1928-02-28

CRIMINAL CODE AMENDMENT


[Stage Direction]
Mr. G. R. GEARY (SQuth Toronto) moved the first reading of Bill No. 37 (from the Senate), to amend certain provisions in the criminal code respecting the possession of weapons.
Motion agreed to and 'bill read the first time.

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved that the -name of Hon. Mr. Ralston be substituted for that of Mr. Sylvester on the committee on agriculture and colonization.
Motion agreed to.


[Stage Direction]
On the orders of the day:
' Hon. R. B. BENNETT:	I direct the attention of the Minister of Finance to the fact that so far as I have been able to ascertain the evidence in the fruit and vegetable tariff inquiry has not been filed with the evidence in the other cases. Perhaps the minister will be good enough to look into the matter and see if it can be procured.
Hon. J. A. ROBB (Minister of Finance):: I shall be very glad to do so.



MONEY POINT, N.S., LIGHTHOUSE

[Stage Direction]
On the orders of the day:
Hon. J. C. ELLIOTT (Minister of Public Works):: I desire to state, in answer to a
question asked by the hon. member for Cape Breton-North Victoria (Mr. Johnstone) yesterday, that it is not the intention of the Department of Public Works to discontinue the telephone service between Bay St. Lawrence and the lighthouse and fog alarm at Money Point at the present time.



TOBACCO GROWING INDUSTRY

[Stage Direction]
On the orders of the day:
Mr. E. J. GOTT (South Essex):: I should like to put a question to the Minister of Agriculture. Seeing that he is not in his seat I will put the question on record, and if the minister cares to release the information it will be possible to get it from him to-morrow. The question is as follows:
1.	Upon whose recommendation was the commission appointed to investigate the tobacco growing industry in western Ontario?
2.	What qualifications were required?
3.	What will be the duties of the commissioners?
4.	What is the general attitude of the department towards the industry, and can a slight outline of the proposals contemplated be given?


Mr. SPEAKER:: The hon. gentleman has
stated that he wishes to put his question in the form of a notice. This will be taken as a notice.



THE BUDGET


[Stage Direction]
The house resumed, from Monday, February 27, consideration of 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, the proposed amendment thereto of Mr. Cahan and the amendment to the amendment of Mr. Fansher (East Lambton).
Miss AGNES MACPHAIL (Southeast Grey):: We come again to a consideration of the budget brought down by the Minister of Finance (Mr. Robb). In the opinion of the members of the Liberal party that budget is a good one, and I am sure they will support it. The Liberal-Progressive members, I am sure, do not think it is a good budget but they will support it. The Liberals from Saskatchewan, coming as they do from that part of this enlightened Dominion, cannot like the budget, and yet I am expecting to hear them say it is a good budget. The Conservatives think this is a good budget, but the**

The Budget-Miss Macphail
must declare it not to be so and having said that they will not be able to vote for it. I think it a rich man's budget and I am in the splendid position of saying that I do not like it and of voting in accordance with my views. So also are those hon. members who sit around me.
The hon. member for South Huron (Mr. McMillan) extended an invitation to me to join up with hon. members opposite and so find entrance to the promised land. I should like him to amplify his invitation. I should like to know if the promised land is entered through proper approach to one of the three bachelor leaders, or through the Liberal party, or both. I agree with what he stated as to the conditions which confront the farmers of Ontario to-day. I think he described the actual conditions as they will be found by anybody who takes the trouble to go out and investigate them. With the rest of the hon. gentleman's remarks I do not agree.
Agriculture is still the main business of the Canadian people. The nation's prosperity depends on a bumper crop. It has been well said that the agricultural returns are the barometer of national prosperity. The following words were used by Aristotle:
The first attention should be paid to that which is in accordance with nature; for by nature agriculture is first; next come all those things which are derived from the earth, such as mining and other arts of like kind.
Or as has been often said, "The well-being of the people is like a tree." Agriculture and other primary industries are its roots, manufacturing and commerce its branches and its life; if the root is injured, the leaves fall, the branches break away and the tree dies.
The roots of the tree of Canada's national life have been injured. We have, for a young and rich country, a depleted and impoverished agricultural industry. In this young country agriculture has not held its own people, nor its power of place and influence. I regret it, but it is true. I do not think anyone in this house will care to deny that our educational, religious, business and political policies have been framed, not with rural needs in mind, but rather, whether consciously or unconsciously, directly antagonistic to those needs. The result is clear to anybody who cares to look around, namely, that our people are leaving the land in numbers that would worry any government, even this one. It does not seem to go further than worry with them, but still it worries them. This great mass of people is disappearing from the open spaces into crowded places which we call cities in either Canada or the United States. To my mind one

of the saddest things is that the individual is lost in the great mass of human beings, and so this constant robbing of the open places does not enrich the cities to the extent that it robs the country. The individual i3 lost; people who have been a power in a local community will after they have spent five years in a city, show by their personality the great loss they have suffered. It is quite true that many people who leave the land and come to the cities give leadership to city enterprises and gain for themselves a place of power and possibly of wealth; but again the country is robbed of very much needed leadership and the places in the country that have been vacated are being taken by citizens of other lands. As a matter of fact we are striving to bring people in from other places to fill up the places vacated by our own people.
Country life develops thoughtful, wholesome and genuine people, to a greater extent than any other life, and I think it is true that in the last analysis the conscience of the nation lies in the country. I think we can all bear testimony, if we care to, to the fact that in cities and towns the conventions of life veneer even the ways of our friends and it is in the country that we find the beauty of simplicity and sometimes the bluntness of unaffected candour. Country living makes for character and because of the need of character in all national undertakings, and because of the importance of agriculture in our national life, we see how disastrous the results must be if people continue to leave the land. Aside from the economic consequences, it heralds the approach of the time when the country will no longer furnish that leadership in business and public life which has been so influential in shaping the course of events.
The rural problem is a many-sided problem and I am not one of those who think that governments are so important that they altogether make the problem or, to any great extent, solve it. I know there are many other forces which operate. It would take too long -and I never wanted to speak for forty minutes until I could not speak any longer- to go into all the phases of this question, but I should like to mention one thing that I think has done much to aggravate our rural problem and that is our educational system. It is true that the whole educational trend is towards the city. Our educational system in Canada has acted simply as a "gangway" to life in urban centres. If I had time I should like to quote some leading educational authorities, corroborative of this view, but I think I can ask hon. members to look around their own counties; if

The Budget-Miss Macphail
they do they will find it is true that more and more people are going to high school and that life in school and high school is utterly divorced from the life of people who live in the neighbourhood of the school and support them. The result is that too many people are rushed into city enterprises; we have an abundance of people hunting for white collar jobs and too few people who are willing to do the very much nobler and better work of nation-building in the open spaces. I am glad that I have not had too much of that kind of education to prevent me thinking for myself, but we have an educational system that actually stuffs children with facts and creates in them a reverence for things as they are, and this is a great disaster to our children, because it hinders them in creating institutions to meet changed conditions. It is true that the best teachers go to the cities to teach, because they are better paid there. This is also true of preachers, I am sorry to say. The better preachers go to the cities because the salaries are greater. Anything, it seems, does for the country.
One other thing that has a great deal to do with the rural problem is this. Individuals and groups of individuals donate large sums of money to educational and religious insti-titions which grants have a moderating influence on the attitude of these and similar institutions towards economic reform that would bring about a better condition for the masses of the people. Until lately the fact that the farmer produced goods but did not market them added greatly to the rural problem. He was not a business man. Now the farmer is becoming a business man, and as a keen business man he is not going to put up with the slipshod methods that obtain particularly in this house and in some other places in Canada. I thought it would be worth while putting on Hansard this sentence of Professor Macklin, of Wisconsin university:
The industry that neglects to assume the responsibility of marketing its own products arrives last in the race for the containers' dollar-like the runt pig.
The farmer is ceasing to be the runt pig and he is learning to market his own products. He is not going to be last in the race for the consumer's dollar, and he is going to demand educational systems that will meet his needs. I should like to know why some fellow, with a fossilized brain sitting in some office in some government service, should direct the kind of education which the children of farmers are to have, and I hope the day may speedily come when that will not be the case.
It would take much longer time than I have at my disposal to review the sufferings
of the farmer in the political field. The farmers, because there are more of them and because they carry on the primary industry of the country, have suffered more than any other class from political policies framed by governments antagonistic to the farmer's economic needs. The full discussion of this question would take me into the realm of finance, transportation, and many other places into which I have not time to go, but I want to review, for the edification of this house and particularly of the Liberal party, a history of the political life of Canada as it is related to the farmers just before and since 1896.
Prior to 1896 the farmers in Canada, to a very great extent, felt that the Liberal party, did voice their aspirations and needs. That is, the Liberal party was the vehicle used by the farmers for the expression of their political needs. For the seventeen years prior to 1896 many able men, particularly Sir Richard Cartwright and Sir Wilfrid Laurier, impressed upon the people of Canada this fact. The farmers believed that the Liberal party was opposed to special privileges, and particularly special privilege as it is embodied in the national policy. Sir Richard Cartwright made some very able speeches, opposing the protective tariff. On one occasion he said:
The moment you introduce the protective system you create a class whose interests are essentially different from those of the people at large, and who become ready contributors to corruption funds sharing with their masters the plunder they have been enabled to take from the people.


Mr. COOTE:: It is too bad Cartwright is dead.


Agnes Campbell Macphail: Yes, it is too bad he is dead but in any case he was ruined before he died. Let me quote from him again:
My objection to this scheme goes deep. I object to it not merely on the ground of the increase of taxes that it involves, or of its complicated details, but on much higher ground than that. I deny entirely the justice of the principle that it is the duty of the government to enable certain sections of the community to tax the rest of the people for their private gain.
I think he puts the principle very clearly. I want to quote an extract from a speech by Sir Wilfrid Laurier given on page 380 of Edward Porritt's Sixty Years of Protection in Canada. This is a famous quotation which we have often heard. Sir Wilfrid Laurier, speaking at Winnipeg as reported in the Free Press, said:
We stand for freedom. I denounce the policy of protection as bondage-yea, bondage; and I refer to bondage in the same manner in which American slavery was bondage. Not in the same degree, perhaps, but in the same manner.

The Budget-Miss Macphail
That was before 1896. Lovely speeches those! They went to the country, and the people, tired of special privilege in high places, sent back the Liberals with a majority. In 1897 the Liberals brought down their first budget, and I suppose that the low tariff people of Canada never looked forward with as great hope to any other budget. In speaking of the time following the bringing down of the budget and subsequently, Mr. Porritt has this to say at page 362:
The policy of the Laurier government with regard to protection has been characterised as a betrayal of Canadian Liberalism. Betrayal is a strong word. But an examination of the fiscal and bounty legislation at Ottawa since 1897 abundantly justifies its use.
And again, at page 366:
When I come to examine the bounty policy of the Laurier government, the amendments to the Railway Subsidy Act and the patent laws, the legislation against dumping, the new regulations intended to reduce the circulation of American trade advertising, the tariff war with Germany, and the readiness with which the tariff question was reopened at the bidding of the Canadian Manufacturers' Association, and the many new concessions that were made to the protected interests in the revision of 1906-07, it will become apparent, I am convinced, that the Liberal government has not only adopted the national policy of the Conservatives, but has greatly strengthened and extended it, and has fastened it more securely on the people of Canada.
Again, at page 385, he says:
It is one of the ironies of Canadian history that responsibility for the full recognition of this new privileged order and for nearly a score of enactments continuing, extending and guaranteeing its existence, should lie with the Liberal party.
Speaking of the farmers having no further representation through the Liberal party, he says at page 456:
Since 1897 the privileged order of manufacturers has held captive both political parties, and the farmers have had no representation in parliament on this question.
One is moved to ask, were there no Liberals who really believed in Liberal principles? Did nobody protest against the betrayal of 1897? Porritt, at page 5 of The Revolt in Canada, says:
While at first there were liberals in the House of Commons who bitterly resented the betrayal of 1897, these men were appeased in the usual Ottawa fashion-by appointment to office or the promise of an appointment, or they dropped out in 1900, in disgust at the cynical abandonment in 1897 of all that Liberalism had stood for in Canada from the days of William Lyon Mackenzie

Not King.
Following rather sketchily the history subsequent to 1897, we find the Liberals still claiming, indeed they do yet, but they did

it with a little more vigour in the years immediately follpwing 1897, to be low tariff. It is quite true that they had the honesty to see that they could not have educational reform clubs or young men's Liberal clubs after such a betrayal, and very comfortably for themselves they dropped them. Sir Wilfrid Laurier did tour the west in 1910, and there he met organized agriculture, and if anybody likes to read the story of it he will find it in the Revolt of Canada. It is very interesting to note that John Evans was one of the men who appeared before Sir Wilfrid Laurier; that is the faon. member for Rose-town in this house, and his speeches then read very much like the last one he made in this house. Others who appeared before Sir Wilfrid Laurier were Roderick McKenzie, father of Donald McKenzie now on the tariff board, J. W. Scallion and J. W. Speakman, father of the hon. member for Red Deer (Mr. Speakman); so some of our men have run true to form.
In 1911 the Laurier government was defeated, and from that time on they never did to any great extent regain the confidence of the low tariff farmers in Canada. Some indeed were such good Liberals that they remained Liberals rather than farmers, but for the most part the confidence of the farmers in the low tariff principles of Liberalism was broken never to be mended again. This sank very deeply into the minds of the farmers, and was really one of the causes of revolt which brought in the sixty-five Independents who came into this house in 1921. The farming people in the constituencies had voted for honest party men, of their own dass, men who spoke well in the constituencies, saying they would come to Ottawa and be true to the agricultural industry. But when these men came to Ottawa they were true to their party, and not to their industry; they were farmers, but they were Conservatives or Liberals first, last and all the time, except at election time, and so the farming people decided they would have to find a new method of representation. They had up until that time sent such men here as the hon. member for South Huron (Mr. McMillan), a man who understands the rural problem, who knows what the farmers need, who knows now that this budget is no good to his constituency, but who because of affiliation with the Liberal party will vote for it, and go back to his constituency and justify it.
Mr. MoMILLAN:	I do not know that it
is not a benefit to my constituency.

The Budget-Miss Maephail


Agnes Campbell Macphail: Then the hon. gentleman is not as intelligent as I thought he was. As I was going on to say, agriculture 6aid: This kind of thing is no good; we are going to organize ourselves as an industry. They said to themselves: Our politics is our business, and we have been foolish in letting other people look after our business; we will never do well that way; we will send people to Ottawa; we will choose them, finance and elect them; we will control them. These ideas were not as clearly defined in their minds perhaps as I have now stated them, but they were more or less clearly in the minds of the people who voted to send the sixty-five independents to the house in 1921. The idea was that these members would vote on issues as they found them in the house, that they would be attached neither to the Liberal nor the Conservative party, nor indeed be antagonistic to either, but be here to look after the interests of agriculture and be an agricultural group in the house. I want to review the comparative failure of the working out of that splendid idea.
In 1921, the sixty-five came to this house- and we must, in recalling what has happened since then, remember that the sixty-five were for the most part men who up until then had been either very ardent Conservatives or ardent Liberals. They were party people with a party bias-a very difficult mind to work independently with. We had not been here long till it became evident to everybody in our group, and I should think to everybody else, that there was dissension among us. I should say that three of the sixty-five were Labour members, and there was no dissension among them, nor between them and us. But from within our own group we lost two to the Liberal party. The dissension among the remaining members, arose on principle, not on legislation. On the legislation we wanted, we all agreed; but on method and in outlook we were two different groups, two schools of political thought, trying to function as one, and it could not possibly go on. The larger number believed in party politics. While they condemned parties, they sought to perpetuate a new party. We, a small group, did not believe in party politics. We believed in an altogether new psychology, which I shall try to make plain to you in a moment. If you think of the personnel of the sixty-five in 1921 and the personnel that are here to-day, you will see quite clearly that those who represent the new school of thought, have been returned while those who perpetuated parties while denouncing them with words were driven by the logic of events either into'private life
or into the Liberal party. Others again, as suits them better, are being driven a step at a time, which the government no doubt considers a step in the right direction. If I took my whole forty minutes I could not tell you what we suffered in 1921 and on down to 1925. The government secured two of our men, and thus gave themselves a party majority, and having done so the issues did not have to be debated on their merits. The legislative programs which the government brought down between 1921 and 1925 do not take long to enumerate. We got almost nothing out of them-the Crowsnest pass rates legislation excepted, we got nothing at all. We went to the country in 1925 because the Liberals had not lived up to their promises, because our farm group had not clearly understood what they were, because we lacked aggressive action and leadership. We were both very much discredited in the country, and only those of the new school and those who sit with our hon. friends opposite came back.
At that time it will be recalled that the government found themselves in a position where they had to do the will of the House of Commons-the will of the people of Canada. No doubt most uncomfortable for the government, but excellent for the people. In 1926 we got a legislative program from the government which was not their program, but the program that had been introduced into this house by the independent group by resolution during the four sessions between 1921 and 1925. Anyone who cares to go over the legislation of that time will find that I am telling the truth. We got a reduction in the tariff-the only real reduction the Liberal party has ever been guilty of; we got rural credits; we got old age pensions-not as good as it might have been, but certainly something worth while; we got the Hudson Bay railway. In fact we got very many things, and this legislative program captured the imagination of the people, with the result that the electorate sent back the Liberal government as you see it to-day. And they sent back the independent, group that sits in this quarter of the house.


Mr. SPENCER:: In increased numbers.


Agnes Campbell Macphail: Yes. The Liberal party benefited very much from having brought down for the consideration of the house legislation which met the approval of the countiy. That is what accounts for the Liberal majority in the house to-day. I do not need to tell them; I do not think they can deny this.
Before I proceed further let me say something about our idea. We are here not to

The Budget-Miss Macphail
work as a party. In that awful session of 1926 we were accused every day of being Grits or Tories although as a matter of fact we were neither. We are not interested either in Liberals or Conservatives, except, personally; as a party we are interested in neither. We want such amendments in the rules and usages of the house as will enable new groups to function; that is, we want to come closer to having representative government than we have had it before. WTe believe that questions should be debated on their merits, that private members should be free to vote on legislation on its merits; and more than that, that private members should be able to introduce legislation and that this house should be free^ to vote on the merits of such legislation. As it is now, legislation is all cornered by the government, and only the legislation which the government approves of stands any chance of getting through this house.
A very considerable number of people in the country believe what we believe. They believe that our present system [DOT] of government is outworn, that it possibly served its day, but that day is over, and they want such amendments in the rules and usages of parliament as will cause it more closely to resemble a representative institution. For instance, take the budget which the Minister of Finance has brought down. Whose budget is it? Is it the budget of the House of Commons?


Some hon. MEMBERS:: No.


Agnes Campbell Macphail: Who planned the budget? Did the Minister of Finance take the members of the Liberal party into consultation, did he have their cooperative help, did he get the help of the Progressive-Liberals, or the Liberal-Progressives-I always forget their correct title-did he? No, he did not,
I am sure of that. He brings the budget down, but it is not representative of the opinion of the House of Commons nor of the Liberal party. If the Minister of Finance is to bring down budgets in this way, well, the rest of us had better go home or go down to Keith's theatre. It looks to me as if the time must come when the government will have to be representative of the people In a word, it is a Robb budget.
The time will come when the cabinet will be a committee of the House of Commons. The cabinet will be chosen from the house and be responsible to it. I look to that day with hope. I do not look for it soon, but I do think it is coming. Once more I want to quote from a leading Canadian to show that others than the few of us who sit in this corner of the chamber believe, that the 
two old parties as at present constituted are simply the cover under which class interests operate in this country. Sir Andrew Macphail in his Essays in Politics, published in 1909, said:
We are living under the government of an interested class, who find a party in power and keep it there until it becomes too corrupt to be kept any longer; when it seizes upon the other party and proceeds to corrupt it.
Sir Andrew Macphail is not a man who makes rash statements. That statement should sicken any good Canadian, and yet I believe it is absolutely true. Of course, I think they pick the finest looking men for the cabinet; the privileged classes like to dress their windows to the best advantage. But, after all, the forces which operate through any cabinet are exactly the same. They are not the forces which look to the interests of the people of Canada; they are the forces which look to the interests of certain well-organized and wealthy classes in this country.
Now I come for a moment or two to the budget. At last we have a "stable" government, the government that the Prime Minister wanted. He made very entreating, very convincing speeches to the country that he must have a majority in the house before he could bring down legislation that was good for all the people, that he must not be hampered by having to submit proposed legislation to the house and be humiliated possibly by having it turned down. So he came back from the last election with a majority. He was joined by our Liberal-Progressive friends, lead by the Minister of Immigration (Mr. Forke) who thought-and possibly still thinks-that the Prime Minister needed greater numbers to bring good government to Canada. I want here to say that my heart aches for the Minister of Immigration. He is an honest, but a deluded man. So the Prime Minister comes back to the house with a majority, and now we are going to get legislation that is in the interests of all the people. We are going to get this thing that he has been desiring to give us since 1921. Last year, his first session, one could say that he had hardly begun, and the budget then brought down was not much; but we can overlook that. Now we come to the second year of his administration, and we get another budget. Well, if this budget is in the interests of the common people, then I certainly am not capable of representing their interests. We had the income tax reduced 10 per cent last session, and now there is another 10 per cent reduction, and we had the spectacle yesterday of the hon. member for North Battleford (Mr. McIntosh) getting up and entreating the rich men

The Budget-Miss Macphail
of the Dominion to make anonymous donations to wipe out the national debt. I do not understand why there should be all this modest anonymity. Since we have started to quote Scripture in this chamber, let me cite the following words which I think describe the effect of the budget very accurately: "For he that hath, to him shall be given; and he that hath not, from him shall be taken even that which he hath." The budget plays with the tariff just as a boy plays with marbles to see how many he can catch when he throws them in the air. There is no real reduction in the tariff. No one knows that better than the Minister of Finance. If there is any reduction at all it is on things bought by people who could very well afford to pay higher prices. On the lower grade of cottons there is no reduction. Surely the Minister of Finance does know that the stretching of the percentage of labour and material that is to go into goods which enter under the British preference from 25 per cent to 50 per cent undermines the British preference. He does not think it was patriotic, does he? He does not believe it was in the interests of the common people, does he? I think not. I think the economic classes that control governments whisper very convincingly in the ear of the Minister of Finance, and he kept himself clear from the enlightenment that might have come to him from his western men. By listening to his own supporters and his stepchildren he might have heard the truth regarding this matter. But he shut himself securely away and so hearkened unto those highly organized >
and exceedingly wealthy groups who whispered to him what would look like a reduction in the tariff but would not hurt them in the least. I hope that my Conservative friends will not be further exercised about the manufacturers: I have no doubt they will pull through this year.
The history of the whole attitude of the Liberal party to the new groups since 1921 has been one of protestations of friendship which, if accepted, have proven to the honest the graveyard of their hopes and to the others a fulfillment of their treacherous plans. Speaking for myself, I would rather have the bitter, uncompromising, unfriendly and snobbish attitude of the Conservative party. At least it was honest and we knew where we stood. I often wonder why these Conservatives think they are so much better than other people.


Mr. BELL (Hamilton):: They look at the Liberals.


Agnes Campbell Macphail: I never could understand it. Certainly, however, if they are ever to get into power they need to lose that characteristic as rapidly as they can.


Mr. CHAPLIN:: You said that at least they were honest.


Agnes Campbell Macphail: They were honest in their bitterness towards us. Now, a very great deal of criticism is directed to myself and others any time we try to point out that economic groups do function under parties, and that the only thing for us to do is to come out as an economic unit and find a place in this house, striving to have the rules and usages amended in order that our people may be given real representation. The hon. member for Winnipeg North Centre (Mr. Woods-worth) the other day quoted in the house an article from the Atlantic Monthly which was reproduced in MacLean's Magazine of August 15, 1927. In that article, under the title "Money dominant in politics," the following sentences appear:
These interest-groups, as we may call them, work for the most part within fhe ranks of the party organization. Indeed,-
This is an enlightening sentence.
-the chief function of the party organization is to furnish a cover or screen for the political activities of groups which desire to keep their true objectives invisible.
This is perfectly true, and we say therefore that the only thing for us to do is to come out as an economic group-a class group, if you like, for I am not afraid of the word-and seek representation in the House of Commons -a genuine representation of the needs of our industry. Politics is a business, and agriculture being the basic industry in Canada, the most important single industry in the country, has a perfect right to find for itself honest and above-board representation in this house. I should not like to say that only functional or occupational groups should come to this house, but I do think that the two parties are simply that. I would not say that others should not come, but I do say that we live in an age of functional organization: * and since political life is only a reflection of economic life it is only reasonable that these new class, or economic, or occupational groups in the country should seek reflection in the House of Commons and should not find it necessary-certainly I do not-to apologise for their place here.
When we have electoral reform, when the Canadian people grasp the idea more clearly, particularly when they know that the old parties are simply systems under which class groups operate we shall see an increase in
The Budget-Miss Macphail

groups. The day will come when the members of our group, the members of the Labour group will increase, and when other groups not now named will appear and find representation in this chamber. When that happens the new groups will be too strong for either of the old parties to command a majority and carry on the government of the country in the old way. Modifications will have to be made and a new method found. It does seem to me exceedingly reasonable that the House of Commons and not the Prime Minister should decide when there should be a dissolution. Why should power be put into the hands of one man to determine when there shall be a dissolution of parliament and when the people of the country shall be called upon to bear the expenses of a general election? I know that some people have the idea that those of us who say these things are cranks. We are not. 1 am not saying, of course, that I am not, but I certainly say emphatically that the Canad'an people are thinking new thoughts and that to them it does not seem at all reasonable that things should be as they are. Our institutions, whether educational or political, will change to meet the needs of changing times. That is only natural. I see no reason why we should not have a change in the form of our governmental institution to meet the changing views of the people, and in conclusion I would quote a great authority on this subject. Follett speaking of politics and of the old idea giving way to the new sentiment of co-operation, says:
What we must get away from is "the hell of rigid things." This is a living life of the people and it must flow directly through our government and our institutions. We are not fossils-
Sometimes one would question that.
-petrified in our social strata. We are alive. All is growing; we must realize this and free the way for growth.
It seems to me that the groups in the house are nothing but an indication of growth in the country. I should hate to bear upon my shoulders the responsibility which rests to-day upon the shoulders of the Liberal-Progressive group in this house. They have done much to discourage progressive thought in Canada: they have, to my mind, a great deal to answer [DOT] for. Indeed, I should not care to be the Liberal party: I should not care to bear the responsibility-I am not sure whether it is parliamentary-of false friendship such as they have shown towards the new groups in this house, from 1921 to this day. But speaking personally, I say it is better for them to realize that we are not people who will one day be Liberals: we have no such ambition. We represent agriculture. We are not Conservatives; we are agricultural representatives, and (Miss Macphail.]
the sooner this house knows that, the sooner they quit wondering whether we are Tories or Liberals, the better it will be for everyone concerned.


Hon. JAMES MALCOLM (Minister of Trade and Commerce):: In spite of the remarks of my hon. friend from Southeast Grey (Miss Macphail), in which she expresses an unfavourable opinion of this year's budget, I am glad to be able to compliment my colleague, the Minister of Finance (Mr. Robb) on the statement of Canada's business which he has presented for this year. It is but a reflection of favourable editorial comment which has appeared in the Canadian press from the Atlantic to the Pacific, and I believe, in spite of everything that has been said by hon. gentlemen opposite, that every man in this house realizes that we in Canada have readjusted our finances and re-established our national credit in a manner more satisfactory and more complimentary to us, since the war, than has any other nation in the world. What percentage of this credit is due to the self-reliance and industry of our people, what percentage to the acts of a benign Providence and what to the actions of the government seems, however, to be a matter for debate. But I think that anyone who has read the statements of leaders of finance and industry, or who has studied the Canadian figures of production, both agricultural and industrial, will admit that we in Canada since the war have as a people done some very remarkable things.
Some hon. gentlemen, speaking on the budget, appear to be unable to comprehend the national sentiment that prevails in this country. Probably they are too close to the accomplishments of the last five years; they are like the men who cannot see the woods for the trees. Let me place on record a comment made by a disinterested observer, a man with a great deal of knowledge of the affairs of the world. Mr. Marcosson, writing in the Saturday Evening Post, used the following words:	*
Equally provocative of comment is the existing Canadian prosperity; the tides of Dominion internal and external trade were never quite so high or the national bank roll of Canada so securely entrenched. All the costly economic hangover of war is completely out of the Canadian system; the country faces an era of unprecedented development.
That comment coming from such a disinterested observer is worthy of a great deal of consideration in this Dominion.
It is a remarkable fact, Mr. Speaker, that each successive budget since 1922 has been met by hon. gentlemen opposite with the statement

The Budget-Mr. Malcolm
that the industrial life of Canada is facing ruin and that the budget under discussion will complete that ruin. Unemployment has always been cited in this house as an evidence of the lack of appreciation of industry by the government-this government always has been accused by hon. gentlemen opposite of being unwilling to consider the unemployment of labour in Canada. To me it is very difficult to explain, except for one particular reason. Our estimated population in 1914 was about 7,693,000; fourteen years later, in 1928, our estimated population is about 9,519,000, or an increase of practically 2,000,000 in the population of this country during a period of fourteen years. Yet we are told that Canada is not growing.
That population has been absorbed, Mr. Speaker. The figures of employment in industry show a remarkable increase, and yet hon. gentlemen opposite are quite honest in their expressions of opinion, and those expressions of opinion can find some unemployment figures to support them. In this Dominion we have at the present time tens of thousands of artisans and sailors who are out of work, and who are not worrying about it. They expected to be out of work; they made provision for it, and now they are getting ready to resume their spring operations. These men are not now and never have been a problem of employment in Canada. I come from a district in western Ontario where every town has its full quota of sailors who are now enjoying our Canadian winter sports, having fully expected to take a two months' holiday in the winter before starting work again in the spring. In addition to these men, however, we always have the newcomer; we always have had him and always will have him. He is a man who in many cases has not adjusted himself to the fact that in Canada many occupations are seasonal, and he is an ever present problem for municipal and provincial governments. Until such time as he realizes that his occupation is seasonal and that during nine or ten months of work he must make provision for the remainder of the year he will always say that Canada cannot produce enough jobs to take up the entire twelve months. That is something which we must admit in this country.
Now I want to speak of this question of unemployment from another angle, and first I would like to read a statement from the industrial employment bureau;
There was a very noticeable decrease in employment in the textile industry. A seasonal curtailment was reported in the boot and shoe industry and many of these factories are operating on part-time schedules. Operations in several lumbering sections of the country were
greatly curtailed during the past thirty days, and a large surplus of this class of labour was reported.
Hon. gentlemen might consider that a very unsatisfactory state of affairs, and probably it is, but this statement does not deal with conditions in Canada; it is issued from Washington and covers conditions in the great republic to our south. They also suffer there from this same problem of seasonal employment. While hon. gentlemen opposite may discuss unemployment in Canada, as they have a perfect right to do and in connection with which they have reasonable figures, and while it must be admitted t-hat there is a certain amount of unemployment in cities like Toronto, Winnipeg and Montreal, yet one has but to read the industrial press of the United States to learn that of the 42,000,000 workers in that country to-day 4,000,000 are unemployed, or 10 per cent of the total. That is admitted by the statisticians at Washington and by the leaders of the trades unions. The condition in Canada is entirely due to seasonal employment, and does not in any way reflect a condition comparable with that existing in the United States.
In this connection I would like to place a few figures on record. In 1921 the unemployment in the Dominion of Canada, not from the figures of the government but from those of the trades and labour coucils, represented 12.7 per cent of their total membership. By 1927, however, we find that we have absorbed those newcomers to our country so well that the percentage has gone down to 4.9.


Mr. HANSON:: They have gone away to
the United States.


James Malcolm: Just a moment; I will
answer that point very quickly. On the other hand, in the United States the unemployment this year represents 10 per cent of their total workers. My hon. friend says that the Canadian unemployed have gone to the United States. Let me read the employment of industries, and we will see:
The year 1927 was characterized by steady advances in manufacturing, in which activity was greater than in any other year since 1920; on December 1, the index was, in fact, higher than on the corresponding date in all other years of the record, including 1920. Statistics were received from some 3,875 manufacturers, employing, on the average, 472,286 operatives, as compared with 452,392 in 1926-
That showed an increase of the operatives of the reporting firms themselves, on their own figures, of 20,000 in the one year.
-while the mean index, standing at 95.6, compared satisfactorily with an average of 92.1 in

The Budget-Mr. Malcolm
the preceding year. Practically all divisions of manufacturing shared in the generally favourable movement. Especially noteworthy were the gains in the iron and steel, pulp and paper, food, rubber and textile groups, which together employ a large proportion of the workers engaged in manufacturing processes.
My hon. friend can have that statement verified by the figures of production in Canada, which I would like to give him. In the year 1926 the total value of the products of Canadian industry reached the enormous total of $3,250,000,000. That represented exactly a million dollars a day more industrial production in Canada than in the year 1927, and the increase of 4 per cent in employment in 1927 over 1926 indicates that the industrial production in this country in the year just dosed will reach the enormous total of something around $3,450,000,000. The figures of actual production supplied to the statistical department by the industries themselves and the figures of employment supplied by the industries both tally with the figures of the labour organizations of Canada, and show irrefutably that Canada in the past fourteen years has absorbed practically two million people who have come to her shores, and that unemployment other than seasonal does not exist in this Dominion. Mr. Speaker, it is an interesting fact that we never hear of unemployment in Canada between May and December, it is never a question	of	discussion anywhere	in	thiscountry.	It	so happens however	that	thishouse meets	iust at the time of	the	yearwhen seasonal unemployment exists, therefore statements made on this side as to employment and statements made on the other side as	to	unemployment can	both	be
substantiated.


Mr. DELL (Hamilton) :: Has my hon.
friend not been informed that people who had been working three days a week in their thousands are now working two days a week in order to spread out the employment?


James Malcolm: That does not agree with the figures of total production. There may have been part time employment in some industries, but when the figures of total production for the manufacturing industries of the Dominion are compared and found to be in direct ratio to the employment figures and the increase therein then there can be no sound basis for the argument my hon. friend advances.


Mr. HEAPS:: I wonder if the minister
would care to answer a question?


James Malcolm: Yes.


Some hon. MEMBERS:: No, no.


Hewitt Bostock: Order.


Abraham Albert Heaps: The year 1921 was the year of deflation when large numbers of men were thrown out of employment. But in the previous year, 1920, there were probably 100,000 more men employed in industry than at the present time. Why not take that year?


James Malcolm: There is something in what my hon. friend said for this reason: Taking the statistics referring to employment -and I have never denied this fact-1920 was the peak year of the post-war boom-we all admit that-and it was in that year that our index number was based on 100. But what we are concerned with at the moment is the decreased employment at the time this government took office in the spring of 1922, together with the figures of employment . to-day, showing as they do to hon. gentlemen oposite that their contention that the successive budgets we have introduced have done nothing to increase the activity of industry in Canada is not fair and is not correct.


Mr. MACDOUGALL:: I wish to ask the minister if his attention has been called to a report in to-day's press of a speech made by the Minister of Labour-


Hewitt Bostock: Order.


Isaac Duncan MacDougall: -in which he says unemployment is the biggest problem in Canada to-day.


Hewitt Bostock: Order.	'


James Malcolm: I should be happy to answer my hon. friend's question.


Hewitt Bostock: I do not think it is fair, now that we are under the forty minute rule, to interrupt an hon. member who has the floor unless with his express permission.


James Malcolm: I am quite satisfied to answer the hon. gentleman's question.


Isaac Duncan MacDougall: I was quite certain when the hon. gentleman resumed his seat that he was willing to answer the question. My question is this: Has the minister's attention been drawn to a report in to-day's Montreal Gazette crediting the Minister of Labour, one of his colleagues, with the statement that unemployment is the most serious problem that Canada has to deal with at the present time?


James Malcolm: I have not heard that
statement, but I think my hon. friend is fair enough and broadminded enough to realize that at the present time, as always at this time of the year there is sea-

The Budget-Mr. Malcolm
sonal unemployment. That is the situation which has always prevailed in Canada and always will prevail.
It is not possible for me in the forty minutes time allotted to deal with many phases of the budget, but there are certain particular matters I should like to discuss. The budget of my hon. colleague the Minister of Finance may be subjected to criticism by some members in the opposite corner of the house on the ground that it was a rich man's budget; it may be criticized by other hon. gentlemen opposite on the ground that certain reductions in tariff items were too severe, but I will say that the general effect of the gradual sales tax reduction which my colleague has introduced meets with general approval all over Canada as does the reduction in the income tax.


An hon. MEMBER:: No.


James Malcolm: I am not saying that it
meets with the specific approval of every man in Canada. Any man who could win the approval of the members in every corner of this house has no right to be on earth. I am prepared to say also that any man who could get the general approval of every member of the house half the time should be translated. But speaking generally the budget has been well received across Canada.


Agnes Campbell Macphail: Do you think-


James Malcolm: I did not interrupt my
hon. friend from Southeast Grey and I would ask the same courtesy that I extended to her.
I should like to deal with the criticisms on trade matters which have been presented to the house. They can be divided into five points. In the first place there is the criticism that we are exporting too much to Great Britain in comparison with the amount we import from her. Secondly there is the criticism that we are importing too much from the United States in comparison with what we are exporting to that country. In the third place our trade balance is criticized on account of its decline. In the fourth place we are criticized for exporting raw material and in the fifth place our trade treaties are under criticism as not being favourable to Canada.
With reference to the first item namely that we are exporting too much to Great Britain and not importing enough therefrom, may I ask how many hon. gentlemen in the house realize that we keep our trade figures as trade figures only, that in reality we do not know the destination of many of our exports. We know that Great Britain is the greatest distributing and greatest trading nation in the world; she does not begin to consume anything like the
percentage of goods which we credit to her in our export figures. For example, Great Britain herself admits the redistribution of
83,000,000 bushels of Canadian wheat. She admits also the redistribution of a great deal of flour ground from Canadian wheat. The total export figures of the North American continent, and they have to be taken together, show an export of 170,000,000 bushels of wheat from Canada to Great Britain and of 17,000,000 bushels from the United States, whereas Britain's figures of import show only 104,000,000 imported from the two countries. Hon. gentlemen in this house know that the British merchant who buys a cargo of grain on this side has the option of chartering a vessel and transferring that cargo to one probably of four or five points. The cargo may be transferred to Rotterdam even if its possible destination is in Switzerland. In so far as our figures show the expo'rt is made to Britain and Britain is credited with that export. Now practically all the European countries keep their trade figures on a country of. origin basis so that our statistics of trade in the total are correct; but they do not show exactly our trade with these other countries. Switzerland claims to import a very great deal more wheat than our figures show. France claims to import $11,000,000 of Canadian products in excess of our trade figures. Germany claims an import of twenty-four or twenty-five million dollars more than the imports which we credit to her. In fairness I want to say that there is no loss of trade. The British exporter is able to distribute our products probably better than we could distribute them ourselves, so that no loss of exports occurs. The only difficulty that arises in the whole situation is the problem of finding who our final customer is and allocating the business to the proper countries. That problem has been confusing to the statisticians of the world for several years. It was a subject of veiy vital study at the conference which was held last month in Cairo at which Canada had a representative. It will be much better if we can ultimately have figures on a country of origin and country of destination basis as we will then have a better opportunity of judging our trade with given countries. It is safe to say that if our trade figures were absolutely correct on the country of origin and the country of destination basis many of the compliments or much of the criticism with regard to our trade with given countries would have to be completely reconsidered.
With regard to our imports from the United States which are supposed to be excessive, practically the same problem in another form presents itself. The United States, like Great

The Budget-Mr. Malcolm
Britain, is a trading country of great magnitude. On account of its proximity to Canada it is a convenient country to buy from, and it has special advantages in importing due to its great population and its ability to import in bulk cargoes. A great percentage of the purchases made through United States wholesale houses by Canadian merchants are made as a result of convenience and their ability to import in large quantities. Moreover, many of the raw materials which we use in our industrial life come through the United States but are not of United States origin. Probably the rubber industry is the most outstanding example' of this. Ninety per cent of the cotton used in the rubber industry is Egyptian cotton, so I am informed by the chairman of the association, but it is bought on the Boston market. The rubber used in this industry is imported via the * United States, but it all comes from the Straits Settlements and Malaysia. Therefore we have this anomaly that as regards teas, coffees, spices and other agricultural products, which come in great quantities from agricultural countries and are collected in the United States, we are crediting to the United States in various items tens of millions of dollars which, if we were crediting our imports to the country of origin, would really be credited to some part of the British Empire.


James Dew Chaplin: We have always done
that.


James Malcolm: I appreciate that fact. I am pointing out to the house that in dealing with our statistics of United States imports, we should divorce from them the figure's which represent imports really from within the empire. Furthermore, it is not fair to allow such imports to stand as United States imports for another reason. I may say in passing that a distinguished British visitor whom we had here recently was quite interested in the problem and I believe he is making a study of it. We are endeavouring to develop trade within the empire. We are trying to show that we are patronizing, as far as we can, other parts of the empire. At the same time so long as we are not able to segregate our empire imports which come to us via the United States, we do not give credit to the other parts of the empire for the purchases we really make from them, and so long as we export through the United States we are not receiving credit ourselves for doing business within the empire.
In the third place we have heard a good deal of criticism with regard to our favourable trade balance declining. The decline in

our favourable trade balance, which to-day stands at $156,000,000, is to be admitted; but it is also to be admitted that the favourable trade balance which we have is the largest favourable trade balance of any country in the world, and while a decline has occurred, it can easily be accounted for as the speeches of some hon. gentlemen opposite have already indicated in this debate. The total decline in our exports is due entirely to the decline in value of agricultural products. As regards wheat alone, the average value of a bushel of wheat for the calendar year 1927 was $1.41; for the year 1926 it was $1.52, thus reflecting an average lower value in the price of flour of thirty-five cents a barrel. Indeed it may be said that all agricultural products taken together account for a greater decline, not in the volume of our trade, because the volume of our trade is as great, but in the dollar value of our exports, than the total decline. The interesting side to this question is that the value of our non-agricultural products, that is, our manufactured articles, has actually increased during the past year. That again, I will say to the hon. member for Lincoln (Mr. Chaplin), bears out the contention that our industrial development has been increasing during the past year.
As there has been criticism in this house that we are exporting too much raw material, let me give this statement as being absolutely sincere and true, namely, that compared with United States exports, the percentage of all exports that leave Canada in manufactured form is something of which every Canadian has a right to be proud and is a steadily increasing quantity. I am sorry I have not the correct figures of exports of raw materials by the United States during the past year, but I know it amounts to about 39 per cent, whereas we exported raw material to the extent of 46 per cent. Their manufactured exports plus semi-manufactured exports amounted to 53 per cent, whereas ours amounted to about 46.6 per cent. Thus it is seen that the United States is about six points ahead of Canada. A very interesting factor however comes into this question of exports, namely, that of our total exports of raw materials, amounting to $578,000,000, no less a quantity than $340,000,000 worth is represented in the value of our wheat, whereas in the total export of United States raw materials a very much smaller amount, which I am sorry I have not under my hand as I left the sheet- in my room, is represented in the value of wheat. If from these figures we divorce wheat, which is one of the great commodities which we are exporting to a far

The Budget-Mr. Malcolm
greater extent than the United States, it is seen that we in Canada are exporting as high a percentage of manufactured goods as is the country to the south.
There is one point on which I should like to speak for the benefit of my Progressive friends. Some people have argued in this house and, indeed, it has been argued in the country, that an industry should not be supported by governments unless it is indigenous to the country. May I point out that, with each passing decade, with increasingly easy lines of communication and especially lines of transportation, the world is becoming more and more of an economic unit. To my hon. friends who say that we should not export raw materials I should like to point out the very significant fact that in 1870 the cost of moving freight on American railways worked out at 1.89 cents per ton mile; while in 1926 the cost of moving freight on Canadian railways worked out at one cent per ton mile. Even these rates are high in comparison with water transportation. The cost of moving grain from Port Arthur to Port Colbome by boat on the great lakes is just one-eighth of the cost of moving any commodity by rail; the rates on grain work out at less than one-eighth of one cent per ton mile. Water transportation has in fact become so cheap that every great seaport in the world has very favourable rates as compared with every other great seaport and we have ceased to measure by distance; we are measuring now entirely by carriage rates. It is notable that products of tropical countries are moving more freely from those countries for processing to the temperate zone, and that practically all of the products of tropical countries are now being processed in countries such as Canada. What is the reason for this? There are, I believe, three reasons to consider. First, there is the superior skill of our people; secondly there is the ability of a skilled people to harness the powers of nature in the work of turning a raw material into a finished product, and, thirdly there is a great potential market for the commodity in the country in which it is being processed. Canada is a very notable example in this regard. We are to-day importing raw materials from the four corners of the globe; we are becoming an industrial nation, the second industrial nation of the British Empire. This is a position of which we are proud and which we intend to maintain, and we are doing thirty per cent of this business on materials which we do not produce ourselves. I would like to give to the house 56103-54
and to put on Hansard a few very interesting figures with regard to this group of industries
Take that great group of industries of which iron and steel are the basis, and which some day will use Canadian ore-I hope soon, because up to the present time ninety per cent of the ore used in Canada comes from either Newfoundland or the United States. We find that in 1926 that group employed 103,500 persons, paid $137,000,000 in wages and salaries, manufactured materials to the value of $258,000,000, and produced products to the value of $505,000,000, adding a net of $247,000,000 to the wealth of Canada. Practically all the iron which is the basis of that group of industries came from other countries.
The story of rubber is probably one of the most amazing stories of any product. The rubber industry has grown tremendously in the last twenty-five years, and probably deserves consideration from the people of Canada to an extent that very few other industries do. Bringing its raw products from the opposite side of the world it has developed to the point where it is not only supplying the needs of Canada but has become a very important export factor in this country. It has grown to enormous proportions. It employs about 15,000 people, pays $15,000,000 to $16,000,000 in wages and salaries, produces commodities to the value of $80,000,000 or $90,000,000, which with some other commodities produced in smaller plants will make a total of $100,000,000. Its exports of its own products amount to $26,000,000, and with other rubber articles exported the exports probably reach a total of $30,000,000. Yet all the raw commodity comes from other countries.
Our tobacco industry employs about 8,000 people, and produces goods to the value of $65,000,000, and until recently this industry has been based upon a raw material which is imported.
Our sugar industry employs about 3,000 people and produces goods to the value of $65,000,000.
Our cotton textile industry is to-day employing in Canada 22,000 people, and producing goods to the value of $86,000,000, and every pound of cotton, its raw material, comes from some other countiy.
Ninety per cent of all the crude oil used in the petroleum industry in 1926, the products of which were worth $71,000,000, was imported.
A very interesting industry which we have developed in Canada is the aluminum industry. Bauxite the raw material used in that

The Budget-Mr. Malcolm

industry, is brought from British Guiana by water to Quebec, and by virtue of our cheap power the industry has been established there. These industries, which are all using raw material imported from abroad, have been established here by virtue of the potential market in Canada, by virtue of the superior skill of our people, by virtue of our knowledge in harnessing the powers of nature, and in addition, by virtue of certain political advantages in the form of British preferences which have enabled them to enter the export field. By virtue of her preferred position Canada is to-day exporting to seventy-five or eighty different countries.
We have had a policy in the Dominion of Canada, for which I am proud to give full credit to a former Minister of Trade and Commerce in another government, of creating trade agencies and establishing steamship communication. That policy has been of inestimable value to this country. If the house could read the many letters in the department showing appreciation from Canadian industrialists as to how much this assistance has meant to Canada's export industry, I am sure they would be proud of the service, I am surprised to hear some hon. gentlemen say that Canada should not be manufacturing anything except those things for which she has the raw material. If we took away from the industrial life of this Dominion the raw materials which by reason of our climatic conditions we cannot produce and must import, I am afraid that the whole industrial fabric of the Dominion would fall.
I am also prepared to say to my hon. friends opposite that so long as we expect the nations of the world to allow us to take raw materials from them which we do not produce, we cannot afford as Canadians to refuse to give to them some of the raw materials which we have in abundance and which they need for fabrication in their own country.
I want to place on Hansard a few more figures Showing whether the policy of this government has been injurious to the various industries with which I have been dealing. It was said in 1922 that industry would languish in Canada if the policy of this government was put in force. I do not think that has been the case, Mr. Speaker. The hon. member for East Toronto (Mr. Ryckman) the other night made a most amazing statement when he said that industry-manufacturing, I think, was the word he used-was stagnant in Canada. My hon. friend is one of the leaders in the rubber industry. No one knows that industry better than my hon. friend,

and he knows that in 1922 the employment in the rubber industry in this country was nothing like it is to-day. In 1921 there were twenty-six manufacturers of rubber products in Canada, employing an average of 8,586 people.


James Dew Chaplin: You did not change the
duty on rubber. That is the reason.


James Malcolm: I admit that, but I will give my hon. friend an illustration the other way in a moment. To-day that industry produces goods to the value of almost $100,000,000. I say to my hon. friend from Lincoln (Mr. Chaplin) that we did not change the duty, but we did change the trade treaties with certain countries, and that gave them a market. My hon. friend also realizes this, that the most notable industry in Canada as an example of not hiding behind the tariff is the rubber industry. That industry deserves the compliments of the people of Canada in this, that in no size of tire is its price over eight per cent higher than in the United States, and on some smaller tires it is lower. They have been able to establish an export trade in foreign countries where we have no trade privileges, and where they have had to compete with the other countries of the world. The rubber industry, I think my hon. friend will admit, has grown very materially in this country.
The policy of the Liberal government has always been to encourage, by trade treaties, wider markets, and my hon. friend, in speaking of trade treaties, must remember this, that from the time we came into power up to the end of March, 1927, we have made fourteen trade treaties, and to these countries we have sold $7,700,000 of rubber products. In 1921 our total exports of rubber products were only $800,000. To Australia, New Zealand and the British West Indies, countries which in recent years have received more favourable trade treatment, the rubber industry sold goods in 1922 to the amount of $600,000, while to-day that figure has reached over $6,000,000.
Canada is going ahead in spite of the cries, the odd cries, of ruination. I will admit they are odd, and in fairness to the leader of the Conservative party I am glad to say that they do not come from him. He has not upon any occasion that I know of made statements of that kind. We as Canadians have a right to be proud of our country. We as a government are prepared to face criticism by the opposition of our methods of administering the affairs of the country, but with the figures in front of us of our industrial production and industrial employment I say

The Budget-Mr. Edwards (Frontenac)
that if we put our shoulders to the wheel of developing this country, and confine our criticisms to each other, and not to the Dominion, we shall make very much greater progress than was made when the Dominion was a target for attack.


Hon. J. W. EDWARDS (Frontenac-Adding-ton):: Mr. Speaker-


Hewitt Bostock: Before the hon. member proceeds, I should like the chair to be supported in this. There were many interruptions a moment ago, with the result that I* had to give a few minutes more to the hon. Minister of Trade and Commerce in order that he might complete his sentence. Under the forty-minute rule if interruptions are too numerous speeches are so cut up that in many instances the meaning of the hon. member who has the floor may be obscured. On this point let me quote Bourinot:
Whilst a member is addressing the house, no one has a right to interrupt him by putting a question to him, or by making or demanding an explanation.
Of course, the member addressing the house may give way through a sense of courtesy, but unless that express consent has been given no interruption must be attempted.


John Wesley Edwards: Mr. Speaker, you have had a long and distinguished political career and you are well known as a very keen observer of men and events. I am sure, therefore, that you will have noted that one of the peculiar characteristics of the present government is the facility with which its members forget, its discreditable acts, and also the ease with which they attribute to others the sins that they themselves have committed. We have had many exemplifications of this in the house, and we had one a few days ago during the course of the speech delivered by the hon. member for Fort William (Mr. Manion) when the hon. Minister of Justice (Mr. Lapointe) and the hon. Minister of Railways (Mr. Dunning) sang a duet in regard to the "shadow" government.
It is quite true, Mr. Speaker, that the government formed by the Right Hon. Arthur Meighen in 1926 was not representative of a majority of the votes in the Dominion. It is quite true that the Conservative party in the house at that time represented only 46.8 per cent of the vote polled in the preceding election. But it is also true that the party represented by the usurping government of Mr. King received the support of only 40.11 per cent of the votes polled in that election. It is quite true that Mr. Meighen had to select his cabinet from 116 members returned at the previous election. It is also true that 56X03-54*
the Liberal party selected their administration from only 101 members returned at that election. It is true likewise that the Conservative party in the election of 1925 polled 201,062 more votes than did the Liberal parfy who usurped the reins of office; that the government of Mr. Meighen in 1926 represented 133,396 more votes in the election of 1925 than the present Liberal government has backing them now; and that the Meighen government of 1926 represented 48,117 more votes than were polled by the Liberal candidates and their Liberal-Progressive allies in the last election. It is likewise true that on June 25, 1926, the King government was defeated three times in one day. It is also true that when a vote of censure was pending the Prime Minister hastened to the Governor General to try to get a dissolution. It is also true that the then leader of the Progressive party, the present Minister of Immigration and Colonization (Mr. Forke), gave his solemn written pledge to the Governor General that he would stay with the session and with the government until the business of the session was finished and supply voted. It is also true that the pledge was violated. It is further true that subsequently the government of Mr. Meighen was defeated in this house by a majority of one, through a member of the Progressive party polling his vote inadvertently. It does seem to me, sir, that it does not come with very good grace from any of the ministers of the government opposite to talk about "shadow" government.
How is their government composed at the present time? The Minister of Trade and Commerce (Mr. Malcolm) and the Minister of National Revenue (Mr. Euler) are well-known protectionists; the minister of Agriculture (Mr. Motherwell) occupies a doubtful position since he has two opinions on everything, one a public opinion and the other a private; while the Minister of the Interior (Mr. Stewart) nails the black flag to the mast and declares himself for the "death of protection." I would call the present government, because of their peculiar career, a zig-zag government, and I would suggest that each member of the cabinet should wear on the lapel of his coat, and hang around his neck by a black ribbon when he puts on his Windsor uniform, a large letter "Z" made of brass. I suggest that letter because it signifies a zig-zag government; I suggest it be made of brass for very obvious reasons. I think something might be added to that, a little emblem in a convenient place worn by the Minister of Trade and Commerce and the Minister of National Revenue with the representation of a strong wall to signify that they are protectionists; on
852	COMMONS
The Budget*-Mr. Edwards (Frontenac)
the * emblem worn by the Minister of the Interior there might be inscribed the skull and crossbones to signify the "death-knell of protection"; a question mark on the one worn by the Minister of Agriculture would indicate his doubtful position; and a representation of a forest on the one worn by the Minister of Immigration would signify that he was still wandering or lost somewhere in the political wilderness.
I recall very distinctly the attitude taken by the present Minister of Immigration when he was leader of the Progressive group in 1924, 1925 and 1926, how he stood forth in the front rank of that party and declared:
If anybody in this house thinks the Progressive movement is done, he is vastly mistaken.
How he declared further:
Whatever changes may take place in the cabinet, the Progressive group will remain intact and carry on as in the past.
And how in 1925 he chided the Liberals- with whom he now sits-for their broken pledges. He saw little difference between Liberals and Conservatives then. He did not think if the Conservatives came into power they would raise the tariff very much, and he was even willing to join them in a coalition. You will find, that sir, in his speech at page 3967 of Hansard for 1925. I quote from a speech he delivered in Winnipeg on September 17, 1925:
Absorption of Progressives by Liberals under whatever guise would postpone for a generation necessary reforms, reshaping of national policies, infusion of that moral courage and idealism which slavish partisanship has well-nigh destroyed.
There he stood forth, the admiration of all those whom he led at that time. He waved his claymore in the air and he shouted:
"Come one, come all! this rock shall fly
From its firm base as soon as I."
And encouraged by the applause of this open defiance of all and sundry at that time, he turned to right and to left and said:
"IV! th such a small majority this government can well be blocked by three.
Now who will stand on either side and keep the bridge with me?"
Up spoke the member for Lisgar, an old time Grit was he:
"Lo, I will stand on thy right hand and keep the bridge with thee."
Then up spoke the member for Southeast Grey, a U.F.O. was she:
"Lo. I will stand on thy left hand and keep the bridge with thee."
And so they went forth to battle. But what happened? Two of them threw their swords down at the entrance to the bridge and struck for the other side as fast they could run. They are sitting over there now, one of them

having realized his ambitions to the full extent of ten thousand and one. One of these ambitions is not an unworthy one, namely, the honours of office, the other ten thousand being represented by a dollar apiece. As to the member for Lisgar (Mr. Brown), he went on the strength of hopes which are vain and, I fancy, will never be realized.
Now I want to make a few remarks regarding the national debt. During the war years and the years immediately following, not one dollar was added to the public debt of Canada for any other than war purposes or purposes arising out of the war. Moreover, not only did the Conservative party in those years administer the affairs of the country out of the revenue but they paid off $698,809,700 of war obligations. I remember the sessions of 1917, 1918, 1919 and 1920. Seventeen appropriation bills were put through this house covering a total of $1,755,000,000, not one dollar of which was ever challenged; nor was the integrity of a cabinet minister ever called in question. I call attention to a few of the burdens which were borne by the Conservatives in those years and from which the present government was relieved: $164,000,000 paid in soldier gratuities; $102,000,000 paid in soldier civil re-establishment; $80,000,000 paid in soldier land settlement; $90,000,000 paid in pensions to soldiers; $10,000,000 paid in soldiers' technical education; and $7,000,000 paid out in soldiers' insurance. These items alone total $453,000,000. In his budget speech the Right Hon. Mr. Fielding, in May, 1922, spoke about surpluses, just as the present Minister of Finance (Mr. Robb) does, but he was a little more candid. He said:
"The result of the operations for the year lust closed is that while we have, according to one calculation, a surplus, we have to acknowledge an addition to the public debt of $86,-
417.000."
The very next year Mr. Fielding, in introducing his budget, again spoke of a surplus, just as the present Minister of Finance has done, only more candidly. He had this to
say:
So far this is a story of surpluses: but there is a further statement to be made which quite destroys that happy picture. There were charges for advances to railways of $07,950,645. If we take the whole expenditure for the year, ordinary, capital, special and railways, there was a deficit: and. allowing for certain deductions, the npt result was that we added to the public debt $81,380,864.
I ask, why was not the present Minister of Finance equally candid? He said that the chartered accountants had certified in their report to a reduction of $105,942,498 in the net debt of Canada for the period from 1924 to 1927. The hon. member for St. Lawrence-

The Budget-Mr. Edimrds (Frontenac)
St. George (Mr. Cahan) referred to that claim and punctured the argument by simply quoting from the report of the chartered accountants, which made it very clear indeed that in the statement they made they did not include the issues of the Canadian National railways guaranteed by this Dominion. The present Minister of Finance claims a reduction in the debt for the last year of $41,896,000, but he ignores railway guarantees of $46,000,000. He claims a reduction of $105,000,000 in the debt in 1924, but he ignores guarantees of $168,000,000 for the same period. That, I contend, is not dealing candidly with the people.
With reference to the reduction in taxation referred to by the Minister of Finance, he seeks applause for reducing taxes which his own party imposed-an increase in the sales tax, an increase in income tax and receipt tax, and so forth-which did not exist under the Conservatives-and an increase on cheques. These are now being gradually reduced and the government is asking credit therefor.
I remember that previous to 1921 the Liberal party were very insistent in declaring that if only they were returned to power they would show that a government that exercised proper economy in their expenditures would not find it necessary to extract all these taxes from the people. Well, we took in the last year of the Conservative administration, in these various taxes, some $73,000,000. How much was collected last year? The amount taken in was $105,613,160, or over $32,000,000 more than was taken in the last year of Conservative rule. Has there been economy in expenditures? I think not.
I have in my hand some figures taken from a return which I asked for last session. It may be news to some in this house perhaps, and I am sure it will be to the people in the country, that we have under this government 623 motor cars for the use of various departments; that there has been spent on these cars, in first cost and repairs and maintenance and chaffeurs' livery, as well as for other things in connection with their use, $1,311,198; and that the ministers themselves have run up a bill for their cars and chaffeurs of $164,640. Adding to that the fact that they had their private railway cars-some ten -one of them the Acadia for the railway commission, to which no one will object; three for the governor general in 1922 and two since that time; for the ministers themselves, five in 1922 and six in 1923; seven in 1924; four in 1925, and six in 1926. I find that we have paid out for these private cars $376,877. For the ministers' private railway cars and their motor cars, it has cost the
country so far some $541,000. That does not seem to me to indicate any reduction in expenditures along proper lines. This is for the last two years.
I wish now to refer for a few moments to the question of immigration. In discussing this subject the hon. member for St. Law-rence-St. George struck the keynote of the whole situation when he said that the question of keeping our own population here and inducing others to come to Canada depended upon the rate of wages paid in this country and the ability to provide our men in this Dominion with employment. So far as wages are concerned, I have this to say: A country paying low wages may successfully cultivate free trade; a country paying high wages must cultivate protection. Wages in Canada are governed largely by wages in the United States; Canada cannot pay high wages and compete with the low scale of wages paid in Europe and Japan, for instance. So long as the products of the United States are protected and wages are high, Canadians will go to the United States and Canada will be simply a nursery for that country. We will continue to raise boys and girls, educating them at enormous expense, only to lose them to the country to our south.
Now, Mr. Speaker, much has been said on this subject of immigration, and there are one or two things I would like to bring to the attention of the house. First I must say that when the United States adopted the quota system, and by that means closed their doors to over a million immigrants, this country had the greatest opportunity ever given any country to increase immigration. That quota system reduced the number of immigrants coming to the United States from 1,218,000 to 168,184 a year; it applied to all countries with the exception of Canada and Mexico. I find that in the four years from 1911 to 1914, under Conservative rule, 554,298 British immigrants, 501,700 immigrants from the United States and 396,633 immigrants from other countries entered Canada, a total of 1,452,631 or an average for the entire four years of over 1,000 immigrants each day. Then let us consider the past seven years; under this government; 361,834 immigrants entered Canada from Great Britain, 175,553 came from the United States and 273,953 came from Ithe continent of Europe, a total of 811,340, or an average of 317 each day as compared with the Conservative average of 1,000 a day, yet this government had a distinct advantage because of the adoption of the quota system in the United States.
854	COMMONS
The Budget-Mr. Edwards (Frontenac)
Let me proceed a little further. For the last five years the total British immigration to Canada has amounted to 248,552; the total number returning from the United States, including Canadians, British and naturalized Canadians amounted to 227,953, or a , total addition to our population in that five year period of 476,505 British and Canadians. At the same time, however, and during the same period, the number of Canadians leaving this country for the United States amounted to 598,402, so from the officials returns of both the United States and Canada we find that we sustained a net loss during that five year period, under this government, of 121,897 British and Canadians, while we brought in to take their places 226,163 foreigners from continental Europe.
I have not a word to say in regard to foreigners coming to this country; many of them make first class citizens, and we welcome those who come to Canada with the intention of becoming British subjects in every sense of the word. I do say, however, that our immigration policy should be so framed as to permit the British element to predominate. I would also like to point out what this loss of 200,000 Canadians means to this countiy. It means a loss of a billion dollars of capital invested in raising and educating these boys and girls; it means the loss of a home market for $17,500,000 worth of farm products and $48,660,000 of manufactured goods; it means homes established in the United States which should be established here. The average value of each citizen to the state is $2,000, which means an annual loss to Canada of $400,000,000, and it means the loss of our best, to be replaced by those who are to say the least not so efficient. I say, Sir, that so long as a policy is followed in this country which makes it difficult for Canadians to get work here at remunerative wages, our Canadians will cross the line to get the work which they must have. Moreover, I say that so long as we follow a policy which deprives the dairymen and farmers of our country of their rights and makes it difficult for those industries to carry on, we can offer no inducement to immigrants to come to this country and go on the farms. Take the figures in dairying, fruit and vegetable growing and sheep raising in Canada; these show no inducement to any person understanding the situation to come from the old country and go into any of those lines of industry here. Everything possible has been done to discourage people from following those pursuits.
Just here I should like to again refer to the McConachie case, and again to direct the attention of the minister to that case. 
McConachie is a Scotchman who fought in the war, afterwards coming to Canada to work and make a home. Then he sent for his wife and five children to join him in this country. Before leaving they were inspected by two government doctors, and they underwent a further inspection on the boat, being passed by all three examiners. When they came to Halifax, however, the little fourteen-months old child was turned down and ordered from the country. I speak of this again because I want to appeal to the Minister of Immigration on behalf of that family. The records show that the minister issued permits to persons almost blind, and to others reported by his own officers as feeble minded; he placed his signature on a permit which allowed a thief to remain in this country, but apparently up to the present he has no consideration at all for this Scotch woman and her little baby. What earthly harm could happen to this country even supposing that child were feeble minded? There would be no harm done at all for at least eight or ten years.


Mr. KING (Kootenay):: The child is
prohibited under the law.


John Wesley Edwards: Does the
minister state that?


John Warwick King: Yes.


John Wesley Edwards: What about the 140 others who received special permits? They were also prohibited under the law. What about the feeble minded boy, of whom the government examiners said he did not know enough to even move out of the way of possible harm? He was prohibited under the law; the officers reported he could not be expected to make enough money to provide for himself in Canada. He was prohibited under the law, but the permit of the minister allowed him to remain in Canada. What about the young man who came here and became a thief as a means of livelihood? He was prohibited under the law, but the permit of the minister allowed him to remain. Is the minister going to show less consideration for this Scotch woman and her little baby than he has shown for the man who spent six months behind the bars of one of our prisons? I say, Mr. Speaker, that it is high time the Minister of Immigration asserted himself as a man of his race should. Belonging as he does to a race which has written its name all over the world with high honours, I appeal to him to throw off the shackles which prevent him from asserting himself over the heads of his department, who are ruining it and making it a joke throughout the country.

The Budget.

Mr. Edwards (Frontenac)


Mr. FORKE:: I will not admit a feeble
minded girl.


John Wesley Edwards: The minister will not admit a feeble minded girl but he will admit a feeble minded boy; he has done so. He will allow a thief to remain in the country; he will admit those who have occupied asylums on the other side of the ocean, as the permits show, but he will not admit a feeble minded child only fourteen months old because he is afraid this country will suffer damage. He will deprive the other children of that family of the love and care of their mother for a few years, rather than grant a permit to allow this little girl to remain in Canada. If that is the minister's final answer in the matter I am sorry for him. I am also sorry for this country that we have in the office of Minister of Immigration and Colonization a man who has been acting apparently merely as the tool or the subservient slave of those who are running his department.


Robert Forke: You must change the act.


John Wesley Edwards: The act does not debar the minister from putting his name to permits and allowing people to come in and stay in this country who were turned down by his officials.


Robert Forke: The act forbids me to admit that girl.


John Wesley Edwards: If the act
forbids the minister to admit the girl then the act forbids the minister to admit the one who served time in an asylum on the other side. But that is not the point.


Robert Forke: The act forbids me to admit them.


Mr. CAHAN:: But it gives the power to
issue a special permit.


Robert Forke: No, it does not, and the
lawyers know it.


John Wesley Edwards: I do not
think the minister was influenced much by lawyers. I remember the time when he had not much use for them, but times have changed.


John Campbell Elliott: He knows them better
now.


John Wesley Edwards: I should like to ask the minister, since he has interjected a reference or two, one straight question:	Is
there or is there not anything in the act which would prevent him from issuing a permit for that mother and child to stay here for six months?


Robert Forke: Yes there is. I have no
authority to let that girl in under the act. Any lawyer would know that if he turned to the act.


John Wesley Edwards: Then all I have to say is that the minister has not made a very careful investigation, because he has admitted others in violation of the act-


Robert Forke: No, never of the same
character.


John Wesley Edwards: -certified by his own officers to be unfit to come into this country, both physically and mentally.
The returns are there to prove what I say.


Robert Forke: I do not like to be criticized before the country as being cruel or inhuman when the law is there.


John Wesley Edwards: The minister will get lots of criticism before the session is over, he may be sure of that.


Robert Forke: That does not help the girl. I think I have probably suffered more over that girl than any member of this house.


John Wesley Edwards: I am glad
there is one minister over there-of course he has not been there long-whose epidermis is not so callous that it cannot be penetrated. It is pretty hard to get through the skins of some of them, but there is a sensitive spot in my hon. friend although it takes quite a while to reach it.
Now I wish to direct attention for a minute or two to the situation of our daily farmers in Canada, and what this government has done to make their situation worse. In 1926 our exports of dairy products-cream, milk, butter, cheese, condensed milk, milk powder, casein and eggs were as follows compared with 1927:
Cream	
Milk	
Butter	
Cheese	
Milk (condensed) . Milk (powder) .. . Milk (evaporated)
Casein	
Eggs

Reduction $ 488.341 215,595 2,264,266 2,603,361 428,917 125,202
453,224
Increase
1,090,788
31,555
$36,336,464	$5,556,158
(Decrease in one year)
Totals

856	COMMONS
The Budget-Mr. Edwards .(Frontenac)
In 1926 our export of these commodities amounted to $41,892,622. In 1927 it had fallen to $36,336,464, a decrease in one year of $5,556,158 in dairy products alone. In 1925 Canada's exports of butter were 24,553,000 pounds, and our imports were 193,000 pounds. Our farmers were supplying Canadian tables and exporting over 24,000,000 pounds a year. The Australian and New Zealand trade agreements changed all that by permitting butter to come into Canada for one cent a pound. Our exports for the year ending March 31, 1927, dropped by 13,425,500 pounds, and our imports rose to 7,190,267 pounds. For the year ending November, 1927, Australia and New Zealand sent us 10,122.866 pounds of butter, and we sent them $3,503,833 in payment, every dollar of which should have gone into the pockets of Canadian farmers instead of into the pockets of Australian and New Zealand farmers. We are up against the Paterson plan in Australia where three cents on every pound of butter manufactured there goes into a pool, and where a bonus of six cents a pound is paid on every pound' of butter exported. Now it costs less than three cents a pound to bring butter from Australia and New Zealand to Vancouver, and butter from those countries shipped from Vancouver to Montreal can be carried at the rate of $2.30 per hundredweight. On the other hand British Columbia butter has to pay a rate of $3.58i cents per hundredweight. The rate from Regina or Saskatoon to Vancouver is 2| cents a pound, so that the price of butter in Saskatoon and Regina is fixed at 2i cents lower than the price of New Zealand butter when it lands in Vancouver.
I wish to give here some figures brought forward by the hon. member for Victoria (Mr. Tolmie) illustrating the effect of this on Canadian production:	Taking the production of an average cow as 200 pounds of butter a year, our importations from Australia and New Zealand last year would keep 50,000 cows in Canada busy throughout the year, and allowing 10 cows for each farm, would establish 5,000 farms in this Dominion. There is a spread, as everybody knows, between the winter and summer prices for milk. There is evidence of that right here in the city where the difference is 40 cents per 100 pounds. In Montreal the spread is 90 cents per 100 pounds. The dairymen in Australia and New Zealand have a decided advantage over us because their climate allows their cattle to graze out the year round, consequently they can produce more cheaply than we can in Canada. Yet we are giving them the advantage of our market in this country at a cent a. pound. At a season of the year when 
the costs of production in Canada are at the highest we allow Australian and New Zealand butter to enter Canada and damage the dairy industry in this country. In the countries named their summer is in operation at this time; it is their flush season. Protests have been entered from all the dairy councils throughout Canada against this unfair competition but nothing has been done to rectify the evil. In addition to the injustice already complained of the government allows Australian meat to come in at half a cent a pound, and it is a well known fact that the Australian government pays a bonus of over $2 on every carcass of beef shipped out of that country. That is sufficient to pay the freight when that commodity is shipped to our own shores. Is it a fair deal to the farmers in this country to be put up against competition of that kind? I submit that it is not.
We imported eggs to the value of $1,826,782 last year, mostly from the United States, Britain and China, but we do not export many eggs to the United States because that country collects a duty of 8 cents a dozen upon our eggs while we allow their eggs to enter this country at 3 cents a dozen. In the same way we cannot avail ourselves of the butter market in New York. When butter was selling in Montreal at 37 and 38 cents a pound it was priced in New York at 50 cents a pound. Why did we not send our butter to New York? For the reason that the United States protects their farmers and dairymen by imposing a duty of 12 cents a pound on our butter thus making it impossible for it to enter.


Mr. BENNETT:: And our price is that
much less.


John Wesley Edwards: Yes, our price is that much less. I am not going to discuss the various trade agreements entered into by this government. Suffice it to say that Canada has lost out in every agreement which this government has made with other countries. We lost out in the case of Australia. We not only lost through a reduction in our exports to that country while their exports to us increased, but we have had to pay from $1,500,000 to $2,000,000 extra in duties on imported raisins. That was part of the deal. We lost again in the case of New Zealand, our favourable balance with that country decreasing by more than $5,000,000 in one year. The same story is true in regard to our treaty with France, an unfavourable trade balance of $S 500,000 increasing to $13,500,000. As regards the West India agreement, a balance in our favour of $500,000 was changed in one year, by the magic touch of this government

The Budget-Mr. Girouard
by way of a trade arrangement, into an unfavourable trade balance to the tune of 82,000,000, and yet we are subsidizing steamers to carry their products to Canada.
Mr. WILFRID GIROUARD (Drummond-
Arthabaska) (Translation):	Mr. Speaker, the
hon. member for Frontenac-Addington (Mr. Edwards) who has just spoken is well known in the riding which I have the honour to represent. We notice that he still continues to occupy a seat on the front benches of the opposition and takes a leading part in the proceedings of his party. He has broached a great number of subjects and I do not intend to follow him in all his rambles. I simply wish to make a note of the admission which he made at the outset of his speech; that in the latter part of June, 1926, when Mr. Meighen grabbed power in violation of constitutional practice, he did not have the confidence of the people of this country, and therefore had no right to take over the reins of government. That was then our contention, and the people at the last general elections were of the same opinion. This is the reason why the hon. member for Frontenac-Addington occupies again a seat on the wrong side of the house.
Allow me, Mr. Speaker, to now congratulate the hon. Minister of Finance (Mr. Robb) on his statement as to our financial situation. Ever since he has been at the head of this important department, the country has had but praise for his administration which has given the government an opportunity, thanks to the substantial reduction in taxation, to introduce measures favourable to the country's development and progress. I listened quite attentively to the various speeches delivered by members of the opposition, and I may state that the whole debate has shown how very acceptable this budget was to the whole country. Two amendments were moved, on which we shall be called upon to vote. One, which is really but a request to increase the tariff, is put forward by the official opposition-it bears with it a pleasant smile for the large interests-the other, without any consideration whatsoever for the needs of our industries, takes the government to task for not having reduced the tariff sufficiently. It seems to me that the task of preparing and putting into practice a fiscal policy consistent with the needs of a country like ours presents the greatest difficulties. Faced with these two clashing amendments, Sir, one can readily see all the wisdom and foresight of the leaders of the Liberal party who intend to give the country a policy which will be most fair towards the claims of the various provinces, but which will also take into consideration the needs of the great mass of consumers of this country and the necessity of protecting our industries. Therefore, the present budget, like all those which the hon. Minister of Finance (Mr. Robb) has brought down in this house, is one that we can call truly Liberal.
The opposition, through their leader, have proclaimed that this year at least it would forsake the old beaten tracks where it was in danger of being engulfed and would bring into the discussion of the country's affairs a constructive criticism. We were therefore prepared to listen to some announcement which would have given us hope that it would break with the past. We looked, listened, waited, but nothing happened; in vain did we wait. It is-Mr. Speaker, you have heard them before-always the same complaints repeated with the same lack of sincerity. The opposition seems always depressed, it traces before our eyes such gloomy pictures that, at times,
I wonder if it would not rejoice itself, for purely political purposes, in seeing a less flourishing state of things in this country. The opposition is well aware-one must give it credit-that years and years will elapse before it. can sit to your right, Sir; but is this a reason to utter but empty complaints and wish to revive this campaign of disparagement, which can only depreciate Canada in the eyes of other countries. Instead of talking at random of mills closing, why does the opposition not rejoice with us and the people of this country, at the prodigious trade boom which took place in 1927?
To-day, our country, so far as the importance and value of its international trade is concerned, occupies one of the first places among the nations of the world, under the present economical rule our industrial development has made great strides. Thus for the period comprised between April 1 and December 31, 1927, our total trade amounted to $1,793,000,000, of which $823,000,000 is for imports, while we have exported goods amounting to $970,000,000, leaving a favourable trade balance of $147,000,000. Why does not the opposition, who so often boast of their broadmindedness, set aside for once their party spirit so as to congratulate the government on the considerable reduction which has been effected in the debt of the country? Why not cease criticizing-which would be depressing if it were taken seriously -seeing that never since the war our finances have shown up so well? Yet, Sir, if there is anyone in this country who should rejoice of this improvement, it is the opposition for they are responsible for the enor-
85S
The Budget-Mr. Girouard

mous debt contracted from 1914 to 1921. Within the last five years the debt has decreased by more than $144,000,000; revenues now exceed expenditures; a cash sum of $47,000,000 has been paid by the government to meet bonds maturing in 1927, and by this transaction the government economizes $3,000,000 each year on the interest alone. These are the conditions which make possible a reduction of ten per cent on the income tax, and a reduction of twenty-five per cent on sales tax. The government, although in no way hampering the progress of the country, wished to practise economy and took the means to curtail expenditures. To have a clear idea of this, we have but to remember that in 1921 the Conservative government were spending $528,000,000, and that in 1927, these expenditures diminished by more than $163,000,000. That is evidence of the good administration of the present government which more than ever has the confidence of the people.
The Liberal party has fulfilled the pledge given in 1921: drag Canada out of the chaos where the Conservative administrations had plunged it. Our finances are now in excellent shape and the future of our country is more alluring than ever, especially if we take into consideration that we are but at the beginning of a period which, by its prosperity and activity, gives us the most assured guarantees of a constant development and progress.
Another question to which I want to refer is the farm loans. One will readily recall that the present government had introduced, during the course of the 1926 session, a bill in relation to agriculture which had been passed by the two houses. Unfortunately, the Governor General of that day, acting in concert with certain members of the Conservative party, had made the signing of it impossible, thus delaying for a year the enactment of legislation destined to efficaciously help the farming class by the means of long term loans. The Liberal party again brought down this bill during the session of 1927, and I wish to state, sir, that the farmers of the riding I represent greatly rejoiced at hearing that this measure had been adopted.
I wish to congratulate the Quebec government who, at their present session, will bring down the necessary legislation to insure its operation. This shows clearly the desire of both the Quebec and Ottawa Liberal governments, to unite their efforts in order to favour the farming class of our province.


Mr. RHEAUME (Translation):: Hear,
hear I


Mr. GIROUARD (Translation):: May I
now, Sir, draw the attention of this house to certain events which happened in the course of last year, and especially to the importance attached to the visit of certain high officials who have visited Canada since last session.
I must say that, personally, it is not without certain apprehension that I see ministers or other officials of the departments for Foreign Affairs or Secretary of State for the Dominions, arriving from London. Their right to visit our country is not disputed; they are welcome to admire its beauty and note the marvellous development which is taking place from year to year.
I think, however, that our welcome should be rather a cold one when-to carry out an idea of propaganda which, I am inclined to think, is not the product of a Canadian's brain-we are told what line of conduct our country should follow under certain circumstances. One would really be led to believe from what they say, that we are unable to manage our own affairs, unless we conform to suggestions not in keeping with the needs and destinies of the Canadian people.
The Mail and Empire of Toronto, recently charged the right hon. Prime Minister (Mr. Mackenzie King) and the hon. Minister of Justice (Mr. Lapointe), with trying to draw us away from the British ties, because of their attitude at the last imperial conference, but, sir, one of the reasons which justified the confidence of the large majority of the people in my county, was their wish and desire proudly expressed to see our country represented by men who, by their words, acts and line of conduct in the past, had proved that they were worthy to represent and assert the Canadian viewpoint.
The policy of the Liberal party-and it should be accepted, I think, by all those who are broadminded and are moved by patriotism -is to create for the country we live in, the most complete autonomy, both at home and outside. Those who come to visit us should bear this in mind.
Mr. Ewart, an authority on constitutional law, speaking of Mr. Amery's visit and his propaganda, stated that Mr. Amery-being fully aware of the advantages which his government would reap by being able to control in case of war, the financial and military resources of Canada-had tried and was trying to create a state of things which would make certain this control. Is it necessary to add, sir, that we should oppose such an attempt; that there is cause to ask all these high officials to travel less or at least to travel elsewhere than here, when the purport of such visits is to spread imperialistic propaganda. Mr. [DOT]

The Budget-Mr. Stinson
Amery works in the interest of his government, but is there not cause to wonder at the fact that members of the cabinet in London can thus absent themselves for months, when in their own country there are so many important and intricate questions capable of taking up all their time and attention. We also must preoccupy ourselves with the interests which are our own. We equally have questions and problems to solve, bearing in mind our needs, geographical situation, aspirations and future as a Canadian nation.


Mr. T. H. STINSON (Victoria, Ont.):: Mr. Speaker, the budget speech of the Finance minister (Mr. Robb) grows in importance to the people of Canada year by year, and is awaited with anticipation and concern by increasing numbers. It is unfortunate that this should be the case as there should be some settled policy upon which the business of this country can be built up, instead of being on the basis of a yearly tenure only.
The problem of the tariff has been one of the most persistent and controversial in Canadian history, affecting as it does the wellbeing and prosperity directly or indirectly of every citizen. As early as 1876 Sir Wilfrid Laurier declared himself a moderate protectionist, admitting that protection was a matter of necessity for a young nation in order that it may attain the full development of its own resources. The national policy as enunciated by Sir John A. Macdonald in 1878 was to benefit and foster the products of the farm, the mine, the forest, the sea, and to give employment to our labourers, and thus build up all the interests of this great Dominion. The importance of manufacturers in our national well-being is strikingly indicated by our population figures. Since 1891 our urban population has steadily increased until now it is one-half of our total population. Apart from the actual number of factory employees it is obvious that in any city or town the wholesale and retail merchants, the banks, the professions, the real estate agents, and the municipality itself are largely dependent upon the factory as the dynamo of their prosperity. If the factory is ruined by trade reverses, the city and town must suffer the same fate. Consequently any ill-timed and thoughtless tariff change is a matter of vital concern to the city and town dweller. He is as directly interested in the tariff as the manufacturer, and surely nothing should be done to endanger the well-being of nearly half our population.
It should be the purpose of the government to direct and mould the business policy of our country for the development of the natural resources, and thus give employment
to our citizens. A nation cannot exist without people, people cannot exist without homes, and homes cannot be maintained without money; and money can only be obtained by (he multitude by work and labour. Therefore, if a government fails in its duty to so direct its policy as to foster and provide work and labour at fair remuneration, it fails in its duty to the people.
The test of a good budget should then be: What does it contain to create industry in order that the foundation of the nation may be maintained in the building up of happy and contented homes? Does the present budget contain one tariff change that will develop a job capable of employing an additional Canadian boy in Canada or bringing one exiled Canadian back from the United States?
It is agreed on all sides that our great need is population, and if that is the case, the government must find ways and means of employing the population we have and making new jobs for those we desire to add to our population. Consequently the efforts of the government should be bent to the task of creating work in Canada, and our efforts should be directed towards building up a balanced population. The farmer says:	If you bring in
more farmers and settle them on the land you are creating more competition for me which will help to lessen the price of my product. The labourer says:	If you bring in more
labourers, there will be more competition for the available jobs in Canada. Therefore it is necessary to build up a balanced population to a point where Canada will present a fairly harmonious economic unit-where the burden of taxation may be so distributed over more shoulders that it bears lightly upon all: where our vast over-expanded transportation machine may be operated efficiently and economically, and where local consumption of industrial products may be large enough to give industry and consumer the benefit of savings incidental to quantity production. We cannot overlook the fact that the first duty of a young nation is to make itself economically secure.
It is time Canada took stock of herself, of her resources and her institutions, and commenced to formulate national policies in keeping with her peculiar conditions and limitations. There is somewhere a point in population where Canada as a business and productive unit would function under reasonably normal overhead cost, which point can be approximately ascertained. The goal should be to maintain by a vigorous immigration policy, and when the time comes by a "closed door" policy, a fairly balanced population in terms of occupation and to
.860
The Budget-Mr. Stinson

sustain the proper equilibrium by wise legislation and executive direction, so far as such may legitimately and effectively be done. We should strive to reach our effective minimum population. Where is that point? We have a mile of railway for every 178 inhabitants; the United States has one mile for every 400. This would indicate railway efficiency when we reach a population approximately twice as great as we now have. The same proportion no doubt would apply to the balance of our public facilities and plant. In a general way we are equipped as we stand for a population double of that we now possess.
A study of the economic value to Canada of a new settler is illuminating. Incidentally it is shown that over 163 million dollars have been brought to this country by immigrants. Professor Irving Fisher calculates that the capitalized productive value of the average individual to the state is $3,000. What Canada and many other countries have suffered from during recent years, and what has given rise to general unemployment, is not necessarily over-population but unbalanced production. With untold mineral and forest wealth, and with millions of acres of the world's richest agricultural lands lying idle and undeveloped while the world is clamouring for food, surely there should be no widespread unemployment if corrective methods were employed by our governments. All our great natural resources are of little value to the nation until developed by the genius of man. Could not the unemployed workers of the British Isles be set to work in that development if our government would bend its energies towards making some arrangement with the British Government in some way and under certain conditions to supply the millions of dollars necessary over a period of years for this purpose? Ingenuity, foresight and energy could no doubt work out a solution for the development of our natural resources in Canada with British capital.
In considering the social value of the citizen we cannot overlook his performance as a consumer of the commodities produced within the state. This has an important bearing on employment and general prosperity. Canadian industry produces goods of a gross value of 2,781 million dollars. Of this Canada exports goods amounting to 453 million dollars. The balance divided by population leaves an annual per capita consumption of manufactured articles of $243.30. This clearly demonstrates the enormous value of the home markets to Canadian labour and industry and incidentally the vast significance to be at-

tached to a policy having for its object the augmentation of Canada's consuming population. Every man, woman and child added to our population is a potential consumer to the extent of $243.30 of manufactured goods.
Mass production is the essential element in successful modern industry. Canadian agriculture will suffer by reason of inflated prices leading to a higher production cost until our general consuming population reaches a point where our industries can function more effectively and thus reduce commodity prices resulting in a lower cost of farm operation and living all round. Until we can bring about a spectacular increase in population, the present handicap of high commodity and operating costs cannot be removed. The present policy of this government of striking at industry here and there, a policy which curtails expansion, retards development, and drives money into safe investments of government bonds instead of into industry, will never solve the question, and imports will never make a market here for what the farmer has to sell. The home market now absorbs 837 million dollars' worth of agricultural products as against our export market of 600 millions. The per capita consumption of farm products in Canada amounts to $87.50. The western farmer producing almost entirely for export receives little benefit from the home consumption of farm products, but with our population doubled, the domestic market would loom up as a very important factor in his sales. At present he is at the mercy of overseas countries, which are now striving with every nerve and with more or less success to promote decreasd agricultural imports. At any time he may be virtually Closed out by tariff walls, as happened to his animal products in the United States. There is every indication that he may in a short time have to compete in the Liverpool market with Russian wheat. This would be a serious thing to our western farmers; consequently if a larger home market can be created for him it will be greatly to his advantage.
The policy of the government of this country should be to protect our farmers and give them the full benefit of our home market. The farmer in this country to-day is competing with his fellow farmers in other countries under conditions of absolute unfairness. The product of the foreign farmer is brought into this country under a relatively low tariff, or none at all. while he is forbidden access to other countries save over a tariff wall. The farmer must now surely realize that he was sacrificed by the present government in the negotiation of the Australian treaty, and which treaty was afterwards extended to New

The Budget-Mr. Stinson
Zealand without our getting any corresponding compensation from New Zealand. At the time this treaty was negotiated the general duty on butter coming into Canada was 4 cents per pound, which by the treaty was reduced to 1 cent. The Australian government also fostered a scheme among its farmers to pay them a bonus of 6 cents per pound on all butter exported, to which fund the farmers of Australia 'contributed. With this bonus fund and the decreased duty our market has been flooded with Australian butter. The bonus fund allows the Australian to carry his butter to Vancouver without cost, as the amount of the bonus pays the transportation charges. Australian and New Zealand butter can be shipped on a through rate from Vancouver to Montreal at $2.30 per 100 pounds. The rate for the British Columbia producer to Montreal is $3.58^ per 100 pounds, so you observe the Australian can ship to Montreal, pay the freight and 1 cent per pound for duty and lay it down for 28i cents per 100 pounds less than our British Columbia producer. Saskatchewan and Alberta are similarity affected by this unfair competition. The western provinces were building up a large dairy industry prior to this unfair competition. In 1910 Saskatchewan produced 1,548,000 pounds of butter. In 1925 this had increased to 15,946,000 pounds. Saskatchewan producers are now feeling this unfair competition, with the result that their production was some 4,000,000 pounds less in 1927 than it was in 1926. The same story is told of Alberta, and the decrease in butter production between the years 1926 and 1927 is quite as much as in Saskatchewan. If the average Canadian cow produced 200 pounds per year, the production of some 10,000,000 pounds now imported from Australia and New Zealand in one year would keep 50,000 cows busy the year round in Canada, and would give jobs to a large number of people in caring for the cows and the handling of the product. Why should this government put millions of dollars in the pockets of the farmers of Australia and New Zealand to the detriment of our own farmers? The United States maintains a duty against us pf 12 cents per pound on butter, with the result that we only shipped 17,774 pounds of butter to them in 1926. They are out to protect their own fanners and keep the home market for their own people. If we kept our home market in butter for our own farmers there could be occupied an additional four or five thousand farms in the Dominion of Canada.
Now again, if it is the duty of a government to formulate a policy to create work and labour in its own country, then I should
like to call the attention of the government to another industry that can be saved to Canada and a payroll built up here instead of being built up in the United States. The duty on our wheat entering the United States is 42 cents per bushel, while we maintain a duty of 12 cents per bushel against the United States. There is a large export business for flour ground from Canadian hard wheat, and the United States government, interested in helping industry and keeping payrolls in the United States, allows Canadian wheat to be brought in and milled in bond in the United States and shipped out to compete with the Canadian flour in the world market to our disadvantage. By section 311 of the Tariff Act of the United States, and under treasury regulations relating to bonded warehouses, wheat may be imported into the United States without the payment of revenue or duty on the condition that the flour product is exported. Under general customs regulations a refund or drawback of 99 per cent of the duty paid may be obtained when the product of imported wheat is exported, but to secure the drawback under these conditions the flour exported must contain a mixture of at least 30 per cent of the product of domestic wheat. The quantity of Canadian wheat milled under drawback regulations is not large, so the chief problem arises in connection with the milling in bond provisions, which offer a much more favourable opportunity to the United States millers.
Milling in bond has been increasing by leaps and bounds. The quantity milled from July 1921 to June 1922 was 6,172,837 bushels; for the same months in 1922 and 1923, 9,280,787 bushels; for the same months in 1923 and 1924, 13,904,837 bushels; and from July 1, 1927, to January 28, 1928, 10,000,000 bushels, which makes the quantity now . over
15.000.	000 bushels per year. The flour product of this quantity of wheat would be in excess of 3,200,000 barrels of flour, while the offal by-product would be 118,000 tons. During that period 3,200,000 barrels of flour made from straight Canadian wheat were sold abroad under United States trade names in direct competition with the product of Canadian mills. In the same twelve months Canada exported to countries other than the United States 12,000,000 barrels of flour.
Out of a total demand abroad for
15.000.	000 barrels of flour of Canadian quality, United States millers supplied no less than 20 per cent with free Canadian wheat for this export trade. United States mills have certain advantages in rates and positions which enable them to sell in competition

The Budget-Mr. Stinson
with Canadian mills. The United States miller has an advantage over the Canadian miller by reason of the fact that a mill at Buffalo pays lower transportation costs on Canadian wheat than does any eastern Canadian mill. The offal from the grinding of the Canadian wheat in the United States has a splendid home market where there is a deficiency of the product. Prom the mill to the seaboard the United States miller at Lake Erie points has an advantage under existing freight tariffs, due to his position, of 2J cents per 100 pounds in freight rates. This difference in export cost of 5 cents per barrel alone makes it possible for him to take away business from Canadian mills. What does it mean to Canada?
Manufacturers' costs of converting wheat into flour, including labour, selling expense and overhead, but not including the cost of bags, may be1 safely estimated at 65 cents per barrel. At this rate the cost on 3,000,000 barrels would be $1,950,000. This amount is paid out in the United States in the year instead of being distributed to labour and capital in Canada. If Canada had milled the additional quantity, our railway companies would have moved 15,000,000 bushels of wheat to Canadian mills and would have moved 3,000,000 barrels of flour and 118,000 tons of offal from Canadian mills, whereas this wheat actually moved direct by water from Fort William and Port Arthur to the United States ports, chiefly in United States lake vessels, and no part of the product afterwards used Canadian routes. The loss to Canadian railway companies on the movement of the wheat to the mills and the flour to the seaboard is in excess of $1,500,000; on the 118,000 tons of offal, if distributed in Canada, it would be $679,000. or if exported, $550,000.
Since 1921 one of the largest milling industries in the world has been built up at Buffalo. The wheat that was formerly brought from Fort William and the Georgian bay route and by rail from Midland through Lindsay and Belleville to the seaboard, is now being carried by American boats to American ports and our railways are losing that advantage. Lindsay, which is a Canadian National divisional point, is suffering in railway employment by reason of the fact that our grain is going to Buffalo and is also being routed other than through Canadian ports. Surely our Canadian National Railway needs all the business the government can put in its way. Wages paid by the Canadian National at Lindsay in 1927 were some $200,000 less than the wages paid in 1921. An additional output of 3,000,000 barrels of flour

for our Canadian mills would mean an increase of approximately 15 per cent on the total output of all merchant mills in Canada, which would have a very marked effect on costs and prices from which Canadian consumers would have benefited because of the keen competition among Canadian mills for the domestic trade. This would also have enabled the millers further to extend their markets abroad for Canadian flour by meeting competitive prices. Canada loses the advantage of the sale of this flour under Canadian trade names. It is exported as a United States domestic flour and helps that country to retain its reputation in the world market for the best grade of flour, and the effect on Canada is unfavourable. In selling, the United States miller may represent the flour as a product of Canadian wheat or he may not. If he does not, the impression is created that perfect substitutes for Canadian wheat and flour can be found in another country and that these Canadian products have not therefore the special values that may be justly claimed for them.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Thomas Hubert Stinson: Mr. Speaker, when the house rose at six o'clock I was discussing at some length the importation of our wheat into the United States duty free for the purpose of milling in bond. The question of the by-product is very important. The bran and shorts produced in the United States from this Canadian wheat amounts to some 118,000 tons, and Canadian dairy and live stock interests lose the opportunity to use this large supply of the best of all feeding stuffs. The effect of a larger output would be reflected back in the cost to the farmer. To encourage the development of Canadian dairy interests there should be available a superabundant supply of bran and shorts at as cheap a price as possible. To-day the farmer is paying $35 per ton for bran. All these direct and indirect losses do Canada when measured in dollars represent a sum total so large that the matter must be recognized as being of national concern.
The magnitude and importance of the Canadian milling industry is clearly shown by the returns published in the Canada Year Book. The capital employed in 434 flour mills is upwards of $65,000,000; salaries and wages paid exceed $7,000,000. The purchasing power of the industry as represented by the amount paid out for materials and supplies is upwards

The Budget-Mr. Stinson
of $125,000,000, and the value of the product is upwards of $150,000,000-a net difference between the two of $25,000,000, which represents the values created in Canada. This industry ranks second to the pulp and paper industry in value of products.
An export duty on wheat could not in any way have a prejudicial effect on the price of Canadian wheat, nor would it in any way affect the Canadian farmer other than to his advantage. The prosperity of the Canadian farmer is fundamental to the development and success of the milling industry, and in advocating this duty I do so in the belief that it would not depress prices or restrict opportunities for sale by the primary producer. On the other hand I think it would strengthen the position of Canadian products with advantage to every Canadian industry. If this flour were consumed in the United States, which it is not, it would mean that a market for Canadian wheat which otherwise has been limited and uncertain would be enlarged by the use of wheat in that way. But under existing conditions no increase in the demand for Canadian wheat is brought about. If there is no increase in consumptive demand, there can be no effect on the basis of prices. The United States miller cannot be as substantial a support to the market as the Canadian miller, since the former can drop out of the business the moment he finds it equally profitable to grind United States wheat, while the Canadian miller must always be a bidder for Canadian wheat. It is by special laws and regulations of the government of the United States that the American miller has been put in a position to do this business. It is the policy of that government to give all the employment possible to United States labour and capital in its milling industry, even when the main product is not required and is even denied access to the domestic
TT1 t*1c fits
The principle of export duties has already received recognition in Canada. An export duty on electric power is not different in kind from an export duty on wheat for milling in bond in another country, nor are the reasons for the former any stronger than those for the latter, as imports of Canadian wheat into the United States for actual consumption in that country are absolutely negligible under the present tariff and merely permit the export of a little more United States wheat or flour in competition with Canadian products abroad. The general application of an export duty would not in such case be open to objection on the ground that it might restrict the market for-Canadian products.
Let me read a paragraph from a letter written by a Canadian now living in New York and looking after the export business of one of our Canadian companies:
You will recall that I wrote some time ago about the situation in Cuba and that the United States mills were getting all the business there on account of the preferential tariff of 35 cents per barrel which the Cuban customs authorities granted on all shipments from American mills, whether the flour was made from Canadian or American wheat. In order to compete we were obliged to buy our flour for Cuba from Buffalo mills and in the past six months have bought about 60,000 barrels.
That milling company is not using to-day more than fifty per cent of its capacity by reason of this unfair competition. No Canadian flour enters the United States for consumption, as their duty against our flour is $1.04 per 100 pounds, while the duty Canada imposes is 50 cents per barrel. Their duty shuts out our flour, while we imported from the United States in 1927 some 45,860 barrels of flour. Why discriminate against our farmers to this extent?
It is surely time that the people of Canada should think in terms of a Canada first policy for the development of our iron and other mineral deposits, our coal deposits, our forests and our water-powers, which development will bring at the same time settlers to our fertile acres which have earned for Canada the title of "the bread basket of the worldT Why should we not bend our energies towards finding ways and means of developing the Alberta coal fields and creating a market for that coal in Ontario, thus keeping many millions of dollars at work at home instead of supplying them to the United States workers?
Ontario is importing annually approximately three million tons of anthracite coal from the American coal fields, whereas the province of Alberta has 14J per cent of the world supply; 21 per cent of all the coal on the North American continent; 72 per cent of all the coal in the British Empire and 89 per cent of all the coal in Canada. In fact her resources are sufficient to supply Canada's needs for the next eighteen centuries.
There would be three great advantages in procuring Alberta coal for Ontario. First, a constant supply of coal for Ontario would be assured. Then empty grain and box cars, idle on sidings during a period of from three to six months during the year when the grain was not moving, could be utilized, thus benefiting the national railway. Finally, the transportation of coal by rail would be productive of more westbound freight and hence greater revenue for the national railway, as well as more employment, which is one of our ever present problems.
The Budget-Mr. Stinson

The province of Ontario has been spending one hundred millions annually in the United States for coal-thirty millions for anthracite, and seventy millions for bituminous coal. Bankers inform us that money has a turnover from three to ten times in every year, consequently we are making available for circulation in American channels three hundred million dollars annually from the coal which we are purchasing there. We must bear in mind that a large part of the railway cost is labour, that 75 per cent of the cost of mining coal is labour and that the money, spent in the United States last year, namely 30 millions of dollars for anthracite, if spent for Canadian coal transported over Canadian roads would have provided twenty thousand jobs for men at $1,500 per year in this country, and in addition would have provided a purchasing power in our western provinces with which they could have bought manufactured goods from Ontario and Quebec. On the same basis if you calculate the number of jobs which would be provided if we purchased seventy millions dollars worth of coal in Nova Scotia, now purchased in the United States, another forty-six thousand jobs would be provided for workmen in Canada.
Surely a duty rests upon the government to find ways and means of providing a freight rate so that this coal can >be brought in to the province of Ontario, when you consider the great benefits to be obtained from the same. If the hundred million dollars which is now being spent year by year by the people of Ontario for coal which they are purchasing in the United States was spent in Canada, sixty-six thousand more jobs could be provided in the Dominion and taking five people to the family an additional 330,000 people, could be kept here. The purchasing power of Nova Scotia and Alberta for manufactured goods made in Ontario and Quebec would then be tremendously increased, and the national railway benefited by the increased westbound freight which must necessarily be created, and which would be carried at a profitable rate. We have no coal problem in Canada; our problem is a problem of transportation, and transportation only. It is a problem which this government should find a solution for, and I sincerely trust it will tackle and solve it in the near future.
Striking at industry will never develop a nation. This country must have a protective tariff so long as the other nations maintain one, and the sooner the government comes out boldly in the matter and preaches what it partially practises the better for all concerned. This year's budget estimates that more revenue will be raised from the tariff

duties than before, and yet you hear sounded from the government side of the house occasionally such expressions as the "death knell of protection," which unsettles, hampers, and curtails industrial development.
We are also told that the government has reduced taxation. What is the fact? The money to be raised by the budget comes from the people; the amount to be raised is $7,500,000 more than the amount raised in 1027. We have the same number of people from which to extract this money, consequently the people who paid in taxes last year the money necessary to run the country are called upon to pay this year $7,500,000 more than a year ago. There cannot be any reduction unless you have more people to pay the taxes or the government reduces the amount to be spent.
I should like to see the government give consideration to the poorly paid country postmasters and rural mail carriers. These parties give efficient and honest public service and are insufficiently remunerated for the services performed. I should like to see the government grant a further sum for the relief of Home Bank sufferers who come within the classification as laid down in the statute and who have not been paid by reason of the fund being exhausted before their claims were reached. All those in the same class should be treated alike. Further I should like to see the road grants re-established to the provinces in order that the ever increasing tourist industry may be further developed.
As citizens of Canada let us strive for a balanced population in terms of occupation. Let us give consideration to the things necessary for the development of agriculture, our mines, our forests, our fisheries and our factories, and thus lay the foundation for a great nation such as our natural resources are capable of supporting. Let us build that development on a basis fair and equitable to all in order that we may have a happy and contented people where everyone may have free scope for individual enterprise and individual development. To-day the opportunity Canada offers to men of mettle, of imagination, and of enterprise is greater than ever before.
I heartily endorse and support the amendment moved by the hon. member for St. Lawrenee-St. George (Mr. Cahan).


Mr. D. F. KELLNER (Athabaska):: The Budget-Mr. Kellner

the United Kingdom had a very much more difficult position to face than either of the other countries under review. For instance, she had to make a readjustment in trade. Her foreign commerce was largely gone when the war was over and she had to cope with an unemployment situation with which neither of the other countries had anything to compare. It has been necessary for her to spend millions of dollars in dole's to her unemployed, and along with that she was disappointed in her foreign loans. A large number of countries which owed to the United Kingdom money, which unquestionably it was thought would be repaid in order to meet her carrying cost, did not make payment, and it was a marvellous occurrence that the United Kingdom was able to reduce her indebtedness to the extent she did. The United States also had their problems, not so outstanding of course as those of the mother country, but they too were disappointed in their foreign loans. They had not the handicap of unemployment to the same degree as other countries, but they had to make a readjustment in their whole trade structure. On the other hand Canada has suffered somewhat, but not to the extent that either of the other countries has. She has been a large shipper of farm commodities and of the necessities of life, and regardless of the financial situation in which the other countries find themselves, they invariably have to purchase those commodities. Our problems have been much less than those of the other countries that I have mentioned, and certainly our achiev-ments have been far less than theirs.
Suggestions are frequently made by the Minister of Finance, and others, who are not wholly in accord with him as to ways and means of paying off the national debt. The minister seems to take the view that the outstanding accomplishment which he can offer to the people of Canada to-day is that of refunding our loans, and by that process he hopes greatly to reduce the amount of interest that we shall have to pay. The present leader of the Conservative party (Mr. Bennett) last year advanced a suggestion which I am a little sorry has not been tried out, because I believe, if it were taken up with a reasonable amount of energy, results would follow.
While I am on that point I should like to suggest that there may be other ways which have been overlooked of making payments on our national debt. At this moment the amount of Dominion notes in circulation is very small-$172,000,000-and against that we have a gold reserve of $100,885,000, which covers not only Dominion notes but savings in savings banks. I do not know what perfMr. Kellner.]
centage of it should be attributed to our note circulation, but I know there is something less than fifty cents on the dollar-to be accurate, between 42 and 43 cents on the dollar-in gold held in the treasury against our note circulation. At the present time we have in Canada gold-iproducing mines that are mining and shipping abroad quite a considerable quantity of gold. I wonder what would be the matter with the government making a purchase of say $25,000,000 worth of that gold and paying for it with Dominion notes, and then issuing another $25,000,000 against that gold reserve. In that way you are not changing by one iota the amount of gold behind your note issues; consequently the argument we usually hear that you are going to inflate the currency will not hold because you are not inflating it; you will have precisely the same amount of gold behind your issue that you have to-day. Furthermore, with that $50,000,000 of note circulation we would have a smaller note issue than we had in 1924 or 1923 or practically any year preceding that from the time the war started. You would have a smaller note issue; you would have the same amount of gold behind your issue, and therefore you could not be accused of inflating your issue. On the other hand you would have at your disposal $50,000,000 which would not bear anj interest whatever, and as power is given to the government to do that if they see fit, there is no reason in the world why they should not do it.
No debate on a budget in this house would be complete without a discussion of the tariff. Formerly it used to dwindle down to debate on the merits or demerits of a tariff, but this year I notice that members are getting a little away from that. The other evening a Liberal-Progressive member said that this was the beginning of a reduction anyway, and I wondered why he did not stay with the Prime Minister's suggestions of last year or the year before that it was a step in the right direction. But I cannot help wondering and more or less marvelling at the attitude the government is taking in claiming that its popularity was based largely on the budget of 1926, because it brought down a budget providing for reductions in the tariff. If we are to take the words of the Minister of Trade and Commerce (Mr. Malcolm), he told us this afternoon about one industry in connection with which the tariff had been reduced and the output and the number of employees had been increased. Tffen he told us about another industry where the opposite had taken place where the tariff had not been touched and yet the industry had gone on

The Budget-Mr. Kellner
to better production. From that I take it that it does not matter one iota whether the tariff is touched or not, and if a great deal of popularity accrues to the government for reducing the tariff, it seems to me that they should reduce it.
There is one thing in connection with the tariff which I would certainly like to see carried out. We have a low tariff government in power, and I wish they had the courage of their convictions and would make a reasonable reduction in the tariff. If they are not satisfied to do that, I am not too sure that it would not be a good idea to elect a Conservative government and see if they would have the courage of their convictions and increase the tariff.
I have often wondered if it would not be possible to consider this whole matter of the tariff on a different basis entirely from what we have been doing. The discussion usually develops into a great argument whether tariff protection or free trade is most beneficial to the country, although it has been repeated time and again that there are practically no free trade advocates. I do not think we shall ever get anywhere by conducting a debate of that kind other than possibly to determine which are the more able debaters. As has been pointed out on numerous occasions, the history of both parties since confederation shows that both Liberal and Conservative governments have adhered to about the same tariff policy, so I presume we may take it for granted that so long as we follow the course we have been following in the past there will never be any material change in the customs tariff.
But suppose, on the other hand, these customs duties were levied on a basis of controlled price-and what I mean by that is that you make it known to the producer of an article made in Canada that you are prepared to give him protection upon one condition, and that is that the selling price of that article is in line with the selling price in other countries. After the 1926 budget was brought down, the Liberal government were very quick to go out through the country and point to the great reductions they had made in the automobile duties, and they tried to take a great deal of credit to themselves for doing that. But to-day, Mr. Speaker, the price of the Ford car in Canada is twenty-six per cent higher than it is in the United States. The element of protection was not changed one iota by those reductions in the tariff. When we used to point out in former days that the Ford car or any other car sold on both sides of the line was sold at a higher price in Canada than 56103-55*
in the United States, it was quite a common reply to say that the Canadian car was a better car than the American, that it contained equipment that you did not get in the American car. That argument will not go now, because when the new Ford car came out this year hundreds of orders were taken on the model sent over here from the United States; in fact, the Canadian factory was not operating at the time they were taking orders for the Canadian Ford car. It seems to me that those who advocate protection are going to have a real job on their hands to convince the people of Canada that they should pay $600 for a car in Canada that costs $400 in the United States. I do not believe the people of this country will ever come to a frame of mind when they will sanction such a disparity, but it seems to me that the results which we hope for from tariff protection could be obtained if we went to the manufacturer-I mention the automobile just for the sake of convenience -and said:	Your industry will be protected
provided you are prepared to put your product on the Canadian market at a price in line with the price for the same article in the United States market, and unless you get into line with that price we are going to lift this tariff and permit the entry of the foreign product. That policy need not necessarily be limited to one commodity; I do not see why it could not be worked out to cover practically everything. It seems to me that anyone who understands the present tariff regulations and their application could easily work out a scheme that would carry out the suggestion I have made.
The Minister of Finance, speaking on the budget made a very extensive comment on the favourable trade balance, and took considerable credit to the government for that. In my opinion his statement was misleading. I do not think we can issue an accurate statement of our trade development if we pay absolutely no attention whatever to the interest on our public debt; for that is one debt that must certainly be considered in the finances of any country. I do not believe the statement that was put on Hansard by the minister in any way at all presents to the people of Canada the true financial situation as it exists. If we do not take into consideration the interest on our foreign loans we are certainly overlooking an essential factor which imposes a considerable burden of taxation upon the average individual in this country.
There is another matter in that connection. Frequently the discussion would lead one to believe that trade is carried on between nations, and that some outstanding achievement has

The Budget-Mr. Kellner

been brought about by the activities of the government. There may be some truth in that suggestion, but there is a whole lot in it that is not true. Trade takes place between individuals, not between countries at all, and if individuals are prosperous there will be a large trade; if individuals are not prosperous there will be a small trade. For the government to claim that any prosperity we may have in Canada is due to their efforts is to claim something that they would have a good deal of trouble in substantiating. We have had several foreign visitors of more or less distinction in this country within recent months, among others, Hon. Herbert Hoover of the United States, and Premier Baldwin of Great Britain; and it is a remarkable thing that in the speeches they have made since they returned to their native land both have given credit to the cooperative organizations of the United Farmers for the better conditions in Canada. I think any government or any individual that wants to be fair must give a certain proportion of the credit for that betterment of conditions to the co-operative marketing organizations in western Canada. Mr. Hoover in his speech on returning to his native land said that he believed the farmers of the United States would benefit to the extent of at least twenty-five cents a bushel in the sale of their wheat in the current crop year-not because of anything they had done themselves but because the Canadian farmers had organized a pool for marketing their product. Now if our Canadian wheat pool is worth twenty-five cents a bushel to the American producer I do not think there is any question that it is worth a whole lot more to the Canadian producer, and when the Canadian producer benefits to that extent in the sale of his crop, undoubtedly that improvement is going to be reflected in the trade of the nation. Premier Baldwin stated that the producers in Canada had discovered a way of looking after themselves, and he pointed to the fact that whereas England was paying doles to her unemployed, the people of Canada had the habit of going out and solving their problems for themselves. He commented favourably upon our organization and was not at all stingy in the compliments he paid to it.
Another very unsatisfactory condition in western Canada is the lack of credit for those engaged in agriculture. The present branch bank system does not pretend to cater to the needs of our farmers in the west, particularly those in the frontier districts. I have known a farmer with sufficient assets to entitle him to a substantial loan refused an advance of a few dollars on the ground that "he was outside their loaning area." I do not know just

how far he was outside their loaning area, but the fact that a farmer who carries on a considerable business, whose reputation for honesty is good, and who has ample assets to secure a loan, cannot go into a bank in western Canada and borrow a few dollars, is certainly not a desirable state of affairs, and I do not believe we shall ever meet the credit requirements of western Canada until we introduce legislation which will provide for the establishment of small banks with a capitalization running from 310,000 to $15,000. I am well aware that a lot of people will get very much excited about such a suggestion and will point to the number of small banks that have gone broke, especially in the United States. Well, sir, I am not so sure that that is any greater calamity than having a lot of our farmers go broke simply because they cannot get any credit, although their assets are sufficient to justify a loan. Besides, the limited capitalization of the type of bank that I have in mind would necessarily limit the extent of the loss in case of failure.
Nearly every hon. member who has so far taken part in this debate has paid some attention to immigration, and I suppose I would be very remiss if I, too, did not deal with this subject. At the present time our federal and provincial governments, our railway companies, and numerous other organizations are engaged in immigration activities. So far it seems to me that their combined achievements have amounted to about this: Year an and year out a certain number of our people in western Canada are leaving their farms for various reasons, but usually because they are not making sufficient money to justify their holding on. The efforts of our various immigration agencies may have resulted in enough immigrants being brought in to take the place of those who have left Canada, in other words, we may have kept pace with this loss, but certainly I do not think we are ahead of the game. Our immigration program is costing from eight to ten million dollars a year. I wonder if we would not make real progress if we spent a like amount in bettering conditions on the farms of western Canada. I have in mind the assistance that was given to a number of immigrants who settled in my constituency; homes were built for them, land was broken, wells were put down, and they were given equipment to start farming. That is all very well, but I would point out that the native born Canadian who is farming beside those people can get absolutely no consideration whatever from our immigration authorities; or

The Budget-Mr. Ryerson
from our government he could not even find a bank out there to lend him enough money to pay his taxes. It does seem to me that if you are going to ignore absolutely our people in this way-I should not like to stop at the native born, but I think they are entitled to first consideration-there is no hope of bringing in a great number of immigrants and retaining them. And in view of the fact that the United States quota law applies to all but native born Canadians, it is apparent that for the future those of our immigrants who are dissatisfied with their prospects in this country will not be able to go over into the states, and the only ones who will not be stopped at the boundary line will be our native born. So it would not surprise me at all if eventually we reach the point where we will no longer be able to speak of our native born-they will all be in the United States.
There may be those in this house-I hope there are not-who think that the immigrants we are now bringing in are equal to the men and women born in the Dominion. I am not prepared to admit that, and never will be. Within a short distance of this city, down through Ontario, there have been raised what I believe to be the most moral and the most physically fit, and the most intelligent people in all the world. I have in my recollection a family down there that I knew well. There were six sons, and if they laid themselves down they would form a line about forty-one feet in length. They would weigh upwards of two hundred pounds apiece. Six better samples of physically fitness could not be found in this or any other country. Five of those boys are now resident in the United States. That fact alone is, I think, something of which we should be thoroughly ashamed. And they were a very moral people. You could go into home after home any morning and you would find them starting the day with a chapter from the holy book, and at night, too, there would be family prayer before they went to bed. In that whole community I very much doubt if a single person has troubled our criminal courts. Compare their record with what happens in many of our cities, where you will find that most of the offences have been committed by people ninety per cent of whom were admitted to this country within the last three years. Then there is a greater cost in educating the children of these immigrants. In a school in my own district a school teacher had a class of thirty children, sixteen of whom could not speak the English language. Does anyone for a moment suggest that those children can make the same progress educationally as English-speaking children? And is it fair to the teacher to expect her to have to devote a large portion of her time to teaching those pupils the tongue which they must understand before they can take up their school work? I hope when the estimates of the Immigration department are being considered this house will see to it that whatever help is extended to foreign immigrants along the lines I have mentioned shall also be extended to any Canadians who require it.


Mr. R. E. RYERSON (Brantford City):: Mr. Speaker, I have no desire to appear as a pessimist, or in any way to minimize the prosperity of this country wherever that prosperity is in evidence; but, sir, claiming to possess some knowledge of business conditions and of the bitter problems of many of those living in the industrial centres of this country, I regret that I am forced to the conclusion that in this matter the boasted prosperity is unevenly divided and a large portion of our population have no share in it. The real prosperity of any country cannot be measured by the wealth of the few or by the statements and reports of banks and other financial institutions, but rather by the happiness and contentment of the large masses of her people.
Sir, many industrial centres in Canada have suffered in the past in different ways as a result of the tariff tinkering policy of this government-a policy which more and more would appear to be a deliberate, studied plan, conceived and carried out with a view to embarrassing and crippling the manufacturing industries of this country. And may I ask, to what purpose this policy of destruction? My answer would be-to meet the demands of a group in this house who maintain this government in power and who upon every occasion advocate the wiping out of every shred of tariff protection save that which protects their own interests. This system of selecting one important industry after another for attack has resulted in a general feeling of doubt and uncertainty throughout the manufacturing trade as to which will be the next to suffer.
We are told repeatedly by hon. members opposite that the tariff reductions in connection with farm implements and automobiles has not injured these industries; that the free entry of and drawbacks on parts and materials which go into the manufacture of these articles have fully offset the reductions in tariff. To what extent this may be true only the heads of these industries can answer. But, Sir, what about the steel and iron industries affected, and the thousands of men employed in these industries and in the plants turning out castings
The Budget-Mr. Ryerson

and parts? Surely there can. be no doubt as to the injury in this respect. Many of these plants are now idle or working part time and their employees scattered.
In correctly estimating the effect of tariff reductions on the farm implement industry this important fact should be given full consideration:	Prior to 1924, when the last revision took place, this industry was greatly depressed and in a bad way, largely as a result of previous attacks in the way of tariff reductions, in which cases the compensation allowed in the way of drawbacks and free entry of materials was not sufficient to offset the tariff reductions. Many of the small plants were crippled, dividends were cut, or ceased entirely, and it was only by economics in management, resulting in half time employment, reduced staffs and reduced wages, that the larger and stronger plants were able to survive.
Further relating to this matter I have before me a report issued lby the Department of Trade and Commerce which therefore should be correct, giving a summary of the trade of Canada for the years 1926-27. I have also added the figures which I received from the same source for 1925, in which will be found a record of the total imports into Canada of farm implements during these three years, as follows:
For	the	year	1925..	..	$11,234,839For	the	year	1926..	..	17,630,949For	the	year	1927..	..	26,101,338In other words,	a total	for	the three years
of the enormous sum of $54,967,126. It will also be noted that the increase in the year
1926	over that of 1925 was $6,398,110, and in
1927	over the same year, $14,866,499. These figures should furnish food for thought to every hon. member in this house and to the country generally. The startling increase in imports in this one industry, following so closely upon the almost entire wiping out of tariff protection, leads to but one conclusion if this policy is continued and extended, namely, the ultimate crippling and wiping out of all manufacturing industries. On the other hand, sir, taking this one industry as an example, a policy that will retain to our own manufacturers as far as possible the home market, would undoubtedly result in the great growth and development of this country, which I am sure we all desire, and which would be followed up by a real prosperity in which all classes of our citizens would share. Further, sir, to my mind, it would go a long way towards a solution of the immigration and emigration problems of which we have heard so much during this debate. Who in all this land, Mr. Speaker, would suffer by reason of such a policy? I contend that the reten-

tion of our home markets would so increase production and decrease manufacturing costs that prices to the consumer would at least be no higher; in many cases they would be lower. The increased population and decent living wage for the workingmen and women, which would follow would provide additional markets for all farm products and greatly assist and stimulate that industry.
I have no intention, Mr. Speaker, of criticizing the intricate, technical and confusing schedules of the tariff changes contained in the budget. The full effect of many of them upon the industries concerned can be determined only by time and experience. However, I presume they are the results of investigation and study by the tariff board, with the able assistance of the talented gentleman who poses as the representative of that phantom organization, "The Consumers' League," but who, I am credibly informed, in reality represents only a small group of Liberal and Progressive members of this house who sponsor and finance his position.
I had intended to refer at some length to the 'woollen industry, but, Sir, the entire case for this industry has been so clearly and ably set forth in the speech of my hon. friend from South Waterloo (Mr. Edwards) that little more remains to be said. The branch of the woollen industry confined to the weaving of blankets and woollen fabrics, and the spinning of yams for the same, has for the past few years suffered largely as a result of insufficient tariff protection under the British preferential tariff. And may I at this point make my attitude quite clear on the question of the British preference? I am in full accord with a policy of preference in trade, not only with Great Britain but with all members of the empire. At the same time I contend that this preference should be mutual, and not to the disadvantage or injury of any Canadian industry. In all cases of tariff preference care should be taken to see to it that the items in the general tariff are high enough to allow for the prefe-ence and still maintain a reasonable protection of our own product. Many of these plants were forced out of business or temporarily closed, and fully 40 per cent of the looms were idle during the past year. Practically all plants now operating are working at not more than 50 per cent capacity. The combined woollen industry appealed to the tariff board and were given a hearing. The particular branch I have mentioned placed all the facts in their case before that board, and were confident that some measure of relief would be granted them in the budget. What consideration did

The Budget-Mr. Ryerson
they receive at the hands of the Minister of Finance? There is not one thing of benefit in this budget for them. On the other hand, the free entry of yams which they now spin themselves may have the effect of bringing about the scrapping of that portion of their plant which is now used in the preparation and spinning of yams, and in throwing out of employment those engaged in this process.
Now, Mr. Speaker, I should like to refer briefly to the proposed changes in the tariff schedules under item 1060, which provides a drawback of 80 per cent. The item is as follows:
Newsprint paper, machine finished book grades of paper, not coated, coated or super-calendered book grades of paper, when imported under tariff items 197, 197a, or 198a.
When used exclusively in the production in Canada of magazines or periodicals, including farm journals, printed, published and issued at regular intervals, and_ enjoying second-class postal privileges, containing critical, informative and descriptive articles on various subjects, current topics, political and other news or reviews, criticism or other informative matter, or fiction, being bound, wire stitched or otherwise fastened together.
No doubt this change is proposed ini the interests of the publishers of the papers and magazines enumerated, but, sir, may I point out that if we wipe out 80 per cent of the protection on this product, the American paper industry will benefit at the expense of our own paper mills. As having a direct bearing upon the subject I should like to quote a portion of an article published in the columns of the Mail and Empire of January 26, under the signature of a prominent and much esteemed lady resident of Brantford, which deals with this very matter in an intelligent and illuminating manner. I regret that time will not permit me to read the whole article, but the important part is as follows:
To the Editor of The Mail and Empire: Sir,-	.
A trade report from Ottawa in to-day s (Monday's) Mail and Empire dealing with Canada's decreased exports and increased imports during December, showing a drop in our favourable trade balance of nine million dollars, in the month, prompts me to offer for publication a letter, written by myself and published in Saturday's edition of our local paper. It is as follows:
"In a recent industrial edition of the Milwaukee Sentinel is an advertisement by a Wisconsin paper company which has branches in several cities in the state and also in Port Arthur, Ont. It is entitled 'The Story of Consolidated Newsprint', beginning thus:	'From the first
bites of the axes in the hands of sturdy Canadian woodsmen 'Consolidated' trained men guide the spruce pulpwood on its journey to the paper machines, etc., etc.' This newsprint concern represents but one phase of Winconsin's marvellous industrial prosperity, which is
largely contributed to by Canada and Canadians who are content to remain 'hewers of wood and drawers of water' to Uncle Sam. In the Fox river valley, Wisconsin, between Appleton and Green Bay, are 37 of the largest paper mills in the United States, turning out not only newsprint but every grade and kind of paper commodity, and great fortunes have been based on the industry. The story of the poor school teacher who 15 years ago left a $1,200 job to go into papermaking and who now controls a fortune of $18,000,000 is no secret, and he is but one of many millionaires in Wisconsin, Michigan, New York and Maine who in a few years made their fortune by small initial investments in the pulpwood and paper business. Of the twenty million dollars paid last year to the 14,000 workers in the 59 papermaking establishments of the state, which turned out 100 million dollars worth of paper in the year, I venture to say that not one-sixteenth of one per cent of those wages was spent upon imported goods of any sort. United States manufacturers, backed up by the rest of the people and insisting upon being protected by a sane tariff policy, would supply all their needs. Whereas, according to our Dominion Bureau of Statistics, the people of Canada last year spent eleven million dollars on imported paper alone! This astounding fact in face of that other indisputable fact that the forest wealth of Canada from Nova Scotia to Vancouver Island is being depleted, exploited and exported by the huge pulpwood and paper manufacturers of the United States."
In concluding my remarks, Mr. Speaker, I desire to direct the attention of the Minister of Finance and the government to the lack of relief in this budget for an important industry which clearly placed its position before the tariff advisory board and the government, and which is now threatened with disaster. I refer to the binder twine industry, and in this connection I desire to read two resolutions which were passed by the Brantford Board of Trade and the Brantford City Council. Perhaps I may be permitted simply to place these resolutions on Hansard.


Hewitt Bostock: It will require the unanimous consent of the house.


Robert Edwy Ryerson: Very well; I will read them. The first is a resolution passed by the Brantford Board of Trade, as follows:
Whereas the prosperity of Canada depends, in no small degree, to continuity of employment and a fair wage to its industrial workers;
And whereas in recent years there has been a determined effort by powerful foreign interests to flood the Canadian market with commodities produced in countries where the scale of wages and standard of living are much lower than in Canada;
And whereas believing that justice to Canadian manufacturers and Canadian industrial workers demands a steady domestic market under fair competitive conditions;
And whereas the Brantford Board of Trade believes that certain industries in Brantford are adversely affected by these conditions: -
Now therefore the council of the Brantford Board of Trade urges that the Canadian gov-

The Budget-Mr. Ryerson
ernment and dominion tariff commission investigate fully and impartially all instances where large quantities of goods produced in foreign countries under unfair conditions are dumped on the Canadian market, and that measures be taken to prevent irreparable injury to Canadian industries.
The resolution which was passed by the city council has reference to the Brantford Cordage Company, the largest manufacturers of binder twine in the British Empire and one of the largest industrial concerns in the city of Brantford. It is as follows:
Whereas it has been brought to the attention of this council that the said company is manufacturing at a disadvantage and is subject to unfair foreign competition;
And whereas it is desirous that all assistance possible should be given the said company to obtain relief from this dumping of foreign product on our market.
It is resolved that in the opinion of this council it is desirable that the federal government be requested to take immediate action to give relief to an industry the loss of which would have disastrous effect on the industrial situation of our city, and that copies of this resolution be forwarded to the Hon. Minister of Trade and Commerce and Robert E. Ryerson, our local representative in the federal legislature.
In conclusion I appeal to the Minister of Finance to give consideration to these resolutions and to the interests of the industries concerned before it is too late.


Mr. M. E. MAYBBE (Northumberland, Ont.):: Mr. Speaker, I am very sorry to see so many empty benches on the government side this evening.


Mr. LAPOINTE:: What about the empty benches on your own side?


Milton Edgar Maybee: The remarks which I wish to make deal with a matter of very great importance and I should have been very glad to have all the members of the government hear them. Much discussion has taken place concerning the present budget, but the questions at issue are so important and affect my constituency as well as the country at large to such an extent that I could not let the opportunity pass without making some comments relative to it. It seems to me that there is an apparent reluctance on the part of hon. gentlemen opposite to attempt to defend the pronouncement as set forth in the budget.
I should like every hon. member to behold for a moment a picture which impresses itself on my mind. I can see the industries of this country drawn up in a line, a defenceless line, with the basic industiy of agriculture forming the background. I also see the adopted policy of the government with their guns trained on this line of industries. First there is sniping at an industry here and then sniping at an in-

dustry there, the shot in every case passing through the industry in the foreground anc lodging m the agricultural industry immediately beyond. Sometimes only a right wing or a left wing is lopped off, but the effect is always to injure agriculture. For the business of the agriculturist is to feed the workingman and his family and to supply certain raw materials to various industries. When these industries are prejudicially affected, and men and women are thrown out of employment, less produce is accepted from the farmer. The latest bomb fired by the administration in its budget wiil dismember the left wing of the woollen industry-the right wing having been shot off by a previous budget of this government-and will complete the demolition of the sheep breeding industry.
From all time two factors have stood out preeminently, so far as production is concerned, in agriculture:	First, fertility of the
soil, and second, freedom from noxious weeds. In connection with the first point I may say that sheep are unsurpassed by any live stock as a fertilizing agency. In the second instance, the Department of Agriculture is spending money in devising ways to eradicate weeds, including decoctions of chemicals, but the pasturing of 25 sheep on every 200 acres would eradicate more weeds than all the chemicals discovered. And yet for all that, the sheep industry is doomed to destruction under this administration. We have unlimited grazing lands, and even on rough hilly land, where other stock would perish the sheep do well. We Canadians, perhaps more than any other country in the world of like importance, require woollen products for clothing, but this government puts a premium on the importation of silks to clothe our wives and daughters, and delivers a blow to the woollen industry.
I am informed by prominent sheep. breeders that any class or breed of sheep can be raised in this country. In confirmation of these remarks, I shall read a letter recently received by a member of this house from Mr. Robert Miller,-ex-president of the Toronto industrial exhibition, a recognized authority on stock breeding and a leading agriculturist of Canada-with full authority to make its contents public. Mr. Miller says in part:
It is my belief that sheep are at once the most necessary and under a fair chance, the most profitable animals on the farm. Many times I have said truthfully that there had not been a year in my experience that sheep had not paid a profit on my farm. That was some years ago when I was importing great numbers and breeding as many as my land would support. For years I have not kept any sheep, because of the uncertainty of the market, because of the neglect of those in position to

The Budget-Mr. Mayhee
do so, to hinder trash of all kinds being sold as all wool. Great quantities of mutton have been coming from New Zealand and Australia so that our market has been most changeable and unreliable. All this has made sheep breeding and feeding the most changeable and unreliable of all farm operations. One year it would be good and the next year the very opposite, so much so that many like myself had to change to something else or lose what we had saved.
James Douglas of Caledonia has been quoted in the press as stating that the Australian treaty is the last straw, and it looks to me that way. Mr. Douglas is one of our most prominent farmers and breeders and he has been most successful as a cattle breeder and was also very successful with sheep. In conversation with him a short time ago, I asked him about the interviews reported and he said it was true, and he believed if a change did not take place he would have to quit keeping sheep.
It seems to me a great pity that an industry in which so many families were engaged in a small way, in many cases their only profit making animals being their small numbers of sheep, a very few cows and some hens, should have their whole hopes blasted as they have been by the Australian and New Zealand treaties.
The very best people that we have in this country are' the modest and quiet living people in country places, who by their industry, frugality and economy rear their children, give them their little education, provide their food and their clothing from the lambs that they produce, from the wool, the butter and eggs that they can spare. While this is being done they are building character into the children that vrill make great men of them, big men that will take the foremost positions in world affairs.
It was humble peopl* like that, that laid the foundation of this country, and if their fondest hopes are 1 o be attained, if this country is to become tile great nation that they hoped and prayed for, then the men and women that are to build the superstructure on the foundation they laid must come from that same source.
Men calling themselves statesmen have attacked the very homes of those people and traded the little chance and preference they had in their own Canadian markets away to other countries, so that men in big business might make their business bigger yet. They have sacrificed many thousands of our best and most deserving for the benefit of the mighty few that are well able to take care of themselves.
In spite of the fact that sheep are no longer to be relied on as profitable directly, I believe that I with mans' others will have to keep more of them in order to destroy the weeds that are fast taking possession of our fields since sheep have been discarded.
In Great Britain sheep have been the mainstay of the farmer and the farms. Without them they could not fertilize their farms, they could not keep them clean and they could not pay their rents. We have just as good land and climate here for the rearing of sheep as they have in Great Britain and we should have as good a market here if the people knew that mutton and lamb is the most wholesome food that human beings can have and if they knew that it is, when bred right, fed right, and prepared right, the greatest luxury too.
Then I wish to read a few passages from a letter written by the vice-president of a woollen industry in. my constituency. The gentleman in question says in part.:
We were very disappointed in reviewing the tariff schedule to see that nothing has been done in a constructive way to alleviate the present deplorable condition under which the woollen industry is trying to operate.
It had been felt that after placing before the advisory tariff committee the manufacturers' position, some assistance would have been given to the woollen cloth manufacturers, instead of which we have received another very definite set back by the entry into Canada, free, woollen fabric in the gray weighing six ounces. This finally disposes of the flannel business for which the Campbellford mill has been justly famous for a number of years. We have endeavoured in the past few years to make a certain amount of flannel to keep the citizens of Campbellford employed and this was only accomplished at a loss to the company, but with the additional reduction in the tariff it is impossible for us to carry it. This is one more fabric that has been lost to the Canadian industry.
This is the industry which this government is sacrificing, with the result that hundreds of men and women are thrown out of employment and are leaving for the United States if they can find the wherewithal to take them there.
The following figures were compiled and submitted by the Canadian Woollen and Knit Goods Association:
Raw wool imported and retained for manufacture in Canada
	Imported	Domestic
Year	pounds	pounds1922.. ..	.. 12,412,914	20,204,5671923.. ..	.. 17,156,902	9,855,9721924.. ..	. . 18,376,652	9,530,3371923.. ..	. . 13,544.482	9,484,4541926.. ..	.. 13,292,727	9,038,233This shows	a steady decline	in the manufacture of woollen goods. In 1923, it was found in 124 mills that an average of 40 per cent of the machinery was idle and undoubtedly more is idle at the present time, but this government will relieve this situation by admitting machinery free. In 1926, $43,000,000 worth of woollen and knitted goods were imported. If this had been manufactured in Canada in addition to what was manufactured here, all our Canadian mills would have been working day and night. Let us compare the policy of this government with that of the Minister of Agriculture of Ontario, as set out in the following:
Hon. John S. Martin, Minister of Agriculture for Ontario, informed the members of the Ontario Sheep Breeders' Association, at their recent annual meeting in Toronto, that the government, in order to encourage sheep raising. is prepared to supply groups of farmers with ewes, pure-bred rams and expert advice on their handling. Farmers desiring this
The Budget-Mr. Maybee

assistance must organize themselves into groups.
To each member of a club the government will give eight good ewes and the free service of a pure-bred ram for two years. Preference will be given to clubs whose members agree on the same breed of sheep. Payment for the original flock will start the second year, when the government will be allowed to choose three lambs from the increase. This payment of three lambs will continue for four years, when a farmer will receive full title to his flock. The government expects this policy will help to reduce the weed menace.
After a commission had investigated1 the cost of production in Great Britain as compared with that in Canada, the Hon. Mr. Fielding said on the floor of this house in 1904, as reported in Hansard, volume 3, at page 4365:
They-
Meaning the manufacturers in other countries.
-are not worrying about the good of the people of Canada. They send goods here with the hope and the expectation that they will crush out the native Canadian industries. And with the Canadian industries crushed out what would happen? The end of cheapness would come, and the beginning of dearness would be at hand. Artificial cheapness obtained to-day under such conditions, at the expense of dearness at a very near day in the future, is not a system of which we could approve or which any of us on either side of the house could encourage.
Yet we find this government encouraging it. A so-called tariff advisory board has been instituted by this administration to investigate these matters, but it has proven to be a patronage committee rather than a tariff commission. It has degenerated into an absolute farce along with the civil service commission, but, withal, costing this country hundreds of thousands of dollars.
The dumping of fruit and garden products on our markets continues. If you walk down the streets of any of our towns or oities you will find on display in the windows of stores apples from Washington and Oregon, and vegetables from Mexico and other southern countries. No finer apples or vegetables can be produced than are grown in the constituency which I represent as well as in scores of other places in Canada, and yet we are debarred from the markets of the United States. It is within the jurisdiction of this administration to preserve this market for the benefit of our producers and to stop this dumping, and I would suggest that, if the wealthy wish to eat out of season dainties that are produced in this country, they should be invited to contribute to our national treasury..
The dairy industry appears to have been singled out for a broadside " barrage " from this government, and I should like to call the attention of hon. members to the fact that
fMr. Maybee.]
the county of Northumberland is noted for its production of high-class dairy products. Last year it stood second in eastern Ontario in the production of first grade and specials on cheese, a number of makers scoring one hundred per cent. The dairy industry is suffering from serious and unjust competition on account of the Australian treaty whereby butter from Australia and New Zealand is entering this country on a payment of a duty of one cent per pound. This butter is produced under summer conditions with no overhead expense with which the dairymen in this country are confronted for costly buildings and winter feeding, and the Australian dairymen receive assistance by way of a bounty of six cents per pound on exportations. One result in my county-and I am sure the same thing prevails in many other sections-is that hundreds of splendid dairy cattle have been sold and shipped across the line. The outcome will be greater importations of butter this year, with the dairymen being gradually forced out of business. It seems remarkable that this government would negotiate a treaty whereby Australia could increase at will the duty on automobiles coming from this country, and yet this government is unable to rescue the dairymen of Canada. It appears that the treaty has been of no advantage to either country and very disastrous to Canada. Even the Canadian Council of Agriculture, an avowed low tariff organization, is strong in its condemnation of the treaty.
The United States tariff commission has found that it costs 35.5 cents more to produce a gallon of cream and 4.3 cents more to produce a gallon of milk in the United States than it does in Canada. The present duty on cream going into the United States is 20 cents per gallon and on milk it is 2i cents per gallon. The National Milk Producers of the United States are demanding an increase of fifty per cent in the duty and it is within the power of the president of the United States to grant this. This would make the duty 30 cents a gallon on cream and 3j cents a gallon on milk. In all probability this request will be granted and, if congress takes a hand in the matter, the duty will likely be still further increased. This will be disastrous to milk production along the boundary where scores of cheese factories, on account of the advantage of this market, have been closed and disorganized, and it shows the futility of depending upon foreign markets and sacrificing the home market. If the figures are correct, the difference in the cost of production shows the high state of efficiency of the Canadian dairyman; but what advantage is this if he

The Budget-Mr. Maybee
is to be taken out and shot before daylight? In 1926 we exported to the United States more than 7,000.000 gallons of milk, valued at $1,245,392, and 5.374,131 gallons of cream, valued at $8,050,912. If we lose this market, what then? I have no criticism to offer of the United States government, but I feel that we should at least have our own home market.
In regard to our immigration policy, I think it is generally conceded that before this country can achieve that prosperity and prominence that is absolutely within the confines of possibility, we must have more population; in fact, if we had sufficient population in this country, profitably employed, many of our greatest problems would be automatically solved. The present government are spending huge sums of money to bring settlers to this country, only to pass them out through the back door to the United States. But what is infinitely worse is that they are not giving our own boys and girls the advantages which they are offering to the foreigners, and while one of our own is worth many foreigners in the progress of this country, they too are going to the country to the south of us. Sir Robert Falconer, President of Toronto University, in his report on the university, is quoted as follows: It is not unreasonable for people to complain that many Canadian university graduates are going to the United States, according to Sir Robert Falconer, President of the University of Toronto.	.
Graduates of Toronto are to be found in every state in the union, says Sir Robert Falconer in the president's report in the university, and he continues: "It would seem that a fair estimate of the number of our graduates of the past decade of Canadian birth who are at present in the United States is between 900 and 1,000, that is to say about 11 per cent of the total. Though this number is too large for the healthful growth of our country, it is, I believe, much smaller proportionally than in other walks of life."
The large post-war classes, Sir Robert believes, could not rapidly be absorbed in Canada during the time of readjustment and there is not much doubt but the exodus in those years was greater than normal. Nevertheless', the condition is considered so serious that Sir Robert Falconer advises, "that every effort should be furthered_ by means of employment agencies and otherwise that will hold out to our graduating classes the opportunities of our own land."
In my humble judgment this government is working at the wrong end to accomplish any satisfactory results.
A national policy must be inaugurated in this country to develop our natural resources, and enable us to export our products in the finished state instead of, as at present, in the raw state. The export of 1,500,000 cords of raw pulpwood last year brought us
$15,000,000. Now if this quantity of pulp-wood had been manufactured into finished paper products in Canada it would have brought us anywhere from $90,000,000 to $150,000,000. If the $7,000,000 worth of raw asbestos that we shipped to the United States last year had been manufactured into finished products in Canada before being shipped out of this country, we would have received $77,000,000 for it. The difference in these amounts would have been largely made up of wages. If our nickel, copper and other minerals had been converted into finished products in Canada last year they would have brought us many millions of dollars. With our imports steadily increasing and our exports rapidly declining, with a population of nine million importing goods to the value of nearly three million dollars a day, with our own Canadian investors buying government and municipal securities rather than investing in Canadian industrial enterprises, how can we expect British capital to be invested in this country? As his gracious majesty the King was pleased to say, "Canada has slept long enough; it is time to wake up."
As a national policy for Canada the Montreal Daily Star has put forward in concise phraseology a suggestion which is worthy of consideration, as follows:
1st-Apply the system of protection in full measure to secure the home market for the producer.	.
2nd-Bonus the manufacturer on his exports to enable him to undersell trade rivals in foreign countries.
3rd-By a rigid system of inspection compel the manufacturer to sell for home consumption at cost with a restricted margin of profit to be determined by an independent tribunal when the policy in inaugurated, and thus convince the consumer that he is not being called upon to pay the equivalent of the duty.
4th-Provide strict preventive laws carrying heavy penalties for the evasion of the enactments governing the strict application of this policy.	.	.
Critics may maintain that such a policy is revolutionary. It is revolutionary, but Canada has been stagnating too long, increasing our population at a snail's pace while our neighbours under a tariff that is almost prohibitive have been going forward by leaps and bounds, exporting to the countries of the world on a tremendous scale.
In conclusion, Mr. Speaker, when our needs are so urgent as they are at present, I wish to say as emphatically as I can that it is imperative that the government consider suggestions from some other source if they have no progressive policy of their own to offer.


Mr. ARTHUR DENIS (St. Denis) (Translation):: 
Hewitt Bostock: Is the house ready for
the question?


Mr. GUTHRIE:: Mr. Speaker, it is about
ten o'clock, and I know the arrangement between the whips is to continue the debate. I would therefore suggest that this is the right time for adjournment.


Ernest Lapointe: But somebody must
move the adjournment of the debate.


Hugh Guthrie: I understand there was
an arrangement as to that.


Some hon. MEMBERS:: Question.


Mr. CASGRAIN:: It is early yet.


Ernest Lapointe: It is not yet ten
o'clock.


Some hon. MEMBERS:: Question.


Mr. CHARTERS:: It was understood, Mr. Speaker, that at the conclusion of the hon. member's speech the Minister of Railways would move the adjournment of the debate.


Hugh Guthrie: We were notified that
he would move the adjournment of the debate.


Ernest Lapointe: But not before ten
o'clock.


Hewitt Bostock: Is the house ready for
the question?


Henry Elvins Spencer: There is an understanding between the whips that the debate shall continue for a day or two because several hon. members wish to speak. As I understand, there is a large party at government house to-night, and probably several hon. gentlemen are absent on that account.


Joseph Philippe Baby Casgrain: It was understood that the debate should proceed a little longer to-night, but apparently some hon. members who were to have spoken are attending certain functions-I do not know where-and consequently are not ready to proceed. Under the circumstances someone might move the adjournment of the debate.
On motion of Mr. Charters the debate was adjourned.
On motion of Mr. Lapointe the house adjourned at 9.55 p.m.
Wednesday, February 29, 1928