1928-02-23

[Stage Direction]
First report of the select standing committee on agriculture and colonization.-Mr. Kay.


[Stage Direction]
Bill No. 52, respecting the Canadian Pacific Railway Company.-Mr. Speakman.
Bill No. 53, respecting the Manitoba and North Western Railway Company of Canada. -Mr. McLean (Melfort).
Privilege-Mr. Cahan

Hon. J. A. ROBB (Minister of Finance):: Mr. Speaker, I desire to lay on the table the statement asked for on Tuesday the 21st instant by the hon. member for East Calgary (Mr. Adshead).



PRIVILEGE-MR. CAHAN

Mr. C. H. CAHAN (St. Lawrence-St. George):: Mr. Speaker, as a matter of
privilege I wish to call attention to a statement which I made on the budget debate, and which has been the subject of some adverse criticism and also of some very gross misrepresentation. In opening that debate I spoke as follows:
I notice that on the very evening on which the Minister of Finance made his budget speech, another gentleman, who is very prominent indeed or who wishes to be so, in the public life of this country, made a speech in the city ot Montreal in which he claimed to himself and one or two of his associates the full responsibility, and corresponding gratitude ot the public, for all the advantageous results which the Minister of Finance had noted. I do not know and I cannot judge from personal knowledge of the capacity of Sir Henry Thornton as an administrator of the railways of this country, but apparently he thinks that the Prime Minister, the Finance minister and the Minister of Railways are mere lunary satellites who become known to the public only when they stand in the reflected light of his great sun or star. But in this house we must look to the ministers of the government, who have assumed the responsibility of the administration of public affairs in Canada for a statement and explanation of their conduct in the administration of their respective offices, and I think the government and parliament and the people of this country would be better satisfied if Sir Henry Thornton would not so often obtrude himself into matters of which he has only a partial knowledge and no experience whatever.
Forty years ago I sat for some years as a member of the Press Gallery of this house, and therefore I appreciate the onerous duties and responsibilities of correspondents who sit in that gallery, upon whom the public rely for a fair statement of the proceedings of this house. So far as my experience goes, in the majority of cases, the fairness and accuracy with which these proceedings are reported does credit to the impartiality and competency of members of the press who sit in the gallery. But I find that the Ottawa correspondent of the London Advertiser, referring to the words which I have just quoted, sent the following report to his paper:
The outstanding feature of the _ speech delivered in the House of Commons this afternoon by C. H. Cahan, financial critic of the Conservative party, was a biting attack on the Canadian National Railw'ays and Sir Henry Thornton, the president of the government-owned system.


Some hon. MEMBERS:: Hear, hear.


Charles Hazlitt Cahan: I remark this to the "hear, hears" of hon. gentlemen opposite, that there is not one statement in that entire speech which reflects discreditably upon either the national railways of Canada or upon the Minister of Railways (Mr. Dunning), who assumes the responsibility in this house for the administration thereof. Further, the correspondent of the London Advertiser proceeds:
Mr. Cahan was the official spokesman of the Conservative party, and presumably he uttered the opinions of the party as a whole when he attacked the national railways.
I think that is an unfair report of the proceedings of this house, and discreditable to the press representative who sent it to his paper, the London Advertiser. I notice also that the Ottawa Journal in dealing with these matters makes the suggestion to members on this side of the house that they should always keep quiet when they are likely to make statements which could possibly be misrepresented by the press correspondents of the house.
If that were carried out, Mr. Speaker, I am afraid the opposition would be entirely failing in the duties which it owes to parliament and to the public.
I would suggest to the right hon. the leader of the house (Mr. Mackenzie King), who in similar matters has had occasion to complain, that some measures should be taken to prevent utter misrepresentations of this character. It is well understood that the press correspondents are in the gallery only as a privilege which is due to the tolerance of this house, and unless we can have a fairer presentation of the proceedings to the public, if will be not only prejudicial to the house, as a house, but it will necessitate, I think, some measures being taken to prevent such misrepresentations being sent broadcast throughout the country.



PRIVILEGE-MR. FANSHER EAST LAMBTON

Mr. B. W. FANSHER (East Lambton):: Mr. Speaker, I rise to a question of privilege. Speaking yesterday in the budget debate I said, as reported at page 702 of Hansard:
The third year of that parliament the budget was brought down embodying substantial reductions on farm machinery and other lines, and that budget received the support of the Progressives.

Questions
That statement was challenged by the hon. Minister of Immigration (Mr. Forke), who said:
Half of the Progressives voted against it.
I have taken the trouble to look up the records of the house as recorded in Hansard, and I find that only one Progressive voted against that budget.


Mr. SPEAKER:: Order. This is not a question of privilege.



SALE AND INSPECTION OF ROOT VEGETABLES

[Stage Direction]
Hon. W. R. MOTHERWELL (Minister of Agriculture) moved for leave to introduce Bill No. 51, to regulate the sale and inspection of root vegetables.
He said:	The purpose of the bill is to
consolidate the root vegetables legislation of 1922 and such amendments thereto as may have been enacted since that date. No new principle is involved, the main departure being a provision for the establishment of an advisory board whose duty it will be to advise the minister of any new grades that may be required or of any modifications of old ones that may suggest themselves from time to time.
Motion agreed to and bill read the first time.

[Stage Direction]
Mr. A. N. SMITH (Stormont) moved for leave to introduce Bill No. 27, to provide in the province of Ontario for the dissolution and the annulment of marriage.
Mr. LAPOINTE:: Explain.


Mr. SMITH (Stormont):: The bill was introduced in the Senate and the object is to empower the Ontario courts to grant divorces in that province, instead of having such cases disposed of in the Senate as at present.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. SPENCER:: 1.	What amount of Dominion government notes were in circulation on the 31st December, 1927?
2.	In what denominations were these issued?
3.	How many were issued of each denomination?
4.	Do any Dominion notes other than $1 and $2 circulate among the general public?
5.	If so, what denominations, and to what extent ?
6.	What use is made of those not in public circulation?


Mr. ROBB:: 1.	$220,808,365.20.
2.	25c, $1, $2, $4, $5, $50, $500, $1,000, $5,000, $50,000.
3.
Denom-	Number in
ination	Circulation
25c	 5,487,852
$1	 19,841,844
$2	 7,092,420
$4	 8,189
$5	 49,961
$50	 15
$500	 3,377
$1,000	 4,328
$5,000	 1,572
$50,000	 3,425
4.	Yes.
5.
Denom-	Outstanding
ination	December 31,1927
25c	$ 1,371,963
$4	 32,759
$5	 249,807
$50	 650
$500	 1,688,500
$1,000	 4,092,000
6. For legal tender between banks.


OTTAWA POST OFFICE
Mr. SENN:: 1.	Were tenders called for the demolition and salvage of the buildings west of the post office in the city of Ottawa?
2.	If so, how many tenders were received, from whom and what amount in each case?
3.	If tenders were not called for, what amount was received for the salvage of the buildings?
4.	Was the work of demolition done by days' work?
5.	If so, under whose direction and what were the conditions of employment?


Mr. ELLIOTT:: 1.	Yes.
2.	(a) Seven.
(b)
Beteherman Iron & Metal Co., Ottawa.$8,311 L. O. Genest and R. J. McKenzie,
Ottawa	7,600
E. and M. Goldstick, Toronto	4,650
York Wrecking Company,	Toronto... 3,850
Sachs Brothers, Ottawa	2,100
The Eastern Wrecking & Construction
Company, Toronto	2,000
Russell Wrecking Company, Hurdman's
Bridge	1,000
3 to 5. Answered by No. 2.
The Budget-Mr. McMillan


DREDGES AND SNAGBOATS ON FRASER RIVER
Mr. McQUARRIE:: 1.	Are the men employed on the Dominion government dredges and snagboats operating on the Fraser river out of the port of New Westminster, British Columbia, required to work 52J hours per week?
2.	After having worked these 52J hours are they not required from time to time to act as watchmen, and remain on the boat the whole of the Sunday?
3.	After having worked this Sunday, are they allowed one day off as compensation therefor?
4.	If they are not allowed one day off for having worked the seventh day, why have not the provisions of order in council, P.C. 1537, dated September 7, 1925, granting all civil servants one day off in seven been complied with ?
5.	Do the men receive overtime pay for this Sunday work?
6.	Was not this matter brought to the attention of the Deputy Minister of Public Works on July 24, 1927?	,	,
7.	Will the minister see that the above order in council is enforced as soon as possible.


Mr. ELLIOTT:: 1.	Yes, hours during first five working days, 5 hours on Saturday, with Saturday afternoon off.
2.	Yes, usually three or four of crew remain on board.
3.	Yes, when conditions permit.
4.	Answered by No. 3.
5.	No.
6.	Yes.
7.	In cooperation with representatives of those interested the department is endeavouring to reach a solution of the question.


THE BUDGET
[Stage Direction]
The house resumed from Wednesday, February 22, 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).
Mr. THOMAS McMILLAN (South Huron):: Again we are assembled to discharge our duty as the servants of the Canadian people. Nature and a beneficent Providence have once more been exceedingly kind in their lavish bestowal of material gifts.


Some hon. MEMBERS:: Louder.


Hewitt Bostock: I must ask hon. members to refrain from conversation; I can hardly hear the speaker.


Thomas McMillan: The year of the diamond jubilee of this confederation will pass into history as one of the most favourable and prosperous in all our national life. As a consequence, the annual budget, as announced by the hon. Minister of Finance (Mr. Robb), in many respects displays a creditable financial record, with years of the most careful administration.
Why should his message not be optimistic? -with evidence of prosperity on every hand, with three successive good harvests behind us, with prices of cereals as well as live stock and live stock products at least fairly satisfactory, which has placed agriculture in such a situation as to be able at least to reflect good times upon almost every class and industry in the land, I might add, on almost all but its own.
This condition, together with a greater mineral production, a further increase of forestry products, more particularly the newsprint industry, has so strengthened our industrial and manufacturing life, that, no matter whether they depend on the farm, the forest or the mines for their raw material, they appear to be fully assured of a sufficiency thereof, and a satisfactory market for their product. With such conditions abounding, those engaged in almost every field of national endeavour, outside of the farm, seem more than ever convinced that Canada has now entered upon the most wonderful development in our history. That being so, is it not the first duty of the government to see to it that as far as humanly possible every phase of our national and productive life shall receive even-handed justice in their means and cost of production, thus enabling and compelling every line of effort to rely upon themselves and upon the ingenuity of their own resources, rather than upon government favours, for material success in their business. That cannot be done in a day or in a twelve-month. It takes time to effect a satisfactory readjustment.
With regard to the sub-amendment which has just been proposed, I must confess that since I have had the honour of a seat in this house I have been at a loss to conceive any good reason why my hon. friends should persist in segregating themselves in the southeast corner of the chamber. After listening to their latest declaration I am more than ever surprised at the unexplainable attitude which they assume. The sub-amendment shows clearly that the difference between them and us on this side is one merely of degree and not of principle, and I am sorry indeed to find that my good friend the hon-

The Budget-Mr. McMillan
member for East Lambton (Mr. Fansher) has placed himself in such a position. If my hon. friends would only drop local, sectional considerations-


Mr. GARLAND (Bow River):: Do you call that local?


Thomas McMillan: [DOT]-and view the situation from a national standpoint, there is not one syllable in the sub-amendment which should prevent them from standing with us and manifesting that broad-minded spirit of compromise which is so necessary to progress.
To the altogether admirable hon. member for Southeast Grey (Miss Macphail), allow me to say in this special year when she seems quite unable to make the necessary approaches to any one of the three bachelor leaders in this house, I extend an invitation to come across to us, and we will be pleased to show her the most desirable pathway that leads to the promised land.
Possibly before I get through I may give my hon. friends even stronger reasons for a difference with the government, but such a difference expressed by resolution would prove fatal to the national welfare. I would advise my hon. friends, and even plead with them, to realize that it is not what any great leader thinks ought to be done that it is always wise to attempt at the moment, but it is rather what step in advance can be taken and at the same time carrying your countrymen with you. That is the great secret of progress in a true democracy.
It is also gratifying to notice that the tariff advisory board is getting after its work in earnest. In many cases the facts elicited are indeed illuminating. They clearly reveal the information, well known to every student of tariff matters, that the present Canadian customs tariff is a structure whose revision in many particulars is long overdue. A number of applications have been received from those enjoying a protection of 30 per cent and over, who say they are selling their goods at the level of world market prices and taking no advantage of the tariff. If that is so, why the need of such protection? And yet the ghosts these men see are weird beyond belief. The manufacturers of enamelware, for instance, put in their story the fear of competition from Japan, and yet the total value of imports of enamelware from Japan in five years was only $214. In one of those years we actually imported six dollars' worth of enamelware from Japan. This constant fear of competition from countries of cheap labour is childish. No nation will ever become a great commercial nation without rich and varied mineral and other resources. Providence has blessed Canada with great natural wealth; we ought to become one of the greatest trading nations in the world, and the desire of the government and the people should be gradually to scale down all needless trade barriers and go forth to meet the open competition of the world. We watch our manufacturers as they push the sale of their products in the world's markets, and we are proud of them; we see them as they go out to conquer and, as they are conquering abroad. Why do they stand and shiver at the thought of meeting foreign competition at home? They are willing to fly their commercial flags in the markets of the world; why allow them to hang at half-mast in Canada? Why should our Canadian consumers be compelled to bear the additional burden? Why not get down gradually to a strictly revenue tariff?
From the cradle to the grave we have had preached to us, through the medium of this customs tariff, the gospel of our inferiority. Talk about an inferiority complex; the very thought of the thing is humiliating. It reminds me of the attitude of the British boot and shoe manufacturers about 1907 or 1908, when they appealed to the British government for protection against the American boot and shoe trade, saying there was such an inrush of American goods that they already had established American branch stores and were rapidly driving the British manufacturers of boots and shoes out of their own home market. Of course the British government gave to those people the only answer a British government could give, that it would never do to burden the whole British people to benefit a few boot and shoe makers. This compelled those manufacturers to turn their attention in another direction, so they renovated their dilapidated plants and brought them up to date. They also remodelled the styles of their footwear and brought them up to date, and what was the result? In less than three years they had driven almost every American boot and shoe out of the British market, and even the American branch shops were selling British made goods. Even before the war they began to successfully invade the Canadian and American markets with British made goods. Such would no doubt be the effect of a well-considered, substantial reduction of the Canadian customs tariff. It has been so in the past. It was eminently so in the case of the automobile tariff reduction, in the face of the great hue and cry which closed the Oshawa shops for the moment and sent a great deputation to Ottawa, many of whom got lost in Hull simply because they did not seem to know whether they were walking on terra firma or in the moon.

The Budget-Mr. McMillan
This customs tariff in its application has been in many ways a species of the most glaring economic injustice. Ever since my boyhood days it has hung like a millstone around the necks of a great majority of our people, and more particularly the agricultural and labouring classes. Surely it is a thousand times more important to the welfare of Canada that we should have a healthy and prosperous agriculture than that any other industry should be able through the medium of a high tariff to wring undue prices from the consuming public. More than that, we find many applications before the board even from manufacturers seeking a reduction of tariff on their raw material. They admit that tariffs add to their costs; scores of them have asked relief on their necessary requirements, and we can readily see that relief to manufacturers may also mean relief to consumers.
You may ask whether agriculture is not now prosperous. The answer is that agriculture is not as prosperous as it ought to be, nor as prosperous as it might easily be made. While some farmers do not make the effort which they might make, yet with the present economic handicaps and the clamour for an eight hour day, a half holiday in the middle of the week, and two or three weeks holidays in the middle of the summer which .those in other lines of life are getting,, no farmer can make a success on the farm, and those who are making it go are the ones who toil from sun to sun, and whose women's work is never done. The man and bis good wife who pledge themselves to each other for life and decide to make their livelihood by dairying and allied lines are entitled to every just consideration by the government. I have sat in the homes of those who are recognized as our most successful farmers, and have discussed the situation with those high-minded wives and mothers, who with the keenest maternal feeling have recounted the experiences of their life's toil, saying that it seemed not so bad when they were young and strong but was now almost unbearable. They have repeatedl}'- appealed to me to know if I really thought they should advise their sons and daughters to stick to the farm and repeat their own experiences in life. Yet, Sir, the lasting wrelfare of this country depends upon the principles that underlie agriculture. What do we see to-day? All over this country agriculture is losing the best and brainiest youths from our rural homes, and it is becoming impossible to replace them with suitable help. We talk about the problems of government. Sir, the greatest problem before this country to-day is the problem of keeping 
our own people on the farm, not of keeping them in Canada. We hear much from our friends opposite of the trek to the United States. Such remarks are very unpatriotic and largely beside the truth. The greatest trek in our history was between 1881 and 1891 when the national policy of protection was in the very height of its glory.


Edward Joseph Garland: It is pretty high still, is it not?


Thomas McMillan: As I say, this is a
problem which stares us in the face. No one seems to want to discuss it but the time has come when the people of this country, and more particularly their representatives in this house, ought to discuss this problem and find a remedy for it. This is a national situation. If we look upon ourselves merely as the creatures of a day, what difference does it need to make to us if conditions are never any better? It will only be a few years until we too are off the scene. If we are here for any good purpose we are here for the welfare of posterity, and we should endeavour to make the conditions under which they will live better than the conditions which we enjoy to-day.


Edward Joseph Garland: Your place is over here.


Thomas McMillan: You people should come to this side. Sitting where you are now you are only holding back the wheels of progress, whereas if .you took your places here you would be able to help them on. As I say, this is a problem which is staring us in the face and we must grappLe with it. The facts are that throughout this Dominion agriculture is losing the best and the brainiest young folks from our rural homes, and it cannot lose them and prosper. It is far from my view of life that every youth born on the farm should1 remain there. I have discussed this matter with scores of our brightest young men, and they tell me the only reason why they are directing their course elsewhere is because they cannot see a sufficient margin of profit easily obtained on the home farm. That has been the case for years. It was the case when a big deputation of farmers waited on the Laurier government in 1910, but it is greatly aggravated to-day. In looking over the proceedings of that deputation the other day I find I then made the following observation :
The farmers are willing to meet any legitimate competition in the labour market of the country. He does not wish to underpay the workmen. His desire is to remunerate them well. But when he is compelled to face a statutory tariff provision which takes from him

The Budget-Mr. McMillan
annually a margin of millions, and those millions are employed in competing with him on his own home labour, he cannot stand an unjust competition such as that.
Those conditions are greatly intensified today. You may ask: Where are those millions of which you speak, obtained by our tariff beneficiaries with which they are able to compete for our agricultural labour? In a moment or two I will give you one concrete instance, but the reply broadly is that other lines of industry are able to obtain their necessary requirements either free or at the lowest possible rates of duty. Why should the agriculturists be deprived of the same privilege? Is the welfare of agriculture a matter of such secondary consideration in this country that it should be required to take a subordinate position?
-Mr. GARLAND (Bow River):	Why does
not your party carry all that out?


Thomas McMillan: They are carrying it
out-


Some hon. MEMBERS:: Oh, oh.


Thomas McMillan: -and they have been
doing so ever since they got into power. The only reason why the hon. member and his friends are sitting over there is because they are trying to find a place in the sun for themselves.


Some hon. MEMBERS:: Oh, oh.


Thomas McMillan: And at every opportunity they try to hoodwink us if they can. The hon. member for Bow River tried to hoodwink me when he wanted the support of Ontario to the subsidizing of the railways in the matter of bringing coal from Alberta. When I did not yield to his request what did he do? He stood up in this house and complained that I should not be allowed to place figures on Pansard without reading them.


Some hon. MEMBERS:: Oh, oh.


Thomas McMillan: Now, Sir, I say that
agriculture is largely a domestic industry. But it is far more than that. It is the one great uncontaminated seed-bed of our population. In this respect there is no other situation in life to compare with it. Should that not count for something in the social welfare? As I say, farming is largely a domestic industry. Consider its requirements! Take agricultural implements, machinery, building materials, food, clothing and other household requirements. These comprise over 60 per cent of the needs of our agricultural life. Take the first of these-agricultural implements. They have not a high duty, only from 6 to 10 per cent. But I ask this question:
Is it of more importance to the welfare of this country that the implement makers should be given a preference and allowed to make money and grow wealthy than that agriculture should so prosper that it would present a good living and comfortable homes to the millions for which it is looking? Sir, the question carries its own answer. We do not ask a preference, but if there is a preference going, agriculture should have that preference, and in no case should agriculture be discriminated against. Agriculture employs one-third of our gainfully employed population. Therefore it follows that a successful agriculture means a prosperous nation. Moreover, it is the first principle in this tariff that those manufactured goods which are exported to foreign countries are given a drawback equal to from 60 to 99 per cent of the duty on the raw material used. That provision gives to the residents of other countries our own goods cheaper than our own people can get them. Where is agriculture allowed any such equivalent? The agricultural industry is by far the greatest exporting agency we have got. Where is it allowed any drawback on its products exported? Absolutely none. The only way by which you can allow any such compensating advantage is to give to agriculture its necessary requirements free. And implements are only one of the hundred and one other things in the line of machinery which the farmer requires which all carry a tariff burden of from 20 to 35 per cent.
Turn to another line. Take paint. One would imagine the rate on paint would be low. Paint is a prime necessity in national economy. It is the rawest of raw materials. It enters or should enter into the construction of almost every building in the land. Yet the duty on white-lead ground in oil, which is the real basis of paints, is 37i per cent among the highest of all ad valorem duties in the tariff schedule. One would think the manufacturers would stand hand in hand with the Consumers League in removing such anomalies. But they seem to fear the slightest touch upon that frail structure of protection.


Mr. GARDINER:: What about the government?


Thomas McMillan: My hon. friend talks about the government. That talk is in line with their amendment. They want everything done to-day, and they will never get any further when they adopt that attitude.


Edward Joseph Garland: We want
something done.
The Budget-Mr. McMillan


Thomas McMillan: It will be only a few years before my hon. friend will be no longer in the sun but will be in the shade. Let me say that protection as applied to trade and industry is a misnomer. Prevention is the proper term. Perhaps that is the reason why our hon. friends across the way dropped the word "protection" entirely at the Winnipeg convention, but every argument which is presented has that principle in ambush behind the shade.
Let us consider the cotton industry. That has already been placed before the house, but for the purpose of my argument I am going to place it again. The protection in Canada on manufactured cotton goods under the general tariff is not far from thirty per cent, and is sometimes more. Every time a Canadian workman buys a piece of cotton cloth in Canada he pays an exorbitant price as compared with the world price of those goods. Apparently, however, the cotton lords do not appear to think so. Their viewpoint was very clearly stated before the tariff board by that eminent Montreal lawyer, Mr. Aime Geoffrion, when he said in speaking of wages as a factor in the cost of production:
As a matter of fact we deny the principle involved in the suggestion, if wages are to be considered, everything spent in Canada should be considered. In other words, all that is a factor. In deciding what should be the measure of protection, it can only be on the suggestion that there is money spent in Canada by which the consumer benefits. So, in that way, there is no distinction made between wages and salaries, purchases from local merchants, and any other expenditure in Canada.
In other words, the contention is that the people of Canada, the consumers, should provide the manufacturer of cotton goods with everything except his raw cotton. There is not other way we can do this than by paying an exorbitant price for our cotton goods. That is what we are doing now, and that we are doing it to the full limit of the tariff there is ample reason to believe. At the recent cotton hearing, the chairman pointed out that there was clear evidence that the manu-. facturers were in some cases taking full advantage of the tariff, and yet, according to their story, it is -absolutely impossible for them to survive. Have they survived? Yes. Is the Canadian Cottons, Limited, doing well? This is their financial statement as summarized in the Financial Times:
The balance sheet of Canadian Cottons, as of March 31, 1927, shows a surplus of $2,737,563 equivalent to over $100 a share on the 27,155 shares of common stock. In addition there is shown among their liabilities an item of $600,000 for special replacement reserve, despite a generous reserve for depreciation. If this 
sum was added to the surplus, the latter would be shown to be equal to $123 a share on the common stock.
Yet they would lead us to believe that they are going broke.
Let us consider the Dominion Textiles, Limited, the story of which company records some of the most remarkable adventures in Canadian financial and industrial history. The present owners paid $500,000 for stock with a par value of $5,000,000. Year after year they paid dividends on its par value. Then as the stock went up in price they gave to every holder of two shares the right to purchase an additional share at par when the stock was selling far above par. A year ago they split the stock in three; that is, every shareholder got three shares for one, and today that stock sells on the market for $130 a share. The company has a capitalized valuation of $29,000,000, and in all the yeais since it was formed only $3,000,000 has been paid for the stock. If we measure the profits paid to-day against the actual amount of cash paid by the original owners, we find the actual earnings of Dominion Textiles, Limited, to be in excess of 220 per cent. But that is not all. How fared this company in the hour of the nation's peril when it was expected that every citizen and more particularly every wealthy corporation should be doing everything possible to strengthen the allied cause? At page 362 of the evidence in the report of the special committee on the cost of living which sat in 1919, the then president admitted that the company earned a dividend of about 291 per cent. This is only one line of industry which has been considered and reported upon by the tariff advisory board, but the information is startling. Is it not time that a halt was being called on behalf of the consuming public of Canada to this kind of thing? In these lines of goods it would pay the Canadian consumer well to keep the extra margin which these cotton duties compel him to pay, with that margin pension every wage earner in those factories to the full extent of the wages they receive and let them go idle all the year, and they w-ould still have a good surplus left.
In the case of agriculture employing one-third of our gainfully employed population, it follows that those engaged therein must bear a large part of that burden. Let us turn the tables for a moment or, as a schoolboy would say, "Turn about is fair play." Surely no one will contend that the cotton industry is of more importance than agriculture. How would it be if we now suggest paying the wage bill of those employed in agriculture, let alone an annual dividend of 291 per cent

The Budget-Mr. Clark
of the cash price of the land? Would not that proposition, if carried into effect, "Make Farmer John a smile put on?" Why, the problem would be solved. You could not keep the people off the land.
I conclude by asking the same question which I put earlier in my remarks: Is it not a thousand times more important to the welfare of Canada that agriculture should be so prosperous that it would present a good living and comfortable homes to the millions for whom we are looking, than that any of these other industries should be able to grow wealthy at the expense of agriculture and the general consuming public? We have abundant economic proof that agriculture is not as prosperous as it ought to be? We are all agreed that at the moment we have, generally speaking, prosperous times in this country. Apart from the capital now in Canada seeking investment, foreign capital is rushing in by the hundreds and millions. Where is it being invested? We have just passed the new year, and we have noticed writers galore expatiating on the good times the country is enjoying and the fine opportunities for the investment of capital. Have you noticed anyone saying that capital, in large amounts is rushing in for profitable investment in our rich agricultural lands, the finest natural asset this country possesses. Yet that is where we all agree that more of our people ought to be and, moreover, if the people could see a sufficient margin easily obtainable, that is where they would be. You could not keep them off the farms; they would be falling over each other to get on the land.
If we are desirous of seeing more of our people on the land, why stand shivering on the brink of doing what ought to be done? The vital importance of successful agriculture is such that farming is far more than an industry. The significance of agriculture in the life of this nation is far deeper than this. Employing as it does about one-third of our gainfully employed population, it touches something really vital and fundamental in our national existence. It involves the continued national prosperity, the economic welfare, the racial character, and the social progress of the Canadian people. We must as a people determine, and it is the duty of this house as the servants of the people to determine, deliberately and wisely the role we wish to have agriculture play in our national economic life. Now is the time to decide. You cannot do this kind of thing during periods of dull times. You can do it only when times are prosperous and trade is buoyant. The golden opportunity has come, and it is the bounden duty of this government, now when it has begun the work,
to take opportunity by the hand and go to it deliberately and wisely. If we wish to see agriculture thrive and prosper and present a good living and comfortable homes to the millions for whom we are looking, then free it from its present unjust economic restrictions. If this is not done, it may well be said that what is badly needed, not only throughout this country but in this house, is such a readjustment of national ideas as will place agriculture and its claims to the best intelligence and the highest skill of our people in the very forefront of national thought. When that reawakening is sufficiently emphatic-and God speed the day of such an awakening, that it may come ere the progeny of the noblest pioneers who ever settled any country have all deserted the farms-there will then be no more hastening away from the farm, but rather such a just conception of agriculture as our main resource and our most dignified and independent vocation as will attract to its just aim in the improvement of methods^ the increase of yields, and in the clearing away of the unjust restrictions which lie across its path, the wisdom and the science and the willing hands of millions, who may then obtain a just remuneration for their labour, and at the same time hand on to posterity an unimpaired inheritance.


Mr. J. A. CLARK (Vancouver-Burrard):: Mr. Speaker, though my remarks will be critical in their nature, I do not want it thought that I am not grateful to Providence for the bountiful crops w'hich we have had during the past few years, nor that I am not extremely grateful for the influx of capital into this country as well as for the use of Canadian capital in developing our mines and our natural resources, nor that I am ungrateful also for the great energy displayed by our people in the development of those resources. I do not, however, admit that in the development of those resources this government has had any hand.	_
I cannot hope to analyze in detail the budget brought down by the Minister of Finance, but I must take note of a few of its salient features.	_
First of all, I would like to point to the method by which the Minister of Finance has arrived at his surplus. I see in the public accounts a certified statement foy a firm of chartered accountants that the net debt of the Dominion does not include the issues of the Canadian National Railways guaranteed by this government. I find that those guaranteed issues have, since the present Minister of Finance took office, amounted to $200,000,000. True, $34,000,000 was in the nature of the

The Budget-Mr. Clark
refunding of an indebtedness due by the Grand Trunk Pacific, which was not previously guaranteed by this country, and another $20,000,000 was for refunding of issues which were guaranteed; so that allowing $54,000,000 for refunding, there has been added to the indebtedness of this country by guarantees the sum of approximately $146,000,000.
Now the Minister of Finance over the same period claims a reduction in the net debt of the country of $105,000,000. Actually if those guarantees were added to the net debt of the country, as they should have been, we would find that there has been over the period during which the Minister of Finance has held office a deficit of some $45,000,000 to $50,000,000. which is not shown in the statement presented by the Minister of Finance this year or in any year since he took office.
I find also that since 1925 there appears to have been a reckless tendency on the part of this government to increase its expenditures. The public accounts disclose that for 1925 our total expenditures amounted to some $339,900,000. That sum increased in 1928, estimated, to $366,000,000, and taking the estimates for the current fiscal year, which are now before the house we find that that amount is still further increased to $373,796,000. If you allow $12,000,000 for supplementary estimates, a fair average, we find that the total expenditure for 1928-29 will be approximately $385,796,000-a total increase since 1925 in this country's expenditure of approximately $50,000,000. I do not think that members of this house can emphasize too strongly this fact, that there has been an increase of $50,000,000 in the country's expenditure in those four short years. And what have we to show for that increase?
I have heard it observed by speakers on the opposite side of the house that this is the people's budget. I suppose that we can assume that the farmers of this country form part of the people, yet what do we find in this budget that is of value to the farmers? I have read and reread this budget, and I have at last found that the Minister of Finance did not forget the farmers. I find an item which does relate to the farmers and which is supposed to benefit that great class, for whom the Minister of Finance must have very strong feelings because the item is the first one in the new schedules, reading:
Small onion plants grown from seeds and imported for bona fide transplanting or propagation purposes.
These are put on the free list, and that is the one and only item in this budget wdiich relates to the farmers of this country or is supposed to benefit them. The only con-IMr. Clark.]
elusion to which I can come is that the Minister of Finance must be personally fond of onions, and I am wondering why he did not add pea soup.
I think we might also include among, the people of this country the employed classes. I find that the family budget to-day is as high as it was five years ago; I am not so sure that it is not higher, but at any rate there has been no reduction in the cost of living since this government took office. But worse than that. In the manufacturing industries of this country there were in 1910, 515,203 employees in industrial establishments. Taking it by five year periods, I find that in 1915 there were 514.883 employees, and in 1920 that number had risen to 609,586. In case it may be thought that I am taking a peak year, I will give the figure for 1917, in which year there were 621,694 employees in the factories of this country. In 1924. the last year for which the figures are available, we find that in the industrial establishments of this country there were 508,503 employees, or some seven thousand less than in the year 1910. I ask the government, Does that indicate progress? There is this reduction despite the fact that we have in this country a new and great industry, the automobile industry, and its allied industries, such as the rubber industry and other new industries, which did not exist in 1910. Obviously, since this government took office it has destroyed many of our industries. The best evidence of that is to be seen in the empty factories throughout the country. But there are the figures. I asked the Bureau of Statistics for them, and I went back and had them rechecked to make sure that they were given on a comparative basis.
Furthermore, my friends on the left and the Minister of Finance also have emphasized another point-reduction in taxation, brought about by this so-called "people's budget ", One of the big reductions we are told is in the income tax. I find that to-day the income tax affects only 116,000 of our people, or a little over one per cent of our total population, and they are the wealthy classes. Does that reduction in taxation indicate that this is a people's budget? Are the payers of income tax the common people that the Minister of Justice (Mr. Lapointe)-who, I presume, is now leading the government-was working to benefit when he assisted in bringing down these budget proposals? I see the Minister of Immigration (Mr. Forke)-not in his seat, but in the house; was he working for the common people when he put his imprimatur upon these budget proposals? How about the poor people who are affected by the sales

The Budget-Mr. Clark
tax? True, the sales tax is reduced by one point, but it is still at the level at which the government found it when they took office. Our people are in the same position in relation to the sales tax as they were when the Liberal party took office, and it is high time that the sales tax was wiped out if the government desires to benefit the common people. The other great reduction in taxation that is claimed by our friends opposite has to do with the business profits tax. Two years ago this tax stood at 9 per cent; last year it was reduced to 8.1 per cent, to-day it is still further reduced to 8 per cent. Now, what does that mean? It means simply this. A business which made a profit of $10,000 last year paid a tax of $810, as a result of the budget proposals that business will get the advantage this year of the great reduction of $10-it will have to pay only $800 on its $10,000 profit.
One of the most noteworthy statements made by the Minister of Finance in his budget is this:
The value of working for closer trade relations within the empire is surely apparent.
And he quotes these figures for the fiscal year 1927: our sales to the empire, $542,000000; our purchases $214,000,000-a balance in our favour of $328,000,000. I agree with the Minister of Finance that it is worth while working for closer trade relations within the empire. But it would be amusing were it not tragic to analyze the way in which he has proceeded to work for these closer trade relations. During the time he has been in control of the Finance department he has made eight trade treaties, six with foreign countries. As a result of those eight trade treaties he reduced our favourable trade balance in the calendar year 1927 by $23,000,000 compared with the figures for the calendar year 1926. This seems to me like a hand-out to foreign countries, but that apparently is the policy of the minister and the policy of the government. It looks like a foreign improvement policy, rather than an attempt at working for closer and better trade relations within the empire.
Let us take these eight trade treaties and deal with them in order. Two of them are with British dominions, Australia and New Zealand. Let me take Australia first. In the calendar year 1927 our exports were $2,300,000 in round figures, less than in the previous calendar year; our imports were $1,200,000 more-or a decreased favourable trade balance of over three and a half million dollars. New Zealand: our exports for the calendar year 1927 were nearly $3,700,000 less than in 1926; our imports were $2,000,000 more-a decrease in our favourable trade balance of $5,700,000. Belgium: for the calendar year 1927 our exports decreased $3,400,000; our imports increased $1,200,000-a decrease in our favourable trade balance of $4,600,000. France:	This is
really the most illuminating of all, because if we go back to the time when the treaty came into force we shall find that we had a favourable trade balance of $7,000,000. For the calendar year 1927 we have a favourable trade balance changed into an unfavourable trade balance of seven and a half million dollars. In other words, in the calendar year 1927 we decreased our exports by $3,500,000; we increased our imports by $4,000,000-or an increased unfavourable trade balance of $7,500,000. British West Indies: The same story. The favourable trade balance for the calendar year 1926 -of $715,000 is changed to an unfavourable trade balance of $1,500,000. Japan:	We decreased our favourable balance
by $8,668,000. With only two countries do we find that we have improved our trade- Italy and The Netherlands. With Italy we increased our favourable trade balance by $8,500,000. Let me point out to my friends to the left that that is represented mainly by the increase of $7,941,000 in our wheat exports for the calendar year 1927 as compared with 1926. That great increase was due to the failure of wheat shipments from Odessa. The same thing is true of The Netherlands. We increased our favourable trade balance by $660,000, but this is more than accounted for by the fact that we increased our wheat exports by $4,000,000, due again to the failure of wheat shipments from Odessa. The day is coming, I fear, when Russia will come back into the world's wheat markets. Only one thing is hindering the return of Russia into the wheat market of the world, and that is the lack of unity within that country, due to the fact that Russia is composed of more than two hundred races that cannot unite politically or economically. But should they ever be able to unite economically, think, Mr. Speaker, of the menace to this country in our foreign trade in wheat and other commodities.
But, sir, more serious than that, something which in my view transcends in importance every other problem that confronts Canada to-day, is the situation in regard to immigration. Here I challenge our Prime Minister (Mr. Mackenzie King) to point to any other five-year period in the history of the Dominion when the emigration of Canadians

The Budget-Mr. Clark
to the United States or to any other country exceeded our immigration. Yet that is the situation in the period between the fiscal years March 31, 1922 and March 31, 1927. I have heard this sneered at by members on the other side, but according to the figures secured by myself from the Bureau of Statistics-	.


Mr. DUNNING:: Of the United States?


John Arthur Clark: Yes; but does my bon. friend doubt the official figures compiled by the immigration department of the United States?


Charles Avery Dunning: No, but I question your use of them.


John Arthur Clark: Do I infer that the Minister of Railways doubts that I am quoting them correctly?


Charles Avery Dunning: No.


John Arthur Clark: Then the minister is indulging in empty talk. ' These figures show that 591,121 persons, including Newfoundlanders, entered the United States as immigrants in a given period. AVe can secure figures in regard to Newfoundlanders only for the last two years, but they would indicate that about 2,000 Newfoundlanders go to the United States per annum. Allowing, say, 7,000 for the previous three years-I am quite prepared to allow 10,000 Newfoundlanders, but let us say 7,000. We find that 11,257 fewer people came into the country than went out. I suppose the Minister of Railways will say, "But think of the returning Canadians!" I have heard the Prime Minister and every other minister on the other side say the same thing. But I took the precaution to get these figures from the Immigration department and I am not afraid to give them; I do not mind giving them.
I would ask hon. gentlemen opposite, however, to recall that Canadians have been going to the United States since confederation, and while some of those may be among these returned Canadians they are not classed as immigrants. If they were once Canadians and they have come back they are not entered^ as immigrants, at least according to the information given me by the department. Last year, our Immigration department claims 42,078 came back from the United States. They are returning Canadians, and I fancy it would be very difficult to tell whether or not they are all Canadians who went to the United States as immigrants.
Now there was a time, only ten short years ago, when the blood of a Canadian was a matter of some consequence in this country. Canadians then took very much to heart,

the tragic fate of our 60,000 dead who were laid to rest in the battlefields of France and Flanders, not to mention 50,000 permanently injured. It was freely predicted then that Canada could not stand the strain on her manhood but under this government, according to the official statistics of the United States, we have suffered nearly 800,000 casualties; and if the truth were known, including the underground route we have lost at least a million to the United States. And practically all these casualties sacrificed to the United States were native-born Canadians. But the greater tragedy is that they are in the United States competing with this country.
How are we replacing these Canadians? I further challenge our Prime Minister to point to any speech he has made in this house- and I have searched Hansard-or to any speech he has made in the country, or to any act on the part of this government, wherein this problem has been grappled with in a fair-minded, broad, constructive manner. All I can find in Hansard are empty statements that Canadians are returning, together with suggestions to the effect that members on this side of the house are unpatriotic in bringing the question to the attention of the country. A\ ell, Mr. Speaker, if I am responsible for keeping one of these intending immigrants at home, I shall be content, providing I can influence the government to any extent in grappling with the question and endeavouring to keep our Canadians in this Dominion.
Let us see how this government has dealt with the question of replacing Canadians. I take the last fiscal year as an example; I presume that it must represent the policy of this government, though as a matter of fact no policy has been announced. However, I presume that these figures will indicate at least the desires of the government. The Minister of Railways laughs, as he usually does, but the fact is that last year was the one year since confederation when more foreigners entered this country than British and Americans combined. Is that something to Jaught at? Perhaps it is to the Minister of Railways, but to no other Canadian.


Charles Avery Dunning: Mr. Speaker, I object
to the remark; it is entirely uncalled for.


Mr. HANSON:: It is not out of order.


Charles Avery Dunning: Many dirty remarks can
be made which are not out of order.


John Arthur Clark: If the Minister of Railways
will contain himself and not smile at such tragic things confronting Canada these remarks will not be made.


Charles Avery Dunning: I am not smiling at any tragedy but at my hon. friend. I am at liberty to smile at him.


John Arthur Clark: And I am at 'liberty to
interpret my hon. friend's smile.


Charles Avery Dunning: That is right.


John Arthur Clark: Now I will give a few of
the figures. I find that of English people- I am not going to consider every race, but I take the English because there are more English than other British races-24,890 came into Canada. There were 15,222 of German origin, and of these 12,540 came from Germany and 2,682 from the United States. I find that there were 4,863 Jewish, 3,466 Italians, 4,941 Magyars, 6,700 Poles, 10,061 Ruthenians, and so forth. I will not go through the whole list. I want to say at once that I am not reflecting upon these people; they are in all probability the most admirable of their race that can be found. I repeat, I am not reflecting upon them. I suggest, however, that if you mix, as are mixed in Russia, all the races of the world, you cannot expect that unity which we all desire. It cannot be achieved under such conditions; it would take generations to assimilate these people into anything like a united whole. That is why I refer to this aspect of the question. And now let me give a list of others who entered the country last year. There were Albanians, Austrians, Bohemians, Bulgarians, Creations, Czechs, Dalmatians, Esthonians, Finnish, Greeks, Italians, Jews, Jugo-Slavs, Letts, Lithuanians, Magyars, Maltese, Mexicans, Moravians, Poles, Portuguese, Rumanians, Russians, Ruthenians, Serbs, Slovaks, Spaniards, Turks, Arabians, Armenians, Chinese, Japanese, Negroes, Persians, and Syrians.


Mr. FORKE:: You have left out the
Scandinavian races.


John Arthur Clark: I said I would not name
them all.


Robert Forke: You left out the best ones.


John Arthur Clark: Perhaps I did; I am quite in agreement with the Minister of Immigration. There are no immigrants more admirable than the Scandinavians, with the exception of the British. I am not reflecting on any of these people; I am only pointing out the danger of bringing in too many of them when we have another country to which we can look.
I have heard it freely said that you cannot get the British immigrants here. Just let us see what the Australians have done; I will
The Budget.-Mr. Clark
just give you the total number of British immigrants into Australia year by year.
1921
1923
1925
86,116
76,674
80,278
80,926
84,252
82,662
90,562
The figures for 1927 are not available, but at all events over 90 per cent of the total immigration into Australia has been British. I point to this as an answer to the statement which has been made that we cannot get British immigrants.


Charles Avery Dunning: Did Australia have a
greater British immigration than Canada during those years?


John Arthur Clark: Yes, much greater. Let me quote the figures for the same years, showing the immigration of British settlers into Can* ada:
1921
1923
1925
1927
59,603
74,262
39,020
34,508
72,919
53,178
37,030
49,784
Now, what is the irresistible conclusion to be drawn from these figures and from the exodus to the United States? There is only one conclusion, and that is the racial complexion of the Canadian people is changing, and changing at such an alarming rate that we cannot stand very many more years of it if we are to remain an Anglo-Saxon and French race. I wonder if this situation appeals to my hon. friends from Quebec; I do not think it does. I firmly believe that they appreciate the fact that the Anglo-Saxon has been the fairest, truest and most broad-minded friend the French have ever had, and I really believe in the heart of every French-Canadian is the desire that, apart from the French-Canadians themselves, the Anglo-Saxon shall be predominant. I do not think there are many in the province of Quebec, I doubt if there would be a handful, who would follow the hon. member for Labelle (Mr. Bourassa), who says that if we want to bring about secession in this country we should bring in the British as immigrants. No, Mr. Speaker, there are not many of that type, because it has been too lately proven on the battlefields of France that the British race is most versatile and adaptable and possesses the greatest power of endurance, much greater than that required by immigrants into this country. The British adapted themselves to circumstances previously unknown, and proved themselves to be the

The Budget-Mr. Clark

best on earth. Let me recall the statement made by Marshal Foch, who said that it was the "hammer blows of the British army" which won the war, or words to that effect. They are the men, Mr. Speaker, who, it is sometimes suggested, are not fit to be immigrants to this country. No man can convince fair minded Canadians that the average Britisher is not loyal to the empire, that he does not understand the principles of British fair play or that he is not three generations ahead of every other available immigrant in suitability as a prospective citizen of this country.
In addition to that, Mr. Speaker, when the Britisher comes here he stays with us. I recall the figures placed on Hansard two or three years ago by the member for Victoria (Mr. Tolmie), which have never been controverted and as to which there has been no suggestion of inaccuracy. Those figures covered the period from 1900 to 1921, and of the various races entering this country we find that 77 per cent of the American born left while 23 per cent remained; 52 per cent of the foreigners left and 48 per cent remained, while only 36 per cent of the British left and 64 per cent remained. Surely these facts indicate the suitability of the British immigration and that we can and should attempt to secure them.
Now, Mr. Speaker, I appeal to this government to adopt the policy of the Australian government. I appeal to our Prime Minister to forget his constitutional theories, and with all the sincerity in my soul I ask him to go to the next Imperial conference determined to take a leading part, and to sit down with the representatives of the British government and ascertain whether there is not something that can be done to bring about a much greater British immigration to this Dominion, and to all the British dominions, for that matter. Furthermore, I appeal to him to promote those trade relations to which the Minister of Finance referred, by every means, to see if we cannot band together this British empire into an economic entity which will set an example to the world at large.


Mr. H. B. ADSHEAD (East Calgary):: Mr. Speaker, I was very much interested in the statements made by the hon. member for East Lambton (Mr. Fansher) yesterday, more especially as he seemed to base most of his remarks on the Liberal platform of 1919. He stated that he stood by that platform, and as one of the Labour party who has perhaps been suspected of being somewhat more favourable to the Liberals than to the other party I felt that I was not quite so lonesome after the hon. gentleman laid 
the foundation for what he said on the Liberal platform of 1919. I am not ashamed to say that I do adhere to the Liberal policies. In fact my leader has on more than one occasion seen fit to introduce me to some of his friends in this peculiar phraseology of his:	Allow me to introduce to you
my Liberal-Labour friend, or what would be called in the old country a Lib-Lab. So that I propose to discuss this question this afternoon from a Liberal standpoint. I am not ashamed of Liberal policies, but I am ashamed of Liberal practices. During the years when I sat close to Doctor Clark, who was perhaps one of the ablest exponents of free trade and Liberalism that this country has ever seen, nothing was greater gall and wormwood to me, and to others in our district, than to have the hon. member for West Calgary (Mr. Bennett) come to our meetings and very truthfully tell us that for years and years the Liberal party had been urging the lowering of the tariff, but when they had the opportunity they only lowered it about one-tenth of one per cent on the whole. Last year I think I made the remark that in 1911 those who believed so strongly in protection had crucified Sir Wilfrid Laurier on the cross of protection. Today it is obvious that another crucifixion is taking place which is even more important, and that is the crucifixion of Liberal principles.
A great deal was said in the budget speech about our expenditures, and there were many references to the annual financial statement m regard to our prosperity. I am very glad to be able to congratulate the Minister of Finance (Mr. Robb) upon his ability to meet those expenditures and still have a surplus. I am not going to attack the budget to-day along that particular line. I am critical not so much of the surplus on hand, but of the steps which are being taken to meet our obligations. That I think is the crux of the situation, and that is the point I intend to deal with in my address. There has been a great deal of attack upon the income tax. I have received protests against the income tax from the retailers' association, and others, and one of the salient arguments advanced was this: If the income tax were abolished we should be able to put more money into industry. That is quite true. If all taxes were abolished I am quite sure we should be aJble to put more money into industry. I should be very glad to see all my taxes abolished because I should be able to engage in business to a greater extent than I am able to at present. I do not, however, see that as any particular argument. We must get money

The Budget-Mr. Adshead
from somewhere to meet our obligations and the question is, where is that money to come from? It is upon the subject of this diminishing income tax, and the promise of still further reduction in that taxation, that I propose to make a few remarks, and I hope not to take forty minutes. Perhaps if we turn to what other countries are doing in this matter we may be able to form some idea as to where Canada stands. I hold here a statement made by an expert in financial affairs, to the following effect:
In England 45 per cent of the total revenue -an enormous sum-comes from inheritance and income taxes-including the super taxes. Sixty-four per cent of American tax revenues are from income tax-in Canada less than 14 per cent. The groans of those who bear this burden, much of it falling upon war profits, have melted the heart of the Minister of Finance. There is a 10 per cent reduction in income tax and, on balance, practically nothing in tariff reductions. There is also the definite warning that unless Liberalism asserts itself the income tax will disappear within a few years and wealth untaxed rule the roost. We have heard for a long period of time the contention that the tariff could not be lowered. We have been told that the necessities of the revenue prevented such action. We see now the hollowness of the argument. We have in the income tax a steady and unfailing source of revenue. Year after year it has been cut. In 1927 it brought to the government coffers over $48,000,000. It has proved itself in England and the United States the backbone of an efficient system of taxation. There is no justification for its reduction to-day. To reduce the income tax while the tariff remains as it is, is a budget decision which will meet with scant approval from forward looking people throughout Canada.
That is the opinion of an expert in taxation matters. However, I think we ought to go back to an earlier date than that of this statement. I took occasion the other day to read the addresses of those hon. gentlemen in the Liberal ranks who supported the income tax when it was inaugurated in 1917. I notice that Sir Wilfrid Laurier, the late Mr. Carvell, and Mr. A. K. Maclean, of Halifax, supported the proposal. I also note that you yourself, Mr. Speaker, made a very eloquent appeal in favour of the income tax on that memorable day, July 25, 1917. I propose to read to the house the opinions of Liberals upon the subject of income tax when that form of taxation was brought into force. On page 3767 of Hansard of 1917, I find the following remarks by Mr. Maclean:
One great value of this form of taxation will be that the taxpayer will take a greater interest in the expenditure of any money which he contributes directly to the public treasury. One of the evil effects of indirect taxation is that the taxpayer is apparently never fully seized of the fact that he is contributing anything in taxation to the public 50103-461
treasury. . . . It is in the interest of sound national finance that we should have in this country some form of income taxation, and I have no doubt that once we have embarked upon it, the judgment of the country will be that it should be continued for many years to come.
He went on and said that if the country feared that the income tax wohld impede immigration such a fear could be easily removed by lowering the rate of customs duty which was excessive. I maintain that that is exactly the position which we in this corner of the house take. That was the position of the old Liberal opposition, but it appears to me that the Liberals have forsaken that policy and are decreasing the income tax but not lowering the tariff. Then too, Mr. Carvell, at page 3770 of Hansard of the same year, said that the income tax had become an institution in Canada. He added:
I was glad the minister did not state he would abolish it at the close of the war. It will never be abolished, because the good sense of the people of Canada will see it is kept in effect for all time.
In spite of these declarations by Liberals we find the present Finance minister declaring in the budget speech that he is not only reducing the income tax 20 per cent but proposes to pursue a policy by which the income tax will be by degrees eliminated entirely. The hon. gentleman who now occupies the position of Speaker of this house supported the income tax in these words:
I warned my hon. friend a year and a half ago when he introduced his business profits tax that he would yet have to come to the income tax, which of all taxation measures is the most natural and fairest. According to the best authorities, such as Adam Smith and Thiers, the income tax is the least objectionable of all systems of taxation, because it makes no distinction as between the taxpayers.
Then further he says:
In spite of the hopes of my hon. friend, bright as he thinks they are, I really believe that the income tax has to-day entered into the politico-economic system of Canada, to stay there for many generations.
Those, Mr. Speaker, are the opinions, the policies, of those old-time Liberals, shall I say, who stuck to Liberal policies, Liberal principles and did not do as Goldsmith, I think, said:
Unskilful he to fawn, or seek for power,
By doctrines fashioned to the varying hour.
By those old Liberals, by those who stuck to Liberal principles and voted for them, the income tax was thought and said1 to be a sound economic Liberal principle, and it was expressly stated by them that reductions, if they
The Budget-Mr. Adshead

ever did take place, should take place not in the income tax but in the customs duties.
But I go still further. I notice that the Minister of Finance in addressing the interprovincial conference made some rather startling statements directly in connection with the question of the public debt and the income tax. On November 9, the Minister of Finance was discussing in the interprovincial conference the debt of Canada, and this is a precis of what he said:
The minister took the conference into his confidence with respect to the war debt which to-day amounts to $1,694,621,687 with an annual cost of carrying including fixed charges of $162,799,000. The special taxes imposed for the purposes of carrying this burden failed to meet it by the sum of over $6,000,000. The minister stated that out of the total cost of administering Canada, its railways, its canals, subsidies, etc., paid out since confederation, 36 per cent represented the cost of Canada in the War.
He went on further:
There had been nothing to do but to impose new taxes or to repudiate the debt.
Prior to the Minister of Finance suggesting or mentioning repudiation of debt at the interprovincial conference, the only mention I notice made of repudiation was in 1917. It must be borne in mind that the income tax was imposed for one purpose, namely, to pay the war debt, and it was to be left on until the war debt was paid. When the Minister of Finance states that he must seek for new taxes in order to meet those debts, I do not know wherein he is consistent when now he wants to abolish a tax which was inaugurated for the purpose of meeting the war debt. He goes on further and this statement of his is still more extraordinary:
The minister stated that Canada was faced with the following maturities:	1928,
$53,000,000; 1929, $60,000,000; 1930, $20,000,000; 1931, $77,000,000; and 1932, $73,000,000. He hoped that if revenues were maintained and the country continued to grow to materially reduce, if not retire all these obligations. The great difficulty came however in 1933 when the sum of $446,000,000 came due, and in 1934 when the sum of $535,000,000 came due. . . .
Coming to the much disputed question of the income tax, Mr. Robb dealt with the contention that it was opposed to the spirit of the British North America Act because it was an invasion of the direct field of taxation.
But this is tihe point. In face of all the statements made by those worthies of old who inaugurated the income tax for the express purpose of meeting the war debt and of the Minister of Finance himself acknowledging that the obligations which matured increased year by year and that in 1933 and 1934 the obligations which matured were so great that he hardly knew how to meet them,

except, as he stated, by imposing new taxes -in the face of all that, he deliberately, against the policy of the Liberal party, attempts not only to reduce the income tax by 20 per cent to-day but to continue reducing that very measure which was introduced into the house for the purpose of meeting war obligations.
How will these obligations be met if the income tax is wiped out by 1934? There is only one other way of meeting them and that is by means of customs duties, although the Liberal policy, as stated, proclaimed by the Liberal party, states that the income tax should be retained and that if any reductions are to take place they should take place not in the income tax but in the tariff. The minister made the further statement that we should not forget that in connection with the national debt the generation which spent the money should not shirk its responsibilities. In view of what I have stated; in view of what the policy of the Liberal party was when the income tax was inaugurated, and in view of the declarations of Liberal leaders that if there is any shirking of the payment of those obligations, I maintain the responsibility lies with those who have the most money with which to pay them, and that the burden should not be placed, as it is under the customs tariff, on the consumer who is the least, able to bear it.
Having put forward that argument, I make the plea that the income tax should not be reduced and that, if there is a way out without endangering the government or lowering its dignity, the 10 per cent which has been taken off should in some way be restored. It was with a heavy heart I heard the Minister of Finance declare that he was going to reduce the income tax by another 10 per cent, and that further reductions were going to be made, especially when I knew that this was contrary to true Liberal principles and to the ideals of those people who inaugurated the tax and supported it for the express purpose of meeting war debts and obligations. If the income tax had not been touched, speaking for nobody but myself, I should have seen my way to support the budget; but I feel, with the giving up of the absolute principles of Liberalism, I cannot support the budget and I must support the subamendment of the hon. member for East Lambton (Mr. Fansher).
Perhaps the Minister of Finance will consider the suggestion that in the committee he might add that 10 per cent on again, even if he distributes it to the provinces. The provinces claimed in the interprovincial conference that the income tax, being direct taxation,

The Budget-Mr. Adshead
belongs to them. The British North America Act however states that the federal government has a perfect right to enter any field of taxation it may desire. I believe there is a way out and moreover I feel convinced, if we really knew just the hearts and minds of my hon. friends opposite, there is a good deal of misgiving among those who may support the budget, that Liberal principles are being sacrificed, and the reduction in the income tax is not at all to their liking. They are perhaps in the unfortunate position of having to vote for something they do not like rather than embarrass the government, or would they rather embarrass the government and stand by their principles? I should not like to see the government turned out. It is unfortunate that sometimes we have to choose between one of two things, between violating our conscience and embarrassing the government, and sometimes as the lesser of the two evils we violate our conscience. In view of the fact that a 10 per cent reduction took place in the income tax last year, against which we protested strongly and moved an amendment which should have served as a warning to the government that such a practice would not be countenanced again so far as we were concerned, and knowing as I do the hearts and minds of the people of my constituency, the people of the Labour party, if you will, and all who are true Liberals, and who have expressed their opposition to any further reduction in the income tax, I feel that I should not be doing my duty to my conscience and towards my constituents if I did not oppose as strongly as I can this reduction.
I am sorry the Minister of Finance is not in his seat at the moment. The Minister of Railways was in the house a few minutes ago, but has gone out. I know that we back-benchers do not command very much attention, although we do get on Hansard. I am sorry the Minister of Finance is not here because I wish to refer to a statement that he made in Calgary last year. It was such an extraordinary statement that I took it up not only with my Labour friends but with my Liberal friends as well, and they were astonished because the minister's statement indicated to them, as it did to me, the attitude of the minister and his viewpoint on the income tax and incorporation tax. He made the statement that the reduction in the tax had saved to the corporations of this country $30,000,000, and went on to say that that $30,000,00 would no doubt gradually sift down right through to the man at the bottom. Unfortunately, that seems to be directly contrary both to Liberal principles
and the actual facts of the case. Mr. Bryan in that excellent book of his, The Crown of Thorns and Cross of Gold, made the statement that theTe were two methods of distributing wealth:	One was that it should
gradually sift down from the top to the person below, and the other was that it should go from the producers upwards until it reached those at the very top. It is evident that the latter way was the one the Liberals had in mind, whether or not that is their idea now, that the primary producers should first receive their share of the wealth they produce. But now we have the Minister of Finance say that the reduction, he had made in the tax had saved the corporations $30,000,000, which would no doubt sift down to the man below.
Dealing with the tariff for a few moments,
I was very glad to hear the excellent speech this afternoon of my hon. friend from South Huron (Mr. McMillan). He asked us why we did not go and sit over on that side of the house. We might equally well ask him why he does not sit over here. It does not matter where we sit; it is the principle we are supporting that matters. I assure him that if the gentlemen on his side will make a serious attempt to persuade the government of the necessity of putting Liberal policies into practice, he will receive all the support that it is possible for this section of the house to give, but he will not receive that support if the government simply go on year after year professing what we have heard to-day and for the last thirty years: Oh, these things cannot be done in a day; they must be done gradually 1 I heard that story, Mr. Speaker, thirty years ago in the province of Alberta, and we are still hearing it to-day. I say that action is necessary, that mere playing with the thing is not going to satisfy the members either of the Liberal party or those who sit over here. When I look over at that side of the house I see Liberals, Liberal-Progressives, Progressives, and in this section of the house Progressive and Labour. Why Progressives over there? Why do they not do as the hon. member for South Huron suggested, join up with the Liberal party? It was just because of the facts I have cited that the Progressives ceded from the Liberals because they felt in their hearts that the Liberal party was not carrying out their policies, and they wanted to see those policies carried out and brought to maturity. That is the reason why my friends over there called themselves Progressives, and that is why they do go so far even as not to attend the Liberal caucus.
The Budget-Mr. Adshead

Mr. Ewart, a gentleman well known in the city of Ottawa, made a very pertinent statement about the tariff, pertinent because true. He said that the Conservatives swore by the tariff, but were afraid to raise it, and the Liberals swore at the tariff, but were afraid to reduce it. I think that is a very true statement when we remember how few reductions have been made in the tariff since 1896, and since this government came into power the reductions have been almost infinitesimal.
I have not been able to examine all the new tariff schedules, but I have the opinion of the adviser of the Consumers' League, and he does not seem to be very favourably disposed towards the present tariff proposals of the government. He says that the general opinion is that there is a revision downward, but that that is a matter which can only be determined: by careful investigation. But this much is certain; there are changes upward, and there are changes downward. In some cases a higher rate of duty is changed on the higher priced product, the rate remaining unchanged on the medium priced article, and on the lower priced article the duty is lowered. The schedules in the intermediate tariff under which practically nothing enters the country are lowered materially, but the schedules under which importation takes place are only slightly reduced. This, Mr. Speaker, is not tariff adjustment; it is tariff legerdemain.
As regards the British' preference, although you have increased the British preference by 50 per cent, you have stipulated that at least 50 per cent of the product must represent empire labour and material. The cotton manufacturers of my native city of Manchester import nearly 30 per cent of the cotton products from the United States. Nearly all their cotton is imported from the United States and is manufactured in Manchester and the neighbouring towns. But if this 50 per cent provision as to empire labour and material is to be applied, their product will not be able to come in under the British preference, and will have to come in under the general tariff and pay a duty of 30 per cent. That would wipe out the British preference so far as cotton is concerned, and simply give added protection to the cotton manufacturers of Canada.
We have been told that this country is very prosperous. I agree that we are more prosperous than we were, but there has never been a time in the history of Canada when somebody was not prosperous. In our darkest hour in 1918, the Dominion Textile Company, which will benefit under these cotton schedules, earned 291 per cent while our boys were dying

in Flanders. They were prosperous. Sil Charles Ross was prosperous when afterwards, if I remember aright, he was voted' two million dollars in lieu of the profits that he might have made. Surely he was prosperous. I say there never has been a time, however dark nationally, when somebody in this country was not prosperous. But the idea of prosperity is not that it should be allotted to three or four or even twenty; true prosperity prevails only when it is spread among all classes so that even in the humblest shack of a settler in the far-away constituency of my friend from Peace River (Mr. Kennedy) its influence may be felt. And that, Mr. Speaker, is our idea of prosperity.
I do hope the government will see the folly of still reducing the income tax. I do hope they will realize that it is contrary-if I may recapitulate-to the declared principles of those great Liberal worthies whom hon. gentlemen opposite hold up as models of statesmanship-the late Sir Wilfrid Laurier, Mr. A. K. Maclean, the late Mr. Frank Carvell, and even Your Honour before you were called to the chair. All these influential leaders of the great Liberal party advocated the imposition of the income tax as a means to pay off the war debt. And yet the government have abandoned those principles and reduced the income tax. WTiat evil influence persuaded the Minister of Finance to take this course I know not, but I sincerely hope that some means will be found by which Liberal consciences, Liberal-Progressive consciences and our own may be satisfied, so that we can support the budget; in other words, I do hope that the government will maintain the income tax without change and thus put into practice Liberal policies and honour Liberal principles.


Mr. H. A. STEWART (Leeds):: Mr. Speaker, the member for East Calgary (Mr. Adshead), who has just taken his seat, will,
I am sure, excuse me if in my limited time I do not attempt to answer in detail the propositions which he has outlined in his interesting speech. But he asked one question which must have occurred to many other hon. members and to the people generally, and perhaps after he has been in this house longer he will become accustomed to the repudiations of policy, the violations of pledges and the inconsistencies he has pointed out in the record of the government. These departures from the often declared principles of the Liberal party can be explained only on the assumption that the conflicting views held by the members of the cabinet and by their supporters in this house cancelled one another, with the result that we do not get

The Budget-Mr. Stewart (.Leeds)
vigorous action on any line of policy; we do not get fulfilment of any of the pledges that have been given by the government in the past.
Now, Mr. Speaker, the budget is, of course, a review of the financial affairs of the Dominion for the past year. We take revenue and expenditure, assets and liabilities, and we analyze as far as we can the situation from that standpoint. In surveying our assets we must not overlook one of outstanding importance, our Canadian National railways, an organization that is extending its usefulness, improving its services and very materially bettering its financial condition as the years go by. That is a situation which must afford great satisfaction to the house and to the country at large. If we endeavour to analyze the causes of these results, I think we may fairly divide them in the proportion of about fifty-fifty between the able management that that organization has had under Sir Henry Thornton, and the loyal support and cooperation which he has secured from the large army of employees of that vast system. These two influences have resulted in increasing the revenue, decreasing the operating expenses, and leaving a very substantial surplus-a surplus that is continually growing larger and larger.
Some criticism has been directed against the Minister of Finance (Mr. Robb) for the way in which he has dealt with the financial obligations of the Canadian National Railways, or perhaps, more properly, I should say the financial obligations of Canada in relation to the Canadian National Railways; because, after all, Mr. Speaker, we own this great railway system, and its debts in the last analysis are therefore the debts of Canada. The member for St. Lawrence-St. George (Mr. Cahan) pointed out that if we took into consideration the financial obligations of the Canadian National Railways we would find that not only had we not decreased our national debt in the last few years, but that on the contrary it had been increased. In this connection it may be interesting to refer to the budget debate in the session of 1923, when the Right Hon. Mr. Fielding was finance minister. He had to deal with the indebtedness of the Canadian National Railways, and in Hansard for that year we find that in the course of his budget speech he said in relation to the Canadian National Railways:
We turn now to the year 1922-23, which closed not many days ago. We have not the complete accounts before us, but there is sufficient information to enable us practically to announce the result. Ordinary revenue amounted to $393,619,000. These are estimates, as the figures are not absolutely final.
Ordinary expenditure amounted to about $331,780,000. As between those two items, there was then a surplus of $61,839,000. Capital expenditure, however, represents $14,500,000; adjustment of war claims, $6,700,000; cost of loan flotations, $3,050,000; these representing in all $24,250,000. There was thus a surplus over ordinary, capital and special expenditures, of $37,589,000. But again the railways have to be taken into account. We had to advance during that year $92,190,000 for railways, and $6,060,720 for the Canadian Government Merchant Marine, making in all for that charge, $98,250,720. This, of course, takes up all the surplus I have mentioned and leaves a large balance on the other side of the account. If we take everything into consideration for the year, the net result was that we added to the public debt in the year just closed $49,293,086. The receipt of something over $8,000,000 from the British government on exchange account helped us to keep down what otherwise would have been a larger addition to the public debt.
The addition of nearly $50,000,000 to our public debt in the past year is not a situation that should cause very much satisfaction in any quarter.
That was the way Mr. Fielding reviewed the situation. In the following year we find the present Minister of Finance (Mr. Robb) adopting an altogether different course. I quote from Hansard:
Turning now to the public debt. On March 31, 1923, our net public debt stood at $2,453,770,868.74. Our estimated ordinary revenue for the year just closed is $396,000,000. Our estimated ordinary expenditures of $328,250,000, and capital expenditures $12,170,000; special expenditures $8,390,000; railway loans $23,781,664; Canadian government merchant marine loans $1,500,000, and loans to Quebec Harbour Commission, which are treated as a non-active asset, $500,000, together with an amount of $621,987 carried on the books of the department for Victoria Shipowners, Limited, which it is proposed to treat as a non-active asset in the place of an active asset as heretofore, make the total charges $375,213,651. Our surplus of ordinary revenue over these expenditures will therefore be $20.7S6.349 to be applied towards the reduction of the national debt as it stood on March 31, 1923. To this must be added $1,317,000, being the amount of sundry outstanding indebtedness cancelled during the past year, and a further amount of $8,305,760.37 received in settlement of an adjustment of acknowledged book debts between the imperial and the dominion governments. These two amounts, totalling $9,622,760.37, together with the $20,786,349 surplus of revenue over total
. [DOT] .	1	1	_..1*1 1 n /I nL4" n o AT
These figures show that with a revenue of $393,000,000 odd, and taking into consideration the situation of the Canadian National Railways, the Right Hon. Mr. Fielding found that the debt of Canada was increased by $50,000,000, while his successor, the present Minister of Finance, with a revenue of $396,000,000, almost the same, finds that our pub-

The Budget-Mr. Stewart {Leeds)
lie debt is reduced by about $30,000,000. It is perfectly clear that these two gentlemen have adopted different methods of procedure in dealing with the revenues of Canada and the expenditures and obligations of the Canadian National Railways. The explanation is found in the fact that in the year 1923 an amendment to the Canadian National Railways Act was passed, permitting the government to guarantee securities issued on behalf of the system; and since that legislation was enacted the government have adopted the principle of guaranteeing the obligations of the national railways and then forgetting all about it when coming to deal with the liabilities of Canada at the end of the year. The Canadian National Railways sign on the face of the bond, the Minister of Finance signs on the back of the bond, and then, like our old friend Micawber, the government says, "Thank the Lord, that debt is paid." The indictment of the hon. member for St. Lawrence-St. George in respect of this feature of our financial situation stands unanswered.
We hear a good deal about the prosperity of Canada, and in support of the contention that we are really prosperous we are supplied with (the statements of bank managers and of financial organizations. These statements are all very well in a way, but I have no doubt they are as optimistic as the circumstances will permit; they have the perfectly proper and legitimate purpose of stimulating and encouraging business. I think, however, it is well that the house should note one sentence in the speech of the mover (Mr. Ilsley) of the address in reply to the speech from the throne-a very able speech. He says:
In discussing the question of Canada's prosperity, Mr. Speaker, there is one unfavourable feature which should be mentioned, and that is the fact that this prosperity has not been as evenly distributed as might have been the ease, or as we would have liked to see it. 1 am not now referring particularly to the distribution as between classes in the community, although a good deal could be said as to that; I am referring to the territorial distribution of prosperity in which the people m the maritime provinces, unfortunately, have been slow to share.
Apparently, therefore, this prosperity, according to one of the supporters of the government, is not as general as we could hope it to be. We all rejoice in the prosperity of Canada; we are not going to disparage or minimize it. It is inevitable that, as we advance from our war difficulties, from the difficulties of deflation, our condition will improve. We have had good harvests and good prices. But, I submit, no gentleman in this 
house has in any direct or tangible way connected the prosperity of Canada with the policies of this government, and it is impossible to do so. The prosperity is positive, and it would be much greater if in this country of vast natural resources we had a government with the courage to evolve and put into force some policy that would conserve and develop these resources for the benefit of the Canadian people. After all, no country of the size of Canada, possessing the vast resources which we have, can be truly said to be prosperous when fifty or sixty thousand of its best people have annually to leave that country to seek their home in a foreign land.
We are of course reminded of the tax reductions, and the outstanding feature in the reduction of the sales tax is the fact that it is taken off little by little. The result is that the consumer does not profit by these trifling reductions. If the sales tax were removed at once and made effective within a few months, and there were no loss to the merchants, then there would be an immediate and practical benefit to the consumers of Canada. It must be recalled, of course, that the sales tax, if the reduction now proposed goes into effect, will then be only where it was when this government came into power in 1921. The stamp taxes, which have disappeared, were also put on to a large extent by this government, and we have the spectacle of an administration boasting of reducing taxes which it has itself imposed on the country.
I contend, Mr. Speaker, that so long as any government takes from practically the same number of people an amount of taxes increasing year :by year we cannot truthfully say there is any real reduction in taxation. In looking up the reports I find that in the fiscal year 1926 the revenue from taxation amounted to $327,575,000, in round figures. In 1927 the revenue from taxation amounted to about $346,650,000, while in 1928 it is estimated that the revenue from taxation will be about $357,000,000. The house will note an increase in the total revenue from taxation during these years, and when this amount is being taken from practically the same population there can be no real decrease in taxation. That contention is as hollow as a drum which may be gilded and beaten in order to provide music to which the supporters of the government may march. It may be sufficient for that purpose, but after all it does not provide very pleasant music for the people of Canada.
We have in this budget a revision of some items to a certain extent. I do not propose to go into those in detail, but after all it

The Budget-Mr. Stewart (Leeds)
is really interesting to review the record of this government in connection with the tariff, because it illustrates in a most striking manner that inconsistency to which the last speaker referred. I sat in the gallery of this house before 1921 and heard the present Prime Minister vigorously demand a general downward revision of the tariff all along the line, and I am sure he went through the country giving that as the policy of the Liberal party. The first budget presented after he came into power was in 1922, and if one only had time it would be interesting to read Hansard and quote some of the statements made in connection with that budget. It is true that there were some revisions, but it was a disappointment to those who expected the promise of the Prime Minister to be fulfilled. His supporters were pacified to a certain extent, however, by the hope that it was only a beginning, and that it was a step in the right direction. Then we had the budget of 1923, in which the then Minister of Finance said we must have tariff stability; that the business interests of Can-must not be disturbed from time to time by these reductions; that the tariff after all was a moderately low tariff, and that if business were to prosper there must be stability of tariff. There were no tariff reductions that year. In 1924 we find another step taken in the direction of reduction, and in 1925 we find the excuse advanced that the tariff board was appointed and therefore the government must wait for the decisions of that board. In 1926, on the eve of an election, we had some reductions in tariff without waiting for the decisions of the tariff board, because it was thought that these reductions would be helpful. In 1927 the government apparently took another backward step; there \yere no changes in the tariff. In 1928 we have some changes, the effect of which I am not prepared to state because I have not been able to analyze them sufficiently in detail.
There is one reduction in this tariff, Mr. Speaker, to which I wish to refer, however, and to which I most emphatically object. I refer to the reduction in the tariff on dairy products coming into this country, particularly the products of Australia and New Zealand which enter our market to compete with the product of our dairy farms. According to the Dairy News, a letter issued from the Department of Agriculture under date of February, 1928, we find that in the year 1927 there came into this country 11,208,819 pounds of butter, while in 1926 we imported 9,151,882 pounds. This is against a tariff wall of only one cent per pound, and of course
there has been a storm of protest from the dairying interests of this country. I have moved for a return showing these protests, and when they come down I am sure they will be very interesting indeed. These protests come from all parts of Canada, and before this debate is over I should like to hear from the Minister of Agriculture (Mr. Motherwell) how he justifies a reduction which is working such injury to the interests that it is his duty to protect and care for.
In connection with the tariff one is interested in the pronouncements of the present Minister of National Revenue (Mr. Euler) before he assumed that office. We find that in the year 1924, speaking on the address, he said:
I do not know what there is to be gained at the present moment by the making of slight tariff changes. A policy of nibbling has never appealed to me.
He goes on to state that he approves of stability in the tariff, and continues:
Let me say to possible critics of my attitude on the tariff when considered in conjunction with the tariff platform of 1919. I did not support that platform; I never endorsed it and I have on two occasions repudiated it in this house. I do so again now.
Then he announces his intention of voting against the budget. I suggest that if he is to be consistent he will vote against this budget on the same ground. This is a nibble at the tariff, and a big nibble to the prejudice of the dairying interests of this country. I should like to hear from the Minister of National Revenue as well, before the debate is finished.
We have heard a great deal, Mr. Speaker, about wider markets. If we look at the trade returns of this country, as published by the Department of National Revenue, we find that our imports in 1927 were greater than in 1926. In 1926 our total imports amounted to $2,256,028,869, while in 1927 their value was $2,298,465,647, and when we look at our exports we find that in 1926 they amounted to $1,328,700,137, while in the year 1927 they were valued at $1,267,573,142. There are, of course, two markets for the Canadian people the foreign market and the home market. Those who have dealt with the treaties that have been adopted by this government have proved conclusively that we are not gaining very much in the foreign market, while the figures I have quoted establish beyond all doubt that we are narrowing and contracting the home market, which after all is the most reliable and the best. In foreign markets we have to meet the competition of the world. Changing policies and changing

The Budget-Mr. Stewart (.Leeds)
conditions make this market erratic and unreliable. In, no instance are the conditions satisfactory.
With regard to immigration, the volume of disinterested and intelligent criticism that has grown up in this country must convince us and the people at large that our policy in this respect is very largely a failure. We are spending many millions to bring people to this country, and we are losing from sixty to seventy thousand of our population annually to the United States. Some say they are coming back. Yes, Mr. Speaker, they come home for Christmas and they go back for the new year. After making every allowance, the figure that I have mentioned' is a fair representation of our total annual loss. We are opening the front door to those coming from other countries, and we are leaving the side door open for the escape of our own people, the best asset we have, in the numbers that I have mentioned to the adjoining country. The situation demands heroic treatment. Some solution must be found. In view of our peculiar conditions we may be driven to adopt export duties, embargos, bounties, and wherever necessary higher import duties, in order that we may conserve and develop our natural resources as far as possible in Canada and for the benefit of our own people.
There is one subject of absorbing interest, Mr. Speaker, with which I should like to deal if time permitted, and which I must discuss very briefly. That is the St. Lawrence development. No mention of it has been made in the speech from the throne, but it is of absorbing interest because of its extent and its direct relation to the prosperity of the country. We have had boards, we have had joint boards, we have had advisory committees and reports galore, but no action has been taken. Let me say that although vitally interested in this project I do not urge any hasty or ill considered action, but I am anxious that Canadian interests shall be fully protected. The development will involve a considerable period of time, and we may well be excused for urging that there should be no delay. The matter has been referred to the courts. If I have any criticism to offer in this connection it is that the reference seems rather involved, and when the proceedings are finished I am afraid it will be necessary for the conflicting interests to arrive at some agreement before anything can be done. If this work is undertaken and carried to a conclusion let me urge that it be done as soon as possible and the whole of it developed concurrently; not without completing one section in one province to the detriment of another section in another pro-

vinoe. When the project is carried out it will bring traffic to our railways, it will attract thousands of people to our country, it will give an impetus to agriculture, and it will make of the valley of the St. Lawrence the most extensive and intensive industrial area in the world; and while, as I have said, we do not urge haste we suggest that action should be taken at the earliest possible moment. Let me point out that when this development comes to the international section the opportunity may be afforded to correct the errors which appear to have been made in connection with the Chicago drainage matter. We trust the scheme will be carried out as far as possible in Canadian territory and by Canada; we are not in favour of joint development except where absolutely necessary.
Now, Mr. Speaker, I must conclude. There is an amendment before the house which reads:
This house regrets that the measures proposed by the government do not tend to provide increased employment in Canada, nor to induce the return of Canadians to their native land, nor to prevent the continued emigration of our people to the United States; and that they make no provisions for the preservation of our domestic markets for Canadian farm and dairy products, nor for the effective development of the natural resources of the country, nor for the abolition of the sales tax by the 1st of January, 1929.
I propose to vote against this budget and for this amendment, and I wish to consolidate my reasons for so doing. I have tried to show that on a proper consideration of all our obligations we have an increasing and not a decreasing debt. If all the obligations we have are taken into account we will find that in the last four or five years our debt has been increased by $40,000,000 instead of decreased as contended by the Finance minister. I have shown that during these few years we have been taking each year an increasing amount in taxation from the Canadian people, and my argument is that instead of there being a decrease in taxation there is an increase. I have shown by the figures from the Department of National Revenue that our export trade is decreasing, and that we are increasing the importation into this country of goods which should be made at home. I have shown that the home market, which is the most desirable and the best market for the Canadian people, is being invaded. Furthermore, instead of our markets abroad being widened, they are being contracted, and at the same time the home market is being opened to competitors who are coming in and taking possession of it to the detriment of our own people. The

The Budget-Mr. Edwards (Waterloo)
figures that the government have' produced show conclusively that we are losing population at the rate of sixty or seventy thousand a year. The government, I think, is gambling to a large extent with Canada's prosperity, and is neglecting to lay down any permanent policy which is calculated to lead to improvement. It is following a policy of nibbling at the tariff which is distressing to industry and to agriculture, and is gradually undermining the foundations upon which our material prosperity rests. For these reasons I shall vote for the amendment and against this budget.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. A. M. EDWARDS (South AVaterloo):: Mr. Speaker, in rising to offer my contribution to the debate on the budget I fully realize that the ground has been pretty well covered by hon. members who have preceded me, but the viewpoints as expressed by hon. gentlemen are of course widely divergent in character, this, I presume, being caused by the varied interests that exist throughout this great country. Those who come from the prairie provinces naturally have the viewpoint of that section; those from the provinces down by the sea have their problems, namely, those of the steel and iron industry, the coal industry and other industries indigenous to that part of Canada, while we in the central provinces have problems dealing more particularly with industrial and agricultural matters.
Before proceeding further I should like to take advantage of this my first opportunity to compliment the Minister of National Revenue (Mr. Euler) upon, his elevation to that high office. We in the county of Waterloo-and I have the honour jointly to represent the good county of Waterloo with the Minister of National Revenue-are very proud of the honour that has come to him, and we in the southern portion of the county desire to congratulate him and to wish him every success. I feel sure that he will fill the position with great credit to himself and also to the state. He is an able native son of our county. With the influence which I presume he has with this government it seems to me that he might have been a little more successful in protecting some of the industries which are established in the southern part of the county and which have been very badly hit by this budget. I refer more particularly to the textile industries, those of
woven cloths and worsteds. This question however I will take up at greater length later on.
AVith the reduction in the sales tax, as shown in this budget, I am in hearty accord As this tax is a burden upon the masses of the people, upon all consumers rich and poor alike, I hope the Minister of Finance (Mr. Robb) will take it into his serious consideration and endeavour to wipe out the sales tax by the end of the current year.
Much has been said about our national debt. To the best of my knowledge and ability to calculate the amount of this debt, we are $20,000,000 worse off to-day than we were when this government took office. Possibly I should not say worse off, because we have not yet been given an account of the tangible assets of the Canadian National Railways for which I presume the money was granted. There are, however, different viewpoints on the subject, but it seems to me a matter of book-keeping whether or not the loans made to the Canadian National railways should be included in the national debt of this country. They are obligations on the country just as much as any other obligation and they should be so recorded.
In the constituency of South AVaterloo which I have the honour to represent in this house we have the happy combination of a splendid agricultural section and a well organized and highly industrialized district with a varied line of manufactured products, including the iron and steel industry in its many different lines, furniture factories and their subsidiaries, large shoe factories, textile factories, including woollen and worsted cloth mills, knitted goods, silk yarn, and silk cloth manufactures. It will be readily seen that any variation in tariff schedules is more or less reflected in conditions in this constituency. We have employed in South Waterloo in the textile factories upwards of 3,500 hands. This is the number of the actual workers in this industry exclusive of their dependants, and therefore hon. members will realize that anything that injures this industry is of very serious moment to our part of t'he country.
With reference to the so-called review made of the textile industry by the tariff advisory board I wish to make a few remarks. All branches of this important industry placed their positions in facts and figures before this board and all that was expected was a square deal with reference to tariff adjustment based upon the facts and figures presented. If this course had been followed and the Minister of Finance had been guided by this in the formulation of his budget, no debate on the woollen goods industry would
732	COMMONS
The Budget-Mr. Edxoards (Waterloo)
have been required at this time. All that is asked by the textile trade or any other industry I know of is to be placed in a position where they can compete on even terms with outside competitors. They are not asking favours; they are not asking any special considerations; they are not asking any high tariff adjustments. What they are asking is that the workers in this country be privileged to compete with workers in outside countries on even terms and nothing more. When we have regard to living conditions brought about in certain other countries by low wages; when we consider such safeguards as the eight-hour day in many lines; the minimum wage law; the Workmen's Compensation Act; safety devices of various kinds which are designed for the protection of the workmen and which are compulsory, humane and necessary; child labour laws; the Old Age Pension law-which I hope will soon be enacted in Ontario-when we consider all these safeguards with which industry is surrounded in this country, it will, I am sure, be readily seen that some protection must be given to Canadian industry to enable it to meet conditions imposed, so that it will not be forced to face unrestricted competition from England, France, Belgium or elsewhere, where like conditions do not obtain.
Let me take the weekly wages of textile workers in Canada as averaged from figures supplied by Canadian mills and compare them by hours of labour and sex of worker with those of workers in the mills of Yorkshire, England. The figures are as follows:
Binders..
Twisters..
Spinners..
Reelers..
Doffers	
Overlookers	
Warehousemen,	
Blenders, carbonizers
and labourers	
Male help in greyrooms, stockroom, packing
department	
Firemen	
Yorkshire Canada -	$	5	92	$13	to	$156	34	13	to	155	77	13	to	156	52	17	to	205	22	13	to	1517	03	35	to	6012	06	18	to	2012	06	18	to	2012 30	19 to 2213 89	30
These figures were gathered at the end of 1924 a*d the comparison is made with wages in Canada in 1924. It is only fair to state that since that time wages in Canada have been reduced by ten per cent. These figures are not guess work; they were obtained by me from the books of the mills. I quote from the budget speech, as follows:
It is proposed to aid the Canadian weaving industry by granting free yarns for weaving purposes.
That particular branch of the industry that is engaged in the weaving of woollen cloths
[Mr. A. M. Edwards. [
and worsteds is the one to which I wish to draw the attention of hon. members, in order to show how it will be affected by this budget.
Previous to this budget, knitted yarn coming into this country, what is called forties and finer, used in the weaving of woollen and worsted cloths paid a duty of 12J per cent. Under the new tariff schedule these yarns come in free, and I wish to show how that change is going to affect the industry in South Waterloo. In the first place there is, I understand, only one mill in Canada making cloth that does not spin its own yarn. This one mill, situated in Toronto, will be in the position of being able to purchase its yam from England at a low price. But what of the other mills? I am thinking now more particularly of two of the larger mills in my constituency, one located in the town of Hespeler and the other in the town of Preston; and these are typical examples showing how this particular industry will be affected not only in the constituency of South Waterloo but elsewhere in Canada. One of these mills employs between 1.000 and 1,100 hands, and the other is actually employing at the present time 228 hands. Both these mills begin with the raw product-the wool-and work it through the different processes up to the finished cloth. I would like hon. members to observe how this help is divided between male and female. In the case of the mill employing the 228 people there are 68 men employed in carding, spinning and preparatory operations, and 22 women; in the warping, weaving and finishing departments, there are 35 men, and 103 women. These figures cover the actual workers in these departments at the present time and do not include workers classed as "overhead"; in other words, the wool is taken in at one end of the mill, and it is washed and combed and carded and spun into yarn. In that process a lot of men helpers are required, but after it passes that stage the material goes into the loom and is woven into cloth, and these looms are largely tended by female workers, so that anything you do that injures the original part of this business, the converting of the raw wool into the yarn, affects the heads of families more than would a change that was applicable to the later processes.
The amount paid for carding, spinning and preparatory operations, including overhead, is 40^ per cent of the total wages paid. I would like hon. members to take note of that fact, that when these new schedules come into operation, out of every $100 that these mills are to-day paying in wages approximately $60 will be paid in the mills, and $40 will be sent

The Budget*-Mr. Edwards (Waterloo)
to other lands. That gives you some idea of the injury that will be done to this business.
The value of the machinery and housing for this particular mill of 228 people which I have mentioned, if it is to be scrapped, will be between $400,000 and $500,000.
I now come to the larger mill employing between 1,000 and 1,100 hands, and in this connection I propose to read a letter I received from the general manager of this company.
I had written and asked him to let me know just how his mill would be affected. Let me say first that this mill is located in a town of 3,500 people, and when a mill employing between 1,000 and 1,1000 hands in a municipality of that size is injured you can see how seriously it is going to affect that community.
This is the reply I received from the general manager of this mill:
We have been going over our records here very carefully, and last year (1927) exactly one-third of our spinning department was employed in making yarns for weaving purposes, and as nearly as we can estimate it not 5 per cent of this plant is likely to be operated for weaving yarns under the new regulations of free yarns for weaving purposes allowed into Canada from (treat Britain, and there is positively no prospect of employing this part of our plant on other kinds of yarn, for the reason that there are other spinning plants in Canada who will be cut out of a certain amount of their yarn business by the new regulation and they will be forced to go after the knitting yarn business to a greater extent than before in order to keep operating, and we cannot hope to get knitting yarn business to take up the slack in our weaving yarn department. It is not only our plant in Hespeler that we are concerned about, but also our spinning mill in Orillia.
We are not denying that the weaving trade in Canada may possibly get some advantage by the change in the tariff on weaving yarns . from 12J per cent to the free list, but the advantage will be entirely at the expense of the spinning industry and those employed in the preparation of the wool through all the processes up to spinning, including sorters, scouring hands, card room hands, gill minders, combers, drawing room employees, spinners and twisters, and not only the above but labour employed in the dyeing department will also be affected because of the fact that much of the yarn required in weaving is in mixture effects, greys and coloured twists, etc., and the stock for these will have to be dyed in England before the material is manufactured or spun, so that the people employed in the dyeing _ in Canada will be hard hit also. We are going to be in the position of having all of these departments working at a discount, or in other words only partially employed, increasing the overhead charges in every one of these departments on the material which we will be able to continue to make. And as I explained to you when we were talking over the situation, the difference in wages which will be paid in our mills in the production of our cloth by manufacturing from imported yarns instead of
manufacturing the raw wool through all the processes into finished cloth will be m the proportion of 59 to 100; that is, where we would be paying $100 to our employees for manufacturing the goods from raw wool Canadian labour under the new arrangement will receive only $59, and the rest of the labour involved will be paid for in England.
If this is a good stroke of business tor Canada, we confess we are quiet incompetent to see it.
What we asked of the tariff board was a reasonable increase in the duty against finished cloth to enable us to carry on all the operations in Canada and employ people in this country. What we are getting from them apparently is nothing of the kind, but is a cutting away of the foundations of the Canadian weaving business and placing a large percentage of our operations on a free trade basis, the principle of which, if correct in connection with the spinning trade, should be equally correct in connection with the weaving trade.
The sacrificing of the spinning branch of the cloth trade in Canada we consider is utterly unwarranted from any practical standpoint, and particularly from the standpoint of the position which the country would find itself in in case of another war such as we have passed through, or which would cut off from Canada a supply of weaving yarns for any extended period of time. A strike in England in the spinning trade would be equally effective in closing up our weaving industry in Canada when our own spinning is in the discard, as it undoubtedly will be as a result of this type of tariff policy.
While we have stated that one-third of our plant is affected, the reason that the entire plant is not affected in the same way is that we are manufacturers of knitted goods as well as woven goods, and a mill which is exclusively in the weaving trade would be affected to at least 50 per cent of its equipment while we are affected to the extent of only about 33J per cent.
I might explain that there is no change in the tariff on spun yam that goes in to the ordinary textiles, such as knitted goods, and that has reference to coarser than 40's.
The two mills which I have taken are fair illustrations of this type of mill, namely, those that make cloth throughout Canada. It will therefore be seen what a serious matter it will be if these mills have to go out of the spinning of yarn for doth. It will be noted that the larger percentage of men workers is in the departments that are affected by the budget, that is, the carding and spinning departments, the operations from there on being mostly done 'by female workers, as the figures show. We are therefore taking the work from the heads of families-a most serious condition indeed. Let us suppose, for instance, that finding themselves unable to spin yam profitably for the weaving trade, these mills turn to the spinning of yam for the knit goods trade. The ultimate will be a large surplus of machinery to take care of existing consumption, and we have the ridiculous clause in the proposed tariff

The Budget-Mr. Edwards (Waterloo)
schedule allowing us to bring in textile machinery free of duty. Who under heaven wants textile machinery when there will be thousands of machines in this country lying idle?
Now let me deal with diy spun yarns to show how inconsistent this tariff schedule really is. This type of yarn has -been imported on a duty basis, subject to a drawback when converted into stockinette hosiery, and so forth. This drawback has been cancelled, to become effective in October next. In other words, dry spinning plants from October on will have the benefit of a duty of ten per cent where previously those yams came in free on the drawback plan. This policy is directly opposite to that pursued allowing yarns into Canada free of weaving. There are but two plants in Canada making this yarn, one in Hamilton, and the other in Toronto. The government apparently is desirous of building up a dry-spun yarn business for two manufacturers, but is not in favour of the same policy for yarn spinners using their own production for weaving.
With regard to cotton yams, fine cotton yarns 40's count and finer-made by only one mill in Canada, that is at Three Rivers- are now subject to duty, whereas up till now they have been free. This also is directly opposite to the action applied to yarns entering Canada for the weaving trade.
I have endeavoured, Mr. Speaker, to place before the house as best I can the effect which the proposed changes in the tariff will have upon the woven goods branch of the textile industry of Canada. Let us now see how far-reaching the results will foe by consulting the Preliminary Report on the Woollen Textile Industry in Canada, as issued by the Department of Trade and Commerce. Referring only to woollen cloth mills, there are fifty-seven mills in Canada making woollen cloth and, with one exception, all spinning their own yarn. These mills are situated: In Nova Scotia, 3; in New Brunswick, 2; in Quebec, 10; in Ontario, 42. The amount of capital invested in the manufacture of woollen cloth alone is $21,342,909, with 4,026 employees. These figures do not by any means indicate the amount invested or the number of people employed in all the textile factories-that is, the figures I have given the house are only for the woven trade. For the textile factories engaged on knitted goods, and so on, the figures are: Capital invested, $42,215,208; employees, 11,017. The value of the products produced, by provinces, was as follows in 1925:
Canada total	 $15,499,326
Ontario	 12,982,583
Quebec	 2,058,704
Nova Scotia and New Brunswick	458,039
[Mr. A. M. Edwards. [
The cost of the raw material entering into these finished goods was $9,415,211, and the value added by the process of manufacture was $6,084,115. Surely this is an industry that should merit careful consideration by those who have to do with the tariff.
I wish now to refer to one other branch of the textile trade, namely, that in connection with the manufacture of tapes, woven labels, and so on. These woven labels with the firm's name are attached to articles of clothing, and so forth. In the city of Galt there is an industry manufacturing this line of goods, established fourteen years ago. Under the existing tariff it has gradually expanded and worked up a fair business, and to-day it is employing seventy hands. It has not yet paid a dividend, profits being used for necessary expansion, the management realizing that in order to make money on a small business of this type it is necessary to put it on a first-class production basis, and in order to do this they have purchased additional equipment from time to time until now they are in a good position to carry on. When I tell the house that last year they made a little over nine thousand dollars profit it will be seen that they are not exploiting their tariff protection. Under the new schedule not only is the duty lowered on the finished product, but a duty is actually added to the raw material, which is cotton yarn. So you see they get it going and coming. On the basis of the 1927 business the increase in the cost of yarn to this institution will amount to $2,943, and the loss on sales through their being compelled to reduce prices to meet British and foreign goods will be $6,440-or a total loss, presuming business to be the same this year as in 1927, of $9,383. This will more than wipe out the entire profits of that institution for last year. If the proposed changes come into force this firm will have to discontinue business in the manufacture of tapes, causing a great financial loss and throwing many employees out of work.
To show who benefits by this cut in the tariff on tape, there is a small concern in the town of St. Mary's in the constituency of my hon. friend from South Perth (Mr. Sanderson), who spoke yesterday and was quite critical in his treatment of the speech made by the hon. member for Fort William (Mr. Manion). The concern to which I refer is a branch of an American mill. Their raw material is tape. Under the provisions of the tariff before this proposed change, they had to pay a slight duty on tape, which is their raw material. They put fasteners on the tapes and with a very slight operation they become their finished product, covered

The Budget-Mr. Edwards (Waterloo)
by patents. Now, under this arrangement they are able to bring their tapes in direct from the parent mill across the line. I ask hon. gentlemen opposite if this is the way to foster Canadian industry? Is this the way to take care of our working people?
To give the house some idea of how this budget is considered by the executives of these concerns, let me quote, from the Guelph Mercury of February IS, 1928, certain interviews given to that paper by the heads of several large concerns:
The spinning business of this city has been badly hurt by the Robb budget, according to Mr. Harry Quarmby, president and general manager of tlie Guelph Carpet Mills and the Guelph Worsted Spinning Mill.
"We have an expensive spinning plant here, with the latest equipment for the spinning of yarns, and all this could be scrapped and the hundreds of people turned out of employment because of the admission into Canada of yarn at the reduced rate provided for in the budget.
"It would seem that the government of Canada is more interested in keeping the wheels of industry in England turning than in Canada, so far as the yarn spinning industry is concerned, but that is of no benefit to Canadian work people.
"The new rates will mean that the orders now on hand for weaving yarn may be cancelled and no more orders received. What that means can be easily imagined by the citizens of this city and by the two hundred employees of the spinning department. The government of Canada has shown absolutely no sympathy for this business.
"Labor in England is poorly paid in comparison with that of like occupations in Canada. The result of this is that yarn can be spun in England, shipped to Canada and laid down in Guelph cheaper than it can be spun here. That requires no wizard to understand the logical result of the government's policy. It means ruin to the spinning industry. I cannot condemn the budget sufficiently so far as the Guelph yarn spinning business is concerned, and what applies to Guelph applies to all the yarn spinning plants in Canada," said Mr. Quarmby.
Hespeler Plant Will Feel It.
Mr. D. N. Panabaker, director of the Forbes Mill at Hespeler, called on by The Mercury, states that there are three hundred people employed in the yarn departments of the big mill.
"The budget is a very serious thing for Hespeler. Just what plan of action will be decided upon cannot be said at the moment. It will make a difference in the cost of cloth, but it is destructive to the spinning end of the big textile industries.
"There are no compensation clauses in the budget," said Mr. Panabaker. In England, according to a report published in February, the wages of spinners while 160 per cent higher than before the war. are still less than 60 per cent of the wages paid to the spinners and carders in Hespeler, and there is no possibility of competing with that handicap.
"Our plants are fully equipped with expensive machinery, and while the new budget permits machinery to come into Canada free, it is of no benefit to us, because already equipped. The tariff advisory board is fully acquainted with
the position of the spinning industry, but is powerless to make any redress. Hespeler will be hard hit, but we cannot tell yet just what procedure is to be followed," said Mr. Panabaker.
General Conditions.
Textile trades are badly worried because of the changes made in tariff. There has been a reclassification under cottons, woollens, silk, linen and hemp. There has been a reduction from 374 per cent to 30 per cent on some cotton duties, but on cotton yarn of 40 counts or finer, there has been imposed a duty under the general tariff where formerly it was free. The general effect of the cotton revision will be to increase the cost of cotton yarns to Ontario manufacturers.
Woollen Mills in Bad Way.
David C. Dick, president of the Canadian Woollen Manufacturers' Association, expressed regret that there was nothing in the latest Robb budget which would seem to be likely to help the old-fashioned woollen mills of Ontario. He said these -were in bad shape.
Mr. Dick said that free machinery from England would not help these mills very much, and as for free yarn, he did not believe that, from the very nature of their business, the old-fashioned woollen mills could buy yarn. Mr. Dick doubted very much whether the weaving mills would benefit one half of one per cent under the Robb proposals.
So far as the old-fashioned small mills, scattered all over the Dominion, where they weave woollen cloth, there are at the present time 20 of them, with 350 looms closed down, in the other 34 mills, with 1,015 looms, over half of the looms are standing idle. In Ontario the situation is extremely bad.
Means Unemployment.
Every weaver of worsted cloths in Canada, with one exception, has its own spinning plant to produce the yarns. If they take advantage of the free yarns, then, according to one of the best authorities in the business, it will mean the scrapping of hundreds of thousands of dollars' worth of machinery, and the throwing out of work of hundreds of employees.
The Robb budget will adversely affect the spinning plants of Canada, which produce worsted yarns to the extent of $500,000, in the opinion of one closely in touch with the situation.
Good-Bye To Lamb Chops.
Another result of the Robb Budget, according to one who has studied the matter, will be that the sheep industry will suffer tremendously.
"If free yarns are admitted, then the Ontario farmer will not find any market for his wool," said this authority. "It will mean that the farmer will not be able to afford to raise sheep. The result will be that you won't be able to buy a Canadian lamb chop on the market. The people of Canada will have to content themselves with eating frozen chops and Australian rabbits."
There are several others but I will not quote further; what I have read will give the house an idea as to just how these proposed changes in the tariff will affect these industries. In the large mill at Hespeler, which I know quite well, I saw huge bins of wool, one filled
736	COMMONS
The Budget-Mr. Edwards (Waterloo)
with an Australian product, another with New Zealand wool, and a third with Canadian. Not being sufficiently familiar with the business, I was anxious to know the proportion of Canadian wool that entered into their product, and how far the proposed tariff would affect the raising of sheep in this country. Accordingly I wrote to the general manager of the concern and to-day I have his wire in reply:
From careful investigation I can assure you that many carloads of Canadian wool have been consumed annually in cloth mills in your constituency. The effect of budget proposals will positively divert this wool from consumption in Canada. Industrial workers overseas and wool from foreign countries will undoubtedly be employed to the detriment of Canadian workers and displacing Canadian raw wool.
This will indicate what is likely to happen to the sheep trade in this country if the proposed policy is persisted in.
My time has about expired, but I hope I have placed fairly before the house the case of the spinning business, especially in relation to woollen and worsted cloth. I sincerely trust that the Minister of Finance will reconsider his decision to inflict upon this industry, involving hundreds of employees engaged in this class of work, a hardship such as I have pointed out. Not only is this continual tinkering with the tariff affecting the woollen and worsted cloth industry of Canada; it is actually frightening capital away from the country, because investors do not know which branch of industry will be attacked next. The result is that we have unstable and unsettled conditions all round.
I must conclude now, and in doing so I wish to thank the members of the house for the courteous hearing they have given me.


Mr. JOHN EVANS (Rosetown):: We had a promise from the government last year that when the tariff advisory board got under way the tariff would be revised, though cautiously, in a downward direction, so as to lower the cost of living. If the changes outlined in the budget now before us represent the work of the board, then I think the people throughout the country will be asking just what the board is doing . In my opinion the reconstruction of the tariff as outlined in the budget is not at all in accordance with the findings of the tariff advisory board. The country expected, as it had a right to expect, that now, ten years after the close of the war, which upset economic conditions for a period, something would be done to enable us to return to normal so far as the cost of living is concerned.
The hon. member for East Lambton (Mr. Fansher) in his speech yesterday discussed
[Mr. A. M. Edwards. [
the way in which the Liberal party, the free trade party, has dealt with this great question, and I propose to adduce some facts to show why that party is pursuing its present course. Raw material under the budget is for the most part free again, but the consumer will have to pay a heavy penalty if he imports anything in the nature of a finished article. In some cases, I find, the intermediate and general tariffs are lowered, but the British preference remains as formerly. I find that item 537b, linen thread, is reduced, when imported from Great Britain, only 2 per cent. This is of value only to the importer; the consumer will reap no benefit. In items 569 a, b, c and d, which cover material for hats, the British preference remains the same but this material coming from other countries is taken off the free list and placed under a duty of 5 per cent and 7\ per cent under the general and intermediate tariffs respectively. The duty on the finished article in this case remains the same, at the prohibitive rates of 22J per cent, 27J per cent and 30 per cent. On inquiry I find that 90 per cent of this hat material comes from countries other than Great Britain, so the enmity to the British preference did not need to be emphasized here. It is evident also that those using this material are seemingly rather lacking in influence. It will be seen when we come to consider this budget item by item that in the importation of many articles in which the British manufacturer specializes the preferences hitherto enjoyed will not from now on apply, certain conditions making it impossible. This will have the effect of shutting out to some extent the British market for the agricultural products of the farmers of Canada.
Again, under item 267b I find a most amazing thing, the full import of which is not readily discerned. As far as I can see, the government has given notice to all small oil refining companies, and to those contemplating entering the business, to get out and stay out. In this connection I cannot help but think of the language used by Sir Richard Cartwright at the famous Liberal convention held in this city in 1893, when he said:
It must be obvious to everyone who will give the slightest attentive consideration to the working of the protective system in this country or elsewhere, that the moment you introduce that system you make legal provision for corruption on a most extensive scale.
I wonder what he would have said of these manipulations in favour of the Imperial Oil Company, let us say, or some of the other large concerns. However, it certainly presages more expensive gasoline for the general public.

The Budget-Mr. Evans
Taking it altogether, this budget is a rich man's feast. The money cost to the public through trade penalties has not been at all lessened, and the moral hazard has not been abated in any way. The income tax has been again lowered, but for the man who has no taxable income the burden has been increased, so far as I can find out. The parliament of Canada is the highest court in the land, the place from which one would suppose justice would emanate for all alike, but the present government, after having taken every possible means to inform themselves on the evil system of trade penalties, now come forth with a budget in defiance of that knowledge. This has given a direct challenge to the primary producers and workers of this nation; it has challenged the farmers to organize for political action, and it is even an invitation to the workers to strike for justice.
I have in my hand a pamphlet which has been presented to the government setting forth the demand of the farmers for free tools and implements, but the entire matter has been simply ignored. The farmers are the men who bear most of the burdens of this kind of state felony, but I am glad that there is at least one class remaining who have no desire to live on the sweated labour of any other class in Canada. The farmers of Saskatchewan have also asked for a freer method of distribution by the abolition of arbitrary valuations for customs purposes, which were designed to protect the large dealers, importers andi jobbers against cooperative companies.
I saw a resolution which was placed on the order paper by the hon. member for Wey-burn (Mr. Young), but since it has already been passed over twice it seems that he is not going to proceed with it, and the reason is obvious. Through party managers and manipulating politicians the government have become linked up with every concern in this Dominion with which they could make a bargain. That may be a rather harsh expression, but that is the way I look at it. Party funds have been subscribed by bootleggers, rum runners, distillers and others who want to defy the laws of this nation and of the United States. In this way these people purchase the legislation they desire, in order to evade the laws of this country. I make this statement on the authority of the report of the commission which has been lately printed, and if anyone wants a specific case he can turn to page 110 and read for himself. Again, the farming class of Canada has been farmed by the capitalistic class of this Dominion for the last forty years, and all governments of Canada for the last forty years, 56103-47
irrespective of party, have done the same thing. In this respect the present budget is no different from the budgets which have been presented in former years, but it does stamp this government as being composed of men who are willing to continue the sweated labour on the farms of Canada of our women and children, to say nothing of our men, to swell the profits of those who, through their henchmen in this house, proclaim their indolence, incompetency and callous indifference to the adverse economic conditions of all those other classes of the people who are practically reduced to the standard of slavery to satisfy their greed. The cotton manufacturers, the steel manufacturers and others come before the tariff board pleading for greater facilities with which to rob the public.
Here is one statement I do not like to make, but the Liberal and Conservative parties in this house to-day hold their offices as members of parliament and cabinet ministers by selling their power and influence. The report of the parliamentary committee appointed in 1926 to inquire into the customs irregularities, reveals the most astounding facts and it is for every patriot and honest man to take these facts into consideration here and now. The Western Producer, a Saskatchewan paper which was started some years ago to reflect the Progressive and economic thought of this Dominion, in its leading editorial of January 20, 1927, has this to say:
The Western Producer demands to know what individuals in the Canadian House of Commons owe their responsible office to money secretly contributed to a fund mysteriously spent.
At the sitting of the committee referred to, on June 11, 1926, after insistent questioning by the member for Peace River (Mr. Kennedy), it came out that $274,000 had been subscribed to party funds and divided between both parties. In a clipping I have here from the Grain Growers Guide, the editor, who I think is very well known from one end of the Dominion to the other, has this to say:
The cases in question, where the evidence is indisputable, show contributions of approximately half a million of dollars from two concerns. It may be reasonably assumed that the campaign fund managers were equally busy taking contributions from all the other liquor interests, and that they must have gathered in at least $2,000,000.
Two millions of dollars! I ask, sir, what hope is there for Canada under these conditions? This money was to purchase the legislation desired. I say that this budget of to-day is a product of purchased power and influence. I wish to remind hon. members of a fact well within the memory of every

The Budget

Mr. Evans

man in this house, that not so long ago Sir Robert Borden read two men out of his party because of some irregularities in the sale of horses. The sale of the rights of men and women throughout Canada to-day goes merrily on, and not one in either of those two parties raises a voice on their behalf. Horse flesh, when considered from the political standpoint, is seemingly much more valuable than the lives of men and women.


An hon. MEMBER:: Hear, hear.


John Evans: I hear the voice of the Minister of Immigration and Colonization (Mr. Forke).


Robert Forke: I was just wondering what
the hon. member was trying to get at.


John Evans: To me it is not a laughing
matter.


Robert Forke: No.


John Evans: I ask to-night whose hands
are clean?


Robert Forke: Whose hands are filthy?


John Evans: Who is not a party to this
iniquitous system? I say it is time that hon. members declared themselves on this subject. This money has been divided between both parties. Whom do they represent in this house to-night? What have the heads of both parties to say to this, and will they take the means that Sir Robert Borden once took to purge their parties of these methods? It hurts me to make this statement, and it hurts worse from the fact that certain hon. members opposite have allied themselves with those who tolerate this system and benefit by it, members who once sat with us in this corner of the house.
I have another clipping in my hand from the Montreal Witness, that old journal which has for eighty years worked for righteousness in this country. In it there is given a list of firms which have evaded the payment of income tax to the extent of many millions of dollars; they were not even asked to make an income tax return. One of my neighbours when I lived on the farm, a poor devil who never had an income, who never had anything to pay income tax on, was sentenced to jail for thirty days at Prince Albert because he refused to make a return. He had to get somebody to do it for him, he did not even understand the English language. Yet the firms in question have not even been asked to make a return. Is this the Canadian parliament?
From the Saskatoon Daily Star, under date of June 14, 1927, I read the following:
fMr. Evans.]
It is estimated that as a result of the customs inquiry and the auditor's disclosures, three hundred millions will come into the treasury.
The farmers in this house have been accused of evading the payment of income tax. They never had any income to pay taxes on. In this budget the class which reduces the agriculturists of the Dominion to a state of dependence through budgets such as this is the one which is again relieved by law of the payment of a large portion of that tax, and the government is dependent on the tariff for revenue-a method which places at least $2 in the pockets of the protected manufacturer for every one that goes into the Dominion treasury. I need not go any further for authority on that point than to the Right Hon. W. S. Fielding, who was Minister of Finance in this government until a few years ago. Let me read his words:
It can be established positively, I believe, that if you take into account simply the difference between the duties that were paid during the period of the Liberal administration and the duties that would have been paid had the Conservative tariff remained in force, the money that went directly into the pockets of the Canadian people on that account alone was from $85,000,000 to $100,000,000. But it must be remembered-and economists, I think, will agree-that the saving you make in a case like that is not to be measured only by the amount that you did not pay into the customs; you have to take into account also the check that was put upon the rise of prices at home, and that for every dollar saved to the people in that direct way probably two dollars -were saved in the difference between the prices prevailing and those which would otherwise have been charged by the home manufacturer.


Robert Gardiner: What was the date of
that utterance?


John Evans: May 10, 1921. Now the
duties paid in 1921 amounted to 1794- millions. Twice that amount is over $359,000,000, and this is the amount that Mr. Fielding says the manufacturers added to the price to the Canadian consumer in disposing of goods sold in that year. The previous speaker, the hon. member for South Waterloo (Mr. Edwards), wants the whole of the difference between wages paid in Britain or other European countries and wages paid in Canada to be made up by the tariff. I ask: By what rule or reason can we shoulder the burden on to any other industry in this Dominion? The farmers, as I have already said, are the ones that carry the greatest part of this load. They sell their produce in the markets of the world, competing with Russia, China, India, Argentina, Australia, and in some of those countries they do not pay over one-sixth of the amount of wages which the Canadian farmer has to

The Budget-Mr. Evans
pay on his farm to get his wheat harvested. By what rule or reason can the hon. member shoulder that on to the agricultural class of this Dominion? Let me ask: By what rule or reason did the government decide to put a heavier burden this year on the agricultural class that is still labouring to make ends meet and failing as the days go by?
The Minister of Finance says: "Work and thrive." Our people are working on the farms of Canada to-day double the hours that are worked in the civil service and four hours longer than are worked by those in the cities who have the eight-hour day. Our women are on their feet at five o'clock in the morning and if they get their work done by nine o'clock at night they feel lucky. I ask again, and perhaps the Minister of Finance will answer me when he speaks: By what rule or reason does he maintain this trade penalty on the commodities which the farmer has to purchase? I find from this pamphlet presented to him and his colleagues this year that there is a duty on some of our articles amounting to 35 per cent. Is this reasonable? Show me that the agricultural class is to-day so prosperous that it can bear . the burden of all other industries. I challenge any member of the government side to-day to do that, and if I have time before I sit down I want to labour that point a little further.
A good deal has been made by the government this year regarding the reduction in the national debt. Debt is a relative matter and it must always be considered in relation to assets. The newspapers even have taken the matter up and much has been made of the fact that we have been able to meet maturing loans from current revenue. There are two ways of looking at this question. The minister gave us the impression, and the country has received it, that as a nation we are further away from a state of insolvency than we were last year. Is this so? I am more concerned to-day about our assets than our liabilities, and for this reason. In 1926 we sold 97,000 fewer finished cattle in the markets of Canada than we did in 1925, and in 1927 we marketed 21,282 fewer cattle than we did in 1926. But there is still another feature regarding agriculture that is worse even than the loss on finished cattle. 'In 1926 the farmers marketed 27,000 more calves than they did in 1925, and in 1927 they marketed 24,915 more than in 1926. Add to this the fact that matured cattle during this last year averaged twenty-five pounds each less in weight than the year before. The tremendous increase in the number of calves being marketed indicates that it will now be 56103-471
five or six years before the live stock industry regains its former status. Taken altogether, the diminishing live stock industry is a situation that should cause alarm to all who care for the development of this country, and not only its economic seriousness but its moral standard as well by the concentration of our workers in the centres of industry or the cities. The figures which I have given for 1927 in regard to the live stock industry I lately secured from the deputy minister of the department, Doctor Grisdale.
Between the years 1921 and 1926, two census years in Saskatchewan, despite all our immigration and despite the natural increase, we find that we had 2,000 fewer farmers in 1926 than in 1921 in that new province where the development in agriculture is chiefly taking place.


Mr. BOURASSA:: Does the hon. member
mean 2,000 fewer farm holders or 2,000 less population?


John Evans: Two thousand fewer farm
holders. This fact regarding the number of farmers in Saskatchewan diminishing during that period by nearly 2,000 is surely conclusive evidence of the result of the traffic of the politicians in the lives of the workers. Our industrial lords and politicians may point to the building of great cities and their growth, but the foundations of cities lies in a contented, prosperous and virile population on the land. Destroy that foundation and the superstructure will tumble down on your own heads. Evil in every form by its very nature is its own avenger. The fact is that the government of Canada is had in tow by business interests, and this condition is of such long standing that even business is a secondary consideration to-day in the amassing of wealth.
The hon. member for Fort William (Mr. Manion) asks what this government has done for the mine owner, the manufacturer, and others, mentioning every activity in the Dominion-all going to show that business ability and courage are not the essentials in business to-day. The one essential, according to the hon. member for Fort William and some of his colleagues, is a successful linking up with the politician. Why?
The hon. member for Fort William also asks, what has the government done for the wage earner? Why does this government let our men go to the United States to seek work, he asks? The workingman has always been the concern of the patriotic protectionist, if you will let him tell the tale. Years ago I thought it was a patriotic thing to purchase my farm equipment from the factories
The Budget-Mr. Evans

of Canada. I have during my thirty-seven years of farming purchased three Chatham fanning mills. I had always thought that these fanning mills were made in Chatham, Ontario; but only lately I found out that the Chatham fanning mill is as often made in the United States or anywhere it can be made the cheapest. One of my friends who can vouch for this fact only lately came across from Windsor with four drayloads of Chatham fanning mills smuggled into Canada.


Mr. BANCROFT:: Was he a friend of
yours?


John Evans: I would ask, where is the
concern for the workingman under conditions of that kind? How do they get those things into Canada duty free? Oh, he spoke to the man in charge who said: These articles are unfinished. But I want to tell this house that all that was unfinished was that the screens were not punched. The Chatham fanning mills are made in the city of Detroit, and I hope hon. gentlemen will get that right. These mills have always been protected by a high duty, for the sake of the workingman, I presume, but they can be smuggled into Canada under the pretence of their being unfinished articles.
The farmer was also a concern of the hon. member for Fort William, but I hope that our agriculturist population will never lose its self-respect to the extent of joining in the plea for political pilfer such as we hear in this house from members who declare their own inability to make their living.
Partyism-let me say a word regarding partyism. Party politics as it is carried on in this country is destructive to every good quality which we as a people should develop. The idea of the politician is to keep in power, but that politics should be dependent on business and business on politics to the extent it is, is evidence of a depravity that should at once be checked. The evil of this party system is seen only in its entirety when the government of a province is of the same political stripe as the one occupying the seats of power at Ottawa, and because of this-I wish the Minister of Justice (Mr. Lapointe) were in his seat-the people of Saskatchewan last year were humiliated and their sense of justice and freedom was ravished by the fact that the provincial police were used as stool pigeons to secure evidence to convict because a federal politician was concerned, an honest man who was not guilty.


Some hon. MEMBERS:: Explain.


John Evans: Proof of that can be had
at any time.


Some hon. MEMBERS:: Give it now.


John Evans: I see the Solicitor General
(Mr. Cannon) in his seat and I wish other ministers were here because I want this to sink in. These are some of the facts which this nation at this time should take into consideration, when the righeous sense of the patriotic people of Saskatchewan, their sense of liberty and justice has been ravished in this way. It was a case where even the officers of the law were debased, and justice became mired in party politics. I am speaking of what I know. This state of affairs has been developed because of the introduction into our	public life	of a system	of	class
privilege. So much for that.
Another question that is occupying the attention of the people of to-day as never before is immigration. There came to hand this morning the Montreal Star, and I was glad to get it for certain reasons. The Star of Montreal, that great Conservative paper-


Some hon. MEMBERS:: Oh!


John Evans: The Star wants more population, but	it has at	last acknowledged	thefact in this article on its front page-and it is valuable on that account-that the farmer has all the burdens he can stand now, and that	no more	can be placed on	hisshoulders. While this editorial outlines a scheme of development which is, I think, just as impossible of success as the present system of protection, it is very gratifying indeed to	see that	such a paper	at	last
recognizes the rights of the farmer.


Mr. FINLAY MacDONALD (Cape Breton South):: Mr. Speaker, I regret that the
acoustic properties of this chamber were not good enough to enable me to hear everything that the last speaker (Mr. Evans) said, but I did hear enough to startle me, and I am sure that the members of the government could not have been listening or they would have risen in their wrath at some of the charges which the hon. member for Rosetown (Mr. Evans) was making against them.


James Alexander Robb: May I say that I listened carefully to the hon. member for Rosetown, and his charges were not directed against anyone in particular. It was just an insinuation that every member of this house was implicated except himself.


Finlay MacDonald: All I have to say about this question of party funds is this: I am willing to join with the hon.

The Budqet-Mr. MacDonald (Cape Breton)
member for Rosetown in asking for a full investigation, because if there has been anything like that done, somebody on our side has been holding out. Many of us did not get our share, and I have no doubt that we had to contribute quite as liberally to our election expenses as did the hon. member for Rose-town.
Having listened to the last * two speakers, I rather sympathize with the Minister of Finance. They attacked him from entirely different angles, but I do not think he should have very much trouble in deciding which of the two criticisms is deserving of consideration. The hon. member for South Waterloo ('Mr. Edwards) presented facts and figures as to the exact effect that the proposed modifications in the tariff are going to have on the textile industry in his riding. As to the hon. member for Rosetown, his remarks were of a general character, and showed that he is too blameless and pure and high-principled to be able to contribute anything of practical value to an economic discussion of this kind. I think we all agree with many of the principles that he enunciates, but I am afraid that in this practical age the hon. member will find himself like a solitary sparrow on a housetop or a lonely pelican in the wilderness.
Now. sir, coming from the constituency in which is situated the great steel industry of eastern Canada, I have to express my regret that the budget holds out no hope for that industry. Two years ago the Duncan report made certain recommendations with regard to it. One year ago the Prime Minister (Mr. Mackenzie King) gave a message of hope to the people of the maritime provinces when he stated that the government intended to implement fully those recommendations. Two years ago the industry submitted its case to the tariff board, asking for more protection, but so far as I am aware nothing has yet been heard from the board. One year ago the Prime Minister gave as a reason for not taking immediate action to implement the Duncan report with respect to the steel industry that the British Empire Steel Corporation was in litigation, and he stated that nothing would be done until matters had been (straightened out. Now ithe litigation has been settled, everything has been straightened out, and all we want at this time is some indication on the part of the government, some gesture of their intention to give assistance to that industry; but none is forthcoming. We had reason to hope, and did hope up to the very time the budget was brought down, that some assistance would be given to the steel industry of Nova Scotia.
I have no desire to embarrass the hon. Postmaster General (Mr. Veniot). In a speech delivered at St. John a short time before Christmas he intimated that when the budget was brought down, or at some very near time in the future, the two major recommendations of the Duncan report, one with regard to the Valley railway and the other with regard to the steel industry, would receive attention, and the news in relation to these matters would be such as to make every maritimer glad. Well, the speech was delivered at a convivial assembly by a minister speaking to his constituents; he would naturally have a strong desire to give them a word of hope and encouragement, and it was to be expected that he would speak in that vein; but I for one refuse to believe that his statement was entirely unwarranted. I believe that at the time the government did intend to do something for our steel industry. What has happened in the meantime to cause them to change their minds? Has anything happened, or are they going to postpone action for another year in order to be able to make political capital out of any concession then granted to the industry?
I am not going to take up any time discussing the question of debt and taxation, for it has already been fairly well threshed out, and I think it is pretty well understood by the people of Canada. I do not understand the great jubilation with which the government's announcement of a surplus is greeted. Unless the government can prove that they themselves have done something to earn that surplus by some legislative or administrative action, I do not see any occasion for such jubilation. At the time of confederation the province of Nova Scotia handed over all her revenues to the Dominion. To-day we are having a hard struggle down there to make both ends meet. In other words, the provincial authorities are finding it very difficult to raise sufficient money to carry on the government of the province. Contrast that lack of revenue with the federal surpluses running from forty million dollars to seventy million dollars. It seems to me that the lesson to be drawn from this disparity between the financial condition of Nova Scotia and that of the Dominion is that the time has now arrived for a considered adjustment of the financial arrangement between the provincial and the federal authorities. The federal government has from time to time invaded the field of provincial taxation, crippling the various provincial administrations, and to-day most of the provinces are experiencing considerable difficulty in meet-
742	COMMONS
The Budget-Mr. MacDonald (Cape Breton)
ing their budget requirements. Even in the small matter of the fines that come in from prosecutions under the customs and excise act, although the provincial government furnishes all the officers and provides gaol accommodation when the prisoners are convicted, the fines go into the federal exchequer. The provincial government has to bear all the expenses. I think in fairness this government should refund to the province and to the various municipalities all the fines that have been collected from prosecutions under the act.
There is another matter closely associated with this question of the relation between the municipalities and the provincial governments on the one hand and the federal government on the other. The country store is passing away; the small storekeepers in the various towns and rural districts are going out of business. These people are being gradually driven out by the mail order houses. In my home city of Sydney I have seen a large room in the post office filled with mail bags crammed with catalogues from mail order houses. The people from the various rural districts send their money to these houses and get goods in return. This practice may possibly be defended on the ground that the goods are cheaper. Very well. But I ask in all seriousness why this government should use the post office department to facilitate the carrying on of this business without making some recompense to the municipality that is being hurt. The local storekeeper has to pay a certain amount of taxation for the upkeep of the town; the mail order house pays nothing. I submit that the time has come when these mail order houses should be made to pay a share of the taxation in the municipalities that are being affected, so that the local storekeeper may be given a chance for his life.
This forty minute rule, Mr. Speaker, is pretty much the same as a three months' note which a man has to meet: the time goes very rapidly. I have not an opportunity to develop any one of the questions which I should like to discuss, but I must hurry on now to the subject which is of supreme importance to me, namely, our fuel supply. We are all agreed in this country as to the great necessity of establishing some fuel policy-a national fuel policy if you will. We all admit that it is highly desirable that we should make this country independent in this respect. We have in Canada an ample supply of coal; at both ends of the country there are large coal deposits. But we are sending out of Canada over $100,000,000 a year for the purchase of coal which could be
fMr. F. MacDonald.]
supplied from our own deposits if only we were able to make them available. Of course, our difficulty lies right there. These coal deposits are to be found on either side of the country while the great consuming portion of the population is situated about midway. It seems a somewhat sad commentary on our boasted civilization that under such circumstances the miners of Canada should be in dire distress and that public subscriptions should have to be called for in order to feed and clothe them during the winter. This is going on from year to year and nothing practical appears to be suggested. Surely something can be done and ought to be done to meet the situation. Our problem in the province of Nova Scotia is winter unemployment. During the summer months we are able to ship our coal to the St. Lawrence market, but for four months in the winter our mines are practically idle and our miners out of employment. Some sort of cure has been offered by means of the banking of coal in winter. This in my opinion is a very poor substitute, because after all the banking of coal in winter simply takes that amount of the market away in the summer time. There should be some more satisfactory way of solving this problem of winter unemployment.
During the past three years we have had a number of investigations into the coal question and various suggestions have been offered. The witnesses who have appeared before the committees all express a desire for a national fuel policy, but no one will tell us what that policy should be. I do not intend to propose what I believe to be a national fuel policy, but I do wish to submit to this government some constructive suggestions which I trust will have some effect in alleviating the circumstances of winter unemployment in Nova Scotia. Let me state the problem simply to the house. It costs us $3.80 a ton for coal at the pit mouth and another $3.80 to land it in Montreal; that is $7.60. American coal can be laid down there $2 cheaper than this figure. How shall we meet the competition? I confess that when I came to this parliament two or three years ago I had the idea that the whole question could very easily be solved; all that was necessary was a high tariff against coal coming in from the American mines in such large quantities. I have learned since that the tariff is only one factor in a very complex problem, and that if we are to cope with the question of unemployment in Nova Scotia there are three or four factors that have to be considered and three or four parties to the problem who will have to make sacrifices.

The Budget-Mr. Bourgeois
We have to meet American coal in the St. Lawrence valley, and to do so we must either cut our costs somewhat, or raise American costs to some extent, or do a little of both. I want to submit the suggestion to the government that it is possible to attain this end by a little sacrifice on the part of everyone. The operator must make some sacrifice and produce his coaJl at a rate lower than $3.30; the traffic man must make a sacrifice and transport his coal from Sydney to Montreal at a rate lower than $3.80, and the local government must make some sacrifice by refunding a portion, if not all, of the tax on the coal mined during the four winter months, because this is the particular time to which I am referring.
How are we going to do that? The idea is suggested by this famous Duncan report. Before the Duncan commission was appointed the maritime provinces were more or less in the doldrums; they were discouraged and rather hopeless; men were leaving and the industries were failing. The Duncan commission held sittings and brought in certain recommendations which, although they have not all been carried out, were still very hopeful, and the statement of the Prime Minister that it was the intention of his government to implement those recommendations had a wonderful effect throughout the maritime provinces. Now, the idea is this: Can we not have a commission similar to the Duncan commission to deal with this problem of winter unemployment in Nova Scotia? Let me make this suggestion to the government: Appoint a commission of five men, one representing the companies, one representing the traffic department of the great railway, one representing the industry, one leading business man and last but not least a representative of the miners of Nova Scotia, and let me say that the miners will send to that conference a man with an intelligence equal to that of any other man there present, and probably with a greater knowledge of the actual condition of affairs. There is no need to take any evidence; the evidence is all here and the facts are all in the possession of the Department of Mines. I am sorry the Prime Minister (Mr. Mackenzie King) is not here to-night, or I would try to secure from him an assurance of his willingness to consider the idea. Possibly the Minister of Finance (Mr. Robb) may give me his assurance. I venture to think that if such a conference as this is held a solution will be found, and a recommendation from that commission will be of sufficient weight, backed up by public sentiment, to effect a remedy for this great unemployment. This is not a cure-all; I am not offering this as a fuel policy but rather as a pure experiment to deal with this question in a practical way. Up to the present no person on either side of the house and no witness whom I have heard or of. whom I have read has ventured to make any practical suggestion which would offer a solution of this difficulty.	*
This is an important and vital question to the maritime provinces. Every year we have a recurrence of these same distressing conditions; every year our miners and their wives and children are in dire distress and have to be helped with food, clothing and the other necessities of life. Surely the time has come in the history of this country when there is sufficient intelligence and patriotism on the part of the general public to make some sacrifice, not only to alleviate the sufferings of these men but that out of it may possibly grow something which will furnish a permanent solution of this very difficult problem.


Mr. A. E. BOURGEOIS (Kent, N.B.):: Mr. Speaker, it is with a feeling of hesitancy that I rise on this occasion, because I readily understand that it is the duty of a member attempting to address this house for the first time to move cautiously; for there is always that danger of wandering too far afield and of having to be reminded to tread the straight and narrow path. For that reason, Sir, I will be brief in my remarks.
It is my first duty on the occasion of this, my first address in this house, to extend to you, Sir, my congratulations on your unanimous selection for the third time to the exalted position of Speaker of this house. This is unquestionable and conclusive proof of your nation wide known impartiality and of your unfailing courtesy and distinctive personality. Although most of the people of our province, so far as I am aware, have never had the honour of your personal acquaintance, I can assure you that your distinguished career in the service of our country is a household topic in the province of New Brunswick, and particularly in the constituency which I have the honour to represent. May I also say that we admire the province of Quebec for the number of talented and distinguished statesmen it has contributed to the public service of Canada.
It is also my desire to congratulate the leader of the opposition (Mr. Bennett) on his elevation to the position he now occupies at the head of the great Conservative party. I am particularly pleased at this because of the
The Budget-Mr. Bourgeois

fact that he comes from the province of New Brunswick and was born in the county of Albert, which is adjacent to my own county. I am confident that in time, if it is his ultimate destiny to become Prime Minister of this great Dominion, he will uphold the best traditions of our New Brunswick statesmen who have sat in the councils of the nation, and will bring to that exalted position those high ideals of the true Canadian statesman which he possesses in full measure.
It is also my pleasure to congratulate the mover (Mr. Ilsley) and the seconder (Mr. Beaubien) of the address in reply to the speech from the throne for the very masterly manner in which they performed their part. I can assure them that they have won not only the admiration of their constituents but also the respect of this house and of the entire country.
Unquestionably the outstanding event of every session of parliament is the presentation of the budget by the Minister of Finance. Although I was not a member of this house until 1926, nevertheless I have followed the trend of events very closely, and I am sure that the great majority of the hon. members of this house will agree with me when I say that at every successive budget presentation the people of Canada as well as the unbiased press of our country have been loud in their praise of the administration of the public affairs of Canada by the present government and the Minister of Finance (Mr. Robb) whose reputation as an honest, sound and economic administrator of the finances of Canada ranks high in the minds of the people. I believe that our expectations of sound economic progress throughout Canada have been again demonstrated by the minister in his presentation of the budget this year.
It is not my purpose, Mr. Speaker, to review what has taken place in Canada since the 14th of September, 1926, for many of the speakers on this side of the house dealt very ably with the conditions at that time when the speech from the throne was discussed. But, Sir, I must say that on that date the, electorate of Canada responded nobly to the appeal to elect a stable government, a government with a truly national policy and one only for every section of Canada. Embodied in that policy are the three essentials of a moderate tariff policy, a policy of adequate protection for the manufacturers of Canada, and one of wider markets for every section and class of industry throughout our country. Do we need, Sir, any greater proof of the wisdom of this policy than the changed conditions brought about since 1921? Year after year 
we are witnessing a gradual reduction of our national debt. Year after year we are also witnessing a large favourable trade balance, and we are pleased to note this year an excess of exports over imports amounting to the large sum of $147,100,904, due, Mr. Speaker, not only to the wise policy of the government, but also to the indefatigable energies and cooperation of the agricultural and industrial population in every province of Canada. But special mention should be made of the agricultural population of the western provinces in contributing in such a large measure towards this favourable trade balance, and I desire to say, Sir, that the pioneers and their families who went west from the provinces of Ontario and Quebec and from the provinces down by the sea, and the folks who emigrated from the British Isles and other lands to western Canada, deserve the greatest commendation for their courage and perseverance in carving out of the Northwest territories the beautiful provinces of Manitoba, Saskatchewan and Alberta. They have accomplished the great achievement of making of western Canada the greatest wheat producing country in the world, and have thereby also contributed to a great extent to the success of the two great railway systems of Canada.
But one must not forget that Ontario, the banner province of Canada, has been a great factor in increasing our favourable trade balance, due to the highly industrialized conditions in that province and its intensive agricultural production. Another contributing factor has been the province of Quebec with its immense resources of forest wealth of wood pulp products and its sane economic hydro development policy, which have had the effect of attracting an enormous amount of foreign capital to that province.
It is true, Mr. Speaker, that in New Brunswick our progress has not been as marked along agricultural and industrial lines as that of the central and western provinces. That is due to some extent to our geographical situation and to our remoteness from the markets of the central provinces; also to the almost prohibitive tariff which prevents us from placing our surplus agricultural products in the markets of the United States, particularly potatoes, of which we have a large surplus every year and on which there is a duty of 50 cents per 100 pounds. Not only does that tariff adversely affect our agricultural population, but it also prejudicially affects our fishing industry to the extent of two cents per pound on mackerel, two cents on halibut and one cent on cod. It is therefore of the utmost importance to the maritime provinces that the government should undertake negotiations at

The Budget-Mr. Bourgeois
the earliest opportunity whereby our products of the soil, the forest and the sea may be admitted to the United States market under most favourable conditions.
But Sir, notwithstanding the disadvantages in that direction a spirit of optimism prevails throughout the province of New Brunswick, and a feeling of the greatest confidence in the future. This spirit has been stimulated by the fostering influence of the government in the opening of wider markets and by the negotiations of the British West Indies treaty; and with the prospects of a greater expansion of trade with the Central and South American republics the agricultural population are bending their energies to a more intensive agricultural production. As a proof of that assertion I may say that the estimated value of our field crop production in 1927 was $23,596,000. Of potatoes alone we had under cultivation 46,998 acres yielding to the farmers of New Brunswick at a conservative estimate a return of $5,423,000. Not only are they directing their energies towards a greater agricultural production but they are also paying attention to the dairy industry. In 1925 our dairy production amounted to $7,663,174. In 1926 it amounted to $8,046,743, a production which is still insufficient to meet the requirements of the home consumption of the province, particularly in butter. If the same increase is kept up from year to year we shall very soon, I hope, have a surplus. Until then the agriculturists of New Brunswick will have no cause to complain of the effects of the Australian treaty in so far as its results upon the butter market are concerned.
Coming to the fishing industry of the province of New Brunswisk, I must say that it is of the greatest importance to a large population located in the area extending from Camp-bellton on the Baie des Chaleurs to Cape Tormentine on the southernmost extremity of New Brunswick on Northumberland strait, an industry from which the fishermen benefited to the extent of $2,375,000 in 1926, and $2,520,722 in 1927. May I point out that the county of Kent occupies a very prominent position in that regard, particularly in- the catch of lobsters and oysters. Within my constituency we have two lobster fishing seasons, one applicable to the district extending from Point Sapin on the north to Chock-fish on the south, which opens on April 26th and closes on June 26th, and the other applicable to the district from Chockfish to River Philip in the county of Cumberland, Nova Scotia, opening on August 15th and closing on October 15th. Between the two last mentioned points there is unquestionably
great dissatisfaction among the fishermen due to the lateness of the opening date. I would point out to hon. members that owing td the prevailing high winds and frequent and sometimes very violent and disastrous storms, the fishermen are unable to overhaul their lobster traps, and as a consequence can avail themselves of but three weeks out of a period of two months. The result has been that a great many have abandoned their occupation. I therefore hope that the royal fisheries commission in their investigations will have found conditions such as to justify the recommendation that the lobster season instead of beginning on August 15th and ending on October 15th, begin the first of August and end the 30th September. I would further particularly recommend that in order that our fishermen may be protected in their at all times hazardous and dangerous occupation in the open seas of Northumberland strait, where frequent storms arise which are sometimes very disastrous to life and property, more protection be afforded along our coast. In this connection, I would point out to the Minister of Public Works ('Mr. Elliott) that in the county oi Kent breakwaters are absolutely essential at St. Louis, Maillet's gully and Caissie cape for the protection of our fishermen along that part of the coast.
As regards the Duncan report, we are particularly grateful to the government for implementing the recommendations contained therein, especially the twenty per cent reduction in freight rates, a reduction which is and will be of incalculable benefit to the agricultural, commercial and industrial life of the maritime provinces. In regard to the recommendation with respect to railway matters in Kent, I hope the government will at an early day so adjust matters as to relieve the unsatisfactory conditions which have existed in the northern part for many years.
Another recommendation of the Duncan report, which is implemented and for which the fishing population are very grateful, is the appointment of the royal fisheries commission to inquire into fishing conditions in the maritime provinces. Its report when submitted will, I hope, tend in a large measure towards remedying the grievances of the fishermen and also towards, a greater development of that very important industry in the maritime provinces.
In conclusion, it is my pleasure to say that we have in New Brunswick a strong and virile population characteristic of the two great English and French-speaking races, living in the most perfect harmony and
Privilege-Mr. Bird

mutual good fellowship, and conscious of their duty to assist in making Canada a happy, prosperous and united country.
On motion of Mr. Arthurs the debate was adjourned.
On motion of Mr. Robb the house adjourned at 10.05 p.m.
Friday, February 24, 1928