reported. We cannot allow the board to become an excuse for inaction or indifference on the part of the government, and the seeming indisposition to carry out that policy as expressed in their platform, and in the utterances of their leader and the members of their party generally.
We are also impressed with the fact that no attempt is being made by the Minister of Finance to deal in a systematic way with the reduction of the national debt, the interest on which at the present time is absorbing 36 per cent of our total revenue. Under the circumstances we feel that it is our duty to present an amendment to this House. I therefore move:
That all the words after the word "that" be struck out and the following substituted
therefor:
Whilst recognizing the advisability of certain minor changes proposed, this House regrets that the budget as presented by the honourable 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;
That the budget shows a further departure from the principle of direct and visible taxation based on the ability to pay.
And further that no systematic effort is being made to reduce our national debt, the interest on which absorbs so large a proportion of the revenues of the Dominion.
Hon. JAMES MALCOLM (hjjnister of Trade and Commerce):: Mr. Speaker, it is
with a feeling of considerable satisfaction that I rise on this occasion to pay tribute to my colleague the Minister of Finance (Mr. Robb) on the favourable statement of the country's affairs which he has presented this year in his budget speech. Not only has the Minister of Finance reason to feel proud but the country as well should feel highly pleased at the statement which he presented to the House.

The budget as delivered deals with the relief of taxation, and I wish to compliment the Minister of Finance on having been able to deal so directly, in the second consecutive year, with the burden of taxation which falls on the average citizen. I think the Minister of Finance should feel very gratified to-day at the manner in which his budget pronouncements have been received. He has been the recipient of compliments, not only from the press, but from citizens throughout the Dominion of Canada; and I am quite sure that no one in this Dominion will hereafter make so bold as to prophesy the ruin of Canadian industry by reason of the action of this government.
I wish also to pay a compliment to the ex-Minister of Finance, the hon. member for West Calgary (Mr. Bennett). While we might expect from an hon. member with the political knowledge and the legal and financial experience of my hon. friend a speech worthy of any subject, it was to me a great satisfaction that from the opposition side of the House we had on that occasion a speech which was not purely destructive but which contained many constructive suggestions, and I wish to compliment my hon. friend thereon.
The statement presented by the Minister of Finance (Mr. Robb) was a plain, uncoloured statement of facts; a statement which could easily be understood and the accuracy of which could not be questioned. And this is as it should be for the presentation of our annual statement should at all times be so clear as to leave no question as to its accuracy. I feel sure that in this instance the Minister of Finance has met tha't requisite. I also wish to compliment the minister on presenting a statement in which he does not take to himself all the credit for conditions as they exist throughout the country. He rather leaves it to the good judgment of the House to decide whether or not his policies have been beneficial to the national life.
His budget deals particularly with relief from taxation, and he chooses on this occasion as in the last budget to make that relief apply more especially to direct taxation. The statement of the affairs of this country which the budget revealed surely is one which will enable us as a people to go forward with courage and confidence into the future, filled with the realization that we are now indeed on the verge of an era of prosperity. I believe the budget itself will accentuate that condition of affairs.
The hon. member for Macleod (Mr. Coote) has criticised at considerable length the in-

The Budget-Mr. Malcolm
come tax reductions proposed by the Minister of Finance, and I wish to refer briefly to his criticism. The hon. gentleman endeavours to create the impression that the whole load of the income tax is on that section of the Canadian people possessed of higher incomes, and that it is therefore a good form of taxation to keep at a maximum. It will be remembered that the Minister of Finance in his budget last year increased the income tax exemptions and the benefits that were derived from last year's budget were practically altogether in favour of those with lower incomes. I believe it will foe found that as a result of last year's income tax reductions about 75,000 of our citizens were relieved from income taxation altogether. There were only about 150,000 who came under the old act. Is it not fair that when so many have been entirely relieved, the budget presented this year by the minister should take some cognizance of that fact and make a reduction such as has been made all along the line? I consider that the reduction in income tax made by the minister this year is an extremely fair one. As a matter of fact it is simply this: when the income tax is computed by the established method, a straight discount of 10 per cent is given on the income tax so computed. That is equality in relief from taxation.
My hon. friend worries as to the revenues of the country and our ability to pay off the national debt. In 1921-22 we collected about
S78,000,000 from income tax. In the yeara following the amounts were in the neighbourhood of $55,000,000 to $00,000,000 per annum or less. Last year it was estimated by the minister that the loss due to his reductions in income tax would amount to about $14,000,000, but it has turned out that the loss of income tax due to those reductions will be only about $8,000,000. This is attribuable to several reasons. The general increase in prosperity in the country has undoubtedly been a factor in giving better returns on invested capital. The larger agricultural wealth, referred to by the hon. member for West Calgary (Mr. Bennett) undoubtedly played an important part in the creation of the increased wealth of the community. Furthermore from time to time tax-free securities have been called in. It is reasonable therefore to suppose that with continued prosperity there will not be as serious a falling off in the income tax collections as some people believe.
The hon. member for Macleod stated that our income tax does not prevent United States capital from coming to Canada, and I would like if I might be permitted, to clarify
his mind in respect to that matter. To a certain extent it is true, in that United States capital which comes to Canada is held by citizens of the United States who own such securities on which income tax is not payable* in Canada. That is the justification for the corporation tax. The corporation tax of 9 per cent is the one method the Minister of Finance has to get at the large United States company operating in 'Canada, the dividends of which company go t,o the shareholders or stockholders residing in the United States. So long, however, as Canada retains a high ratio of income tax on large investments just so long will we not be able to get investors of large amounts of capital to become Canadian citizens and pay income tax in this country. That is the point in question. Is it not natural to expect that the converse will also happen, namely, that men possessed of decided wealth in Canada, who do not care much whether they make their permanent home, in let us say, the city of Montreal, or their winter home in the south, should (finally establish their residences in the United States and pay their income tax there under less severe rates? If the hon. member for Macleod reviews the situation, I believe he will come to that conclusion.
I consider that he is also wrong in stating that the income tax reduction is not a popular move with the agriculturist. I do not think anyone can question the interest taken in agriculture by the Premier of Manitoba. Premier Bracken is probably as much interested as any man in western Canada in the agriculturists, and I would inform my hon. friend that last week Premier Bracken brought down a budget announcing a reduction in the income tax.
I now wish to refer briefly to the reduction made by the minister in 'the stamp tax on commercial documents. There is a very-erroneous impression abroad as to who pays this tax. To me it is burdensome and paid by the wrong class of people altogether. It cannot be denied that in every instance it is the debtor who pays the tax. A debtor has obligations enough in paying his debt in addition to the ordinary banking charges on commercial paper, without having ten or twelve dollars added to his note in the form of taxes, and without the necessity every time his note is renewed at the bank, or a cheque given, of covering the whole back of it with stamps. In reducing this tax the minister is appreciably relieving those in our country who are heavy borrowers and who are paying

The Bxcdget-Mr. Malcolm
their bills. The banks do not pay this tax. The commercial houses do not pay it. In every instance the man who meets the obligation is charged with the cost of the stamps which have to go on his paper. There is every justice in making the tax on commercial paper as reasonable an amount as can be set. I am glad the tax is being continued from the standpoint of revenue, but I am glad it is being removed in its present excessive form.
With regard to the remarks of the hon. member for Macleod concerning the sales tax, I wish to make just this observation, that I have never been an enthusiastic supporter of the sales tax. I think it drives up the cost of merchandise, it is unquestionably pyramided, and it eventually slows up merchandising and trading. On the other hand, no better illustration can be given of the difficulty of removing a tax once it has been established than the problem of the sales tax. Many people have argued in favour of the complete and speedy removal of this form of taxation. Many representations have been made to the minister and much has been said in the press in favour of this. But the minister must take into consideration the very disturbing effect the sudden removal of a full five per cent of the value of the merchandise would have on business. Merchants and wholesalers all over the country have enormous stocks of merchandise, of a value probably many times the total capital invested in their businesses and if the government were to make a sudden reduction of five per cent in the value of the stocks held, it might mean a fifty per cent reduction in the total assets of those businesses. Therefore, I compliment the minister in doing what he has done, in making a gradual reduction in the sales tax, and my advice to him would be to continue with this gradual reduction, such as can be absorbed without causing any very great hardship to the merchants, until the tax is finally eliminated.
My hon. friend from West Calgary, the ex-Minist.er of Finance (Mr. Bennett) made a statement in his speech on Thursday to which I wish to refer. While it is very easy for me to admire a speech made by my hon. friend, it is not always so easy to agree with the premises on which he bases his argument or with the conclusions at which he arrives. He made the general statement that the Dominion government took from the people of Canada in the year just closed $1.64 more per capita than it had taken in the previous year. First, I wish to correct my hon. friend as to a slight inaccuracy in his mathematical calculation.

He took the difference in the two years' revenue and divided that by the population of Canada in June, 1926. Now in June, 1925, we had a population in Canada of 9,268,000; in June, 1926, we had a population of 9,390,000.


Mr. BENNETT:: I might say to the minister that no allowance was made for the numbers of people who had left Canada between 1925 and 1926, and I took the figure as given by the department for June, 1926.


James Malcolm: The hon. gentleman's remarks are quite in order. I took the same figures as were given to him for June, 1926, but I also got from the department the figure 9,268,000 as the population of Canada for June, 1925. Now if we divide the revenue for 1925 by that figure, we find that $35.34 was the total per capita amount of federal -taxation for the fiscal year 1925, whereas dividing the population of 9,390,000, the figure for June, 1926, into the revenue of $343,000,000 collected in that year, gives us a per capita contribution of $36.53, resulting in an increased per capita contribution, not of $1.64 as stated by my hon. friend, but of $1.19.
But aside from this slight inaccuracy, Mr. Speaker, we cannot accept the very simple method of my hon. friend in arriving at the per capita contribution of the people of Canada to the total of taxation. My hon. friend from Macleod (Mr. Coote) referred a moment ago to the very heavy increase in the importation of raw material by the manufacturers of this country. That is quite true, and that becomes a very important factor with respect to the duty collected when these goods are manufactured here and exported to another country. My hon. friend from Macleod assumes that all the goods imported by the Canadian manufacturers are free of duty. As a matter of fact, all equipment used by Canadian industrial plants which manufactured for export pays duty, and there is no rebate, and even where there is provision for rebate, in no case is the total duty rebated. I desire therefore to point out to the House that a considerable contribution to the exchequer results from duties paid on equipment and plant, and merchandise imported which is afterwards exported to other countries of the world. This particular source of revenue forms, I believe, an increasingly larger and more important part of the revenues of this country as the years go by.
There is also another matter which my hon. friend from Macleod has I fear entirely misunderstood. He speaks of the excise revenue as being a per capita revenue. Personally I

The Budget-Mr. Malcolm
do not think that excise revenue can be treated as a per capita revenue at all. I do not believe that all people contribute equally to the excise revenue. I do not think that my hon. friend from West Calgary, for instance, and a few other gentlemen are charged with as large a proportion of excise taxation as some other people.
There is another factor which is very important in the distribution of revenue per capita, and it is this. In times of prosperity, is it not true that the wealthier of our citizens purchase more luxuries, which in Canada are dutiable, and thereby contribute in greater proportion to the revenues of the country? And is it not still more true, Mr. Speaker, that when times are prosperous, the average citizen indulges in the purchase of more articles, more comforts for his home, thus by the purchase of two articles instead of one, adding to the total revenue of the country?
But then, after all, supposing we did collect more revenue last year than the year previous. Did any harm result? I submit not. My hon. friend from West Calgary himself pointed out that as a result of that increased revenue and the lessening of expenditure we were able to do what my hon. friend from Macleod says we are not doing fast enough-pay $13,000,000 off our deadweight debt. Surely there is ground for satisfaction in that.
My hon. friend analyses under the heads of the various departments the money extracted from the people by means of taxation. In this connection I think he will agree with me, that the $1.50 per capita deficit of our Post Office department is not one which can be very much questioned. We as a people in Canada have chosen to accept a uniform postage rate from the Atlantic to the Pacific, rather than a rate based on mileage, the same as transportation. Canada has been built up by those who have pioneered the vast spaces, and it is only logical that those of us who live in the more densely settled districts, where the distribution of mail matter is much more economic, should be more heavily charged than those who live in the sparsely settled districts. The whole question of postal revenue is one of national policy, and I believe that every man in the country to-day is in favour of a uniform postage rate and a uniform parcels post rate; I believe that every man in the country is in favour of rural mail delivery in order to make the lives of the people in the country a little more pleasant. I have never found any difference in policy as between any two governments in Canada on this question, and
I believe that if there is a slight deficit in the returns of the Post Office department this year, the Canadian people are quite satisfied that those who live in the more heavily settled districts, and receive the cheapest service so far as actual cost is concerned, should pay a greater proportion of the cost of the whole service.
I wish to refer for a moment to the criticism of the hon. member for Macleod as regards the budget and the tariff. The budget has announced no tariff changes this year, and I presume that that furnishes legitimate ground for criticism by those who want tariff changes either up or down. Many applications for advances and many applications for decreases in the tariff have been laid before the tariff board. There were charges both ways. It , was charged that the high tariff made living expensive. It was also charged that the lowness of the tariff made it difficult to conduct industry in this country, and that unemployment was caused thereby. Much data has been collected by the board, but, Mr. Speaker, not nearly all the data that is necessary to substantiate the claims of those who are seeking an increase in the tariff has yet been collected, more particularly with respect to the major industries, steel, woollens, and boots and shoes. Nor has there been anything like unanimity in their arguments on the part of those asking for tariff increases. People in various branches of the steel industry, for instance, in their presentations before the board have held diametrically opposed views as to whether the tariff should be increased on certain articles, articles, for instance, which are the finished product of one mill and the raw material of another. Therefore, until *these diametrically opposed views can be reconciled it is only reasonable to suppose that in this major industry the minister could not deal with the request for advances in the tariff. The case of the tariff on woollen goods has yet to be heard and when it comes up the same condition may arise. Various branches of the industry will probably hold different views. There may have to be revision of classifications, and a considerable time must elapse before the board can collect the required data. With regard to the question of boots and shoes, hearings have taken place but I understand further hearings are to be held. Truthfully it can be said that in no industry of major importance has all the evidence been brought down or all the facts established for submission to the government.


Richard Bedford Bennett: Is it not true that something over forty odd reports have been made to the minister?

The Budget-Mr. Malcolm


James Malcolm: No, only twelve.


Richard Bedford Bennett: Only twelve? It must have been more than that.


James Malcolm: The hon. gentleman heard my statement. I will eome to that question in a moment. The hon. member for West Calgary in a speech some time ago stated that the difficulty experienced in arriving at a satisfactory conclusion as to what measure of tariff should be applied was very great. To quote his actual words, in the House of Commons debate, May 18, 1926, he said:
We realize, as every man in this House must realise, how difficult it is to understand fully the complex operations of the tariff, and come to an adequate and proper conclusion with respect to how far-reaching its ramifications may be.
Just so. With regard to the major industries they are so complex that a great deal of evidence, has to be compiled after the first representations are made, and on these major industries, regarding which the country is looking for decisions, there has not yet been sufficient evidence compiled to justify the minister in making a decision. Furthermore, it has been pointed out by my hon. friend that the tariff board is not making definite findings, that it is only an information-collecting bureau. When this information has been collected and placed before the Minister of Finance, the government itself must assume responsibility for the action taken as a result of the findings. It is therefore logical to assume that some consideration must yet be given even to those cases to which my hon. friend referred a moment ago in his question. I wish to point out to the hon. member that the items which have been before the board, and on which the board has secured information and submitted it to the government, number ten or twelve- I think, thirteen altogether. Now there is no item of such major importance as to justify a revision of the tariff this year. They are small items indeed. An application was made for a reduction of the duty on calcium chloride A reduction was asked for on certain pumps! An increase was asked on piano player rolls, though the matter is really a question of classification in the Customs department, as to whether they are to be classed as sheet music or musical instruments. A reduction was asked in the tariff on imported candles. An application was made with regard to gabardine cloth, and I suppose the minister saw no particular reason why he should consider that application before he had reviewed the whole textile industry. And so on all down the line. All

the matters that have been reported upon by the board are comparatively of so little economic importance to the country that I think the minister has done wisely in withholding his decision on that group, until he could deal with the major industries. I will however say this-that when the evidence and the facts are brought down they will be reviewed, and on the evidence submitted and having regard to the economic conditions in this country, the government will bring down its policy for reduction or increase, and will be prepared, as it has always been, to stand by its decision.
If some of my friends who are strongly in favour of no increase in the customs tariff were very wise they would also be very patient. Patience is the course of wisdom, if you are looking for no increase, for the reason that the industries which two years ago were in a stagnant 'condition are this year prosperous, and it will be more difficult, as prosperity continues, to establish a case for increase in tariff. I believe that this year we have got into our stride and that manufacturers are in a better position than heretofore. As a result of that many industries which were blaming the tariff for their troubles will be no longer inclined to do so, because the trouble has disappeared. In last year's budget the most important item of change was the reduction of the duty on motor cars, and the establishment of a qualifying content of fifty per cent Canadian labour and material. I do not wish to embarrass any hon. members opposite by quoting to them their speeches regarding the dire disaster that would befall the automobile industry, because I feel that genuine alarm was felt by them, as well as by some on this side of the House. The fact however remains that the important item with respect to the motor car tariff reductions was the fifty per cent qualifying content made necessaiy. To-day everyone is agreed as to the wisdom of the policy which the minister announced in last year's budget, that before certain rebates of duties would be granted to American concerns manufacturing in Canada Canadian labour and material must be used to the extent of fifty per cent. We realize the great wealth and resources of the American republic, and we are willing to admit that probably our geographical position deprives us of many of the commodities which we would desire in this country-many commodities which are necessary to the economic life of the country. The hon. member for South Essex (Mr. Gott) I think had a question on the order paper to-day in regard to agricultural imports into Canada. Such agricultural imports consist largely of tropical

The Budget-Mr. Malcolm
fruits and vegetables which we do not grow, and which though termed agricultural products, are entirely different from those produced in this country. We need these commodities, but our climatic conditions do not permit us to produce them. We do not for example produce cotton and rubber. Our limited production of certain commodities and the limited production in other parts of the empire of commodities such as we produce, has induced the government to support a policy of British preferential tariffs. There is no question but that the policy of a British preferential tariff, not as we extend it to some other countries, but as some other countries extend it to us in return, has induced many manufacturers to come to Canada to establish branch plants. If an industry comes to Canada and is merely an assembling plant it is not of very much consequence to Canada, and the best way to turn that assembling plant into a real manufacturing plant that will give employment to Canadian labour and build up the industrial growth of the country is to stipulate that before the plant will be given a preference in this country the production must be a certain specified percentage Canadian.
Premier Bruce and Premier Coates visited Canada on their way home from the Imperial conference, and we were glad to have them honour us with their company. They both asked us in effect: " Is it reasonable that we should give to you a preference on motor cars, of which we buy practically our whole supply from you, unless those cars are Canadian-made and not merely assembled?" No one can gainsay the wisdom of the Australian and New Zealand governments in inserting a clause in their custom tariffs for that purpose. What our Minister of Finance did by his last year's budget was to compel our automobile manufacturers to bring their cars up to the 50 per cent point of Canadian content. Had he not done so then, the motor car manufacturers would have found themselves forced to take that course by virtue of the customs regulations of the countries to which they export their cars. With the permission of the House I should like to place on Hansard a table showing the production of passenger automobiles, trucks and chassis in the Dominion during the past eight years.
Production of Passenger Automobolies, Trucks and Chassis in Canada, 1919-1926
5919	 87,835
1920	 94,114
5921	 66,246
1922		 101,007
1923		 147,202
1924		 132,580
1925		 162,221
1926		 205,116
In 1919 W'e produced 87,000 motor cars in round figures. That production gradually increased until by 1923 it had reached 147,000. In 1924 there was a decrease. In 1925 both export and domestic business improved and the total production reached 162,000; while in the year just closed the production increased to 205,000, about half being for domestic consumption and half for export. There is no cause to worry about the employment of labour when we have such a big increase in production. I may say that there has been a very material improvement in employment conditions in our motor car factories. Not only that, but any man who is interested in the great number of supply houses-and there are several such men in this House-representing a variety of genuine Canadian industries, owned by Canadian capital, founded and developed by Canadians, is aware that those industries have benefited to a very great extent because the motor car manufacturers have had to place their orders for supplies with such Canadian industries, thereby giving employment all over the country.
There is a very great difference, Mr. Speaker, between an industry in Canada which was built up by Canadians and an industry established here for the definite purpose of securing the benefit of certain preferential tariffs. Especially is this difference realized when we consider that in the latter case most of the stock is owned in a foreign country, and the dividends do not pay income tax here except perhaps on a small percentage of the stock held by people domiciled in this country. The greatest benefit of the 50 per cent requirement laid down in last year's budget has been in the form of orders from our motor car manufacturers for other Canadian industries.
With regard to employment, Mr. Speaker, many statements have been made. The statistical branch of the Department of Trade and Commerce keeps a record of 6,000 industries, which make monthly returns to the department. This number remains constant, because only when one industry passes out is another taken in. From those returns an index number of employment is carefully compiled. The peak of the post war boom was in January, 1920, and accordingly the index number for that year was placed at 100. By 192!l the index number had fallen to 87.4 and from that time on there has been a gradual rise, until to-day the index number is at 98.4. In other words, there has been an increase in the index number of practically 11 points. Every point in the index number represents over 8,000 people. The total increase in employment, as estimated for me to-day by the bureau, shows a gain in all our industries of about 100,000 since 1921. This cannot be

The Budget-Mr. Malcolm
said to apply to the motor car industry alone; it is spread over every industry in the Dominion. A population of 100,000 workers unquestionably means a total population of about half a million, assuming that it is true to say that those dependent upon industrial workers represent a ratio of 5 to 1. I believe therefore that the industrial improvement in this country during the past four years represents an improvement in population of 500,000.
This increase in industrial development can best 'be judged by the rise of security values, and there is no one in this House at the moment but is willing to admit that we have had a tremendous increase in our security values. The common stocks of our banks have improved; that speaks well for the solidity of our financial houses and for the volume of transactions. Our power stocks have all improved; that speaks well for the consumption of power in this country-and we must remember that the greatest consumer of power is industry. Our manufacturing stocks have also improved, and not even in some of the lines of industry for which members of parliament are wont to beseech further consideration of customs tariff do we find any necessity for assistance.
The hon. leader of the opposition, I think, was trying to take a fall out of me in his speech on the address when he asked me to give to tariffs for other industries the same support I gave to a tariff for the furniture industry. May I point out that the furniture tariff is 30 per cent general, 27| per cent intermediate and 18 per cent British preferential as against a general tariff of 35 per cent on all woollens, an intermediate of 25 per cent on knitted goods, 27 per cent on flannels, 29f per cent on fabrics, socks and stockings, and1 a British preferential of 18 per cent on knitted goods and flannels, 22| per cent on socks and stockings and 24J per cent on fabrics. It is therefore evident that the furniture industry is not one of our highly protected industries, and I do not think our furniture or woodworking manufacturers-and they are not asking for increased protection -can show as rapid a rise in the value of their stock as can Penman's-from 152 to 186 in two years; as can the Dominion Textile common stock-68 to 107; as can Canada Cement-92l to 131 in a like period. I could give a long list of other industries whose stocks show a similarly rapid rise, but I will not weary the House with further examples. No, Mr. Speaker, the position of the industrial life of this country the government does not take entire credit for; but the government does take credit for making the pathway along which business can proceed profitably and

easily and to that extent it is entitled to credit.
The business of this country is expanding, as my hon. friend said, owing, for one thing, to the enormous production of our agricultural wealth. It is also expanding because there has been a very great improvement in our exports of manufactured products. As the hon. member for Macleod mentioned, our exports are 56 per cent agricultural. Let me ask him what the other 44 per cent represents. From year to year we have been developing a greater market abroad for our manufactured goods. Our trade commissioners, established by Sir George Foster when he was Minister of Trade and Commerce, have done good work in various parts of the worid. Canadian implements and Canadian automobiles are becoming well known in all parts of the Empire. Our industrial life is growing apace with our agricultural wealth, and I believe every hon. gentleman will agree with me that that ia what we desire. We do not want to be a onesided nation. As my hon. friend the former member for Lambton said, we want to be a well-rounded household, able as far as possible to create 'wealth within ourselves, but able to sell our wealth in the form of merchandise to other countries.
My hon. friend from West Calgary referred to the exhaustion of our mineral wealth In the course of his speech following the introduction of the budget he mentioned that we exported a tremendous amount of minerals. It is true that we exported about 852,000,000 worth to the United States but we also imported from the United States $83,000,000 worth of minerals in the same time. That is not a very bad state of affairs.


Richard Bedford Bennett: One was coal.


James Malcolm: It is true that we exported a million dollars worth of nickel, but we imported a million and a half dollars worth of aluminum. We did not export any iron ore, but we imported a considerable amount, worth a million and a half dollars. It is true that we have exported gold, but I would like to ask my hon. friend of what use gold is if we do not export it. We cannot use it all in the fine arts. Gold is a medium of exchange; it is very valuable, but we in this country do not want to hoard all the gold we produce. We imported $50,000,000 worth of coal, but my hon. friend has a most logical mind, and I would suggest that since the exportation of mineral is an exhaustion of our mineral wealth, surely the importation of coal is a conservation.

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Richard Bedford Bennett: I will answer that at once. The estimated coal in the province of Alberta alone is enough to take care of the needs of the British Empire for something like half a century.


James Malcolm: I quite recognize the value of my hon. friend's comment, but I would like to know the estimated wealth of the north country in gold and other minerals, and whether he has any fear of those?


Richard Bedford Bennett: I was referring principally to asbestos, nickel and wood pulp.


James Malcolm: I must say that my friend even went further than the leader of the opposition, who in his speech on the address said it was all right to export farm products as they were replaceable. My hon. friend said the other day, however, that they were not replaceable, to a certain extent, as they exhausted the soil. He recalls to my mind a very frugal and cautious countryman of mine in the county of Bruce; he wasna' happy when he had no crop because he had no siller, and he wasna' happy when he had big crops because it was hard on the land.
Even in connection with immigration, which is so much discussed, the figures are improving. Last year 134,984 immigrants came to our shores as against 84,000 registered in 1925, but most significant of all, and the thing I think we should be most happy over, was the fact that 48,000 Canadians came back from the United States, and at the border declared their intention of residing in Canada. We are not increasing our population nearly as fast as we should, but I believe that if the feeling of optimism and of loyalty to our government and institutions is preserved; if those of us who are out of power quit knocking our country and all join together, our immigration figures will rapidly improve. It is little wonder that people went from Canada when half the people were saying Canada was not fit to live in. I am glad to compliment my friend the ex-Minister of Finance (Mr. Bennett) for giving the lead to the note of optimism and for pointing out to this House that while there is something to be gained by destructive criticism, much more can be done by constructive suggestion.
The volume of business done in this country has been enormously increased in the past year; the figures of the clearing houses in the different banking centres show that in 1926 they handled commercial paper to the extent of $30,358,000,000. In 1925 the amount was $28,126,000,000, and in 1924 $27,-
157.000,000. Therefore it will be seen that the financial transactions in this country have
been gradually improving, and conditions becoming better. Both official and non-official figures on building construction show a marked improvement. MacLean's building reports show contracts awarded in the past year to the amount of $373,000,000, in round figures, while the Statistical Bureau, which deals with sixty-three cities, reports a figure of $156,000,000; in both cases the transactions show an increase of 25 per cent. My hon. friend referred to life insurance, which is another good indication, Life insurance in force is amazingly large in Canada; in 1921 the figure was $2,934,000,000, and at the end of 1925 that had reached $4,159,000,000. It is estimated by competent authorities that to-day the Canadian people are carrying insurance on thear lives to the extent of $4,500,000,000. Surely that is an indication of prosperity, and it has taken place in the short period of five years. Another good indication of wealth is the number of motor car registrations. Thar number has increased from 465,000 in 1921 to 728,000 in 1925, which is an indication of the ability of people to purchase luxuries. The number of telephones in use in Canada, also an indication of the ability of the people to procure conveniences rose from 902,000 in 1921 to 1,114,000 in 1925.
Perhaps the best indication of all as to our condition is the Canadian National Railways. In 1921 the government of my honoured leader came into power facing a deficit in operation of $11,000,000. The fact cannot be gainsaid that the rapid change in the financial condition of the National railways, which I will leave the Minister of Railways (Mr. Dunning) to enlarge upon, has been a very great factor in reducing our taxation. In the five years the situation has so changed that to-day we have an operating surplus of over $46,000,000, making a total change of about $58,000,000 in that short time. I will deal in a moment with the expenditures and receipts of the country in this connection, but before doing that I would like to make one other reference. When a people numbering 9,000,000 are able to handle $30,000,000,000 worth of transactions through banking houses in a year, when they are able at the same time to pay premiums on $4,500,000,000 of life insurance; when they are able to pay taxes amounting to $35 per capita and, in addition, increase their savings in actual cash in the banks to the enormous total of $1,372.000,000, they are not in very bad condition.
I would like to deal for a moment now with the expenditures of this country, divided into two columns to show the relative importance of the expenditures made on the Canadian National Railways in the last few years. The
The Budget-Mr. Malcolm

first column of figures is taken from the public accounts of 1925-26, at page 44, and is exclusive of advances made to the Canadian National Railways, the Canadian Government Merchant Marine and so forth. The second column is taken from the Canada Year Book of 192.5 at page 767, and is inclusive of the advances to the Canadian National Railways, the Canadian Government Merchant Marine, and so forth.
1920-	21	$418,620,544	$528,302,5131921-	22	
365,701,791	463,528,3891922-	23	
350.608,547	434,735.2771923-	24	
344,021,787	370,589,2471924-	25	
339,902,776	351,169,8031925-	26	
343,980,513	355,186,423
And for the first ten months of 1926-27 the figures are $267,758,384 as against $278,293,593. When you review these figures it will be seen that the difference to-day as compared with the condition in 1920-21 amounts to practically $100,000,000 the sum which the government of that year had to find for the Canadian National Railways. Is there any reason why Canadians should not be proud of the success of that system? I think not. Is there any particular reason why grave criticism should be made against the man who has brought that about? I think not. Sir Henry Thornton is not operating the Canadian National railway system alone and much credit must be given to that very loyal, worthy and clever band of operators who form the executive staff under him. To these men great credit is due. But Sir Henry Thornton himself has done well. He has created a feeling of pride among the Canadian people in their system, he has created a feeling of loyalty in the employees of that system. In other words Sir Henry has sold the national system to the people and to the employees, with a consequent saving of one hundred millions to the taxpayer.
The hon. member for West Calgary (Mr. Bennett)-I am sorry he has left the chamber -dealt with a rather clever and unique suggestion as to the financing of the national debt. The hon. member for Macleod (Mr. Coote) did not comment very extensively on that scheme. I have no doubt in the world but that a man of the experience and ability of the ex-Minister of Finance gave the scheme most careful thought before he proposed it. On my part I have not gone into it sufficiently to justify any very detailed comment on it, but I do venture to draw a few points to the attention of the House. There is no doubt but that in time of great stress such as war, a government is entitled to confiscate if it wishes, for the saving of the nation. Constitutionally, under the War Measures Act,

we were justified in doing many things that we would not be justified in doing in times of peace and prosperity. In the first place I do not know whether this particular scheme is constitutionally sound. Secondly I do not know but that the Dominion of Canada can get sufficient money without resorting to such a drastic scheme. Therefore I am not sure that it is economically necessary. Finally I am not sure but that it would not foe morally wrong to ask the policy holders of the life insurance companies to make the sacrifice which would be necessitated by the investment of their funds in a lower rated security than would otherwise be the case, and that for the benefit of those of us who are not heavy holders of life insurance. To my mind the scheme is good if it can be worked out without inflicting hardship on those who have investments in the banks and expect the rate of interest to be governed by the earnings of the bank, as well as on those who have investments in bank stocks and expect their directors to be able to invest their money in the highest money market. If the scheme can be worked out as the hon. gentleman suggested by taking care of the surplus which is not earning four per cent, I think the suggestion is worthy of a good deal of consideration.
I have spoken for a longer time than I intended and I will now bring my remarks to a close. It is a cause of very great satisfaction I think to all members on this side, who have generally supported the policy of the British preference, to note the extent to which that policy has been taken up by other parts of the empire, and to see how it is coming to be supported by men on the opposite side here-by men who a few years ago were bitterly opposed to it. I was therefore delighted to hear the remarks of the ex-Minister of Finance on what he claimed was a better plan, namely economic union. My hon. friend is right in his desire but he knows as well as I know that in so far as the motherland is concerned, economic union is impossible except by the creation of a tariff in Britain under which she could give preferences. The creation of such a tariff would materially affect and indeed probably destroy her foreign trade. The success of the mother country is based upon her trading, her revenues from her shipping, her revenue from control of merchandise the world over. Therefore we feel that our contribution towards empire unity should be the installation of preferences in so far as we can, and we have accepted the doctrine that we will give to the British government preferences on Britain's exportations of

The Budget-Mr. Malcolm
merchandise to this country, knowing that the same preferences must and will extend to other parts of the empire. I say this not only from the standpoint of empire trade, not only from the standpoint of empire development but from the basic viewpoint of the development of Canadian trade; I believe that in the years to come, as Canada's manufacturing grows, we will be the greatest gainers of any part of the British Empire by the preferences granted to us by other countries.
My hon. friend the leader of the opposition made some reference to our foreign trade. I am going to crave the indulgence of the House for not going into the criticisms made by him on that particular occasion; I want to deal with that matter at a later time. I may say however that it is a question of very serious doubt as to whether the statements made in relation to the foreign trade of this country are accurate or not. Statistics purporting to show where our merchandise goes are not accurate. Statistics as to where our merchandise comes from are not accurate. The statistical department can only keep records as to what is supposed to be the country of destination, and can only keep account of what is supposed to be the country of origin. I have been endeavouring for some weeks to try and find a better scheme than we have at present for compiling statistics. Every man in this House knows that with the improved facilities for ocean radio, cargoes are diverted on the high seas just as cars on trades are diverted in the domestic field. A cargo of grain leaves Canada and is billed to England. We class it as an export to the motherland. The Liverpool merchant intercepts it. It may go into the Mediterranean, say to Greece. We cannot follow where our cargoes finally go. As a result of the fact that the Netherlands and Great Britain are the two heaviest traders in Europe, they are credited with much of the merchandise which finally goes to other countries. In a similar way we are not credited with as much trade with some of our sister dominions as we actually enjoy. Premier Bruce referred to the great problem he had of justifying the small purchase we made of Australian merchandise. My hon. friend the leader of the opposition and the ex-Minister of Finance referred to the increase of our purchases from Australia, as being 300 per cent. As a matter of fact we did improve our trade with Australia about $2,000,000, each way it was about even; but the Australian sales to us were so remarkably small previously, that the two million increase we gave them did make an increase of 300 per cent, and taken on a percentage basis it looked ridiculous: But, Mr. Speaker, Premier Bruce makes the assertion that we are not buying anything like enough merchandise from Australia. I pointed out to him, however, when we discussed this matter, that it will be necessary for us to get some further statistics before we can substantiate that fact. We buy enormous quantities of Australian wool from the United States and Great Britain in tops, noils, or yarn. It comes in various forms. Some comes from the United States, but mostly from Great Britain. That wool is the product of Australia and Canada should be credited with importing it, just the same as the country which imports cereals from us should be credited with the exports which we send. In dealing with trade figures, therefore, it is a very difficult matter to determine exactly where the goods go. The general trade figures are therefore the most interesting and significant index. Whether or not we are doing as much foreign business as we should do is the question to be considered.
The hon. member for Madleod referred to the fact that there was a very great decrease in our foreign trade in the past year. He is hardly correct in his statement. Taking the fiscal year we did get to the enormous favourable balance of $400,000,000. The calendar year however shows a credit of only $275,000,000. That is largely due to outside factors. The British coal strike tied up navigation and made a scarcity of ships. Then there was an early freeze-up at the head of the lakes which tied up grain in the elevators. Everything tended to retard the movement of grain in the first ten months. It may be that in the coming year we shall see a freer movement of the crop in the spring, that we shall not be faced with the same navigation difficulties, and that we shall be able to get out a large proportion if not the whole of the year's crop. We may have from time to time unfavourable conditions such as these, but I believe the total balance of trade in Canada is satisfactory. What my hon. friend says with respect to overestimating the value of a favourable trade balance is also true. Some economists say that in times of prosperity when a country is growing the best, its balance of trade decreases. That remains to be seen. If we bring in capital from another country in the form of merchandise, undoubtedly such is the case. In the construction period of our railways, when Mackenzie and Mann and other railway contractors were borrowing money in Europe and taking not cash, but steel rails and equipment, we had heavier duties and an adverse balance of trade. That condition is not so likely to apply in Canada at present.
The Budget-Mr. Malcolm

I have before me a 'table which I am anxious to place upon Hansard, a table which I think is worthy of review by members of the House. It deals with our exports and imports, our trade balances, favourable and unfavourable. There are forty-one countries with whom we have a favourable trade balance. Of these twenty-six are outside and fifteen inside the empire. The table shows twenty-seven countries with whom we have an unfavourable trade balance. Of these nineteen are outside and eight inside the empire. These figures are as accurate as we can compile them from present statistics, and I am sure they will be of interest to many an hon. member in discussing the question of foreign trade. The tables are as follows:



BALANCE OF TRADE, BY COUNTRIES WITH WHICH CANADA HAD A ''FAVOURABLE&quot; TRADE BALANCE, FISCAL YEAR ENDED MAR. 31, 1926.

[Stage Direction]
Countries	Exports	Imports	Excess of Exports over Importss	S	SUnited Kingdom	509.266,143	163,731,210	345,534,933Irish Free State	4.709.565	19,318	4,690,247Africa, British East...	995,022	102,682	892,340British South...	9,087,748	129,579	8,958.169British West	587,210	406,723	180,487Bermuda	1.176,583	77.097	1.099,486British Honduras	513,078	271,293	241,785Jamaica	4.800,033	3,783.481	1,016,552Trinidad and Tobago.	3.921,941	1.061.514	2,860.427Other	3,889,892 61,269 1,891,248	996,335	2,893,557 61,269 345,082Hong Kong	1,546,166	Malta	277,861	221	277,640Newfoundland	11.655,670	1.615,132	10.040,538Australia	15,418,236	3,042.054	12,376.184New' Zealand	16,579,861	2,725,235	13.854,626Argentina	12.639,776	3,454,108	9,185,668Belgium	22,893.264	6.953.173	15,940,091Bolivia	173,983	1,031	172,951Brazil	4.832,391	1,848,758	2,983,633Chile	1.410,484	670,145	740.339China	24,479,396	2,547,995	21,931.401Costa Rica	215,050	77,065	137,985Denmark	6,215.474 150,173 1,340.020 86.317	137,466	6,078,008 150,173 1,262,162 86,317 1,534.968Egypt..	77,858	Finland	1,578,554	43,586	French Africa	211.016	8.501	202,515French West. Indies... St. Pierre and Mique-	223,778	1,169	222,609Ion	521.458	36,442	485,016Germany	30,763,192	9,986,763	20,776,429Greece	3,709,798	334,909	3,374.889Hayti	608,351	130,162	478,189Italy	12,801,832	2,597,759	10.204,073Japan	34,702,876	9,564,074	25,138,802Jugo-Slavia	105,156	1,407	103.749Lettonia	528,765	400	528,365Netherlands	23,764,224	6,864,563	16,899,661Dutch East Indies....	3,881,957	1,729,283	2,152,674Dutch Guiana	108,136	7,442	100.694Norway	6,769,717	630,781	6,138,936Panama	483,650	4,410	479,240Poland and Danzig....	2,295,215	35,566	2,259,649Azores and Madeira..	79,297	69,946	9,351Portuguese Africa	811,086	20,770	790,316Roumania	305,169	2,363	302,806Russia	3,788,266	7,207	3,781,059Salvador	131,146	54,623	76,523Siam	294,246	95,731	198,515Canary Islands	78,581	916	77,665
BALANCE OF TRADE, BY COUNTRIES WITH WHICH CANADA HAD A "FAVOURABLE" TRADE BALANCE, FISCAL YEAR ENDED MAR. 31, 1926.-Concluded.
Countries	Exports	Imports	Excess of Exports over Imports$	$	$Swreden	3,550.729	1,134,644	2,416,085Syria	47,586	3,940	43,646Alaska	275,382	191.715	83,667Philippines	172.731	74,253	98,748Porto Rico	866.688	2,372	864,316Uruguay	1,910,260	69,558	1,840,711Venezuela	1,483.522	188,761	1.294.761Sudan	45,445	13,534	31,911

[Stage Direction]
"Unfavourable" Balance
Countries	Exports	Imports	Excess of Exports over Imports$	$	$Aden	50,320	36,640	13.680British East Indies-	British India	9,477,453	7,422,231	2,055,222Ceylon	2,747,442	606,886	2,140,556Straits Settlements.	4.674,388	3,597,657	1,076,731British Guiana	4.503,203	2,312,861	2,190,342Barbados	4.130,822	1,641,372	2,489,450Fiji	2,567,204	271,931	2,295,273Austria	196,033	22,849	173,184Colombia	693,058	685.843	7,215Cuba	11,063,284	8.536,084	2,527,200Czecho-Slovakia	1,272,045	133,728	1,138,317France	19,151,699	14,051,111	5.100,588Guatemala	256,523	152,455	104,068Honduras	582,153	169,879	412,274Mexico	3,684,460	3,008,249	676,211Nicaragua	78.665	46.267	32,398Paraguay	47,735	46.099	* 1,636Persia	152.980	17,691	135,289Peru	5.700.109	1,227,162	4.472,947Portugal	348.817	121,795	227,022San Domingo	6,791,339	350.256	6,441,083Spain	2.085.850	832,547	1,253,303Switzerland	7,462,608	1,232,317	6,230,291Turkey	344,268	110,597	233,671United States	609,719.637	485.952.235	123.767,402Hawaii	251,253	13.347	237,906
I have spoken at greater length than I had intended, but I wish to say this in closing; with the finances of Canada improving as they are; with taxation being gradually lightened, whether it be by reducing direct or indirect taxation I care not; with trade responding and with our people happy, can we not as a nation outgrow what has been going on in this country since confederation and what does not as a matter of fact obtain in the United States? Elections take place in that country, but the day after the election the United States is the best country in the world to the Americans and they are all boosting for it. Unfortunately the party in opposition in

The Budget-Mr. Manwn
Canada has for many years been trying to discredit the party in power by saying that the country is going to ruin at the hands of the government. No one party alone has been guilty of such tactics; we have all been guilty of them. Can we not as a nation criticise the government in power fairly and constructively? Can the government in power not be big enough to take constructive suggestions from the opposition and apply some of them? Under the conditions existing in this country to-day we have as a people more to be proud of than any Canadian citizens had in the past, and I look forward to this era as being the greatest in the history of our Dominion. Let us do our part.
Robert James Manion: Mr. Speaker, let my first words on rising be words of congratulation to the Minister of Trade and Commerce (Mr. Malcolm) who has just taken his seat. This is the first opportunity I have had of congratulating him upon hia elevation to the cabinet, and after his very excellent speech, with a great deal of which many if not most of us, can agree. I should like to point out to the Minister of Finance (Mr. Robb) who is leading the government at the moment, that the wisdom of the government is revealed in their taking a good, stable, allround protectionist into the cabinet. I repeat that with much of the speech of the Minister of Trade and Commerce we can all agree. There are parts of it which might be criticised; but as I have my own speech to make I do not intend to take up much of the time of the House in dealing with the remarks of the hon. gentleman.
With the appeal which the minister made just as he was closing his speech I think the whole House can agree. When he points out that it is the duty of an opposition not to offer only destructive criticism but to offer constructive criticism, I might point out that if he will look back over the speeches of many members of the opposition during the last few years, he will find that while there has been a good deal of destructive criticism based upon facts there has also -been a good deal of constructive criticism. If I may be pardoned for a personal reference,
I have endeavoured all my life never to make a speech -that is wholly destructive. I feel that a speech which is wholly destructive is one that is of very little use to anybody or to any party. All speeches should at least finish with something constructive on behalf of the man who is making it and the country which he is trying to represent. So no one will quarrel with the hon. gentleman, but of course
j	_*	BEVISED
the hon. gentleman, now being a member of the government, would like, and quite justifiably so, to have the members of the opposition never offer any criticism at all.


James Malcolm: Oh, no.


Robert James Manion: What he would like, and what members of the government would naturally like, would be that members of the opposition would do nothing but tell them how to carry on the business of the country. That would be constructive criticism, and anything else would be destructive criticism. Let me ask him if it is destructive criticism to point out the facts? I do not think so. I believe if we stand up in this House and refuse to point out the facts as we see them, facts which are perhaps not useful to be published but which the country should know in order to correct any ills which arise from them, we are not doing our duty as an opposition. For example, the hon. gentleman mentioned immigration. Unfortunately the immigration that is coming in at -the present time is nothing like the immigration that should be coming in, and nothing like what was coming in before the war, back in 1913 and 1914. Unfortunately the exodus from this country -and this is supposed to be a great deal of the destructive criticism which we have offered at different times-is going on to too great an extent. I hold in my hand a despatch from Washington of February 2. I meant to use it at a later point in my speech, but I will read it now. It states:
During the last six months in 1926 a total of 49,335 persons emigrated from Canada to the United States, according to the report of Immigration Commissioner Hall, made public tonight.
That may be said to be destructive criticism. I shall be told by somebody that by telling that, I am causing people to give up jobs which they have in this country and run off to the United States to hunt up new jobs. I tell it for this reason, that I think there is -too much of an exodus from our country; it means that too many of our boys and girls are giving up their homes in this land of ours and going to the United States to earn a living. I give it with the sincere hope that this government, which will probably be in power for some -time-


Some hon. MEMBERS:: Oh, oh.


Robert James Manion: I admit that freely. It is not likely that we shall have an election within a year or two. I mention it in the hope that this government will endeavour to correct an evil which means that we are losing



EDITION

[Stage Direction]
The Budget-Mr. Manion
[Stage Direction]
our young Canadian boys and girls to the United States at the rate of 100,000 a year, not counting those who are going by the underground route. It is a constructive suggestion to the government to do everything they can to cure that ill.
Dealing with the budget itself, I do not wish to be factious in my criticism in any shape or form. I intend in this speech-and I so intended before the minister sat down- to make a few criticisms of the budget, and then to offer to the government what I consider to be a very constructive suggestion, one which I have offered before but which has been little heeded, although it has to do with a matter of the utmost importance, not only to one great section but to all sections of this country. There is not very much that fair-minded people can criticise in this budget. It was probably a good, fair presentation of the facts as seen by the Minister of Finance, except of course, that one might criticise a little the political padding which it contains. For example, the Minister of Finance-and this is only an example; I will not go any further with it-said that all the factories in Canada are working full time. I could take him to a number of factories in my city that are not. I could take him to one factory which was working prior to the time this government came in but which is not working at all now, a factory which employed three hundred people and which with a very small amount of protection would open up again and sell its goods to the prairie provinces and the rest of the country which are now being supplied by American products. I could take him to other factories in my city which are working half time because of the goods that are being imported from foreign countries "'here labour is cheap and living conditions art. much lower than ours. Surely those are not good conditions. I venture to say further that there are many representatives in this House who come from industrial constituencies who could take the minister to plants in their constituencies where similar conditions prevail.
Richard Burpee Hanson: The boot and shoe trade, for instance.


Robert James Manion: Yes, that is one, but I
shall not go into that now. It is the prerogative of the Minister of Finance, to which ever party he may belong, when he is bringing down his budget, to paint things in the rosiest possible light. It is his duty to do that, and I do not begrudge him it at all. But my hon. friend from West Calgary (Mr. Bennett), in one of those brilliant speeches of his to which

we all are pleased to listen, exposed some of the fallacies of the reasoning of the Minister of Finance. He pointed out that while there was in the budget of last year an apparent reduction, in taxation, there was actually a real increase in the amount taken from the people. Certainly it is a strange paradox when you can cut down taxation and yet take more money from the pockets of the people.


Mr. DUNNING:: It always happens.


Robert James Manion: It always happens when
the Liberal party is in power. I fear that the Minister of Finance is somewhat of a financial Christian Scientist. He realizes that it is not so important to cut down taxes as to make people think you are cutting them down. I well remember a witticism of Mr, Dooley, that famous character of Finley Peter Dunne. He said that if Christian Scientists had a little more science and medical men a little more Christianity, it would not matter which you called in so long as you had a good nurse. Now the Minister of Finance is the financial nurse of the Canadian people, and I will admit that he has put over his financial Christian Science so well that he has made a great many people believe that they have had their taxes reduced, when as a matter of fact they have not been reduced to the extent he points out.
The Minister of Finance came into Ontario in the election campaign, and like another warrior of some centuries ago, I will admit that he came, he saw, he conquered. He impressed the people very much. He has such an honest, frank appearance, almost too frank at times. Outside of the Minister of the Interior (Mr. Stewart), the Minister of Finance is the most honest looking man in the present government, and on one occasion I remember pointing out in the House that the Minister of the Interior looks more honest than any man could possibly be. So when the Minister of Finance came into Ontario the people looked him over and said: Once more the Liberal party has given us an honest man. They had become almost hopeless of finding one in the Liberal party since my good leader and myself left it. They found the Minister of Finance was such a frank, blunt, honest gentleman, that they really believed him when he told them he had cut down the taxes of every man, woman and child in the country, for that is really what he said. The Minister of Finance, the Prime Minister and all the other ministers, and their friends too I suppose, stated that the taxes of every man, woman and child had been cut down by the last famous Robb budget.

The Budget-Mr. Manion


Mr. STEWART (Edmonton):: They did
not need to tell them. The people believed it.


Robert James Manion: That is what I say; that is where the Christian Science came in.


Charles Avery Dunning: They felt it in their
pockets.


Robert James Manion: The Minister of Finance forgot to tell them that while the automobile cuts he made may have perhaps lowered the price of automobiles, that did not affect the family of the ordinary workingman. He forgot also to point out that the ordinary workingman is not an income tax payer, and that the ordinary workingman does not give many receipts, from which the Minister of Finance took the tax last year. He might have added that the ordinary workingman in Canada has given many less receipts in the last four years than ever before, unless you take into account receipts for visas and passports to go to the United States; for apart from that the ordinary workingman has not had very much to give receipts for. I repeat what I stated last year: The only reduction made in the cost of living to the ordinary workingman in this country by the budget of last year was an occasional one-eent postage stamp on the letters he mails. I will admit that the present budget is a little improvement on that because the Minister of Finance this year has reduced the sales tax, and that will be of some benefit to the ordinary working people. But I would point this out in regard to the sales tax: When we went out of power in 1921, our sales tax was three per cent. It was raised to six per cent by the incoming Liberal government, of which the Minister of Finance was a member; was lowered to five per cent last year, and the minister now reduces it from five to four per cent, or reduces it, as he says, twenty per cent; so the sales tax is still about 33i per cent, to use the minister's own method of figuring, higher than when we went out of power in 1921. I fear that cutting it from five to four per cent will not make a very great deal of difference to the ordinary workingman.
The income tax has been reduced by this budget. There is nothing in that for the ordinary workingman of this country, for he does not pay income tax. We have also a reduction in the stamp tax on cheques and on notes and overdrafts, but the ordinary workingman does not indulge in any of those to any great extent, so the sales tax is practically the only thing by which the ordinary workingman will benefit by this budget.
32649-33J
I find myself sometimes propounding this problem to myself:	How is it that this
government, which avows that it contains the only Simon pure friends of the workingman, that it contains the real tribunes of the people, finds it so difficult to give proofs in its budgets of its love for the workingman? I remember reading of Tom Moore, the poet, saying that he wrote for the masses and the classes, but not for the asses. The budgets of my good friend the Minister of Finance are for the classes, but not for the masses. That is his attitude in regard to the workingman.


An hon. MEMBER:: Where are the asses?


Robert James Manion: The asses are those who believe everything the Minister of Finance tells them in regard to budget taxation.
Oh, yes, I forgot one cut that the minister has made in this budget for the workingman, and that is in the excise duty on matches. Those pipe smokers who smoke more matches than tobacco now have the gratifying knowledge given out by the Eddy Company the other day that there will be a one cent reduction in the price of a large box of matches. So the workingman does gain a little there.
May I sincerely congratulate the Minister of Finance on one feature of his budget, and that is that he has quit, for this year at least, the tariff tinkering which did so much to bring about instability and depression in business, unemployment, and that exodus from our country which has been greater in the past four years than ever before in our history. At the same time I find myself wondering what has become of those boasts he made, as well as the Prime Minister and other members of the government, even the Minister of Trade and Commerce this afternoon indulged in them-that these cuts in the tariff have not only improved the industries concerned, but have improved the conditions of the ordinary workingman and have helped to bring about general prosperity.


Charles Avery Dunning: They have.


Robert James Manion: If they have, why is it the Minister of Finance has stopped making cuts? What has become of that famous speech of my good friend the Minister of the Interior regarding the death knell of protection? What about those famous speeches from the housetops of the Minister of Immigration on the beauties of free trade? The real fact, Mr. Speaker, is this, that the Minister of Finance has at last come to the conclusion that we have been right in saying during the past
The Budget-Mr. Manion

four years that what Canada wants is a stable tariff policy. We have not been advocating a high tariff policy, but have been advocating a stable tariff policy, and I submit that the Minister of Finance should be thoroughly congratulated on his adoption of the views we have adhered to and expounded for the past four years.
After recess I propose to take up another subject of great importance to this Dominion of Canada.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


Robert James Manion: Mr. Speaker, when the
House rose at six' o'clock I was congratulating the Minister of Finance on the fact that he had once more come back to the sane attitude of a stable tariff policy for this country. I was pointing out that his budget represents the attitude which has been advocated by the party on this side of the House for the past four years, and that we were all happy that the tinkering with the tariff, which had caused so much depression and unemployment and such a great exodus from our country in the past four years, had been halted for some time at least; and I was asking him why, if the cuts in the tariff which he had made in his former budgets were good for the industry of the Dominion, they had been discontinued.
I wish, now, Mr. Speaker, to devote a few moments to general questions affecting the country as a whole before coming to the constructive suggestion that I hinted at-a suggestion, it is true, applying largely' to one great section of our country, bur which if adopted would have a very marked and profitable effect upon the country as a whole. It has become more or less a trite saying on the part of our public men that Canada is confronted by many difficult problems, which are largely the outcome of geography. For example, it is said that we have on our hands a large railway problem, a serious taxation problem, a pressing immigration problem, a disquieting exodus problem, and perhaps a problem of sectionalism. In discussing these problems our public men in addressing various Canadian Clubs have divided our country geographically into four sections, although in some of my own' platitudinous speeches I have increased these to five. These five sections are easily discerned when one looks at the map of the Dominion. First, there is the eastern section comprising the maritime provinces; then comes Quebec and eastern Ontario, which should be taken as another great sec-
	j ; . ,|#||[?
tion; next comes northern Ontario, which is often described as an uninhabited barren waste, but which extends for 700 miles from North Bay on the east to the Manitoba boundary on the west, and which I shall show in a moment is really a vast empire in itself; to the west again we have the prairie provinces; and, finally, across the Rocky mountains comes the fifth section comprising the province of my good friend from Vancouver Centre (Mr. Stevens)-British Columbia.
Each of these five sections, as has been pointed out many times, has its own resources, its own problems, its own aspirations and its own sectionalism; and if we are to progress as a nation, as has been said on frequent occasions-and I believe it is very true-we must in each of these sections treat our local problems rather from a national than a sectional viewpoint. In other words, we cannot develop this country in patches, we must look at all questions nationally, in a spirit of compromise, ready to do what is best for the Dominion as a whole, each section regarding the problems of the other sections in the kindliest spirit possible.


James Alexander Robb: Hear, hear.


Robert James Manion: Let me point out to you,
Sir, a few examples of the problems to which I refer. In the maritimes we have had the very fine, kindly, hospitable people there- people whom I had the very great pleasure of visiting during the recent elections, and who are represented in this House by I think a group of men as brilliant as any group representing any other section of the country, if not the most brilliant-I say we have had those very kind people in a veritable slough of despond by reason of the problems confronting the maritimes, which problems the Duncan commission was appointed to study and to find remedies for.
The Duncan report has been laid before this House, but I regret to say, Mr. Speaker, that I have failed so far to discern in the budget speech any intimation from the Minister of Finance that he is prepared in any way to make provision for any of those recommendations. And my good friend from Pictou (Mr. Cantley) in the question he put to the Minister of Finance recently did not receive very much encouragement in this respect. However, I do hope that before this session is much further advanced the Minister of Finance and the government will show that they are deeply impressed with the Duncan report and propose to give effect to a large part, if not all, of its recommendations. Personally I am not directly interested in the maritimes, but I am interested in the build-

The Budget-Mr. Manion
ing up of a great Canadian nation on this part of the North American continent, where my sons and yours may live and love and propagate their species, instead of being forced, as in the past, to go across to the United States to earn a living. Because of that feeling, I am looking at the maritime question as I try to look at the questions of the other sections of this country, from a national standpoint, the standpoint of building up a great nation in a great empire.
Then take Ontario and Quebec, which I have placed together, because despite all differences of race and creed these two sections have the same industrial, agricultural and economic interests, and even these sections have their troubles. We heard something of them here this afternoon, when the hon. member for Macleod (Mr. Coote) criticised the Minister of Finance because there were no more cuts in the tariff. That is an absolutely opposite attitude to that which I am taking, Sir. One of the problems of this great industrial section of Canada, eastern Ontario and Quebec, is that problem of a stable tariff policy. Old Ontario and Quebec have the big industrial developments of our country and they have the problem of regaining a stable tariff policy in order to carry on the industries of this country. You must have confidence in the country in order to carry on business prosperously and progressively, and I hope the members of this House from the prairie provinces will look at that problem in the same spirit I mentioned a few moments ago when I mentioned my standpoint in connection with the maritime question. They must remember that while they demand a number of things, they should consider the interests of this eastern industrial section of our country, and they should hesitate to destroy a tariff policy which, for a period of fifty or sixty years or more, has helped to build up the industrial life of Canada.
If you take Quebec alone, that province has its own problems, one of which was referred to by the Premier of Quebec in a recent speech when he said that it would be wise for the people of Canada generally to keep their hands off the British North America Act. In our country there are, unfortunately, what I sometimes call constitution mongers, people who are so worried about the constitution of our country, or so worried about the autonomy of Canada and so much afraid that we are subservient to some other part of the empire that they wish to put all the power of our people in the hands of this parliament. Mr. Taschereau, if I read his remarks aright as I think I did, stated recently that it was the policy of the people of Quebec
to guard those rights which they were given in the British North America Act, of which they are passionately fond, and that he objected to any of those rights being taken away by any other part of Canada. He contended that the act should remain as it is unless changed by the same parliament which put it into force. I believe that to be a- proper attitude; I believe this confederation may only be held together by looking at all matters in the light of the best interest of each portion of that confederation. The Prime Minister of Canada recently stated at a meeting in Toronto that if my leader and the present Minister of Justice (Mr. Lapointe) should get into an argument as to the rights of the minorities in the province of Quebec, the people of that province knew quite well from whom they would get the greater justice. I will not criticise that statement, but I will say that I am very sure Premier Taschereau was not worrying about the present government nor the present Minister of Justice, and neither would he have worried if our party had been in power. The Premier of Quebec was probably looking ahead forty or fifty years to the time when, instead of there being only two English speaking people to one French speaking person, there may very possibly be five or ten English speaking persons to one person speaking French, and he was fearing for the future of those minority rights which the French people of the province of Quebec value so highly. Again I say it is the duty of everyone to look at these problems in the same way as we looked at them when the question of confederation was first mooted.
I might, take another section before I deal with the problem of my own particular part of Canada, referring'now to the prairie provinces and British Columbia. They have their problems also, largely questions of transportation because of the great distance, in the case of the prairie provinces at least, to the seaboard. The situation is somewhat better now in British Columbia because of the Panama canal, but the prairie provinces have a long haul to the sea. It is true that Mr. Beatty recently stated that Canada has the lowest freight rates of all the countries of the world. I do not differ from him at all but, Sir, even though the freight rates are low, because of the vast distances over which our producers have to ship their grain to the markets of the world before it reaches seaboard, in comparison with the distances other grain-growing countries have to carry their products, even the lightest burden of transportation charges is quite heavy enough for the people to bear. Again I say it is the duty of those in other
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sections of our country to look at these problems aa broadly as possible, remembering at the same time that in Canada we have two great railway systems in which the people of Canada and the people of other countries have invested something like $3,000,000,000, and we must consider'the rights of these railways to a certain extent.
I would like to deal for a moment with the Hudson Bay railway, and then I will pass on to the problems confronting my own part of Canada. The Hudson Bay railway is another sectional question; the only people who are arguing very strongly for its completion are those in the provinces of Manitoba and Saskatchewan. I may say here and now, very frankly, that I have very little faith personalty in the Hudson Bay railway ever becoming a very serious competitor of the present railways as a grain carrying route. I am also free to admit that I may be wrong, but even with that feeling which I have expressed I have never opposed the Hudson Bay route, although it was wrongly said in the prairie provinces that 1 had done so. Yet I believe with many others that even if it turns out a failure, the millions spent there might be well spent if they bring about a better national understanding and a better general good feeling in our country than we have at present.
This afternoon the hon. member for Macleod (Mr. Coote) stated that Canada is an agricultural country, a statement which has been made very often. I am going to assume the risk of making a prophecy to-night, although I know that prophesying is a very dangerous game. I believe that within twenty-five years, instead of our greatest interests being in agriculture, Canada will probably have a far greater interest in minerals. Even in 1926, the past year, we produced minerals in this great country of ours to the extent of almost a quarter of a billion dollars, the exact figure being $243,000,000; that is the value of the products of our mines in the last year. It has been pointed out by geologists, and if you look at a geological map of our country you will find it to be so, hat 85 per cent of our country is potentially a mineral country, and only 15 per cent agricultural. If those figures are accurate, and I have received them from geologists whom I could name if necessary, then I think I have some basis for the prediction I made a few moments ago. In Canada we have a vast extent of pre-Cambrian rock, which is the oldest geological formation known in the . world, and it has been pointed out by these same geologists that all the rich mines in the world have 'been discovered in that rock. 
The rich Rand mines in South Africa; the Mysore mines of India, and the rich Australian mines have been discovered in pre-Cambrian rock, and more than half the surface of Canada is made up of this formation. If you look at this geological map you will find that there is an immense horse shoe of rock almost completely surrounding Hudson bay, taking in northern Quebec, in fact nearly all of Quebec; all new Ontario; northern Manitoba, northern Saskatchewan and extending up to the Arctic regions. This area contains about two million square miles, more than half the total area of our country, and it is all made up of pre-Cambrian formation. That shield of rock was described very recently by the secretary of the Ontario Mining Association as the greatest undeveloped mineral field left in the world. Those are his own words; I am using his own expression, and I believe it to be correct from my study of the . matter. Mr. Corliss, one of the directors and general manager of the Mond Nickel Corporation, a very able and outstanding mining engineer who has been in the north country for about twenty years, in speaking of this same area stated that only 5 per cent to 7 per cent of that pre-Cambrian shield has ever been explored. That part includes a small section which juts down into the United States just west of lake Superior. In that 5 per cent to 7 per cent which has been explored we have the immensely rich copper mines of Michigan, which have been worked for nearly a hundred years and which turn out annually millions of dollars worth of copper; we have the immensely rich iron mines of Minnesota, which annually turn out about 60,000,000 tons of iron ore; we have also the Sudbury nickel mines, which supply 90 per cent of the nickel of the world, and which have turned out $700,000,000 worth of nickel since they were opened up hardly more than a generation ago; the rich Porcupine gold mines, and the ribh Cobalt silver mines, to say nothing about the Rouyn district in the province of Quebec, the Woman lake and Red lake districts of northern Ontario, and the rich mineral areas up in northern Manitoba. If, as Mr. Corliss states, in from five to seven per cent of our country lying under this pre-Cambrian shield we have found the immense riches I have just mentioned, what lordly dreams we might conjure up in our minds of the possibilities of the exploration of the other ninety or ninety-five per cent of that area of pre-Cambrian shield!
Let me take the liberty for two or three minutes of presenting to the House a few facts, and many such could be given. These are so startling that it is worth while perhaps

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to mention them because I think the question is a very important one. In the first place, look at the Hollinger mine, which I had the pleasure of visiting a few months ago. It is an immense gold factory which employs three thousand men the year round and which turns out in dividends at the present time about $6,000,000 a year. Eighty per cent of these three thousand men are Canadians and own their own homes, and the Hollinger mine is on the verge of becoming the greatest gold mine in the world.
Speaking of nickel, I mentioned a moment ago the fact that the Sudbury nickel mines produce ninety per cent of the nickel used in the world, that they have produced $700,000,000 worth of nickel since they opened up about a generation ago, and that they have paid about $100,000,000 in dividends.
Speaking of silver, the Ontario silver mines are stated to be adding one ton of silver a day to the silver supply of the world.
As to the district of northern Manitoba under this pre-Cambrian shield, the Flin Flon mine there is stated by authorities to-day to have $226,000,000 worth of ore already blocked out. A quarter of a billion dollars' worth of ore already blocked out!
In Ontario in 1910, roughly sixteen years ago, we produced $42,000 worth of gold; today we produce $31,000,000 worth, and the authorities declare that it will shortly become the second greatest gold producer in the world, second only to South Africa. Many other facts of this kind might be stated, if I wished to take up the necessary time. But the facts I have mentioned are so startling, so outstanding, it is a sufficient indication of what I mean when I speak of the importance of the great pre-Cambrian shield. And, Sir, it should impress upon this government the importance of the mineral aspect of our country which has not been sufficiently dwelt upon in the past. In fact I believe no government of the past has been sufficiently seized of the importance of the mineral development of our country.	_
Now, Sir, to get closer to the problem which I am going to discuss, if you look at the map of Canada-and it is sometimes worth while looking at that map-you will find that the northern section of Ontario to which I have alluded is in area an empire in itself. It is 700 miles across and is wider than the provinces of Manitoba and Saskatchewan together. It has been described as an uninhabited barren waste, and yet that area is as great as the area of England and France together, having a population of only about 200,000 people, but on account of its richness in pulpwood we, in association with the province of Quebec, are
turning out much of the pulp and paper which is going to make an immense export from our country; and I have already mentioned some of the potentialities in regard to the minerals. But because of the scarcity of population up there and because of the small agricultural development, it is a heavy burden on the three lines of railways which run across it from east to west and from west to east. Any solution, therefore, which would bring about greater development, greater freight traffic in that section, would be beneficial not only to the railways, not only to that section, but as well to the country as a whole. In addition to that, Sir, any great development of that country-and it must take place ultimately- will mould into one mighty whole the two areas of Canada which that section divides.
Sir, besides the precious metals which I have briefly mentioned, and the fringe of which we have merely touched, we have in that section- and there are in other parts of the country which I will mention in a moment, for instance thf province of Quebec, from which my hon. friend the Minister of Justice (Mr. Lapointe) comes-there are hundreds of millions of tons of undeveloped iron ore. Mr. Corliss, whom I quoted a few minutes ago, states that the United States government geologists have asserted that we have in northern Ontario nine thousand million tons of thirty-five per cent iron ore or better, which at the present rate of use of iron ore in the United States would last that country itself for over one hundred years. In addition to that, other great discoveries have been made in the provinces of British Columbia, Quebec, Nova Scotia, and Manitoba, the Belcher islands in Hudson bay showing t'he occurrence of immense deposits of iron ore; and in spite of the existence of hundreds of millions of tons, perhaps thousands of millions of tons, we are not using one ton of Canadian ore in the blast furnaces and steel plants of the country. We are importing to-day about a million of tons of ore a year, two-thirds from the United States and one-third from Newfoundland; and we imported last year about $200,000,000 worth of steel products, quite a large proportion of which would, under a proper policy, be produced in this Dominion.
In the development of iron ore, coal is very important indeed-in fact, iron ore cannot be converted into pig iron and steel without the use of coal. We imported as well last year about $60,000,000 worth of coal, and we exported about $4,000,000 worth. Yet we have down in the maritime provinces, in Alberta and in some other sections of the country immense deposits of coal, in fact the second largest coal deposits in the world. We have

The Budget-Mr. Manion
also immense deposits of iron, which I have just described. Surely, Sir, with these vast deposits we should apply our brains to working out the problem of developing our own iron and steel industry from our own' iron ore and our own coal. And, Sir, it can be worked out; in fact to my mind has been worked out, and I shall give proofs of that in a few minutes-because I ^hall not take up a very great deal of the time of the House on this occasion.
Sir, iron and steel are basic elements of commercial progress in any country. If you look over the commercial history of the world you will find every country on the face of the globe which has gone ahead very rapidly commercially has based the foundation of its commercial progress upon iron and steel development. That is true of England, it is true of Germany, it is true of France, it is true of the United States. I could give figures to prove that but I do not wish to take up the time of the House in doing so at the present time. May I poipt out, as well, to those who are studying international affairs that the iron and steel valleys between Germany and France are the cause, to a great extent, of the periodical wars between' those countries. They are the cause at the present time of the difficulties in settling the problem between these two countries, showing the importance to any country of iron and steel.
Now before I go into further details, may I give you a few of the reasons why I am not a lone voice crying in the wilderness in regard to this great problem? In the first place an iron ore committee was appointed by the Drury government, the Drury progressive government in Ontario, I think it was in 1922. The committee investigated the whole iron and steel problem. They spent much time visting various parts of this country, they were men experienced in this question, they investigated the whole iron and steel problem of our country, and in 1923 when Mr. Ferguson had come back into power they made their report. They had not completed that report when Mr. Drury went out of office, they made their report to Mr. Ferguson. In brief their report was to this effect-that we could develop the iron ore resources of our country by a bounty, by a cooperative bounty, if I might express it in that way, given by the provincial and the Dominion governments towards that development. That report was accepted by the Ferguson government, they agreed to carry it out, and the question was put up to this government, here at Ottawa. But so far as I know no serious consideration has even been given it by this government. In 1924 I put a question on the order paper regarding it 
and was informed by the Minister of the Interior that the question was still under consideration.	So far as I know it is still
under consideration, and of course as we all know, that does not mean very much. In other words the Dominion government did not at all, so far as I know, cooperate in any way with the provincial government cf Ontario.
But I should like to point out to you, Mr. Speaker, to the Minister of Justice (Mr. Lapointe) and to my other Fremch-Canadian friends in this House, that Ontario is not alone interested in this great question. A few years ago in Quebec, around Chicoutimi, millions of tons of iron ore were discovered. It is described as titanic magnetic iron, and government geologists have passed upon this as being possible of economic development. That is stated in scientific issues of our government papers. Because of that immense discovery the Taschereau government in 1925 passed an act called the Iron Ore Premium Act, which is reported in an issue of Investigations of Mineral Resources and the Mining Industry, 1924, by the Department of Mines, as bringing forward the proposition that they would offer four-fifths of a cent per unit, that is, per one per cent iron, of any ore mined in Quebec and used in the steel plants or blast furnaces of that province. So the great Liberal government of Quebec, great at least from the standpoint of the Liberals, has come to offer a bounty for the development of the iron ore of that province. Surely if I have no weight with the Minister of Finance, the Taschereau government should have some weight. Here we are sitting to-night, midway between the Conservative government in Toronto and the Liberal government in Quebec, both of which have realized the imporL ance of this great question and have offered bounties for the solution of it, and we have the Ottawa government, sitting here midway between the two, which, so far as I have been able to discover, has made no move even to consider the question.
In 1926 the Canadian National Railway officials issued a booklet, a copy of which I hold in my hand, and a perusal of which is worth the time of any hon. member. If any hon. gentleman has not read that booklet on the mineral resources along the Canadian National railways in northeastern Canada, he should make it his duty to do so at once. In that booklet they give pages to the iron ore question. They state that the Vermilion ranges and the Mesabi range in the state of Minnesota extend into Canada and they conclude their article on pages nine and forty-seven by advising that this Dominion government-and

The Budget-Mr. Manion
I commend this to the Minister of Railways, who is giving me his kind attention-should cooperate with the provinces of Quebec and Ontario in the development of those ores by a bounty system. In addition I have letters from high officials of the Canadian National Railways to whom I wrote some years ago on this question. They point out to me that this is a vital question as regards not only Canada but the national railways, and at the bottom of one letter the following sentence is used:
I do not know of anything of greater importance to Canada than the development of our iron ore resources.
That the Canadian National take the attitude they do is, I think, a reason why this government should give the question some support.
But I have still another very good authority, a man who has the respect of all classes in this country, a man who certainly has the respect of all the Liberal party in this country, a man who is looked upon as one of our Canadian statesmen. I refer to the Right Hon. W. S. Fielding, who made two speeches in this House dealing with this question. One was in 1909 and the other in 1920. Naturally I did not hear the one in 1909, but I did hear the one in 1920 and I listened to it with pleasure. I took the trouble to look it up and I have on my desk the statement regarding this question. I will read just a couple of passages, although the whole speech dealing with bounties is worth reading. He was dealing not directly with the question I am supporting, that is, the giving of a bounty for these iron ores, but with the question of bounties for the iron and steel industry, which bounties, he pointed out, were instituted by the Conservative government under Sir Charles Tupper before the Liberal party came into power in 1896, and which he carried on. This is from Hansard of 1920, volume 2, page 2505.
Bounties on iron and steel originated with the Conservative government in the days of Sir Charles Tupper. The operations under them were not large. There was a small operation in the province of Quebec and another in the province of Nova Scotia. I have not the figures but I think no very large sum was paid out until after our government took up the question.
Then on the next page he says, and this practically sums up the conclusion to which he comes:
At all events the time came when the bounties automatically ceased, and to-day no bounties are paid. What was the result of that? Was there anything in the result which would justify that departure from free trade principles? I
am afraid my farmer friends will not agree, but I believe it is susceptible of proof that every dollar that was paid out by way of bounties on iron and steel, and millions were paid out-
By the way, between $18,000,000 and $19,000,000 were paid out.
-came hack to the Dominion treasury in the form of excise and customs duties on the new business created as the outcome of that policy. 1 think that can be established as a pure financial question, but there is more than that.
Then he goes on to describe the growth of the iron industry in Nova Scotia, New Brunswick and some of the other provinces. I made it my business, since reading his remarks, to look up the growth of that iron and steel industry, and it is worth while putting on record a few figures which are very expressive of the growth of the iron and steel industry after the bounty system had been inaugurated in this country by Sir Charles Tupper and supported by Mr. Fielding and the Laurier government, just as the old national policy of Sir John A. Macdonald was carried on by them in the same way. _
In a pamphlet called Iron and Steel, which I have under my hand and which was issued by the Statistics branch of the Department of Trade and Commerce, they point out that in Canada in 1924 there were 1,005 iron plants manufacturing iron and steel with a combined production of $371,000,000, and capital employed $537,000,000; men employed, 79,000, and wages paid, $100,000,000 per annum. What I am going to give now is of interest to my friends, particularly from the prairie provinces; I refer to the distribution of these different plants. The distribution is as folplants
Ontario	 645
Quebec	 174
British Columbia	 69
Nova Scotia	 36
Manitoba	 32
New Brunswick	 20
Alberta	 18
Saskatchewan	 6
Prince Edward Island	 5
In other words, every one of the nine provinces of this Dominion had some of those iron and steel plants, the foundation of the progress and prosperity of which was laid in the bounties of the Conservative government, followed by the Laurier-Fielding government. If I may digress just for a moment, I should like to point out in this connection the progress that is being made in manufacturing generally in those western provinces. The Statistics branch of the Department of Trade
The Budget-Mr. Manion

and Commerce, in the same year, 1924, issued a report on manufacturing in the four western provinces. The figures are as follows:
Four Western Provinces Capital invested in manufacturing. .$458,000,000
Gross value of the products	 384,000,000
Wages paid	 76,000,000
I do not wish to go into details, but in order to explain the point a little further I may say that about one-half of that development has taken place in British Columbia and the other half in the three prairie provinces. Therefore, not only in iron and steel but in manufacturing generally the western provinces have profited by the policy which we advocate on this side of the House, and which was carried on for so many years by the Laurier-Fielding government for the purpose of assisting so far as they could in building up the industries of this country.
I have still one more reason, and then I shall have concluded with my reasons why this question is worthy the consideration of this government. I refer to the Duncan report, which I mentioned a few moments ago and which is of the utmost importance to at least one great section of this great country. The Duncan report deals with the different problems in the maritime provinces. It deals, among others, with the coal problem and it gives three recommendations for the solution of the coal problem of the maritime provinces. In the first place it says that the tariff board should immediately investigate the reasons for imposing, if necessary, a tariff on coal coming into this country. I believe that is being done by the tariff board at the present time. Secondly, it advises federal aid to coke ovens. That means a bounty system. Third, it advises that a bonus should be paid on all Canadian steel when it is made with Canadian coal.
I have given you, sir, the report of the Duncan commission, which backs up absolutely the attitude I am taking, and I hope that that report, not only in regard to coal but in regard also to other branches of industry in the maritime provinces, will be acted upon by this government in the very near future. I have cited to you authorities from all sections of our country and support from all classes in our country, support from political leaders of opposing parties and different sections, in regard to the necessity of this government giving some attention to the development of the iron and steel industry in Canada. There is this to remember. If you offer a bounty for the development of iron ore in this country and no Canadian iron ore should be developed, not one dollar will be lost to the treasury; in other words, failure will cost you nothing.

It might be asked why the United States is not giving bounties for the development of this industry. There are many reasons. In the first place the United States is an immensely rich country, and it is much more densely populated than Canada. In the second place they have richer ores than any that have so far been discovered in Canada. I have been over there and have stood on the brink of a body of ore that stretched as far as from here to Keith's theatre, into which trains were running, loaded with ore by means of steam shovels. That ore is very easily mined. Again, they have immense capital; they have their own railways and steamboats: and, as well, they have a tariff which has built up the iron and steel industry in that country.


Charles Avery Dunning: I wonder if my hon.
friend has given any thought to the side of this question which he touched upon a moment ago when he spoke of the very much better quality of ore, the higher iron content of the United States ores as compared with Canadian ores, from the point of view of how high a bounty would be required in Canada to make it more economical for Canadian iron and steel plants to use Canadian ore of the lower quality, rather than import United States ore as they are doing at present.


Robert James Manion: - I have given a good deal of thought to that, but I do not wish to go too much into detail to-night. There are reports before this government and before the provincial governments. They have an act in the province of Quebec under which a bounty of four-fifths of one cent per unit is paid, which would work out at about 40 cents a ton of 50 per cent iron. To my mind, although I am not an authority at all, that would not be sufficient to develop our bodies or ore. But I have the impression that once our iron ore deposits have begun to be really developed we will find some richer types if ore such as they have in the United States. With all the immense deposits of iron ore we have io this country, surely the good God did not let all the good ore stop at the 49th parallel. Surely Canada has been treated a little better than that.


Charles Avery Dunning: The Belcher deposits
are better.


Robert James Manion: Yes, they are better. I
noticed in the Financial Post issued just a few days ago an article dealing with Belcher deposits and saying that Captain Bernier was being employed to go up to Belcher island and take a cargo of iron ore from there to England for testing purposes; and if it is found worthy of being developed they are either going

The Budget-Mr. Woodsworth
to carry the ore across to England or build some plant on the border of the Hudson bay, if they can get the water power they require.
Mr. James J. Hill, that great Canadian-American, wrote a book in 1910 from which I quoted in later years in this House. He stated in this book that those immense deposits of American ores would in from twenty-five to fifty years be well within sight of depletion. To-day the rich ores in the United States are being so rapidly depleted xhat they are beginning to use the lower grade ores, ores of a very much lower grade than they were using twenty years ago, and it is only a matter of time when we would bring in our low grade iron ores. I am one of those Canadians who do not wish the development of my country to take so long that we shall all be gone and forgotten before any of these immense deposits -9,000,000,000 tons-of iron ore are developed. I agree with Mr. Dooley when he says that he doesn't know what posterity has done for us that we should do so much for posterity. Let us do something for this generation, so far at least as the development of our iron ore and coal deposits are concerned.
I have another suggestion to make before I sit down. We have to-day a Minister of Mines who gives his spare moments, perhaps an occasional spare hour from his multitudinous duties as Minister of the Interior, to the question of the development of our mineral deposits. I believe that without increasing the size of the cabinet at all there are within the government a number of ministers who have much less to do than the Minister of the Interior, and this whole question of the mineral development of our country is so important that it might be well for the government to put this matter into the hands of some other minister who has more time than the very busy Minister of the Interior-I say this of him in no critical spirit. This mineral development is an important question. It is a question which if properly solved would help to solve in a very large way the railway problem of our country; it would help to solve our immigration problem; it would mean more work and more wages for our people; it would lower taxation in this country.
My good friend the member for West Calgary offered something constructive to this House. I am copying him, if you will, although I had this idea also, but I care not who gets the credit for this development if it should take place. I am quite willing to give the credit of this development to this government, and to give them my meed of praise if they will come forward and develop these great resources, but I do desire this great country of ours to be made a country
where our boys and girls can remain and find employment, and help to build this country up into a great Canadian nation. I hope, in other words, that this government, which I have abused perhaps as much as anybody-somebody behind me says, "not half enough"-I hope they will so act that they will prove to our boys, the boys who went to the front, if you like, that this is not only a good country to die for but a good country to live for.


James Shaver Woodsworth: Mr. Speaker, as the various
budgets have come up in the last few years we have been trying from this comer to present as far as possible the distinctive viewpoint of labour with regard to the various points at issue. I take it that, since we will all acknowledge that labour is basic, what is in the interests of labour is really in the interests of the people at large. If we raise the level of labour we raise the general level. As one American economist puts it somewhere, the effect on the marginal people of the community is a good test of the value of any policy.
The Minister of Finance (Mr. Robb) has taken a very optimistic view indeed of the situation in Canada. He says:
The Dominion enters its diamond jubilee year with a happy outlook. Our farmers have, in general, enjoyed bountiful harvests; our industries are active and working well up to capacity, many indeed are working overtime; employment is at a high level and our transportation companies report a large volume of business; retail trade is brisk, money is plentiful and a buoyant spirit prevails.
While that may be true with regard to certain individuals or groups, I submit it is not true of very considerable sections of our community. It may be true that some have great prosperity, but I would point out that there is a great difference in these days between the rewards which are received by the ordinary worker, whether in industry or on our farms, and those which come to many who live largely by their investments. I have been trying as far as I could to get statistics from Canadian sources, but I find that our bureau of statistics is not adequately equipped to give matters of this kind the attention that they require. However, the general conditions existing here and in the United States are somewhat similar, and I suggest that a detailed statement of the conditions in the United States affords a very valuable sidelight on our conditions in Canada. Recently the United States Bureau of Statistics has been taking a census in which there is a survey of American statistics from

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1923 to 1925 covering some. 160 lines of manufacture. They find that the number of individual establishments is decreasing and that the number of workers employed in these establishments is decreasing. The statement is made that during those two years the compensation received by the workers decreased $5,000,000 while the employers' profits went up $380,000,000, or a net gain for the employers of $385,000,000.	1 can quite understand that in these circumstances the employers might take the attitude assumed by the Minister of Finance and consider that things were now very satisfactory. The figures also show that the output per worker increased from $3,157 in 1923 to $3,461 in 1925, an increase per worker of $304. During that same period those workers who were retained on the job had their wages increased an ever-age of $31 a year. In other words, for every dollar paid out in increased wages the employers added nearly $10 to the price of his product at the door of the factory. That is the evidence afforded by the United States Bureau of Statistics. What are the workers in this country to think of this condition of things? I was glancing over a labour paper some days ago in which there was some comment with regard to the enormous profits that were being made in the automobile industry, and a long list of figures was given from Motor Stocks, fourth edition. This was the comment on the figures taken at random from one of these reports:
The first figure shows that $1,000 invested in the Buick Motor Car Company, organized in 1904, returned in eleven years $710,000. What does this mean? It means that a man earning $1,500 per year (and that is more than the average worker earns), would have to work almost five hundred years to earn as much money as this one thousand dollars would bring by being invested for eleven years.
That helps us to realize the situation that exists. Then we ask ourselves, why work when it is easier to make more money by not working and investing in this way? A case is given in the press in connection with a man named James Cousens, who had been working as a bookkeeper at $75 per month. After spending years and years of energy in this capacity he was able to save $1,509. He borrowed $1,000 and lent the $2,500 to the Ford company and went to work in the Ford factory in 1904. Twelve years later we are told that Cousens, in addition to drawing a large salary from the Ford company, received $30,000,000 in dividends, and in 1916 he sold out his interests in the Ford company for $30,000,000. That undoubtedly is an exceptional case, but these exceptions help to illustrate the effects of a situation under which very large awards are

being given to those who invest and much smaller awards in every way to those who are actually producing. I should like to quote a statement given by our Dominion Statistician with regard to the distribution of income. He says:	.
According to an authoritative study of wealth and income of the people made by W. I. King, and published by the National Bureau of Economic Research, some years ago, the income of the people of the United States is divided approximately as follows, according to the diffrent sources:	landlords' rents, (using the term
landlord in a strict economic sense) one-twelfth; interest, two-twelfths; wages, six-twelfths; and profits, three-twelfths. This distribution of the national income would probably fairly well correspond to the distribution in Canada.
The Bureau's estimate of the national income of the people of Canada in 1923 or 1924 is somewhat over four billion. Using Professor King's proportions, we would estimate the total of income received as wages in Canada was something over two billions per annum in these years; that business profits were somewhat over one billion; landlords' rent perhaps 350 millions, and interest on capital 700 millions. The term "profits" as used here, of course includes the business profits of the 700,000 operating farmers, as well as those of the big corporations.
Then I turn to King's book for further illustrations of the distribution of wealth. He says:
In 1918 about eighty-six per cent of the persons gainfully employed have incomes of less than $2,000 per annum and almost fourteen per cent have incomes exceeding that sum. In the same year, about sixty per cent of the national income was divided among the eighty-six per cent of the gainfully employed who have incomes less than $2,000 per annum and almost 40 per cent of the national income was divided among the fourteen per cent of the gainfully employed who had incomes exceeding $2,000.
And one little table here:
The most prosperous one per cent of the income receivers had 14 per cent of the total income,	.
The most prosperous 5 per cent of the income receivers had 26 per cent of the total income,	.
The most prosperous 10 per cent of the income receivers had 35 per cent of the total income,
The most prosperous 20 per cent of the income receivers had 47 per cent of the total income.
I think it is high time that our bureau of statistics was able to furnish us as full statistics along this line as are being furnished by the United States departments.
Now I want to consider for a few minutes the statement as given us by the Minister of Finance. With regard to taxation I notice there was a decrease in the amount received for income tax of $8,671,961.57. There was, nowever, on the other hand an increase in the amount received for customs duties of

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$14,144,856.50. It is very significant indeed that whilst the proceeds from income tax are decreasing the proceeds from customs duties are increasing. That is, upon those who are least able .to bear the strain a greater burden is being imposed. Let us see what sums are "being extracted from the pockets of the people," to use the very graphic phrase of the member for West Calgary. The total amount received for taxation, according to the statement of the Minister of Finance, was about $343,000,000. That means $38 per head on an estimated population of 9,000,000, or $190 per family of five. Of this total the customs import duties alone, according to the minister's statement, amount to $141,500,000. That means $17 per head, or $85 per family. It is this particular kind of taxation that is steadily rising; already it is $85 per family; while the income tax received from a comparatively small group, who, however, own the greater part of the wealth of the country, is steadily decreasing.
For what are those amounts secured from the taxpayers of Canada? It is difficult for most of us to apprehend these large figures; it is much easier to understand proportions. Now let me give a few items upon which, according to the minister, we expended these revenues: Health expenditure, .19; scientific institutions, .27; labour across the country, so far as this government is concerned, .39. We talked for nearly two years about giving relief to the Home Bank depositors. The amount paid them represents . 13 of our revenue. These four items together amount to only .98 -less than one per cent to these very important calls on ,our exchequer. Now, supposing old age pensions were put into operation in all the provinces, the proportion which would be paid by the Dominion government, according to the present scheme, would amount to only 3 per cent of our income. Bear in mind that the minister has told us that the proportionate amount of our expenditure that can be directly attributable to the war was 45.18 per .cent. I think a comparison of these items will enable us to see that we are drawing enormous sums chiefly from the poorer sections of our community-the less wealthy, if you like to put it that way-and that on the other hand the greater part of these huge sums is going to the people who hold a mortgage on this country, and to whom interest must be paid on the war debt.
With regard to the proposed changes put forward by the minister, I would congratulate him on the reduction of the sales tax. I think that is a good move. But on the other
hand there is a 10 per cent reduction on all the rates of income tax, which will have the effect of relieving taxation on the higher incomes out of proportion to the relief granted the lower incomes. The same thing is true in regard to the two-cent stamp on all cheques, irrespective of value; two cents on a small cheque is an altogether different proposition from two cents on a large cheque. Thus throughout this budget, in almost every case we find it is the higher incomes or the higher expenditures that are being relieved. I am not quite sure, but as far as I can see there is one gain that labour makes in addition to the sales tax-cheaper matches. Since this is the one outstanding example, it may be well for us to consider how much it amounts to.
On each package of matches manufactured or sold: three-fourths of one cent for each one hundred matches or fraction of one hundred matches.
In recent years I have not had enough to do with household buying to know just how many matches we use in a year. I suppose those of us who are not smokers use about twenty packages. That would look to me something like a yearly saving of 15 cents! But supposing it is ten times that, what is a dollar or two saving in the annual budget of a family that pays through the customs import duties $85? Yet in view of this wonderful saving of 15 cents or a dollar a year the minister says that the diamond jubilee of confederation should unite us to work for the lasting prosperity and progress of this our glorious land. Should it? I would suggest to the minister that there will have to be some more changes than he has announced in his budget before a good many people become very enthusiastic over the prospects of prosperity. Some hon. gentleman suggests that as there is a poetical license there ought to be a ministerial license. Even then this is rather extravagant language.
For a little while I should like to turn to the alternative suggestions offered by the member for West Calgary (Mr. Bennett). I presume that the Conservatives are pretty well satisfied with this budget; they have offered no amendment. I presume that even the Minister of Immigration (Mr. Forke) must be fairly well satisfied with it, or he would not be where he is to-day. Let me examine the statements made by the member for West Calgary, for if we must accept some alternative to the Liberal proposals I suppose it would be along the lines he has put forward. After reading his speech with considerable care I am inclined to believe that he is a
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better lawyer than an economist. Apparently his ideal is largely that of a self-contained nation. As he says:
The domestic market is of the first importance to Canada-
And he urges that this market is:
-the only means by which we are able to build up the industrial life of Canada and bring to our shores a consuming population for our own products.
And again he warns:
Every time we open a channel of trade; every time we seek for our commerce an outlet; every time we develop for ourselves a means to send our trade and commerce to foreign lands, we place ourselves in a position where it may be possible for a foreign legislature to destroy that channel overnight with untold injury to the Canadian people.
I submit, Mr. Speaker, that that is mere rhetoric. We might as well say that every time we cross the street; every time we go for a walk; every time we take a meal and every time we inhale a breath we expose ourselves to some dangers. But do we propose to shrivel up and die because there may be some possible dangers in the ordinary course of living? I think we may understand that we must take the dangers along with the benefits which come from international trade.
The hon. member envisages a world filled with commercial enemies. That may have been true at one time, but to-day we are more and more living in a cooperative community; industrially, commercially and financially we are closely interlocked, and we are developing into a vast inter-related world. Only politically, as a matter of fact, do we maintain our independence with a moderate degree of success; otherwise we are closely related to all parts of the world. We all know that we have $2,000,000,000 of British money invested here, and that we have $3,000,000,000 of American money; that means that whether we like it or not, to that extent English and American investors are penetrating and controlling this country. They are crossing our international boundaries every time their money crosses. We must necessarily send our goods to every part of the world; to-day we are anxiously watching events in China and other parts of the world, which simply indicates that we have interests scattered over the world, and it would seem to me that we would be turning the clock back if we were to revert to the idea of self-contained communities with other communities as commercial rivals profiting at our expense. Rather I think we are advancing to the stage where the benefit of one is the

benefit of all, and where world trade flows freely there is mutual benefit.
The hon. member for West Calgary (Mr. Bennett) was very much perturbed because Canadian trade with various countries does not always balance, or because in some particular instances our imports are greater than our exports. In effect he says, "I found that from Switzerland we imported last year goods amounting to $9,170,000, while we sold that country goods amounting to only $1,310,000. Can we afford to establish a channel of trade with that community?" 1 should like to ask why not. These figures by themselves are of very little value, because trade is not always direct, and we have all sorts of.three-cornered, four-cornered and six-cornered trades We all know the place the clearing house has in ordinary banking affairs, and I submit that in the world's great clearing house it is a matter of comparative indifference on what bank my cheque is drawn. In our analysis of these figures we must take into account the larger and more complicated relations, not simply the figures which relate to the direct traffic between one nation and the other.
The hon. member seems to have conveniently forgotten the paramount importance of the domestic market when he bemoans the fact that the export of trade is falling. For the life of me I cannot see that this latter part of his discussion is at all consistent with his earlier remarks. He said, "I view with the greatest apprehension the diminution of our export trade; to the extent to which that trade is diminished, to that extent does it work a hardship upon the Canadian people." A little earlier it was the domestic trade that was of importance, now he bemoans the fact that the export trade is said to be diminishing. This kind of reasoning, it seems to me, is very characteristic of some of those who seek protection as the cure all for our social ills; they have not realized fully that we can export only as we import. Apparently such a simple consideration has not yet entered into the consciousness of a great many of those who are so keen on what they call protection. We export only as we import; the one process is absolutely dependent on the other. If we hinder importation we hinder exportation, and if we increase the one we are liable tc increase the other, indeed must ultimately increase it. It is by fixing attention for a while on one process and then forgetting it altogether and concentrating on an altogether

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different process that some of the advocates of this policy manage to win and apparently hold public approval.
The hon. member is somewhat consoled with the ten per cent reduction in the income tax, and hopes that in time the income tax will be entirely abolished. If we turn back to the figures I gave a while ago it will be seen that if the income tax is abolished the larger part of the wealthy people will go almost scot free. What would the hon. member substitute? To use his own words, "A universal turnover tax, a tax by which every man who buys something will be able to make some contribution, a known contribution, a percentage levy." Surely that is a brilliant scheme to fleece still further the man with the lower income. As I understand it, and I am subject to correction, we are banishing the sales tax but erecting a super-sales tax, a universal sales tax, one affecting all commodities notwithstanding the fact that a great many of these commodities are already taxed by means of the customs duty. I want to be fair to the hon. member. So I quote his own words:
... if we impose a tax based upon the expenditure of the people, then as the poor man has less to spend than the rich, his contribution will be correspondingly less, but because he exercises the franchise he will make some contribution to the life of the state in the form of taxation.
Really, the audacity of the rich and their representatives simply staggers one 1 I wonder whether they really believe that by their specious arguments they can any longer fool the great mass of the people. Perhaps it is only fair to think that they nave so long concentrated on their own view of this question that they have absolutely failed to realize the viewpoint of the majority who are not the beneficiaries of the present system. A man's ability to pay surely must be judged not by what he spends on the necessities of life but by what he has left after spending that money-the very part which, according to this scheme now propounded, would be exempt.
The hon. member has given us two new rules which should! apply with regard to taxation, two grand new principles which may be added to those of Adam Smith-universality and visibility. For a long century we knew nothing about these two principles! The world waited in earnest expectation. At last in the fulness of the time they have been revealed to us through the mouth of the hon. member for West Calgary. Visibility and universality! And what about visibility? Why, the hon. member would take away the
only tax that we have to-day that is clearly visible-the income tax. And what about universality? From those who have the large incomes-on which he says he would like to abolish entirely the income tax-he is removing the opportunity of paying to any considerable extent for the upkeep of the country. He is placing the greater part of the burden, according to this statement, upon those people who must pay for the necessaries of life, and who as they spend would have to carry the weight of taxation. It is rather interesting in this connection to note the plea that is made as to benefactions obtained from well-minded people. The hon. member states that in this new country hospitals have to depend on benefactions that come from well-minded people. On this there are one or two comments I should like to make, because the whole viewpoint that is put forth here is so very characteristic of one class in our community. In the first place I would say that the statement that the hospitals have to depend entirely upon benefactions is not correct, I know of a great many hospitals throughout my own part of the country, and the greater part of their income is not derived from benefactions but from taxation. It is quite true that some of the benefactors seek, where possible, to retain the right to sit on boards, and more or less manage the concerns of the hospital, but the greater part of the revenue comes out of public taxation. I should like to ask further why hospitals and educational institutions should have to depend upon benefactions? These institutions which minister to the primary interests of the people should not have to wait until some well disposed people come along and endow them. It would seem to me that the very first claim upon the resources of the country ought to be the hospitals and educational institutions. The implication behind this suggestion is that these public benefactors, who are the wealthy people, of course, know much better than the public where their surplus wealth should be placed. The raison d'etre of the income tax is that the public ought to decide where the surplus wealth is to be placed. And if we carry out the principle underlying the income tax still further it will remove this surplus wealth, because after all that wealth has been built up out of special privileges which have been given because of the protection afforded by the government or society at large.
A little earlier in his speech the hon. member for West Calgary suggested that the poorest man, in fact everybody who has the franchise, should contribute to the upkeep of his country. I would say much more should these well meaning benefactors who have

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grown wealthy through the arrangements that at present exist in society-much more should they be willing to do their share in carrying forward the larger concerns of our country; and I am a little bit suspicious, I must say, of philanthropists who would seek to avoid their obligations to the state which has enabled them to amass their wealth.
Further -the hon. member has a very interesting plan to suggest with regard to the paying off of our debt without our being conscious of doing so. I suppose you may characterize that as painless extraction. We in our Labour group believe in paying off the debt, but we believe also in that splendid principle of visibility; we believe that it should be paid off in, such a way that people would see who was paying it, and that the people themselves would decide who was best able to pay it. Now, in order to be perfectly fair I propose, for the benefit of those who may be present to-night who have not closely read the speech of the hon. gentleman (Mr. Bennett), to read a paragraph containing the scheme which he set forth and which is already 'being commented upon in our leading newspapers:
. Therefore I propose that the Minister of Finance should, after creating his four per cent consolidated Canadian securities, provide by legislation that a percentage to be hereafter determined, of the revenue of the insurance companies, amounting to a net total of over $110,000,000 this year and from the deposits of the Canadian people in our savings banks, amounting approximately to at least another billion and three-quarters, should he utilized for the purpose of paying off this $100,000,000 This four per cent security I would maintain at all times at par-a very simple process. Under our Finance Act, our Department of Finance operates practically as a federal reserve board, and all that the insurance companies would have to do if they require additional money would he to deposit, either through their hanks or with the Minister of Finance the four per cent consolidated securities and receive the money from the federal reserve hoard.	-
Wei, I should like to congratulate the member for West Calgary upon his boldness in setting forth this scheme. I have thought over it, and it seems to me that it really involves the conscription of money at four per cent. I can see it in no other light than the conscription of money at four per cent. Even four per cent, however, may not be a bad thing from the standpoint of the insurance companies, for I notice in this morning's Mail and Empire of Toronto the following sentence referring to Mr. Bennett's proposal:

It might be welcomed by the insurance companies as a source of an irreducible return of four per cent, and as an influence to check the upwardness of other trust fund prices.
So it is possibly doing the insurance companies a good turn, now -that rates are falling so rapidly. The member for West Calgary spoke as follows:
I submit, Sir, that the time has come, for this parliament, in the exercise of its unquestioned authority and power, to say that these deposits of the people should be utilized to the extent necessary to provide for the maturing obligations not met out of surplus.
I am sure that the House ought to be very grateful to have this high legal authority assure us that parliament has unquestioned authority and power, but I should like to ask, why select the savings in the hands of the insurance companies and in the savings departments of our banks? What of other forms of wealth? Why limit the operations of this scheme to those particular kinds of wealth? Why should we not conscript every kind of wealth? I am inclined to think that the principles laid down by the hon. member would carry us a great deal farther than he would like to go. The hon. member tells us that "this country in the present moment of stress and strain should utilize the savings of the .people in the interests of the whole population"-surely a far-reaching principle. Personally I would substitute for the word "savings" the word "wealth". But let that go; the hon. -member would probably maintain that all wealth represents savings.
I am sorry 'that the hon. member is not now in his seat, but I should hope that he will be able to induce his colleagues to support a motion in his own terms which I propose to place upon the order paper:
Resolved that in the present moment of strain and stress, the time has come for this parliament, in the exercise of its unquestioned authority and power, to utilize the savings of the people in the interest of the whole population.
I propose to support the amendment moved by the hon. member for Macleod (Mr. Coote), because it is in line with the policy on which I was elected to this House and which, in the form of an amendment, I brought before the House several years ago. The Independent Labour party of Manitoba has these sections in its platform:
I. Abolition of fiscal legislation that fosters and sustains class privilege.
.2. Removal of taxes from the necessities of life.
3. Taxation of land values.

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4.	After exemptions of small incomes, a steeply graded income and inheritance tax.
5.	A capital levy for the extinction of the war debt.
I should like to dwell for just a moment in closing upon the last clause of the amendment:
And further that no systematic effort is being made to reduce our national debt, the interest on which absorbs so large a proportion of the revenues of the Dominion.
As the minister has informed us, the principal expenditures attributable to the war amount to something like 45.18 per cent of the total expenditure. Last year in bis budget speech the minister went on to point out other expenditures in addition to these. He referred to the heavy railway and merchant marine expenditures and other expenditures which grew out of war conditions. He said that during the war and demobilization period, large outlays were charged to ordinary expenses which, while not actual war costs, were directly attributable to war conditions. In addition to these there were heavy annual charges not taken into consideration in the summary submitted, for which the war is responsible. He stated that there might also be included the cost of housing the staffs connected with these services, which is now carried by the Public Works Department.
Therefore putting these items together I think we are safe in saying that practically one-half of the entire revenues of the country go to pay for the war, a large part of it being interest on the war debt. That means that there is a huge mortgage resting upon this country, and as long as we permit that mortgage to remain, a large part of our revenue must be used in paying the interest charges. Sooner or later we must frankly face the war debt. If you do not want to repudiate it, why not have a capital levy or in some other way deal with it? We are not suggesting in this amendment the manner in which that may be done. That is for the government to decide. But I would suggest that in ordinary business concern, the president, in reporting to the board of directors, would deal, not merely with current income and current expenditure, but with the mortgages carried by the corporation. We ought not to go along year by year simply accepting this war debt and spending the great part of our time and energy in collecting money from the poorer people to pay to the wealthier who hold the war debt mortgage. I have mudh pleasure in supporting the amendment moved by the hon. member for Macleod.


Mr. J. A. FRASER (Cariboo):: Mr. Speaker, in rising to say a few words on the motion before the House I want, in the first place, to congratulate the Minister of Finance (Mr. Robb) on taking holus-bolus and adopting as his own child, one of the most important principles of the Conservative party, namely, stability of the tariff. Unquestionably if there was one point that the Conservative party urged from time to time during the last session of parliament that I had the pleasure of being in this House, it was that what the country required was stability of tariff, and the Minister of Finance in his budget has adopted that as his own baby.
I want also to congratulate the minister on the fact that he is still trying to make the people of Canada believe that he is reducing taxation. He told the people last year that by some miraculous means that I have yet to ascertain he was reducing taxes to the extent of 125,000,000, and at the same time he was spending more money than he was the year before. How he bridged the gap I do not know; but having successfully made the majority of the people of this Dominion believe that he had done so, he promises to repeat the dose. In this budget he says that he is reducing the taxes of the people of Canada by 827,000,000, and still in his speech which is reported in Hansard he says that he is actually increasing expenditure by 16,000,000. There is thus a gap of $33,000,000 which he has to bridge in order to show the people where he is reducing taxation. So far as I can see he is increasing the taxation of this country by about $3.50 a head, if I know anything at all about mathematics. The majority however, of the people during the last election believed that the Minister of Finance was actually reducing taxation.
I want to extend further congratulations to the Liberal party. I desire to congratulate most heartily the members of the Liberal party from Quebec in that they have succeeded in imposing upon their Liberal friends from the western prairies the good old protective principle of the Conservative party, Because if there is one principle which is maintained in the present budget it is, as I said before, the protective policy of the tariff, and if there is one thing which the Liberals of Quebec are to be congratulated upon it is that no further reduction is to be made in the tariff during the present year. Therefore, as I said before, we are to have stability of the tariff for at least another year.
This afternoon the Minister of Trade and Commerce (Mr. Malcolm) made a few remarks regarding imports and export? of raw

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materials. Some mention was made of the fact that we were exporting a considerable amount of raw material. The Minister of Trade and Commerce said that we were exporting about $50,000,000 of gold. I do not know exactly what he means by the exportation of $50,000,000 of gold; I suppose what he had in mind was commercial gold, not gold in its raw state. I do not remember the figures as to exportations of gold during the last year, but I believe they were somewhere in that neighbourhood. I want, however, to draw his attention to his own report, the report of the Department of Trade and Commerce for the year ended March 31, 1926, in regard to the export of some of these raw products. "What I think is meant by raw gold is gold in the shape of ore which is shipped out of this country and the values smelted in a foreign country. That is exactly what is happening in my own province of British Columbia, where large quantities of quartz are being shipped out of the country for the values to be removed on the other side of the line and the money sent back to this country. That is what I understand by the exportation of raw gold.
In the last annual report of the Department of Trade and Commerce there is given on page 13 a list of the principal Canadian commodities exported. Baw gold was exported to the extent, in round figures, of $25,968,000, of which, $11,360 went to the United Kingdom and $25,956,734 to the United States. There is an example of the export of our raw materials to foreign countries, the question that was under discussion this afternoon, and no one can deny that the United States is a foreign country. Let me call attention also to some other significant figures in the report of the Minister of Trade and Commerce. On the very same page I find our export of nickel. The minister stated this afternoon that we exported $1,000,000 of nickel, but he pointed out that we imported $1,000,000 worth of aluminum, which he said about struck a balance. I find on page 13 of the minister's own report that instead of exporting $1,000,000 worth of nickel, last year we exported $12,829,000, of which $4,000,000 went to the United Kingdom and nearly $7,000,000 to the United States. We also exported copper ore and blister to the amount of $13,945,000. That is another case of our raw material going out of the country to be smelted on the other side of the line and there fabricated into articles of commerce which are shipped back and sold in this country. Of pig lead we exported $13,292,000. We exported raw asbestos to the amount of $9,000,000, and

aluminum in pigs to the amount of $6,000,000 odd. We exported zinc spelter to the amount of $4,862,000. These items, all of which are the raw mineral products of this country- and this is not the full list; I am giving only the more important items that enter into our exports-total just around' $100,000,000. We export that amount of our raw materials to be smelted and fabricated in a foreign country into the finished products which are then shipped back here. Now if there is one thing that the Conservative party has always emphasized on the floor of this House and throughout the country it is that we should find some way to stop so large an exportation of our raw products.
Coming as I do from a mineral province, I have been very much pleased to see so many references in the speeches that have been delivered in this debate to the mining industry and the importance of mineral development. Last year very little was said on this subject, but I hope it will be discussed more and more as the years go by. I was very much interested in the remarks of the hon. member for Fort William (Mr. Manion) a short time ago, and I heartily concur in his prediction that in the next few years the mining industry will be one of the most important in this country. I am not so sure but what it is very nearly in the first place now. I should like to emphasize that conditions generally in this country cannot be more rapidly improved than by the development of the mining industry throughout the whole country. I have seen it stated somewhere- I cannot give the authority at the moment- that during the last twenty years there have been more minerals used all over the world than in all previous time. That is a significant statement, and it will be appreciated particularly by those who live in a country so rich in mineral resources as Canada undoubtedly is. Here is another significant statement. Since the year 1800 the population of the world has doubled, and since 1800 the production of iron alone has increased onehundredfold; so you see how rapidly the production of these metals is gaining on the population of the world, and the same applies to coal and many other minerals.
I should just like to point out the influence that the development of the mining industry has on the development of any country, and I would like the Minister of Immigration (Mr. Forke) to pay attention to this. No mineral has had a greater influence in the development of different parts of the world than has the mineral that is known by the name of gold. No mineral has had more to do with the colonization of different coun-

tries in the world than gold has had. A gold strike is one of the greatest colonizers that there is or ever has been on the face of the earth. When word comes of a gold strike, what do you find? You find that every man with any ambition is anxious to get into that country. I need not enlarge upon that, because you all know it is true. The discovery of gold in the Yukon is within the experience of us all. With the rush of men into a country where gold is discovered there springs up a demand for all kinds of agricultural products; for these men must be fed and the next thing you find is that those who are not so much interested in mining as in agriculture immediately start to develop agriculture in that part of the country, and long after the gold has been depleted the agricultural wealth of that part of the country continues to grow and expand. I need only mention, for instance, the development that took place in Australia; it was a gold strike that started the colonization of that country. Then look at what happened in California. Before gold was discovered in California there were very few people there, but the moment gold was found people were attracted from all over the world. They got to California just as fast as they could, and later on many of them started in agricultural pursuits, probably when they were not successful in mining. However, that may be, the discovery of gold, important though it was to California, was not one-hundredth part so important as the development of agriculture. Anyone who has gone there and looked at the wealth coming every year from the orchards and fields of California must realize the amount of wealth which is being distributed from that source. The initial impetus given to the development of that particular state at least was the discovery of gold.
I need only tell you what happened in my own province of British Columbia. In 1858, when gold was first discovered in the Cariboo district, what happened? There were then a few traders and a few wandering bands of Indians in that province, and nothing more; nobody knew anything about it. But as soon as gold was discovered thousands of people from all over the world were at once attracted to that province. These people went into a section which was absolutely impossible so far as the pursuit of agriculture is concerned, because it is far above those parts of the province where you can grow any kind of agricultural product. I refer to the original Cariboo gold fields, which were at an elevation of four thousand feet and produced practically no agricultural products. But the very fact of a population of ten or fifteen thousand 32649-34J
The Budget-Mr. Fraser
going into that district brought about a demand for agricultural products, the result of which was that some of these men went down to the lower level where there were agricultural lands and started to develop them, and that development has continued to this time. So that from a population of two or three thousand in British Columbia when the development started we have at present 600,000 people, and their occupation is very largely agricultural.
I wish to draw the attention of hon. members from the eastern provinces to the present development in the northern parts of the provinces of Ontario and Quebec. Does anyone suppose for one moment that we would have had the development we have seen in the northern part of Ontario to-day had it not been for the discovery of precious metals in that district? Everyone knows the history of that development. Everyone knows that the object of the construction of the railway into that part of the country was to develop the agricultural lands of the district, and it was only by accident that the minerals were stumbled upon. But the impetus given to the development of agriculture in that northern country would never have reached its present stage had it not been for the minerals discovered there. The same thing applies to the northern part of Quebec and Manitoba, the development of which we have heard so much about to-night from the hon. member for Fort William (Mr. Manion). We from British Columbia feel jealous that there are so many of these things going on in the eastern provinces, because we know they are good things and we would like to see more of that kind of development in British Columbia.
Not only is the mineral industry of great importance to national development, but the same applies to almost every line of industry. For instance, we have on our hands what we are pleased to say is a great railway problem. That is one of the great problems the people of Canada have to solve, and nothing will solve it more quickly than a revival of or the giving of an impetus to the mineral industry, because taking all the railways together the mineral industry' is responsible for thirty-five per cent of the traffic accruing to them. I have seen a statement of the Canadian National Railways in which they attributed forty-seven per cent of their total revenue to the mineral industry. If that is so, surely it is important that every person in Canada should pay careful attention to the development of that industry; and it is particularly important that the government do so.
532	COMMONS
The Budget-Mr. Fraser
I call attention also to the fact that out of every dollar spent in the production or development of the mine fifty cents is paid out for labour. Another important fact in regard to the mining industry, which will cause the farmers to realize that it is the best friend they can have, is that out of every dollar spent in mining twenty-five cents goes directly for farm produce. That surely should attract the attention of our good friends from the prairies, because last year the production from the mines of this country was $243,000,-000-a record for all time, I am pleased to say, so far as the mining industry of Canada is concerned. If twenty-five cents out of every dollar goes to the farmer to provide supplies and sustenance, it. means that $60,000,000 out of $243,000,000 goes directly to the farmer.
I wish further to show what this production of $243,000,000 will do for the labouring man. An expenditure of $243,000,000 in the mines means that labour is paid about $120,000,000. That means that 60,000 men will be supplied with an annual income of- $2,000. We all . agree that population is what we require, and anything that will bring a number of people to our Shores and help us to carry our load of debts is in the interests of the country. The miner is a good customer of the farmer, and the farmer in British Columbia knows perfectly well that if the miner is in a prosperous condition he himself has a pretty good chance of being prosperous too. This applies not only to British Columbia but to the whole Dominion. It is impossible to find a better market for farm produce than a prosperous mining community, and when mining is in a flourishing condition in British Columbia our farmers there are not worrying about overseas markets.
Now, I repeat, what is good for the railway and the farmer and the labouring man of this country must be worth while studying from a national standpoint. As I have said, mining stands third among our primary producers. As my hon. friend said to-night, 85 per cent of the Dominion is mineralized. Last year our mines produced per capita $27 of new capital. In 1890 our mineral production per capita was $2.23. So you see we are getting along pretty well, but there is lots of room for further development. Let this government and our provincial governments work together to put our mines on a still better producing basis. To accomplish this we require the co-ordinated efforts of all our people and all our governments, and I advise this government, so newly elected, that the mining fraternity of the Dominion expect it to pay a little more



attention to the mining industry than has been paid during the last few years.
Now let me touch a different angle of the mineral industry. I refer to the bearing that it has on our imports and exports. Last year we had a favourable trade balance of $401,000,000. It may be asked, what relation has our mineral development to our national trade. I propose to give a few outstanding facts to show how the two are very closely related. I should explain that the Department of Trade and Commerce classify our imports and exports under nine different heads. In speaking of our mineral trade I shall take three of those nine, namely, iron and its products, non-metallic minerals, and non-ferrous minerals, because I consider that they all have a bearing on our mineral industry. The trade returns are for the year ending March 31, 1926. I find our mineral imports amounted to $367,923,725, or 39.5 per cent of our total imports. Our mineral exports amounted to $196,780,192, or 14.5 per cent of our total exports. We established that credit of $401,000,000 in order to help pay our interest charges and our other financial obligations abroad.
I think the Minister of Finance will be interested in hearing what part our minerals had in establishing that credit abroad. Had it not been for the adverse balance in regard to our minerals, we would have had $171,143,533 more of a favourable balance of trade. It is an important question for our people to consider how we can bring that unfavourable trade balance to a position very nearly favourable. It is also very important that our people should understand the relation of that particular mineral industry to the general trade of the country. Therefore I am going to give some further figures for the benefit of hon. members and the public. These figures deal with the first four months of the last fiscal year, and they indicate how this debit balance in our mineral products is accounted for. I have shown by reading a few items in the trade returns that we sent out $100,000,000 of minerals in the raw state. Now I propose to show in what shape we are bringing them back. Taking the first four months of 1924, we imported in the form of castings and forgings $1,447,444 worth; for the first four months of 1926 we had increased that amount to $1,831,522, or 26 per cent. It was bad enough before, but, you see, it is growing worse. In those respective periods our imports of rolling mills products have increased from $13,508,740 to $16,564,143, or 18 per cent. Then take tubes, pipes and fittings. Can anyone in

The Budget-Mr. Fraser
this House tell me why we cannot make those things in Canada? I am not an ironmonger and I do not know much about it, tout it seems to me that it should be possible for a good Canadian to manufacture tubes, pipes and fittings, and if a good Canadian cannot do it I can tell you where you may find people who can. You will find them on the Clyde in Scotland, and you can bring them here if you will show them where to get work. During the first four months of 1924 our imports of these materials amounted to $924,290, and during the first four months of last year they increased to $1,462,043, or 58 per cent. The next item is wire. Is there any reason in the world why we cannot make wire in this country? I would like some of our foundrymen to tell me that, because in the first four months of 1924 our imports of wire amounted to $878,561, and they rose in the first four months of 1926 to $1,204,666, an increase of 37 per cent. The next item is engines and boilers. In 1924 our imports amounted to $2,389,577, and in 1926 to $4,570,731, or an increase of 91 per cent. I want to say to the Minister of Finance that here is where some of his tinkering with the tariff last year came in, and on looking at these figures I am not surprised that he thinks it better to stop that tinkering for one year to see how it will work out.
The next important item is one which I wish my hon. friends from the west to notice. The imports of farm implements m the four months of 1924 amounted to $3,013,040, and in the same period last year they amounted $7,467,065, or an increase of 147 per cent. It seems to me that I heard something about a reduction in the tariff on farm implements last year. On the other hand our imports of machinery, except agricultural machinery, amounted to $9,029,850 in 1924 and $13,131,545 in 1926, an increase of 45 per cent. Then I think I heard something about a change in the tariff on automobiles.


An hon. MEMBER:: Yes.


John Anderson Fraser: Thank you. Here we have an item under "vehicles," and in 1924 our imports amounted to $10,486,668; in the first four months of 1926 they amounted to $24,641,565, or an increase of 135 per cent. That is what tinkering with the tariff did to the automobile industry, and that is what it is doing at present.


Mr. ODETTE:: Does the hon. gentleman
know that the motor car industry in Canada is busier and in a more prosperous condition to-day than at any time since its inception in this country?


Some hon. MEMBERS:: Hear, hear.


John Anderson Fraser: I hear a great thumping of desks, so I suppose that must be true; I dc not know. Iam giving you the position, however, and would not the industry be in a much better position if the automobiles represented by that figure of $24,000,000 were manufactured in Canada?


Edmond George Odette: I would refer my friend
to the secretary of the Canadian Manufacturers' Association for an answer to that question.


John Anderson Fraser: He is not here, so I cannot talk to him.


Mr. BROWN:: Has the hon. gentleman the amount of duty paid on the imports of automobiles, as compared with the other 3mars?


John Anderson Fraser: I have not.


John Livingstone Brown: I think it would be very
useful to have those figures; it might perhaps set the hon. member right on the question of rates of duty versus total revenue.


John Anderson Fraser: The hon. gentleman has not spoken in this debate; he can bring down that information.


Edmond George Odette: I would call the attention
of the hon. member to the fact-


Some hon. MEMBERS:: Order, order.


John Anderson Fraser: I am very glad to see that I have touched up a few of the high spots on the other side of the House. I have not very much more to add because I do not want to waste all the night.


Some hon. MEMBERS:: Oh, oh.


John Anderson Fraser: Thank you. I wish to
point out just a few items in this little blue book issued by the Minister of Trade and Commerce and entitled, "Monthly Report of the Trade of Canada; imports for consumption and exports, July 1926." There are some very interesting items here; on page 199 I find the following:
Articles not otherwise provided which enter into the cost of the manufacture of goods, chiefly agricultural implements, enumerated in tariff items 445, 446, 446b, 447b, 448 and 591, when imported by manufacturers of such goods for use in such manufacture, from April 11, 1924.
I think it well that the working men who have had to leave this country and go to the United States should understand why they have had to take that little trip in order to get a job. In the first four months of 1924 the importations under that item amounted to
The Budget-Mr. Fraser

$353,340, while the amount this year was $1,053,729, or an increase of 198 per cent. Here is another item:
Cream separator materials, which enter into the construction and form part of cream separators when imported by manufacturers of cream separators to be used in the manufacture thereof, and articles of metal for use in the manufacture of cream separator parts.
That item increased from $63,090 to $218,225, or an increase of 252 per cent. I submit, Mr. Speaker, that with that result before us it is not strange that a halt was called in the tinkering with this tariff, until it was seen how the last reductions would affect the body politic of this country.
We also have the other two divisions of mining one of which is non-ferrous metals and their products. These increased from $13,560,915 to $15,352,227, or an increase of 13 per cent, while the non-metallic minerals increased from $46,155,591 to $50,188,217, or an increase of 9 per cent. Notwithstanding the remarks of the Minister of Finance the other night in regard to how busy Canada was, requiring more raw products to keep her factories going, I find that both coal and petroleum remained about the same for the first four months of this year, which does not indicate that they are making any difference in the imports and exports of this country. And then a very strange thing. I do not understand the significance of it, I must admit, but I find that during the four months that I am speaking of, the importation of stone and its products advanced fifty per cent. Now I want to know why we have to import stone? Coming from a province like British Columbia, and having in mind the Rocky mountains andjthe rest of the available areas in this country, I am amazed to think we have to import stone at all; yet I find we are increasing our imports of that material by fifty per cent. And here is another marvelous thing: an increase in the import of sulphur and brimstone of sixty per cent. Sulphur and brimstone! What for? I am inclined to think these products were imported to raise a fog in order to enable the government to deceive the people in the last election and help them out of their difficulties.
Now I want to point out to these gentlemen the significance not only of the import and export of these minerals but of their destination, and the bearing that it has upon our international trade. In the four months ending July, 1925, we imported minerals to the extent of $119,338,844, and in 1926 we increased that importation to $148,725,002, an increase of $29,386,158 or, putting it on a per-
[Mr. Fraser. 1
centage basis, an increase of 24.8 per cent. That is what the imports of mineral products into Canada during the current fiscal year show, an increase of 24 per cent. Now let us see what the destinations of these minerals were, and how they are affected by this interchange. We find in the first place that from the United Kingdom we imported $13,524,976 in 1925, which was decreased to $11,545,493 in 1926, a total reduction in value of $1,979,483, or a decrease on a percentage basis of 14.56 per cent. Remember the total importations increased by 24.8 per cent, and the importations from the United Kingdom decreased 14.5 per cent. From the United States we imported $99,428,122 worth in 1925, and in 1926 we imported $128,283,965 worth, a total increase in value of $28,855,843 from the United States, or a total increase of 28.92 per cent from that country. Hon. gentlemen will note a 24 per cent increase* in total importations, a decrease of 14 per cent in the importations from the United Kingdom, and an increase in the importations from the United States of 28.92 per cent. I think I heard someone opposite this afternoon mention how they on that side stood for preferential trade. Did 1 not hear some statement of that character? 1 believe I did. In the four months in question of 1925 we imported from other countries $6,385,746, and this year our importations amounted to $8,895,544, an increase in value of $2,499,807 or 39.11 per cent. Those are tihe importations from all other countries. That is the kind of preferential tariff we are getting in our mineral industry from the present government-an increase of importations from all other countries except the United Kingdom.
Now I suppose a person making statements of that kind during this session, when we were supposed to have so much cooperation, should give some direction to the government, should indulge in some constructive criticism that would help them along in their endeavours to build up trade. Well, in looking around I saw where I could make some suggestions that might be of benefit, that might indicate in what direction the government could travel in order to build up the industries of this country. As to the production of copper, in order to get my information I had to go to the United States; I could not find any statistics, although I suppose they are extant, so far as Canada is concerned. You sometimes hear rather gloomy statements in regard to the production of copper -that the production will be greater than the demand; that the next thing you know the mines and smelters will be closed, and

The Budget-Mr. Fraser
the men employed there will be out of work. All this, it is predicted, would take place if the price gets down to a certain point. I want to indicate to the government what my opinion is in regard to the use of copper and its alloys, bronze, brass, and other materials. I am not going to distinguish between them, I am going to indicate some new uses which are already in effect and which are being more largely employed, in order to try to show the government that they need not be afraid of expanding the mineral industry, and especially the mineral manufacturing industry.
In 1921 the electrical industry in the United States consumed 450,000,000 pounds of copper and 765,000,000 pounds in 1925. The automobile industry consumed 70,000,000 pounds of copper in 1921 and 245,000,000 pounds in 1925. The radio industry consumed 3,000,000 pounds of copper in 1924 and
10,000,000 pounds in 1926. Iceless refrigeration was not heard of at all in 1924, but in 1926 it consumed 45,000,000 pounds ot copper. Now let us take building construction. In 1922, with a building program in the United States of five thousand million dollars, they consumed 64,000,000 pounds of copper. And note these figures: In 1926, with a building program of only five thousand five hundred million dollars, or an increase of five hundred millions which is only about five per cent, they increased the use of copper to 111,000,000 pounds, or an increase of 68 per cent in the four years.
Now let us take washing machines. In 1921 not fifty per cent of the washing machines manufactured in the country were constructed of copper. Last year 95 per cent of the washing machines manufactured in the United States were constructed of copper, and the industry consumed 15,000,000 pounds of that material. Then you have the expansion in the use of copper shingles, which are becoming very common in the construction of large buildings. Also you have lighting fixtures, the demand for which is going to grow from time to time, especially in a country like Canada where you are proposing to harness your water powers and produce electrical power in increased quantities. Then you have also the copper that is going into the construction of large public buildings, such as halls, parliament buildings, libraries and various other edifices. These items from 1921 to 1925 increased the consumption of copper by 600,000,000 pounds, or at the rate of 150,000,000 pounds peT annum, so that there is not much danger of a decline in the copper industry for the next few years. It is about time-and it would be a first class thing for
the government to do-to proceed to give to that part of the mineral industry such assistance as they possibly can. In submitting these statistics I want to impress upon the government the necessity of doing more for the mining industry in the future than they have done in the past.
There are two ways in which they can very easily do that. In the first place by tariff legislation they can very largely assist Canadian manufacturers to turn these goods from the raw state into the finished article, without the necessity of sending our raw material to foreign countries to have it fabricated into articles of commerce and then returned to this country at 5, 10, 15 or maybe 100 per cent increased cost to the individual. I say to the Minister of Immigration (Mr. Forke) that so far as I can see there is no better colonizing agent than the mining industry. An increase in the manufacture of our mineral products is the best basis on which to build up an immigration policy. Indeed I do not know that I would not favour a policy under which the minister would dismiss his immigration officials altogether and use the $3,000,000, which is the appropriation for his department, in helping the prospector and the mining industry in this country. If you were fortunate enough to make one good mining strike in any part of the Dominion it would attract more people to this country in the course of three or four months than all your immigration agents would do in the next ten years.
The second method is by a little more liberal appropriation. The government should be inclined to give a little better consideration to the Geological survey, especially with reference to British Columbia. The industry of agriculture absorbs 1.64 per cent of the national expenditure. These are figures submitted the other day by the Minister of Finance; I am not manufacturing any of my own. Dominion lands absorb 1.20 per cent; fisheries, .41 per cent; public works, .28 per cent and mines, .17 per cent of the national expenditure. That means that seventeen one-hundredths of one per cent of our national expenditure is devoted to the development of our mines. In other words, you are spending on immigration just four times as much as you are spending on your mines, and the amount spent is out of all proportion to the returns you are getting from your immigration policy.
I am not familiar with the activities of the Geological survey in the eastern provinces, but I know (that in British Columbia it is doing valuable work. I do not want anyone to get the idea that I am trying to knock the Geological survey branch, because I know
The Budget-Mr. Fraser

it too well; I know it has splendid officials and it is doing valuable work for the Dominion. But from my point of view, coming as I do from a mining province, the amount provided for the work to be done by the Geological survey is out of proportion to the needs of the country; it should be multiplied, at the very least, by five or even by ten. The hon. member for Fort William (Mr. Manion) was depicting to us to-night one part of the country which is a mineralized area, and he did not say a single word about the other great range which is equally as big as the pre-Cambrian range. I refer to the Cordilleras, a range which extends from Mexico to the Yukon and beyond, and which has been touched only in spots. There is plenty of opportunity for work to be done throughout all these sections. We have in British Columbia to-day in the city of Trail the largest smelter in the world, employing more than 3,000 men, with an immense pay-roll, making huge sums of money. That is only one instance. In all parts of British Columbia there are possibilities for repetitions of that sort of thing, but in order to find those prospects we must have a systematic and intelligent survey of geological conditions throughout the province.
I think British Columbia has a little stronger claim for consideration in regard to the expenditure of these funds than any other province, because when it came into confederation one of the conditions of union was that the Dominion of Canada should carry on our geological survey. I recommend to the careful consideration of the Minister of Mines and the cabinet the advisability of appropriating a little more money to the Geological survey. I know the minister will get results, because I know the men in the department. They are capable men and they could easily make profitable use of an additional appropriation in that service.
If I were Minister of Mines I would be ashamed of the conditions under which men are expected to work in this city of Ottawa. The first thing the minister should do is to provide a substantial appropriation for a suitable building for the important work which these men are carrying on. The present buildings in the southeastern part of the city are the most ramshackle, untidy looking structures that I have ever seen in my life. I have been looking a little into the conditions of the mining department here, and I find that the different branches are scattered all over the city. There is no appearance of consolidation at all. It seems to me that about one-quarter of the efforts of the minister's department are dissipated in going from

one part of the department to another. He Should be able to secure useful information and recommendations from his officials as to a proper building with suitable headquarters in this city. If he cannot spend any money in British Columbia, perhaps he could spend some here.
I want to bring to the attention of the different ministers some of the very modest requirements of my constituency. Let me tell the Minister of Public Works (Mr. Elliott) that British Columbia has an area of something like 400,000 square miles, and that the district of Cariboo comprises about one-half or very nearly one-half of that area. Hon. members can imagine what kind of territory it is. There are people scattered all over that vast district. In the first place I am requested to ask for an extension of the telephone system, and I do not think that is an unreasonable request. How are you going to get pioneers into those places if you do not give them some of the comforts of modern civilization? They will not do it without them. I want to tell the present Minister of Public Works that I shall not be satisfied with what I got from the last Minister of Public Works. I put in a request last year for an expenditure of $26,000 for telephone service, and that included the Peace river country. I think it was a very modest sum to ask for, but I am not half as modest as the minister. How much do you suppose I got?


Ernest Lapointe: Twelve thousand dollars?


John Anderson Fraser: Three hundred dollars. Do you think that a square deal? I appeal to the Minister of Finance, who squeezes the last dollar as long as he can squeeze it. I got only 1.15 per cent of what I asked for, and the amount I requested had all been passed upon by the officials of the department as a reasonable one. On account of the treatment I got last year from this Liberal government I thought I had better make it plain on the floor of the House that I was really after something.
There is another matter. Accommodation has to be provided for the public in the shape of post offices. I have been looking over the reports of the Postmaster General for the past couple of years to see what has been expended on post office buildings in the different parts of the province, and I want to tell him that I have received requests from two different parts of my district for new post offices, one from Prince George, and the other from Salmon Arm. I am sure that if the minister were living in either place he would be in

Peace River Railway
full agreement with the people who are asking for these new post offices, because he looks rather reasonable, and I want him to grant this request.


Peter John Veniot: Might I interrupt my hon.
friend to say that that comes under the Minister of Public Works? I might help you out by recommending it.


John Anderson Fraser: I am aware of the fact that the recommendation must come from the Postmaster General and his officials, and I appeal to him to make a recommendation in these two cases.
There is another expenditure that is badly needed in my district, and that is for the construction of roads. In that immense district the only means of communication for a lot of the settlers is the roads. In 191S the Conservative government initiated a policy of assisting the provinces in the building of good roads. British Columbia has exhausted her portion of that grant, but there are thousands of miles of roads yet to be built in British Columbia, particularly in the district of Cariboo. That policy of the Conservative government was a very popular one in British Columbia, because it takes a lot of money to build the kind of road that is required, and we need assistance. I can assure the different ministers that if they provide a certain sum for this purpose I am sure they will be amply repaid for any expenditure they may make if they will only take a trip out to British Columbia and see the magnificent scenery we have out there. I have received all kinds of requests from my district, but I am a very modest man and I do not ask for anything that a reasonable man would not readily grant. I submit with all respect that the requests which I have put forward to-cight are very reasonable and proper ones for me to make, and particularly with respect to the expenditure on telephones. Let the Minister of Public Works not forget that he granted only 1.15 per cent of what I asked for last year. I want him to do much better this year.
On motion of Mr. Young (Weyburn) the debate was adjourned.
On motion of Mr. Lapointe the House adjourned at 10.48 p.m.
Tuesday, February 22, 1927