1928-02-27

SELECT STANDING COMMITTEES

Hon. ERNEST LAPOINTE (Minister of Justice):: On behalf of the Prime Minister
(Mr. Mackenzie King), I beg to move, seconded by the Minister of Finance (Mr. Robb):
That the names of Messieurs Duff, Sinclair (Queens), Jacobs, Descoteaux and Glen be substituted for those of Messieurs Bourgeois, Boivin, Delisle, Fafard and Steedsman on the select standing committee on agriculture and colonization.
That the name of Mr. Lacroix be substituted for that of Mr. Kay on the select standing committee on railways, canals and telegraph lines.
That the name of Mr. MacLaren be substituted for that of Mr. Price on the select standing committee on marine and fisheries; and
That the name of Mr. Price be substituted for that of Mr. MacLaren on the select standing committee on printing.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. T. W. BIRD (Nelson):: I rise to a
question of privilege. I wish to quote from an article which appears in The Evening Guide, a newspaper published at Port Hope, Ontario, and I trust the house will restrain its sense of humour until I have concluded the quotation. The article in question, which appears in the issue of this newspaper of Monday, February 13, in commenting upon the bill which was introduced in the house a few days ago by the hon. member for Winnipeg North Centre (Mr. Woods worth), for the purpose of amending the criminal code in respect of blasphemy, makes this statement:
The personality of those wdio supported the bill is worth a passing notice. It was introduced by 'Mr. Woodsworth and supported bv Mr. Bird.
That is misstatement No. 1.
Remarkable to relate both these members of the house are ex-clergymen.
Misstatement No. 2:	I am no more an
ex-clergyman than the leader of the opposition (Mr. Bennett) is an ex-lawyer.

The former was a teacher or professor in the Winnipeg Methodist Theological College a few years ago.
This, I understand, is false: misstatement No. 3.
The latter was a prominent preacher of the gospel in one of the western provinces.
That is a slight exaggeration.
The question might very well be left just here, without note or comment.
But apparently the writer cannot withstand the temptation to slander, so he proceeds:
All that might be said of this extraordinary exhibition will readily occur to every rightthinking person. One cannot but hope that in the inner consciousness of each of these gentlemen some ray of light may pierce through the outward darkness that enshrouds what was once their better selves. Milton depicts Lucifer's fall as immeasurably tragic, because he had held an honoured place with the most high. One wonders at the strange perversion of an erstwhile religious mind contemplating the advisability of removing all restrictions to the flood-gates of heart-breaking, vile, shocking and contemptuous blasphemy, under the childish plea that liberty of speech is being fettered. It is a sad commentary, however, that the withdrawal of clergymen from their calling and their entry into public life in this country, has been disappointing and in many cases truly tragic. In no single case has any one of these clergymen been anything but a disappointment. Not a few but have gone wrong morally.
So much for this paper. I turn now to The Port Hope Daily Times of February 17. This newspaper prints the following:
The Rev. Mr. Woodsworth and the Rev. T. A. Bird of Nelson-
Not ex-clergymen this time.
-want to strike out the section of the criminal code under which Sterry was convicted, so that in future particularly red orators would be free to blaspheme at will. The language used by Sterry in the paper he published was of a most revolting character and made cold shivers creep up the spines of even those who cannot be termed religious, and one of the ministerial members of the house is so much enamoured of it that he attempted to read it to the house. Hon. Mr. Bennett, however, objected to the pages of Hansard being thus polluted and Rev. Mr. Bird took a second thought and desisted.
I will overlook the comparison between the religious zeal of the leader of the opposition and that of myself; it is very much to my disadvantage. However, I want to say that in regard to the first-


Mr. POWER:: I rise to a point of order. We have on two or three occasions in the past listened to personal explanations from members of this house, to corrections of misstatements, or to commentaries on statements or articles which have appeared in the press. Possibly we were right in treating these as matters of privilege, but I respectfully submit that we should not regard as a

Privilege-Mr. Garland (Bow River)
question of privilege the reading, with comments upon them, of lengthy newspaper articles.


Mr. SPEAKER:: Bourinot is very clear on this subject. He says:
When a member conceives himself to have been misunderstood in some material part of his speech he is invariably allowed, through the indulgence of the house, to explain with respect to the part so misunderstood.
He concludes the paragraph by urging that such explanations be brief.


Thomas William Bird: It seems to me, Mr. Speaker, a much more serious matter for a member of-this house to have his standing before the public, especially in relation to his religious convictions, scurrilously slandered in the manner adopted by these newspapers. Surely I can claim the protection of the house from that kind of thing. These articles attempt to brand me in the eyes of my fellow-religionists as being unworthy of the name I profess and of the profession I have followed for a good many years. I desire to call the attention of the house to what I actually said on the occasion in question. When this matter was before- the house I was careful to make my point of view clear. I had not intended to speak to the bill at all; I knew nothing about it. But when my hon. friend from South Toronto (Mr. Geary), perhaps unintentionally, cast an imputation upon my hon. friend from Winnipeg North Centre, I rose and at once explained why I took part in the discussion. I said:
Now, I take part in this discussion in order to protect my friend from Winnipeg North Centre (Mr. Woodsworth) from what I consider to be the unjust objection of my friend from South Toronto (Mr. Geary).


Charles Gavan Power: Mr. Speaker, I again rise to a point of order. This is nothing more or less than an attempt to justify the participation of the hon. member in some debate, and I suggest that if his words on that occasion were not considered by the house to be sufficient justification for his stand, the matter should be allowed to drop.


Hewitt Bostock: I have already said that these explanations must be brief, but at the same time in justice to the hon. member I must remind the house that Bourinot says that in all cases of personal grievance the house will frequently cast aside rigid adherence to established usage in order to permit a full explanation to be made. I think the comments made by the hon. member justify him in explaining his attitude to the house, but I again call upon him to be as brief as possible, because time is precious.


Thomas William Bird: I am just following the example set as recently as yesterday by a much more experienced parliamentarian than myself. On that occasion the hon. member's opinions were under attack, while in this case my character is being assailed. Any hon. member can read my few remarks through and see at once that I have been grossly slandered and misrepresented. It is my view of religion that when a friend of mine seems to be suffering under an unjust imputation, I should immediately come to his aid, and I would also say as the hon. member for St. Lawrence-St. George (Mr. Cahan) said yesterday, that there should be some protection for hon. members of this house against attacks of this kind. If there is one kind of blasphemy worse than another it is not the blasphemy of the soap box atheist who shouts on the street corner, but rather the blasphemy of the man who poses as a champion of religion, and while in that pose makes an uncalled-for attack upon the character of another man.


Mr. HOCKEN:: Perhaps these editors wrote inadvertently.
PRIVILEGE-MR. ADSHEAD On the orders of the day:


Mr. H. B. ADSHEAD (East Calgary):: Mr. Speaker, I also rise to a question of privilege, but it is quite different from that raised by my hon. friend from Nelson (Mr. Bird). In addressing myself to the house yesterday I made the statement that the Minister of Finance (Mr. Robb) had addressed a meeting in Calgary, during the course of which he stated that 830,000,000 had been saved to corporations by his tax reductions, and that that saving was passed on the men below. The Minister of Railways and the Minister of Finance were both present at that meeting, and they have drawn my attention to the fact that I entirely misunderstood the remarks of the minister. It was quite unintentional, and I assure hon. members of the house that I had no desire to misquote my hon. friend. Therefore, accepting their statements as I do, I withdraw that portion of my address which relates to that particular statement made by the Minister of Finance.



PRIVILEGE-MR. GARLAND (BOW RIVER)

[Stage Direction]
On the orders of the day:
Mr. E. J. GARLAND (Bow River):: Mr. Speaker, I rise to a question of privilege. Yesterday the hon. member for South Huron (Mr. McMillan) is reported at page 715 of Hansard to have said:
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.
Tariff Advisory Board

I am quite sure the hon. member did not intend to misrepresent me, so I simply state to the house that I have privately and publicly expressed my disapproval of any sub-sidy'for the movement of coal from my province to any other place, and through the mouth of its Premier the province of Alberta has done likewise. The operators of that province also, at a recent meeting, unanimously passed a resolution asking that the transportation be carried out without subsidy.



TARIFF ADVISORY BOARD

[Stage Direction]
STENOGRAPHIC REPORTS OP EVIDENCE On the orders of the day:
Hon. R. B. BENNETT (Leader of the Opposition):: Yesterday the Minister of
Finance laid on the table sessional paper 132, in which the following words appear:
As stenographic reports of the public hearings are now taken, copies of the stenographers' notes have been filed with the Minister of Finance. These cover all hearings during the year 1927. The chairman has also filed with the minister his general report on the activities and proceedings of the board since he was appointed to office.
This has reference to the proceedings before the tariff advisory board, and I would ask the minister whether he would lay on the table for the lise of the members of the house the stenographic reports of the public hearings before the board during the year 1927, together with the report of the activities and proceedings of the board as prepared and filed by the chairman.


Hon. J. A. ROBB (Minister of Finance):: I shall be glad to table any information I have received from the board in that regard.
IMMIGRATION ESTIMATES On the orders of the day:


Richard Bedford Bennett: I would like to draw the
attention of the Minister of Immigration and Colonization (Mr. Forke) to his estimates on page 22 of the estimates as laid on the table of the house, and to ask him whether he will prepare and have printed and circulated for the use of the members of this house the details of votes 55 to 60 in those estimates, that we may intelligently and, we hope, usefully criticize his estimates. In part H of the Auditor General's report there is a statement in detail of the expenditure under the vote of last year, and it is quite clear that unless some further detail is given no useful criticism can be made of the current estimates. We would therefore like the minister to prepare and circulate the details of these votes, having regard to the terms of part H of the Auditor General's report, which in-
dicate the actual expenditures of last year. I believe the right hon. Prime Minister will quite agree that in these circumstances we may be able to act as a committee on the estimates, and may be able to offer some useful advice with respect to expenditures in ports such as St. John and Halifax and other places, but as the vote now stands, composed of only five items, it will be quite impossible to make that useful criticism which is so essential in order that this vote may be understood by the house and by the country. If the minister could prepare this detailed statement and have it printed and circulated before these items are considered it will be greatly appreciated.


Hon. ROBERT FORKE (Minister of Immigration and Colonization):: I will be only
too happy to agree with the suggestion of my hon. friend, just as far as it is practicable.


Richard Bedford Bennett: That is all that is intended.



REPORT OF FISHERIES COMMISSION

[Stage Direction]
On the orders of the day:
Mr. W. G. ERNST (Queens-Lunenburg):: I desire to ask the Minister of Marine and Fisheries if he is able to give the house any further information as to when the report of the royal commission investigating the fisheries of the maritime provinces will be tabled in the house.


Hon. P. J. A. CARDIN (Minister of Marine and Fisheries):: I regret that I am
not in a position at present to fix any date for the presentation of that report. My present information is that the commissioners are losing no time in preparing it, and I will inquire about the date of its completion and inform my hon. friend not later than Monday or Tuesday.



THE BUDGET


[Stage Direction]
The house resumed from Thursday, February 23, 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 oommittee of ways and means, the proposed amendment thereto of Mr. Cahan and the amendment to the amendment of Mr. Fansher (East Lambton).
Mr. JAMES ARTHURS (Parry Sound):: Mr. Speaker, there are two outstanding questions which are engaging the attention of the thinking citizens of Canada at the present time. One is how to continue what pyos-

The Budget-Mr. Arthurs
perity we already have in Canada and how to increase it, and the second is how to increase our population in order that among other things we may lighten the burden of taxation throughout this Dominion. We on this side of the house rejoice that there has been a certain amount of increased prosperity in Canada. With our vast country, our great natural resources and our industrious people this was inevitable, but I want to point out that this increase in prosperity is due to no action on the part of the present government and, as a matter of fact, has come to Canada in spite of the acts of this government. I also point out that there is nothing in the present budget calculated to induce greater prosperity in Canada at the present time. The chief causes of the increased prosperity can be summed up under four heads: In the first place we have had three years of bountiful crops, thanks to Providence, and those crops have been sold by the farmers at prices much greater than existed in pre-war days. In the industry of animal husbandry a similar increase has also occurred, and good prices [DOT] have been obtained. Consequently the farmers of Canada to-day, no matter in what province they may reside, are in a better position, relatively speaking, than they have been for some time.
The second great industry in Canada which has been prosperous is the mining industry. Here again we find the federal government is exercising no control or very little. The mining industry in Ontario, the province from which I come, is going ahead by leaps and ' bounds, largely on account of the measures taken by the provincial government. That government sent its Minister of Mines over to the old country on a very successful visit to interest British capital in the mines of the province. The mines of Quebec, I believe, are in a similar condition; and in almost every province of Canada the mining industry is increasing with the result that towns are springing up everywhere, and other industries are developing in connection therewith. The same thing may be said of the pulp industry, which is one of our largest industries. This is almost entirely under the control of the provincial government and is not subject to the whim or the control of the present government at Ottawa.
We have a fourth industry to which I should like to call attention for a few minutes, one that is gaining in importance every day ^ in Canada-I refer to the tourist traffic. During the last few years it has grown at a wonderful rate, until it is estimated1 that last year the money left by tourists in this Dominion represented a total of upwards of $200,000,000.
The traffic has been largely brought about by the construction of good roads in the various provinces. The movement for good roads originated, really, through a grant from the federal Conservative government for improved highways, and the movement for good roads has grown throughout the Dominion to such an extent that almost every Canadian province is spending a large part of its revenue in connection with improved road systems. The result is that the tourist business in increasing every year and will continue to increase, notwithstanding the fact that nothing at all is being done by this government to advertise Canada in that way. A few years ago, I believe, some advertisements were sent out by the Immigration department but these have been discontinued largely so far as I know.


Mr. STEWART (Edmonton):: I am afraid my hon. friend has not been reading the press.


James Arthurs: There are a few pages
of advertising published here and there, but very few.


Robert Forke: A lot of money has been
spent on advertising.


James Arthurs: I have no desire to preach blue ruin or anything of that nature, but I should like to point out that a good deal of the prosperity which has been advertised so freely by hon. gentlemen opposite is nonexistent. We have reports showing that our banks are prosperous, and we believe it to be the case, but what consolation is that to the man who is out of a job, the man who has lost his occupation in some factory in this country? The immense amount of life insurance in force has also been cited. May I point out to the.house and to the country that the great part of this life insurance is in the nature of investments by wealthy men, men who are anxious to avoid paying income tax and to provide that when they die their estates shall .not be subject to taxation either.
The point that we are interested in mostly is this: Are conditions better in the country and in our small towns since the advent of this government, or are they worse? There can be no question but that in almost every town in this country the conditions are worse than they were four or five years ago. Our young men are leaving for the United States, hundreds have already gone, and no matter what the government may say these men are remaining in the country to the south, they are not returning. I think the member for Vancouver-Burrard (Mr. Clark) gave the house some figures on this subject from an American report yesterday. I should like to
The Budget-Mr. Arthurs

quote some further figures in order to show the extent of this movement of Canadians to the United States. During the six years, from 1922 to 1927, 645,212 Canadians left Canada for the United States. They paid their head tax and went there with the intention of becoming permanent residents of that country. During the same years the proportion of Canadians going to the United States has vastly increased. For instance, in 1921, the proportion of Canadians to the total number of immigrants entering United States was 9 per cent; in 1922 it was 15.01 per cent; in 1923, 22.04 per cent; in 1924, 28.04 per cent; in 1925, 34.9 per cent; in 1926, 30.07 per cent; and in 1927, 25.03 per cent. In other words, during the last five years practically one-third of all the emigrants to the United States were from Canada and were Canadians, because these figures do not apply to other than native bom Canadians. I would also point out that in the fiscal year, 1926-27, of the total increase in the population of the United States 88,023 were Canadians. That is to say we permitted 88,000 more Canadians to go to the United States than returned from that country to Canada. The claim is made that Canadians are returning from the United States. I should like to point out that according to the United States report of naturalized citizens leaving that country for Canada, 721 are given as Canadians; these in addition to 10,374 Americans. This shows conclusively that the exodus of Canadians to the United States is not at an end, and that we are losing vast numbers of our population to that country. In 1881 our population numbered 4,324,810. Since that time the volume of immigration to this country has amounted to 5,436,663, which should give us a population of 9,761,473. In addition to that we should have had a natural increase in population, estimated by the best judges to be upwards of 100,000 per annum. If we had retained this annual natural increase, amounting approximately to 4,000,000 souls, we should have a population to-day of 13,761,473. But such is not the case and it is apparent that we have lost by some means or other a population of upwards of 4^ millions.
As a matter of fact it is well known that our present immigration system is an absolute farce. We are supposed to hand-pick immigrants, and in many cases they do not stay in Canada but leave after a very short time. If we were to contrast our present system with that of the past we would certainly find it would be better to go back to the old system of allowing everybody to come in. For years we had a large immigration and a vast majority of the men coming in made 
good. We do not need to go outside of our ranks in the House of Commons to-day to see the result of the immigration policy of the past. We have in this house at the present time thirty-one members who were immigrants to Canada; in other words, twelve and one-half per cent of the total number of members in this house were bom outside of this Dominion. These men made good and, as a matter of fact, many of them boast that they came to Canada without any advantage either monetary or otherwise, but under the present system they would probably not have been allowed in at all. I wish to point out also that these men were not all farmers. As regards nationality there were nine English, twelve Scotch, four Irish and six from the United States, and of the whole thirty-one members only ten were farmers. Yet these men have made good in this country and in the majority of cases we are pleased and proud to have them here.
I do not know whether the government purposes taking up the views of all their associations, but I find in yesterday's Ottawa Citizen a resolution passed by the Liberal association of a city close to this, advocating among other things that we have no more immigration in the meantime because we have some men out of work, and in the second place that, if we do have any immigration, it should be confined to farmers only, and if they leave their farms inside of ten years they ought to be arrested and deported. I do not know whether the minister is taking up that resolution or not, but I would recommend' it to his consideration as being about as good as some that he has at the present time.
One of the principal problems we have now undoubtedly arises from the fact that we have a large debt owing to the war and we must increase our population in order to make this debt less burdensome upon the individual. This government, during the period it has been in power, has done absolutely nothing to remedy this condition. We lack the greatest of all remedies, namely, sufficient protection for our factories, our farmers and our labourers so that they can supply the home market. I know that many, especially our western members, speak very lightly of the -home market and claim that, as they have to sell in the world market, they should also be able to buy there. But this does not apply at this time to the majority of our farmers, who know the value of the home market, and I would point out to my friends from the west, those who are engaged largely in wheat growing, that the

The Budget-Mr. Arthurs
day is inevitably coming when the Russian republic will again enter the field as a producing nation. With her two hundred million people, with some of the finest land that, to use a common saying, lies out of doors, these people will come into direct competition with the farmers of Canada and the United States. In addition, other countries are liable to be developed along the same line, and the day will come, I believe very soon, when the importance of the home market will be felt even by those who are grain growers solely, as it has been felt by others. The hon. member for Comox-Alberni (Mr. Neill) last year made a speech, part of which was probably the greatest protection speech I have ever heard, wherein he pointed out that little towns were springing uo in British Columbia and that the farmers in their vicinity found a market there for everything they could grow. The same principle should apply throughout Canada; we should develop our little industries, develop our towns and, if possible, have all our manufacturing for Canadians done in Canada.
Sometimes in this house too much weight is given to the farmer side of this question, and our friends are liable to overstep the mark even as regards their facts and figures. For instance, last year, a certain member belonging to the group to my immediate left, was speaking of Canada's exports and imports and he made this remark.


Mr. SPENCER:: What is the name of the hon. member?


James Arthurs: The then hon. member for Maple Creek. He made the remark:
We have one billion and a half dollars coming into Canada as a whole from all agricultural products.


Edward Joseph Garland: He is not
an hon. gentleman to the immediate left of my hon. friend. He was over there.


James Arthurs: Well, he moved. I withdraw the implication. If we look up the statistics of this government we find that the hon. gentleman was mistaken to the extent of about 100 per cent. Our exports of farm produce are undoubtedly large and they should be larger; we should give our farmers every encouragement to produce and to export; but at the same time the exports are not proportionately as large as the hon. member endeavoured to make out. The total exports for last year of farm produce of all classifications amounted to $702,000,000, and these were classified in various ways. I would like to call the attention of the house to some of these articles classified as farm produce because they are most interesting. For instance, blueberries, groceries of all kinds, ale, gin, whiskey and other potable spirits, are all included under the head of farm products in a government return.


Mr. CHAPLIN:: All the fish products of
Canada will also be found there.


James Arthurs: Under farm products are included cigars, cigarettes, plug and twist tobacco, all other tobacco, pine tar and pitch, turpentine, linen and jute manufactured, and oilcloths. The amounts are large. For instance, our exports of whiskey and various other potable spirits amounted last year to about $28,000,000, and these are all included in farm products. Under the head of animal products we find harness leather, sole leather, upper leather, all other leather, glue stock, tankage, belting of leather, moccasins and Indian slippers, boots and shoes of leather, gloves and mitts of leather, harness and saddlery, and so on. If we turn over the page we find farm products including wool carpets, woo! fabrics, wool underwear, wool clothing, woollens and glycerin. Incidentally, probably the export of farm products is one of the most prosperous businesses the government have, and if they did not export whiskey, they could not claim a surplus perhaps even according to their own book-keeping.
We on this side of the house, Mr. Speaker, have no objection at all to doing those things that are necessary to make any part of Canada prosperous. I do not think there was a dissenting voice on this side to any of those measures which were found necessary to build up our maritime provinces and to give them the rights to which they are entitled. We have for years in the central portion of Canada, in the provinces of Ontario and Quebec, been paying the bulk of the profits, if any, of our Canadian National Railways. Our frienAs in the west have been enjoying, and we granted it to them quite willingly, the benefit of much lower rates than obtain in Ontario and Quebec. We are glad to do these things, but in return we feel that we should receive some consideration for those factories which have been established in Canada for many years. Go where you will in the province of Ontario or elsewhere, where years ago there were small knitting factories, woollen factories and various other small factories, to-day we find that they have been put out of business largely perhaps on account of neglect by the government, and sometimes through adverse legislation. There is not a civilized country in the world at the present time that is a free trade country. In Great Britain the duties have been raised
The Budget-Mr. Arthurs

from time to time until to-day that country is a more strongly protected country in many lines than is Canada. Great Britain has a flexible scheme for the protection of its industries, under legislation that is known as The Safeguarding of Industries Act, under which the control of the. customs is placed in the hands of the British Board of Trade, with power at any time to increase or decrease a duty when they feel that there is unfair competition because of lower wages in competing countries, a different standard of living, or from any other cause. They have power, for instance, to decide:
Whether foreign goods of the clasp or description to which the application relates are being imported into and retained for consumption in the United Kingdom in abnormal quantities.
Whether the foreign goods so imported are being sold or offered for sale in the United Kingdom at prices which are below the prices at which similar goods can be profitably manufactured or produced in the United Kingdom.
Another clause reads that competition is not to be deemed unfair unless it arises, amongst other things, from:
Inferior conditions of employment of labour, whether as respects remuneration or hours of employment, or otherwise, obtaining amongst the persons employed in the production of the imported goods in question as compared with those obtaining amongst persons employed in the production of similar goods in the United Kingdom.
It goes on to outline the whole procedure by which duties in Great Britain may be increased or changed without the consent of parliament at all, and as I said, the duties are being raised until some of their industries are better protected than ours. In the United States the same thing obtains. I think it was the hon. member for Fort William (Mr. Manion) who the other day gave a case where goods had been purchased by an American importer from Canada, and before the goods reached his warehouse the duty had been about doubled. I know of my own personal knowledge a case in my home town where a manufacturer has been selling goods to the United States, and after a contract has been made the duty has been increased to such an extent that it amounted in one case to over one hundred and fifty per cent. In selfdefence, Mr. Speaker, I think we should do something to protect our workingmen, and for the benefit of the country generally.
Some splendid speeches have been made during this present session regarding the condition of the iron and steel industry in Canada. We have in Canada billions of tons of iron ore, and it is a burning disgrace that we have to acknowledge that during the last
[Mr. Arthurs.!
three or four years we have not produced a single ton in this country. The government of the province of Ontario a year or so ago offered to give a certain bounty for the production of Ontario iron, and I believe the Prime Minister of the province of Quebec made a similar offer, providing this government would come into the scheme and pay a fair proportion of the bounty. Nothing has been done in that direction. Yet we find that this government is able to spend, or is pledged to spend $2,000,000 to convert a couple of small blocks in this city into a park. I want to tell this house that if this $2,000,000 were spent in bounties or otherwise to help develop the iron industry in Canada, it would give employment to thousands of our unemployed Canadians and immigrants.
In conclusion, Mr. Speaker, I want to ask a few questions.
Will this budget help to make Canada prosperous?
Will it help the farmers or the workingmen?
Will it keep our boys in Canada?
Will it cause the wheels to turn in the factories that are now idle?


James Alexander Robb: None idle now.


James Arthurs: I am afraid the Minister of Finance is not a great traveller. This budget will increase industry in a slight degree, but it will be industry in another country; it will not increase industry in Canada, and the increase in industry in those other countries will be at the expense of Canadians and drive more of them out of this country to find work elsewhere.
What we need is a policy that will utilize the raw materials we have in this country. We should manufacture them into the finished product in this Dominion so far as possible, instead of sending those raw products to another country and buying them back in their finished state at an exorbitant price. In other words, Mr. Speaker, what we need to-day is a real policy of Canada for the Canadians, and not for anybody else.


Mr. W. A. HALL (South Bruce):: Mr. Speaker, at the outsed, I wish to congratulate the Minister of Finance (Mr. Robb) on the sound condition of the finances of this country as shown by the budget, as well as upon his courage and good sense in taking advantage of the circumstances that made this condition possible, notwithstanding the fact that the hon. member for South Wellington (Mr. Guthrie1) accused him of lacking courage. The same hon. member accused him of deceiving the country by his method of dealing with the amounts guaranteed by the govern-

The Budget-Mr. Hall
ment to the Canadian National Railways, which makes it appear that the debt of the country has -been reduced when it has actually been increased by over twenty million dollars. He further said that all finance ministers prior to the present minister had added these guaranteed amounts to the national debt, instead of charging them to the particular railway company. But the Ontario government, he said, had five or six years ago evolved a plan to pay off the provincial debt in about thirty years, and so far had found no inconvenience in carrying it out.
Now, Mr. Speaker, I may say that none of these statements is in accordance with the facts. What are the facts? First, I need only say that this house as well as the -country knows that the Minister of Finance not only has courage, but he also possesses honesty and modesty in a marked degree, characteristics possessed by few so-called politicians. His financial statement disproves the second accusation as to the increase of the national debt. If the hon. member for South Wellington will look up the records he will find that the 8124,000,000 guaranteed by the Laurier government from 1896 to 1911 was not charged to the national debt; he will also find that the $170,000,000 guaranteed by the governments between 1911 and 1921 similarly was not added to the public debt. As to the Ontario government's scheme for retiring the provincial debt, the hon. member is wrong in saying that it was evolved five or six years ago. The Ferguson government was not then in power. He is also in error in stating that the scheme is to extend over thirty years; forty years is the term. As to his statement that the Ferguson government -have found no difficulty in putting the scheme into practice, I may tell him and this house that the provincial treasurer has had to acknowledge a deficit every year since Premier Ferguson assumed office. The first year it was fifteen million dollars, the second year eight million dollars, and the third year five million dollars. This year for the first time the provincial treasurer finds himself able to balance his budget and announce a surplus, due principally to the profits from the government liquor stores. Presumably from now on the debt retirement scheme will be put in operation.
Turning to the budget, Mr. Speaker, this presents reductions and increases-reductions in taxation and the national debt; increase in trade and revenue, with a substantial surplus. The Minister of Finance is able to announce reductions in direct taxation as well as in indirect taxation, the sales tax, income tax and corporation tax being reduced. The reductions in indirect taxation, that is the customs 56103-48
tariff, are largely in the duties on textiles- cottons, woollens and linens. As these belong to the necessaries of life, the reduced tariff will lower the cost of living, and thus lessen the burdens of the working classes. The national debt has been reduced by $41,896,729, leaving it at the net figure of $2,306,000,000. During the five years the Liberal party has been in power the national debt has been reduced to the extent of $144,700,000.
The trade of Canada has been increasing by leaps and bounds. Canada ranks second among the exporting countries of the world, and fourth among the world traders. Our total trade, both exports and imports, for the nine months ending December 31 last, amounted to $1,793,209,092, leaving a favourable balance of trade of $147,100,904, as compared with an unfavourable balance of trade of $29,000,000 during the last year of the Meighen administration. But the most unfavourable balance of trade in the history of Canada was $222,000,000, or $29.61 per capita, in 1913 under Tory rule and a protective tariff which did not protect; while in 1926 Canada had a favourable balance of trade of $29.34 per capita under Liberal rule with a tariff for revenue only. During the year there has been a large increase in the revenue and a corresponding increase in the surplus. The revenue exceeded the expenditure by $54,815,000. After deducting the nonactive assets, there is still left a net surplus of $41,896,729 which was applied to reduce the national debt.
According to the press of both political parties, Mr. Speaker, the fifth Robb budget is being well received by the major portion of the people. But it must be confessed that this budget, in relation to the customs tariff, is not comprehensive and far-reaching enough to satisfy a minority of the agricultural class of this country. They must remember, however, that this is the beginning of reductions, not the end; among the first, not the last. Reductions shall continue until the primary or basic manufacturing industries are free to compete with the world, having no tax, no tariff, or no protection. In bygone days agriculturists were looked upon as inferior to other classes. They were dominated by other interests because they knew not their needs, they knew not their strength, and they were not organized. To-day all that is changed. Agriculture is conceded by almost everyone to be the basis of Canadian prosperity. The agriculturists have organized. They have expressed their needs in clear-cut terms. They have made their demands with no uncertain sound. They are cooperating in buying as well as in selling, thinking that cooperation

The Budget-Mr. Hall

is the keynote of agricultural prosperity, as it was thought to be in Denmark, whose people now boast that they enjoy a fair share in the distribution of wealth and prosperity of that country. But, Sir, I say that unless agriculture can be put on a paying basis the rural population cannot be satisfied, happy and contented.
Let me mention some of the reasons why agriculture does not pay:
1.	Lack of science in tilling the soil, and in breeding, feeding and caring for live stock. Education along these lines is fast becoming more general.
2.	Lack of discretion, or, shall I say, lack of sense, in decrying or condemning-or damning-their own occupation by branding it as drudgery or slavery, and by everlasting complaints. Doubtless this has driven, and is still driving, the young people from the farms to the urban centres more than any other cause-the net result being the concentration of industry and population in these centres at the expense of the rural districts.
3.	Lack of labour. This is a natural consequence of the preceding cause.
4.	Lack of working capital. This may be the natural outcome of preceding causes.
5.	Lack of credit. This comes from a lack of capital. This has been partially overcome by the rural credit bill of last session.
6.	Lack of business methods in doing business. Doubtless many farmers are like medical doctors who think that they are too busy to attend to business properly outside of their daily routine of work.
7.	Lack of moderately-priced implements or manufactured articles. This arises from taaxtion, which I shall refer to later.
8.	Lack of cheap transportation and distribution of products. This is partially overcome by cooperation.
9.	Being reckless and profligate in buying luxuries. This is the last but not the least, cause for farming not paying. Luxuries may be coveted and may be desirable, but they reduce the profits of the farmer enormously.
As agriculture is the recognized source of greatest wealth, we have to depend chiefly upon it to meet our national liabilities, assisted by the products of forest, mines and fisheries. These are the main sources of real wealth we have to rely upon to restore our country to a healthy and sound financial condition. Of these, agriculture is the greatest; it produces annually more than the other three combined. The Financial Post gives the production of agriculture for the year 1927 as $1,660,387,100 and the production of the other three as $811,446,000, or less than half that of agriculture. Hence the important part

the farmer plays in the economic welfare of the country. From his soil is furnished the food which is the foundation of labour for all classes. 'Without him the other classes could not exist. As consequently the prosperity of all classes depends upon the prosperity of the farmer, we should, as far as possible, remove every obstacle in his way so as to enable him to secure for himself a fair share of material wealth and happiness. I need not say that the chief obstacle which prevents the farmer from making a fair profit from his investment is the high cost of living, and this is due to the customs tariff, principally on the necessaries of life and on the implements of production.
But it will be asked, what about the manufacturer? He says he must have protection or must close his factory and so throw a lot of men out of their jobs; if this should happen just imagine the multitudes of unemployed! Well, recall the story of the closing of General Motors at Oshawa two years ago when the duty was lowered on automobiles and their accessories. We all know what the result was. Others say that the country must have revenue to meet its liabilities and pay off its immense debt. Let us apply this to the farmer. If you tax- his implements of production-his binder, mower, horse-rake, plough, harrow, threshing machine, wagon and so forth, you take away from him the money that he has earned by the toil of his hands and the sweat of his brow and transfer it to the bank account of the manufacturer who has already millions which have been taken from his fellow farmers by means of the tariff. Thus you see that this money does not go into the revenue of the country and so does not contribute one penny towards meeting the liabilities and debt of the country. Manifestly this answers the Tory cry for revenue raised in this way.
The farmers of this country have always been anxious for reciprocity with the United States in natural products since the termination of the first reciprocity treaty in 1866, as they have a large export surplus of agricultural products and so must find a market for them. Take wheat for instance: only about one-sixth of the production is required for home consumption, notwithstanding the assertion of the Right Hon. Arthur Meighen during the election campaign of 1925. He went all over Canada telling the people that $500 was lost to the home market in respect of farm products for each person that crossed the border. That being the case. 9-} millions of people would consume 9i millions times $500 or 4| billions of dollars of farm products each year. But Canada produced less than

The Budget

Mr. Hall
1J billions of dollars of farm products last year; therefore, we must import over twice as much as we produce to feed our population-some exaggeration! But the truth is that we need only a small fraction of many of our farm products for home consumption.
This led the Laurier government in 1911 to make a reciprocity pact with the United States which would have been an immense benefit to the farmers of Canada. If the then government had put it into effect so as to show the benefit of it, instead of taking a referendum of the people, it would have meant millions of dollars each year to the farmers; and in the end it would have been a great boom to the manufacturer, as every additional dollar got by the farmer from the Americans meant an additional dollar of purchasing power from the business concerns of the Dominion. However, the government said that the people should be consulted. What happened? The manufacturers, organized to defeat the reciprocity agreement. It is said that they, with the rest of the Tory party, raised an immense campaign fund. It is said this was the only time in history that there was any money left after a political campaign in Canada, although it is said large sums were paid to the press, vast sums paid the constituencies, and every means used to create a public opinion hostile to that policy. However, all this would have been of no avail, but for a so-called political strategist, said to be Hon. Bob Rogers, who coined the slogan, "No truck or trade with the Yankees." This, coupled with the waving of the old flag, defeated reciprocity and won the election for the Tories, to the everlasting disgrace of the Canadian people.
In passing, I may say that the manufacturers although not injured by this pact but rather helped, were desirous of perpetuating the system of protection so that the money, equivalent to the duty, would continue to flow into their bank accounts as automatically as the rivers flow into the ocean. Since then, seventeen years have passed, and Canada has not been able to secure reciprocity in natural products with the United States, although the Borden government, shortly after it took office, sent a delegation to Washington to try to revive the reciprocity agreement in whole or in part. But they failed in their mission as the Americans could not trust them. This pact they had strenuously opposed a few months before. Their opposition was to win the election, and not for the good of the country.


Richard Bedford Bennett: The hon. member is incorrect. The Borden government sent no delegation to Washington to revive any reciprocity treaty.
5610S-48i


Walter Allan Hall: That is what the leader of the opposition says, but I say differently.


Richard Bedford Bennett: I simply want to call the hon. member's attention to the fact that the statement is incorrect.


Walter Allan Hall: You have had your say.
This is one more example of the inconsistency and insincerity of the Tory party. Before passing to another division of my speech, I may say that the Conservative party were anxious to have reciprocal trade relations in the natural products with the United States up to the election campaign of 1911. Indeed, Sir John A. Macdonald made several attempts to gain access to the American market for our natural products, but failed. It may have been that the Americans mistrusted the Canadians just as some of the hon. members opposite mistrust the Americans now.
Associated with agriculture, Mr. Speaker, is the question of the tariff, the question of transportation, and the question of our trade relations with other countries. It has been asserted that the question of the tariff is dividing Canada and would divide the Liberal party. It certainly divides the Canadian people into two classes, namely, high and low tariff people, or protective and revenue producing tariff people. The first class is represented by the Tory party and the second class by the Liberals and the Progressives. This is a very general statement. Let us particularize. The interests of the farmer and the interests of the manufacturer are said to be a great point of contention. Let us see how this works out. Canada does not figure largely as a manufacturing country; it is certainly not one of the great manufacturing countries of the world. Why is it not? Do Canadians lack ability in management, in intelligence, in application, in thrift and in industry? Certainly not. Is it not a fact that Canada produces, per capita, the greatest export surplus of food stuffs, which is the very foundation of labour, of any country in the world? Is it not a fact that Canada has an abundance of raw material from the farm, the forest, and the mines? Is it not a fact that Canada has the most magnificent water powers in the world, the ultimate hydro development from which is calculated to be forty million horse power? Is it not a fact that the centres of our population are situated in close proximity to the ocean traffic which carries their products to all parts of the world? Is it not a fact that Canada has transportation facilities, by land and by water, excelled by few countries in the world? Is it not a fact that Canada has a good labour market? Is it not a fact that Canada
The Budget-Mr. Hall

has excellent banking facilities, affording adequate capital to manufacturers? To summarize it all, Canada possesses the six essentials for manufacturing, namely, an abundance of food stuffs, of raw material, of cheap power, of cheap transportation facilities, of good labour well located, and of available capital.
Then why is Canada not a great manufacturing country? Our people leave our own country and go across the line; the Canadian artizan and the Canadian manager are in demand in every country of the world. Then why is it that in his own country he cannot compete with the world? Who amongst us will confess that Canadians are inferior to other nationalities? Did not the Canadian soldiers in the late Great war prove themselves inferior to none, equal to any and superior to many? If all these things are so why cannot we compete with the world in our basic manufacturing industries as we compete with the world in our agricultural industry? There must be something wrong.
For the last half century the manufacturers in Canada have worshipped the fetish of protection; they have manufactured for the tariff and not for the consumers of the world. This idea of protection for the manufacturers in Canada has been carried to such an extent by the Conservative government and indeed by all governments that it has defeated itself, but the original idea of protection as conceived by Sir John A. Macdonald the father of protection in Canada, was protection only for the infant industries, not to be continued to those attaining the status of adults. In many cases this is a commendable policy, quite different from the Tory policy of to-day.
In spite of Canada possessing everything required to place her in the front rank of manufacturing nations, the principle of protection keeps her in the rear, which is the reason for the present government to make a gradual downward reduction of the tariff all along the line, as well as to facilitate transportation and to continue the further extension of our trade relations with other countries, especially with the other dominions within the empire. These things would establish industry on a sound basis and would enable1 the manufacturers of Canada to compete not only in a market of nine and a half million people within our own borders, but in the great markets of the world as well, thus adding real wealth to our country by greatly increasing the volume of international trade, which is the true barometer of the wealth and prosperity of a nation. This is 
our purpose in pleading for a low tariff; not because we have any hostility to any industry in Canada but because it has been proven that the principle of protection is restrictive and destructive, and must be changed if Canada is to achieve any great pre-eminence in her manufacturing industries. Thus we see that the interests of the farmer are in common with the interests of the manufacturer; a separation of interests affects both adversely.
If a low tariff is best for the farmer surely the same tariff is best for the manufacturer, because the prosperity of the manufacturer depends almost entirely upon the prosperity of the farmer. A bountiful harvest with good prices means busy factories and great prosperity.
For a few moments let us look at the condition of our farmers. Many of them are far removed from the ocean ports, living and carrying on their work in the interior of the continent. Yet they must meet the competition of the world with their products. The railway freights are against them also, but they have accommodated themselves to these conditions and are able to carry on. They have no protection, and what is more they want none. The Tory party promised them protection; what would it be worth to them, since they now produce a large export surplus of farm products? Indeed, of what value is a protective tariff to manufacturing industries based on the natural resources of this country, when they now manufacture an immense surplus over home consumption? It is of no benefit. I submit, Mr. Speaker, that if the agriculturist can thrive and prosper without protection under such adverse conditions the manufacturer should be able to do likewise under a low tariff with the favourable conditions mentioned a few moments ago. Doubtless the basic manufacturers in Canada possess sufficient industry, energy, intelligence and ability for good management to put their industries on an export basis instead of a protective basis. The reduction in the customs tariff on automobiles in 1926 by the present government is a striking example of the truth of this proposition. Why would this not apply to other industries? It certainly would. The only thing needed is for this government to lower, adjust, equalize and stabilize the tariff on many of the manufactured articles instead of only a few, and in that way convince the people of this . country that a low tariff is a sound and sane policy. In all these cases, the consumers share in the benefits with the manufacturers, just as they did in the case of the automobiles.
After this is done and the manufacturers have learned their lesson, they will no longer

The Budget-Mr. Ryckman
call their employees together to tell them that they will have to close their factory doors on account of the lowering of the duty on similar manufactured products, while on the other hand the employees will no longer harass the manufacturer for higher wages since the cost of every article they require will be lowered. In other words the cost of living, and I presume the cost of dying, will be much less. As a result of all this there will follow a period of prosperity, contentment and happiness unsurpassed by any like period in the history of our country, as well as a complete and satisfactory solution of both our emigration and immigration problems. Doubtless this period will be known in our history as the second golden era of progress and prosperity since confederation, like unto that other golden era of the Laurier regime from 1896 to 1911.


Hon. E. B. RYCKMAN (East Toronto):: Mr. Speaker, I am afraid I can hardly agree with the hon. member for South Bruce (Mr. Hall) who has just spoken, when he says that the protective tariff is restrictive and destructive and must be destroyed. If I had a mind that wanted to think that way I would not allow it to do so, because the entire commercial world thinks otherwise. I am sorry I cannot add any words of praise or commendation of the budget. I take what benefits the budget gives me, and it does give benefits; the cuts in sales tax, corporation tax and income tax all help me. They are gifts, and when a man is hungry he is anxious for any food, but I would take them all and cast them aside if the Minister of Finance had shown that courage which has been mentioned in the house this afternoon, and given this country the government it needs and the fiscal policy it requires.
I object to the budget because I ,do not think it is frank; I believe it to be misleading. I think it can be shown that the people of Canada are expected to take from this budget a view which the facts do not warrant. I hope I may not repeat too much of what has already been said, but there are certain matters to which I must refer. My chief complaint against the budget is that it starts to tell us there is a reduction in debt when there is no real reduction at all. It declares such a reduction when there is no real reduction in debt, that there is a surplus when there is no real intrinsic surplus as the minister has attempted to show. Further, the minister in his speech referred to the certificate given by the accountants. No one knows better than the minister how such certificates run. The formula is well understood. I pick up the budget speech and I read the statement of
the Minister of Finance at page 505 of Hansard, to the following effect:
That there should be no uncertainty as to the correctness of the public accounts of this Dominion, I recommended to the treasury board that an independent audit be made of the balance sheet of the public accounts as of March 31, 1924, 1925, 1926 and 1927. The well known firm of chartered accountants, P. S. Ross & Sons, of Montreal, Toronto and Winnipeg, were engaged and instructed to make a complete audit of the departmental accounts in question, and on the fifth of December last their certificate which is printed on page XIV of the public accounts for the year 1926-27 was received. Their report confirms the accuracy of the public accounts as submitted^ to parliament, and certified that the reduction in the net debt during the period in question was $105,942,498.65.
The Finance minister expected, and still expects, that the people of Canada who have seen this budget speech-and all Canada has seen it-will take this statement and understand that the certificate that has been given was given in the usual course, according to the usual formula, and specified the correctness of the accounts. That is not true. The certificate is what? It is dated December 5, 1927, is addressed to the Minister of Finance and says:
By authority of the treasury board, given 28th June, 1927, we have examined the balance sheets of the Dominion of Canada for the fiscal years ended 31st March, 1924, 1925, 1926 and 1927.
Then do they give a straight certificate? No. What they desire to say, and what subsequently they give a form of certification to, is this:
We certify that the published balance sheets examined by us have been compiled in a manner similar to the corresponding statements of previous years, and do not include in the net debt of the Dominion, issues of the Canadian National Railway Company and the companies included in its system, which carry the guarantee of the Dominion. The details of such guarantees have been shown separately each year in the public accounts.
They expressly exclude from the net debt of the Dominion all moneys that have been paid in connection with the Canadian National Railways for which the country is liable.


James Alexander Robb: Since my hon. friend has read
part he might as well read the whole certificate.


Edmond Baird Ryckman: There is no object to
be gained by taking up time in reading it.


James Alexander Robb: Ah!


Edmond Baird Ryckman: It seems to me that is
rather oheap. They do certify afterwards in effect-I am not going to take up time by

The Budget-Mr. Ryckman
reading the whole of it-reductions in the net debt with the exceptions which they have
specified.


James Alexander Robb: Will my hon. friend permit
me? He wants to be fair.


Edmond Baird Ryckman: Certainly.


James Alexander Robb: The auditors certify surpluses for each year. More than that these gentlemen-who are the auditors for the province of Nova Scotia, the province of New Brunswick, the Royal Bank of Canada, and the Sun Life Assurance Company of Canada- tell me that our books are kept in exactly the same form as the books of the provinces including the province of Ontario. The last named province owns a railway system and a hydro-electric system and has the same form of book-keeping as the federal authorities.


Edmond Baird Ryckman: That, certainly, has
nothing to do with the actual debt of this country, and which it and no one else will be called upon to pay.


James Alexander Robb: The province of Ontario is
following the same system of book-keeping.


Edmond Baird Ryckman: The system in force
here is the system that wrecked the Home Bank; it was just the same system of financing exactly. We found the general manager of the Home Bank doing what? Keeping two sets of accounts, not taking into account his liabilities, but taking all the assets that he could find, and then, with the liabilities not all accounted for, claiming that the bank was solvent. He even fooled the Minister of Finance because the bank was not shown up when it should have been. I say, Mr. Speaker, that in principle and in dealing there is no distinction between the handling of the Home Bank affairs by Mason and the handling of these accounts by the Finance minister if he claims there has been a net reduction in the national debt of Canada of $105,000,000. Why even the Minister of Finance was not astute enough to put his two inconsistent positions far enough apart in his budget speech. Take what we find at page 508 of Hansard':
Surplus, $54,815,000.
Then at page 509:
Guaranteed Securities Canadian National Railways
Financial requirements of the Canadian National Railways were met by an issue of $65,000,000 4J per cent 30-year bonds, dated July 1, 1927, guaranteed by the Dominion of Canada.
This is a little more than $10,000,000 larger than the alleged surplus. What was this sum

of $65,000,000 for? For refunding and paying $20,000,000 that the Canadian National Railways could not pay. The next item is $15,000,000 for the funding of a temporary loan for which the Canadian National were liable and could not pay. Then there is $16,600,000 to provide for expenditures authorized in the railway appropriation for 1927-28 for general additions and betterments and miscellaneous maturing obligations as provided for by vote 408, Appropriation Act, 1926-27-"Loans to Canadian National Railway Company." This is again a sum which the Canadian National Railways could not pay, and so on. Therefore we see that more than this alleged surplus is used on the very next page of his speech as it appears in Hansard. Everyone knows that if you guarantee a primary debtor who is no good, who, you know, is no good, who can never pay, and who, you know, can never be expected to pay, you have to pay the debt yourself. That is the situation of this country and that situation should be frankly laid before the people. It is wholly idle and misleading and it should be condemned when one sets up that, during the period named by the Minister of Finance, we had a net reduction of the sum alleged.
In that clause of the certificate of P. S. Ross & Sons you can insert the words "Home Bank" instead of "Dominion", and you will find a certificate which will absolutely justify everything that that Home Bank did. Why, that certificate just points to a sinkhole in which you could deposit every bad debt in a financial institution. Instead of the certificate reading:	We have examined the accounts and
we certify that they exhibit a true and correct view of the country's affairs, it states:	Here
is a sinkhole, let rubbish of all kinds be deposited here, and you can do this under the certificate of the accountants. It occurs to me to ask:	Was there any correspondence
with the accountants about the certificate and its form? Was this second paragraph of the certificate discussed by them with the Minister of Finance? Did the Minister of Finance take this qualifying clause, which really destroys the effect of the certificate, and accept the certificate as satisfactory to the government and the people of Canada?


James Alexander Robb: Does my hon. friend desire
an immediate answer?


Edmond Baird Ryckman: Yes, otherwise I would
not have asked the question.


James Alexander Robb: The question is very fair.
The firm of P. S. Ross & Sons are too well known and of too high a type to be influenced by any person in giving their certificate.

The Budget-Mr. Ryckman
There was no correspondence; there was no consultation as to the form of the certificate, and the government selected the firm of P. S. Ross & Sons to make this audit, because the government desired an audit that, by our opponents at least, would be regarded as satisfactory, because it is well known that the firm of P. S. Ross & Sons are amongst the most outstanding supporters of the Conservative party in Canada. One of them was a candidate for the Conservative party.


Edmond Baird Ryckman: It is a very fine firm
of accountants. Please do not misunderstand me. I am not complaining; I am saying that, as accountants understanding their duty, they could not certify to what they were asked or expected to certify without these qualifications and they insisted upon putting them in.


James Alexander Robb: Will my hon. friend allow me
to clear that up a little further? The firm of P. S. Ross & Sons was selected to make this investigation after I had read a speech delivered by the hon. gentleman who at that time was leading the Conservative party, challenging the budget and the balance. I thought it was fair not only to the government but to all the people of Canada that we should have a true statement of the affairs of this country. I therefore cut out the report of that speech and sent it to the gentleman who did the auditing, stating:	I want
you to find out if that statement is correct or not. That is the answer from the books.


Mr. MOTHERWELL:: An auditor from the dead would not please my hon. friends.


Edmond Baird Ryckman: I am afraid the Minister of Agriculture will be examining corpses before long. I am not objecting in any respect to the certificate or its form, because I realize that the auditors could do nothing else; but I am saying that the form of it, which is in accordance with the facts, should not have been satisfactory to the Minister of Finance; that it is not satisfactory to the people of Canada, and that the minister cannot honestly state that there is a net reduction in debt of the amount specified of $105,000,000, because there is not.
The Minister of Finance in his budget also .seemed to me to essay a political flight, but it was promptly met when he was carried to ground. There is no question-and no one regrets it more than I do-that there have been losses in our population and those losses have been chiefly to the United States. Everyone knows that is a subject that rankles in the hearts and minds of Canadians. We would like to cure or to palliate the situation,
and the Minister of Finance in his political budget endeavoured to create the impression that Canadians were returning from the United States. He was immediately challenged for doing so. The Minister of Finance knows that, during the period with which his budget dealt, many more Canadians had gone to the United States than had returned from there. The figures have been given in this house and it is plain that the tide of immigration is not set our way. It is unfair to represent to the people of this country in an important speech such as the budget of the Minister of Finance that there is a turn in the tide; that the numbers are now favourable to us, who want to see them in our country, and that there is not an exodus to the United States but an exodus from the United States to Canada. That is not the fact and the people of the country must know it.	_
The Minister of Finance also allied himself with the prosperity of Canada. I do not object to that very much. He was not responsible for it, it is true, as has been stated this afternoon. Very cogently and carefully the hon. member for Parry Sound (Mr. Arthurs) this afternoon gave the causes of prosperity in this country. Everyone admits, as leaders of finance and industry have said, that there is prosperity. It is like a crosssection of a fruit loaf; there are many currants in it, but there are also spaces in which the Minister of Finance, if he is hunting for currants, can never find them. What is the situation? There never was more money in the savings banks than there is at this moment, the amount being, I believe, something like $1,500,000,000. Bank deposits and bank debits, of course, are large and perhaps larger than ever before. The Minister of Finance says: "There is money to spend" and in his own budget he says it is being spent in the United States. There is money to spend and it is being spent in the United States. Is there money for speculation? Yes plenty of it driven, I believe, into speculation in some measure at least by the financial policy of this country. We find now that even the little children prattle the jargon of the stock exchange. Women are interested; young boys are interested; defalcations are taking place in order that men and women may speculate on the stock exchange but there is nothing-and I challenge the minister-for new industries. There may be something for the pulp and paper business, but there is nothing for new business or industry in Canada. It will be found that some of those who are engaged in business are consolidating; that they are putting

The Budget-Mr. Ryckman
their affairs into shape and taking advantage of this money that is available at present for anyone who can set up a case that will entitle him to receive it. But for those starting out to manufacture some of our raw material or to conduct an industrial business which would be a credit to this country and to the men engaged in it there is no money available because men are unwilling to go into business on account of the financial policy which has been put into force by the present administration. Manufacturing is at a standstill in this country. Manufacturers are courageous; they are a benefit to the country there is no doubt about that even our farmer friends will admit it, but there is no man and no body of men who are willing, unless under some extraordinary special circumstances, to engage in industry in this country because they do not know when the attack will come from the government. At one time it was the agricultural implement industry. Then the government made it up to those engaged in that business. On that we cannot take time to dwell. The automobile business was treated in the same way, but always there was a preference to those who are engaged in it. We know how the shuffle took place. We know how the Minister of Finance said, and he will pardon me for recalling this, that he was going to stand by his guns, that there was going to be no change; but there was a change. That business is suffering even with the consideration the Minister of Finance gave to it. And now it is the woollen industry. I am acquainted pretty well, as I have no doubt the Minister of Finance is, with the personnel engaged in the woollen industry in this country, and I know of no finer body of men anywhere, no men who love their country and want to carry on business in it and enjoy all that Canada affords more than they do. They have been struck by this tariff.
We had the speech from the throne. There was not much in it. I think members on the opposite side of the house will agree with that; if they do not, I think an inquest should be held because actually there was nothing in it. In this budget there is nothing that this country can take as a real benefit exclusive of the cuts in taxation, and I would be very glad to roll up and stow away all those cuts if the Minister of Finance would do what is manifestly the obvious thing to do, namely, cut the sales tax. When he came into office he found the garden sown with these tares. There was a sales tax which was put on in war time, and which has been a handicap to business. The large majority of people do not know how that tax cuts into 
them; I do not believe the members of this house do. I am not arrogating to myself any special knowledge, but I have had occasion to consider this particular matter of the sales tax and I say to you, Mr. Speaker, and through you to the people of Canada, that there has been nothing that has cut so hard into the workingman, into the consumer, as the sales tax, multiplied as it is, in some cases, several times, and lifted from the pockets of the consumer without his knowledge. The only knowledge he has of it is that the money is gone and that it should be in his pocket. The Minister of Finance knows that this is true, and in this budget he has put the sales tax back t-o where it was when his party came into power. I ask him now-I do not wish to appear over-earnest, and frankly I am not trying to play politics-I ask the Minister of Finance to strike that sales tax off the books altogether. I believe the country can afford it. As the minister says, the revenues are buoyant, and if he will wipe away that tax altogether in the interest of business, the rebound in business that will follow will mean greater revenue, more prosperity, and a better feeling throughout the country. It would in all respects be to the benefit of the country as a whole.
I heard the Minister of Justice (Mr. Lapointe) say something yesterday about the shadow government. I was but a short time connected with it, but sufficiently long to know that I for one walked into the shadow of a department that was a great spendthrift department. Mr. Speaker, I dislike to use the word economy; I do not know that I should be called upon to preach it. The abuse and the misuse of the word is something that troubles me, but I submit that there is nothing like economy practised in the government of this country. What is economy? It is the spending of money wisely, and the refusal to spend it foolishly. I want to give two instances where the government could practise economy, and I speak of one of them because of my connection with the city of Toronto. I have been told that this government was losing thousands of dollars a day in Toronto just by reason of the port of Toronto being so glutted that goods could not be examined and duties paid and the work carried on properly. I knew that the government offices were housed in buildings for which the government is paying large sums in rent. I asked for some particulars, and I found that everything was in readiness to build a customs house in Toronto, but it had' not been done; why, I will leave to your imagination. But it is as plain as the nose on your face that the government would

The Budget-Mr. Ryckman
be money in pocket if it only provided reasonable accommodation for carrying on its own business in the port of Toronto. Shortly before the house prorogued last year I asked the Prime Minister if he had read the testimony of the Liberal officer, and he is a good one, who has charge of the customs house in Toronto, and who had said that if he were called upon to carry out the regulations which the government itself imposed, the port of Toronto would close in two weeks. The Prime Minister did not know anything about it. A commission has sat. I have not read their report, but from what they have said apparently this country is not going to lose any more money because it has not a proper place of business in the city of Toronto, and it will collect the revenues and the benefit will be felt all over the country. That is one thing that has not been done. I am not going to suggest the reason why, but it has not been done.
There is another matter. I dislike to touch upon it, but I feel that I have a duty to discharge and I propose to do it. There is a restaurant attached to the House of Commons. I am a member of the House of Commons. I receive an indemnity and perquisites, and one of my privileges is going to that restaurant. That restaurant loses $30,000 a year. There are 245 members of the House of Commons, and if you take in the senators, that would bring it to 300, not more. That means that in order to carry on that restaurant we, the members of this house, are taking, and, in some cases, literally having forced down our throats, an expenditure which averages $100 per member. The matter came up. I had never discussed it with anyone. I do not believe I had mentioned restaurant, but someone, I think as a joke, put me on that committee, although I had never heard of any question that related in any way to the restaurant. But I learned that the restaurant was losing $30,000 a year. I think that is something which should be corrected. If that amount can be saved, the members of this house should insist upon it. " Well," I said, " let us get someone, the Canadian National Railways or the Canadian Pacific Railway, to take the restaurant over for the session at actual cost plus ten thousand dollars and let us cut this loss by at least twenty thousand dollars, for either company should be glad to earn ten thousand dollars for the privilege of conducting the restaurant." That is a pretty good return, for it is actually money in hand. But there is a gentleman connected with the restaurant, and I was told that he had to be cared for. I have not a word to say against him. My attitude was:
Take care of him, let him be satisfied, but let us cut down this loss. This man, we were told, is very useful in looking after private luncheons and dinners for members-and there seems to be difficulty in adopting my suggestion. But, Mr. Speaker, the people are not content to pay on an average every session about $100 for the food of each hon. member. I do not want the Minister of Finance to think I am trying to make a mountain out of a molehill, but this recurring loss is on my conscience, and I tell him that we have no right to continue losing thirty thousand dollars in the restaurant department. If we cannot carry on the restaurant successfully and make it pay for itself, then let us do without it. I could mention other savings that might be effected, and I will do so when the opportunity presents itself. While on this, let me say that I really have to laugh when I contemplate myself attempting to play this role to-day, but I must discharge what to me is a duty that I owe to the country.
In his budget speech the Minister of Finance quoted the captains of industry and the heads of financial houses in their references to the prosperous condition of Canada. What they have said is quite true. But the minister knows that in the reports to which he drew our attention there are also references to the lack of a proper immigration policy and the deplorable exodus of our people to the United States. Does he remember what was said at the annual meeting of the Bank of Montreal and of the Bank of Toronto with regard to this exodus? What was then said is absolutely true, and the Minister of Finance, as one of the most important members of the government, should make it his special business to solve	this problem.	The problem	has	notbeen	met by any	suggestion that	has	yetbeen made. If a question is put on the order paper asking the intention of the government in regard to some particular matter it is frowned upon; but I warn the government that the people will insist on their providing at this session some solution, the best that they can think of, for the immigration question. I must criticize the Prime Minister, and I am sorry that	he is not in his seat.	Hesays,	in effect, that	it does not do	to speak
of these things. I am just as anxious for the advancement of this country as any member in this house, I am just as loyal, but I am not prepared to see one other man, whether a mechanic or an unskilled labourer, enter the Dominion unless he can be directed to a job. Is that a rash statement? Let me tell you what I find in Toronto. On the way to my office in the morning I pass ah employ-

The Budget-Mr. Ryckman
ment agency. Through the windows I see inside a milling crowd, seeking to find out if since last night any fresh jobs have been listed. Outside there is another crowd waiting to get in. My office is opposite the offices of a newspaper published about eleven o'clock in the morning, and I am told that it contains more want ads than any other newspaper in Canada. Outside those offices every day you will see hundreds of men waiting for the latest issue, which they grab from the newsboys and eagerly scan in search of a job. When you enter your office you find men waiting there anxious for a job. Their only anxiety is to work; they do not want charity. Some of them are men who have fought for their country. When you are daily confronted with this regrettable state of affairs, what are you to do? Are you to tell them:	This is a
fine country to bring more people to. The condition I have described probably does not obtain in the country, but any hon. member from Toronto will tell you that this is the state of affairs there.


An hon. MEMBER:: Hear, hear.


Edmond Baird Ryckman: I do not know what
hon. members from Montreal find in their city. Undoubtedly in our urban centres there is a demand that this problem shall be settled. I have in my hand what the hon. member for Parry Sound (Mr. Arthurs) referred to in the issue of the Ottawa Citizen of yesterday, headed, "Hull Liberals give immigration views." I may tell the Minister of Finance that before I join the Liberal party I am going to associate myself with the Hull Liberals to find out if it is a party that I should like to belong to. Those men in Hull say that proper consideration is not being given to the question of immigration, and they go so far as to declare that unless you can put an immigrant on the farm they do not want him. I have no grudge against the farmers. Certainly they should not be asked to provide jobs for immigrants when it is against their interest to do so. But if newcomers can be taken on the farm I am in favour of it. That phase of the question will have to be discussed by the committee on agriculture and colonization which is to investigate the Immigration department.
But, Mr. Speaker, we do insist upon having this problem handled promptly and in a business like way. I regret that the present Minister of Immigration (Mr. Forke) was given the portfolio. I think he would have been better satisfied with some other department. I am not cavilling about the reason why he was taken into the cabinet; it makes no difference; he is rightfully there, and if his 
leader wants him he should be there. But let us handle this most important part of our national affairs reasonably and quickly as business men would do, and see if something cannot be done to arrive at a satisfactory solution. In conclusion, I want to say this-


Hewitt Bostock: Order. The hon. member's time is up.
Mr. ,7. S. WOODSWORTH (Winnipeg North Centre): Mr. Speaker, the amendment before the house expresses regret that the budget provides no measures to increase employment, to induce Canadians to return, tc prevent the continued emigration from Canada, and no provisions to stimulate the domestic market or to develop our natural resources. Now, I submit it is not at all cJear that the Conservative policy would accomplish these ends.


An hon. MEMBER:: Give them a trial.


Mr. WOODSWORTH:: It is suggested,
Give them a trial. Well, all these evils complained of have, I think, come about during the period when we have had a protective tariff. We have had that to a greater or lesser extent for very many years now, and these things have been happening under it, so it must be conceded that we have already given that policy a trial.
The last speaker, the hon. member for East Toronto (Mr. Ryckman) said, if I caught him aright, that the business world was against free trade. I would suggest to him that the whole business world is not resident in Toronto or in the province of Ontario. It is only a short time since some strong resolutions were passed by the league of nations and by the international chamber of commerce, and we had also a very important document from some of the leading bankers and other financial men in Europe and America, all deploring the extent to which tariff restrictions had been set up, and urging that we could have peace in the world only as these restrictions were broken down. In view of such statements it is absurd for the hon. gentleman to suggest that the whole business world is against free trade.
I have a great deal more sympathy with that portion of the amendment which calls for the reduction of the sales tax, but we in this corner should like to distinguish between the sales tax on luxuries and the sales tax on the necessaries of life. Until the income tax is much higher than it is at present, we should be inclined to retain the sales tax on luxuries. The amendment to the amendment some of us will feel obliged to support. It calls for a reduction in the sales tax on

The Budget-Mr. Woodsworth
the necessaries of life. It urges that adequate relief has not been given in the proposed tariff changes and regrets a departure from the principle of direct taxation which is evident in the lowering of the income tax.
I desire to repeat the statement made in this house yesterday by my colleague from East Calgary (Mr. Adshead). In England 45 per cent of the total revenue-an enormous sum-comes from inheritance and income taxes -including super taxes. And I might say that as there are other sources of revenue, the proportion of the revenue which is raised through this form of taxation is considerably higher than that. In the United States 64 per cent of the revenues are derived from the income tax, while in Canada less than 14 per cent comes from this source. I do not think this statement can be too strongly emphasized.


Mr. GEARY:: Is any part of the income
tax to which my hon. friend is referring levied by the state? Is he giving state plus federal taxes?


James Shaver Woodsworth: I am referring to
federal income tax.


George Reginald Geary: In the United States the
64 per cent is entirely federal. Are you sure?


James Shaver Woodsworth: No; I am afraid
I cannot be positive on that point. My memorandum does not show that.
It is stated by some that at the Dominion-provincial conference the provinces claimed that they should have the field of income taxation to themselves. I would point out that the income tax is not in operation in all the provinces of Canada at the present time. I would also suggest that there should be no duplication in the collection of the tax and it would be a comparatively easy matter for the government here to turn over a certain percentage to the provinces. I strongly urge however, that we do not surrender the underlying principle which, as has been observed again and again, is a sound principle and which was adopted to meet an extraordinary demand-the	discharge,
namely, of the debts incurred by the country through the war. So long as these debts remain unpaid this tax ought to be kept in operation.
It has been further pointed out that since there is a corporation tax the income tax means double taxation. In answer to that I would remind the house that the small man is taxed over and over again. Excise, sales and stamp taxes amount to 21.33 per cent; customs import duties, 37.23 per cent; excise duties 13.82 per cent, or a total of 72.38 per cent of the total revenue; or a still higher percentage of the revenue raised by
taxation, as this latter amounts to only 86.55 of the revenue. That means that the man who has children must pay taxes on a great many of the necessaries of life; if he has two children he pays probably twice over, and his taxation is correspondingly heavier all along the line in proportion to the size of his family. In other words, we have here not merely double but multiple taxation, and that upon the men least able to bear it.
I ask what is the purpose of all these heavy taxes? How do we spend our revenues? That is a rather interesting question. According to the minister's own statement, no less an amount than 45.11 per cent is devoted to expenditures attributable to the great war; and for national defence we have another 4.37, while for the mounted police, closely allied to the military, the expenditure is .65. There you have over 50 per cent devoted either to making provision for war or to the payment of the debt incurred by the last war. Careful calculations would seem to show that if you add to this the additional expense of collecting the larger revenues involved and also the additional cost of the flotation of loans, you find that somewhere around two-thirds of the entire revenue of the country goes to expenditures directly or indirectly connected with the war. This is an enormous portion of the revenues of the country to be paid out in this direction.
Now I turn to what I may perhaps term social expenditures. I find that health amounts to .21 per cent; scientific institutions-and I am very glad that it is proposed to devote a little more to this field in the future-.28 per cent; labour .38 per cent; and, last year to the Home bank depositors' relief, .06 per cent. Adding these together you have only .93 per cent. So that if we gave as much again this year to the Home bank depositors we should still have only one per cent of our revenues expended on this whole range of social activities. These contrasts are well worth public notice.
It has been said that the tariff board is more or less a smoke screen for the government. I can hardly believe this, because, so far as I have been able to study the tariff, it would seem that the information submitted to the tariff board has been very largely disregarded. None of us of course, are in a position to say what the tariff board recommended, if they made any recommendations; but certainly the facts that came before the board do not seem to have received great consideration in the changes now proposed. The other day I sat down for several hours trying to wade through these tariff schedules.

The Budget-Mr. Woodsworth
I found three classes, with all kinds of limitations and exceptions. Heinz's 57 varieties are not in it with these tariff schedules. There has been a reclassification; the old classes have been split and doubled up and rearranged until now we have a regular Chinese puzzle. I am glad that just to-day we have had placed in our hands some tables of comparative rates which may help us a little in coming to some conclusion with regard to this budget. In passing, I would suggest that the enforcement of these very highly technical classifications will require a small army of technical experts. As I read these tariff schedules I find them full of jokers, although this is not altogether new; there are grades specified, certain qualities, special makes, dates of applications and drawbacks. I admit that there are some concessions in the interests of the consumers at large, but on the other hand I note that decreases are often offset by increases. In some instances there are decreases on articles of minor importance; for example, I notice that braided candle wick now comes in free, while on the other hand there are large concessions to the electrical interests. I suppose that since we no longer live in the age of candles we can afford to be generous with those who still use them, but when it comes to modem systems of lighting and electrical appliances, that is another matter. Further, there are decreases where there is practically no importation; there are decreases in manufacturers' supplies, perhaps especially as these relate to mining and refining. I was rather interested to note that press blankets are now on the free -list; I suppose that helps out the newspaper syndicates, but I cannot see why press blankets should be free while horse blankets are not free. I notice that the rate on wrapping for paper has been reduced, but I do not see why this should not be manufactured in Canada by the paper makers themselves. In some instances there are discriminations against the small manufacturers. In my own city of Winnipeg we have some cap and hat manufacturers; I do not know just how this is going to affect them, but it would seem to me that they will be hard hit.
As far as I can judge, without being an expert in the matter, there seems to be no rhyme or reason to the construction of this tariff. There are special concessions in evidence on every page. I am reminded of a time when I was a child, when my mother's mending basket was upset; in it were spools of thread, balls of yarn, tape, and a great variety of other articles. Some little kittens began to play with the contents of that basket, and perhaps you can imagine the mess there was [Mr. Woodsworth.!
left when they finishel, and the snarls and tangles which resulted from their fun. This tariff is very similar; there have been all sorts of pulls by various people who have had a hand in it, but I really do not know who will untangle the tariff; I hardly think parliament is likely to do it.


Mr. NEILL:: Who are the kittens?


James Shaver Woodsworth: I do not like to accuse the Minister of Finance (Mr. Robb) of being kittenish in his actions, but he has had a part in it, and I fancy a great many people who frequent his office have had an even greater part. In view of this very difficult question, I am inclined to take my opinion from those closer in touch with the situation, so I go to the Montreal Gazette, which says:
The Minister of Finance maintains his reputation as a safe and sound administrator.
I presume there are good grounds for saying that. Further, the Gazette editorial states:
With regard to the revision of the textile group, it is largely departmental, and further, the general effect of this will be, it is thought, favourable to the industry whose case for relief was fully made out two years ago.
_ According to the Gazette apparently the industry is to profit and is to obtain relief, instead of that relief being given to the general public. Then I turn to another financial paper, the Financial Post, which has the following to say:
The tariff changes announced in the budget are more important as a low tariff gesture than for the effect they will have on business.
I would commend that statement to some of the hon. gentlemen directly opposite. In this connection I was reminded of an article which I read a few months ago in the April number of the Atlantic Monthly, called " The Money Power in Politics" and written by Mr. William B. Munro. Mr. Munro is a firm believer in the money power, and hence his admissions are rather interesting. He speaks of Mr. Elihu Root's phrase, "our invisible government" and says that:
All governments, wheresoever they operate, are subject to the pressure of invisible influences. This pressure is unrelenting; it comes from many quarters; it is exerted upon voters, legislatures, executives, and courts alike; and its sources are often so well concealed as to be unrecognizable even by those against whom it is directed."
Again he says:
The motive power in law making is supplied from somewhere outside the legislative halls.
And again:
These interest groups, as we call them, work for the most part within the ranks of the

The Budget-Mr. Woodsworth
party organization. Indeed, the chief function of the party organization is to furnish a cover or screen for the political activities of groups which desire to keep their true objectives invisible.
He is in favour of such outside influence being exerted; he thinks the money power is beneficial on the whole; some of us can hardly agree with him.
The minister makes a great deal of what he calls our "favourable" trade balance. I would suggest that he is still harbouring the antiquated economic theory of the mercantilists, that the excess of exports over imports is an indication of prosperity. His theory forces him to put Canada in 1913 in the same class with the Argentine and British India. He seems to have some misgivings, however, for he says:
Both the decrease in exports, $28,000,000 and the increase in imports, $56,000,000, can be attributed principally to greater domestic demand under conditions of prosperity such as we have been enjoying.
If this argument is true I submit that if we had still greater prosperity presumably the exports would decrease and the imports increase still further, but with absolute disregard for logic the minister proceeds:
But it is also apparent that our ability to produce still exceeds our capacity to consume by a broad margin, and that our exporters annually market over a billion dollars worth of goods in other lands.
Just look at this question of the trade balance for a moment in a perfectly practical way. When does a farmer send off his farm more goods than he receives payment for? Surely he does that only either when he is making a loan or when he is paying a loan; those could be the only reasons for his continuing to ship goods out without having goods shipped in. Where is the "favourable" trade balance in such a case? I should like to quote an authority for this position. I tried to refresh my memory with regard to economics, and consulted The Principles of Economics by Seligman, one of the acknowledged authorities. He says:
The so-called favourable balance of trade is for several reasons a delusion. It is difficult to state with accuracy the exact relation between exports and imports.
And he goes on in detail to explain the reason, concluding:
The statistics themselves are therefore of dubious value. Even if the balance could be accurately ascertained, however, it would not tell us anything of importance. Some prosperous countries, like England, Germany and France, habitually import far more than they export; some poor countries like Peru, Siam and San Domingo, habitually export more than they import.
He might have added Canada. Further on he explains the situation.
An excess of imports may represent the incurring of liabilities to other countries which must be met hereafter, or it may, on the contrary, represent a liquidation of past or present indebtedness by other countries. In the same way an excess of exports _ may mean that one country is making others its debtors. Or, on the contrary, it may be a measure of the amount of tribute which that country is paying to others for past or present favours in the shape of capital invested or services rendered. In itself the so-called balance of trade is irrelevant.
It seems to me that years and years after treatises of this kind have been written, a hundred years after these old theories have been exploded, we might hope that at least the minister would not come from year to year and try to fool the public by talking of the "favourable" trade balance.
In view of what Seligman has said I should like to examine some of the possible explanations with regard to this excess of our exports over imports. In an article in MacLean's Magazine of August 15, 1927, Mr. W. A. Irwin calls attention to the fact that our total wealth is estimated at 822,000,000,000. He gives our debts up to date

federal, railway, provincial and municipal-as $5,700,000,000, and he says that means that one-quarter of our national wealth is mortgaged. I may say that almost 30 per cent of these mortgages are held outside of Canada, so there is not much wonder that we have to ship out the interest on these mortgages. In addition to the public mortgages we have a very large number of foreign investments in this country, and in this connection I would call attention to some very interesting studies recenty made by Kenneth W. Taylor, and published in the Financial Post. With regard to the ownership of Canadian securities, Mr. Taylor gives the following figures:
Total (excluding land
and mortgages)	
Per cent	
Ownership of Canadian Securities 1927 Grand	Total	United	United	OtherTotal	Canada	Foreign Kingdom	States Countries$15 793,000,000 $10,885,000,000 $4,908,000,000 $1,927,000,000 $2,798,000,000 $183,000,000 ' 100.o'	6S.9	31.1	12.2	17.7	1.2
The Budget-Mr. Woodsworth
With regard to the outside capital invested in Canada Mr. Taylor says:
Of new issues of Canadian bonds and preference stocks, approximately $290,000,000 were sold in the United States, and $13,000,000 in the United Kingdom. About one-third of this amount was for refunding purposes, so that the new money from these new issues of securities would be about $190,000,000 from the United States and $12,000,000 from the United Kingdom. About one-half of these new issues were for power or pulp and paper developments.
I think perhaps this accounts for the fact that our imports were large in recent years. We are importing what is necessary to develop our paper and pulp resources. Mr. Taylor gives the following preliminary estimate of the total outside capital in Canada as of January 1, 1928:
United Kingdom.. ..	$2,110,000,000
United States	 3,031,000,000
Other countries	 236,000,000
He says:
The interest and dividend payments on this outside capital invested in Canada have been estimated at $254,000,000 during 1926, divided as follows:	United Kingdom, $105,000,000;
United States, $137,000,000; other countries,

This huge volume of interest has to be paid some way. We pay it in the only way in which interest is paid to-day, that is in goods. I submit that this is the reason for the so-called "favourable" trade balance. And may I add in that connection that these men who are enjoying these very large returns from Canadian investments pay no income tax whatever to Canada, since they are resident in the United States.
I should like to give one other set of figures as presented by Mr. Taylor. These figures appeared in the Financial Post of February 3, 1928. They have reference to Canadian investments abroad; for there is the other side of the question which I do not want to forget. He gives the following preliminary estimate of Canadian investments abroad as of January 1,1928:
Total	 $1,362,400,000
In	United	Kingdom	..	118,000,000In	United	States..	..	722,200,000In	other countries..	..	522,200,000
And adds:
Interest and dividend receipts on Canadian investments abroad have been estimated at $63,000,000 for 1926, divided as follows: From United Kingdom, $6,000,000; from United States, $34,000,000; and from other countries, $23,000,000.	'
May I point out that if I were a protectionist I would suggest: Why not develop our Canadian natural resources by keeping our capital at home? I would suggest: Why not a super

tax on this capital which is invested abroad? I think I should be quite consistent in urging that we develop our natural resources in Canada where more capital is necessary. If our financiers think they can make greater returns by investing in Mexico, or in South America, or in Cuba, I suppose that is their business; but if we really are in earnest about developing our own natural resources why cannot we take some means of keeping Canadian money at home?
The Minister of Finance states that work and thrift are the only sure roads to success. I suggest that this is one of those very dangerous half-truths that are frequently put upon an innocent public. Let me ask, will work and thrift bring financial success to an individual to-day other than to a very limited degree? How have our Canadian fortunes been made? If you go into any of our cities you will find many men have made their fortunes through land speculation, and many of the wealthiest people have made money by gambling on the grain or stock exchanges. You will find that a still larger number have managed to lay the foundations of their fortunes by securing special concessions and privileges. That has been true all through the history of Canada from the lavish grants of lands in the early days-yes, I might go even further back to the grants of special privileges to the Hudson's Bay company by the imperial parliament. Then we come right down to our railway charters, bank charters and all the rest of it. W'e have to consider in this connection all the devious methods of high finance, watered stock and things of that sort. I came across a statement somewhere which I think is rather too cynical but which might be taken as suggesting a portion of the truth. It was alleged that to financial success nowadays men can climb only by crooked stairs. Certainly when the minister enunciates as a great truth that, for the individual, -work and thrift are the only sure methods of success, he is not at all in accordance with the facts of the case as we see them round about us.
Will wrork and thrift bring general prosperity? I do not believe that this either is clear under existing circumstances. Already we have so-called "over production;" that is, more goods are being produced than can be bought back with the resources at the disposal of the consumers. Indeed, many economists of high standing have suggested that one trouble with the world to-day is that there has been in one sense too much thrift; that on account of the unequal division of wealth the people wrho so very largely control the processes of manufacture, distribution and exchange, are able to retain in

The Budget-Mr. Beaubien
their own hands a great part of what is produced; that not being able themselves to consume this large quantity, they are forced to put it back, or as the phrase is, to plough it back, into the business. The result is that they develop still greater plant equipment which, in turn, produces an increasing volume of goods, and to-day we are suffering from over development of plant equipment, of facilities for producing. On the other hand we have not adequate buying powTer on the part of the masses of the people. If any hon. member is interested in following up that line of argument, I would suggest that he could not do better than read some of the recent treatments of the subject by J. A. Hob/son* the distinguished English economist, whose thesis is that an undue proportion of savings is being put into fixed capital. I would suggest that this budget is rather accentuating that very tendency because we are placing the burden upon the poor man. We are making it harder for him to expend money on consumable commodities, and on the other hand we are releasing large sums of money that must of necessity find investment in various fields of enterprise.
The true fiscal policy would be, it seems to me, to place the burdens where they can best be borne, so far as possible to release the income of the smaller men so that they may be able to buy back what they have produced, and instead of forever talking about the development of foreign markets, to lay a great deal more stress on the development of our home markets. That is what we need to-day. I know some of my Conservative friends are very apt to use that phrase: "The development of the home markets." They are thinking of the development of home markets for agricultural produce. I would suggest that we need more home markets for all manufactured goods as well, and if we had a greater purchasing power that could be accomplished.
I am afraid that some of us cannot consistently vote for the budget as it stands. We see in it, as has been stated in the subamendment, a departure from the principle of the income tax. That to me is very important. I should like to see the income tax greatly increased. I should like to see the higher incomes still more heavily taxed. It may be said by some that we advocate this arrangement simply to benefit ourselves. Frankly we do, but we claim that in reality we represent and are endeavouring to speak for the large part of the population of Canada. Only a very small number of people pay income tax, yet their great wealth makes it possible for them to pay much more than they are paying at the present time.
I would urge upon the Minister of Finance, in view of the large measure of unemployment which exists among a great section of the people to-day, and in view of the unsatisfactory conditions which are found among many people who are engaged in the ordinary business activities, that he might very well try an experiment along another line from that which has been followed in this country for the past fifty years, and that he should arrange his budget in the interest not of the big industries, which may be quite sincere in identifying their interests with those of the public, but rather in the interest of the great mass of the people who, although they may not be able to understand the intricacies of the tariff schedules, are nevertheless the best judges as to where their own interests really lie.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. A. L. BEAUBIEN (Proveneher):: Mr. Speaker, in rising to make a few observations on the motion of the hon. Minister of Finance (Mr. Robb) and the amendments thereto, I intend to follow my usual practice and be brief. At the outset I desire to thank hon. members for their kind expressions on my behalf in the course of the debate on the address. The hon. leader of the opposition (Mr. Bennett) in his speech on the address said that my speech as seconder could have been equally well pronounced from his side of the house.


Richard Bedford Bennett: I am sorry, Mr. Speaker,
but that is not quite correct. I said that the hon. gentleman would be equally at home on either side in making a speech in moving the address.


Charles-Philippe Beaubien: I have his remarks
here, Mr. Speaker, but I am not allowed to quote from a previous debate. I have only this to say to the hon. leader of the opposition. It is very seldom that I offer advice to any of the leaders, but I will take the liberty at this time of saying that had he had a greater knowledge of the French language or awaited the translation of my speech, I do not think that remark would have been made.
Another hon. gentleman seemed to be rather peeved at my being chosen as the seconder of the address, and that was the hon. member for Bow River (Mr. Garland). He was concerned at my seconding the address in reply to the speech from the throne without having had anything to do with the preparation of that speech. I have no apologies to offer to anybody. The hon. member for Bow River
7G8

The Budget-Mr. Beaubien
has to my knowledge voted on many occasions for speeches from the throne with the preparation of which he has had nothing at all to do, and I again take this opportunity of thanking the Prime Minister and his colleagues for the honour which they did to my constituents in choosing me to second the address.
We have heard some very good speeches during this debate, Mr. Speaker, and we have also heard some blue ruin speeches. I have heard those blue ruin speeches for the last four or five years in this house, and I have come to the conclusion that if the exodus from this country is as serious as our friends on the opposite side claim, it is caused by these blue ruin speeches, and I am almost convinced that these gentlemen are immigration agents for the United States.
It is not my intention to go into financial questions, the reduction of the national debt, public accounts, or the accounts of the Canadian National Railways. There are men better qualified than I am to do that. I will say, however, that I believe the Canadian National railway accounts should be kept entirely separate from the Canadian government accounts.


Mr. CAMPBELL:: Do you suggest handing it over to a company?


Charles-Philippe Beaubien: No, I say that the accounts should be kept entirely separate from the country's accounts.


Milton Neil Campbell: Is not that the case
now?


Charles-Philippe Beaubien: If our friends want to
mix the debt of the Canadian National Railways with the debt of the country, we are always going to :be confused. I have only forty minutes, Mr. Speaker, and I have never taken up that much time in the house. I think the hon. gentleman had better reserve his remarks for his own forty minutes and allow me to proceed; otherwise I may need the full time at my disposal.
The tariff resolutions which the Minister of Finance has presented to the house are confusing. I do not believe that all the lawyers in Philadelphia could understand them, and I am not going to discuss them because they are too confusing. I would point out, however, that there seems to be a joker in the proposals submitted by the Minister of Finance, and that joker is in the changing of the numbers of the schedules. Let me cite just one example in order to make my point clear. Item 526 of the present schedule provides:
White and cream coloured lace and embroideries, of cotton or linen: British preferential 
tariff, 12J per cent; intermediate tariff, 17J per cent; general tariff, 20 per cent.
Then Item 575 reads:
Embroideries, n.o.p.; lace, n.o.p.; braids, n.o.p.: British preferential tariff, 25 per cent; intermediate tariff, 32J per cent; general tariff, 35 per cent.
In the new schedules which the minister has brought down that is changed to item No. 545, and in changing the item they have inserted the words "for use exclusively in the manufacture of," and therefore these articles which I have mentioned instead of carrying a rate of 12J, 17 and 20 per cent, which is the rate shown in the new schedule, will carry a rate of 25, 32J and 35 per cent. I know the minister has no intention of doing that, but some of the officials of his department, I am sure, have made a mistake. I feel certain from the declarations the minister has made on previous occasions that he will see when we are in committee that the necessary change is made so that the people who are buying these articles not only for manufacturing purposes but for general purposes will get the benefit of the reduction proposed in the new schedules. 1 just wanted to make that point clear.
The Minister of Finance is also providing that in order to get the benefit of the British preference fifty per cent of the goods must be empire-made instead of twenty-five per cent as formerly. My information is that the cotton manufacturers of Great Britain import a great deal of their raw product from the United States, and I do not think the British manufacturer will be able to get any benefit of the British preference in our market if this increase is left in the schedules.
The reduction in the income tax, I am frank to say, does not please me. Our taxation should be as direct as it is possible to have it. I believe that every man who is able to pay income tax should pay it. He owes it to his country, he owes it to the masses of our people. I have paid income tax, a very small amount it is true, but I have gladly paid it. I would not have any objection if the exemptions were raised a little higher. In short, impose the income tax in such a way that no man will suffer by its operation. That is my idea of the income tax. But why give the man with an unlimited income the benefit of a reduction in income tax when he really is not entitled to it? Many people in this country made fortunes during the war by preaching a spurious patriotism to enrich themselves. Now, why should not those people pay a tax on their incomes? There is no reason in the world why we should not tax them in

The Budget-Mr. Beaubien
order to lighten the burdens on our returned men, many of whom are crippled and incapable of earning their living.
Now, Mr. Speaker, there have been presented to the house the motion of the bon. Minister of Finance (Mr. Robb), the amendment of my hon. friend from St. Lawrenee-St. George (Mr. Cahan), and the subamendment of my hon. friend from East Lambton (Mr. Fansher). What are we to do? Well, I will tell you what I am going to do, and I will give my reasons. It is easy to move amendments. It is the safest thing in the world to rodk the boat when you are standing on land and in no danger of drowning. My hon. friend from St. Lawrence-St. George knows very well that nobody in the southeast corner and nobody on this side of the house can vote for his amendment. So his party is safe. Then there is my friend from East Lambton and all his associates in the opposite corner, for all of whom I have a great deal of affection, especially for the lady member.


Some hon. MEMBERS:: Oh, oh.


Charles-Philippe Beaubien: I mean that, Mr. Speaker. Now, they know the Conservatives cannot support the subamendment, and they know we will not vote for it. Well, they are rocking the boat while standing on dry land -the safest thing in the world to do. But we will suppose that the amendment from the official opposition carries. What happens? This government is defeated. Then who comes into power? Our friends opposite, now the official opposition. Would we have a ten per cent reduction of the income tax? No, Mr. Speaker; unless I am very badly mistaken the income tax would be wiped out immediately. Would we have small reductions in the tariff? No, Mr. Speaker, there would be increases, or else their speeches that I have listened to during the last five or six years do not amount to anything. Now suppose the subamendment of my hon. friend from East Lamibton carries, what happens? Would the U.F.A. group take office, with my friend from Acadia (Mr. Gardiner) as Prime Minister? I have the greatest regard for him, but would he be able to form a cabinet?


Miss MACPHAIL:: There would be enough of them to form a cabinet.


Charles-Philippe Beaubien: They have no chance of coming into power. The only thing they can do is help put the Conservative party in the saddle, and I know they do not desire to do that.


Mr. McGIBBON:: Which side would you be on then?


Charles-Philippe Beaubien: Would the U.F.O. group take office? I should like to see the lady member become prime minister. But how would she be able to form a cabinet, whom could she choose besides the hon. member for East Lambton?


Edward Joseph Garland: May I submit to the hon. gentleman that if the hon. member for Southeast Grey became prime minister a large number of members would floek to her party rapidly.


Charles-Philippe Beaubien: They would all like to be bachelors. I have proven that it is impossible for the U.F.A. group to form a government, and I have also proven that it is equally impossible for the U.F.O. group. What other group can we look to to form a government? We have the Progressives from Saskatchewan, four in number, led by my hon, friend from Rosetown (Mr. Evans). By the tone of his speech last night he seems to be at loggerheads with the world. Now, would he undertake to form a government? If he would be prime minister-well, to be prime minister a man has to do a lot of smiling. I am afraid my hon. friend would either have to change the tone of his speeches or adopt my mentality-I can smile almost any time. But I have not yet exhausted the possibilities. We have another group in that corner of the house-the hon. member for Nelson (Mr. Bird). I have the greatest regard for him. But he is alone, we cannot very well expect him to attempt cabinet making. Our last recourse is the labour group of three members, and for them I have a very high regard. How could they govern the country? There is only one ultimate result in voting for the amendment or the subamendment if either carries-the return to power of our Conservative friends. I am certain that nobody on this side of the house desires to see them on the treasury benches, nor do my hon. friends in the southeast corner desire it, and far less do the Canadian people.
As I said before, Mr. Speaker, the budget does not satisfy all my ideals or provide all that I think the country requires. I am frank about it.


Edward Joseph Garland: Not frank enough.


Charles-Philippe Beaubien: But I would rather have a slice of bread than no bread at all.


Edward Joseph Garland: There is
not even a slice.


Agnes Campbell Macphail: It is not bread this
time, but a stone.



The Budget-Mr. Beaubien


Charles-Philippe Beaubien: I know the hon. Minister of Finance is a very kind-hearted gentleman, and I am sure that when we are in committee of the whole he will see his way clear to deal with the little difficulties in the wording of the proposed tariff changes to which I have drawn attention.
Now, Mr. Speaker, any remarks I make are always brief and to the point. I intend to vote against the amendment of my hon. friend from St. Lawrence-St. George; I intend to vote against the subamendment of my hon. friend from East Lambton; I intend to vote for honest and practical legislation-for the budget.


Mr. L. W. JOHNSTONE (Cape Breton North-Victoria):: Mr. Speaker, I wish to confirm what the previous speakers from this side of the house have declared, namely, that the budget is a great disappointment to the country generally and in particular to the maritime provinces, in that it contains nothing that can be of any comfort to our people, especially to the working classes and the unemployed. It has always seemed to me, Mr. Speaker, that the people of Canada have always watched with eager interest the annual report of the Finance minister, commonly known as the budget. In this report many looked eagerly for some statement upon which maybe their whole existence depended; they hoped for something in its terms by which their livelihood would be regulated. And Burely, Mr. Speaker, one would naturally expect to find in it something concerning our great basic industries; for although each county and province would look for something touching its own local affairs, the great basic industries of the country affect Canada as a whole.
Take for instance the iron, steel and coal industries of Chnada. Everyone is more or less interested in them, and yet not one word of them is mentioned in the budget, notwithstanding the declaration of a member of the government during the past year that the Duncan report would be fully implemented.
In the maritimes we have been very hard hit, as we fully expected some protection to our coal and steel industries. During the past few years public relief has been necessary to our miners in Cape Breton. That should not be; yet the government members cry out, "Prosperity; prosperity in our country; our country is growing." Canada cannot be prosperous, this country cannot be built up if we dose our industries and factories and import the manufactured articles; and so long as we have the amount of steel and coal imported into Canada, that is now coming in, our manufacturers and collieries must suffer.

We in the maritimes were last session very hopeful when the Duncan report was laid on the table, and we felt sure that it would be carried out, especially when a minister of the government publicly announced in the city of St. John that the Duncan report would be fully implemented. And now when the great steel and coal industry of Cape Breton has been placed under a new head, one who seems to be willing to do all in his power to help the situation, surely the government will cooperate to get the miners of Cape Breton work during the winter. As my colleague, the hon. member for South Cape Breton (Mr. MacDonald), said last night, the solution of the question is difficult; but certainly he offered a very good suggestion to the government, and I only trust that the government will act upon the idea. The situation is serious enough, at any rate, for a trial. I do not think the government realizes the conditions that exist in Cape Breton. We can take one instance. My home town, and the surrounding district of Sydney Mines, has a population of about seven thousand people. There are three coal mines in the vicinity- one splendidly equipped mine ahs been closed for over three years; we have six churches and large school houses, with a large attendance of children. The same conditions exist on the southern side of the harbour; large population, many children, good schools, and churches; heavy taxes, accumulated bad debts, and no winter work. We have lost many by exodus; they had to leave for the purpose of getting a livelihood elsewhere. Over four thousand passports to the United States were issued during the year. Can a country be prosperous, Mr. Speaker, or can a country grow and be built up when our people are leaving in hundreds; when industries and factories of all kinds are closed and we are importing coal from foreign countries? We are exporting the greatest asset that Canada ever possessed, that is, our young men and maidens, educated at the expense of the Canadian ratepayers, and we are losing them, they are giving their brains and muscle to other lands.
Canadians paid about $10,000,000 more last year for United States coal than they paid for Canadian coal. United States capital derived more profit from selling coal in Canada last year than Canadian capital derived from the year's operations. More men were employed in the United States to mine coal for sale in Canada than Canadian mines could find work for. More money went into circulation in the United States last year for payments on coal than went into circulation in Canada. In view of these facts, one thing

The Budget-Mr. Johnstone
is certain: that the budget has done nothing to remedy the situation of the unemployed by creating new industries. Rather the reverse; they are closing up the present ones and any business that they may have is stagnant. They cannot therefore expect our people who have left to return to their native land, when no inducements are offered.
I fail to notice in the budget anything relating to our fisheries. I do not suppose the report of the fisheries commission has yet been brought down, but I cannot help feeling that the fishing industry, like many others, has been sadly neglected. I do mot wish to say much on the question until the report is given to the house, but I would ask the Minister of Public Works (Mr. Elliott), with whom I have had considerable correspondence, to place in the supplementary estimates such a sum as would be of substantial benefit to the fishermen of Victoria county. A part of my constituency devoted to fishing is so situated geographically that the small harbours and inlets are very much exposed to the storms of the Atlantic, and therefore no breakwaters or wharves can be built. The fishermen cannot compete with the larger fishing fleets of Gloucester and other places because they cannot use boats larger than can be hauled up on the shore. The ex-Minister of Public Works, as an experiment, installed an engine by means of which the boats could be hauled up on a skidway or hoist. This worked very well and I firmly believe that had that gentleman continued as minister of the department he would have installed more such engines. The experiment proved quite successful. When the present Minister of Public Works considers the situation carefully I 'believe that his generosity, so highly spoken of a few nights ago by an hon. member, will show itself in this instance. I do not know of a more deserving case. Imagine twenty fishermen or so coming into harbour on an evening in the fall, in October or November, a gale of wind blowing. The poor men, tired out from the long day's work, are compelled to go out to their waists in the icy water to drag the fish-laden boats up on the shore. If you ever watched this work being carried on you would say that these men were certainly entitled to some assistance from the government. For two years I have been trying to interest the government in the matter, because the cost would only be about $500 for an engine and skidway, and the fishermen would operate the engine themselves. Now that the Minister of Finance shows a surplus why should not the people of Canada share in it? I am not opposed to the spending of 56103-49J
money to beautify Ottawa and make it the Washington of Canada; I do not object to spending half a million dollars for our embassy in Washington while the representative of the wealthiest country in the world has been contentedly living in a rented house in Ottawa, but I do say that while these large and extravagant expenditures are being made by the government on these and other works, the poorer places throughout the country should participate.
There is not a member of this house who has not somewhere in his constituency a small town with no proper post office or other public building. I am reminded of one instance of a beautiful little town along the north shore where the post office was maintained by an old gentleman in his kitchen, for which he received a rental of $1.50 a month. A few years ago this became a distributing office, and the old gentleman had to enlarge his kitchen by building a shed, because a good deal of mail began to come in. Through me he applied to the government to have his rent increased to $21 per month, which was the rent then paid by the customs, but I was told by the Postmaster General that this could not possibly be done, that the laws governing the matter were very strict and could not be altered. I am sure we can all recall similar instances, Mr. Speaker, and I think the government is deficient in its duty to the people of this country in not spending more money in our rural districts. When the people of the maritimes learn of these great expenditures for which they have been taxed they will certainly feel that, according to the estimates for the mari-times this year, they have been discriminated against.
A larger reduction in the income tax would have met with greater favour throughout the country, and I believe the abolition of the sales tax is very necessary. It is the only tax which strikes the working man in what he buys both in the way of clothing and food; in everything he gets from the smallest store in the country it affects him personally, and the abolition of this tax would meet with very strong favour. I will certainly vote for the amendment.


Mr. MICHAEL LUCHKOVICH (Vegre-ville):: Mr. Speaker, I rise to speak neither in praise of the budget nor yet in absolute condemnation of it. I appreciate the difficulties of the Minister of Finance (Mr. Robb) and I know it is no easy task to budget the accounts of this great country of ours in such a manner as to satisfy and conciliate not only this house but also the conglomerate elements in his own party.

The Budget-Mr. Luchkovich
I believe it is a rule in this house to use as much courtesy as possible when commenting on the speeches of other hon. members delivered here. It has been very noticeable however, at least to myself, that whilst the custom of congratulating and complimenting other members on their excellent addresses has been adhered to in the opening of one's speech, it soon becomes apparent that these chivalrous remarks must soon give way to criticism, at first mild but progressively hostile and vituperative. Honeyed words rapidly turn to the bitterest vitriol; sweet-scented bouquets become the hardest of bricks.
It is not my intention to hurl any boquet-wrapped bricks at the Minister of Finance; suffice it to say that the budget of 1928 is a marvellous piece of manipulation, considering the circumstances under which he had to work and the diverse elements with which he had to deal. There are many people in Canada who think that the success of any government is contingent upon compromise; that no government can successfully deal with or satisfy the electors unless by compromise. Their philosophy of politics is summed up in one phrase:	No government can function successfully without compromise; its very stability depends upon it. In view of past events it would seem that this philosophy was sound so far as the government were concerned. At any rate they all seem thoroughly imbued with this doctrine, as is proven not only by the budget but by certain things that have been said and things which have taken place in this house in the past few years.
It is now a matter of history that this corner of the house once boasted of a fairly large group. What has become of that group of yesterday? Ask compromise. Where are those ten Progressives who used to glare so defiantly from this corner at those who sat on the government side of the house? They were led astray by the siren voice of compromise. What force is it that can transform the free and militant eagle into the gentle and cooing dove of peace? It has been the magic wand of compromise wielded by the Prime Minister of Canada (Mr. Mackenzie King) who is possessed not only of an intellect of a very high order, but a genius for compromise unrivalled by any member in this house. Consequent upon this understanding there has been an agreement reached whereby it is recognized that the country has demanded a stable government and the group are anxious to comply with that demand; that the policies upon which Progressives and Liberals were elected are based upon commons principles; that the Progressives shall give united support to the government upon those principles, and that the

Progressive group shall retain its identity as hitherto. I agree that this is a masterpiece of compromise and admit that it is very cleverly stated, but whether or not the Progressive group is capable of retaining its identity, they have an opportunity even while sitting on that side of the house to act as guardian angels over the Liberal party, to stop them from committing the unpardonable sin of breaking pre-election promises and keep them in the straight and1 narrow path in-dicf ted by the low tariff reform pledges which have put them in the high position they now occupy in the country. I am sure that any reasonable person when offered strawberries and cream will refuse to accept apple sauce instead; if promised the substance we should not grasp at the shadow. I should like to believe that the members who left our group have acted and will act in all sincerity, for I should not like to hear it whispered in application to them, when the roll is called out west:	"Oh compromise, what indiscretions
have been committed in thy name!" I hope that the Liberal-Progressives are still the evangelists of low tariff. I sincerely urge them to practice what they preach, and if they feel it incumbent upon themselves, in view of their non-activity in the matter, to offer up a prayer, I wish they would include in it a solicitation to their colleagues for a more consistent attitude towards the tariff policy on which they were elected.
When I say this I am reminded of a band of evangelists who were holding a revival some time ago, in order to make a sinful world see the error of its ways and repent. At the conclusion of one of the meetings it was suggested by one of the brethren that some hats should be passed around among the hard boiled sinners in order to take up a collection. This was done, but when the hats came back they were found to be full of old nails, buttons and pins, but not one red cent. Thereupon one of the brethren remarked "Let us now thank God." "For what?" inquired another. "Let us thank God that we have got our hats back," was the reply. Now before our Progressive friends over there pass their hats to their so-called Liberal friends by conviction let their high priest, the hon. member for Lisgar (Mr. Brown) give them first a sermon, taking as his text: Come unto me all ye that are heavy laden and seeketh relief, and I shall give you the protection .of my low tariff. Let him then without any further admonition go boldly to the Minister of Finance, hat in hand, with one eagle eye on the minister and the other equally concentrated on the hat, and see to it that the hon. minister puts in . that hat not the old nails of futile promise and

The Budget-Mr. Luchkovich
adroit circumvention, but the new and shining pennies of a promise fulfilled, of an agreement unbroken, of a tariff policy unsullied, yea, even by a certain element on that side of the house. The member for Lisgar is a man of strong and commanding presence who looks like a likely person to scare the Minister of Finance into relinquishing a vise-like hold on the nickels that are entrusted to his care.
It has often been said that the Progressive movement is an anomaly in Canadian politics; that if they do occupy a place it is only as a sort of left wing to the Liberal party. This view is based on the supposition that both these groups are advocates of the low tariff; the only difference between the two being that while the one group is a little impatient in its attempt to reach that goal, the other believes that we should-
-move forward cautiously with the aid of knowledge of the facts secured by the tariff advisory board toward the goal of making our tariff structure bear as lightly as possible on producer, industry, and the people generally, having always in view the greatest prosperity of all legitimate industries of Canada. The tariff must be made to serve the best interests of the Canadian people as a whole. It must be adjusted from time to time to meet the needs, not of one class or group of industries alone, whichever one that might be, but of our whole economic structure.
Now, what I admire in any person and no less in a government, is courage-the courage of one's convictions. The Finance minister of Canada in concluding the budget speech of last year said:
We are recognized throughout Canada, and we are proud of it, as the low tariff party.
There is an old saying that caution is the better part of valour. If that is true, then I say that the present Liberal government is the most courageous government that Canada ever had. It is cautious to a fault. And why are they so cautious? They are cautious because they believe that is the only alternative. They are cautious because they do not wish to lose their parliamentary quota from Ontario; they are cautious because they do not wish to antagonize protectionist Quebec. I do not believe that hon. members will gainsay me when I emphasize the protectionist temper of our Quebec members. Who but our member from Quebec-Mont-morency (Mr. Lavigueur) had this to say in his speech on the budget last year? I quote from his address on that occasion:
I consider it an honour to follow the hon. member for Southeast Grey (Miss Macphail) the only lady member in the House of Commons, although I do not share her views generally and particularly as far as the tariff is concerned. She has told us she is absolutely in favour of a low tariff. Let me assure her
that neither the province from which I come, nor I myself, can sympathize with her in that regard. We are in favour of protection for industry. We do not believe in a low tariff. I am glad to have an opportunity to-night to state my views on the tariff question. I am pleased to see that the budget contains no items of reduction.
I have spoken of courage. I believe I must take those remarks back after reading the above quotation. The member for Que-bec-Montmorency is very brave in bearding the lion in his own den; but at the same time he is throwing caution to the winds.
No, we are not Liberals. We are a separate entity called the United Farmers' Association. We believe in low tariff, and it is our duty to jack up the Liberal party every once in a while and remind them constantly of their duties in that regard. Like Atlas, we have been holding the world on our shoulders for ages-a thankless task of which there should be some recognition. Now, it has been our fate that we have to sit on this side of the house with hon. members who uphold the doctrine of protection. Owing to the fact that we often sit, talk, and smoke together in the lobbies we have come to love each other almost to the point of brotherly affection. I also wonder whether it has not been by the same token that the Liberals and the Progressives kiss each other's cheeks on that side of the house. Notwithstanding our congeniality in some matters I am sorry however that in matters of policy over here we must disagree. I hope that our differences in this world will be reconciled when we pass off to a better world.
High protection is not the doctrine of the United Farmers' Association, We do not think it is a good thing for a dominion such as ours with its preponderating agricultural industry and among whose constituent provinces there are such wide and glaring differences of interest in this matter. It appears to me that at best protection is an expedient to which the Tories would like to resort to safeguard our industries against foreigners who might unfairly injure them; at worst it is a form of domestic robbery which is very obnoxious when it goes so far as to rob the state to enrich the individual; it is based on a bad principle when importation is forbidden in order to prevent reasonable competition; and finally it is only justifiable when the taxes which it imposes are made available for the needs of the national treasury.
I think we on this side of the house would be very illogical if we did not support a low tariff doctrine. Indeed we must either hang together on that tenet, or hang separately when we get back home.

The Budget-Mr. Luchkovich


An hon. MEMBER:: Hear, hear. You
struck it that time all right.


Michael Luchkovich: I wonder whether
it was the member for Provencher who made that observation?


Agnes Campbell Macphail: No, it was the Minister of Immigration and Colonization.


Michael Luchkovich: There are many
people to-day who think that Canada should be divided politically into two parts, western and eastern Canada. I am not an advocate of a suicidal policy of that sort. I think that all we need is one government in Ottawa. I have one suggestion, however, that may be interesting if not practical. If we are to have a low tariff versus a high tariff form of government, let us first weed out all the protectionists on the Liberal side and send them over here, and all the low tariff men in the Tory ranks and send them over there. In a word, let us unite all the low tariff men in this house, and whether we be in a majority or in a minority let us then proceed honestly to do the work for which our electors sent us here.
And what of the changes in the budget? After the budget is brought down it is quite usual to hear in the lobbies and elsewhere many preliminary skirmishes as to its merits or demerits. Naturally I'was interested in getting the opinion of others. One man in answer to my query had this to say about the budget: "Is there one tariff change in the Robb budget that means a job capable of employing a Canadian boy in Canada or bringing an exiled Canadian back from the United States?*' "And what about the income tax?" was my further query. "A very considerable number of Canada's former income tax payers," he said, "are now in the United States working for their living. Had the policy been adhered to of protecting our home markets in the interests of both agricultural and manufacturing producers, Canada would probably have had a million more people than she has to-day and her wealth production would have been enormously increased. United States is the most highly protected country in the world. Why should we not protect Canada also? Why, if I had my business down there I would be able to make three times as much as I make here." Of course I realize that distant pastures always look green and I am not prepared to argue this matter. I have pondered his words, however, and I am still wondering whether his case is not analogous to that of the Irishman who thought if he could take the lakes 
of Killamey with him to purgatory he would be able to sell them down there at a Shilling a drop.


An hon. MEMBER:: What about the Jew?


Michael Luchkovich: The Jew? Well, I
do not think he believes in purgatory.
I have heard it stated many times in this house and I have heard it stated during this budget debate that the government has been responsible for the exodus of many young Canadian men and women into the United States. I have no reason for agreeing with the government, but on this occasion I would venture to state that the government is not wholly to blame for this wholesale emigration. I believe there are certain subtle and insidious influences entering into this matter which are beyond the control of any government. Some one in this house has said that Canada is a geographical absurdity. Perhaps this is one of the reasons; but there are other reasons which are not of a rational but rather of a mystical nature.
Last spring it chanced that I paid a visit to a doctor friend of mine in Detroit. I admit that I was deeply impressed when, on getting off the train at Windsor, I beheld the countless numbers of tall skyscrapers skirting the Detroit river on the American side and looming up into the skies in majestic grandeur. The sight seemed all the more striking when one compared the luxuriously constructed American side with that of the city of Windsor. I have often wondered ever since how that grand sight has affected the countless young men and women who have had the fortune or perhaps the misfortune of viewing it as I viewed it. I am not a student of psychology, but the place once seen must have stirred up a conflict of emotions in their young breasts. Many of them, doubtless, would feel that they could do better over on the American side; and this feeling is naturally augmented by the fact that many of their friends have done well in the states. If a poor young Canadian girl, unknown and unheralded, leaves Toronto and makes a name for herself as the greatest living American actress, is it not reasonable to assume that others would like to emulate her success? I refer to Mary Pickford. If it is possible for a poor young Toronto boy practically to traverse the continent down to Los Angeles and win a $25,000 prize, does it not follow that other boys would like to do the same?
The United States is a very populous and rich country, older by many years than Canada. There is no doubt that wonderful progress has been made in the last decade, but just the same I for one prefer to live in Can-

The Budget-Mr. Luchkovich
ada. I prefer the quiet dignity of Canada to the loud egoism of the States; I prefer the stem but fairer administration of justice in our law courts; and finally I prefer the splendid morale of my people to the looser living of the folks across the line. Once I stepped into a law court in the United States and I was quite surprised to find two lawyers sitting on chairs in the law court and smoking cigars. They had their hats on and they were vying with each other as to which one of them could emit saliva into cuspidors about twentydive feet away from them. I am sure nothing of that sort happens in Canadian courts. We have in this country decorum, dignity and many other things which the people of the United States do not possess.
You tell me that the youth of our land has gone to the States. Well I believe that the process will be reversed just as soon as we begin to forge ahead a little more. I do not, however believe in colossal strides in progress. That is what is wrong with the United States; they are going ahead too fast, with disastrous effects upon the chastity and morale of her people. It is better for Canada to forge ahead slowly but surely and to keep her traditions of dignity, courage, chastity and thrift intact, than to go ahead by leaps and bounds but at the same time destroy all we should hold dear as life itself. I am an optimist. Our boys and girls will come back and so will Canada, not because, but in spite of, the Robb budget.
And what is that budget we hear so much about nowadays? From a Liberal viewpoint, summed up briefly it means a lowering of the cost of living to the people, while at the same time giving every reasonable protection to industry and every possible encouragement to the promotion of trade within the empire. They call it a "work and thrift" budget. But is it a "work and thrift" budget? Let us see. The government each year has been spending more than the preceding year. Its surplus is, therefore, not the product of economy. Now the Minister of Finance has declared that the government's policy is to work both ways-to reduce debt and to reduce taxation. These may be admirable objectives, but I feel sure he would be able to do each of these things more acceptably to the Canadian people if he would produce surpluses by economy as well as by budgeting for a large revenue. I believe the minister will admit that 1927 was a comparatively good year, so that when a government budgets for nearly $55,000,000 more than it spends and taxes the people enough to secure the budgeted income, it is not difficult in a period of expansion to produce a surplus.
I realize that when I speak of economy the Minister of Finance may say: "All right,
then, we shall withdraw our assistance for good roads and technical education and also increase the freight rates and use the extra income of the railways to promote immigration." This, I contend, would be false economy; and I understand he favours the withdrawals in all cases. I would like to point out, however, that the dominion treasury was enriched by about two and one-half million dollars last year from the liquor business in the province of Alberta alone; but that the amount for roads and technical education paid out to Alberta by the Minister of Finance was very small in comparison. Practically all the provinces are now engaged in the liquor trade. When one considers the fact that the government receives more from this trade than do the provinces themselves, the talk of economizing by withdrawing the grants for highways and technical education is extremely unreasonable.
I understand that Sir Henry Thornton, whether on the initiative of the government or not I do not know, has a proposal to increase freight rates and to apply the extra income derived therefrom to promote immigration. This would be discrimination, and I see no reason why the shippers of this country should carry our immigration burden. Immigration is a general policy and should therefore be a general charge upon the whole community. If the minister wishes to economize he can do so by a weeding out process in the departments, by amalgamation of branches that could be practically run under one head. Tax reductions were made last year at a sacrifice of $27,000,000 in revenue; this year the reduction amounts to $19,000,000, so that $46,000,000 might easily have been added to the curtailment of our huge war debt which, strange to say, hovers every year in the neigbourhood of about $2,600,000,000.
A payment of about $1,000,000,000 falls due in 1933. It bears interest at 5i per cent. The minister of Finance proposes to take advantage of the favourable condition of the money markets and retire this debt with money borrowed at 4 per cent. I think this is good business and I have no quarrel with the minister on that score. It is good economy.
In so far as the sales tax is a heavy burden on the consumer, I approve of its reduction on the necessaries of life.
And now I come to that "most unkindest cut of all"-the income tax. During the course of the budget debate last year I remember some one on this side of the house remarking that the farmer is opposed to a reduction in the income tax because he does not have to pay any income tax at all; that he desired the repeal of the sales tax law because he could not evade the sales tax.

The Budget-Mr. Luchkovich
The truth of the matter is that there are very few farmers whose incomes for taxation purposes reach beyond the exemptions set by law, and even if they had such incomes they would prefer to pay income tax to paying either tariff taxes or sales tax. It is the belief of all farmers' organizations that reduction of taxation, as it becomes possible, should take place by reducing and removing those protective duties on imports which increase the cost of living and production in preference to a reduction of other indirect taxes, such as the sales tax, and that the income tax should be maintained at substantially the scale then in force. Farmers want the retention of the income tax, not on the basis of any class interest but on the definite principle of equity in taxation and the desirability of taxation being direct rather than indirect. They do not ask the repeal of the sales tax, as an indirect tax, until after the existing duties on imports have been removed, since they regard the sales tax as somewhat less injurious than the tariff.
The income tax in 1926 produced $55,571,961.57, and after the 10 per cent reduction the Finance minister estimated that the income tax would, in 1927 produce $47,900,000, a loss of over $8,000,000 from this source. Of course, the government has been bombarded by all the large income tax payers, who naturally want relief. The argument that the income tax reduces funds available for investment in industry has been worked overtime. Of course it is quite true. But all taxes have the same effect. When the farmer pays his various taxes, visible and invisible, he has just that much less money to invest in the development of his own industry. But it must be remembered that the income tax is the only federal tax which compels people to contribute to the cost of running the country in proportion to their ability to pay. We do not believe that the income tax, even before this last reduction, bore unduly or unfairly upon any one. It should not be forgotten also that just as the income tax is reduced so will the proportion of indirect taxation increase, and a heavier load will be placed upon those least able to carry it.
Last year's budget has been described as a rich man's budget. In view of the further cut in the income tax I know of no better name for this year's budget than to call it the richer man's; for where the man who is capable of paying last year paid 10 per cent less, his income tax this year virtually becomes 20 per cent less. At this rate it will soon be eliminated, and this means that the great majority of Canadian people
[ Mr. Luchkovich. ]
will hereafter pay taxes to the federal authorities only upon consumption in the form of tariff duties, which go to the treasury when paid upon imported goods, or to the manufacturers, who, under shelter of the tariff, *can charge higher prices for competing articles of domestic production.
Why should we in Canada be so anxious to reduce the income tax when countries like England and the United States still retain it? Why should the Minister of Finance lend a willing ear to these who are best able to pay, many of them still enjoying the fruits of war profits, and then thrust the burden upon the backs of the common people? In the United States 64 per cent of their taxes come from the income tax, in Canada less than 14 per cent. Last year the income tax brought $48,000,000 to our treasury. Why should the government wish to reduce it? Not on the ground of equity, for it is the most equitable of taxes; not on the ground of visibility, for it is the most visible of taxes; not on the ground of certainty or convenience, for it is the easiest tax in the world to collect. There is absolutely no justification in the world for reducing the income tax in view of the paltry reductions made in the tariff. In view, therefore, of the staggering figures of our huge war debt, and in view of the almost negligible reduction in the tariff, I see absolutely no justification for the minister lowering the income tax.
The average man at home looks upon the member at Ottawa as a person who is supposed to " bring home the bacon ". In the old parties it means getting as much patronage for your supporters as you possibly can; and in this respect I look upon the Postmaster General (Mr. Veniot), as the grand daddy of them all; in a word it means " to the victor belongs the spoils".
The phrase about " bringing home the bacon " was coined by the old negro mother of Joe Gans, the prize fighter. On the eve of one of his greatest battles she said: "Joe, I expect you to get into that ring and win; your old mammy will be praying for you, so don't forget to bring home the bacon ". Thus when I speak of " bringing home the bacon " I mean bringing home victory for those who sent us here. What we want is a square deal for the farmer, nothing more and nothing less; but how can we do it when the Minister of Finance continues to sizzle our bacon to a frizzle? The farmer wishes to get the same equal treatment for his industry that the manufacturer is getting for his. I should like to dissipate the view held on this side of the house that we in this corner are a band of outlaws come out from the wild and woolly

The Budget-Mr. LucKkovieh
west to burn up their factories and carry o2 their wealth. We are just as law-abiding as they are, and we are just as serious in putting our industry on as sound a business basis as we already realize they have done with theirs. All we ask is an equalization of opportunity; in other words, we want equal rights for all and special privileges for none.
What I would like hon. members to know, who think that the farmer has no grievance, is that there is -too great a discrepancy between the prices the Canadian farmer receives and the prices he has to pay for what he buys. Nobody will kick about 75 cents a bushel wheat if shoes are down to S2. We realize that laws will not do everything for us-and I am sure this year's budget will not -so we are beginning to do things for ourselves. We have learned how, by cooperation and education, to avoid exploitation by middlemen. We are striving to put our farming on a business basis and we hope to see the time when we can make businesslike decisions on our own initiative.
I repeat, therefore, that all the Canadian farmer asks is the same right which other Canadian industries now enjoy, through their superior organization, to name a price in the first instance, and to acquire an organization which will secure to him the same power to maintain that price. This we are striving to do, mostly through personal initiative, and partly through legislation; and this is my idea of the noblest way of " bringing home the bacon
I should now like to deal with the question of immigration, especially in the light of what has been said during this budget debate. No one seems to oppose immigrants coming into this country, but they do question the method or manner in which they are brought here. I for one, deep down in my heart feel that we need more people here, and I am courageous enough to say that I do not oppose immigration. This country is big enough and good enough to contain three times its present population. There is one thing certain about the position of a member of parliament, and that is that he never lacks for material of all shades of opinion. Thousands of pounds of mail in the shape of letters, pamphlets, magazines, books and newspapers reach the members during the session for their information or misinformation. Yesterday I received a copy of the Montreal Star containing an article marked with a blue pencil, on the failure of our immigration policy. The whole argument is so much in line with what our Conservative friends have to say on this subject that I am intrigued into quoting a part of it:
It is an extravagant and cruel folly to entice people to come to this country and to leave them stranded here without means of earning their livelihood.
I am in complete accord with that part, but it goes on to say that only through a protective tariff policy can we get immigration. With that I am not in accord. Some one has said that ouir immigration policy is very analogous to the famous old rhyme:
"Will you walk into my parlour,"
Said the spider to the fly,
"It's the prettiest little parlour That ever you did spy."
But if the fly was wise He never would go in;
He would know very well There was nothing there for him.
I know a case where some false representation has had beneficial results in the end, but this is an exception to the rule, and in any case it could never work out in the same way to-day. I know a district in Alberta where a settler who came here thirty years ago felt quite lonely because he was there all alone. He wanted more of his own villagers to settle there with him so he wrote back home saying that Canada was a most luxuriant country where everything from hay to coconuts, peaches and bananas grew in the greatest abundance. It was not long after that letter was received away back home in the old country that that whole village became depopulated, for they all sold out and came to Alberta. Of course at first they were all sorely peeved, but being a very hardy race they soon adapted themselves to conditions here, and to-day they are among Alberta's best settlers. I have said that this is an exceptional case and should not be followed as a general rule by the immigration authorities.
I object again to the commercialization of immigration, which enriches a few individuals at the expense of the country. Immigration should be controlled by the Dominion and not delegated to private individuals or associations. The Dominion should select the immigrant and when he gets here should see that he is properly placed.
I do not believe in paternalism or a spoonfed immigration. I know from experience with immigrants in the past that those immigrants who had the least means and help were the ones to make the best success; while those who came here i.n comparative luxury are now virtually begging off their more prosperous neighbours. I say emphatically that paternalism is a vicious animal which will finally turn upon and bite its master. This is no country for mollycoddles; what we want is the hardy red-booded pioneering type that

The Budget-Mr. Luchkovich
scorns being fed with a silver spoon, but will roll up his sleeves and tackle without a murmur any obstacle that may confront him.
And how best can we bring them over here? To my mind the best and safest method is to allow families already settled here to bring their relatives to this country, provided they are fit and of the proper type. This will ensure to the country that someone at least will be responsible for them when they get here, and that they will not become a charge upon the country. Of course other supplementary methods could be suggested, but my time is short. And from where shall we bring those immigrants? From any country under God's sun that has the proper, adaptable type for a country like Canada; meaning, of course, a type of the white race that would be amenable to our ideas and democratic form of government. I object strenuously to the suggestion that the central European does not make a good citizen. A good citizen is a man who behaves himself, pays his taxes, does the right thing by himself and his neighbour, and, last but not least, is a sticker. The Germans and Scandinavians make wonderful settlers, but so do the Ukrainians. In a few years they have acquired the language of this country, and an understanding of our institutions as good as the best of them. I think that the member for Saskatoon (Mr. Young) will agree with me that in the institute in his constituency there are about 120 of the finest Canadians of Ukrainian extraction one would ever meet. I repeat that measured by every possible standard the Ukrainian becomes as good a Canadian as any of them. I have said that he is a sticker, and I mean it; for what avails it to a country, if a native born would rather flaunt his patriotism by waving a flag and rocking the boat than putting his hands to the oar. I have seen many of our native born run up a debt and then leave their farms because they would not live within their means. True patriotism, I insist again, also includes persistence and frugality even under trying circumstances.
I know it is hard to be patriotic under trying circumstances, but no man is a true patriot unless he has character; and character after all can only be moulded by a persistent battle with those circumstances. The man who comes out of such an elemental conflict successfully is a man of strong character. It is probably this that the Irish politician had in mind when he said: "Oh, never mind the foreigner, he is all right. In a few years he'll be out of the skinned class into the skinners and he'll then be as patriotic as any of us." If we wish to make the foreigner patriotic we must meet him half way and give him a

fair chance in the world. If we wish him to share our responsibilities we must stop discriminating against him; we must stop making him the goat of all our social unrest. Let us remember that it was a central European who risked his life in the Hollinger mine to save native Canadians, from death. Surely this example alone should prove that he is actuated by the same high motives as our native born. So why should we not help him instead of hindering him from becoming a genuine Canadian citizen?


Mr. DEPUTY SPEAKER:: Order.


Mr. A. E. MacLEAN (Prince):: Mr. Speaker I am sure that we were all greatly pleased a few days ago when the Minister of Finance (Mr. Robb) brought down the budget. Believing as we do on this side of the house in the principles enunciated in the budget I think we may at least commend him to a certain degree. There can be no doubt that if circumstances had compelled him to announce a deficit and an increase of taxation he would have been the most unhappy and the most unpopular man in this house. But we are all pleased that the business ability which he has so conspicuously displayed in his private affairs he has brought to bear in handling the financial affairs of the Dominion, with the result that from year to year he has been able to show a steady improvement in the finances of the country. When he presented the budget he said he was pleased to be able to announce a reduction both in the national debt and in taxation; and I think this will constitute another Robb budget slogan for the coming year.
Some of our friends opposite have told us in the course of this debate that the tariff reductions proposed by the Minister of Finance will force into exile more and Inore of our native bom Canadians. But this dismal prediction is not confirmed by the very favourable comments that have appeared in the English press. For instance the London Express says:
The Canadian budget is of a kind to make an Englishmen's mouth water. It is one more proof that Canada to-day is perhaps the most enviable country in the world. It is being borne along on a tide of natural and, therefore, enduring prosperity. Ater all, it is only a meagre reward compared with the certainties of the future. Young men and women of character and pluck should not hesitate. The heritage of empire and chance of fortune are there to seize.
I think that is very good immigration literature and very encouraging proof that the budget is well received in Great Britain. The Sunday Observer remarks:

The Budget-Mr. MacLean (Prince)
The Hon. James Robb introduced the budget to make European finance ministers envious. The new tariff is framed to safeguard the interests of home products in a growing market. The principle of British preference is carefully maintained, and is now as established a feature of Dominion finance as it is of our own. As a whole, the budget and facts lying behind it supply conclusive arguments for an energetic and coherent immigration policy.
I do not think we could wish for very much better immigration literature than that. Among the good things contained in the budget is an item of sixteen million dollars to take care of the revaluation of returned soldiers' land. I do not think there is a better item to be found there. Then $1,477,000 is provided for pensions to our returned men. That is another item that I think everyone throughout the country will approve, and I do not see how any bon. member can vote against it. That, in addition to the thirty-eight million dollars already paid in pensions to our returned men is something that Canada may well be proud of. This year the additional amount provided for our returned soldiers in the budget totals $17,500,000.
There is no doubt, Mr. Speaker, that we who support a lower tariff would like to have seen further tariff reductions. I do not know how some of my friends from the maritimes view the situation, but I feel very strongly that the tariff is one of the greatest hindrances to us down there. We have only to look back a few years and examine the figures showing the decline of population in the maritime provinces to see what great difficulties they have had to overcome. Taking the percentage of natural increase, we find that from 1901 to 1921 the figures were as folows:	Saskatchewan, 729; Alberta, 725; British Columbia, 192; Manitoba, 139; Quebec, 42; Ontario, 34; New Brunswick, 17; Nova Scotia, 31. Thus of all the provinces in Canada in which there was an increase Nova Scotia shows the lowest, while Prince Edward Island had a decrease in population of over 14 per cent. It is only natural for us to inquire into the reason for this, and for an explanation we need but go back a few years and look at some of the figures which have been given indicating the decline in population in the maritime provinces, and especially in the province of Nova Scotia. What do these figures reveal? According to the census for the ten year period 1817-27 there was an increase in Nova Scotia of 61,000; in the next decade, 78,000; then, in the successive decades respectively, 72,000, 34,000, 56,000 and 52,000. We come to the period, then, within which the national policy was introduced. When this last census was taken the national policy had not been introduced; it was put into effect in 1878. In that period we find that the population of Nova Scotia had declined, so that the increase, instead of being 52,000, was only 9,000. I do not see how our friends opposite can rebut a statement as conclusive as this. In the next ten year period the increase stood at the same figure, 9,000. So that the fact is quite significant that, with the introduction of the national policy and the change in the conditions of trade in the maritime provinces resulting therefrom, our population suffered to so considerable an extent that, in place of an natural increase of 52,000 in a period of ten years it had fallen to 9,000, while in Prince Edward Island the increase had been entirely wiped out and there was a decrease of 14 per cent, shortly following this period. I do not think that any argument can be advanced in support of a protective policy so far as the maritime provinces are concerned.
Now I come to the amendment which was moved the other day by my hon. friend from St. Lawrence-St. George (Mr. Cahan). The amendment begins with the declaration that this house "regrets", and one infers from a reading of it that there are many things which are to be regretted. It seems to me that the greatest regret of all, from the standpoint of hon. gentlemen opposite, is that they are not on this side of the house in charge of the administration of public affairs. The old policy which our friends have preached to the country year after year, election after election is dressed up in somewhat new clothes, but it is the same old doctrine. I do not deny that it is ingeniously worded this time, no doubt with the idea of avoiding the use of the term "high protection"; the amendment evidently seeks to convey an impression that this is not its real object. It seems that the term "high protection" is being abandoned by our friends opposite, so that to-day they mention it only with bated breath or in a whisper. However, it is stated in the amendment that the measure which hon. gentlemen opposite propose will tend to keep at home those Canadians who are now in the country and induce those Canadians who are in the United States to return. There is no doubt at all as to what our friends really have in mind; they believe that higher protection will bring about this wonderful result. All we need do is to introduce again this brick for brick policy, about which we have heard so much in the last few years, and everything will be perfectly satisfactory again. That is what our friends would have us believe. But what is the meaning of the amendment, translated into plain English? It is simply this:	This house regrets that the
government has not brought in a measure of
780	COMMONS
The Budget-Mr. MacLean (Prifnce)
higher protection for all our industries, making the tariff so high as to induce Canadians in the United States to return and Canadians who are now in the Dominion to remain here. That is what it means. The inference is also to be drawn from the amendment that, in the opinion of hon. gentlemen opposite, high protection will build up the home market for our products. It is the same old story; protection will do it all. I do not think my hon. friend from St. Lawrence-St. George could have been altogether sincere in advancing this policy. I find that in his own remarks, as reported at page 623 of Hansard, he admits that the policy is not satisfactory for the whole of Canada. He states there that if the policy were introduced it would be necessary to do something for the maritime provinces and for the prairies as well. In other words, they would bonus these provinces in some way to offset the injury which they would suffer from protection. I do not think a policy of that description can be very well advocated as one that could be applicable to the whole Dominion.
I have observed in the Montreal Star a suggestion rather similar to the above and which one of our western friends referred to a few moments ago. The Star offers a new policy, mid I do not know whether it is altogether in conformity with the proposal put forward by the hon. member for St. Lawrence-St. George. In the first place, it is proposed to apply the system of protection in full measure to secure a home market for our producers. Now, I am willing to give the Star credit for an earnest desire to do the best it can in the interests of this Dominion. Those who direct its affairs have done a great deal to give to this country what is perhaps the greatest newspaper we have, and I am inclined to think that their interest in Canada is sufficiently strong to actuate them in what they consider to be the wisest course. But we must look into their policy critically to see how it will operate. They say we should have protection so as to shut out foreign goods and keep our market for the home producer. But if you keep out all foreign goods you immediately increase prices to the consumer. This is clearly the case, because if protection is not intended to increase prices why is it demanded? In other words, the manufacturer here would have the market now if he could produce cheaply enough to hold it. Prices to the consumer must therefore be increased correspondingly with every increase in protection. That is fact No. 1, and I think the house will agree with me that the consumer gets the worst of the bargain.

The next suggestion is to bonus the manufacturer on his exports to enable him to undersell trade rivals in foreign countries. Here again the consumer in Canada gets the worst of the bargain. Let us take an industry in Ontario. The province of Prince Edward Island has to contribute its share to pay the bonus to the Ontario firm, but it gets nothing in return. As a matter of fact, the consumers in Prince Edward Island, under such an arrangement, are taxed twice on the same article; they pay the increased price for the article in the home market on account of the added protection, and they also contribute to the bonus for the exporter. In this way the farmer of Prince Edward Island is taxed twice over. I do not think that such a policy would be for a moment acceptable to the whole Dominion. But what aviout the farmer? He has to go out and sell his produce in competition with the world, with no guarantee of any fixed price, notwithstanding the fact, as I have pointed out, that he would have to contribute in two ways, under such a policy as is here proposed, to the support of the manufacturer, who has a safe margin of profit, without any risks in connection with the disposal of his goods. It seems to me that when the Star looks into the suggestion somewhat more closely it will realize how unworkable it is. A rigid system of inspection i3 also urged whereby prices shall not be increased. To my mind this is also impossible. The manufacturer has to sell at cost, plus a small profit. It would be impossible to enforce such a system inasmuch as one manufacturer can produce at a much cheaper rate than another. The result is that the consumer would soon find himself paying the full added tariff together with a nice margin of profit to the manufacturer. So I do not think it would be possible to put that policy into operation, notwithstanding the good intentions which no doubt influenced the Star in that connection.
There is another strange thing about the speech of the hon. member for St. Lawrence-St. George. Presumably he laid down the policy of the Conservative party, and among the principles he enumerated was the following:
The stabilization in Canada of the costs of living and the costs of implements of production on such comparatively low bases as will enable our people, in producing and selling our surplus of national products abroad, to compete advantageously with the products of foreign countries in our common markets abroad.
I do not know whether or not that is the policy advocated by the Star, but our friends opposite have been condemning the Liberal party for years, and they said our policy of

The Budget-Mr. MacLean (Prince)
lowering the cost of implements of production was driving our people from Canada, forcing them to compete with the cheaper markets of the world and giving them less than an equal chance with other countries. This government have been taken to task at different times by hon. gentlemen opposite for this very thing. Now our friends are going to do two things at once; they are going to put the cost of living and the cost of production on such a low basis that our people will be able to compete with foreign countries in the markets of the world, and they are going to do it by increasing the tariff. That is the peculiar part of this argument, although the hon. member does not specifically say so. I cannot see how our friends opposite can be consistent in advocating a policy of that kind; to my mind that is ridiculous. How can you cheapen the cost of the implements of production by increasing the tariff? I do not think this policy will prove very acceptable to the Canadian people. Do they propose to bring our people to serfdom by compelling them to work longer hours for less pay, in order to produce cheap manufactured articles to sell in competition with the world? If we fully consider this article in the Star we nan only come to the conclusion that if an industry requires a bonus in order that it may be kept going, it is up to the province, the municipality or the city in which that industry is located to look after it, if it is going to be a benefit to that particular community. I do not think the rest of Canada should be asked to pay a bonus to an industry in the city of Toronto, or some other city, to the detriment to the rest of the Dominion. If it is so advantageous to these communities to retain these industries, those communities should bonus the industries locally; the whole country should not be asked to do so.
Referring for a moment to the tariff board, which has been discussed quite often, I have advocated from time to time the widening of the scope of this board. I do not know the views of the government on this question, but I think the efficiency of that board could be greatly increased by widening their scope in order that they might confer with other tariff boards. In the United States they have a tariff commission which is a fact finding body acting in an advisory capacity, very similar to our own board, and if these two bodies could confer together there might be a good many items on which a reasonable adjustment could be made.
The question of potatoes in the province of Prince Edward Island has often been mentioned in this house. We are in that business on a very large scale at present, and are forced
to ship these potatoes into the United States against a tariff of 50 cents per hundred pounds. We are growing certified seed potatoes there, which the farmers in the southern states need; it is to the benefit of the farmers and consumers to get those potatoes as cheaply as possible. I have had a good deal of correspondence with the United States tariff commission on this question, and I was surprised at the attention they gave the matter simply through my personal request. They went into it very thoroughly, and the question of whether or not seed potatoes could be identified as against table stock came up. Finally I received a communication from them stating that the explanation I had offered had been carefully considered, and they were of the opinion that if the state of Maine did not object too much there was a possibility that some satisfactory solution of the question might be found. I assured them that seed potatoes were certified with a government tag, and could be identified as such; therefore there was no possibility of these potatoes coming into competition with the table stock. I believe that the government would do well to widen the scope of the tariff board and let them interview other tariff boards in connection with matters of this kind.
There are always matters of local interest which we wish to talk over, and matters of this kind have been referred to by other speakers in this debate. Just in passing I would like to compliment the government, and more particularly the Minister of Public Works (Mr. Elliott), on the splendid facilities which have been given us for the handling of our crops-through the erection of suitable cold storage or semi-frostproof warehouses at Summerside, Charlottetown and Georgetown. These warehouses have been a great benefit to our people and have been used very extensively during the past year. As time goes on our people will see more clearly the benefits which they are receiving from these improved facilities.
That brings to mind another matter, and I would like to refer briefly to the request which has been put forward for a second car ferry. This is now being considered by the management of the Canadian National Railways. We sincerely hope that the time is not far distant when another efficient and suitable boat will be put on that route to take care of the increased traffic. The one boat on the route at present is taken off for perhaps six weeks in the spring season for repairs, and that is the very time of the year that it is most needed, with people coming to the island as tourists and others returning from trips abroad. The Scotia, which takes the place
782	COMMONS
The Budget-Mr. MacLean (Prince)
of tlie ferry during those weeks, offers very poor passenger service, and I sincerely trust that this important matter will not be overlooked. Prince Edward Island is only a small province, but it is one of the provinces of this Dominion; the other provinces have their interprovincial bridges and other means of transportation, so why not give little Prince Edward Island the same amount of consideration? We are only asking for a fair deal, to be treated as a province of this Dominion should be treated and given the transportation facilities now enjoyed by the other provinces.
There is another question which has been discussed at various times and which is supported by all shades of political opinion in Prince Edward Island, that is, the need for more branch lines to extend the present railway system in that provinces. This is very important, and the matter has been brought to the attention of the government by myself and the other members from that province. We sincerely hope that it will be taken into favourable consideration by the railway management. Perhaps it is difficult to grant all the things we ask, but Prince Edward Island is purely an agricultural province; unless our people have adequate shipping facilities near at hand to take care of their products it is impossible for them to carry on, and we ask that these matters be given very favourable consideration.
The question of the fisheries of the mari-times is before a royal commission, and we entertain the hope that some assistance will be given towards removing some of the difficulties which our fishermen have to contend with. One recommendation I wish to make now is that some small boat harbours be constructed along exposed coasts, which would be a great benefit to our -people. I do not know any class who endure the same hardships as the fishermen on the exposed coasts of the maritime provinces, and if a vote should be brought before this house with a view of alleviating their condition I hope that members from other parts of the Dominion will not look upon it as something which is -being handed out in a political way to ridings in the maritime provinces. I wish to protest emphatically against such an idea as that, an-d to say that there is not a small boat harbour, wharf or breakwater on the coast of the maritimes which does not benefit the fishermen and the shipping public. Greater facilities are needed, and I hope that the requests we have made to the department in this connection will be considered this year.
There are a few suggestions I should like to make having as their object the improvement of the fisheries situation. They may be summarized as follows:

(1)	Some assistance to develop a better system of preparing our fish for market so that a uniform and absolutely reliable brand or pack may be put on the market.
(2)	That assistance be given to the fishermen by way of cold storage facilities and swift transportation to enable them to place their fish on the market in the best possible form.
(3) That a system of inspection be instituted in order that the pack may carry the inspector's guarantee as to quality.
(4) That the superior qualities of the lobster over the Japanese crab or the American crayfish be advertised to the world' by the Department of Fisheries.
I may say that other varieties of fish are encroaching upon the market for lobsters, which used to be a wonderful industry in- the maritimes. I think it is only necessary to demonstrate the superiority of the lobster over fish sought to be introduced as substitutes to convince everyone that the lobster should receive its rightful place in the markets of the world.
(5)	That special attention be given to the restoration of the oyster areas in the maritimes, especially the habitat of the famous Malpeque oyster.
For the past few years we have been asking the Department of Fisheries to do something towards the restoration of these former wonderful areas. I brought the matter up in this house a few years ago, and I had the suppqrt at that time of the hon. member for West York (Sir Henry Drayton) who is not with us this session. That hon. gentleman stated that in his opinion there was not a more important question before the house that session than the restoration of these oyster areas, and if it was at all possible the effort should be m-ade to restore them to their old time condition. I believe that if a proper expert were put in charge of this work, those wonderful Malpeque oysters which were formerly the envy of the world could be brought back to a proper state of productivity. There is no doubt that if this were done hundreds of thousands of dollars would accrue to the fishermen of our province.
(6)	That the present season now in effect in the maritimes for lobster fishing be retained, with a possible change of opening -dates and boundaries to suit conditions.
(7)	That every day's lobster pack be labelled with a government label and that there be a tag on the case, giving the name of the packer and the date on which the prodqct was packed, so that no fish can be sold without this government guarantee.
These are a few recommendations which I am sure would help the fishermen-, and I trust

The Budget-Mr. MacLean (Prince)
that the Minister of Marine and Fisheries (Mr. Cardin) will not overlook them when the report of the royal commission is being considered, along with any changes which the department itself may feel impelled to introduce.
One question which has been greatly discussed by the members from the maritime provinces is the implementing of the Duncan commission report. To my mind the government has made an honest effort to implement that report; some of its phases have been splendidly taken care of, while others remain to be further considered. With respect to the question of a twenty per cent reduction in the freight rates, I notice there is an item in the estimates amounting to $3,395,000 to give effect to it. This is a very large item, and I was unable to ascertain just what proportion of that sum would go to each of the maritimes. The management of the national railways was not able to give me any detailed information on the matter, but it is quite certain that a very large share will go to the province of Prince Edward Island. I looked into the freight rate matter before leaving for Ottawa and I find that on a carload of potatoes shipped from the western part of the province there is a reduction of about $12 a car. In the case of shipments to the St. John or Halifax market there is a reduction of some $15 a car, and so on according to the mileage involved. I think these reductions will not only benefit the shippers of freight from Prince Edward Island, but that it will represent a large item on the freight coming in. Therefore these reductions, which have come about as a result of the Duncan commission's report, will be of great benefit to the people in the maritimes and will save hundreds of thousands of dollars to the people of Prince Edward Island.
With respect to the tariff, hon. gentlemen opposite have complained that the Liberal party this year have taken more in customs duties than they had done themselves in former years. Personally I feel that I could not have a better story with which to go to the people of my county. We have always advocated a tariff for revenue, otherwise a low tariff, and it works out apparently just as we have always claimed it would do. The lower your tariff the larger revenue you get, and the people of the country are given a chance to import commodities which they desire at reasonable prices, while at the same time a substantial contribution is made to the revenues of the country. Hon. gentlemen opposite, therefore, need not try to alarm the country, especially the maritimes, by making this complaint with respect to customs duties,
because our people want the tariff reduced to a point where they can import what they need at a reasonable rate, while at the same time the revenue gains to no inconsiderable extent. A high tariff will defeat this object.
The question of an increase in the subsidies to the maritimes is one of outstanding importance. The people of the maritime provinces hope that these subsidies, especially the subsidy to Prince Edward Island, will be still further augmented. I do not know what the Minister of Finance will say to the suggestion but I hope that he will give it his favourable consideration. There are many reasons why the subsidies should be increased, and those reasons have been stated here from time to time. The Duncan commission went very thoroughly into the matter, and their opinion was that sufficient account was not taken of the abrogation of the reciprocity with the United States. This regrettable event left the maritimps without a market and it tpok them a great many years to find a new market. I have pointed out on a previous occasion that when that agreement was abrogated, and the national policy was brought into effect, in one decade the population of Nova Scotia dropped from $52,000 to 9,000 souls. There must have been some reason for that, and the reason is that the national policy did not suit the conditions in that part of Canada. Prior to confederation the customs and excise duties went to the provinces as their chief source of revenue. At confederation these were turned over to the Dominion government. These revenues have gone on increasing and the Dominion is getting the benefit therefrom while the subsidies to the maritimes have not increased in the same proportion. That is a very strong reason in favour of an increase. In order to supplement the case I may state that in 1868 for every dollar paid out to the provinces in subsidies the federal government only received $4 in the form of revenue. To-day for every dollar paid out for the same purpose the federal government receive $12 in the shape of revenue or three times as much as they derived in 1868. On that score alone we have a strong claim for a larger subsidy. Sir Andrew Rae Duncan referred to-the purchasing power of the dollar, and said that even if the arrangement with the maritime provinces may have been satisfactory for the carrying on of the governments there in 1907 the drop in the purchasing power of the dollar would call for revision at the present time.
The question of the public lands should also be borne in mind. The proprietors in
784	COMMONS
The Budget-Mr. MacLean (Prince)
Prince Edward Island received grants oi land from the British crown, but three-fiftha of these lands were bought out by the tenants and local government prior to confederation. A sum not exceeding $800,000 was set apart under the terms of confederation for the purchase of these lands and $45,000 was to be paid annually by the Dominion. The commission reports that nearly this whole amount and the $45,000 annually, has been lost to the province, so that it has received no benefit from the arrangement.
The same can be said about the railway claim. Something like $4,700,000 was placed to our credit on entering confederation and the cost of the railway, which was built at that time in Prince Edward Island at a cost of $3,000,000, was charged up and deducted from the federal allowance on which we expected to receive interest from confederation on, the result being that we have lost the interest on that $3,000,000 ever since. The question has been brought up of the return of the railway lands in British Columbia to that province. We do not object to the return of those lands; but we say that if those lands are returned to British Columbia, it would be just as equitable to return that sum of $3,000,000 to the credit of Prince Edward Island, and to have the province receive the interest on that money from year to year.
There are many other claims that could be advanced but time will not permit me to take them up at the present time. No doubt those matters were fully dealt with by the Premier of Prince Edward Island at the interprovincial conference; but there is just one question to which I wish to refer, and that is the return of the natural resources to Alberta. We find that those natural resources are at the present time worth to that province more than $2,000,000. We admit that according to the statement that has been produced it costs about $2,000,000 to administer those resources. We also find that those resources in the last five years have increased in value by more than $1,000,000. The surface of the natural resources of Alberta has hardly been scratched, and as time goes on those resources will become more valuable as their development progresses. We trust that when the question of an adjustment of the subsidies to the different provinces is being dealt with, those matters which I have brought to the attention of the house will be given due consideration.
Hon. JOHN A. MACDONALD (Kings): Mr. Speaker, as this is but the second time I have attempted to make a speech in this

house, I am rather afraid I have so much to say that I shall not have an opportunity of saying it within the forty minutes at my disposal.
I should like to devote a moment or two to the remarks of the hon. member for Prince (Mr. MacLean) who has just taken his seat. If a tariff is a hindrance to an increase in population, why has the hon. member so consistently supported a government which maintains a tariff? Further, in regard to his statements as to population increase and decrease in Prince Edward Island, he was very far at sea in stating that the decrease in population in that province commenced immediately after the national policy was adopted. That is not so. In the census of 1891 the population of Prince Edward Island reached its highest peak, and that was thirteen years after the national policy was adopted. Consequently his argument that the adoption of a protective tariff started a decrease in the population of Prince Edward Island was not correct. As a matter of fact the first decrease in the population of that province commenced in 1901, five years after the Laurier government took office, and the decrease, as shown by every census since that time, has continued steadily. So that his argument in that respect does not appear to have much weight.
As regards his argument that a tariff increases prices, I wonder how he reconciles that statement with the fact, examples of which we see every day, that the United States, the most highly protected country in the world, has on most of its products the lowest prices to be obtained anywhere, prices so low that they can ship their manufactured products into Canada in very large quantities and pay a tariff on them on the way in. As regards his argument in connection with bounties, I do not think he can claim that paying bounties to industry is any part of the Conservative policy.
In regard to seed potatoes and his correspondence with the tariff commission of the United States, he will find', as every other country finds and has always found, that the United States is not going to open its doors to competition with its own people. The United States takes care of its people, manufacturers, farmers and every other industry or person, and I think the hon. member for Prince will find that out before he finishes his correspondence with the tariff commission of the United States.
The hon. member for Provencher (Mr. Beaubien) spoke about the arguments from this side of the house being more or less arguments in favour of immigration for the

The Budget-Mr. Macdonald (Kings)
United States. That, of course, is simply an echo of the present Prime Minister (Mr. Mackenzie King), because his policy appears to be to hide the truth rather than to speak it, as though we could hide any fact from the world at large. I am not concerned with his attempt to justify his political career; but when he states that he would like to see the national railways run separately from the government, why does he not insist that the government should cease to guarantee the bonds of the national railways and thus have it really and truly separate?
The larger aspects of the budget have been fully discussed by many speakers and I rather feel like confining myself to its bearing locally in the maritime provinces, and particularly Prince Edward Island. We must, however, remember that a country like Canada, with its large expanse of territory, with its many diverse elements, must necessarily receive great consideration from many different standpoints, and the government must always be prepared to recognize and to adapt its policy to suit changing conditions. To-day we have large manufacturing industries in the central parts of Canada. Ten, fifteen or twenty years from now many similar industries may be established in western Canada, and when that day comes probably our western friends will have a somewhat different view of the policy of protection. To my mind we must always adopt a policy which will work the least possible hardship to any section and at the same time conserve the industries of the country. Without such a policy we cannot hope to be generally successful, and even if we have to make compromises here and there, we must accept those as being inevitable in Canada. I do not envy the job of the Minister of Finance (Mr. Robb) in endeavouring to reconcile all the different elements; but I do object to the financial conclusions at which he arrives, and it would be more to his credit if he made a really fair statement of our financial affairs and included all the liabilities. I do not intend to discuss the question of the national railway liabilities because it has been set forth so fully and so often already that it is not necessary for me to do so.
When we come to the taxation proposals, we find that after all very little relief has been given except to those with large incomes, and even there the relief is not very much. The reduction of one per cent in the sales tax will not mean much for the average man or woman or for the average farmer in our province. It will mean five or six cents on a pair of boots, twenty or thirty cents on a 56103-50
suit of clothes, and similar small reductions of that nature. That is all the benefit that Prince Edward Island will receive from these reductions in taxation. The Minister of Finance has always used reduction of taxation as a battle cry, as a means to furthering the political fortunes of his party. He advertised a twenty per cent reduction last year; he is advertsing a twenty-five per cent reduction this year. It is onlly one per cent in each case, and next year he will take another one per cent off, I presume, and advertise a thirty-three and one-third per cent reduction, take another one per cent off the following year and advertise a fifty per cent reduction, until finally when election time comes round he will be able to announce a reduction of one hundred per cent. In all the five years during which he is reducing the sales tax he will have reduced it by two hundred and twenty-eight per cent, and after he has reduced it two hundred and twenty-eight per cent in the five years it will be abolished. The forty-five per cent reduction he has made already has only brought the sales tax back to the point where it was when the present government took office. There is no doubt whatever in my mind that if reasonable economy in the administration of the finances of this country had been practised in the past two or three years the sales tax could have been fully abolished and we would not miss it in the revenues of this country. Sufficient economy could very well be practised to maintain the standing of our finances, to provide surpluses and to make a reduction of debt possible, even if the sales tax were abolished.
One of the questions to which the budget always refers is that of markets. If we are not able to adopt a policy that will build up the home market then we shall fail. There is not and never was a market that will be equal to the home market. That applies to every country. The home market is always there; you have it through good times and bad times, and regardless of world conditions. I am in favour of foreign markets so far as we can reach them, and let us go after them to the fullest possible extent, but in the foreign market you are always up against world competition, and years will come when that world competition will practically put you out of business in that market. But if you take care of the home market you have a stable outlet for your products from year to year, regardless of world conditions.
I was rather surprised at the statement of the hon. member for Queens (Mr. Sinclair) in

786	COMMONS
The Budget-Mr. Macdonald (Kings)
connection with the Australian trade treaty when, speaking a few days ago in this house, he said:
As an agriculturist in direct touch with this work of finding markets for our dairy products, I am in a position to state that the main result of the importations of Australian butter has simply been to put the speculator in Canadian dairy products out of business rather than to injure the farmer. To-day we have a ready market all the year round in Great Britain for our dairy products.
I wonder if he really gave serious consideration to that statement before he made it. He argues that the only thing to do with our butter is to export it to Great Britain. Now any person with a knowledge of the facts knows that in Canada our season of large and less expensive production is about six or seven months of the year, and during the remainder of the year, for five or six months, production is very much curtailed and the cost of production very much increased. What happens to-day under the Australian treaty is that we have to send our butter to Great Britain in the summer time, when prices are low. It is no using holding it until the winter season when it might command a better price because at that season the cheap butter of Australia and New Zealand, produced under summer conditions, is coming into this country, and we have no market for our butter in Canada. When it is remembered that the home market in Canada will take Care of almost our whole butter production if we shut out importations, the fallacy of the argument of the hon. member for Queens will at once be seen.
But the Australian treaty goes further in its effects. It practically prevents winter dairying. Due to the high cost of production in winter, it is not profitable to the farmer because again the cheap butter of Australia and New Zealand, produced under summer conditions, is coming in and undersells our butter. There is no way of meeting this situation fairly to the farmer except by imposing a duty that will protect him, and he should be protected just as much as the manufacturer. Protection would put him on a fair basis. In this connection I should like to quote a statement made by one of the officers of the federal Department of Agriculture in Charlottetown a short time ago in which he distinctly disagrees with the statement of the hon. member for Queens. In a public statement issued at Charlottetown he says:
At the present time, our markets have received quite a setback, owing to so much New Zealand butter being dumped into Canada. Up to November 1st, 100,000 boxes of New

Zealand butter was exported to Canada, and one boat in November delivered 34,000 boxes in Halifax.
New Zealand and Australia are producing under summer conditions, and are bonused to the extent of six cents a pound. So you see why we cannot compete with that trade, and make a profit with our type of cow.
That statement was issued by an officer of the Department of Agriculture, and I venture to say that the Minister of Agriculture (Mr. Motherwell) agrees with him, although he does not appear to be making any effort to meet that situation.


Mr. SINCLAIR (Queens):: Does the hon.
member agree with the statement made in this house a few nights ago by the ex-Minister of Agriculture, the hon. member for Victoria (Mr. Tolmie), when he admitted that the Australian treaty did not decrease the price of butter to our dairymen?


Mr. MACDONALD (Kings):: I am quoting the statement of an officer of the federal Department of Agriculture. I am not discussing any statements made elsewhere. I did not hear the statement to which the hon. member refers.


Richard Bedford Bennett: Neither did I.


John Alexander (1874-1948) Macdonald: Further in connection with this matter, I have here the history of a carload of choice No. 1 pasteurized creamery butter shipped from Prince Edward Island in the summer of 1926 and sold in London. On account of its choice quality it brought a higher price than the regular quotations there-one shilling and six pence above the current English quotation. Yet while it brought a fancy price, the net result to the shippers from Prince Edward Island was 28J Cents a pound, while practically the lowest price, the less than average price, quoted in Prince Edward Island for butter during that season was 32 cents a pound. That will show the disadvantage of being obliged to ship our butter to the British market during the summer time. If it could be held over for later consumption in Canada you would get the benefit of the higher price.
The hon. member for Queens also dealt with the question of implementing the Duncan report. He made remarks in that connection with which I cannot agree, and which I cannot let pass unchallenged. As the hon. member knows, I am not criticizing him personally; I am criticizing his statement. He stated:
I think it is fair to say that on the whole the government have gone as far as it is possible for them to go in implementing the recommendations of the Duncan commission.
Now, Mr. Speaker, that is an attempt to bolster up the case of the government with an

The Budget-Mr. Macdonald (Kings)
argument that cannot succeed. He referred particularly to the improved facilities offered by the Prince Edward Island Railway and the ferry service. I do not wish to criticize the government unreservedly in this connection, for I appreciate what has been done and, as the hon. member for Prince (Mr. MacLean) said this evening, some of the recommendations that have been carried out have been a great benefit to us. But even in discussing the question of subsidies, we find that although the recommendation of the commission was in the hands of the government in September 1926, no subsidy was paid until late in 1927, and then only for the half year. The government should at least have paid a full year's subsidy. As I say, we do not wish to condemn the government unreservedly, but we cannot give them our full approval and accept, what they have so far given us as completely implementing the Duncan report.
In, connection with transportation the Duncan report has this to say:
The railway administration admitted that there was substantial foundation for much of the complaint we heard in Prince Edward Island with regard to the railway service there. It appears that in view of the character of the roadbed and the succession of heavy curves and heavy grades the difficulties which railway operations incur, and the inconvenience which the public suffers, cannot be quickly and substantially lessened without a measure of capital expenditure.
What has happened iu relation, to that recommendation? Absolutely nothing, Mr. Speaker. It is in exactly the same position to-day as it was two years ago when the report was made. To give the house some idea of the handicaps 'that we have had to overcome, I may say that only last November and December on the section of the road from Georgetown to Mount Stewart we were limited to ninety thousand pounds on any carload of freight. That was not too bad while we were using box cars, but the moment frosty weather set in and we were obliged to use refrigerator cars of sixty thousand pounds tare, it meant that we could load only thirty thousand pounds, or ten thousand pounds under the minimum capacity. But to make matters worse, we were charged freight on the forty thousand pounds minimum loading. Now does the hon. member declare in view of such a condition that that recommendation of the Duncan report has been implemented in full? I submit, Sir, Hhiat his statement can not be justified. That is only one sample of the handicaps that result from the failure of the government to fully carry out the recommendations of the Duncan commission. Next let me take the case of the Murray Harbour railway, a stretch of narrow gauge 56103-504
line running partly through the hon. member's county and partly through mine. Nearly two years after the Duncan report no effort has been made to convert that railway to standard gauge.
Then take the car ferry service. The Duncan report recommends that:
The railway administration should be asked to make a survey of what is required in this connection, and that the department should make capital provision for the improvements to be undertaken within the shortest possible time.
Two sets of estimates have been placed before this house since the Duncan report was in the hands of the government, but no provision has been made to take care of that work, which, it will be noted, was recommended "to be undertaken within the shortest possible time." The member for Prince sincerely hopes that something may be done in regard to it in the near future. But I think he and the hon. member for Queens should do a little more than "sincerely hope", because early action in regard to these matters is of great importance to Prince Edward Island as a whole.


John Ewen Sinclair: Is not my hon. friend -aware that the survey to which he refers was made during the past season?


John Alexander (1874-1948) Macdonald: You can go on making surveys indefinitely for years to come. No survey was required in this case; the whole condition was well known to the railway authorities and the government.


John Ewen Sinclair: What is the recommendation in the report?


John Alexander (1874-1948) Macdonald: That is the recommendation:
Altogether the ferry boat service is unsatisfactory. The railway administration admitted that there was need for supplemental provision being made in the form either of a second ferry boat or a special freight boat. We recommend that the matter be gone into from the point of view of placing at the disposal of the island such satisfactory means of communication as will ensure as regular and complete a service as can reasonably be made. We further recommend that, so far as the ferry boat service is concerned, it should not be run as part of the railway operations, but should be run by the railway administration under separate account for the department. We feel that, by reason of its association with railway accounts, this service does not get the attention it should receive.
Now, has that been done? Would a survey be required to change the accounting system of the car ferry? I ask that question of the hon. gentleman. Has anything been done to meet the demands of the province for a second car ferry, which is very much needed? It is
788	COMMONS
The Budget-Mr. Macdonald (Kings)
needed from the standpoint of traffic at the present time. I was not able to get the figures for the past year but I can give the house the figures for 1925 and 1926 of the total number of outward and inward cars: Outward Inward Total
1926	
12,972	13,001	25,9731925	
9,960	9,671	19,631
It will be observed that the increase in 1926 amounted to 6,342 cars. Everyone who knows anything about the conditions there is aware that the ferry boat was operated to its maximum capacity in the fall of 1926. Taking last year, we know that the number of cars moved was considerably larger than for the preceding year. So that the necessity really exists for a better service, and yet nothing whatever has been done. In the summer season the ferry service is taxed to its utmost. Of course the boat must be put in dry dock every year. On these occasions the olid boat from Hawkeslbury is taken over, but it is entirely inadequate for the service. The element of danger is always present, and an accident to the ferry would isolate the island completely and might have very serious consequences. This is a matter of much more importance than when we had a steamboat service to the mainland twenty years ago, because then the people provided in the fall for their winter requirements and laid in enough supplies to carry them through the long period of disconnected traffic. We are not doing that to-day, for we are depending on the car ferry, and consequently we would be in a very serious condition indeed if an accident happened and the service were interrput-ed in the winter time. The hon. member for Prince has been asking for branch line railways in the province, but I say, let us first finish the lines which were started twenty or thirty years ago; let us change from narrow to standard gauge before talking about branch lines.
With regard to operating accounts, it should be remembered that this is an interprovincial matter and that the accounts for the car ferry should not be charged to the operating service of the Prince Edward Island section. It is not fair, and in regard to this matter the government has a precedent established a good many years ago. The terms of the union provided that we should have a continuous, efficient steam connection. Is a service which was good enough even fifteen years ago efficient to-day? Under the changed conditions it is not, because traffic has increased to such an extent that additions are necessary all the time. I need hardly refer to the fact that for forty-five years, as regards connection by transportation between Prince
fMr. J. A. Macdonald.]
Edward Island and the mainland, the bond of Canada remained broken and disregarded until the Borden government provided the present facilities which became operative about ten years ago or so. This broken bond of Canada was largely the cause of our loss of population. But it was not only population that we lost; we lost whatever industries we had, and we lost revenue also to a large extent. In fact, our losses are well nigh incalculable.
Now, it is incumbent upon the government to maintain not only the present system established by the Borden government several years ago but to maintain it in such a manner that it will adequately handle the traffic offering. Failure to do this will constitute a failure to keep the bond of this Dominion with the little province of Prince Edward Island. It must not be forgotten that as a province we have rights and a status which the government should recognize and respect. I was going to say a moment ago that a precedent was established for changing the accounting system here, when the cable service between Prince Edward Island and the mainland was taken over by the government and operated, the entire cost charged to the government, and no delay being necessitated in connection with the telegraph service with the mainland. This placed us on an equal footing, as respects telegraph communication, with Pictou or Cumberland county or any other point on the mainland. The government should seriously consider carrying out that recommendation and placing the accounts in connection with the car ferry in the railway department instead of under the Canadian National Railways. As suggested in the Duncan report, Prince Edward Island would probably obtain greater consideration and a better operation on the part of the Canadian National Railways if this were done. If the straits were a mile, three-quarters of a mile or half a mile wide instead of eight or nine miles, the Dominion would have built a bridge and there would be no heavy charge for maintenance.
Another matter which I brought up last year when the estimates were being considered is the establishment of an air service at the capes, so that when the boat is tied up passengers and mails at least may be carried across without being subjected to delays of hours or even days, as is sometimes the case to-day.


Mr. VENIOT:: You have that now.


John Alexander (1874-1948) Macdonald: From Moncton to Charlottetown once a week, on Saturday evenings. But we want to get across oftener than that.

The Budget-Mr. Macdonald (Kings)


Mr. YENIOT:: The object is to have the mails carried over on Saturday so that the people may not have to wait until Tuesday before having them distributed.


John Alexander (1874-1948) Macdonald: I understand that, and it is a move in the right direction.


Peter John Veniot: Why not give credit for it?


John Alexander (1874-1948) Macdonald: I am willing to give the Postmaster General all the credit he cares to take for it, but I am advocating something better. The present arrangement is not sufficiently satisfactory. I want to see established an air service at the capes which will be always ready to transport mails and passengers when the ferry is tied up.


Clarence Joseph Veniot: Mails and passengers?


John Alexander (1874-1948) Macdonald: Mails and
passengers, yes. It would be a comparatively cheap service; it is only a few miles.


James Alexander Robb: Free passes.


John Alexander (1874-1948) Macdonald: No, we do
not want free passes; what we want is service. The Minister of Finance may smile as much as he likes, but this is a serious matter with us.


Peter John Veniot: You are getting a service now which is not costing anyone a cent. It is perfectly free, paid for by the government.


John Alexander (1874-1948) Macdonald: Who else
would pay for it?


Peter John Veniot: The persons who receive the mails by this means should pay extra. It is done everywhere else, but we do not get a cent from the people of Prince Edward Island.


Richard Bedford Bennett: It is only a substitute mail.


Peter John Veniot: It is a service Charlottetown asked for.


John Alexander (1874-1948) Macdonald: We know
very little about it because as a matter of fact it started only last week.


Peter John Veniot: That is right. They asked for it last week and they received it within forty-eight hours of the request.


John Alexander (1874-1948) Macdonald: I hope the
Postmaster General will be as prompt in giving the full service we now ask for.


Peter John Veniot: If the requirements demand it you will get it.


John Alexander (1874-1948) Macdonald: I wish now to refer to the question of the subsidies paid in connection with the steamboat service between
the mainland and the province. For steamboat communication between Charlottetown and Pictou S35,000 is paid. I have no objection to this, but there is another service for which a subsidy had been voted for upwards of forty years and which was dropped last year for the first time. This is an important service, much more needed than that between Charlottetown and Piotou, and yet not a dollar is being voted for it. It is highly important for this reason, that there are a number of places such as Murray Harbour, Lower Montague, Newport and several other points which are a long distance from any railway, some of them fifteen and sixteen miles away. Heretofore there has always been a service connecting these points with the mainland, but the vote was dropped a year ago. Yet last year $10,000 was added to the Charlottetown service which, I say, is not nearly so important. I plead with the government to re-establish the communication between the eastern part of the province and the mainland and to grant a small subsidy for it.
I wish now to discuss for a moment or two the West Indies trade agreement. I had intended reading an article from the Maritime Merchant, a non-political trade journal published in Halifax. The article is devoted to a consideration of this question, but in view of the fact that my time is about up I will not read it. A large amount of money will be expended under this arrangement for which those who have some knowledge of business conditions do not feel that we are likely to get any adequate return. Not only that; we shall probably suffer in the maritime provinces by reason of Cuba's attitude towards Canada in this matter. There will be a considerable expenditure on steamers to carry on the service, and yet the only place in the West Indies where we might secure trade, that is, Cuba, will be closed to us for the reason that under the trade agreement the steamers are not allowed to call at Havana or any) other port in that island. We have a very large trade with Cuba, which takes about 3,000,000 bushels of potatoes a year from New Brunswick and Prince Edward Island, and we should like to retain that trade. There is a difficulty, however; we cannot directly say that it is on account of the trade agreement with the British West Indies, but the inference is that that has something to do with the fact that Cuba has put a very heavy duty on our potatoes. It is supposed that this was done in retaliation for the preference granted the British West Indies on sugar. Last year the duty was advanced from 65
790	COMMONS
The Bvdget-Mr. Macdonald {Kings)
cents per hundred kilos to $2 per hundred kilos, or almost a cent a pound, which is a very heavy duty indeed.
Just in passing I should like to refer to some newspaper reports which appeared last year, and which so far as I can judge are nothing but propaganda in favour of this government. These newspaper reports, which were sent out by the Associated1 Press, stated that the government had taken, action and had) succeeded in getting some reduction of this duty against our potatoes. Such a thing never happened; I do not know whether or not any action' was taken, but certainly no results were obtained; the rate remains at $2 per hundred kilos. We are suffering severely on that account, because this offers an encouragement to the Cubans to grow their own potatoes. Instead of planting small quantities last fall they planted very large quantities and spread the planting season from the middle of October until well on in December. The result is that they will have their own potatoes all through February and March, with a later crop in April, which will shut out our potatoes. The ostensible reason for increasing this duty is of course the protection of their own farmers. That is a very laudable object, but it is generally conceded by those who know something of conditions down there that the duty was at least partly inspired as a means of retaliation against Canada for the preference given the British West Indies on sugar.
On motion of Mr. Matthews the debate was adjourned.
On motion of Mr. Robb the house adjourned at 10.35 p.m.
Monday, February 27, 1928
The house miet at three o'clock.



PENSIONS AND SOLDIER PROBLEMS


[Stage Direction]
On motion of Mr. C. G. Power (Quebec South) the second report of the special committee on pensions and returned soldiers' problems was concurred in.


James Alexander Robb: On Friday last the leader of the opposition (Mr. Bennett) asked that the stenographic reports of the public hearings before the tariff advisory board during the year 1927 be laid, on the table, together with the general report of the chairman of that board. The various stenographic reports as received from the

board are now tabled, save the report on cottons which was tabled on Monday, February 13, at the request of the hon. member for East Calgary (Mr. Adshead).



QUESTIONS

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

Mr. ESLING:: 1.	Did the federal government or any department thereof, enter into any agreement with the government of British Columbia, during the year 1927, for the survey of the road between Revelstoke and Golden in British Columbia?
2.	If not, has an agreement for such a survey in the present year been arranged for?


Charles A. Stewart: The subject is under discussion.


ABBOTSFORD, B.C. LIQUOR SEIZURE
Mr. BARBER:: 1.	Was a seizure made at Abbotsford, British Columbia, on November 24. 1927, of a freight ear supposed to contain liquor?
2.	If so, by whom?
3.	To whom was it billed, and where?
4.	Who was the shipper?
5.	What did the car contain?
6.	What quantity of liquor, if any, was found in said car?
7.	If the car contained liquor, what was its final disposition?
8.	Was the liquor sold, and, if so, what amount was realized?
9.	What amount was due the seizing officer or officers?
10.	What amount, if any, has been paid the seizing officer or officers?
11.	Have customs officers at border power to seize cars containing liquor billed as another commodity, without export papers, and consigned to the United States?
12.	Has inspector at Vancouver advised customs officers to keep hands off such shipments?


Mr. EULER:: 1.	Liquor contents seized but not the car.
2.	S. J. Bates, senior customs excise examiner and G. E. Leary, customs excise examiner.
3.	Shipment billed as shingles consigned to Samuel Cabot, Inc., Fort Wayne, Ind.
4.	Export shipping bills not on file. No information.
5.	Liquor and shingles.
6.	360 cases containing 693 proof gallons whiskey.
7.	Liquor has been forfeited to the crown but not yet disposed of.
8.	Answered by 7.
9.	Cannot be determined until liquor disposed of.
10.	Nil.
11.	Yes.
12.	No.

Questions


CANADIAN NATIONAL RAILWAYS-ROUNDHOUSES
Mr. WOODSWORTH:: 1.	What is the number of stalls, their length, and the approximate value of the roundhouse of the Canadian National Railways at the Neebing terminal, Fort William, and at Sioux Lookout, Ontario?
2.	What was the cost of these structures?
3.	Does this value include the heating boilers used in connection with the plant?


Mr. DUNNING:: 1.	24 stalls-22 are 99 feet 9 inches long, and two are 129 feet 3 inches long, costing $181,956.61.
2.	Roundhouse, $181,956.61; Machine shop, $23,278.41 (94 feet 9 inches by 51 feet); Boiler room, $38,126.42 (60 feet by 39 feet,
7 inches), including equipment.
3.	Yes; boiler room and machine shop adjoin engine house.


CUSTOMS DRAWBACKS
Mr. SMOKE:: 1. In the budget statement made by the Minister of Finance does he include, as customs duty, the amounts paid for drawbacks?
2.	What sums were paid for customs drawbacks in (a) the fiscal year ending 31st March, 1927;	(b) from the 1st April, 1927, to the
31st January, 1928?


Mr. ROBB:: 1.	No; the figure mentioned represented the estimated net receipts from customs duties for the year.
2.	(a) $14,639,450.94; (b) $10,536,155.39.


MR. A. GEMMELL
Mr. WILSON (Wentworth):: 1.	Is Mr. A. Gemmell, of North Battleford, Saskatchewan, employed by the Department of Agriculture ?
2.	If so, what position does he hold?
3.	What salary is attached to the position?
4.	Was the appointment made by patronage, or by the Civil Service Commission?


Mr. MOTHERWELL:: 1.	No.
2 and 3. Answered by No. 1.
4.	Mr. A. Gemmell was appointed by the Civil Service Commission to a temporary position as egg inspector at North Battleford, with effect from April 18, 1927, and continued in employment till January 23, 1928, when his services terminated.


CAP-ST-IGNACE POSTMASTER
Mr. CAHAN:: 1.	Who is the postmaster at Cap-St-Ignace, county of Montmagny, Quebec?
2.	When was he appointed and on whose recommendation ?
3.	Did any returned soldier apply for the position?
4.	And if so, why did he not receive the appointment ?


Mr. VENIOT:: 1.	Joseph Mathieu, O.A.S.
2.	15th August, 1927-by Civil Service Commission.
3.	Yes.
4.	Present postmaster is a returned soldier.


DISMISSAL OF POSTMASTERS
Mr. BRADY:: 1.	How many postmasters were dismissed throughout Canada from October 1, 1926, to February 1, 1928?
2.	During above period, how many of those postmasters were dismissed in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Nova Scotia, New Brunswick, and Prince Edward Island?


Mr. VENIOT:: 1.	421.
2.	British Columbia	 7
Alberta	 9
Saskatchewan	 34
Manitoba	 H
Ontario	 32
Quebec	 122
Nova Scotia	 106
New Brunswick	 99
Prince Edward Island


METALLURGIC PRODUCTION IN CANADA
Mr. PREVOST:: What was the metallurgic production in Canada, in 1921 and 1927, respectively?


Mr. MALCOLM:: Metallic mineral output of Canada: 1921, $49,343,232; 1927 (estimated), $112,238,100.


MR. VALERE LABONTE
Mr. CAHAN:: 1.	Was Valere Labonte, of St. Joseph de la Beauce, Quebec, formerly employed as a preventive officer of the customs branch ot the Department of National Revenue?
2.	When and on what grounds was he dismissed from his employment?
3.	Were three separate criminal informations laid against said Labonte before Arthur God-bout, a magistrate of the District of Beauce, Quebec, by Pamphile A. Martineau, an investigating officer of the said department, or ot the government, in November last?
4.	Were the said three criminal charges ever prosecuted by the government?
5.	Were the said criminal charges withdrawn by the government ?
6.	If the government either refrained from prosecuting or withdrew said charges, what were the grounds of the government's action in so doing ?
Questions


Mr. EULER:: 1.	Yes.
2.	Dismissed October 9th, 1927, for irregularities in connection with his expense accounts.
3.	Four separate charges were sworn before the district magistrate.
4.	No.
5.	No.
6.	Prosecution held in abeyance pending securing of further information. In two cases statements upon which charges were based were withdrawn by the complainants


Mr. GOTT:: 1.	Who is the excise officer at St. Joseph, Beauce?
2.	On whose recommendation was he appointed?
3.	Who was his predecessor?
4.	Was he dismissed?
5.	If so for what reason and on whose recommendation?


Mr. EULER:: 1.	J. Edward LeMay.
2.	On the recommendation of F. W. Cowan, chief, preventive service.
3.	Mr. Valere Labonte.
4.	Yes.
5.	For irregularities in connection with his expense accounts.


SLAUGHTER OP CATTLE
Mr. GARLAND (Bow River):: 1.	How many head .of cattle have been slaughtered under the restricted area plan in each of the provinces of Canada?
2.	What is the total area now free from tuberculosis in each province as a result of the operation of plan?
3.	What was total amount of money paid to owners of slaughtered cattle in each province?


Mr. MOTHERWELL:: 1.	As recorded to February 1, 192S:
Number
of
cattle
Prince Edward Island	 582
Nova Scotia	 806
New Brunswick	 20
Quebec	 8,570
Ontario		540
Manitoba	 1,680
Saskatchewan	 203
Alberta	 Nil
British Columbia	 5,069
2.	No area has had tuberculosis absolutely eradicated. The following figures show the percentage of animals reacting to the initial test 	.1 |
in each area and to the last annual test, where an annual test has been made.
Area Number One, Manitoba:
Thirty townships in the rural municipalities of Dufferin, Rolland, Thompson and Gray. 1,080 square miles:
Initial test, February 1st, 1923, percentage reactors, 5.7; last annual test, November 1st, 1926, percentage reactors, .4.
Area Number Two, Quebec:
Counties of Beauhamois, Chateauguay and Huntingdon, 773 square miles.
Initial test, October 23, 1924, percentage reactors, 7.9.
Last annual test, October 1, 1926, percentage reactors, .8.
Area Number Two "A", Quebec:
Counties of Vercheres, Chambly, Laprairi'-Napierville, St. John and part of Richelieu.
Initial test, April 28, 1927, percentage reactors, 5.9.
Area Number Three, Prince Edward Island: The entire province, 2,184 square miles. Initial test, August 13, 1925, percentage reactors, .59.
Area Number Four, British Columbia:
5,600 square miles in the Fraser river valley.
Initial test, February 23, 1926, percentage reactors, 7.9.
Last annual test, March 1, 1927, percentage reactors, 1.1.
Area Number Five, Saskatchewan:
The rural municipalities of Longlaketon, McKillop, Millington, Last Mountain Valley, Mount Hope and Wreford in the Last Mountain district. 1,782 square miles.
Initial test, June 15, 1926, percentage reactors, . 8.
Area Number Six, New Brunswick:
The parishes of Manners, Sutton and1 Flume Ridge in Charlotte county.
Initial test, March 10, 1927, percentage reactors, .76.
Area Number Seven, Ontario:
The county of Prince Edward and that part of Murray township in the county of Northumberland, which lies south of the Murray canal and adjacent to the county of Prince Edward.
Initial test, May 12, 1927, percentage reactors, 2.1.
Area Number Eight, Nova Scotia:
The counties of Antigonish, Coloester, Cumberland, Guysboro, Pictou and Yarmouth.
Initial test, September 8, 1927, percentage reactors (as at February 1, 1928), 1.68.
3.	As recorded to February 1, 1928.

Questions
Compensation paid
Prince Edward Island	$ 14,955	92Nova Scotia	
26,016	20New Brunswick	
513	33Quebec	
284,146	05Ontario	
19.990	73Manitoba	
55,667	80Saskatchewan	
5,826	60Alberta	
nilBritish Columbia	
180,703	16


COPPER AND HEMP BOUNTIES
Mr. WHITE (Mount Royal):: 1.	When were bounties first provided for on the production of copper bars and hemp twine in Canada ?
2.	Where are the factories located for the production of these commodities and what was the amount paid in bounties on such production in 1925, 1926 and 1927?


James Malcolm: ,
1.	The bounty on the production of copper bars dates from May 12, 1923. The bounty on hemp twine dates from January 1, 1926.
2.	Bounty on copper bars or rods-Consolidated Mining & Smelting Co., Trail, B.C.: Paid, 1925-26, $14,822.67; 1926-27, $164,242.30; 1927-28 to February 4, $73,604.92.
Bounty on hemp-Doon Twines Ltd., Kitchener, Ont.: 1927-28J to February 1,
$285.72; Consumers Cordage Co., Ltd., 283 St. Patrick street, Montreal: 1927-28 to February 1, $74.18; Manitoba Cordage Co., Ltd., Portage La Prairie, Man.: 1927-28 to February 20, $1,025.92.


TRADE OP MARITIME PROVINCES
Mr. MacLAREN:: Has the government available such a Bystem of statistics as will show a comprehensive measurement of the trade of the maritime provinces with other provinces and with foreign markets?


James Malcolm: No.


FRUITS AND VEGETABLES
Mr. FRASER:: 1.	What quantity and value of beans were imported into Canada in the fiscal years ending March 31, 1926 and 1927?
2.	From what countries were these beans imported and what quantities from each?
3.	What rate of duty was imposed on these importations, and, if various rates, specify each?
4.	What is the rate of duty on fresh fruits and vegetables imported into this country: (a) from the United States; and (b) from other countries?


Mr. EULER:: 1 and 2.
Statement of Imports by Countries of Beans: N.O.P.: Entered for Consumption in Canada During the Fiscal Years ended March 31, 1926 and 1927
Fiscal year 1926	Fiscal	year 1927Country	Bush.	Value	Bush.	ValueGreat Britain	
11,633	$ 38,330	47,863	$ 87,395Hong Kong 	
5,272	11,980	4,474	8,459Newfoundland	
11	62	-	-Austria	
980	1,638	1,335	2,035Belgium	
49,357	93,741	287,020	516,341Chile	
1,705	8,169	815	3,987China	
124	293	460	919
1,064	2,179	29,934	55,709
201	1,114	-	-
550	1,500	7,359	12,3095,181	38,254	58,665
2,457	6,519	10,298	17,532106,254	94,126	147,311.. 	
2	10	651	1,8731,140	12,594	23,256Syria	-	22	279United States	
16,746	83,954	60,719	190,906Totals	$362,064	595,924	$1,126,976
Questions

3.
Rates of Duty Imposed on Importations of Beans: N.O.P.: From Countries Specified
Cents	Cents	CentsCountry	per	per	perbushel bushel	bushelGreat Britain ..	.. . 15	22i	25Hong Kong .. .	. . . 	-	25Newfoundland .	. _	25Austria .. ..	25Belgium	.	22i	25Chile	25China	25France	. ..	22i	25Madagascar .. .	224	25Germany	___	25Hungary .. ..	. .	25Italy	224	25
83 Potatoes, n.o.p., and potatoes dried, desiccated or otherwise prepared, n.o.p. 83a Potatoes when imported from a country which imposes a customs duty on potatoes grown in Canada, per one
hundred pounds	
85 Tomatoes, fresh	
87 Vegetables, n.o.p	
87a Onions in their natural state	
90 Fruits, viz.:-plantains, pineapples, pomegranates, guavas, mangoes, wild blueberries, wild strawberries and wild
raspberries	
90a Wild edible berries, n.o.p	
90b Bananas	
92 Apples, per barrel	
95	Blackberries, gooseberries, raspberries,
strawberries, cherries and currants, n.o.p.; the weight of the packages to be included in the weight for duty, per pound	
96	Cranberries, and fruits, n.o.p	
97	Pears, quinces, apricots and nectarines,
n.o.p., per one hundred pounds	
97a Plums, per bushel	
98	Melons, each	
100	Grapes, per pound	
101	Oranges and lemons	
101a Shaddocks or grapefruit, n.o.p., per one
hundred pounds	
lOlaa Shaddocks or grapefruit, when imported from the place of growth, by ship, direct to a Canadian port, per one hundred
pounds	
101b Limes	
102	Peaches, n.o.p., by weight of the package
to be included in the weight for duty, per one hundred pounds


LAFLECHE, SASK., POSTMASTER
Mr. ERNST:: 
Mr. VENIOT:: 1.	Edmond Hector Bilodeau.
2.	Temporarily appointed May 5th, 1927. Permanently appointed February 20th, 1928.
3.	John C. McAdam.
4.	Yes-for political partisanship-on recommendation of member for constituency.

Unopposed Motions jor Papers



ANYOX-ALICE ARM MAIL CONTRACT

Mr. BRADY:: 1.	Who holds the mail contract between Anyox, Alice Arm, and -way points?
2.	When does the contract expire?
3.	Wliat is the frequency of service?
4.	What amount, annually, does mail contractor receive for his service?
5.	Is the department aware that the mail service between points mentioned above has been discontinued since February 1, 1928?
6.	If so, was this service discontinued with the knowledge and consent of the department?
7.	What is the reason for the suspension?
8.	When will this mail service be re-established?


Mr. VENIOT:: 1.	H. F. Kergin and H. R. Fowler.
2.	Temporary arrangement.
3.	Three trips per week.
4.	$1,200.
5.	6, 7, and 8. Contractors' boat laid up for repairs 1st February. However, prompt action was taken to authorize a temporary weekly service at $25 per trip, the most reasonable offer obtainable and information on file shows that the temporary service commenced on the 9th February. The regular service will be re-established upon completion of repairs to the contractors' boat. It is reported it will take from six to eight weeks to complete these repairs.



SAWYERVILLE, QUE., POSTMASTER

Mr. HANSON:: 1.	Who is the postmaster at Sawyerville, Quebec?
2.	When was he appointed and on whose recommendation ?
3.	Prior to his appointment who was postmaster at Sawyerville?
4.	Was he dismissed?
5.	If so, why, and on whose recommendation?


Mr. VENIOT:: 1.	John Smith Gilman.
2.	December 20th, 1927, by the Civil Service Commission.
3.	W. E. Marshall.
4.	Yes.
5.	By Postmaster General in interests of
public service.	[DOT]



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. QUINN:: 1.	Who was the federal government purchasing agent in Halifax during the year 1927?
2.	Did said purchasing agent purchase supplies for the Hudson bay and Hudson straits
expedition of that year ?
3.	What quantities of American anthracite and bituminous coal "were purchased for these expeditions, from whom and at what price?
4.	What quantity of potatoes was purchased for these expeditions, for what departments, what was the price paid, what quantity was American potatoes, and what quantity was Canadian potatoes?


MAIL CARRIER ROUTES, NOVA SCOTIA
Mr. SMITH (Cumberland):: 1.	How many mail carrier routes are now maintained in the county of Cumberland, Nova Scotia?
2.	What points do these cover?
3.	What is the mileage of each?
4.	What is the remuneration paid for each route ?
5.	What is the name of the contractor?
6.	When does the present contract cease in each case?
7.	What is the average cost per mile for these routes where one-horse conveyance is used?



UNOPPOSED MOTIONS FOR PAPERS


Edward Joseph Garland: For a copy of all correspondence, telegrams, and all other communications between the government, any department of the government, or any minister or official of the government, and any other persons, respecting the appointment of Sergeant Forbes, of Calgary, Alberta, to the position of chief customs preventive officer for Alberta.



AUSTRALIAN TRADE TREATY

Mr. PRESTON (for Mr. Stewart, Leeds):: For a copy of all letters, telegrams, resolutions, petitions or other communications, between individuals, associations, companies, or organizations, and any department of the government of Canada, relating to the alleged injurious effects of the operation of the Australian trade treaty upon the interests of agriculture or dairying in Canada.



JOLIETTE POSTMASTER

Mr. McQUARRIE (for Mr. Cahan):: For a copy of all documents and correspondence on file in the Post Office department concerning the appointment of a postmaster at Joliette, Quebec, including any and all complaints received by said department against the present acting postmaster.



ST. PAUL DU BUTON POSTMASTER

William Garland McQuarrie: For a copy of all documents, including the correspondence on file 117 the Post Office department, relating to or concerning the appointment of a postmaster at St. Paul du Buton, county of Montmagny, Quebec.



CAP ST. IGNACE POSTMASTER

William Garland McQuarrie: For a copy of all documents, including the correspondence on file in the Post Office department, relating to or concerning the appointment of a postmaster at Cap St. Ignace, county of Montmagny, Quebec.

Representation of Nova Scotia



UNEMPLOYMENT INSURANCE FUND

Mr. BRADY:: For a copy of all correspondence, telegrams or any other communications between the government and the Prince Rupert trades and labour council or any other trades and labour councils in Canada, regarding the creation of a state unemployment insurance fund.



CAMP HILL HOSPITAL, HALIFAX

Mr. QUINN:: For a copy of all letters, telegrams, memoranda, contracts, and all other documents which have been prepared or which have passed between various ministers, and between departmental officers, and between these and all firms, or corporations, and any person or persons, in reference to the purchase of fuel by the Department of Soldiers' Civil Re-establishment for use m Camp Hill Hospital, Halifax, Nova Scotia, tor the winter season of 1927-1928.
tariff advisory board



PRINTING OF EVIDENCE

[Stage Direction]
On the orders of the day:
Mr. J. L. BROWN (Lisgar):: Might I ask if it is the intention of the government to have the verbatim reports of the evidence taken before the tariff advisory board printed for the use of members of this house?


James Alexander Robb: The reports are now tabled and they are the property of the House of Commons. There is no money voted in the department to pay for the printing.



MONEY POINT, N.S., LIGHTHOUSE

[Stage Direction]
On the orders of the day:
Lewis Wilkieson Johnstone: I wish to ask the Minister of Public Works (Mr. Elliott) if it is the intention of the government to discontinue telephone communication between the lighthouse and fog alarm at Money Point, and Bay St. Lawrence? I have received a communication to-day informing me that the line is now out of repair and that it is not intended to establish communication again, and this is a very serious condition of affairs. Money Point lighthouse is the most northeasterly point of Nova Scotia, and the only means of communication at present is through a farm house four and a half miles away.


Hon. J. C. ELLIOTT (Minister of Public Works):: I do not recollect having received any information in this regard within the last two or three days, but I shall be very glad to inquire into the matter and will endeavour to give my hon. friend an answer within a day or so.	,	)



REPRESENTATION OF NOVA SCOTIA

[Stage Direction]
On the orders of the day:
Mr. ROBERT K. SMITH (Cumberland): I wish to ask the Prime Minister what steps, if any, have been taken to give the province of Nova Scotia its full representation in the House of Commons as provided for under the terms of the British North America Act and which, according to the population of Quebec, excluding Abitibi, at the last Dominion census, entitles us to fifteen members while we are allotted only fourteen members under the last Redistribution Act?
Right Hon. W. L. MACKENZIE KING (Prime Minister):: If my hon. friend will place the question on the order paper he will receive an answer in due course.



INQUIRIES FOR RETURNS

[Stage Direction]
On the orders of the day:
Milton Neil Campbell: I would ask the Postmaster General when I may expect to receive the papers asked for by orders passed by this house on February 13th and February 15th?


Peter John Veniot: Almost the entire staff of the department are working on the returns that were asked for, and just as soon as they are ready they will be brought down.



THE BUDGET


[Stage Direction]
The house resumed, from Friday, February 24, 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. R. C. MATTHEWS (Toronto East Centre):: Mr. Speaker, in the short time at my disposal I propose to make a few comments on some aspects of the budget as I see it. Other hon. gentlemen much more competent than I have discussed the general financial position, the tariff adjustments, and other matters contained in the budget, with their effect on industry and the general prosperity of the country. I shall confine myself to two subjects. I propose to make a few comments first on the retirement of the public debt, and to follow that with observations a little more in detail on the question of the income tax and its administration in Canada.

The Budget

Mr. Matthews
The question of the retirement or the elimination of the public debt must inevitably receive attention in this debate. It was brought to the attention of the Minister of Finance (Mr. Robb) in the last session of the house. That was done in the hope that the minister would make a careful examination of suggested plans, not only of sinking fund methods, but of refunding also, and would bring down proposals looking to the future that this house might accept. Since that time, since the adjournment last spring, one of the most important operations on record of refinancing has been accomplished. Those who followed the stupendous refunding of United States liberty loan bonds, representing S3.100,-000,000, 4| per cent seconds, and $2,160,000,000, 4i per cent thirds, into lower interest bearing securities, must have felt that the minister would have been inspired by the success of this financing to bring forward something definite, or at least an outline of what might be expected, or what could be done in the field of Canadian finance. But with that lack of initiative so noticeable in this government, nothing of the kind was proposed. I wan* to be fair to the minister and so will tell the house what he has not divulged -that so far as a refunding operation of any great magnitude was concerned, it was really not possible, for the reason that Canadian loans of victory bonds and other issues are non-callable. It was the callable feature of the second liberty loan that made possible Mr. Mellon's vast refinancing, which operation saves his government $21,000,000 per annum. But notwithstanding this disability with respect to a large operation corresponding in some degree to the American venture, there was plenty of scope for the government to use acumen and foresight, just as much as in the case of private companies that in many instances have revamped their financial structure, or have made plans for new financing. All of these are made with debt retirement features, mostly by sinking fund, covering periods of from fifteen to thirty years. A longer period probably would be advisable in government finance, if the interest rate were low, as it is at present. The callable feature should not be overlooked. I observe, however, that in the meantime the minister has sold $65,000,000 \\ per cent non-callable bonds without sinking fund provisions. These are Canadian National thirty year bonds unconditionally guaranteed both as to principal and interest by the Dominion of Canada.
In support of this methodless method, the minister harks back to a sentence written by an economist, McCulloch, in 1845-eighty-three years ago-twenty-two years before confederation when income tax in Great Britain was seven pence on the pound, instead of listening to the voices that are speaking in 1928 of achieved and possible financing following the accumulation of debts after the Great War. McCulloch advanced the idea that:
Greater productiveness of industry and the greater well being of the community are the real sinking funds which a wise government should exert to build up and encourage.
This is a pleasing generality, but it will scarcely stand beside the masterpieces of actual financial operation. Great Britain did not heed McCulloch when she funded her debt of $4,600,000,000 in the United States and arranged for orderly payments. She has since paid $95,000,000 of principal and $615,405,000 of interest, making total payments of $710,405,000. If the Chancellor of the Exchequer had
accepted McCulloch's sentimental and indefinite financial ideas Great Britain would not have had the credit and the standing she has in the world to-day. Mr. Coolidge does not go back eighty-three years, but he points with pride to the fact that in the years since 1921 when the debt of the United States towered $26,500,000,000 there has been an orderly reduction until $8,500,000,000 or 30 per cent of the total has been removed. Permit me to quote from his message to congress transmitting the budget for the year ending June 30, 1929, with reference to current debt reduction from taxation. Speaking of reduction of taxation the president makes this
significant remark:
Since 1920 there have been three reductions in taxes for the purpose of relieving the people of some of their war burdens. The act of November, 1921, lightened the tax load by a reduction of $663,000,000. The act of 1924 afforded additional relief of $519,000,000. The act of 1926 made a further reduction of $422,000.000. Taking these all together our tax demands have been lessened by $1,604,000,000. This in itself illustrates the value of orderly procedure. The people are permanently richer because of the diminished demands made by the federal government. And hand in hand with these material curtailments of the amounts taken from the people the public debt has been reduced. From a peak of more than twenty-six and a half billion dollars the debt has been reduced, on June 30, 1927, by $8,084,794,716. This lowering of the debt means an annual saving in interest of approximately $320,000,000 While this tangible and extraordinary saving emphasized the importance of debt reduction as a preliminary to ultimate adequate tax reduction, we have at this time for consideration the question of further relief to those who pay federal taxes.
From this it will be seen tha/t since 1921 the United States national debt has been reduced by more than $8,000,000,000 or about thirty per cent, while the Canadian debt has been reduced something like five or six per
The Budget-Mr. Matthews

finances for the fiscal year ended June 30, 1927, refers to the income tax as a class tax. His exact words are:
Analyses of the returns made under the 1924 and 1926 acts indicate that the income tax has become a class rather than a national tax.
If these remarks apply to the United States, they apply much more to Canada. If the secretary's conclusions that the income tax in the United States is a class, rather than a national, tax is correct-and the figures certainly support his view-the same with more force can be applied to the Canadian income tax.
We have come to this position that the income tax must be levied fairly and completely on those entitled to pay. I am sure that the love of fair play and justice is as inherent in the Canadian as in the British people when the facts are known and understood. Parliament would not allow an act like the Canadian Income War Tax Act to live in Britain, unless the enforcement was impartial and complete.
In respect of the reduction of income taxation much could be said. There seems to be a disposition on the part of some hon. gentlemen to hold that the higher the tax rate, the more money will be collected. Does that necessarily follow?
An inquiry into the effect of reduction in Canada and the United States can lead to no other conclusion than that a moderate tax will be more remunerative to the Department of National Revenue than the retention of rates that are excessively high.
The Canadian rates are greatly in excess of the American. For example, the following table shows the income tax payable by a married man with no dependents in Canada, as compared with one similarly placed in the United States, and assuming that income to the extent of $5,000 in the United States is earned income:
Income $5,000 00 6,000 00
7.000	00
8.000	00 10,000 00
15.000	00
20.000	00 50,000 00
100,000 00 500,000 00
Canada $32 00 56 00 88 00 128 00 232 00 632 00 1,232 00 6,688 00 19,048 00 162,848 00



U.S. $16 88 28 13 39 38 56 25 101 25 311 25 618 75 4,878 75 15,858 75 116,058 75

[Stage Direction]
The Revenue Act of 1926 in the United States reduced the normal tax 2 per cent rate to U per cent; 4 peT cent to 3 per cent; 6 per cent to 5 per cent. Surtaxes were cut from a maximum of 40 per cent to a maximum of 20 per cent. The report of the secretary of the treasury in 1927 states:

It was very naturally anticipated that these changes would result in a considerable loss of revenue. As a matter of fact, however, the individual returns for the year 1925 showed a larger tax than for 1924.
The conclusion of the treasury department, after the most searching investigation and analysis, and reporting its judgment in respect of the incidence of income taxation covering a period of years, is given in these words in the 1927 report:
* TileJ treasury department has always contended that in the long run the taxation of income at moderate rates would be more productive than at very high rates. The soundness of this contention appears to have been amply borne out by the tax returns under the law of 1926, for both calendar years 1925 and 1926.	calendar
But we do not need to go afield to find conclusive proof that a moderate tax will produce more income than excessive rates. Last year collections under income tax in Canada amounted to $47,000,000 odd. A ten per cent reduction was applied in 1927. Immediately there were strong contentions in parliament that the income tax must not be reduced. These arguments, or rather statements, were advanced without a true knowledge of the situation, and regardless of any endeavour to find the level at which the income tax would produce the most revenue. If the 10 per cent reduction of 1927 had had the effect of taking 10 per cent off the returns, we would have this year only about $43,000,000 instead of $47,000,000. But actually, the National Revenue Review announces in February collections of $54,500,000, and at the same rate the revenue for the fiscal year ending March 31st, 1928, will be in excess of $55,000,000, an increase of $8,000,000 at a reduced tax rate. Similarly, in my opinion, the 10 per cent reduction for this year will not diminish the amount collected. What this country needs is to collect the tax. And I charge, without fear of contradiction, that the government has merely played with this tax; and that the application of it has been so grossly unfair that it has led to its greatest abuses.
Consider, for example-and it is only one example-the case of bearer bonds. It is reported to me that about $4,000,000,000 of taxable Canadian government, provincial, municipal, school and industrial bonds are in existence, and are mostly held in Canada. I am credibly informed that comparatively little of this vast sum of four billions is reported to the revenue officials as being in the hands of taxpayers. Yet we know the bonds are outstanding and are largely in the hands of Canadian investors.

The Budget-Mr. McIntosh
They prove the futility of the Income War Tax Act as an effective measure, unless the solution of its complete administration is found. It has taken vigilant care for 105 years of actual experience in Great Britain to arrive at an approximately complete enforcement. This country does not lend itself as easily to enforcement; we are still in the initial stage of development, still seeking outside capital and immigration. High rates of direct taxation are not conducive to settlement or investment, and the income tax cannot succeed unless the country is prosperous, I cannot but think that the financiers in the republic to the south have taken steps in the paths of wisdom and foresight, and Canada would do well at least to consider carefully their example. Income tax rates higher than theirs, cannot but have an effect on this country, and an approximation to the rates they are paying in income taxes would probably assist in further settlement and enterprise here.
I have endeavoured to place the problem before the house in a manner that will induce examination and consideration of a war measure that is on the statute books, but is fraught with many difficulties and perplexities in actual operation. This, together with other problems, will require the best intelligence in the department charged with its enactment, and the support of citizens everywhere if its operation is to be attended by success.
Mr. C. R. McINTOSH (North Battleford):: The Budget-Mr. McIntosh

thousand sons of Canada died. Why should these men, who profited by the war to the extent of millions of dollars, not come forward even at this late date and say to the parliament of Canada, to the government, to the Minister of Finance, "We will do our best to assist in reducing the national debt; we will give you a part of our millions which we will ask you to put out at compound interest as is done in Great Britain"? Why should not our millionaires follow the example of the rich men in Great Britain and come to the assistance of the nation in this way? If they made such gifts, in fifty years the national debt of Canada would be very materially reduced.


Mr. HEAPS:: But suppose they will not
come forward, what then?


Cameron Ross McIntosh: In that case I say, cultivate them in such a way that they will want to contribute.


Agnes Campbell Macphail: I gave the countrysix thousand dollars; would the hon. gentleman do the same?


Cameron Ross McIntosh: Did I understand the
hon. member to say that she gave six thousand dollars towards the national debt?


Agnes Campbell Macphail: Call it anything you
like.


Cameron Ross McIntosh: If the hon. member did
that she deserves every commendation. That is along the line of my argument and now that a start has been made in the House of Commons I believe the time is ripe for other member millionaires to follow suit. Those who feel strongly inclined to follow the example of the hon. member should come forward and give a lead to those outside the house.


Mr. HANSON:: She has no family to keep.


Cameron Ross McIntosh: That is an individual
question. I am discussing the national debt, something much broader. Now so far as paying off the national debt is concerned, I think it might be well to consider for a moment or two the records of the two parties in this respect. Let us go back to the time of confederation and see what the Liberal and the Conservative parties have done respectively in the way of reducing the debt of this Dominion. Before the war our national debt was heavy enough; since the war it is considerably larger. In 1871 our Conserva-vative friends paid off about $500,000; in 1882, $1,734,000; in 1912, a little over $100,000; in 1913, $25,000,000. This represents a total of $27,000,000 approximately, over a period of thirty-four years, or an average

of $82,000 a year. That is not a wonderful record; it would take a long time to pay off the national debt at the rate of $82,000 a year. It is clear, then, that the Conservative party has never made any serious effort to cope with the great problem of our national debt and has done comparatively little towards its reduction. What about the record of the Liberal party in this respect?


Some hon. MEMBERS:: Oh, oh.


Cameron Ross McIntosh: I am sure hon. gentlemen will be pleased to hear the record of their opponents, because there is nothing in life, especially in public life, like political chivalry. In 1900 the Liberal party paid off over $700,000; in 1903, $10,000,000; in 1904, $739,000; in 1907 over $3,000,000; in 1924, $35,000,000; in 1925, $345,000; in 1926, $27,000,000; and in 1927, $41,000,000. In other words, the Liberal party in 27 years has paid off a total of $159,000,000, or an average of $448,350 per annum-practically half a million a year. This is a record of which the Liberal party ought to be proud; and when a Conservative member brings up in this house the question of the national debt I am pleased to stand up and show what the party in power has done in squarely meeting the situation and making a real effort year by year to wipe off the debt and reduce taxation in order that the Canadian people may have a chance to develop more fully.
The budget, as every one knows, is the annual statement presented to parliament by the Minister of Finance for the approval of this house, and in the budget we receive a statement of the estimated revenue and expenditure for the coming year, as well as the financial policy and proposals of the party in power for the ensuing year. In this respect the budget now under consideration is a very favourable reflection of the system in force in this country. It is direct and effective and possesses a continuity linking it up with those budgets preceding it. It is direct because it gives us a picture of the finances of Canada; it is effective because from it we get a clear-cut conception of business conditions from coast to coast, and in the preparation and presentation of this budget the hon. Minister of Finance has done a piece of work which will bring credit to himself and to this country.
When we were considering the speech from the throne there was no amendment brought in, but to this budget an amendment and a sub-amendment have been proposed. I would like to say that as far as the speech from the throne is concerned I am glad to note that nationally and internationally we are making

The Budget-Mr. McIntosh
progress. Canada has won a non-permanent seat on the council of the League of Nations; we are making every effort to increase our trade with other parts of the motherland as well as the other countries of the world, and during the past year we celebrated the sixtieth anniversary of our confederation. I believe it very important to have mentioned that point in the speech from the throne, because I think we should know more about our background of history and the material developments of the past, in order to be more fully alive to our duties in the years to come.
The speech from the throne emphasized the fact that we are making progress by land, by sea and by air. On land we are branching out and colonizing new areas; we are building a new railway in the north which will give our trade a new outlet through Hudson bay. Work has already begun on the construction of a new ocean port at Fort Churchill on this great inland sea. W e are also taking to the air, making every effort to assist in the development and advancement of aviation. So all in all, Mr. Speaker, while the speech from the throne did not mark the beginning or the end of things, yet the message contained therein is one of congratulation to the government and commendation for legislation already brought down or to be put into effect.
The budget seeks to tell us just what we are doing as a party for the country in a financial way. We have an estimated surplus this year of about $54,000,000; we expect to be able to pay off this fiscal year $38,000,000 of our national debt, and in addition to that we have lowered taxation by about $19,000,000. Our taxation reductions in 1926 amounted to $25,000,000; in 1927 they amounted to $27,000,000 and in 1928 the figure is $19,000,000. On the other hand, before the liberals came into power in 1921 the national debt increased greatly. The Conservatives in 1920-21, their last year in power, had a deficit of $92,000,000, but we have balanced the budget, and to-day we have progressed so well that we can announce to parliament a large reduction in the national debt and an estimated surplus which will prove to the world that as a people we are advancing and mastering our difficulties, both financial and commercial.
Then we come to the principle of the British preference, and in the budget this year we do not depart from that principle, which was laid down by the Liberal party in 1897 after 18 years of Conservative rule. In 1897 the principle of the British preference was introduced; it has been gradually amplified, and the Liberal party are still adhering 56103-514
to it. The Conservatives talked about preferences within the empire for years, but until the Liberals were returned to power no move was made to bring them into being, so it is important to know the history of the British preference in connection with the development of this Dominion. In 1868 the imports into Canada from the United Kingdom amounted to about $37,000,000; in 1897 that figure had dwindled down to only $29,000,000, and if that had gone on the trade between Canada and the United Kingdom would have almost ceased. But notice the change. The Liberal government introduced the principle of the British preference and in 1911, fifteen years later, the imports from the United Kingdom amounted to about $110,000,000. In 1919, while the Conservatives were in power, they again dropped to about $73,000,000; in 1926 they went up to about $163,000,000, while to-day they have gone up to $214,000,000, or practically triple the figure in 1919. But when we buy from a country we expect that country to buy from us, because there are two sides to every trade transaction. If we did not trade with the outside world, the outside world would not trade with us, and consequently our world trade would gradually go down as was the case in 1896, when the wheels of industry stopped and commercial development was almost at an end. At that time Canada lacked perspective and vision, and if ever a country needed political direction we needed it then. When the Liberals came into power, however, a change took place, and I have already shown what that change meant with respect to imports from the motherland.
Now let us consider the exports, which in 1868 were practically nothing. In 1897, when the British preference was introduced, they amounted to $77,000,000. In 1911, fifteen years afterwards, they had about doubled and stood at $136,000,000. That is loyalty of a practical nature. That is what counts in the consolidation or the building up of the empire. It is not a case of indulging in idle1 dreams, or of flag waving; it is getting down to actual business and doing something which will not only build up the empire but will unite this country more closely in a commercial sense with the old country and the rest of the dominions. As I say, the total in 1911 was $136,000,000. In 1922, when the Liberal government again came into power, the total was $300,000,000. In 1926 the total had grown to $500,000,000, while to-day it has reached approximately $542,000,000.
Then what about the total trade of the United Kingdom with this Dominion? In 1897 the total was only $105,000,000. It is no
The Budget-Mr. McIntosh

wonder the government of the day felt inclined to do something if Canada was to prosper and the empire was to move forward as a unit. In the course of a few years, as a result of the efforts made by the Liberal government, the total trade had doubled. In 1897 it was around $105,000,000 and by 1911 it had reached $246,000,000. In 1926 it had gone up to the $600,000,000 mark, and in 1927 to a total of $756,000,000.
With reference to the articles placed on the free list and the cuts made in the tariff I have not the time to-day to deal with these matters as fully as I should like. However, we have had a cut in the sales tax. The Liberal party, as might be expected, has the interests of the people at heart. A number of articles have been exempted and a number, including boots and shoes, have had this tax cut to 50 per cent of the general tax, or li per cent maximum. It is true that tax was originally 3 per cent. It is true that this government raised it to 6 per cent, and afterwards reduced the' amount successively to 5 per cent, to 4 per cent, and to 3 per cent. The only reason why the sales tax was increased in the first place was that we had a debt to pay. And when it was increased, pyramiding the tax was effectively stopped. Not only had that ddbt to be paid but it was necessary to balance the budget, and so the sales tax had to be raised at the source. To-day, after having balanced the budget, after having developed a large empire trade and a large export trade, after Canada has been placed on her feet commercially and is making such tremendous progress, the sale's tax has been reduced from 4 per cent to 3 per cent. I believe the policy of the government is to cut down that sales tax still further and gradually to eliminate it in the course of the next two or three years.
There are a number of members in this house who think that the income tax ought to be adhered to, and that if we can raise forty-seven or fifty millions of dollars a year from this source we ought to continue to do so. I am inclined to support that point of view but there is this fact to be borne in mind: We want to know exactly in what direction we are heading and we must adopt a policy of some sort. If that policy is not satisfactory to all it cannot be helped. We must go forward, we must drive ahead, we have got to take our stand. We must tell the people clearly and definitely just what we propose to do. Although the government is not telling us what its definite policy is on the income tax, I take it for granted that a 20 per cent reduction having been made in income tax, its desire is to continue lowering

the income tax so as to make it possible for the province's gradually to adopt direct taxation. Some people argue that the more the income tax is reduced the more likely we are to have indirect taxation through the medium of the tariff. I believe there is something in that argument. Nevertheless the government has communicated its policy to the house and to the country, and it is for hon. members to declare where they stand in the' matter of reduction of taxation.


Peter McGibbon: Is the hon. member
speaking for the government when he says the tendency of the government is to do away with income tax and leave that field of direct taxation to the provinces?


Cameron Ross McIntosh: I thought I had made
it perfectly clear that I was not necessarily speaking for the government but merely expressing my own views.
Now I should like to deal for a few minutes with the question of immigration. I was talking with one of our members on this question and he said "Do not discuss that, it is too dangerous." I have no hesitation in discussing it. I never saw anything yet that I was afraid to discuss, either in this house or out of it, when the matter was one which concerned the people of Canada and the development of a truer Canadian spirit. There is no doubt but that the immigration question is a very important one. It is a very big problem and has been with us ever since confederation. So important is the immigration question that the government has announced its intention to have the whole subject investigated by a committee. That is the right course to pursue. In my opinion we need immigration in Canada, we need millions more people. We have vacant lands to be settled, and primary industries that must be manned in order to develop the country. I believe that for immigrants we should have the best class of people, not only in Great Britain, not only in Norway and Sweden, but in other countries of northern and western Europe. First of all our object should be to bring in Britishers. We should get the very best people we can from Scotland, from Wales, from England and from Ireland. Then, we could bring immigrants from northern and western Europe. But any immigration policy adopted should receive the united support of all parties in the house. Then we might reasonably expect to attract hundreds of thousands of people to our shores as we did not so many years ago.
We often hear people speak about the "foreigners" of western Canada. I am not using that name in any disparaging sense and

The Budget-Mr. McIntosh
I believe that instead of using that name, we ought to use the words new Canadians or " newcomers." I believe there is attached to the name "foreigner" a stigma that ought to bar it from the language of Canada as a nation, or of any political party in this country. When the great Civil war was being waged in the United States from 1861 to 1865 and when we had people largely of British stock fighting for the right of dealing in slavery, for the right of man to hold property in man, what about the men who came from other lands to the shores of the United States? Those whose descendants are termed foreigners to-day and who had come to the republic to make their living on the soil, to find there homes and a new opportunity for service, were not found fighting in the armies of the south. They were found fighting in the armies of the north, and if it had not been for the aid that those men from the outside gave to Lincoln and the ideals for which he stood; if it had not been for the support they gave to the fight against slavery, that cause might have been lost. So to-day as regards these newcomers, men and women, who come to our shores from other lands, if we know how to receive them, how to weave them into our national life and how to use them in building up Canada the splendid qualities and attributes they possess, because it must be remembered they come from the great nations of the world, we shall feel that in the years to come they will be an important factor in politically consolidating this Dominion, in developing its resources, and in linking us up even more closely with the empire.
In 1921 the population of Saskatchewan amounted to 755,000, of whom 114,000 came from countries outside of the British Empire. Out of those 114,000, 80,000 were naturalized and mostly all could speak the English language. They were among our most reputable citizens and they were taking their part nobly in building up our municipal institutions, our provincial life and our national ideals. In my riding of North Battleford we have people from Germany, England, Ireland, Scotland; we have people from Poland and Russia; we have Ukrainians and Ruthenians; we have men and women from Hungary, Holland, Belgium, United States, from the uttermost parts of the earth, and many men and women who have made a pronounced success on the land will be found amongst those who have come from other lands, who have taken up land that was rough, hard to cultivate, and who still remain on the land. These people have made a huge success in developing those areas of the west, and so to-day I think, as a member of this house, I
owe it to them, after the way in which they have been slandered and held up to ridicule, to tell Canada through this house that Saskatchewan feels proud of those who came to that province from other lands; that they have done a great work; that we thoroughly trust them to work out higher ideals in our municipal government, in building up our schools, in consolidating the different elements of the province, and in making Saskatchewan play the part it ought to play in the development of this Dominion.
Only a few years ago an investigation covering the years from 1915 to 1924 was made into the question of the effect upon the national character of the presence in Canada of people of outside extraction, and it was found that, in regard to this element of our population there is no danger of losing our ideals or of the British race becoming submerged. That sort of talk is all nonsense. The truth was brought out that serious crime had increased in Quebec and Ontario by one per cent, while in Alberta it had decreased forty per cent, in Saskatchewan twenty per cent and in Manitoba fifteen per cent or a decrease directly proportionate to the relative percentage of non-British people resident in those western provinces. That is a pronouncement that should be placed before the country. We have men going about berating these people and saying that they are responsible for this and that; but when we study the facts and make a scientific investigation of the racial problem in Canada, we can only conclude that these people have done a wonderful work; that we should thoroughly trust them, and that if we trust them still more they are going to fill, as our people of British stock have filled, and as we want all our people to fill, more and more the important positions in Canadian public life.
In conclusion, following out those remarks on immigration, I should like to give to the house a few considerations that ought to concern us as Canadians: first, the adoption of the selective principle to a greater degree than heretofore, thus securing the best racial strains to be found in the world for nationbuilding in Canada; second, concentration on British and French stock wherever possible. The British and French stock, the major races, have by union, largely made the Canada we have to-day. I believe if we link up the French with their fire and courage, with the respect they have for their native land, the admiration they possess for our literature and art, as well as their adaptability, with the British who have a genius in colonization, who have a courage to face all difficulties, and who are always found standing for ideals
The Budget-Mr. Campbell

of justice and progress, the future development of Canada will be absolutely safe. At the present time the French and the British combined comprise more than eighty per cent of our population and yet, because we are trying to bring the remaining fifteen or twenty per cent of our population from abroad, we hear people saying that there is a danger of British ideals and Canadian ideals being destroyed and the British people being wiped off the face of the Dominion. That argument does not in the least appeal to me.


Milton Neil Campbell: Mr. Speaker, I regret that I cannot congratulate the last speaker, the hon. member for North Battleford (Mr. McIntosh), on the suggestion that he has given the house for the reduction of the national debt. His suggestion, as I understand it, is that wealthy persons in Canada should be asked to come forward voluntarily and from patriotic and altruistic motives pour their shekels into the national hat. This comes rather peculiarly from the supporter of a government that has just announced a substantial reduction in the income tax and that proposes eventually to eliminate it entirely. For the year ending 31st March, 1928, the Minister of Finance (Mr. Robb) estimates that income tax collections will amount to $55,300,000. I find from the Canada Year Book that in the year 1926, 1,233 people, that is, those with incomes of $20,000 per year and upwards, paid 92 per cent of the total income tax, and it is for these needy people that the Finance minister proposes, as he stated in his budget address, to continue "gradually to lighten the load in the income tax field." Shifting the burden from this infinitesimal proportion of the population would not be so bad did it not necessarily involve placing the burden on the shoulders of the great mass of the population. The minister, of course, intimates that this proposal is in the interests of those provinces that now have income tax systems of their own. I should like to examine that proposal for a moment.
I think the assertion will not be challenged that the great majority of these large incomes are found in the central provinces, in Ontario and Quebec; but, Sir, I think it will not be denied that these incomes are earned from all over Canada. They are the large salaries drawn from transportation companies, financial companies of various kinds, insurance companies, companies doing business and earning profits in the maritime provinces, in the prairie provinces, and in British Columbia, as well as in the provinces of Ontario and Quebec. The maritime provinces today in spite of some relief they have secured,

are still labouring under a sense of injustice. The prairie provinces are suffering a similar injustice-in fact their position is very much worse because they have been refused the return of their natural resources; that is a standing grievance in the prairie provinces. Now if you leave this income tax field entirely to the central provinces, a source of taxation which I believe should accrue to the whole people of Canada-if you centralize it again in the central provinces you will simply intensify and increase that dissatisfaction, and I say that a procedure of that kind may be fraught with serious consequences.
Those of us in this section of the house who object to the reduction in the income tax are frequently met with jibes and reminded that the farmers whom we principally represent pay very little income tax. It is unfortunately true that very few of those engaged in the agricultural industry owing to the small returns they receive from their work are liable under the income tax law. But it is absurd to suggest that farmers and working people do not contribute materially to the federal taxes. According to the minister's budget speech estimate, the revenue from taxation for the year ending March 31, 1928 will be $357,000,000, of which $298,600,000 will be collected through the customs department in import duties, excise and sales taxes. Now every farmer and every workingman who purchases a pair of boots or a pair of overalls or a calico dress contributes in some form or other to the federal taxes. In the United Kingdom forty-five per cent of the total revenue is derived from income and inheritance taxes. The United States receives sixty-four per cent of its total revenue from income tax while Canada receives less than fourteen per cent from this source and, the minister, whose heart aches for these needy rich, proposes now to eliminate even this fourteen per cent. And still we are calling upon the people of the United Kingdom and of the United States to come to this country as immigrants to assist us with their brain and their brawn in the development of the natural resources of this country and in building up here a great Dominion. I would suggest that the immigration literature which we distribute among these people should include these figures I have quoted, and that the people should be told frankly that they are invited to come here and share a larger proportion of the burden of taxation than their class is obliged to bear in the countries from which they come.
I submit in any case, when the minister had decided to reduce the income tax, that it

The Budget-Mr. Campbell
would have been very much fairer had he raised the exemption rather than reduced the total amount to be paid. Under the present system a person having a taxable inoome of $4,000 will receive a rebate of $2 under the reductions that go into effect this year, but a man having a taxable income of $25,000 will receive under this reduction a rebate of $253.
The Financial Post, a paper that might be assumed to represent and speak for those who have large incomes has this to say in an editorial in its issue of February 10 last:
The campaign for the abolition of the income tax may do more harm than good. This campaign is being chiefly pushed by an organization styling itself the Retail Trade Bureau of Canada, a dissentient offshoot from the larger Retail Merchants' Association of Canada. The bureau has won a good deal of publicity for itself by conducting this campaign with considerable vigour and persistency. It has won over a number of influential people and, of course, has the hearty encouragement of every one who believes that a nation can be run without taxes.
The income tax became part of our tax system during the war, and is to that extent a war measure. Some day when Canada has practically recovered from the financial aftereffects of the war it may be possible to drop the income tax entirely. But although the war is over, we are still paying for it directly in annual payments of $125,000,000 a year for interest on war debt and for pensions and indirectly in other governmental expenditures.
Then I turn to the Financial Times, another paper representing the same viewpoint, a paper that might reasonably be expected to applaud the announcement of the minister that he proposed to wipe out this tax. The Financial Times takes a very strong stand against that proposal. It says that this tax is wholly suitable to Canada because it is capable of being graduated in accordance with the tax-paying power of the payer, and then it goes on in a lengthy article to attack very strongly the policy of the minister in leaving this field to the provinces.
The present Minister of Immigration, the hon. member for Brandon (Mr. Forke), speaking in the city of Winnipeg on September 17, 1925, had the following to say, according to the Manitoba Free Press:
The retention of the income tax without reduction, until the proposed fiscal reforms have been established and the revenue requirements have been reduced to the lowest figure possible, is imperative.
Again, I find a despatch in the Regina Leader from Fenton, Manitoba, dated October 2, 1925, which says:
Mr. Robb, the Minister of Finance, has announced that if the government is returned, he will reduce the income tax. "I am not in
favour of it," said Robert Forke, Progressive leader here Thursday night. "It is the simplest tax and is paid by those who can afford it. It is much fairer than a customs tax."
I wonder if the minister's voice was heard in loud and angry protest in the cabinet council when these proposals were being considered. It would be rather interesting to know, because I have so much respect for the minister that I can hardly think he has allowed his viewpoint to become changed by -shall I say?-the sweets of office. I hate to think that he has changed his opinion. I would rather think that he protested, and protested vigorously, to his colleagues against this reduction.
But I have someone else to quote, someone who had very much more influence within the cabinet than the Minister of Immigration, and that is the Prime Minister himself. Speaking at Yorkton, Saskatchewan, on November 8, 1920, he is quoted as saying:
There is no doubt where the Liberal party stands on the tariff.
I quite agree with that statement; there is no doubt about it to-day. But let me quote the Prime Minister further:
Taxes have to be raised, but it is not necessary to do it all by direct taxation. I would tax incomes, business profits and luxuries.
Then listen to this gem:
All could be raised in that way.
Here you have the Prime Minister, the leader of the government, when he was appealing to the people of western Canada for support, assuring them that if he got into power he would tax incomes, business profits and luxuries, and that all the revenue could be raised in that way. But when we come to examine the figures we find that this government is collecting a very much smaller proportion of its revenue from the income tax than the late Conservative government did. I will quote a few figures to prove my statement. I am taking the year 1921-22 as the last year of the Conservative administration, for although the Liberal party were in power during the last half of that fiscal year, yet the taxation policy was that set by the Conservative budget. The tax collections for that year were as follows:
Income tax and business profits tax
Excise and sales tax	
Customs duties

Total	$317,411,000
The important thing to remember is that in that year only 33 per cent of the total revenue from taxation was collected through
The Budget-Mr. Campbell

the customs tariff. Then we come to the year 1927-28. This is the minister's estimate: Income tax and business profits tax $ 55,940,000 Excise and sales tax, under the
war tax legislation	 88,000,000
Ordinary excise	 57,000,000
Miscellaneous taxes	 2,500,000
Customs duties	 153,600,000
Those items represent a total of approximately 1357,000.000. We have heard a good deal about reduction of taxation. The Minister of Finance himself made a great ado about it in his budget speech, and the hon. member for North Battleford, who preceded me, boasted of the achievements of his party in that regard. Yet, Sir, we find that this year the government expects to collect $40,000,000 more by taxation than did the late Conservative administration in the last year it was in power. But more important still is the1 fact that while in the year 1921-22 only 33 per cent of the total revenue from taxation was collected through the customs tariff, this year it will be 43 per cent. In 1921-22, 32 per cent of the total taxes were derived from income tax and business profits tax, and only 33 per cent from the customs tariff; whereas this year, 1927-28, only 14 per cent of our total revenue from taxation will be derived from income tax and business profits tax, as against 43 per cent from the customs tariff. Of course, under the policy laid down by the Minister of Finance this difference will increase year by year.
Next, Mr. Speaker, I come to the question of tariff reductions. The more I examine the budget the more I realize that the tariff is not reduced at all; it is actually raised. Of course, I am speaking from the standpoint of the consumer. I appreciate the fact that considerable reductions have been made on machinery and raw material used by the manufacturers, and in fact the great bulk of the reductions are really in their interest. I am not complaining of that; on the contrary I am delighted, because I am interested in seeing them just as prosperous as other classes of the community; but speaking from the standpoint of the consumer I must confess that I am unable to discover these reductions. The Minister of Finance in his speech states that he proposes to do something to foster interimperial trade. Well, Sir, I submit that the policy which he has laid down is directly designed to impede that trade. The changes with respect to the British preference will have the effect of raising the protection to the Canadian manufacturer, preventing the importation of goods under the British preference, and of course ultimately raising the cost to the consumer. The minister states:

At present Canada requires 25 per cent to be empire labour and materials. It is proposed to double this percentage.
Now, Sir, let us analyze the effect of this on the cotton industry, for instance. Of course, I appreciate the fact that where practically nothing enters under the intermediate tariff there are substantial reductions. As the hon. member for Winnipeg North Centre (Mr. Woodsworth) pointed out, there is a reduction of the duty on candle wick. Had that reduction been made fifty years ago it might have been of some relief to the consumer. But let me proceed to discuss the effect of the budget on the cotton industry. Ninety per cent of the short staple cotton used in British mills is purchased outside the empire, 30 per cent of the total American exports of cotton going to the United Kingdom. Not more than 15 to 20 per cent of the cost of the finished product of the British cotton mills is labour. Of course other materials enter into the finished goods besides -cotton, and Great Britain has to import some of those materials. So it will be seen how difficult, how impossible in fact, it is for the British cotton manufacturers to secure the advantages of the British preference. In any case, may I point this out, when cotton prices are high on the market, the relative value of the cotton in the finished product will be increased; and the minister, in effect, says to the Canadian consumer: When -cotton prices are high I propose to increase the duty on cotton manufactured goods, and when cotton prices are low there is a possible chance of these goods coming in under the British preference. In ten years the average value -of the raw cotton used in British mills was 46 per cent of the finished value of the goods. In one year it was about 58 per cent. It is quite obvious, then, that under this new proposal the advantage of the British preference will largely be lost to the British cotton manufacturers.
Now, Sir, the Minister -of Finance and his colleagues have made a great ado about the tariff board. Last year the excuse was made that tariff reductions were withheld until reports were received from the board. I have come to the conclusion that the tariff board is simply a shock absorber for the government- something to put the blame on, something to pass the buck to. That is about all it amounts to, because I find that this change in the British preference never went before the tariff board at all. Some of these interests apparently were allowed to come in by the back door, as the hon. member for Winnipeg North Centre suggested the other day; but when a delegation representing the United

The Budget-Mr. Campbell
Farmers of Saskatchewan came down here and laid their claims before this parliament, they were told that the proper place for them to go to was the tariff 'board, and) no relief was given them. In a recent issue of the Financial Times it is stated:
Some relief has been given the Canadian linen industry under the new Robb budget.
I presume this refers to section 532 of the present tariff. It covers cotton yarns, No. 40 and finer, which I believe are largely used in the manufacture of linen. These were all free under the old tariff, but under 522b and 522d of the amended tariff they will be dutiable to the extent of from 7i to 15 per cent. I understand that none of these yarns are imported; that the Canadian mills spin all their own yarns. So this just means an increase in the duty, and as the Financial Times assumes, "some relief has been given the Canadian linen industry."
From the minister's budget speech I take it that in 1927 we exported to the United Kingdom goods to the value of $448,000,000, and bought in return only $164,000,000. leaving a balance in our favour of approximately $300,000,000. As Great Britain, Mr. Speaker, provides almost the only market for our grain and for many other farm products as well as some manufactured commodities, I submit that the principle laid down in this budget may have disastrous consequences for us, because there is nothing to prevent Great Britain buying her grain and many of these other products from other exporting countries that are prepared to buy dollar for dollar from her. Whatever tariff we may impose against the United States, I submit that it is a most serious thing, at this time when the balance of trade is in our favour, to place any impediment against British exports to Canada.
Enough has been said about the Liberal platform of 1919, and I do not propose to quote from that historic document. But it is my complaint that hon. gentlemen opposite from Saskatchewan and Manitoba, and the government as a whole, secured the support which they received in the prairie provinces, particularly in Manitoba and Saskatchewan, by appealing to the people on this very platform of 1919 which they now ignore, by telling the electors that if they would only send men who would attend the Liberal caucus and sit in council with the Liberals the western point of view, as the Prime Minister said, would prevail. A stirring appeal was made to the electors in those provinces to abandon their Progressive ogranizations and to line up with the Liberals in order, as they declared, to get the low tariff forces together. That w^as
the common slogan in the election. I wonder what it means to those gentlemen to-day. This appeal had its effect in securing the return of the block of Liberal members whom we find in the house to-day from the province of Saskatchewan, and as 'well in the absorption, in whole or in part, of the Manitoba Progressives, who also sit opposite. The whole argument, from the Prime Minister down, both in Manitoba and in Saskatchewan, was that if the electors would only send supporters to attend the Liberal caucus, men who would sit in council with the Liberals and take their share of responsibility, they would secure the fulfilment of the promises made in the platform of 1919.


Some hon. MEMBERS:: Hear, hear.


Milton Neil Campbell: Hon. gentlemen opposite are more optimistic about the future than I am; I am glad that at least they can indulge in some applause to keep their spirits up. I wonder what the hon. member for Battleford really thinks; it would be interesting to know what is really in his mind. And what does the hon. member for Weybum (Mr. Young) think?


Mr. YALLANCE:: Which Battleford is the hon. member referring to-North or South Battleford?


Milton Neil Campbell: I am referring to the member for South Battleford; not the member for North Battleford.


John Vallance: There are two Battle-fords.


Milton Neil Campbell: The Prime Minister, at Yorkton, on November 8, 1920, said:
All agricultural implements should be placed absolutely on the free list.
I wonder what was his real view when he uttered those words.


Mr. McLEAN (Melfort):: Will the hon. member tell us what he is quoting from?


Milton Neil Campbell: From a good Liberal paper which consistently supports this government to-day-the Yorkton Enterprise.


Malcolm McLean: It was a good Tory paper in 1920.


Milton Neil Campbell: It is a good Liberal paper to-day. When the United Farmers of Saskatchewan, through a delegation here, asked this government to implement these very promises, their request was studiously and coldly ignored. A despatch in the Leader, Moose Jaw, September 30, 1925, refers to a meeting attended by the Prime Minister and some other gentlemen in that town. I quote:
The Budget-Mr. Campbell

The Premier also made a plea for the merging of the forces of the low tariff in the west to fight the common enemy of high protection led by Right Hon. Arthur Meighen.
On the same platform the present member for Moose Jaw (Mr. Ross) said:
The Conservative party says, "We will tax you more by our tariff proposals." Proudly the high protection flag is being flown by Mr. Meighen and his party. "We will tax you more," they say, "so that the rich men of the east may have better limousines and more sumptuous living."
On the same platform the then Premier of Saskatchewan the present Minister of Railways (Mr. Dunning), made this statement:
"No one will question one fundamental in so far as the tariff is concerned", said Mr. Dunning, "and of all the individual taxes which our people bear, this one of the tariff is the highest and one which brings no advantage to the people of the province."
Yet, only a short time earlier, the same lion, gentleman speaking in Ontario, made haste to reassure the people that he was not a free trader. At Pembroke, Ontario, on August 10, 1925. of the same year, he said:
I have been described as a free trader. I am not a free trader.
At the same meeting at Moose Jaw the Prime Minister, at the time he was making his appeal to the Progressives to drop their own candidates and organization and merge with the Liberals in order to defeat the common enemy, uttered these words:
The east asks your representatives to join with them. We ask you to send to our councils men who will work with us in shaping our policies,-
I wonder to what extent hon. gentlemen opposite from Manitoba and Saskatchewan joined with the government in shaping this budget. They are a sadder and a wiser lot to-day, but I am not blaming them; most of them were quite honest. They thought they could revolutionize this party when they came down here in a little bloc, but today they must admit it is beyond hope. But let me conclude the quotation:
-because we want the western point of view to prevail with regard to all the questions that apply to our Dominion.
Now I say, in view of all these promises, in view of the appeal that was made to the people of Manitoba and Saskatchewan, this government holds office to-day by fraud and deception.


Mr. BELL (Hamilton):: And always has.


Some hon. MEMBERS:: Order.


Milton Neil Campbell: I have here some figures taken from Trade of Canada-


Mr. CASGRAIN:: I understood the hon.
gentleman to say that the government conducting the affairs of this country holds office by fraud and deceit. This language is not parliamentary and should be withdrawn.


Milton Neil Campbell: I hope I shall be given extra time for these interruptions.


Hewitt Bostock: I hope the hon. member will withdraw the expression; it is not parliamentary.


James Alexander Robb: May I say on behalf of the government that nothing which the hon. gentleman can say will hurt them.


Milton Neil Campbell: In deference to your
ruling, Mr. Speaker, I withdraw the expression.


Joseph Philippe Baby Casgrain: I a^k that the hon. member withdraw it.


Milton Neil Campbell: I have withdrawn the remark, but that does not alter the facts.


Some hon. MEMBERS:: Order.


Joseph Philippe Baby Casgrain: The hon. gentleman ha3 not withdrawn it.


Hewitt Bostock: The withdrawal must be absolute.


Milton Neil Campbell: I have withdrawn the statement, but I cannot change the figures. Now I wish, to quote figures taken from the Trade of Canada-


Joseph Philippe Baby Casgrain: I understood it to be your ruling, Mr. Speaker, that the words should be wholly withdrawn.


Hewitt Bostock: The hon. member withdrew the statement but he added a qualifying remark which I must ask him to retract.


Milton Neil Campbell: I do not think there is any mistake about the remark having been withdrawn, Mr. Speaker; I withdraw it. Now, there are certain figures which I wish to quote up to the year ending March 31, 1926. I am taking the last five years of the Conservative administration and comparing it with the first five years of the present government's administration. For the five years from 1917 to 1921 inclusive the average rate of duty on dutiable imports was 21.9, while for the five years from 1922 to 1926 inclusive, under this administration, the average rate of duty collected on dutiable imports was 24.06, op a difference under the late Conservative administration of 2.16 lower. We hear a great deal about the high tariff and the low tariff parties in this country, and for some time after coming to this house I wondered which of the two old parties was the high and which was

The Budget-Mr. Campbell
the low tariff party. To-day I no longer wonder; I am quite convinced from these figures that as between the two old parties the low tariff party sits to our right while the high tariff party occupies the benches opposite', including in their ranks the hon. members from Saskatchewan and Manitoba.
In his zeal and in his enthusiasm to represent the people who elected him, the hon. member for Weyburn (Mr. Young) placed a resolution on the order paper at the beginning of this session asking that section 43 of the Customs Act be eliminated. That resolution was called twice, but the hon. member failed to respond. I am not blaming him particularly ; when he filed that resolution I believe he did so honestly, and with the firm conviction that he was representing the viewpoint of the people who sent him here and in order to carry out his pre-election promises. But I wonder what happened after he reached Ottawa? It would be interesting to know what happened in those Liberal councils to which the Prime Minister asked us to send representatives.
Then again, we have the hon. member for Willow Bunch (Mr. Donnelly). In his zeal to represent the people who sent him here he brought down a resolution asking that mixing at the terminal elevators be eliminated in connection with grades 1, 2 and 3 of wheat. I know that is a burning question in his constituency, but the hon. member was a little more frank than my friend from Weyburn. He did not wait for the Speaker to call the resolution; he withdrew it from the order paper, and I wonder just what happened in the party councils to bring about this result.


Mr. DONNELLY:: Would my hon. friend
like to know? I was advised by the Saskatchewan pool not to proceed.


Milton Neil Campbell: That is no answer at all. If my hon. friend's constituents wanted that action taken he should have had the house divide on the question. The hon. member for Brandon, the present Minister of Immigration, speaking in Winnipeg on September 17, 1925, is reported by the Manitoba Free Press to have said:
The absorption of the Progressives by the Liberal party, whether in or out of office and under whatever guise effected, would postpone for a generation the attainment of necessary reforms.
I am not going to criticize the minister, because I believe he said that from the depths of his heart; I believe that was his honest conviction, and if he would admit it I think it is still his firm opinion. However, we have all seen what has happened; a part of our representation from Saskatchewan and Manitoba has been absorbed, and you see the effect in this budget. When appealing to the Progressives to give up their organization and join with the Liberals, the Prime Minister is quoted as saying at Moose Jaw, during the campaign of 1925, the following:
Mr. Crerar and Mr. Hoey did not present themselves in this election. Mr. Forke is like the ordinary Scotchman; he is going to hang on to anything he has until the end.
I am sorry the Prime Minister was not such a good prophet as the Minister of Immigration, because the minister did not hang on veTy
long-	.	,
I listened with interest and attention to the speech of the hon. member for Provencher (Mr. Beaubien) a few evenings ago. We miss his smiling face, his ready wit and genial companionship on this side of the house. For a long time I looked forward to the day when he, like the prodigal son, would return to us, but his speech indicated that there is no hope of that now. He at least is one of those who have been absorbed, and for whom there is no hope. The hon. member objected to the reduction in the income tax, and I think he pleaded with the minister not to increase the duty on lace, or something like that. Knowing what a ladies' man the hon. member is I can understand his concern, but he wound up by saying that he was going to vote with the government anyway. In effect and in substance he said to the government, "I do not like your budget, but I am going to vote for it anyway." What is the effect of that? I say my hon. friends from Manitoba must bear the full responsibility for the fact that such a budget is now before the house.
Let us go back over our history from 1922. The first really good budget, from our standpoint was in 1924, and that was due to the fact that the government lost some byelections and were in a weakened position. At that time the pressure from this comer of the house forced them to live up to their own policy and carry out, in a measure at least, their own pledges. Then almost the same thing happened in 1926, and here is the irony of the situation; on the strength of those two budgets this government is in power to-day. As a matter of fact we saved the government in spite of itself; and I wonder who is going to save the government the next time? I understand and appreciate the difficulties which my hon. friends from Manitoba have had to face, but I put it up to them squarely where their duty lies to-day. Should they not take an independent position and stand over here, serving notice on the government that unless
The Budget-Mr. Ernst

they cany out their own policy and fulfil their own pledges they will not be entitled to support? Had that been done, what would have been the result? We never should have had a budget such as this:	so my hon.
friends must bear the full responsibility for the nature of this present budget.


William Gordon Ernst: Mr. Speaker, I listened to the first part of the speech of the hon. member for Mackenzie (Mr. Campbell) with some approval, but when he reached the latter part of his remarks I knew he was voicing the extreme views of the west. It will be my purpose, Sir, to voice not the extreme views of the east but the views of the extreme east, and to discuss them not in an abstract manner in relation to the tariff in general, but in so far as budget changes affect the industries and the natural resources of that portion of Canada from whence I come.


Milton Neil Campbell: I might say that I was voicing the views expressed by the government in the west.


William Gordon Ernst: Then the government expressed an extreme view in the west.
It seems to me that the internal management of the country and the internal functions of a government in relation to the country to-day divide themselves largely into three groups. First of course there is the maintenance of law and order; then comes the conduct of the various departments of government and the collection of revenue, and lastly what you might class under the general heading of conducting the government for the benefit of the people, particularly bearing in mind under that heading the development of trade and our natural resources. In a country such as Canada, a young country blessed abundantly by nature, it would appear that this latter in itself is a gigantic task, and one of the most formidable which would be undertaken by any government. It is idle for the Minister of linance to come before parliament and boast that this is a year of prosperity, seeking to Prove, it by quoting trade figures for this year in comparison with the figures for 1920 or any other year; many factors affect trade conditions, which in turn affect our revenue. Providence is one factor; world economic conditions are another, and lastly and possibly the least important of all, we have the policies of the government. Before these figures assume any particular importance it behooves the Minister of Finance or anyone talking glibly about the prosperity which this government has achieved for the country to show just how the government brought about

the prosperity referred to. What particular items in its policy does it indicate as working for the general prosperity of Canada during the past seven years? Look the policy over item by item; consider the tariff changes. In so far as the whole tariff schedule is concerned the changes are trifling and insignificant. Surely it cannot be said that this government, by its tariff changes has so lowered the cost of living or the cost to the primary producer that it has increased the prosperity of the country. Take the trifling changes in the rate of taxation. Can anyone point to an instance where those changes have enabled one individual to stay in this country or one industry to remain in operation? Consider the immigration policy. Surely the government does not point to that as one of the factors contributing to the prosperity of this country, because looking at it for the last seven years we find that it has been the most ghastly failure in the history of that department. While we are bringing settlers in by the thousands, our own people in greater numbers are leaving the country. Then to what policy of the government shall be ascribed this prosperity? Is it because of economy? Surely not, because each year we find our expenditures increasing. What is left? To what features of its policy do hon. gentlemen opposite point in order to prove that the prosperity is the work of this government?
There is a better test, a really accurate way of measuring these things, and it is this: Are we developing the natural resources of this country to the maximum compatible with world economic conditions and with the preservation of these resources over a period of years? Are we developing in Canada a prosperity which will prevail in each of the provinces and will be effective from coast to coast? That is the true test to be applied in determining whether or not Canada is prosperous, and any government which cannot answer that question in the affirmative must be regarded as derelict in its duty to the people.
Much has been said during the last year about national prosperity and about national unity. We have witnessed also a great deal of pageantry. Pageantry is all very well, and I for one do not deplore it, but it seems to me that the only sure foundation for national unity in this country is to have such policies for the development of the resources of each province as will make the people of that province prosperous and contented and imbue them with an abiding faith in the destinies of Canada. Unless we make the people of each province prosperous and contented they

The Budget-Mr. Ernst
will not have that faith in the future of the country which they should have and they will not have a true belief in national unity. It is from this aspect that I want to consider the budget in relation to the industries of the province of Nova Scotia.
I am going to ask hon. gentlemen opposite if they can see in this budget, in so far as the primary and secondary industries of the province of Nova Scotia are concerned, anything calculated to develop those industries one little bit? I will consider the industries one by one. I will point out the tariff proposals, and then see what the effect will be, if any. There is a lowering of the sales tax to the extent of 1 per cent. I believe it is the view of the people of Nova Scotia as it is the view of the western members-I am sure it is the feeling of my own people-that the sales tax ought to have been abolished entirely because it weighs on everybody, high and low, rich and poor, whereas the income tax affects the wealthy alone.
What is there in this budget to help the coal and the steel industry in the province of Nova Scotia? The Postmaster General (Mr. Veniot), when he spoke at St. John some months ago, said that what the government was going to do for the steel and coal industries would make the people of Nova Scotia proud. What has the government done? What is the government going to do? We have in our province practically an unlimited supply of coal. We have in the adjacent Dominion of Newfoundland iron ore which can be brought to us in but a short journey over the water. We have all the potentialities of a great industry except the market. We need a national fuel policy, and we need protection for our steel industry. I wonder what there is in this budget which is going to help that industry to get on its feet again after its long struggle? If the Postmaster General can take any pride in this budget in that respect he must take pride in something in which he is usually wanting and that is silence.
Let us take our diversified manufacturing industries. We have a number of small manufacturing industries scattered over the entire province. What is there in this budget, or in the tariff schedule filed by the Minister of Finance, which is calculated to help even one of them? Take for example the woollen industry. In this budget the schedules with regard to it are rearranged. The woollen industry was dealt a severe blow when the British preference was introduced, a blow from which it has not recovered to-day. The only effect of the present budget is to threaten the spinning end of the woollen industry with
extinction, and to leave the weaving end exactly where it was before the budget was introduced. With all due deference to the British preference I submit that what we need in this country is a policy of Canada for the Canadians. Let us place Canada first. Let us develop our own country for our own people and then, and only then, if we can do so compatibly with the interests of our own people, let us grant concessions to the mother country and to the other dominions. But always let us first consider our own people, let us develop Canadian industries in the interest of Canadians.
I pass on to the agricultural industry. The agricultural industry in eastern Canada differs largely from that in other parts of the Dominion to this extent: We have small farms devoted to mixed farming and which, excepting perhaps in the case of the apple industry, look largely to the home market for the sale of their products. Is there anything in this budget calculated to develop that home market, calculated to increase the growth of the urban centres where we market our products, or calculated to make new centres spring up where' none exist to-day? Take the effect of the Australian treaty. The Minister of Finance (Mr. Robb) and the Minister of National Defence (Mr. Ralston) must be aware that the farmers of Nova Scotia are protesting against the effect of that treaty and against the importation of Australian and New Zealand butter to compete with their own product. Is there anything in this budget calculated to remedy that injustice, or to increase the market for our dairy farmers so that they may sell what they produce at a profit?
Take the pulpwood industry as to which we are differently situated from other provinces of Canada. Ours is a small province almost entirely girt by the sea, and our forests are easily accessible from the ocean. With what result? We have witnessed the spectacle of thousands of cords of our pulpwood going to the United States in 4-feet lengths there to be manufactured into pulp and paper. Last year 170.000 cords were exported from the province of Nova Scotia. From the constituency which I represent 40,000 cords went out on the Lahave river in 4-feet lengths. In three years more that river will be denuded of its forests and nothing will be left except the water with which to turn the wheels of an industry that can nevermore arise. You may say that is a matter of provincial concern. It is not a matter of provincial concern because the lands from which this wood is exported are largely owned by private investors, by private capital, and the pro-
The Budget-Mr. Ernst

vincial government is practically powerless to stop exportation. It is a matter for this government to take up and it will have to deal with it quickly if our forests are to be saved for posterity.
I pass on to the fishing industry. What is there is in this budget likely to be of any great assistance or benefit to the fishermen of the province of Nova Scotia? I realize, Sir, that a royal commission was appointed to investigate the fisheries of that province. May I remind the house and hon. gentle-ment opposite why that commission was appointed? It was appointed because open discontent was manifested and open hardship had occurred in the' eastern part of Nova Scotia, in the town of Canso, in the constituency of the hon. member for Antigonish-Guysborough (Mr. Duff). So acute was the situation that this government deemed it advisable to appoint a commission without the authorization of parliament for expenditure involved. I agree that the need was urgent, but political expediency dictated the sittings which that commission was to hold. It held sittings not only in practically every fishing village and hamlet of importance in the province of Nova Scotia, but also in New Brunswick and extended into Quebec, which was not originally contemplated. The reports of the government's own officials, including Mr. Ward Fisher, superintendent of the eastern division, for several years had drawn its attention to the conditions which existed, but it was not until open discontent was displayed and actual hardship was experienced that the royal commission was appointed. Be that as it may, the fishermen of Nova Scotia knew the need to be urgent, and action by the government was expected early this session. What has happened? As the result of the itinerary being mapped out by politicians and not by the commission itself the report is only now in course of preparation. It may be received in time for consideration by parliament during the present session. As to that I do not know, but I do know this: Had that report been available, and had the commissioners given full effect to the evidence submitted to them there would have been some proposals before parliament worthy of the consideration of the Finance minister and calling for notice in the budget. As a result of the delay which has occurred the proposals of the commission, whatever they may be, will have to wait at least one year more for fulfilment. As to the fishing industry I am reminded to some extent of the words of the Postmaster General, who I regret is not in his seat, when he spoke in this house on the 8th of February. He sought to leave with the house and the 
country the impression that Conservatives from the maritime provinces were disgruntled and had no real grievance, and he allied himself with the Minister of Finance and the Prime Minister who talked glibly of prosperity in this country. I wish he would come down with me to the shores of Nova Scotia and see conditions as they there exist. We have there a great fishing industry with resources practically inexhaustible and we have a people who are adapted to that industry; yet I can take him to villages where the average earnings last year per man were less than $200, and those men are heads of families. Those are not isolated villages. I can take him to whole stretches of the coast line where the average earnings per man were less than $300 per annum, I can point out to him reports of this government that since 1914 ten thousand men have been lost to this industry. I can show him whole villages where house after house has the windows boarded up and the occupants have gone to the United States, to Gloucester and Boston. Yet the hon. member, along with other members of the government, talks glibly of prosperity. For one thing I thank God, and that is that I cannot talk glibly of prosperity while my people are enduring hardships. The industry is one which ds crying for bread, one which requires governmental direction and policy, if any industry ever did so.


Richard Burpee Hanson: The government gave them a royal commission.


William Gordon Ernst: That is not an end; it is only a means to an end. What has the industry got in this budget? Let us examine the proposals one by one. Of the items which are reclassified in the schedule filed by the Minister of Finance, there are six which directly affect the fishing industry. The first item is oakum, which enters into the caulking of boats and of ships. This was duty free before and it is free now. The second item is sails for boats and vessels and the duty on those is absolutely unchanged. The third item is sail twine and in this there is a reclassification. The duty under the British preference is lowered by some five per cent, and the duty under the general tariff is raised by some five per cent. The fourth item is oil clothing, in which I believe there is a general reduction of five per cent under the British preference and the intermediate tariff. A peculiar feature about that is that the larger portion of the oilclothing used by fishermen in Nova Scotia at least, is manufactured in that province, and if there is any cut in price, it will affect an industry which that province is struggling to maintain. The fifth item is aluminum

The Budget-Mr. Ernst
floats. I will confess that when I read that the duty on aluminum floats was to be removed, I thought, as the cut was substantial, the fishermen were going to derive a real benefit. I had spent most of my life along the shore and I had never seen an aluminum float, but I thought someone else might have and so I sent a telegram to the president of the fishermen's association at Canso in the county of Guysborough, Nova Scotia. That gentleman has spent his life on the sea; he has fished both in this country and out of Gloucester, and this is the telegram which I received from him:
Aluminum floats not used in this part of the province. Never heard tell of them, never saw them.
Possibly the government is in advance of the times and is endeavouring to introduce them, but it will certainly be a change if it is.
The last item under the tariff affecting fishermen relates to gasoline engines and engine parts for fishing boats. The reduction is five per cent under the British preference, twelve and one-half per cent under the intermediate tariff and twelve and one-half per cent under the general tariff. That again looked like a substantial reduction, but I draw the attention of the house to the fact that the reduction is not on engines but only on the complete parts of engineSi Engines were formerly admitted at the same rate at which these parts are now being classified, so that the net result is that this change can benefit only those who have engines made outside of this country and who require complete parts for them. It is a matter of ordinary deduction that if this is going to be of any great benefit to the industry, there must be a substantial number of these engines. I took the trouble to look into the figures and I found that there are in Nova Scotia about 6,200 gasoline engines in use in fishing boats. I found further, upon investigation from a reliable authority, that less than fifteen per cent of those engines had been manufactured outside of Canada, Therefore any benefit that would accrue would be to less than nine hundred people who own the nine hundred engines constituting less than fifteen per cent. I was amazed to find that practically all those nine hundred engines had been manufactured by a United States company which has ceased to do business in that particular type of engine, and carrying my investigations one step further I found that gasoline engines manufactured in Nova Scotia sell to-day for less than those manufactured in the United States. That is another of the benefits handed to the fishermen of the maritime provinces.


Mr. RALSTON:: Has the hon. gentleman not had strong representations from the fishermen of Nova Scotia asking that engine parts be put in the same category as engines with regard to duty?	.


William Gordon Ernst: I was an attendant upon the royal commission for probably three-quarters of their sittings in Nova Scotia. The other quarter I was not present. As I recollect, only one individual, Mr. Daniel Fleet at Louisburg, asked for any reduction. Others may have done so, but I have no knowledge of them.
I am not complaining about the reduction; what I am pointing out is that to an industry which is crying out for bread, this government is giving nothing but a stone. This industry requires assistance and this is only a gesture, a mere nothing. The fishing industry in Nova Scotia is in a difficult state. In a year of reclassification it was looking to the Minister of Finance to make some changes in the tariff, and one of the changes for which it was looking was a reclassification of the tariff item relating to the present duty on fish. There is to-day a duty of one-half cent per pound on fish imported into this country, or on fish landed, other than those caught by fishermen in Canadian fishing vessels. To put this in another way, the man who fishes in Canadian fishing vessels lands his fish in this country duty free; all others are expected to pay a duty of one-half cent per pound. The fleet in Nova Scotia consists of eleven trawlers manned by about 250 men and of about 15,000 odd fishermen who fish by hook and line. Of the eleven trawlers, five are or purport to be owned in Nova Scotia and six are owned outside of this country. Those six trawlers may not always be the same six because they come and go. They return to the country whence they came and others come here, but not one trawler coming from outside of this country has ever paid a fraction of a cent of duty on any fish landed by her in Nova Scotia. I was amazed to find this out, and when I wrote to the department asking why such was the case, I was informed that these fish were being landed duty free because the Department of Justice had given a ruling that a ship coming from abroad and chartered to a Canadian company was a Canadian fishing vessel. I know that in its application this is applied largely to trawlers coming from Great Britain and flying the British flag, but I should like to point out to hon. members that the provision in the customs tariff is that only fishermen who fish in Canadian fishing vessels can land their fish in Canada duty free. In other words, the word "Canadian" has a distinctive meaning; it means Canadian and nothing else;
The Budget-Mr. Ernst

it does not mean British. To carry it to its logical conclusion,, let us say that a Norwegian fishing boat comes over here and is chartered to a fishing firm in this country. Under the ruling of the Department of Justice she would be equally entitled to land her fish duty free. Now how can she be a Canadian fishing vessel when under the Merchant Shipping Act and in accordance with international law she is still a Norwegian boat? But even assuming that the Justice department were right when they ruled her to be a Canadian fishing boat, there is another consideration.
The officials of the Department of Marine and Fisheries know, or they ought to have known, that those boats are not chartered at all. What is done is this, that the corporation -there were three, and two have latterly been concerned in the province of Nova Scotia- does not enter into a charter in the ordinary sense of the word, but it enters into an agreement to purchase the fish which that trawler may land at a certain pre-determined price. For instance, during the month of October they may agree to pay two cents a pound for the fish landed at a certain port. The trawler goes where she will, she comes and goes as she will, she is complete mistress of her own destiny, except that she knows when she lands her fish she is going to get a certain price for them. So there is no charter in the sense in which the word charter is understood legally. There is subterfuge and evasion. All the fish landed by these trawlers should have been subject to duty. They have been taking bread out of the mouths of Nova Scotia fishermen for years to the knowledge-at all events the department ought to have had that knowledge-of the Department of Marine and Fisheries and the Department of Customs.


Charles A. Stewart: Are these
chartered Canadian companies in Nova Scotia, that is, the companies that purchase the fish?


William Gordon Ernst: I believe that two hold
Nova Scotia charters, and as to the third, I do not know whether it has a Dominion or a Nova Scotia charter. But I do know this, that in their relationship with these trawlers there is no charter party in the sense in which a charter is understood. Those trawlers are controlled entirely by the foreign agent who resides in Nova Scotia and pays the men. They have no connection with the company whatsoever. Sometimes it is true the English company, or the company which sends the trawler to this country, sets up a man of straw, a Canadian, to whom they charter the vessel, and the Canadian then enters into an agreement with the fish com-

pany, but that is all done for the purpose of evasion of the Customs Act, and amounts in substance to defrauding the people of Nova Scotia, particularly the fishermen, of the living which is coming to them. These six trawlers catch the equivalent of what roughly twenty-five hundred fishermen would do, so practically twenty-five hundred fishermen have been deprived of their living year in and year out through the illegal action of these trawlers which have been landing their fish duty free.
I wish to say to the Minister of Finance that the first thing which the fishermen of the province of Nova Scotia are interested in is this: They are interested in having that abuse righted.	This was a year of tariff
reclassification, and they may very properly have expected the Minister of Finance in his broad reclassification to include this item 9 under the customs tariff, so as to compel these trawlers which come here for a season and then go to pay the duty which they ought to pay when they land their fish in Nova Scotia.


James Layton Ralston: Do I understand my hon. friend suggests there are some companies which have merely a nominal charter or an arrangement which is not a charter? Will he kindly give the names of those companies?


William Gordon Ernst: I shall not divulge the names of those companies on the floor, but I will say to the hon. member that if he will look up the evidence of Mr. Wilson given at the hearing of the fisheries commission held in Halifax he will find there evidence which will substantiate everything I am saying:


James Layton Ralston: That is S. Y. Wilson?


William Gordon Ernst: Yes; the hon. gentleman
knows to whom I refer. I say further to the Minister of Finance that there will be disappointment over the whole coast line of Nova Scotia that the government apparently has not had the courage to grapple with this problem. The inference will be drawn, rightly or wrongly, that it has not had the courage because the officials of these companies support this government. That may be a wrong inference; I hope it is, but I do hope for the sake of the fishermen of Nova Scotia that some redress will be given during the present session.
I fear that it is going to be too late to have an adequate discussion of the report of the fisheries commission when it is tabled, but I do urge upon the government that immediate action is necessary. We are going to lose large numbers of our men to the United States during the coming summer unless something is done. Something must be done,

The Budget-Mr. Ernst
and must be done during the present session. I do not intend any remarks or any suggestions that I now make to be exhaustive. The subject is too large for any one man to cover adequately. I do want, however, to make a few suggestions to the government in connection with the fishing industry of the province of Nova Scotia, and I make them now because I believe that a full discussion of the fisheries' commission report will not be possible during the session.
In the first place, scientific research needs to be intensified. We have, it is true, a biological station at Halifax. While it has achieved valuable results, it is only scratching at the surface of a great problem. The research needs to be intensified, and the fruits of that research need to be brought home in a practical manner to the fishermen.
The next thing which needs to be done is to have the fishermen organized along cooperative lines so that they will not buy in the most expensive market and sell in the cheapest. Hon. gentlemen opposite have always used this expression as a sort of dogma, and they now have a chance to give their views practical application and enable the fishermen to organize cooperatively.
In the next place, market development is necessary. I know that a campaign has been carried on to educate people in the use of fish, but that campaign has not been adequate, and it needs to be re-started on a more intensified scale. Coupled with it there needs to be improved transportation facilities to get fish to market in the proper condition. The system of collection boats has been started at places along the coast. That system needs to be extended to cover the whole coast line wherever people are unable to get their products into the nearest market.
Standardization, inspection, and grading of the product which comes on the market is the next essential. The consumer, in order to make him a permanent customer, needs to be assured that he is getting the best article obtainable, and these products should be graded, just as are other products, by government inspection.
The next necessity is the perfection of a system of storm signals and bait reports. The Minister of Marine and Fisheries has, I see by the papers of Nova Scotia, offered to inaugurate a system of storm warnings. The same [DOT] despatch, which emanated from Ottawa, stated in effect that that was due to the insistence of the hon. member for Antigonish-Guysborough (Mr. Duff) on the floor of this house. I have not heard him myself, but I hope that he has done something towards getting this from the minister, 56103-52
because it is a step in the right direction. I was also pleased to learn that seventy-five vessels of the Lunenburg fleet are equipping with radio to prepare themselves for receiving the broadcast weather reports. But this is only a beginning. The Louisburg station may not be sufficient. It may be necessary to broadcast from five or six stations in the provinces in order to give complete reception at sea. There have been no tests to determine whether you can hear Louisburg at a particular point or not. It should be started on a larger scale. The commercial station at Halifax and the station at Moncton should also broadcast the storm warnings and as well there should be included a system of bait reports to tell the fishermen at sea where the nearest point is at which they can obtain bait when they need it.
In the next place, provision for giving fishermen information as to market quotations is a necessity. In very many isolated districts to-day there is no such provision, and the fisherman does not know if he is getting a fair price for his product or not.
Lastly, and as I say, I do not mean these suggestions to be exhaustive, there should be developed a more intimate association between the ministry, or the department administering the fisheries, and the fishermen. In the past that department has been administered by the Minister of Marine as a subdivision or branch of his department. It is the unanimous opinion of the people lof Nova Scotia-and I believe the other provinces agree-that the only effective way to administer the department is to sever it completely from the Department of Marine and to place it under a responsible minister. Then, and then only, will we get that intimate touch which is necessary for the industry to prosper and improve.
Now, Sir, I have given these only as suggestions, but I give them because, as I said, immediate action is necessary; something must be done to save an industry which has great potentialities, an industry which ought to grow and prosper, but which to-day is decaying and dying. And I may say that in. any references which I have made to the province of Nova Scotia I have not been actuated by any feeling of depression or any lack of faith in her future. I believe she has a wonderful future if a lead is given in governmental policy; but in so far as this present session is concerned, as revealed by the budget, to which we look at least for some intimation as to the policy of the ministry, it is exceedingly barren. We who come from Nova Scotia are appealing: first, for a national fuel policy and protection for steel to enable our

The Budget-Mr. Prevost

coal and steel industries to grow; secondly, we want a home market for our agricultural producers-that is, we want the hardship entailed by unfair competition from abroad removed and that market saved for our own people; thirdly, being the gateway of Canada, we want a fair proportion of the trade of Canada to go through our ports; fourthly, we want for our diversified manufacturing industries encouragement and protection where necessary-not the protection which will enable them to profiteer, but the protection which will enable them to live in certainty for the future; and, lastly, we want for our great fishing industry, an industry of inexhaustible resources, a chance to grow and prosper. I believe, Sir, that if we get these things to which I have drawn your attention the dream of Joseph Howe will come true:
That the day will come when Nova Scotia, small as she is, will maintain half a million men upon the sea.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.
Mr. JULES-EDOUARD PREVOST (Terrebonne) (Translation):	Mr. Speaker, in the
brief time allotted to me, I wish to make a few remarks which may be considered as thoughts suggested by the budget rather than comments on the budget proper. And this is the reason:	It seems to me absolutely
unnecessary to praise the budget which was presented to us by one of the most popular finance ministers that Canada has ever had. On this side of the house, a number of speakers, financial experts, have sung its praise so highly and with such competence that I deem it useless to begin over again. The more so, as I feel that the task would be for me difficult. In regard to the opposition, their thoughts on the present budget, as expressed in their amendment, are so hazy and indistinct that one is obliged to look elsewhere to discover the real views of the government's opponents on the important political questions in Canada.
Mr. Speaker, it is interesting to note that the program of the Conservative party-in so far as they have one-must, to measure up with the thoughts and ideal of the Canadian people, unavoidably resemble the Liberal program. I could furnish numerous proofs to this effect. The attitude of the Conservative opposition on this budget is a further evidence.
It has for ever so long been admitted that politics is the science of concessions. This IMr. Ernst.]
is especially true in a country as extensive as ours where government is so difficult and complicated owing to differences in situation, nationality and religious belief. Conservatives and radical Progressives

I mean those members of the opposition on the extreme left-object to this budget on totally different grounds, more than that, for reasons which are contradictory to, and exclusive of, one another. The Conservative amendment and the sub-amendment emanating from the extreme Progressives therefore clearly define the difficult situation that the government of this country has to face.
The happy medium policy, so consistently advocated by Laurier, is still the policy of the present government. It has been battered by extremists. However, it is still the policy needed in this country and the one which must eventually triumph as it does at present. This is so much the case that extremists of all shades are forced to admit and submit to it when they wish to attain practical results, face realities and the duties entailed by the latter.
Let us for the present consider the Conservative party only. The stand taken by them on the budget indicates fully well that they do not dare any more to boast of those great principles which they so loudly proclaimed, and that, not so long ago; very meekly and only to save appearances do they oppose in their amendment the policy of the Liberals. In the amendment to the budget moved by the hon. member for St. Lawrence-St. George (Mr. Caban), we find a weak, vague, lifeless, wavering and uninspired criticism ; in that amendment, I say, we find the obscure policy inspired by the great Conservative convention held	at	Winnipeg	inOctober last. This solemn congress brought together the entire forces of the Conservative party for the purpose of choosing a leader and defining their program. In the resolutions of	this congress,	the	outcome	ofelaborate	discussions, are	to be found	theobvious proof that the Conservative party cannot adopt a policy which suits the Canadian people without falling into line with the Liberal program. The resolutions adopted at that convention regarding the numerous issues with which the country is faced, in	no way throw	new	light on	our
problems, but, under various forms, they endorse the policy adopted and put into practice by the Liberals.
Let us first examine the tariff question which for fifty years was their great battle steed. The tariff resolution passed at the Winnipeg convention, is indeed an abandon-

The Budget-Mr. Prevost
ment of the Conservative policy. It is a complete surrender and the opponents of the Liberal policy herewith lay down their arms. That party which for many years past has been lamenting to the four winds, moaning on the sad plight of industries ruined by the Liberals; these Conservatives who for ever so long have never ceased, both in their wild speeches and subsidized press, exclaiming that the tariff taxes were too low, that the Liberals had lowered them too much, that our markets were being swamped by foreign products, that the King government were too indifferent, guilty, criminal and unpatriotic, because they did not raise the tariff walls as it is done in the United States and elsewhere, finally these Conservatives at a large and solemn meeting gathered to issue their program, what do they do? Listen to them: "the convention glories in the historical and fiscal policy of the Conservative party."
Let us admire this new and timid phraseology on the lips of Conservatives. They dare not even mention the word " protection " of which their orators gargled their throats during fifty years.
Listen to them again: "Our tariff should from time to time be revised ". But what becomes then of this stability loudly proclaimed and which was set up as a dogma?
The resolution then asks for a tariff commission-which after all the Liberals have established and will maintain. The resolution further demands a preferential tariff for the empire, which should neither be detrimental to the farmers nor the workingmen and includes the utilizing of Canadian ports- for ever so long these things have formed part of the Liberal program, and already an essential part of it has been realized. That comprises all. It is all the Conservative party mentions and demands as regards the tariff.
As you are aware, sir, therein is to be found the Liberal policy. The Conservative party ceases to be strictly uncompromising on the tariff question, they are willing to make concessions which in the past they refused indignanatly. The time is no more when protection, high protection was the Alpha and Omega of the Tories' policy!
At that time, it might have been said with reference to that poLicy always claimed by the Conservatives as the remedy for all evils., what Sydney Smith said of the Electoral Reform sought in England between 1815 and 1830:
All young ladies will imagine-as soon as this bill is carried-that they will be instantly married. Schoolboys believe that the Gerunds and Supines will be abolished, and the Currant 56103-52J
Tarts must ultimately come down in price; the Corporal and Sergeant are sure of double pay; bad Poets will expect a demand for their epics; Fools will be disappointed, as they always are.
This bubble has been pricked by the Conservatives themselves.
How far remote we are from the noisy and violent Conservatives' outbursts of 1925 and 1926! After having tried to stir up the country against the Liberals whom they charged with ruining the national industries, the Conservative party in their so-called program, which was concocted in Winnipeg, have neither more nor less rallied to the Liberal standard. They acknowledge its superiority, since they cannot do otherwise than follow in its footsteps and oopy it. That party admits that there is no more place in our country for high protectionists, doctrinaries and extremists. It is exactly what the Liberals have thought for a long time past, to the great horror of the Conservatives.
The Liberals have taken the lead and the Conservatives are but following them. In fact, the Liberal party was the first to grasp that the tariff should be supple and flexible, capable of adapting itself to new needs and various circumstances in which the country finds itself.
Owing to a moderate tariff policy and a sound opportunism, the Liberals, while lightening the burden of customs duties, have stimulated the development of Canadian industries, especially those which depend on our natural resources.
Again do I state, the tariff policy of the Liberals was strongly opposed by the Conservatives who, to-day, accept and adopt it. The Conservative party, especially after 1921, taunted the Liberal party, in whom they feigned to see an enemy of industries and a slave of the west. All the leaders of the Tory party, in this house, on the public hustings and in their press, have violently denounced the Liberals who, according to them, are traitors to the true interest of the country selling the east to the west, etc.
Why did they sound the alarm? Simply because the Liberals believed that a party, and therefore more so a government, cannot and must not favour especially one part of the country, one section or one class; that a tariff., while protecting our industries, must consider the producer, the farmer and the consumer. This is what, at present, the Conservative party demand, if we are to put faith in the resolution on the tariff adopted in Winnipeg. Really, the Liberals have been well avenged.
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The Conservative party which dilly-dallied in an out-of-date policy and sterile criticism, now change their plans 6imply for election purposes. On the other hand the Liberals are but adhering to a policy which they have always advocated and from which Canada has largely benefited.
Political history tells us that the Liberals were able to apply protection in a more practical way than the Conservatives who, for half a century, boast of having given it birth. The present Liberal government continues to carry out the beneficial policy adopted by the Laurier administration which gave Canada fifteen years of great prosperity.
The Conservatives by more or less adopting the Liberal policy, acknowledge the excellent bases of this policy which demands rather a wider protection than a higher one, thus benefiting all classes in this country and not only a few favoured and privileged groups.
Some hon. MEMBERS (Translation): Hear, hear!


Jules-Édouard Prévost: The same
may be said, Sir, with regard to the important problem of transportation. For the maritime provinces as well as for the western provinces and centre ones, what can the Conservative party suggest which the Liberals have not already accomplished or begun?
Without gainsay, transportation is one of the most important political questions.
Since the Liberals are at the helm of the country's affairs, they have given close attention to this question and have made an effort to solve these difficulties with which it is surrounded.
The freight rates from east to west and west to east, the famous agreement of the Crows-nest pass, the transportation of our enormous crops from the west to Canadian ports, the interests of the ports of Quebec and maritime provinces threatened by too high freight rates, all these aspects of a complex question, where various interests come in conflict, have been closely studied by the King government.
Since the Liberals have assumed power, excellent reforms have taken place in the freight rates affecting the maritime provinces, as well as the western and centre provinces. A solution has not yet been found for all the difficulties which unavoidably beset a system of transportation across a country as vast as ours. However, we are on the path which leads to a complete solution of this difficult problem.
The country is indebted to the Liberal government for the efforts made in order to improve conditions and for the excellent results already obtained.

Wishing to foster in this country union and peace, without which a true national spirit cannot exist, the King government listened with an open mind to the complaints and grievances which rose from the various parts of the Dominion. Defying prejudices, so easily roused by opponents, and influences of powerful organizations which attempt to enslave Canadian politics to their egotistical interests, the Liberal government turned towards the east and west to render them justice each in their turn.
The Conservatives, naturally, highly criticized the Liberal government. But what do they intend doing to solve the transportation problem? The resolutions of the Winnipeg convention apprise us that on the transportation question, as well as that on tariff, the Conservatives are quite satisfied in rallying themselves to the Liberal policy.
Is the west concerned? The convention asserts that the Conservative party pledges itself to maintain as a maximum the present freight rates on grains and their products. When it is a question of the maritime provinces. The convention asserts that the Conservatives "approve and pledge themselves, when they return to power, to put into force legislation which will carry out the Duncan report." Now, as everybody knows, it is exactly what the King government is doing.
Is it a question of the Canadian ports? The convention asserts "that the policy of the Conservative party is to promote, through Canadian ports, the transit of Canadian products and imported goods for the use of Canadians." This, as we all know, is the policy put into practice by the King government. In fact, by reducing the freight rates, it favours the ports of Quebec and those of the Maritime provinces; moreover, it has lowered the customs duties on goods entering the country through Canadian ports.
Is it to the Hudson Bay railway that reference is made? The convention asserts, that the Conservative party pledges itself to complete it without delay and build a terminus and suitable port."
Is it a question of the national railways? The convention asserts "that the Conservative party pledges itself to keep the national railway system free from political influences." Well, that is acknowledging and approving what was done by the Liberal government which placed the management of this railway system in the hands of a highly competent man, and who, free from all political ties, has made it a great success.
So far as the transportation problem and the tariff are concerned, the Conservative party sails in the same boat as the Liberal party.

The Budget-Mr. Prevost
It offers nothing to the Canadians which is personal, new, special and superior on questions which agitate Canadian politics.
Whether it is a question of tariff or transport, of social legislation or administrative reforms, the Liberal party has always kept in sight Canadian interests, and has endeavoured to have these national interests dominate over the narrow views of parties and groups.
Its broadminded policy on national unity was first ignored by the Conservative party which brands it, for instance, with sacrificing the east to the west, of selling the east to the Progressives. We still hear, in certain quarters of the Tory press, the faint echoes of this violent denunciation of 1925 and 1926. But now the Conservative party is preparing to also turn their back on their past. The selection of Winnipeg for its convention of last autumn is quite an indication, one moreover discussed and explained in a very lucid manner by the former temporary leader of the Conservatives who, with an unexpected gracefulness, turned his back on the east and opened his arms to the west.


Ernest Lapointe: Hear,
hear!


Jules-Édouard Prévost: Once more, the Conservatives vary their tactics. In a rather clumsy way and without tact, they endeavour to follow out the Liberal policy and gain favours from the west. However, what the Liberal party has alwrays done, under Laurier and Mackenzie King, from conviction and love of national unity, the Conservative party does it, to-day, for election purposes. This tardy expedient to which it has recourse is so repugnant to its past history that we have a right to suspect its sincerity.
Let us now consider the so important question of imperialism and our imperial relations.
The Conservative party did not state its policy at the Winnipeg convention, on our relations with the empire as regards our participation in wars and the military or naval defence of England and its possessions in all parts of the world.
Notwithstanding the famous intervention of Mr. Meighen, the convention neither endorsed nor disavowed the statement of the ex-prime minister. So that in the event of Canada being called upon to participate in an imperial war, we do not know what would be the Conservatives attitude. Would they make an appeal to the people before taking a decision, as advocated by Mr. Meighen or would they choose the policy of immediate action which is thus expressed:
"Ready, aye ready" and which was proclaimed by the same Mr. Meighen at Toronto? The country has yet to learn.
The convention remained silent on this important and serious aspect of our policy.
In beautifully couched phrases, the convention expressed the Conservative party's loyalty to the crown. " In words no less beautiful it rejoiced in the powers and freedom of action that Canada as a nation has attained." It ends there. Really that is very little. These are but words, and very vague at that-. We must wait and hope that the Conservative party will prove by their actions the sincerity of its Canadian and autonomous sentiments. I well remember several circumstances of their not acting in accordance with those sentiments. For ininstance, when they rebuked the King government for having concluded with the United States a treaty which bore only the signature of a Canadian minister and thus having insulted England and its ambassador at Washington.
The imperial spirit which has guided the Conservative party in the past is well known. It has brought on legislation, struggles, regrettable acts which form part of our political history. To-day, even with a program overflowing with pleasant words and pompous statements on Canadian autonomy and equality of races, I think that this is insufficient to reassure us on the course the Conservative party will take. Time alone will tell us whether this party has freed itself of the influence of Tories, Orangemen and jingos who have guided it heretofore.
Canadians who are lovers of peace, union and harmony-French Canadians are of that number-do not wish to be unfair to the Conservative party, but they do not wish either to be imposed upon by the politicians who for too long a time acted as generals for that party.
The French Canadians especially have grounds to be prudent and cautious. They have not yet forgotten those waves of fanaticism which have embittered Canadian life, and from which they had so much to suffer. They are not yet ready to forgive the Conservative party for its odious Elections Act during the war. Their pride as well as their true love of national unity forbid them to confide without reserve in the guidance of a party which allowed them to be vilified far too long by its principal newspapers and which have still as allies, to-day, leaders of leagues who batter at the principles which guided the fathers of confederation, by advocating one single language for this Dominion.
The Budget-Mr. Prevost

Truly, the Conservative program, evolved in Winnipeg, offers no serious guarantees that the imperialists and Orangemen have ceased to have the upper hand in the Conservative party.
The true Canadian policy, the one that looks to the future, is in the hands of the Liberal party. The Conservative party cannot adopt any other without drifting away from the expressed will and wish of the nation.
To-day like yesterday, the Liberal idea is at the basis of all reforms which benefit the people. The Liberals take pride in this beautiful tradition. Loyal to the crown, yes, indeed, they are, but they are first Canadian citizens, jealous of their freedom and autonomy.
The Conservatives, with or without the Orangemen, will be forced to rally to this policy or resign themselves to wallow in their helplessness and unpopularity.
The fact that the Conservatives cannot adopt a suitable program for Canada without incorporating the main features of the Liberal program, is a homage to that program and at the same time a lesson to the Conservatives, who have set aside the best traditions of their party and have too often forgotten that Canada is invincibly and irresistibly forging ahead towards her great national destinies.


Mr. A. E. ROSS (Kingston):: Mr. Speaker, in continuing the debate on the budget I think it can be safely stated that it is one of the duties of a government to have an exact knowledge of the natural resources of the country. For this purpose the government is divided into departments, each department having a head, in order that a special study of some particular branch of the question may be carried on. It is equally a duty of the government to know the people of the country, to learn their racial characteristics, their aptitude for special work, their tendencies and their aspirations in order to work these people into the development of the natural resources in such a way as to apply their special characteristics to the task. If one were to study this budget to ascertain the policy followed by the government in its preparation, one could find nothing of this kind at all. The government, through a knowledge of the natural resources and a knowledge of the people, should be able to formulate a national policy in the national interest, but if this budget is studied nothing of that nature will be found. The government should be able also to show an adherence to whatever policy may be formed, but a study of the last few budgets will show that this King government

adheres to no policy. A party which is pleased one year will be displeased the next year, and so you have nothing but a characteristic shufBing of policies to keep the party in power instead of a national policy in the best interests of the country.
We can go even further. We find that this government ascribes a great deal to Providence; they are still trusting in Providence. If a man wants a job he has to trust in Providence rather than in this government. In the city of Ottawa, as in many other cities, the unemployed are still trusting to Providence and the occasional snow storm to give them a job if even only for a few hours.
Now I would like to speak for a moment with regard to how this budget affects or does not affect my own constituency. Others have spoken along technical lines and have taken up the different features of this budget; we had a splendid address this afternoon showing its effect on Nova Scotia, and now I would like to deal with certain matters connected with that section of the country from which I come. The first question with which I will deal is that of the feldspar industry. In the county of Frontenac is found the finest type of feldspar in the world, and quantities of this ore are also found in different parts of Ontario and the eastern United States. It is interesting to note the facts with regard to this ore and to see how this government is proceeding to develop that natural resource. Feldspar is employed in a great many industries; it is used in the ceramic industries, in the manufacture of porcelain and tiles as well as the making of certain glasses; thirty-one mills are located in the United States for the grinding of this ore. The rough ore is admitted free, while a 30 per cent duty is placed against ground ore in the United States. With the best ore it is possible to get, Canada has only two mills, and that deplorable fact can only be explained by the indifference of this government. One of these mills is located in Kingston, while the other is in Toronto; these are able to take care of the requirements of this country at present, but if they were given the same treatment by this government as is received by this industry in the United States, the situation would be greatly improved. If instead of the 30 per cent duty on ground ore we had even a 15 per cent duty, these mills would double their capacity and double the number of their employees. This matter was brought before the tariff advisory board, but received no consideration whatever. I believe the government should take it into consideration and give these two mills at least one-half the protection received by the United States mills.

The Budget-Mr. Ross (Kingston)
The situation is very similar with regard to mica. In Quebec and Ontario we have mica ore of the very finest quality, but we do not help this industry as the United States helps the mica industry of that country. When the ore is taken from the mine in Canada and sent to the United States unwashed and with no labour expended on it, it is admitted free, but just as soon as there is any Canadian labour applied to it the duty begins, and it ascends from that point. In other words, the intention is to provide work in the United States by taking that work away from Canada.
Another question which should be considered by the government is the application of the vegetable growers for consideration. It may seem strange that the representative of an urban constituency should speak on behalf of the vegetable growers, but I believe we in the cities realize that if you have a prosperous urban community you will have a prosperous rural community and vice versa, because the two things cannot be separated. There are a great many people throughout Canada engaged in growing vegetables, and they certainly should receive some consideration from this government. The vegetables which would be affected most by any duty would be those which might be called the rich man's vegetables, and in that case he can well afford to pay for them, but in any event, this association of vegetable growers should receive consideration from this government, which they certainly do not now receive.
For a number of years, in connection with providing more work throughout Canada, I have brought to the attention of the government the question of the direction of steamship companies. The United States will not permit a board of directors to have Canadian representation, while in Canada it is only necessary to have one Canadian representative, which gives to these Americans the control of our shipping and takes work away from our Canadian sailors and steamships. In the same way I brought to the attention of the government the question of repair work on damaged ships. When an American boat is damaged in Canadian waters it is taxed 50 per cent for the necessary repair work when it returns to the United States, while Canada only charges 25 per cent. Therefore, under these regulations, no work will be done to American bottoms on Canadian shores.
Another item in the budget which interests my constituency is the small protection given for the manufacture of locomotives and other machinery required in the mining industry. If there is one industry in Canada which should be supported by work done in Canada it is
the mining industry. The Canadian Locomotive Works in Kingston have started to manufacture locomotives, engines and other things required in mining, and I would ask the government to see that this industry is given a little more protection than is provided by this budget, in order that this work may be carried on in Canada.
There is still another matter to which the budget does not refer, but which is of primary importance in our section of the country. I refer to the St. Lawrence development. Eastern Ontario is somewhat divided in this matter, and while I believe everything that can be said has been brought out, I would like to draw the attention of the government to the fact that the development of the St. Lawrence is not only an engineering question but that it is also a question of navigation, and the advice of navigators and marine men should be taken into consideration when considering whether or not this great work should be proceeded with.
After having referred to these local matters I would like to say a few words on the budget as a whole. One would naturally expect a certain amount of independent criticism from the other side of the chamber, especially since we have across the way an independent wing which moved from this side of the house, led by our good friend the Minister of Immigration and Colonization (Mr. Forke). More especially would this independent criticism be expected since on more than one occasion the Minister of Immigration has expressed himself very strongly from the front benches of this side of the house. I would like to ask him how he views this budget to-day, in the light of what he said in past years. Let me speak more specifically. In 1924 he declared that the budget should be a financial statement showing the commitments and liabilities of the country so plainly that the man in the street might easily understand it. If the Minister of Immigration believes this budget to be so plain that the man in the street can understand it, he has acquired since crossing the floor a wider viewpoint than he had while on this side of the house. In 1923, while leading this independent wing, the same gentleman expressed himself very strongly and moved an amendment to the budget which contained two things. First, it advocated the readjustment and extension of the income tax, to bear more heavily on unearned increment, and then it suggested the increase of excise and other taxes on luxuries. Now, for two years the minister has sat on the other side of the house and w'atched his principles trampled to the ground without
824	COMMONS
The Budget-Mr. Ross (Kingston)
once raising his voice in their defence. We can understand the feelings of those hon. gentlemen a few years ago when the first desertions from their camp took place; two gentlemen, finding no support for their principles on this side of the house, crossed the floor. They took their places on the back benches, and we all remember how the tears rolled down the cheeks of the present minister that day, as he denounced the treachery that had occurred in his camp. It was very sad; his chief whip and the chairman of his caucus went back on 'him. But where does he find himself to-day? Where but in the arms of these gentlemen. He has now gone to the support of his Chief whip. I would like to draw the attention of the house to one very significant fact, however. When those two deserters crossed the floor of the chamber they took their places on the back benches opposite, but my hon. friend the minister has got as close to the front as he can possibly.get, and for what reason? Someone says for ten thousand reasons, but at least we know that he has entirely divested himself of the principles he espoused while on this side of the house.


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


Arthur Edward Ross: I have not come to the hon. gentleman yet; if he sits down I will reach him in due time.
My friend the minister made another statement in dealing with the necessity for the existence of this independent wing. He said they were absolutely necessary to this country, and made use of the following words:
There will be no turning back; we have our faces to the rising sun...
Apparently it does not matter where the sun is now that the principles have gone. This budget is representative of a government composed of elements united for power alone; elements which have discarded their principles and which have divested themselves in a few short years of all conscious adherence to those principles which could possibly form the foundation of a national policy tending to develop the whole country into one great unit. The budget has nothing whatever to offer to the working man. In defence of the budget it has been said that there is a good deal of prosperity in the land. If that be so I should like to ask this question, and that is all I am going to say on the prosperity: If this is a prosperous country and the people are conscious of it, if the people in the old country are conscious of it, and we have a Minister of Immigration trying to bring im-
migrants to this prosperous country and they do not come, what is the conclusion? It must be one of two things: Either the country is not as prosperous as the government claim or the minister has fallen down on the job.


An hon. MEMBER:: Both.


Arthur Edward Ross: An hon. member says "both". Well, the government can settle for themselves which it is.
The government claim that they have reduced the debt of Canada. That subject has been well threshed out, but I have failed to hear any member of the government explain why there is an increase in the railway debt greater than the supposed reduction of the national debt. I am not going to discuss the matter any more than to cite figures which have been repeatedly given. According to their own figures there has been a reduction of $105,000,000, and then turning to the official report of the national railways you find an increase of indebtedness amounting in round numbers to $158,000,000, showing that not only has there been no reduction in the debt but there has actually been an increase of approximately $53,000,000 during the time this government have been in power.
I wish to turn now to a matter which has been already fully discussed but upon which I wish to say a few words. The treatment which this government have given the woollen industry is very marked and is characteristic of their attitude toward this branch of commerce. If we study the history of the woollen industry we will find that for some unknown reason the Liberal party have been always antagonistic to it. The following figures will amply demonstrate that: In 18S5 there were 241 mills, 460 cards, 2,062 looms in this country. In 1897 there were 236 mills, 477 cards, and 2,120 looms. Then came the Liberal policy, and the next figures we have are for 1907 when, owing to the tariff of the Liberal government, the mills had been reduced from 236 to 148. In 1912 they had dropped to 78. During the few years that a government favourable to the industry was in pewer the number of mills increased, but owing to the policy of the Liberal government for the last few years the number has been reduced until it stands at, I think, about 59. I should like to draw this supposition to the attention of the government in connection with the admission of free yarn. If one manufacturer sends for yarn to a country outside of Canada he says practically to his employees: I have no further interest in you. I will close that branch of my industry dealing with yarns and I will make more progress. My industry will go on, but I will discontinue employing the

The Budget-Mr. Ross (Kingston)
labour in connection with the branch in question. Now if one manufacturer takes that stand and imports his yarns what will be the result? Every other manufacturer in Canada will do the same. The Minister of Trade and Commerce (Mr. Malcolm) shakes his head, but I will guarantee that is the very course they will pursue. Every other man in the yarn business will have to import his yarn in order to compete with the manufacturer who first adopted that policy.


James Malcolm: My hon. friend realizes, of course, that free yam is only intended for one class of the industry.


Arthur Edward Ross: That is what I
mean. I am only referring to one class. I do not know what would happen if it were pursued generally.


James Malcolm: A great deal of yarn is imported now.


Arthur Edward Ross: That is all I wish to say in regard to that matter. I have said sufficient if I have shown what the effect will be upon one branch of the woollen industry. Every manufacturer in that branch will necessarily have to do the same as the otheT manufacturer who imports his yams in order to compete with him. The result will be that the labour engaged in that particular branch will be thrown out of employment and, in effect, will be told by the government to seek work in the United States or wherever they can get it.
The government claims that it is reducing taxation, but we on this side do not agree that the claim is justified. When you reduce the income tax you affect, as was said to-day, only 116,000 people in this country. But when you retain your sales tax, the abolition of which we urge in our amendment, you are touching all the people in the country. The collection of taxation in this form affects the poor people to a greater degree than any other class. During its term in office the government has taken out of the people from this source $472,888,973. The largest amount taken from the people by the Conservative government was some $38,000,000. The present government took over $100,000,000 when it increased the sales tax to 6 per cent. We think the sales tax should be wiped out. Let me give the exact figures of the amounts which this government has collected in taxation of this character from the poor people of this country. In 1921-22 they collected $61,520,687.79, having increased the tax to 4 per cent. In 1922-23, they collected $91,262,254.13. In 1923-24 they increased the tax to 6 per cent and collected $100,980,076.80.
In 1924-25 the government reduced the tax to 5 per cent-this is what they call reducing taxation-and they collected $62,795,183.84. In 1925-26 they collected $74,025,093, and in 1926-27 they collected $82,305,670, a total of $472,888,973 raised from the sales tax. They took this enormous amount of money out of the poor people of the country, and in view of the fact that they are making great professions of economy and that the present Minister of Immigration and Colonization when sitting on this side of the house demanded rigid economy, the government would be well advised to wipe out the sales tax.
I should like to quote from a little article which I read the other day in regard to cloth, and if you want to substitute any other article of manufacture, it will meet the situation just as well. This was the policy adopted by England when she was labouring to get herself into a good sound position:
Cloth is to be sold rather than wool, finished cloth rather than unfinished, the more highly worked cloths rather than the simpler fabrics, the dyed rather than the undyed, dyed with English colours rather than foreign colours, and all with the object that the subjects of the realm may take as much benefit as possible.


Herbert Bealey Adshead: What is the date of that?


Arthur Edward Ross: About 1714. That was England's policy and it is her standing policy to-day. I should draw the attention of the hon. gentleman to the fact that England secured her position through protection, and this is one of the policies that she adopted. This is another, which follows upon it, and which I would also ask the government to accept:
That the importation of such goods as hinder the consumption of our own or cheek the progress of any of our manufactures is a visible disadvantage, and necessarily tends to the ruin of multitudes of people.
That is a policy which this government has absolutely ignored. The Minister of Agriculture (Mr. Motherwell) sits complacently in his seat while some other ministers put it all over his department with the Australian and New Zealand treaties. The result is that he rarely ventures to meet the dairymen's conventions or associations of this country because they have a few questions to ask him. He is an artful dodger.
In conclusion, I should like to say that if any country ever was blessed with an opportunity to formulate a national policy, this country is the one. No government ever had a better opportunity to evolve a policy that would be founded upon national interests. We have in Canada unlimited resources, any one of which will develop an integrated industry, and yet we are sending out our ores,
826	COMMONS
The Budget-Mr. Ross (Kingston)
allowing these integrated industries to be developed on the other side of the line. To refer only to one that this government could well take in hand and work up into a big industry, I would mention the iron industry and in that connection this government have all the opportunities that any government ever had. We have deposits of iron ore in eastern Ontario and any quantity of it north of the great lakes, and yet in the last few years not one pound of Canadian iron ore has been mined or used. There are difficulties connected with other industries, but this is one which this government could well take in hand and work up into a great national policy. The same thing is true of the pulp and paper industry. Now is the time; if the government wait another five or ten years this opportunity will have passed, never to be regained by this or any other government to evolve a policy that wild help in making this a great country.
The fishing industry has been allowed to dwindle away on both the Atlantic and the Pacific. This government are quite indifferent to the question; they have no policy on it, and in fact I should like to know what they have a policy on except whatever will enable them to gather in and to hold this independent wing so that they may remain in power. They should have some pity on this independent wing; they should give them a chance not to see all their principles massacred, but to see some of the principles which they had on this side of the house worked up on the other into a policy. But the government have surrounded them in front, behind, to the right, to the left, so that there is no escape for this poor independent wing. They have to sit there and listen in quietness to a crucifixion of all the principles they ever adopted on this side.
I would ask the government, therefore, that they should study the situation of Canada; that they should take hold of some one of these great natural resources and work it up into a national policy that will make Canada a good place to live in and that will give work to our people. If these resources were made use of, every man in Canada would have a job, the exodus to the United States would be practically stopped and, in fact, men would be looking to Canada and returning. We would have an actual return, not a mere fanciful fiction on paper. I have canvassed my constituency and all the country round, and I cannot find more than a dozen people or so who have returned. Deseronto and Trenton, which once were prosperous towns, are now almost off the map owing to the policy of this government. Families of eight and ten have gone away and I have not seen 
one of them return. I would therefore ask the government in their next budget to consider some national policy on some natural resource so as to make this a better country than they have so far made it.


Mr. MALCOLM LANG (South Timiska-ming):: Mr. Speaker, having just returned
from a visit over the week-end to my constituency, I feel it is my duty and pleasure to convey to the Minister of Finance (Mr. Robb), the government and members of this house the general satisfaction which prevails throughout my constituency with regard to the budget which is under discussion in this chamber at this time. I had occasion to visit different parts of that great constituency and to speak with prospectors, miners, farmers, and housewives, people of all classes and people who have in the past been affiliated with all the different political parties, and in no case did I meet with any other expression of opinion than approval of the budget that was brought down and satisfaction with the wonderfully improved conditions which, they know, prevail throughout this great land of ours.
I wish for a moment to pay my respects to the hon. member for Kingston City (Mr. Ross) who has just addressed us. I have listened with a great deal of pleasure and attention to his speech, and I wish to compliment him and say that in my opinion he made a most wonderful address considering the difficult case which he tried to make out. I am going to refer first, if I may, to some of the arguments which he asked this house to listen to with regard to the mining industry, by reading from an editorial which appeared in the Northern Miner on Thursday last. This editorial appeared in this publication after the editor had time to study the effects of the tariff proposals upon the mining industry in Canada. This publication, the Northern Miner, is published in Cobalt, the centre of the constituency which I have the honour to represent. It is owned and edited by two brothers who some years ago came into northern Ontario to do pioneering work along with the rest of the people in that north country. One of them, prior to coming into the north country, had had some newspaper experience, and after staying with us for a short time and becoming acquainted with the possibilities, these gentlemen were able to get a job printing press in with which they started a printing plant about the beginning of the Porcupine camp in 1909 or 1910. This paper has grown and now has an extremely large circulation in all parts of Canada. It is read with confidence by everyone in this country and in the United States who has anything

The Budget-Mr. Lang
to do with the mining industry or mining investments. It has built up a reputation for itself for honesty and for giving authentic information to the public. Its circulation is not confined within the borders of our country, but reaches out to every countiy that is interested in mining. It has a wide circulation in the United States and in Great Britain. Every man who has t'he slightest connection at all with mining knows The Northern Miner, of Cobalt, and looks forward to its authentic information about our Canadian mines. It is read in Europe, in South Africa, in the United States and every other country where the mining industry has a place. I think an editorial in its issue of February 23rd last will be of interest to members of the house and the country generally. It is headed, A Good Budget for the Mines, and says:
Tax and tariff reductions announced by the Minister of Finance indicate sayings to the Canadian mining industry of a million dollars a year. And the changes made will be particularly encouraging to a branch of the mining industry in wheh Canada may be expected to take a leading part, that of treating complex ores, such as copper-zinc-lead-gold-silver ores, now shown so abundant in northern Manitoba, in Sudbury and in Rouyn.
Among the interesting items m the tariff changes are those that admit free certain acids used in the treating of complex ores and which lower the duty on machinery and equipment used in concentrating and smelting. With several new plants going up these items are particularly interesting. Another reduction is in the duty on hoists of a type not made in Canada.
The tariff changes were so framed as not to hurt the growing manufacture of mining machinery in Canada. This is becoming quite an industry, and one which is proving helpful to mining by reason of the ability of Canadian factories to quickly supply machines and parts of a kind suitable to Canadian needs. The government feels that in cutting the tariff on these items it will aid mining and not yet injure manufacturing.
The Ontario Mining Association must have felt gratified to learn that five out of its six tariff recommendations -were adopted. The sixth was not of great importance and because it was found to impose on manufacturing was not pressed.
That testimonial, coming from such a source, is to my mind, and I believe to that of every fair-minded person, a remarkable commendation of the Minister of Finance and of the government of the day.


Mr. GOTT:: Give the credit to Hon. Charles MicCrea.


Malcolm Lang: Perhaps it is just as well for me to tell this house that the Northern miner is particularly friendly to the Hon. Charles Mc-Crea and to Conservative governments as a rulle. As I said at the outset, this paper has built up a reputation for honesty and for giving authentic information to the public in regard to the mining industry of Canada. It
has been kept pretty well independent so far as party politics is concerned, but to my knowledge the owners and the editor have voted Conservative on all occasions in the past. With that explanation, hon. gentlemen will understand that this editorial has not been written with a view to commending the Liberal government that is in power at Ottawa, but simply as the honest expression of its own conclusions after having studied the effect of the tariff reductions that are proposed in the budget brought down by the Minister of Finance.
This house is indebted to the hon. member for Nipissing (Mr. Lapierre) for the address which he delivered early in this debate. In a very concise way he showed the important place which the mining industry holds in Canada at this time, and I shall therefore not dwell upon that. I wish, however, to give credit to the present Minister of Mines (Mr. Stewart) in the government of the day for the sympathetic attitude which he and his department have always had towards the mining industry ever since the advent of this administration. It is admitted by mining men in all parts of Canada who have been watching events, and by those who had been engaged in the mining industry for years prior to the advent of this administration, that the treatment which they have received from the present Minister of Mines and the Mines branch has been more kindly and sympathetic than under any previous administration, a tribute that applies equally to their attitude towards the mining industry as a whole. The Mines branch, under Dr. Camsell, as deputy minister, has carried on geological surveys in all the back portions of this great country of ours, and has prepared geological maps giving information which has proved of untold value to prospectors and mining men generally. Their research work has also been of great benefit to the mining industry in this country. Before leaving that subject, may I say for the benefit of the hon. member for Kingston City who has just addressed the house, that if he had listened to the remarks of the hon. Minister of Mines a few days ago, when he told the house of his trip to the old land last year and of the activities in scientific research as applied to mining, intimating to the house that the problem of the proper treatment of the iron ores of this country had been, he felt assured, solved by scientific research, he would have realized that the iron which we have in such great abundance in many parts of this country constitutes a great national asset, and that the iron industry will in a very short time be one of the great industries of this country.
The Budget-Mr. Lang

Then the hon. member for Kingston City referred to the St. Lawrence waterway- something that most of his colleagues are keeping pretty well away from, I notice. The hon. member for Fort William (Mr. Manion) also wanted to know where the government stood in regard to this question. I cannot speak for the government, of course, but I think I can speak for every member on this side of the house when I say that at least there will be no danger of the government trying to steal the policy of the Conservative party in respect to this great project. It is my sincere hope that the negotiations now proceeding between the two nations will reach a successful conclusion, and that the deepening of the St. Lawrence will be proceeded with as rapidly as possible. When that day comes, and I hope it will come quickly, our fresh water carriers will be able to transport grain and other cargoes from the head of the lakes down to Montreal for reshipment on ocean going vessels, and this will do away with the present unsatisfactory condition of American bottoms carrying 80 per cent of our grain. Then we shall be able to build up a merchant marine that this nation will be proud of.
Most of the hon. members who have so far taken part in this debate have dealt with immigration, and our friends opposite have tried to create the impression that the trek across the line never commenced until the Liberal administration came into power, and that it never will be stopped until the Conservative party regain office. But I have lived long enough to remember that prior to 18G6, when the Laurier administration assumed control, we suffered the greatest loss of our manhood and womanhood to the United States. With the wonderfully improved conditions-if the term "prosperity" is objected to, I am quite satisfied with this description -that exist throughout the Dominion to-day, and with the still greater improvement that we may expect from now on under the present strong, sane administration, I do not think we need worry very much about our immigration policy. During the past year it has been shown conclusively that our people have become rich enough to invest a very large proportion of the capital that is now being used to develop our industries: in fact more than half of the capital that has gone into our mining development is Canadian capital.
It is also gratifying to find that capital is being attracted from all parts of the world for investment in the Dominion, for the simple reason that capitalists in other countries are shrewd enough to see the great

possibilities of profitable investment in the development of our natural resources. And there is not a doubt in the world but that immigration will follow capital. I am confident that men and women, physically fit, will seek to establish themselves and play their part in the pioneer work that is necessary to continue the development of our natural resources and the industries related thereto, and that we shall have all the immigrants we need from Great Britain and continental Europe. Our chief concern must be to see to it that only those best fitted are allowed to enter the Dominion.
I was struck by an observation made by the, hon. member for Parry Sound (Mr. Arthurs) when he took part in this debate. He stressed a point that used to be stressed years ago, but I thought the Conservative party had gotten over it by this time: he laid the blame for all our railway troubles on the Laurier regime in building the Grand Trunk Pacific railway during the period from 1908 to 1911. Let me point out, Mr. Speaker, that if the Grand Trunk Pacific railway had not been constructed by the Laurier government we would not be getting to-day the great benefits flowing from the development of our mineral, forest and agricultural wealth that has taken place along the railway in northern Quebec, northern Ontario and northern Manitoba since the war ended. As a result of this development, that part of our Canadian National railways which a few years ago our Conservative friends predicted would always be a charge on the country, is now paying its way, and in the near future it will be one of the best revenue producing portions of our National railway system.
Now, Mr. Speaker, there is just one other matter that I wish to mention: it has to do with the recent discoveries of mineral wealth in northern Manitoba and northern Saskatchewan, and particularly with the administration of the mining laws to govern the great activity that we may expect there in the immediate future. From what prospectors in northern Ontario have told me, I feel sure that in the coming season there will be the greatest rush to stake mineral claims in northern Manitoba and northern Saskatchewan that we have ever witnessed in the mining history of Canada. It is vital for the good and the prosperity of the mining industry and of the people of Canada generally that the very best mining laws and regulations be established to govern the staking and the operation of mines Which will be opened up. In my humble opinion the present mining laws which have been enacted by the federal parlia-

The Budget-Mr. Rowe
ment and which up to t)he present time have been in force in relation to the staking of mineral wealth and of the natural resources of our provinces, where those resources are still under federal jurisdiction, are not up to date, nor are they the wisest laws that could be enforced under the conditions as they now exist. I would therefore suggest to the Minister of Mines and to the government that during this session, before the staking rush begins in that part of the Dominion for the ensuing season, they endeavour to formulate the most suitable laws and regulations in order to give to that country the best government possible. We in Ontario have had a good deal of experience with mining laws and we have been able to cope with many great rushes in different parts in the north of the province. In northern Quebec also there have been some big rushes in the staking of claims, and the mining act of that province has very suoces-fully met the situation that has developed there. In my opinion our Ontario mining act is probably one of the best pieces of legislation of the kind, if indeed it is not the best, in Canada or for that matter anywhere in the world, and I do not think that this government would encounter any difficulty in drawing from the acts of these two provinces such regulations as would take care of the situation in the part of the country I have been speaking of, with a view to obviating as far as possible litigation and disputes generally that must inevitably arise in connection with every mining rush.
I do not think there is much more I want to burden the house with. I feel that we in Canada to-day are living in the most favoured spot on earth. With our great agricultural wealth, our vast forest resources, our enormous hydro potentialities, our good climate and the unbounded possibilities in minerals-the greatest possibilities of mineral wealth of any nation in the world-we have every reason to be proud and happy. I am sure that all Canadians must take the keenest pleasure in the realization of the resources available to us to-day. When we look back over the pages of history we find that from the earliest recorded times the nations that have become supreme and that have maintained supremacy have always forged ahead because they have had hidden treasures in minerals to supplement their other resources. This has been so throughout the ages. Until the Armada, Spain had scoured the seven seas in search of precious metals. Then came the Spanish Armada and England wrested the supremacy; and she has retained her supreme place since that time because of her possession of mineral wealth. To begin with, she had coal and she
developed her iron and steel industry, in which field she has long remained in the forefront. Is it not a gratifying reflection that we in this part of the empire should possess mineral resources which will be available for centuries to come? We can picture Canada in future generations, indeed, centuries from now, playing an exceedingly important part in helping to maintain the supremacy of the great commonwealth of nations to which she belongs. The British Empire has been supreme on land and sea, commercially and in every other way, and it is the fervent prayer of every Canadian that she may long continue to maintain her position. And in the maintenance of that supremacy, in the interests of humanity, Canada will be an important factor. This country is destined to play a vital part in holding the empire together to the end that her benign influence may spread to the furthermost comers of the civilized world and that peace and Christianity may everywhere prevail.


Mr. W. E. ROWE (Dufferin-Simcoe):: The amendment moved by the hon. member for St. Lawrence-St. George (Mr. Cahan) to the budget which has been brought down by the Minister of Finance (Mr. Robb), has failed, and naturally so, to enlist the support of gentlemen on the government benches. However, it has attracted keen interest in all other sections of the house and national concern throughout the Dominion at large. When we carefully consider the activities of this government since it came into office in 1921, and since it was given a new lease of life after the last election, we cannot but regret the absence of any sign of stability of purpose or principle in the economic management of the affairs of this Dominion. After the government's long term of office, it would seem that the ship of state to-day is merely drifting aimlessly, without any apparent course. The present government has depended very largely on the whims of fate, as members of the administration have said on different occasions. Providence has been indeed very kind to them. Listening to the hon. member for South Timiskaming (Mr. Lang), who described the greatness of the country in its natural resources, I could not help thinking that it was indeed fortunate for the Dominion that our heritage was so vast and our harvests so bountiful; because had this country not been so blessed in natural endowments, so favoured by Providence in natural conditions, the people could not have prospered as they have done under so weak an administration as that which now governs the affairs of this Dominion.
The Budget-Mr. Rowe

After almost ten years of privilege, almost from the conclusion of the Great war, the government, much to the disappointment of the people, shows no sign of retrenchment nor of any effort at a permanent reduction in the national debt. Year by year we have heard of different surpluses, but when you analyze the government's own reports for the last five years, from 1921 to 1926, when you look into the liabilities in connection with the national railways, you find that our debt stands to-day at $217,000,000 more than it did when the present government came into office. During their term of five years the government, who have been preaching economy to this side of the house and to the Dominion, with a political astuteness which we are now bound to admit and which is becoming more and more evident to the people, have been securing money from the taxpayers by a process of painle-s extraction. At any rate, they have collected and spent more during the past year by .$18,000,000 than the year before, and they have collected $211,000,000 more in the five years from 1921 to 1926 than did their predecessors in the previous five years, including a part of the war period. They have indicated in this year's estimates their intention to spend $10,000,000 more in the coming year, and for nine months of this fiscal year they have already extracted $14,000,000 more in taxes than they did during the same period last year.
The present much talked of era of prosperity is indeed a splendid advertisement for the present administration; at least they are taking advantage of it. To quote the glib words of the Prime Minister (Mr. Mackenzie King), prosperity is no longer in the far distant future; it is here:	we have had
in the past year a total trade greater by $42,000,000 than we had in the previous year. But what are the facts? When you analyze the figures you are disappointed to find that this $42,000,000 of a greater trade is really not so favourable as it seems on the surface, for there have been greater importations to the extent of $103,000,000, of products that might have been manufactured in this Dominion, while there has been a diminution in exports from Canada to the extent of $67,000,000. So that when the government boasts of an increase of $42,000,000 in our total trade it is on the wrong side of the ledger. There has been a decrease in exports, in the nine months of the present fiscal year for which we have figures of $56,000,000; and when we look over the monthly reports of the Department of National Revenue we find that our importations have increased by over $33,000,000 in

the past nine months than in the same period of the previous year. It is hard to understand how the government can take credit to themselves for the era of prosperity, for which Providence is so largely responsible.
The people of this Dominion have been viewing with alarm the attitude of the government towards the manufacturing industries of this country. Hon. gentlemen opposite have negotiated several trade treaties with foreign countries, and it seems to me that they must surely admit now that they are poor international traders. They are apparently optimistic regarding their future success as ambassadors, but it seems to me that, judging from our experience of them as traders, they are hardly fitted for ambassadorial responsibilities. In the case of every trade^ treaty which this government has negotiated with a foreign country our favourable trade balance has appreciably diminished. I will refer the house to our treaties with Australia, New Zealand and France. I wonder what the Minister of Agriculture (Mr. Motherwell) thinks to-day of the Australian treaty, which he once cherished so dearly. It must be a source of inspiration to him as he sings "bit by bit" the old free trade song; and no doubt, the Minister of the Interior (Mr. Stewart) will rejoice once more in sounding the death knell of protection. I do not think, however, that the Western Dairymen's Association, the farmers and sheep-breeders throughout the country would be entertained by a duet on the part of these two ministers, because the evil effects of the Australian treaty have been felt by every farmer and dairyman throughout the Dominion, With Australia our favourable trade balance has declined by $3,500,000, only to be followed by similar reductions in our trade balances with other countries. In the case of New Zealand our favourable trade balance has been reduced by $5,500,000, and in the case of Belgium by $4,500,000. With France, with whom we had that famous treaty, our trade balance has declined by $7,500,000, and to-day we are purchasing from that country twice as much as we are selling to her. In our relations with the British West Indies, our favourable trade balance has declined by $2,000,000, while with Japan our favourable balance has been reduced by $8,500,000.
Under the circumstances, the present administration must realise that the home market is more important to the agriculturist, more important to the domestic producer in every line, than markets which may be sought far afield. We have often endeavoured to impress upon the government the necessity for culti-

The Budget-Mr. Rowe
vating the home market, and the uncertainty of foreign markets is clearly demonstrated in our trade with the United States. We must, however, accord the government credit for endeavouring to give the United States a reasonable chance in their trade with this Dominion. Since taking over the reins of power the government have made every effort to build up trade with the country to the south of us, but what have they given us in return for the home market which we have lost? We find that in 1921, when the present administration took office, we sold to the United States two and a half times the amount of agricultural products which we sold them in the year just past. This is an evidence of the uncertainty that exists in attempting to establish markets far from our own shores. Many members on all sides of the house have in the past emphasized the view that agriculture was the basic industry of the country, but experience has taught us that no basic industry can make any progress without reference to others; it is bound to be more or less dependent upon the secondary industries if the industrial development of the country is to be maintained.
We awaited with interest the budget that has been brought down by the Minister of Finance, and now that it has been submitted we find certain tariff changes proposed. The budget may be pleasing to those who are interested in a low tariff: the Minister of Finance calls it a re-classification, but whether you describe it thus, or whether you call it a ratification or a modification or a lowering of the tariff or tariff tinkering, the effect will be the same; it will be felt just as injuriously by industry throughout the Dominion. The present budget is only another evidence of the instability of this administration's fiscal policy, and it will react unfavourably not only on the textile industry but on many others besides. Certainly, at any rate, it will affect the textile industry, one of the earliest established enterprises in this Dominion. I need not go into details in regard to this industry inasmuch as the effect of the proposed tariff reduction as related to textiles has been emphatically stated in Hansard. But while the budget will entail considerable hardship, while it will throw many of the labouring class out of employment, while it will shut down many factories and worry many capitalists who have put their money into similar industries, it will prove the statement I have made that agriculture and all these other enterprises are interdependent:	one cannot
suffer without injury to the other.
We on this side regret that the government has dealt the textile industry another blow of uncertainty. The effect upon the industry, the labouring man, and our domestic markets can readily be anticipated. This subject has been dealt with in detail by several hon. members on this side and is therefore already cm Hansard. But may I say that we find industry and agriculture showing a common concern in view of the unhappy situation in which they find themselves. I know there are many older members in this house who will recall the tariff cuts on textile goods in 1898, when hundreds of woollen mills and scores of textile plants were forced out of business. The sheep industry immediately felt the effects and began to decrease from 2.500,000 head until the number reached 2,000,000 head only in 1911. After the smoke of the reciprocity battle had blown away, and a stable fiscal policy had been inaugurated, we find that both industries improved and the increase in the number of sheep by 1921 amounted to 60 per cent. Then followed the negotiation of the French and Australian treaties, and we regret to note that during the succeeding five years the number of tsheep decreased from 3,700.000 head ito 2.87 < -000 or approximately 30 per cent. It is interesting also to find that during that time Australia increased its number of sheep by
13.000.	000, and France by 1,000,000.
In the early days of Canada the sheep was christened the golden hoof of agriculture. The value of sheep as weed exterminators has always been appreciated by expert agriculturists, and when we hear of the admitted problem of weeds where grain cropping becomes the chief enterprise, as our western friends well understand, I would ask the right hon. the Prime Minister, who has recently joined the industry, and the hon. Minister of Agriculture (Mr. Motherwell), another sheep breeder, if they would not consider the possibility of gaining
100.000.	000 sheep for Canada, similar to the number in Australia and other countries, instead of the two or three million that we now have as likely to prove a benefit to agriculture.
Now, Mr. Speaker, I note a report has been laid on the table of this house by a research commission regarding the condition of our woollen industry, and while I have not read it I might say that if the government is desirous of improving conditions they have only to follow a very simple process. First, let them encourage the breeding of better sheep, and the careful grading of the wool. Second, let the duty be raised on raw wool, as well as woollen products instead of being lowered. Let them also encourage other industries, thereby enlarging the home market for mutton.

The Budget-Mr. Rowe
Then let the government amend the Australian treaty so as to no longer invite cheaply produced mutton and wool to supply the Canadian home market when it is established. Our citizens in western Canada, might with profit scan the past and realize what the future holds in store for them if their present favorite policy of low tariff or free trade prevails. Forty years ago Ontario was chiefly an agricultural province. Its people then were imbued with the same ideas touching a national policy as our friends in the west now are. As Ontario became industrialized and good home markets came into existence their views altered, and the effect of this experience is beginning to be felt in the west.
On this question I wish to refer to page 39 of the annual report of the Canadian Bank of Commerce, which, quoting the president's address, says:
It is not generally understood in eastern Canada how far the springing up of local manufacturing industries and such developments as those just referred to are hastening the time when the interests of the prairie provinces will no longer be almost purely agricultural, and when they will play a most prominent part in Canada's industrial activities. In 1926 the factories of Manitoba turned out manufactured goods valued at $125,000,000, those of Saskatchewan $40,000,000 and those of Alberta, $75,000,000. This total of $240,000,000 represented the products of about 2,150 manufacturing establishments in the three prairie provinces and is the outcome of an investment, in round figures, of $220,000,000, and the payment of wages of $42,000,000 to over 25,000 employees. These developments are bound to increase, and must result in a lessened economic dependence of the west upon the east.
With adequate protection these industries will continue to expand and population will be attracted to the prairies, other than for land settlement purposes, creating an ever growing home market for diversified products of the land. On the other hand our farmer friends should not overlook the obvious fact that they are not long going to enjoy the present, markets in Europe except with the keenest competition and substantially decreased prices for grain.
Russia, an agricultural country covering half of Europe and Asia, is rapidly going to become a competitor of Canada in the wheat market of both those continents. Located adjacent to both it will produce and transport at much less cost wheat equal in quality to No. 1 hard at a price ruinous to the Canadian farmer. Russia has a population of 146,000,000, of whom 116,000,000 are peasant farmers owning, occupying and operating 22,000,000 farms. Their production of farm products has increased 34 per cent in the last four years. Their 1926 crop was 87 per cent in excess of the 1921 crop. They produced in 1926 sufficient

to feed their large population and exported 18.3 per cent of their production, or sufficient to feed 30,000,000 more persons. This is going to be a real problem with our western farmers, because the European market will indeed be affected. They are educating their farmers more carefully than they have in years gone by; they are employing railway experts from the United States; they are getting American efficiency into their transportation problems, and there is no doubt that the time is not far distant when the cumulative effect of these efforts intelligently to increase production and economically transport the products from these 22,000,000 farms to the centres of population in both Europe and Asia, will have a profound effect upon our foreign markets for farm products. As a forecast of this I say to our western friends that last year our exports of agricultural products fell by more than $77,000,000. Is this not an opportune time for industrial expansion throughout our western provinces? Is it not important at this particular time that some encouragement should be given to industries so that the western farmer will very soon, have established within his own border, his own section a stable and what is, after all, the only safe market for any agricultural area to depend entirely upon.
There is one other department that, for several reasons, is closely associated with agriculture and that is the Department of Immigration. In the first place our present immigration policy is to allow inside our shores only those who are interested in agricultural pursuits. The second reason is that the present Minister of Immigration (Mr. Forke) who, I regret, is not in his seat, has been a farmer, and also a short time ago he led a group of farmers in this other comer of the house, only later to leave them, in order to sit on the other side. Apparently he has lost his policy in the confusion, because we find that he is now struggling with a real problem, one that affects the very life of our nation. He has a whole army scouring European countries and hand-picking prospective immigrants who can be assimilated in certain sections of this Dominion, and the result is that his department is spending more money and accomplishing less than it did under any previous administration. This is indeed a serious problem. It is all very well to say that immigrants are going to come here because the Lord is sending us good times; but we must have a definite and fixed policy of immigration if we are going to accomplish anything in this Dominion, and I would suggest to the Minister of Immigration, who has made such a great change of heart in

The Budget-Mr. Rowe
order to give his services to the present government, that he now ask the government of which he is a member to make a change of heart also and to adopt a policy whereby our people may have more work at a reasonable wage. If that is done our immigration problem would soon be solved.
When we stop to consider that more boys and girls are to-day leaving our shores than we are bringing in to replace them, we can appreciate the seriousness of the problem. Some of the members of the government shake their heads. I will go back some years and I somewhat agree with the hon. member for South Timiskaming (Mr. Lang). I will make this statement and I ask any member of the government to contradict it. If we go back some years it will be found that more of the Anglo-Saxon race and their descendants have gone to the United States to reside than we have in the whole Dominion of Canada, and I ask my hon. friends from Quebec if a similar situation does not exist in regard to the French-Canadians in their province. I am not giving all the credit for that misfortune to the present administration, but I say that that is the situation in this Dominion. The very best blood of our nation, the sons and daughters of the old homesteads, the labouring man and his family, the university graduate and his sweetheart have all gone to the United States where they can find employment. Only the other day I was speaking to a boy who graduated this year, and I asked him what he was going to do. He said that he was going to the other side, so I said: "Why not stay in Canada?" He said: "Fifty per cent of our year are going there and last year they all went there but one."
This is a serious problem and it is high time that the immigration department assumed more responsibility than merely endeavouring to assimilate the foreigners who settle in Canada. I do not mean to say for a moment that we do not need the foreign element to assimilate in this country, but we should give some attention to those boys and girls who are born under the British flag, and who do not need assimilating in order to become fine Canadian citizens. If a foreign settler is worth one thousand dollars to our nation before he becomes assimilated, how much more is one of our own boys or girls worth? It is high time that we inaugurated in the Department of Immigration a real immigration policy, and by the way I hope that, after this immigration investigation is completed, the immigration department will do what the old customs department did, namely, change its name to a more creditable 46103-53
and better name, a name that will be more appropriate to the changed conditions. We could well change the name to Farm Settlement and Colonization department or any such name as the government might choose. But let the government change the system first and give us a policy whereby our own boys and girls as well as those who come from other countries will receive some assistance. When we change the name of this department, we should change it to one more pleasing to the newcomer and less embarrassing to our own boys and girls who, under the new system, might seek assistance from this department.
I know that my time is limited and forty minutes does not give sufficient time to do justice to the weakness of such an administration as this. No doubt the Minister of Finance has, as he has often glibly said, tried to serve all classes of this Dominion, and with all due respect and regard for the responsibility which is his, I wish to tell him that the farmers and dairymen realize that he was the founder of the Australian treaty, and they will see that he has done nothing to relieve them in regard to the out in the price of butter to the tune of from twelve to fourteen cents a pound and nothing to reduce their taxation. I am satisfied that the average citizen will look over this budget carefully and he will see that, while there have been some reductions in the income tax, they affect only 1.3 per cent of our population. He will also see that he is still paying a sales tax of three per cent, at which rate it stood when this government came into power, on every dollar's worth of the necessaries of life that he buys. He will also note that it would be a good thing for this Dominion if we had more rich men because they have been well dealt with. If a man's annual income is 8100,000, his taxes will be reduced by $2,000; if his income is $200,000, the relief he will get by this budget is $6,000, and if by any chance any person should be clever enough under this administration to make $300,000 a year, this poor man's budget will reduce his burden of taxation to the tune of $9,000. The labouring man will also note that the treaties which this government have made, have increased the cost of some of his foodstuffs by 35 per cent.
Let me say in conclusion, because I do not want to trespass on the rules of the house, that I thoroughly regret that the present government has given no relief to the labouring man in the way of decreased cost of living, nor any sign of more work and better wages. In this budget there is no encouragement for the agriculturist in his home matket nor any reduction in his present taxation. There is

The Budget-Mr. Rowe

also no sign of an attempt to recover the long since lost security that is necessary for advanced industrial development in any country. On the other hand, to the strong and the true who are hewing our timbers and sending forth our raw resources to foreign manufacturing plants, the Minister of Finance hands out only the slogan, " Work harder, practise thrift, and the kind hand of Providence may come to your rescue with a bountiful harvest, and our ambassadors will then go forth and tell the world of the wonders of our trade


Mir. FRANKLIN SMOKE (Brant):: Mr. Speaker, the budget speech starts out with statements of leaders of finance and industry as reflecting progress and prosperity. The people are the best judges of whether there is prosperity or not. Prosperity with the banks and so-called leaders of finance and industry, is not necessarily conclusive of a similar degree of prosperity among the masses. We must go to the masses to learn how far they are sharing in this prosperity. The degree of unemployment which still exists among those in greatest need-whether they are wholly unemployed, or working on part time only, and even when employed, employed at wages such as at present prevail-is a far better criterion of the social condition of that class of the community which should receive the greatest care from the administration. A contented populace is the best sign of prosperity.
The constant nibbling at the tariff, which is the favorite diversion of this government, makes it harder every day for the employers of labour to carry on, and if they do succeed in carrying on, too often it is done by the reduction of the wage scale as a necessity to their carrying on at all. There is a constant demand that profits should be passed on to the consumer. This is the reverse case. The losses are passed on to the working man.
Should these reductions in the tariff result in the slowing down, or closing down, of industries, it means, besides greater hardships to the working man, the depreciation or wiping out of capital which, once lost, is lost for all time-lost not only to the individual who suffers the loss, but to the country as a whole as a part of the previously accumulated wealth.
Too much is made of the term "industries". Very often people look upon industries, or rather the owners of industries, as plutocrats, but as a matter of fact in nearly every large industry the stock is widely scattered and held by all classes of the community who have in the past been able to add a little to their savings. The widow, the orphan, as well as the man of moderate means, and the wealthy, 
are the ones whose funds are available as capital with which to carry on these industries, and when industries fail the losses reach to all classes of the community who have in any way been able to lay by something in the past. It is hard to distinguish such treatment by the present government from the Soviet system of confiscation. If it differs at all, the system of the present government is worse than the soviet system. As I understand the soviet system, they confiscate, but do not destroy; they leave facilities for production practically unimpaired, and production still goes on, while by the system adopted by this government capital is entirely destroyed. This government will be known to posterity as bolshevist, or worse. No name can more accurately describe it.
The financial statement of the Minister of Finance (Mr. Robb) has been punctured most effectively by the hon. member for St. Lawrence-St. George (Mr. Cahan), and by those who have preceded me. No one, not even the Minister of Finance, is deceived by the casuistries of his argument, though he hoped to convey the impression in the country that all is as he says. All he has done is to furnish the Liberal stump speakers-or such of them as are unable to think of something themselves, and there are many such-with ammunition with which to stump the country in the next campaign. That is probably as much as the minister hoped for.
I am old enough to remember the days of the Macdonald administration, when the government were spending $28,000,000 a year, and this covered all public services. That is only about forty years ago. The cries of indignation of Sir Richard Cartwright and others over the extravagance of the government still reverberate through the memories of many now living. To increase the expenditure by $28,000,000 from one budget to the next in these days is mere child's play. It is done almost every year.
We hear a lot about the desire for work and thrift. The minister highly recommends it, but it would be more to the purpose if he were to lay a foundation by practising economy in the public service so that those who do practise thrift will not necessarily see the product of their labours taken away from them in taxes.
I am not well enough acquainted with the
effect the tariff changes will have on the industries of the country, or even on the industries in my own riding, though I have what I consider good grounds for believing these changes will be injurious, and possibly disastrous. An attempt is being made to lessen the injury to these industries by the re-

The Budget-Mr. Smoke
duction or wiping out of the duty on some of their raw material and what machinery they may desire to import. The reduction or wiping out of the duty on raw material may be of benefit to those who are not manufacturers of this raw material, but it will cut out from under the feet of those who do both weaving and knitting a profitable part of their business, and will do no one any good. While as for machinery, there are few mills who have not now more machinery than they know what to do with; instead of wishing to buy they are in the market to sell, and there are no buyers, and the result is it will have to be sacrificed, which means pretty nearly a total loss.
What will be the effect on the wool industry of the country as a result of the proposal in the budget to admit free yarns? The sheep industry has had hard sledding for years. Statistical tables show that the sheep population has been almost constantly dwindling for many yeai-s, and that the per capita sheep population in Canada is many times less . than that in other countries where sheep thrive no better than they do in Canada. What do Canadian sheep farmers think of this? The farmers' cry, in so far as there has been a distinctive cry from that class, has been that the government has been more solicitous for the weal of the urban industries at the expense of the farmer. Surely if ever there was justice in this contention, this government has gone out of its way to give absolute proof that after all the government's pretended care for the farmer is only a pretence.
The amendment proposed by the hon. member for St. Lawrence-St. George expresses regret that the measures proposed by the government do not provide for increased employment in Canada, nor prevent the continued emigration of our people to the United States, and that they do not make provision for the preservation of our domestic markets for Canadian farm and dairy products, nor for the effective development of our national resources, nor for the early abolition of the sales tax. As I believe the arguments hitherto presented in this house are conclusive proof of the statements in the amendment, I am m hearty accord with his amendment, and shall have pleasure in voting for it.
There is, however, another subject which has a strong appeal to me It is not in any sense a criticism of the government except m so far as it may indicate a lino of inaction on the part of the government. I must premise what I am about to say by stating that I have not consulted my chief or any of my colleagues on the subject, and that my statements which follow will be as new to them as to any other
56103-53i
member of this house, and it necessarily follows that what I have to say is only my personal view and is not in any way binding upon a single member of this chamber.
I have, however, long meditated on the subject. I know that it has been mooted elsewhere, but that is about as far as it has got. It has been pooh-poohed and ridiculed, but that is no argument in itself. It has been brushed aside as something entirely subversive of all economic ideas held hitherto as almost sacred, but I have failed in my reading to come across any reasoned and convincing argument against it.
While not denying that some inconvenience will result, still if it could be accomplished without too great an interference with economic conditions, the result would be well worth striving for. If the experiment is not fraught with too great dangers to warrant the attempt necessary to secure the accomplishment of the project, I am sure every one wjU agree that the project is well worth the consideration of parliament.
We heard from the hon. member for Red Deer (Mr. Speakman) and the hon. member for Last Mountain (Mr. Fansher), and we have heard and shall hear from many other members of that school of thought, that because certain kinds of taxes were imposed during the war-such as income tax, sales tax, business profits tax-these should be retained unaltered so long as any part of the war debt remains. IV hat is there so sacred about the income tax, or the sales tax, that they must not be touched? At the time of the war the need was great and the government of the day saw these ways for raising money and adopted them. Others might have found other or additional ways. That is not the question
I look upon Canada in its financial aspect after the war as just like a mutual fire insurance company. Everyone knows that the members of a mutual fire insurance company share the losses of those who suffer loss in proportion to the size of their several risks. Our country was in deadly jeopardy. Had we lost the war to Germany, it cannot be seriously contended that Canada would not have fallen into German hands. Our property would have been actually confiscated, or if not, we should have been so taxed by the Germans that confiscation would have been preferable. The war debt is a debt of the nation and should be paid for by those whose property was salvaged in direct proportion to the risks involved, exactly as in the insurance case mentioned. It is easy to say that the debt is a debt of the nation, but when it cames to payment it is not the artificial
The Budget-Mr. Smoke

entity, the nation, which pays it; it has to be paid by the individual through the tax collector. It is our debt-yours and mine- and we should face the situation.
It is calculated that the national debt of the country is practically ten per cent of the total estimated wealth of all Canadian citizens. These citizens in the last analysis ewe it and must pay it. I know the idea of a capital levy is looked upon as financial heresy. It may be so. Not having been a profound student of finance, and not being a financier, I cannot say, but as I look upon it I owe ten per cent of whatever small amount of this world's goods I possess to the creditors of the Dominion of Canada. Except for the fact that our creditors have been good enough to defer time of payment, our debt would be now due and payable. An honest debtor pays his debts if within the range of possibility, and it is my duty to do my share, and the duty of every citizen of this country to do his share. I am willing that ten per cent of my worldly wealth be sequestered to meet my share of this debt; and until I can be convinced that the idea of a capital levy is not only supposedly, but really, financial heresy, I shall continue in the belief that this is the true and only sensible solution of the difficulty. If I think I am worth SIO.OOO, that being the whole of my means, and I really owe SI,000 of this to the creditors of the Dominion of Canada, I am only worth $9,000. Let us take ourselves down a notch or two and get into an honest environment. Let us face facts. As to how this would be accomplished, 1 do not venture to say. We all remember that during the war every person had to register, and in the archives of this building, or in some other public department in this city, will probably be found a record of such registration. It was not difficult to do in those days. A new doomsday book can be compiled showing the total wealth of all kinds in Canada. A comptroller for liquidation of the national debt might be appointed and given authority to have this doomsday book prepared, and then some way might be devised of sequestering the ten per cent, or whatever percentage necessary, of each person's wealth. I would not say, take it away from any industry or any company; a company is owned by its shareholders. I would take it away from the individual owner, that is, I would sequester ten per cent of every person's stock, whether in a joint stock company, a bank, or in any other form of investment-10 per cent of his property of every kind. It should be set aside and administered, not necessarily all at once, but in time,

so as not to disturb unduly the business of the country. The national debt would then be taken care of.
The farms and other property of the hon. member for Red Deer and the hon. member for Last Mountain are a part of the property salvaged by our troops as the result of our success in the war, and in my humble judgment they should be willing to have ten per cent of their wealth, or whatever amount the assessment on an insurance basis would require, set aside as their contribution to the payment of the debt. We think we are worth twenty-five billion dollars. We owe two and one-half billion. All we are really worth is twenty-two and one-half billion dollars. Do not let us continue to deceive ourselves by thinking anything else.
The war was not the result of anything we in Canada had done, nor was Great Britain's responsibility for the causes of the war any greater. The Anglo-Saxon and the French races have an inborn love of peace, and all that peace brings in its train, and this has been the outstanding policy of the Anglo-Saxon and French peoples for at least a century. It must, however, be peace with honour. Great Britain was forced into the war, and Canada without hesitation wholeheartedly took her natural place beside the motherlands and has never regretted it.
We, as a result of the war, are burdened with a colossal debt. Why should we of this generation not pay it? Are we going to cast on posterity-which may without this burden have troubles enough of its own-the burden? True, we were not the cause of it, but it was incurred during our trusteeship of the country's affairs. Let us have mercy on the growing and unborn generations, and look after our own burdens. Let us leave posterity free to deal with its own problems untrammelled by any which have arisen during our trusteeship. May I suggest the appointment of a committee or commission of inquiry into the feasibility of a capital levy? Such committee should not contain a single member chosen for political reasons, but it should be strictly non-partisan and have no thought of politics. The government can surely select representatives of every class of the community who would be really helpful, and whose duty it would be to give intelligent study to the question, who would cast aside every conclusion arrived at hastily and without sound logic, and all preconceived prejudices. The members of this commission need not be all Canadians. I would welcome the appointment of members from the motherland, or from any part of the world where good material is available and would not limit the number

The Budget-Miss Macphail
so long as all chosen would be of some real service. It may be that the proper conclusion will be against the idea in favour of which I venture to speak, but I do not believe it. If it should happen, as I pray that it may, that the people of Canada can lead the way and evolve and carry out a plan that will free the rising generations from the incubus of the war debt, utopia will have arrived', we shall have presented an object lesson to other nations who will eagerly follow our successful efforts, and the name of Canada will be revered throughout all the nations of the world through every generation forever and forever.
On motion of Miss Macphail the debate was adjourned.
On motion of Mr. Robb the house adjourned at 10.30 p.m.
Tuesday, February 28, 1928