1928-02-20

[Stage Direction]
Bill No. 46, respecting The Nipissing Central Railway Company.-Mr. Lang.
Bill No. 47, to incorporate Canadian American International Bridge Company.- Mr. Edwards (Ottawa).
Bill No. 48, respecting The Calgary and Fernie Railway Company.-Mr. Gershaw.

Questions


Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I move that the house proceed to government notices of motion, in order to take up the motion which stands in my name. It is the motion which refers matters pertaining to the Department of Immigration to the committee on agriculture and colonization. I have no doubt the house will wish to have the committee consider these matters while the debate on the budget is in progress.


Mr. SPEAKER:: By unanimous consent
Mr. Mackenzie King moves, seconded by Mr. Lapointe:
That the Immigration Act and regulations thereunder, including the work of the Department of Immigration and Colonization, be referred to the committee on agriculture and colonization for consideration and report.


[Stage Direction]
Motion agreed to.


Mr. C. G. POWER (South Quebec) moved:: That the interim report of the special committee on pensions and returned soldiers' problems, which was presented on the 17th of February, be concurred in.


[Stage Direction]
Motion agreed to.

Mr. WILLIAM DUFF (Antigonish-Guys-borough) moved:: That the annual report of the Minister of Marine and Fisheries for the fiscal year 1926-27, and the annual report of the fisheries branch of the Department of Marine and Fisheries for the fiscal year 1926-27 be referred to the select standing committee on marine and fisheries.


Hewitt Bostock: This motion can only
be made by leave of the house, seeing that no notice was given of it. Is it the pleasure of the house to adopt the motion?


[Stage Direction]
Motion agreed to.

Hon. J. H. KING (Minister of Soldiers' Civil Re-establishment):: On behalf of the
Secretary of State (Mr. Rinfret) I table the report of Commissioner Hunter and also the evidence taken before him.


Hon. R. J. MANION (Fort William):: Will the minister also table the special audit of Gordon C. Scott, dealing with the same matter? I should like to have that report also.


Mr. KING (Kootenay):: I shall be very
glad to table that also.



QUESTIONS

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

Mr. WOODSWORTH (Winnipeg North Centre):: What action has been taken or does the Government propose to take to protect the public against the operations of the Proprietary Articles Trade Association?


Mr. HEENAN:: An investigation under the Combines Investigation Act was made into the operations of the Proprietary Articles Trade Association as an alleged combine of manufacturers and wholesale and retail druggists established to fix minimum resale prices on certain proprietary medicines and toilet articles. The commissioner, Mr. L. V. O'Connor, reported, on October 24, 1927, that the association was operating against the public interest. Immediately after the publication of this report the association withdrew its stop-list and ceased operations.


UNLOADING COAL AT HALIFAX
Mr. SMITH (Cumberland):: 1.	Is pier No. 9, in the city of Halifax, Nova Scotia, reserved for use of Canadian National Railways?
2.	Was a large quantity of American coal unloaded at this pier during 1927?
3.	If so, for whom was such coal unloaded?
4.	By whom was such coal used?


Mr. DUNNING:: 1.	Not exclusively; portions being leased.
2.	Not by or for the Canadian National Railways.
3.	No information.
4.	No information.



COLPTON MAIL CONTRACT

Mr. ERNST:: 1.	Was a new contract recently executed by the Post Office Department for the carriage of the mail from Colpton station to Colpton post office, Nova Scotia?
2.	If so, who were the parties tendering, and what was the amount of the tender of each person?
3.	Were any representations made to the department of the Postmaster General or any official thereof, respecting any of the parties tendering ?
4.	If so, by whom?
Questions


Mr. VENIOT:: 1.	Yes.
2.	The amount involved being under $200 per annum, it was not necessary to invite tenders.
3 and 4. See answer to No. 2.



BAESS CORNER-NEW GERMANY MAIL CONTRACT

Mr. ERNST:: 1.	Was a new contract recently executed by the Post Office department for the carriage of the mail from Barss Corner to New German}" post office, Nova Scotia?
2.	If so, who were the parties tendering, and what was the amount of the tender of each person ?
3.	Were any representations made to the department of the Postmaster General or any official^ thereof, respecting any of the parties tendering?
4.	If so, by whom?


Mr. VENIOT:: 1.	Yes.
2.	L. S. DeLong, Barss Corner, $779; Everett F. Langille, Barss Corner, S7S9.
3.	Yes.
4.	Government candidate for constituency.



PRICE OF FANCY DELICIOUS APPLES

Mr. STIRLING:: 1.	The producer in British Columbia receives $2.35 for a box of extra fancy Delicious apples containing about 140 apples, and out of that he pays the cost of their production.
The consumer is paying, on the average, 74 cents apiece to-day in Ottawa, which is equivalent to $10.50.
2.	What are the details of that spread?


Mr. MOTHERWELL:: 1 and 2.
The following prices cover fancy Delicious apples, as prices for the extra fancy grade were not obtainable:
Per box
Shipping point price, $2.35 to $2.00,
mostly	 $ 2 45
Freight to Ottawa	 75
Heating charges	 10
Brokerage	 05

Wholesale price to retailer, $3.50 to
$3.75, mostly	 $ 3 75
Retail price to consumer, $4.25 to $4.50,
mostly	 4 50
When sold by the specimen the retail price is higher, ranging from 2 apples for 25 cents to 5 apples for 25 cents, according to size, average 4 for 25 cents.



DEPUTY MINISTER OF JUSTICE

Mr. ANDERSON (High Park):: 1.	What is the salary of the Deputy Minister of Justice?
2.	Was not the salary of the Deputy Minister of Justice raised to $10,000 because the then deputy was able to and did personally attend and argue appeals before the Privy Council ?
3.	Does the present Deputy Minister of Justice personally attend and argue appeals before the Privy Council?
4.	If not, why?


Mr. LAPOINTE:: 1. $10,000.
2.	No.
3.	Since his appointment in 1924 it has not been found necessary to instruct him to attend personally before the Privy Council.
4.	He has during that period been needed as deputy head of the department in Ottawa, where the work has been consistently increasing.



WELLAND CANAL

Mr. TELFORD:: 1.	On what date was the construction of the Welland canal commenced?
2.	What amount has been spent on the construction of the Welland canal up to January 1, 1928?
3.	What amount has been expended on the Welland canal in each year since the commencement of the work?


Mr. DUNNING:: 1.	During September, 1913.
2.	$87,465,040.90,
3.	Welland canal appropriations:
1905-06		.. S 13,231 97
1906-07		.. 10,825 27
1907-08		.. 8,300 34
1908-09		.. 19.993 37
1909-10		.. 9,979 91
1910-11		.. 21.229 35
1911-12		.. 23.138 60 $ 106.698 81
Welland ship canal appropriations:	
1912-13		.. $ 112 890 92
1913-14		.. 994,257 60
1914-15		.. 4.074.200 69
1915-16		.. 4.909,732 51
1916-17		.. 3.513.769 82
1917-18		.. 1,235.046 59
1918-19		.. 1.823 875 96
1919-20		.. 3.499.963 35
1920-21		.. 5.070,297 57
1921-22		.. 5,429,566 86
1922-23		.. 6.404.157 18
1923-24		.. 7.192.506 60
1924-25		.. 10,097045 62
1925-26		.. 11.863,209 14
1926-27		.. 13,988.961 74
April to December, 1927..	.. 11,362,635 52 $ 91.678,816 48

Unopposed Motions jor Papers
Less: Plant sold and collected for during fiscal years 192122 to 1927-28, inclusive.. ..	4,213,775 58
Cost to December 31, 1927.. $ 87,465,040 90
Expenditures prior to 1913-14 were for surveys and investigations preliminary to commencement of construction work.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. GEARY:: What is the total amount of butter and the value thereof in each month from April 1, 1926, to January 31, 1928:	(a) exported to Great
Britain; (b) exported to other countries; (c) imported from Australia; (d) imported from New Zealand?


MAIL CARRIER ROUTES IN PICTOU COUNTY, N.S.
Mr. CANTLEY:: 1.	How many mail carrier routes are now maintained in the county of Pietou, Nova Scotia?
2.	What points do these cover?
3.	What is the mileage of each?
i. 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?


DISMISSAL OF POSTMASTERS IN NEW BRUNSWICK
Mr. JONES:: 1.	How many postmasters in the province of New Brunswick have been dismissed since October 1, 1926?
2.	What are their names, the names of the post offices, and the federal constituencies in which said post offices are located?
3.	How many of said positions have been filled to date, and on whose recommendations were the appointments made?
4.	In how many and in what cases were investigations held?


RAILWAY SECURITIES-DATES OF ISSUE
Mr. WHITE (London):: What are the dates of issue of the various securities listed in schedule Y, page 15, of the Public Accounts of 1927?


UNOPPOSED MOTIONS FOR PAPERS
Mr. ERNST:: For a return showing the names of all persons employed as counsel or solicitors in the province of Nova Scotia during the calendar year of 1927 by the Department of Justice in the prosecution of cases arising out of the Customs and Excise Acts, and of cases in the Exchequer court arising out of seizures made by officials of the customs and excise service, showing the respective amounts paid to each of such counsel and solicitors.


ALMVICK TOWNSHIP INDIAN AGENT
Mr. MAYBEE:: For a copy of all correspondence, letters, telegrams, and other documents in the possession of the government, relative to the dismissal of W. R. Coyle, from the position of Indian agent, on the Indian reserve in Almvick township, Northumberland county, Ontario; and also all similar papers in connection with the appointment of his successor.


RENATA POSTMASTERSHIP
Mr. ESLING:: For a copy of all correspondence, letters, and other documents in connection with the dismissal of Peter Friesen, from the position of postmaster at Renata, British Columbia, and similar papers in connection with the appointment of his successor.


CANADIAN NATIONAL RAILWAYS-STURGEON FALLS BRANCH LINE
Mr. LAPIERRE:: For a copy of all correspondence, letters, telegrams, petitions, and other documents in the custody of the government in connection with a demand for a branch railway from a point near Field on the Canadian National railway to Sturgeon Falls, Ontario.


MARITIME FISHERIES COMMISSION
Mr. FRASER:: For a return showing:-
1.	The total cost of the royal commission investigating the fisheries of the maritime provinces, up to and including January 31, 1928.
2.	The personnel engaged as members of such commission and as secretaries, stenographers, counsel, or in any other capacity.
3.	The respective amounts paid or _ payable to each person engaged in any capacity with such commission up to and including January 31, 1928: (a) as fees, and (b) as expenses.


RELATIONS WITH SOVIET RUSSIA
Mr. SPENCER:: For a copy of all correspondence, telegrams, resolutions, orders in council, reports, or other documents in the custody of any department of the government of Canada, in any way relating to the breaking off of diplomatic relations with Russia during 1927.


William Lyon Mackenzie King: In connection with this motion there is some correspondence with the British government on the matter, and before bringing down that part of the correspondence the government would wish to have the consent of the British government; otherwise the return will be brought down as it stands.


Mr. HEAPS:: I think the Prime Minister
made that statement to the house last Thursday. Has there been any reply yet from the British government?


William Lyon Mackenzie King: Not yet.
The Budget-Mr. Cahan


SENATE REFORM
[Stage Direction]
On the orders of the day:
James Shaver Woodsworth: Is it the intention of the
government at this session of the house to take any action looking to the reform of the Senate? I have no reference whatever to the appointment of new Liberal senators.


Hewitt Bostock: Notice should be given
in the case of such an important question.


UNEMPLOYMENT RELIEF
[Stage Direction]
On the orders of the day:
Abraham Albert Heaps: Has the Minister of Labour received from any provincial government or any municipality throughout the Dominion a request that the federal government give relief in regard to the unemployment situation?


Peter Heenan: We have not had a request to
contribute, but the Premier of Ontario and, I think, the Premier of Manitoba, inquired if we intended to carry on the old system of contributing one-third.


Abraham Albert Heaps: Will the minister be willing to table the communications he has had with those two governments?


Peter Heenan: I will table them tomorrow.


THE BUDGET
[Stage Direction]
The house resumed, from Thursday, February 16, 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.
Mr. C. H. CAHAN (St. Lawrence-St. George):: Mr. Speaker, when the leader of
the opposition (Mr. Bennett) invited me to reply to the address on the budget of the Minister of Finance (Mr. Robb), I could not but accept the invitation as an expression of personal confidence and goodwill on his part; but the task of replying to that address and of setting forth as best I can the views and policy of the Conservative party in this house and in the country on the several matters enunciated by the Minister of Finance is, I find, a grave duty and responsibility and, therefore, I ask the indulgence of the house when I attempt to perform that duty.
The Prime Minister (Mr. Mackenzie King) in a recent debate endeavoured, as he

frequently does, to distinguish between the expressions "equality of status" and "differences of functions." I presume he will not disagree with me in the suggestion that hon. members on this side of the house have an equality of status with members of the government and their supporters on the other side. The difference of function is one which, I think, he will also admit. We have had from the government from time to time the expression of their function in giving a very incomplete statement of the facts relating to the administration of the government and the financial and commercial conditions of the country. After the Minister of Finance has presented his budget, in which he confines himself to the truth but to a very incomplete statement of the truth, it is always necessary that members on this side should fulfil their onerous duty of placing the full facts before the country.
I notice that on the very evening on which the Minister of Finance made his budget speech, another gentleman, who is very prominent indeed, or who wishes to be so, in the public life of this country, made a speech in the city of Montreal in which he claimed for himself and one or two of his associates the full responsibility, and corresponding gratitude of the public, for all the advantageous results which the Minister of Finance had noted. I do not know and I cannot judge from personal knowledge of the capacity of Sir Henry Thornton as an administrator of the railways of this country, but apparently he thinks that the Prime Minister, the Finance minister and the Minister of Railways are mere binary -satellites who become known to the public only when they stand in the reflected light of his great -sun or star. But in this house we must look to the ministers of the government, who have assumed the responsibility of the administration of public affairs in Canada for a statement and explanation of their conduct in the administration of their respective offices, and I think the government and parliament and the people of this country would be better satisfied if Sir Henry Thornton would not so often obtrude himself into matters of which he has only a partial knowledge and no experience whatever.
The Finance minister, in making his statement to the house, dealt with the net debt of the country, and, simply because Sir Henry Thornton has obtruded himself into this public discussion, I intend to reflect somewhat upon the part he plays in the administration and in respect of the net and gross liabilities of this country.

The Budget-Mr. Cahan
The net debt of Canada on March 31, 1927, was $2,347,834,370, showing on the face of the accounts a reduction of $41,896,729.33 in the net debt over that of the preceding year. And yet the national railway indebtedness, to the public only, increased in 1927 by $46,000,000.
The certificate of the firm of chartered accountants who have been employed for the first time by the finance minister to give a certificate as to the actual financial condition of the country, and who have audited the public accounts for the first time, contains the following:
We certify that the balance sheet has been compiled in a manner similar to the corresponding statements of previous years, and does not include in the net debt of the Dominion issues of the Canadian National Railway Company and companies included in its system, which carry the guarantee of the Dominion. The details of such guarantees are shown separately in the public accounts.
That I think is the first time that that specific statement has been placed in the return of the public accounts, and on that account it is interesting to note that the chartered accountants who have now for the first time audited the public accounts found it necessary in the fulfilment of their duty and responsibility to make that specific explanation.
The long term indebtedness of the Canadian National railways in respect of securities issued to and now held by the public amounted on December 31st last to $981,381,796 according to unrevised figures, but I assume they are approximately correct. A large portion of these securities are actually guaranteed as to principal and interest by the government; another portion are guaranteed as to interest only; but whether guaranteed or not, this government and the people of this country must accept full responsibility, morally and legally, for paying ultimately those liabilities; because, although they are kept in a separate account and are the liabilities of what I may term one branch of government, they are nevertheless the liabilities of the people of this country and ultimately must be paid by them. But the entire sum of $981,381,796, no part of which can ever be repudiated by this government, is not included to the extent of one dollar in the net debt of Canada as presented to parliament by the Finance minister in his budget speech.
The liability of the national railway system to the Dominion government for cash advances made out of the Dominion treasury on December 31, 1926-I have not the figures
for December 31, 1927, but they will no doubt be given by the Minister of Railways- amounted to $507,848,511. It would be expedient, I think, on another occasion that the Minister of Railways Should bring down his returns to this house so that they may be discussed in connection with the budget of the Finance minister with which they are intimately related. But let me remark that of this enormous sum of cash advances made by the government to the Canadian National railways not one dollar of interest has ever been paid. Only simple interest is computed thereon, and the simple interest up to December 31, 1927-1 have not the exact returns before me-undoubtedly amounted approximately $226,500,000. In addition there is included, I may say by way of explanation, certain other amounts to which I have made no reference whatsoever. There is included in the long term indebtedness of the national railway, as shown by the balance sheet of the company, about $436,500,000, which represents approximately the amount expended by the Canadian government upon certain government railway lines, such as the Intercolonial, the Prince Edward Island railway, eastern branch lines, and the Transcontinental railway, which entered into the consolidation of the national railway system. That is another amount which is entirely excluded and which may properly be placed, as the Minister of Railways has contended once in my hearing in this house, in a different category from those cash advances to the amount of $507,848,500 which had been made by the Dominion government to the railway company itself up to December 31, 1926.
I may add that on December 31, 1927, the long term indebtedness of the Canadian National railways to the investing public was, as already stated, $981,381,796. The long term indebtedness to the Dominion government, subject to the explanation which I have made, was $1,225,046,995, including, as I say, the cash advances amounting to $436,500,000- and the total long term indebtedness amounted, on December 31, 1927, according to the unrevised report to which I have had access, to $2,236,428,791. I submit, Mr. Speaker, that those figures are sufficiently staggering to have received some comment and explanation from the minister who presides over the Department of Finance.	_	_
Now, the minister also laid claim to reductions in the net debt. He stated, according to the report tabled', that the net debt of Canada was actually reduced by $41,896,729, for the fiscal year 1926-27. That is true in the restricted sense that the accounts of the Department of Finance actually showed such
The Budget-Mr. Cahan

a reduction in the net debt. But there is this other department or branch of government, namely, the Canadian National railways, whose liabilities, as I have already said, and as I wish to emphasize, are not included in that statement of the Finance minister. When the Finance minister, therefore, reported a net reduction in the debt for the fiscal yeai ending March 31, 1927, if I remember, of $41,896,729, he failed to take into consideration the increases in the long term liabilities of that other branch of government to which I have called attention, which, during the calendar year ending December 31st last, increased its long term liabilities to the public-let me confine it to that, excluding its debt to the government for public advances-increased its long term public debt from $935,383,109 on December 31st, 1926, to $981,381,796, on December 31st last, an increase for the year of $45,998,697, approximately $46,000,000, in the net debt to the public on account of the railway alone, as compared with a decrease of $41,900,000 in the debt to the public of those other branches of government over which the Finance minister presides. When the minister made that statement of decrease in the public debt there was loud applause on the other side of the house. I fail to hear any applause from the other side now.


Some hon. MEMBERS:: Hear, hear.


Charles Hazlitt Cahan: I am glad my friends from
the west respond1. They always treat me in the most chivalrous way possible. The Finance minister made a statement to the house and the country, and I repeat that it was far from being the whole truth.


Some hon. MEMBERS:: Oh, oh.


Charles Hazlitt Cahan: Far from being the whole
truth, and the statement which I am now making includes the truth in respect to the Railway department. The Finance Minister and some of his journalistic supporters throughout the country, when members on this side of the house, in attempting a solution of any public problem, present the whole truth, regard it as an unpatriotic action. I have only to say, with the best of goodwill to the Prime Minister and those who surround him, that I and other members on this side are not unwilling to enter into a comparison with him and his associates at any time and on any occasion with respect to the performance of our patriotic duty, and I may add that we on this side have as much disinterested loyally to the best interests of this country as the Prime Minister or any other hon. member, even his most humble supporter or journalistic advocate.

The Prime Minister reported also a reduction in the net debt of Canada during the four years from March 31, 1923, if I have the figures correctly, to March 31, 1927, of $105,-942,498.65-he was particular even to the sixty-five cents. That statement was also true in a restricted sense, but it was not the whole truth in respect of the reduction or increase of the liabilities of the government and of the people of this country. The fact is that the long term debt of the national railways to the public, excluding the original appropriations for the construction of the government lines, excluding the advances made in cash by the government to the national railway system, excluding the simple interest which has accrued on those cash advances-excluding all those things, the net debt of the national railways to the public alone, which amounted on December 31, 1923, to $823,099,056, was increased on December 31st, 1927, to $981,381,796, an increase of net indebtedness to the public in that time of $158,282,740, as compared with a decrease of $105,942,498 which the Finance minister showed in respect of the departments whose accounts he calculated in his return. If all the governmental accounts were kept as they should be, and the liabilities shown as they should be in the financial statement which the Minister of Finance annually submits to parliament, he would not have been able to announce a reduction in the debt in those five years of $105,942,498; he would have had to announce an increase in the net debt of the country during the same time of $52,340,000, on account of the increasing net liabilities of the government to the investing public during the four years mentioned.


Mr. BENNETT:: By the people of Canada?


Charles Hazlitt Cahan: By the people of Canada,
to the investing public alone.
On a proper basis of accounting the $65,000,000 of bonds which, as the Finance minister discloses, were issued by the Canadian National Railways as of July 1, 1927, guaranteed by the Government of Canada, would have appeared as a direct liability of the Government of Canada.
But these bonds do not, by the present system of accounting, appear as part of the consolidated debt, nor as a part of the net debt of Canada, although on January 1 last $60,272,764 of the proceeds of this loan had been expended-an amount which more than wipes out the Finance minister's estimate of $38,815,000 as the prospective reduction of the net debt during the year ending March 31, next.

The Budget-Mr. Cahan
The Finance minister continued:
It is with pleasure and satisfaction that once again we are in a position to propose further reductions in taxation.
He was not speaking of the rate of taxation. He was giving the impression-I think deliberately-to this parliament and to the people that there had been great reductions in the volume of taxation from year to year under the Liberal administration. He might have added, even in giving his own partial description of the facts for the sake of better clarity and greater verity, that the sales tax and income tax reductions-both reductions of special war taxes-were in fact reductions merely in increases of taxation which this government had previously imposed. They found the sales tax levied at the rate of 3 per cent; they increased it to 6 per cent. They then discovered that this rate was an intolerable burden on the country, increasing exorbitantly, as every per cent of it did, the cost of living. They first reduced it to 5 per cent, then to 4 per cent, and now they propose to reduce it to 3 per cent-just where they found it on attaining office. I think the opinion on both sides of the house is that when making their last reduction they should have announced the abolition of this tax, for thereby they would have done more than by any other single act of government to reduce the average cost of living in this country, which is so high in comparison with the cost of living in the same state of society across the border. They increased, two years ago, the income tax so as to impose double taxation on the incomes of all companies- once on the incomes as earned, and again upon the same incomes when distributed. Now, in a round about way-and apparently this government can never do anything frankly and directly-they propose to mitigate in some degree the burdens which they themselves had previously imposed, and which the people have found almost intolerable.
But apart from decreases in their own impositions of taxes, the volume of taxation has not been diminished since the Liberal party took office away back in 1921. In 1924 their excise taxes increased from $107,989,893 in 1923 to 1123,668,847. In 1925, by reductions made of their own increase of taxation, the excise tax was reduced to 889,330,838-a decrease of $34,338,009 below 1924. Between 1924 and 1925 there was some reduction in the amount collected of other war taxes which were imposed by ohem-selves. But, as I said before, except in these instances there has been no reduction in the volume of taxation annually collected. The total taxation collected rose from 409 millions in 1922 to 459 millions in 1923, to 479 millions in 1924. The total taxation then decreased by reason of the reduction in the taxes which they had previously imposed, and in 1925 the volume decreased to 395 millions. But the returns show that the amount of taxation increased next year to 443 millions, and again in 1927 to 471 millions. In the fiscal year 1927, which should have showed such enormous reductions in taxation according to the statement of the Minister of Finance, they obtained from taxation 61 millions of dollars more than in 1922, their first year of office.
I ask the indulgence of the house to place on Hansard a short statement, which may be examined by hon. gentlemen on both sides of the house, showing how these increases took place in the four years which I have briefly reviewed.


James Shaver Woodsworth: Mr. Speaker, personally I do not object to tabular statements being placed on Hansard within reason, but I would urge that we have some sort of uniform action in this regard. It was only at the last session of the house-


Some hon. MEMBERS:: Order.


James Shaver Woodsworth: I think I am in
order.


Hewitt Bostock: Does the hon. gentleman
rise to a point of order?


James Shaver Woodsworth: Yes, your honour.
On the point of order, I say I do not personally object to having certain tables placed on Hansard; I think it is a good thing; but I would remind the house that there ought to be uniform action in this regard. My colleague from North Winnipeg (Mr. Heaps) was stopped Thursday evening from placing such a table on Hansard. An hon. member objected, and the Prime Minister, supporting the objection, said he objected on behalf of the house to this practice. If objection is to be taken in the one case I think it should be taken in all.


Hewitt Bostock: There is a rule of the house, and it is a custom also, that no document may be placed on Hansard without its being first read by the hon. member addressing the house. There is, however, a time-honoured exception in the case of the budget speech delivered by the Minister of Finance and the speech in reply by his chief critic. I think the house would be living up to its traditions by allowing the Minister of Finance and his chief critic to place certain statistics on Hansard. Otherwise it would have to be by unanimous consent.
Tfie Budget-Mr. Cahan


William Lyon Mackenzie King: Mr. Speaker,
inasmuch as mention of myself has been made by the hon. member for Winnipeg North Centre (Mr. Woodsworth), I should like to say that he is quite right. I did take exception to his colleague putting on Hansard last Thursday a lot of material that he had in the form of a Statistical table. At the time I think the hon. member mentioned that last session I had taken exception to an hon. gentleman opposite adopting the same course. In both cases I did so simply to uphold your honour in maintaining the rules of the house, and I still think that principle ought to be observed. Either we should alter the rule or have it observed. With respect to the time-honoured custom' which you, Mr. Speaker, have mentioned, of giving to the critic immediately replying to the Minister of Finance a wider latitude than is granted to hon. members generally, I have no exception to take. Apart from that, I think it is the duty of every member to uphold the rules, and I believe we shall get further ahead if we make no exceptions.


James Shaver Woodsworth: May I ask the
Prime Minister whether he will have that rule observed-	1


Some hon. MEMBERS:: Order.


Hewitt Bostock: I would refer the house
to Bourinot, page 365.


James Shaver Woodsworth: I object to the
statement being placed on Hansard.


Some hon. MEMBERS:: Order.


Charles Hazlitt Cahan: The very simple statement which I am putting on Hansard gives the figures to which I have alluded and explains them, so that they may be open to further criticism if necessary. I should have no objection to reading them because, in this case fortunately, I am not limited to forty minutes. The statement is as follows:
Increase of Customs and Excise Duties Increase of Taxation
Customs duty	$121,487,393
Excise duty	 36,909,899
Total	$158,397,292
Customs duty	$133,803,370
Excise duty	 36,259j654
Total	$170,063,024
Customs duty	$135,122,344
Excise duty	 38,616,038
Customs duty	$120,222,453
Excise duty	 39,005,343
Total	$159,227,796
Customs duty	$143,933,110
Excise duty	 43,370,231
Total	$187,303,341
Customs duty	$158,966,367
Excise duty	 49,139,913
Total	$208,106,280
1928 Estimates by minister-
Customs duty	$153,600,000
Excise duty	 57,000,000
Total	$210,600,000
Total Taxes Collected
Customs and Excise	$158,397,292
Special War Taxes	 251,386,774
Total	
Customs and Excise Special War Taxes.
Total	
Customs and Excise Special War Taxes.
Total	
Customs and Excise Special War Taxes.

Total	$395,722,792
Customs and	Excise	$187,303,341Special War	Taxes	
256,524,653Total	$443,827,994Customs and	Excise	$208,106,280Special War	Taxes	
262,890,761Total	$470,997,041
Certain changes in the tariff and in the tariff policy of the country have been announced in this budget. Before proceeding to discuss these items, many of which are exceedingly difficult of discussion inasmuch as they call for a great deal of technical knowledge and skill, I wish to state what I believe to be the general tariff policy of the Conservative party in this house and in the country. We approve of tariff changes and generally of such tariff changes from time to time as the changing conditions of domestic industry and of foreign trade may require. In effecting such revision and the correlative readjustment of tariff rates we on this side
Total..

The Budget-Mr. Cahan
of the house stand by certain principles. These principles I intend to enumerate as best I can:
1.	The stimulating and developing of our vast and varied natural resources.
2.	The preservation and enlargement of the markets at home and abroad for Canadian farm products.
3.	The 'establishment, extension and development of Canadian industries on stable and remunerative bases, so as to induce investments in Canada, of Canadian as well as foreign funds, and particularly so as to create and furnish such ever-extending and diversified employment to the Canadian people as will preclude any considerable emigration of Canadians to the United States of America for the purpose of seeking more remunerative employment in that country.
4.	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.
5.	The reduction of the customs tariff or the imposition of higher excise taxes, whenever and wherever necessary, to prevent the immoral use or abuse of the existing tariff, or any unfair advantage being taken of the tariff, as for example by those who would resort to profiteering by exacting unduly high prices for their products from domestic consumers, under the protecting elements of the existing tariff.
6.	The adjustment from time to time of our preferential treatment of the products of the British countries comprised within the British commonwealth of nations, so as to modify preferences which are given at the expense of the Canadian farmer, dairyman or other industrial worker, and which tend to restrict domestic employment and decrease the general standards of living in this country; and
7.	The promotion of the export and import trade of Canadian ports wherever possible.
This I understand to be a general statement, in my unexpressive language, of the tariff policy of the Conservative party in this house and in the country. We fully realize that in such a widely extended country as the Dominion of Canada the economic independence of any one section or of any one group or class is an unrealizable dream. We realize that each section and group are dependent upon each other section and group for the promotion of our common interests. We must
stand or fall together in this country. No one section of Canada can suffer permanent injury without detriment to the whole body politic. In a word, we cannot conserve the economic interests of the whole country by promoting exclusively the interests of any one group or class. No one section of the country should be permitted to seek its sole aggrandizement at the expense of the whole body politic.
We recognize also that the monopoly of either trade or industry is often-times a source of economic evil, and, when such tendencies become manifest, they must, like every other public evil, be subjected to the control and restraint of this parliament. But we remember, and we affirm, that unfair and dishonest foreign competition is also prejudicial to the producers of this country, and measures for its due restraint are in like manner necessary and commendable. In every such case, however, such measures should be conceived and carried into effect for the general public interest of Canada, and not for the aggrandizement and profit of any particular group or class, no matter how closely associated they may be to the government of the country.
Experience has disclosed that each group or class or section of the country will tend to govern in its own interests when it has the opportunity and is irresponsible; but members of this parliament, on either side of the house, are, I suggest, representative of the whole Canadian nation, and as such they must exercise their authority without fear or favour in the interests of the Dominion as a whole.
The national policy as formulated by Conservative statesmen was designed, and admittedly designed, for the political unification and for the material and economic development of the whole country. Readjustments of the customs tariff for the encouragement of domestic industry were advocated only as one of the several elements of that policy. The national policy, in its broad outlines, contemplated the extension of the dominion from sea to sea; the opening up of the northern half of this continent to trade, traffic and transportation by railways and canals; the building of wharves and docks for the increase of commercial and shipping facilities; the intensive encouragement, on an extensive scale, of such primary industries as agriculture, forestry, mining and fishing; and, since men and women cannot live by bread alone, the national policy contemplated the establishment and extension in Canada of secondary
The Budget-Mr. Cahan

industries suitable to the existing conditions of this country, which will supply, so far as reasonably possible, the multifarious equipment, clothing, furniture, utensils and other things which satisfy the needs of our daily life. There are thousands of our own people who are not well adapted for the work of our primary industries of agriculture, mining, forestry and fisheries, and it is therefore necessary, if we would conserve the interests of the whole country, that we should establish from time to time those industries suitable to our necessities which will enable large classes of our people to obtain and retain employment in Canada, where they may contribute by their skill and labour to the economic welfare and advancement of our own country. The development of our primary industries being assured and safeguarded, the men who by their skill and labour in our domestic factories transform the raw materials of leather into boots and shoes, of coal and iron ore into iron and steel products, of wood pulp into paper, of wool into clothing and the like, are creating
national wealth and promoting the general prosperity of the Canadian people. The secondary industries we maintain should be encouraged. But we must ever bear in mind that there can be nothing final in the political, industrial and commercial development of a widely extended country such as ours, which is only partly prospected, only partly explored, and its future progress and prosperity must depend upon our loyal, and sometimes our self-sacrificing, cooperation foe the attainment of ends which we all have in common.
I obtained from the department of statistics a statement of the industrial production of Canada for the year 1926, and to save the time which would be consumed in reading it I ask leave now to have it inscribed upon Hansard.


James Shaver Woodsworth: Mr. Speaker, I
object.


Charles Hazlitt Cahan: western supporters by reducing the tariff rates on manufactured goods and, on the other hand, to appease the manufacturer by reducing the customs duties on the imported materials which are used in the manufacture of his completed product.
.In the case of automobiles, for instance, the government at first reduced the net protection by lowering the tariff on the manufactured product, and they sought and received the acclaim of their western supporters. In the end they increased the net protection by reducing the tariff on materials and component parts imported, and also by reducing the sales tax previously imposed on the Canadian product, so as practically to maintain the same net protection and thus permit the Canadian industry to survive. I refer to that because I find the same tactics exemplified in the tariff schedules which have been submitted in the budget for the approval of parliament. But would not an intelligent public-because while you may deceive some of the people some of the time you cannot deceive all of the people all of the time-have more respect for the Minister of Finance and the government which he represents, if he did not resort to this sort of camouflage, but had the courage frankly to admit that by this indirect method he was endeavouring to please both wings of the divided party on which the maintenance of the government in power depends? In the end it is the producers of wool, hemp, iron and steel, and other primary Canadian products who suffeT, and as a result of this and similar reductions of duties on raw materials, we find that Canadian growers of wool, dairy producers, and coal, iron and steel producers, are placed under serious disabilities, while their employees from year to year, as I will endeavour to show, are forced to emigrate and seek employment in the republic to the south.
Dealing with the new tariff, we frankly, admit that, as trade and industrial conditions change, corresponding changes in the tariff are necessary in order to split up complicated schedules and to clarify existing schedules; but many of these new items, although intended for that purpose, seem to me to complicate matters still more thoroughly. I doubt if the Minister of Finance, in presenting his budget of tariff changes, took into his counsel the Minister of National Revenue (Mr. Euler) who has control of the department administering the customs, because I fancy that the experts of that department will for a long time find greater difficulty in ascertaining what some of the new schedules mean than they have ever had before in connection with any similar tariff items. It is

difficult for one who is not an expert to determine the net result of some of the changes proposed. Owing to the variety of cotton products manufactured in Canadian factories I find that different factories are undoubtedly differently affected; but the new duties, as I will endeavour to demonstrate, will, I think, tend to turn over to United States factories a large share of the cotton business and particularly the coloured cotton business of Canada. Some Canadian mills may receive from some items of drawback or some items of customs duty a slight advantage as, for example, in the advance of duty on textiles of cotton mixed with rayon or on pure rayon textiles. Other mills, such as Wabasso, which confine themselves to particular branches of the trade, may reap some slight benefit from some of the changes made. Penmans will probably not be prejudicially affected so far as my vision goes, but I am not an expert. But the Minister of Finance, referring to these cotton schedules of the new tariff, said1:
Coupled with the general lowering of rates on the finished products is a lowering of rates on yarns and other materials used by manufacturers for further processes.
There we have the automobile trick all played over again, the second time in an attempt to appease the conflicting elements which I see on the opposite side of the house. This statement tends to create in the minds of one wing the impression that the customs duties have been lowered all along the line, and in the minds of the other that the net protection to the manufacturer has been maintained. But, continuing, the Minister of Finance said:
In the proposed changes the needs of the Canadian consumer and manufacturer have been carefully considered, while incidentally the scope of the British preference has been materially widened.
Let me deal for a moment with the alleged widening of the scope of the British preference in respect of cotton fabrics. Four items of the new tariff, namely: 523, 523a, 523b and 523c cover all imports of cotton woven fabrics. Item 523a remains unchanged, evidently, as I think, and as I may suggest, for the purpose of quieting some friends of the administration who probably have special and irresistible claims. Consider first the British preference as shown in these four items. In item 523 the British preferential rate is 12i per cent; no change. In item 523a the British preferential rate is 15 per cent; no change. In item 523b the old British preferential rate of 22i per cent is reduced to 20 per cent-a reduction of 2i per cent. In item 523c the old British preferential rate of 22J per cent is reduced to 20 per cent-a reduction of 2i per cent.

The Budget-Mr. Cahan
There is no change in the British preferential rates on two items; on the other two there is a reduction of 24 per cent, from 224 to 20 per cent. If this were all, there might be some substance in the claim of the Finance minister that he is enlarging the scope of the British preference. But the Imports into Canada of British cottons are met in this market by a corresponding competition from the factories located to the south of the Canadian border. They, the Americans, are the chief competitors of the British manufacturers in our market. How are the American competitors treated in these cotton schedules? In item 523 the former general rate of 25 per cent against the American is
reduced to 224 per cent, while the British preferential rate is not reduced at all There is a difference of 24 per cent in favour of the American manufacturer against the British. In item 523b the general rate against the American manufacturer is reduced from 324 to 274 per cent-a decrease of 5 per cent in favour of the American competitor. In item 523c the general rate against the American product is reduced from 324 per cent to 30 per cent. There is another decrease of 24 per cent in favour of the American manufacturer. I have prepared a short schedule containing only four tariff items showing the old and the new duties, which I will ask leave to place on Hansard:
Preferential	Intermediate	GeneralOld item 521. Unbleached cotton..	. 124	224	25New item 523. tjnbleached cotton..	. 124	20	224Reduction	. 0	24	24Old item 522. Bleached cotton.. ..	. 15	224	25New item 523a. Bleached cotton..	. 15	224	25Reduction	. 0	0	0Old item 523. Coloured cotton.. ..	. 224	30	324New item 523b. Coloured cotton..	. 20	25	274Reduction	. 24	5	5Old item 523. Coloured cotton.. ..	. 224	30	324New item 523c. Yarn dyed	. 20	25	30Reduction	[DOT] 24	5	24
Average reduction in preferential 11 p.c Average reduction in intermediate 34 p.c Average reduction in general 21 p.c.
The result is that there is an average reduction in the preferential rate in favour of Great Britain of 11 per cent, and in the intermediate tariff of 34 per cent. The Minister of Finance is giving foreign goods coming in under the intermediate tariff a better rate than they ever had before, while the general rate against the Americans is reduced by 24 per cent. Between the British manufacturer and his American competitor in the Canadian market, the American manufacturer, I repeat, in respect of three of the four items, which cover the whole bulk of the imports of cotton fabrics into this country, is placed on a more advantageous basis by either five per cent or 24 per cent in competition with the British manufacturer. If reducing the tariff in favour of the Americans more than you reduce it in favour of the British, and giving the American competitors a better opportunity of competing in the Canadian market, is enlarging the scope of the British preference, I do not understand the 56103-40
meaning of the English language. I do not make any reflection upon the Finance minister. He, as all hon. gentlemen know, is a genial gentleman who is esteemed on this side of the house as fully as he is on the other, but evidently his intellectual qualifications, like those of the Prime Minister, are somewhat limited in certain circumstances, and he apparently has been misled by some of his advisers into making the mistakes which he did make in the house in delivering his budget speech.
Now look at this situation. The imports of all classes of cotton fabrics from Great Britain were in 1921, 33,320,613 square yards, and in 1926, 35,161,338 square yards, or an increase in the imports of cotton fabrics from Great Britain in five years of nearly 2,000,000 yards. On the other hand, under the tariff as it then stood, the imports of all classes of cotton fabrics from the United States was in 1921, 36,648,986 yards, and in 1926, 30,616,076 yards. Under the tariff as it stood until

The Budget-Mr. Cahan

last week, therefore, the American factories lost 6,000,000 yards of Canadian business. The Finance minister, whether he intends it or not, by reducing in greater proportion the general rate on American fabrics, is in fact restoring the American factories to their former position of pre-eminence in the Canadian market.


Mr. DUNNING:: Does my hon. friend
suggest that the American factories ever were pre-eminent, to use his own word, in the Canadian market?


Charles Hazlitt Cahan: My language will stand.
Whatever I said I will stand by. Their position was certainly pre-eminent over the British position, and if the hon. gentleman can take any other meaning or implication from my remarks, he is welcome to do so.
Let us look at another characteristic of the new tariff. It is impossible in the time at my disposal to review, separately, all of the 159 items. They will be considered in committee-


Charles Avery Dunning: You have all the time
you want; you are not limited at all.


Charles Hazlitt Cahan: only effect of this change in the tariff schedule will be to induce foreigners to undertake the business of exporting woollen yarns.
Let me deal for a moment with the worsted cloth mills. There are, as I said, only six worsted cloth mills in Canada, operating 474 looms. The Minister of Finance may suggest that the woollen cloth mills which are idle

and which seem likely to remain idle under the present provisions of this amended tariff- might be turned into worsted cloth mills. I submit to him that the technique of making woollen cloths and worsted cloths is so different that it is impossible that the managers and employees of one should turn over and work the other. They are trained for the one, and they are not trained for the other; and he might as well suggest that I should give up my practice of the law and turn it over to ray hon. friend the doctor who sits to my right (Mr. Manion), and that he should turn over his medical practice to me, and that we would be equally successful in our new positions, because we happen to be graduates of the same university.


Charles Avery Dunning: It might be good for both your clients.


Mr CAHAN:: That is quite impossible,
and I venture to say that none of my clients is so stupid as even to suggest that.


Robert James Manion: And I might add, neither
are mine.


Charles Hazlitt Cahan: Worsted yarns for making
worsted cloths are, however, standardized the world over, and they can be bought to specifications by cable in England, France or Belgium. The old tariff imposed the low rate of duty of 12J per cent under the British preferential schedule. These worsted yarns are now made flee of duty. Personally I do not know 'he business sufficiently to predict what the result will be. I do know that one or two of these worsted weaving mills now existing in Canada do import largely of worsted yarns, but on the whole the quantities of worsted yarn now made in Canada by the Canadian mills are larger than the quantities imported. In other words, the worsted mills in Canada now make the bulk of their own yarns. If these worsted yarns are to be placed upon the free list instead of being encouraged by a 121 per cent duty-which I do not think even my western friends would complain of-the result, so far as the spinning of yarn is concerned, will be to diminish their home production, with the result that Canadian workmen and work women must suffer lack of employment.
Now, one other phase, and I will not keep the house very much longer.


Some hon. MEMBERS:: Go right along.


Charles Hazlitt Cahan: I refer to the steel and iron industry. On January IS last the hon. Postmaster General (Mr. Veniot) representing the government of Canada, in discussing at St. John the Valley railroad and the bounty to the Sydney steel plant, said, as reported in the Telegraph-Journal:
These two matters, however, were receiving the serious consideration of the government, and within a few weeks the policy would be divulged which, he thought, would make every maritimer feel proud.
Having been originally a maritime man myself, I looked through the tariff schedules with great anxiety to see how the steel industry was thereby being encouraged in Canada, and all I could find were the items allowing to the worsted mills and the woollen mills the importation of free machinery-which they did not need-and one or two removals of duty on locomotives and that sort of thing, all of which could very well I think, except for certain specified patterns or types, be manufactured in Canada. But I call the attention of the Minister of Finance to the present condition of the iron smelting and steel making trades in Canada. I find from a report made by Mr. F. W. Gray, which was published in Iron and Steel of Canada, January, 1928, this depressing condition of affairs:
The Dominion Iron and Steel Company, Sydney, Cape Breton, has six completed furnaces, at the end of October, 1927, it was operating only one.
Only one, I understand, has been put in operation since that time.
The Nova Scotia Steel and Coal Company's blast furnaces have been continually idle for the last five years.
Londonderry Iron and Mining Company, Londonderry, Nova Scotia, had one furnace which was idle and has since been abandoned.
Canada Iron Corporation Limited had two furnaces at Drummondville, Quebec, and one at Radnor Forges, Que., both idle and dismantled.
Standard Iron Company of Canada, Deser-onto, Ont., has one furnace at Deseronto and another at Parry Sound. They have both been standing idle for years.
The Steel Company of Canada, Limited, Hamilton, Ont., has two large furnaces. One only is in partial operation.
Canadian Furnace Company, Limited, Port Colborne, Ont., has one furnace, which has been continuously idle since November, 1924.
Algoma Steel Company Limited, Sault Ste. Marie, Ont., has four furnaces, and only one was in operation in recent months.

The Budget-Mr. Cahan
The number of persons employed and the between 1920 and 1926 in the following propor-wages and salaries paid have been reduced tions:
1926
Persons
employed
Blast furnaces and steel mills.. ..	13,874
Secondary plants	 101,887
Wages and salaries paid
Persons	Wages and
employed	salaries paid
$ 22,824,530	6,014	$ 8,934,536135,860,417	75,400	125,229,867
The total of men employed has been reduced from 115,761 in 1920 to 81,414 in 1926. I might go into the whole question as elaborated in this report and show that in 1926 for producing a total value of $496,000,000 of completed iron and steel products, the output of this country, there was imported $255,000,000 worth of material which could have been produced at home, thus giving employment to our own workmen and our own country. Out of the entire manufacture, representing over $500,000,000, only $41,000,000 worth of primary products of Canadian origin was utilized. If the Minister of Finance will look into this record of idle blast furnaces, of unemployed men, of declining production of primary products within Canada, he will find sufficient to show that the earnest attention of this government should be given to the consideration of this vital industry of producing iron and steel, the prosecution and development of which is absolutely essential to the economic independence of this country. It is one of the most serious problems we have to face. We admit there are difficulties; but the government are there to consider serious difficulties and to suggest some improvement. And up to the present time they have absolutely failed. My own native province of Nova Scotia is more deeply involved in this regard than perhaps almost any other part of Canada, but I will not go into that question because there are others here-especially my colleague from Pictou (Mr. Cantley)-who are far more competent to deal with it. It was with a feeling of very considerable disappointment that the people throughout the country generally scanned the changes in the tariff made by the Minister of Finance, for they offer no relief whatever to this depressed and ever-vanishing industry.
The whole problem of immigration, to which this parliament is asked to-day to give special attention by sending a resolution on the question to the standing committee on agriculture and colonization,-I say, the solution of the whole problem of immigration into this country and of emigration from this country depends upon one thing and one thing only:	It depends in the final analysis
upon providing remunerative employment throughout the Dominion to our own people
and, as well, upon giving equally remunerative employment to those people whom we seek to induce to come and! settle here. This is the problem which, from year to year, confronts the hon. gentleman who sits in the office of Minister of Finance. But it is a problem to which he appears not to have given the slightest possible attention. He comes to this house year after year and tells us of the enormous development of our import trade, while year by year our own factories are idle, our own industries are diminishing and our Canadian workmen are being driven out of employment, and while, year by year, we are giving to American factories, which have the advantage of selling their manufactures in their larger market, the privilege of controlling the markets of Canada as well. If hon. gentlemen opposite intend to fulfil their whole duty and responsibility of promoting the advancement and progress of the country which Providence has committed to our charge, they cannot overlook, they must not overlook, the absolute necessity of providing more varied and more extended employment for our people. This is a matter that comes home to my heart because, wdiile I sit in my office in Montreal,, month after month I am besieged by young men from the technical colleges and the universities, young men who have served their time in our industrial concerns, who cry, "For goodness sake, Mr. Cahan, can you not find employment for us in this country-this country in which we were bom and bred?" And what can I do? I have to tell them that I am utterly incapable of doing anything to help them under present conditions, with the result that they take the night trains for the United States and enter into industry there. I tell hon. gentlemen that in a country such as ours, with our large agricultural industry, which is growing from year to year, and with our industrial development, depressed though it is, there should not be one native-jborn Canadian who could not to-morrow or a week hence find profitable employment somewhere in this Dominion in some of our diversified industries. Until hon. gentlemen give to this problem the attention which it demands, and find a solution, we
The Budget-Mr. Cahan

shall never have the development of Canada placed on a permanent, stable 'basis. Until they solve this problem of unemployment we shall simply be raising families of sons and daughters and educating them here at our expense to qualify them to take up their vocations for life in the neighbouring republic.
Providence has committed to our charge and responsibility, temporarily under this government, one of the finest countries ever created, and we are making such a mess of the administration of it that we cannot retain our own people at home nor, without paying millions in bonuses, induce people even from the starved areas of Europe to come here and settle and make their permanent homes here. I therefore ask leave, Mr. Speaker, to move in amendment, seconded by the hon. the leader of the opposition (Mr. Bennett):
That all the words after the word "that" be struck out and the following substituted therefor:
This house regrets that the measures proposed by the government do not tend to provide increased employment in Canada, nor to induce the return of Canadians to their native land, nor to prevent the continued emigration of our people to the United States; and that they make no provisions for the preservation of our domestic markets for Canadian farm and dairy products, nor for the effective development of the natural resources of the country, nor for the abolition of the sales tax by the 1st of January 1928-
That is wrong; I should have read, " 1929."


William Lyon Mackenzie King: Perhaps I can help my hon. friend. I will give it to him; it is here in the evening paper of to-day.


An hon. MEMBER:: He doesn't need help.


Richard Bedford Bennett: It is better than having the budget speech out before it is delivered.


Mr. ALFRED SPEAKMAN (Red Deer):: Mr. Speaker, as, unlike the hon. member for St. Lawrence-St. George (Mr. Cahan), my time is limited to forty minutes, I shall not endeavour to emulate his exhaustive analysis of the budget proposals, nor is it my intention to comment in any way upon his address. With some of the remarks he has made in a most excellent, address I am in entire accord. To some I might take exception. But I shall say nothing further than this:
I listened with intense interest while the hon. member indicated and outlined the tariff policy of the Conservative party as laid down at the convention in Winnipeg last October. I think that it warrants the term which is used in that connection. For years we have listened to a plea for stability in tariff matters. Now "flexibility" has taken 
its place, and I gathered from the hon. gentleman's remarks, as I followed his interpretation of the policy, that it provided for these things: for the manufacturer it suggested "adequate protection" without using the words; to the farmer "low cost of production"; to labour "steady employment at remunerative wages"; and to the consumer in general "protection against exploitation and increase in the cost of living." I can only say, Mr. Speaker, that if any tariff policy could bring about all these beneficial results I think the country as a whole would welcome it, and would adopt it as a truly national policy. The thought was in my mind, as I listened to his speech, and as I remembered some statements made by the present Prime Minister in former days, that the Conservatives at the present time have apparently adopted in toto the fiscal policy of the premier at that time; and I can only hope that what is suggested in some parts of the present budget proposals is not true, and that the Liberal party have not adopted as their policy the former policy of the Conservatives.
Mr. Speaker, in endeavouring to consider for a few moments the budget proposals brought down by the Minister of Finance (Mr. Robb), my first words must be words of congratulation to the minister for the manner of its presentation. It was brief and concise, characterized by clarity of expression and by an absence of cumbrous or unnecessary verbiage. It was characterized also by a refreshing absence of overmuch political boasting. I may also congratulate him on one aspect at least of the budget itself. It illustrated the fact, which is well known to the people of Canada, that not only is the minister a capable business man- and as such respected throughout this Dominion-but that he is also a diplomat and a politician of a very high order. To my mind, Mr. Speaker, this budget represents a clever and not unsuccessful attempt to reconcile and express the varying and conflicting interests and opinions which go to form the present Liberal party. To the one wing we find is offered a reduced income tax; to our manufacturers a lowering of tariff on some of the raw materials which enter into the goods that they manufacture; to the other wing we find a reduction of the sales tax offered and, I am free to say, a rather vague and indefinite suggestion of a general revision of the tariff. I hold, Mr. Speaker, that it is a clever and not unsuccessful attempt to reconcile all the varying opinions upon which the minister must depend for support.

The Budget-Mr. Speakman
I wish to consider for a moment the preamble to the budget itself. That preamble includes two statements of some moment. The first is the following which I quote:
Seldom have the annual statements from leaders of finance and industry throughout Canada so generally reflected such progress and prosperity as that of the year 1927.
Mr. Speaker, the claim that we in this country are enjoying increased prosperity has frequently been made by successive ministers of finance, and not infrequently with less reason for the statement than exists at the present time. I can well believe that from the point of view of those leaders of finance and industry referred to by the minister the assertion is in this case indisputable. Undoubtedly there is an increase in the volume of business being done 'within this country, increased dividends are in many instances being paid, and our banks, trust and insurance companies are becoming the depositories, and to some degree the beneficiaries, of an increasing volume of wealth. This question, however, is being asked by hundreds of thousands of men and women in Canada to-day:	Why, in view
of these visible manifestations of increased wealth it is so difficult, in many cases so impossible, for individuals to secure any share of that wealth for their own personal requirements. While business is increasing and wealth accumulating, tens of thousands of our workmen throughout this country are in receipt ot a scale of wages far below the amount necessary to maintain a decent standard of living according to the computation of the Department of Labour. Thousands of our farmers are fighting to make ends meet, working under conditions and home surroundings which many of us here can not visualize, which none of us would tolerate, and content and satisfied if at the end of the year they have been able to hold their own. Moreover, hundreds of our small tradesmen and professional men throughout this country are struggling in that morass which has engulfed so many of their kind and forced them into bankruptcy. This question demands an answer. I cannot answer it, but I may suggest a line of inquiry which, if followed to the end by men more able than myself, might assist in the solution of this problem. The tendency of modern civilization is to concentrate our population in a few large centres, to centralize industrial production in large and larger units, and to concentrate the control of both industry and finance in the hands of a decreasing number of increasingly wealthy individuals and groups of individuals. In the
limited time at my disposal I have not the opportunity to discuss whether this system is unavoidable or not, or whether it is good or bad. I will say this however: That through a multitude of channels is drawn to these centres a large part of the profits made in this country by the industry of men and women throughout the whole countryside. On the' other hand the back channels through which these profits dhould again flow to irrigate the countryside, and freshen and brighten the lives of our people, seem to have been overlooked or are obstructed. Or to put the same thought into other words, centralization while it tends to efficiency in production, tends also to the most appalling inefficiency in distribution both of profits and of products. To solve this dual problem of distribution, possibly through cooperative effort, is a task towards which the best minds of the country both in the government and outside their ranks might well turn their serious and earnest attention.
Since I was a small boy I have worked on a farm or have been closely associated with men who have worked on and are working on farms, and I am inclined to believe that the same conditions which apply there apply largely to all classes of industries. We find men and women working day by day intelligently and industriously at hard manual labour; we find them very often working under admittedly unpleasant conditions, and we find them, in the case of the farmers at least, working for very long hours and yet apparently unable to provide for themselves and their families comfortable homes according to the modern standard of comfort, a decent comfortable standard of living and education, and some reserve in case of sickness or death. Why is that? It must be due to one of these two things. Is it because the workman as a whole, who is after all, in field and factory, in mine and forest, the great producer of our national wealth, receives an unfair remuneration for his work, or is it because he has to pay an unfair price for the things he has to purchase? One or other or both of these must be true, and due to my own circumstances during my life I have been face to face with that problem so that it has become a very real problem to me as it is to the people I represent. Again I would urge upon this house, regardless of any question of politics or parties, to concentrate on the problem of returning to the workingman of any sort, any class, whether manual or mental worker, a fair share of the wealth which he produces.

The Budget-Mr. Speakman
The next point in the preamble to which I should like to call attention is again an utterance of the minister. This is what he says:
The statement of the nation's business will show conclusively that, notwithstanding our annual reductions in the rate of taxation, our revenues have been ample to meet fixed charges, take care of the ever increasing needs of a growing country, and provide also for a reduction of debt.
As regards the first part of that statement as to reductions in taxation I concur in the ministers statement, and I am afraid I cannot follow the reasoning of the hon. member for St. Lawrence-St. George (Mr. Cahan) and some of his colleagues. After all the true test as to the weight of taxation is not the aggregate amount but the percentage of income or business profits which is drawn into the channels of taxation, and while it is true that a greater aggregate and a greater per capita amount have been paid in taxes, still it is also true that reductions have been made and that the percentage of taxation on profits made-and by profits I mean all income secured in any way at all-is slightly lessened. Let me illustrate what I mean in this way. Assuming for a moment that the price of motor cars has been reduced-and I think that is a fair assumption at the present time -and assuming that, partly by reason of that reduction in price, so many more cars are sold that the aggregate amount and the per capita amount paid for cars within the country are greater than before, no one would argue from that situation that the actual cost of motor cars had not been reduced. That is an illustration of what I mean when I say that it is the percentage, the rate, and not the aggregate amount that should be taken ino consideration in discussing the subject of tax reduction.
But I cannot agree with the next statement of the minister as to the debt reduction, and I find myself drawn to the same logical conclusion as that expressed by the hon. member for ISt. Lawrence-St. George and on former occasions by others in this house. I have not the time to go into t'he back history of this country and I will not burden Hansard with any intricate computations. I will say simply this:	We have in the same statement
side by side the declaration of the minister that, after allowing for certain reduced assets, the net reduction of our national debt will amount to $38,815,000, while at the same time and during the same year $65,000,000 worth of Canadian National railway bonds were guaranteed by the government. A portion of that guarantee was simply a refunding matter. 
An amount of some $20,000,000 indicates simply a change from a Short-term, three-year guaranteed obligation to a long-term, thirty-year guaranteed obligation. It is simply a matter Of bookkeeping and it neither adds to nor diminishes the total sum of our liabilities. The bulk, however, of the rest is a fresh liability on the part of the railways. I can conceive that if, as in the case of the Montreal harbour commission, for example, which had also guaranteed bonds to the extent of $S,000,000, the security within the company is ample to cover such bonds, the minister might say that it did not add to the liability of the country. But what are the facts in this case? It is generally believed and freely stated that the Canadian National Railways are at the present time over-capitalized. It is being suggested-and I concur in that suggestion-that the capital should be written down to a reasonable figure in order to allow them to have a fair Showing in competition with other similar lines. If the railway is over-capitalized, this means that every available asset and every form of security it offers are mortgaged more than one hundred per cent. It means that there is no security in the railway itself for any additional loans or obligations, and we are in the position of a man who signs a note for another man who is mortgaged to the extent of every stick of furniture he owns, who has no assets of his own to meet that obligation. In that and in this case the guarantor becomes in fact the debtor. I shall leave that as my time is short and I simply wish to indicate my opinion and give some reasons for it.
I commend very heartily the minister's action in reducing the sales tax by 25 per cent. It is a tax which is cumbersome in operation and unfair in application. It pyramids as it reaches the consumer and becomes greater. It affects directly the standard and the cost of living and it hampers business in general. I think it was a proper move for the minister to reduce that tax at least to the extent he has done.
When I come, however, to the tariff proposals I am somewhat at a loss. I am without the intimate knowledge of certain lines of business that is possessed by the hon. member for St. Lawrence-St. George, and in the absence of comparative schedules, which the minister will table and which will be at our disposal at a later time, I am unable to arrive at any accurate or detailed knowledge as to what that revision actually means. The reclassification is carried on to such a degree; items are carried from one classification to

The Budget-Mr. Speakman
another, and no comparative schedules are given showing the actual reduction or increase made that it is impossible for me to form anything but a general estimate as to the line which has been followed in that tariff revision. One or two indications, however, are fairly distinct and clear. The first is that a large portion at least of this reduction does not tend and was not intended to give any relief to the consumers, but was intended, so far as it is effective-and I am not discussing the question of its being effective-to give .manufacturers a little greater advantage by reducing some of the costs of the raw materials and the machinery which enter into the cost of the manufacture. With that I have no quarrel whatever. I am simply indicating what to my mind are the salient features of the budget. As to the general revision affecting consumers I shall say nothing; I am inclined to think the effect will be slight, but lacking accurate information I do not intend to give utterance to a premature opinion.
On one point, however, I am fairly clear, and that is the question of the British preference. The statement has been made that it has been amplified and enlarged. Again, I shall not follow the hon. member for St. Lawrence-St. George into his computations as to the exact meaning of the word. I wish to point out that accompanying the suggestion that the British preference is being amplified and enlarged comes the qualification that the percentage of the empire cost of production shall be increased from twenty-five to fifty per cent on all goods coming in under that preferential rate. Inevitably and obviously that provision will mean the effective curtailment of the quantity of goods coming in under that tariff. I am not saying that that is right or wrong; I am simply pointing out what would obviously be the effect. If you increase the percentage of empire cost of production from twenty-five to fifty per cent, you will inevitably curtail the quantity of goods coming in under that preferential tariff, and I cannot see how that can be called an amplifying or widening of the preferential idea.
There is another point in connection with the tariff to which I would like to refer, and that is in regard to the work of the advisory tariff board. Ever since my intelligence has led me to regard such a board as a fact-finding board, I have been in favour of it, but in view of the fact that the evidence brought before that board and the evidence elicited by it is not available to the members of this house, although it is available, I presume, to the government. I believe that the opinions of tho?" who hold that that board is a smoke
screen behind which the government can evade responsibility are at least partly justified. I took issue with that statement when it was first made because I conceived it to be a sound principle when we were dealing with the tariff that we should be in possession of all the information necessary to come to a conclusion, but if that information is to be only in the hands of the government and not in the possession of members of the house, then when the Minister of Finance says that the board has inquired into certain matters and certain findings have been made, I say that the government is to that extent shifting the responsibility from itself to the board, because it is not giving to the members of this house the opportunity to judge for themselves the value of the information brought forward. I urge upon the Minister of Finance that as soon as possible and at all events before another budget comes down an adequate appropriation be submitted to the house to provide for the perusal by members of parliament of the information brought before the tariff board to which they are entitled, and which they expected to receive when voting for its formation.
I come now, Mr. Speaker, to that part of the budget to which I take the greatest exception, and that is the reduction in the income tax, coupled with the statement by the minister that " it is proposed that the Dominion shall continue gradually to lighten the load in the income tax field ", There is an inescapable inference to be drawn from that language and from the action of the government in bringing down this budget, and that is that the Finance minister and the government contemplate the gradual elimination of this form of taxation. I do not take issue with that on the ground imputed to myself and some of my colleagues by the daily press and by some hon. members to my right, that we object to any reduction in this form of taxation because we and the men and women we represent do not pay income tax, not having sufficient income to come within the scope of the act. It is possible, I believe in this house, and I claim that right for myself as I accord it to others, to discuss questions on their merits, without either imputing or receiving imputations that we are speaking from a selfish point of view. I do not impute to any gentleman here who votes for a reduction in the income tax the motive that he is voting for it because he has a large income and is therefore personally interested in a reduction, and I personally expect to have my own opinion respected in like manner. I am
The Budget-Mr. Speakman

opposed to this reduction on grounds that I shall give which appear to me to be sound as applied to the whole country.
First, I would say that this tax, with others, was instituted as a war tax to take care of the increased expenditure of this country consequent upon the war. Is that expenditure done away with now? Is that debt paid? Is the debt for which the income tax was instituted retired to such an extent that we are warranted in eliminating the tax?


Mr. GARLAND (Bow River):: They have not scratched it yet.


Alfred Speakman: 
Abraham Albert Heaps: Unfortunately I have not seen the Ottawa Journal this evening, and therefore I am not in a position to know exactly what is contained in the amendment proposed by the hon. member for St. Lawrence-St. George (Mr. Cahan). However, I suppose I shall have an opportunity to look over the amendment before eight o'clock and see how it appeals to hon. members in this corner of the house.


Mr. ROBB:: If my hon. friend will allow
me to say so, he is not in any worse position than the government.
Mr.	HEAPS:	I	realize that,	but	weall know that it	is	nothing new	for thesethings	to appear	in	print before	they	areactually brought up in the house. I have been informed on reliable authority that speeches have appeared in the Montreal newspapers before	they were	actually delivered in	the
House of Commons here. However, in continuing this discussion I should like to 6ay that I was very much interested in the opening remarks of the Minister of Finance (Mr. Robb) when introducing his budget. He said:
Mr. Speaker, seldom have the annual statements from leaders of finance and industry throughout Canada so generally reflected such progress and prosperity as that of the year 1927.
I wonder why, in that statement, the minister left out any allusion to the farmers and the labourers of this country. Surely they should be in the minister's mind when framing a budget for the people of the Dominion of Canada; yet he referred only to the progress as reflected by the statements of the leaders of finance and industry. If I were a leader of finance or industry I know I should regard the budget as being very good, but not
The Budget-Mr. Heaps

being such a leader I cannot say that. I represent a working class constituency, where most of the men and women have to work for the money they get, and they cannot be classed in any way in that particular category referred to. Consequently I am compelled to view the budget as it affects the electors whom I represent, and I think that is the attitude which should be taken by every hon. member of this house in discussing this question. I presume that one of the reasons why the minister did not refer to anyone with the exception of leaders of industry and finance s because no one else has enjoyed prosperity.


Edward Joseph Garland: His conscience gagged at it.


Abraham Albert Heaps: I will not put it as baldly
as that; I think there may be other reasons, because after the statements made in this house by the Minister of Immigration (Mr. Forke) and by others coming from farming communities, the minister might have known that he could not claim any prosperity among the farmers and workers of this country. Knowing that certain of the provincial governments had made requests for federal assistance to the unemployed, he must acknowledge that there is no prosperity among the workers here. From his opening statement I think it quite proper to infer that our farmers and workers were in no way prosperous during 1927. I admit there is a certain amount of prosperity in the country at the present time, but that prosperity is all at the top; it does not reflect itself at the bottom. What is prosperity? The fact that a bank manager, a railway president, or an industrialist, at an annual meeting, states that his particular institution has had a prosperous year is in my opinion no indication as to conditions throughout the country as a whole.
I think prosperity reflects itself in the general condition of the masses, and when they are prosperous in Canada, then, and1 only then, can it be truly said that we are in a state of prosperity. At the present time there is not an hon. member, I do not care from what part of the country he comes, who can say that the masses of the people are experiencing prosperity; and so long as they are in a state bordering on poverty, only a few days removed from starvation, perhaps not even knowing where their next meal is coming from, I think it well that we should hear less talk of prosperity and should consider the actual conditions as we find them throughout the Dominion.
I want, now, Mr. Speaker, to deal for a few moments with another condition of 
affairs in which the minister took a certain amount of pride. He referred to our huge exports and their excess over imports. People are very easily deluded when figures of that nature are placed before them. I do not attach any great importance to such figures It is quite true that in the past few years we have been exporting far more than we have been importing. I think one of the reasons for this is that we have in the past imported so much capital that we are now repaying in goods some of our borrowings. I am using now the minister's own arguments in his budget speech. He claimed that in 1913 Canada had an adverse balance of trade of $29.61 per capita, and that in the same year India had a favourable trade balance. Now, because of that favourable trade balance does he mean to say that the people of India in 1913 were in a better condition than the people of this Dominion? That is the inference one must draw from the statement he placed on Hansard. Of course, it only goes to show the absurdity of trying to arrive at conclusions respecting the actual condition of a country by discussing the question of favourable or unfavourable trade balances. Invisible imports and exports have always to be taken into consideration, but the Minister of Finance omitted-conveniently or inconveniently-to mention this feature. In this house we have a number of farmer members, and I heard them applaud the statement that our exports were greater than our imports.


Edward Joseph Garland: You did
not hear this comer applaud.


Abraham Albert Heaps: I apologize to my friends of the Alberta group. I am speaking of my friends opposite.


Edward Joseph Garland: The Liberal farmers.


Abraham Albert Heaps: Supposing a farmer has a
couple of hundred head of cattle and sells 150: if he had been compelled by force of circumstances to get rid of his cattle would he be proud of the fact? I do not think any farmer would be pleased with a situation of that character. Having by necessity been compelled to dispose of the greater portion of his stock, probably at an inadequate price by reason of the forced sale, he would not at all feel happy. The parallel holds good nationally. We have in this country vast natural resources-natural resources which, I believe, ought to be the inheritance of our people. What have we done? We have bartered away many of those resources for a mere pittance. The result of that is shown

The Budget-Mr. Heaps
to-day in exports. In the past few years we have imported a vast amount of American capital; I do not know exactly how many hundreds of millions of dollars have been invested by American capitalists in the water powers and forest wealth of this country. As a result development is following along lines that obtain in the United States-we find "company" towns springing up. Recently, Mr. Speaker, I was at a meeting of the Montreal Trades and Labour Council, and I heard men state that when they had gone to these company towns in the neighbouring province, created by the importation of American capital, they were refused admittance. In other words, the Canadian people are denied the right to set foot on Canadian soil, controlled by American capital. What applies in some parts of Quebec also applies, as I know, in certain parts of Manitoba.
I wish also to deal with the implications that follow the importation of this capital from the United States. I am not one of those who look with kindly feelings towards American imperialism, especially as I see its workings and its implications in Mexico and Nicaragua. I have read statements of United States ministers, high up in the councils of their government, in which they claim that American capital wherever invested is entitled to the protection of the American government. That is a new international doctrine. The other night we listened to the hon. leader of the opposition (Mr. Bennett) discuss the diversion of water from lake Michigan by the Chicago drainage authorities, and in the course of his speech he quoted a statement by the late President Roosevelt in connection with the Alaska boundary. The very same problem is intensified to-day when we look at the amount of United States capital invested in foreign countries. You will generally find that those investments are followed later on by United States military occupation. I do not suggest for a moment that after the capitalists of the United States have secured financial and industrial control of a large part of the Dominion their government is going to do the same in this country as they have done in some of the South American republics, but the implications are there. Only in to-day's newspapers we read that some of the highest authorities in the United States claim the right for their government to intervene wherever American investments may be jeopardized. There is no telling when we may pass laws that may not be altogether to the liking of those to the south of us, and under such circumstances I can see us getting into a nasty squabble with the government at Washington. So long as we have American capital coming here I do not see how we can possibly avoid it. For my part, I would far sooner have waited a little longer, if possible, for the development of our natural resources than see the people of Canada become, in the language of the Bible, hewers of wood and drawers of water to American capitalists.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Abraham Albert Heaps: When the house rose at six
o'clock I had just referred to the establishment by American capitalists of company towns in Canada. I do not mean it to be inferred from anything I have to say with respect to American capitalists that the Canadian capitalist is by any means a saint. However, the creation in this country of these company towns is something new, and something which I look upon with a great deal of disfavour. The men employed by these companies hardly dare call their souls their own. They are almost enslaved body and soul for a wage of from 35 to 45 cents per hour, and Canadians who attempt to enter these places are often prevented from doing so in spite of the fact that they are natives of this country.
The minister has reduced the income tax. By the reduction of that tax he is giving to these corporations an advantage which I do not think they are entitled to receive. It has been stated over the last week end, that the persons objecting to reduction of the income tax are those who do not pay that tax. I want to take issue with that statement. All taxation is paid out of production, and if there is no production there can be nothing to pay income tax with; and whilst it may be true that the farmer or the worker does not pay income tax directly, yet I claim that as they are the chief producers in the Dominion they thereby pay indirectly a large share of the income tax. I object to the reduction of the income tax because I believe it to be the fairest form of taxation. It is a tax that is based purely and simply upon ability to pay, and I do not think there is any fairer form of taxation than the taxation of those who have the ability to pay. The indirect taxation we have to-day places a heavy burden on the people of this country, and I would venture to assert that the farmer and

The Budget-Mr. Heaps
the worker pay heavier indirect taxes, in proportion to their income, than those who pay the income tax.
Now the Minister of Finance has been good enough to suggest in his speech, and I agree with the idea, that we ought not to shirk our responsibilities in regard to the national debt. He says that the people who created the debt ought not to shirk the payment of it, or words to that effect. I quite agree with that statement, but I maintain that the minister himself is shirking responsibility in reducing taxation and allowing the debt to remain at its present huge figure. He goes back to the year 1845, approximately eighty years ago, to try and find a precedent for the budget that he is bringing into this house in the year 1928. He quotes an economist who lived in that year in order to try and give the impression to this house and the country, that the budget he has brought in and the methods of financing he is adopting are the best that could be followed under modem circumstances. I entirely disagree with that premise. I believe myself that the minister ought to have a definite and fixed policy in regard to the payment of the national debt of Canada. There is no telling how long the national debt will remain the huge liability it is at present. He says we ought not to shirk our responsibility. Quite true, but how long did it take to create that debt? It was created in four years, and yet by the method of financing which is followed at present there is no way of telling whether the national debt will be paid in four years or in four hundred years. I believe that debt should be wiped out in as short a time as it took to create it. I have a suggestion to make to the minister and I hope he will give it due consideration. When I say "due consideration" I do not mean the kind of consideration which is frequently adopted by ministers when they throw suggestions into the waste paper basket.


Charles Avery Dunning: We file them.


Abraham Albert Heaps: You file them? Well, you do a little bit better than throwing them into the waste paper basket. As a matter of fact you file them so securely that you never can get at them again.
I would deal with this question of the national debt from a little different angle, perhaps, than the one from which hitherto it has been viewed. I am going to suggest to the government that the question of inflation and deflation as between the years 1920 and 1926, should, in some way, form a basis from which to consider the whole question of the national debt. In the first place no effort

has been made by this government to consider the problem of the national debt in relation to industry. In Great Britain a special commission was appointed in 1924 to consider this very important question, but in Canada we have allowed this matter to take care of itself by following purely haphazard methods; there has been no systematic or scientific effort on the part of the government to provide for the national debt of Canada. It is quite true that some reductions in our debt have been made during the past two or three years, yet these reductions cannot be regarded as the basis for a proper method of handling this problem. There is no such thing as a national sinking fund, and if lean years should come for the Dominion treasury it follows that no provision for reduction of the national debt could be made out of surplus revenue as is being done now. In 1920, and I am using that year because it was the peak year for commodity prices, our net debt was $2,248 868,624. At the end of the fiscal year, 1926, according to the Canada Year Book, our net debt was $2,389,731,099, showing an actual increase in the net debt for the year 1926 over the year 1920. It would not be fair to blame the government entirely for this condition. In 1920 there were shown assets of $792,660,963 which by 1926 had dwindled to $3/9,048,085, this dwindling of the national assets being to an extent due to the deflation which took place during that period. Whilst the government has very little to show because of this fact, the people of Canada have now to pay out of present production one hundred cents on the dollar which in 1920 was worth approximately 70 or 75 cents. The taxpayers of to-day and those of future generations are to be penalized in the first place for the inflation that took place in 1920 and in the second place for the deflation that took place in the period succeeding the inflation.
I want, however, to make this suggestion to the Minister of Finance. Most of the public debt of this Dominion was created during the period of inflated prices when the dollar was not worth what it is to-day. The following figures taken from the Canada Year Book will give the house some idea of the relative value of the dollar from 1900 to 1926. Taking the value of the dollar in 1913 as 100 we arrive at
the following:	
Year	Value of
	dollar
1920		
1921		
1922		
1923		
1924		
1925		
1926		

The Budget[DOT]-Mr. Heaps
If I had taken the figure for 1920 as it stood in the month of June or July, it would have shown a considerably higher level for that year and consequently the disparity would have been greater than is shown by the set of figures I have taken. In this table it will be noted that there is a difference of 33 points which means a decrease in the retail cost of commodities of approximately 18 per cent. It also means that the people who own the debt and control the money of the country are relatively so much better off to-day than they were in 1920. In other words, deflation which became effective in 1921 had the effect of adding more value to their holdings because the debt of this country was in no way affected by the deflation which then took place. The people who suffered mainly were the farmers, producers and working people. There is no need for me to mention the tremendous drop which took place in the price of farm commodities in those years. Hon. members of the farmers' group have referred to this matter on several occasions, but I would say that nothing would more forcibly show the feelings of the farmers of this country than the fact that in the election of 1920 they returned sixty-five members to this house. This no doubt was the result of the economic depression which hit the farmers so severely during that period. As regards the working people of this Dominion, in 1920 the number of wage earners was 526,571, and in 1921 this dropped to 381,203.
These are some of the results of the policy of deflation as adopted by the financial interests of this country. Whilst it left the great mass of the people poorer, these interests became more wealthy. When hon. members discuss the question of people leaving Canada, these figures might give one reason why so many men and women were compelled to emigrate. It was not choice but necessity that drove them away, and if such was the case, it is obvious where part of the blame lies.
The question arises why present and future generations should be penalized for the monopoly of money and currency by those who control it. Why should the taxpayers of Canada be penalized for things for which they are not responsible? Why should the government not use the power vested in them and adopt some measure that will protect and give back to the taxpayer that which has been taken away fro mi him by the hands of finance? My suggestion in this regard is that the amount of deflation as shown by statistics should also apply to the national debt. Why should the financiers of Canada and elsewhere benefit at
the expense of the great masses of the Canadian people? If the national debt were deflated in the same ratio as other commodities- and it is obviously fair that this should be done-the corresponding decrease would mean that the net debt of 1920 of 82,248,868,624 should be reduced by 18 per cent, which would mean that the figure for 1926 would be $1,844,072,272, or a reduction of $404,796,352. This in turn ought to save an annual interest charge, based on a rate of five per cent, of $20,239,800.
To create this deflation in the national debt,
I would suggest that Dominion currency equivalent to this amount should be issued over a period of three years and be used to retire bonded indebtedness. At the present time the Minister of Finance contemplates a loan of $500,000,000. How does the minister accomplish this? He issues securities which are regarded as gilt-edged, endorsed by the Dominion of Canada. These securities are easily negotiable and in many respects they have the same function as money, with this notable exception, that currency issued by the government bears no interest charges while bonds, of course, will. Naturally I would expect that bankers and other financiers would prefer to hold bonds which bear a good rate of interest to holding government currency which will not. It might be said that this suggestion would mean a policy of inflation. It would mean a policy of limited inflation of the currency of the country. What harm would it do? In place of creating any difficulty or doing harm, this limited increase in money issued by the Dominion government would be an advantage because in the first place it would mean a huge annual saving which, of itself, could finance the entire cost of the old age pension scheme for this Dominion. It would mean further that this extra money so created would have to find an outlet and this, in turn, would stimulate commercial activity. A policy of limited inflation must not be confused with the policy of inflation that was prevalent in European countries a few years ago. The amount of money and currency in circulation must always have a due regard to the productivity of the country, and I might also add to this, its potential productivity. Canada's industries have grown enormously since 1920, yet we find that the actual currency has decreased as shown in the following table:
Year	Currency
1920	 $296,353,737
1926	 231,603,330
Or a decrease of $64,750,407, and this in spite of the fact of the greatly increased
The Budget-Mr. Heaps

production that has taken place in Canada during this period. The amount of currency issued by the Dominion treasury is very small as compared with the total amount of money in circulation in this country. As an example of the relation of currency to the total amount of money in circulation, it might be interesting to note the actual amounts on deposit in the chartered banks of Canada in 1920 and 1925, the last year for which statistics are available:
Deposits in
Year	chartered banks
1920	 $2,438,079,792
1925	 2,221,160,611
The total amount of currency for 1925 is equivalent to only ten per cent of the total bank deposits for the same period, and if the Dominion government added on to this currency an amount equivalent to the deflation between 1921 and the present year, it would naturally add a good deal to our currency, but even then it would be equivalent to only 26 per cent of the total deposits in our chartered banks.
Last year the hon. gentleman who now occupies the position of leader of the opposition (Mr. Bennett) made to the government a suggestion which they have filed away securely. It was that the government should conscript the surplus money owned by large financial institutions in this country and use it for the retirement of the national debt, paying four per cent for the use of same. I think that was a far more radical proposal than the one I am now suggesting. I had always thought, that, to the Conservative party, property was a sacred thing. At all events, I have not the least objection to the suggestion of the leader of the opposition, and I hope that he will repeat it during this debate. His proposal was regarded as a piece of statesmanship last year, coming from my hon. friend the leader of the opposition, but I suppose the same suggestion coming from this corner of the house would be regarded as bolshevism.
In the few minutes remaining to me, Mr. Speaker, I would like to say a word or two in reference to the closing remarks of the Minister of Finance. All through his budget address he had in mind the financier and the industrialist, and then practically in his last sentence he referred to the great masses of the people of this country, and his message to them was:	Work and be thrifty, I think he
had nothing else to offer them except that piece of advice. I am wondering who in this country does the work if it is not the working-

man and the man on the farm. Where else does all this prosperity come from? And then when you remember that the average man employed in industry in this country earns approximately only twenty dollars a week, I would like the Minister of Finance to tell the workingman where he is going to commence being thrifty on that wage, and where he is going to end. I would suggest to the Minister of Finance, when he talks about thrift, that he should start right on the government benches and set an example of thrift there. I am going to make a suggestion with which I hope our Conservative friends will agree. I would suggest that the Minister of Finance start saving on the militia estimates. These estimates show an increased appropriation of several million dollars over last year, and most of that money I presume will go in lace and gold braid. If there is a wasteful expenditure in any part of the world, it is this expenditure on armaments. When we have a delegate at the League of Nations, and a branch of the League of Nations Society in this country, with representatives going around and preaching peace among the nations of the earth, I think the last thing in the world the government ought to do is to increase the estimates for military purposes. I think it would have come with good grace from the Finance minister, if he had the least desire to set an example in thrift, to throw out these millions of dollars of increased expenditure in the militia estimates for this year.
With regard to the amendment placed in your hands, Mr. Speaker earlier this evening, by the hon. member for St. Lawrence-St. George, the one thing that seems to remain in my memory more than any other part of his speech is his reference to the Canadian National Railways. He referred in no complimentary way to the president of the Canadian National Railways, because he did not like something Sir Henry Thornton had said. When the hon. member for St. Lawrence-St. George does not like something which Sir Henry Thornton said, I am inclined to think that Sir Henry Thornton must have said a very good thing, because otherwise we would not find objections coming from the hon. gentleman. I cannot see that the amendment is any better than the budget itself. 1 think the speech which the hon. member for St. Lawrence-St. George gave this afternoon was the finest possible commendation of the budget I could have, and when I see commendation of the budget coming from the Conservative side of the house I am bound to feel a little bit suspicious of the budget myself.

The Budget-Mr. Harris


Mr. J. H. HARRIS (Toronto-Scarborough):: The Budget-Mr. Harris

that the deficit of the Canadian National Railways and the guarantees undertaken by this government. Anyone with common intelligence who finds it necessary to finance himself a little finds on going to the 'bank that while on the front of his statement he has to show' his assets, before he endorses that same statement he must give on the back all the notes or other securities which he has endorsed. That, in my humble judgment, is the course that should be pursued by this government, and I ask the minister to be frank and sincere with the people of Canada, and in future bring down a statement which will show the net debt with everything we have endorsed and for which we are undoubtedly responsible. As it is with the individual so it should be with the government.
In each budget presented by the minister we are told that our importations and our exports are of such a nature that we have a fine balance of trade, even though we find the imports creeping u,p a little. In that case the minister takes refuge in informing us that this increase is due to an increase of raw materials coming into Canada. But I ask the members of the house to look at and analyze the schedules prepared by the Department of Trade and Commerce; if they do this they must come to the conclusion that the increase in importations is not due to an increase in raw material, but is rather due in large measure to an increase in manufactured goods. So I desire to place on Hansard the facts with regard to several articles, since I have not time to review the whole schedule. These references, however, will illustrate the whole question, and a review of the schedule will confirm what ;I have to say. Let us consider first the non-ferrous metals, such as copper, silver, lead, zinc, cobalt and so on, which are found in raw state in abundance in this country. Taking the year 1924 as a basis,
we find that the increased importation of the manufactures of these materials amounted to 18.5 per cent in 1925, 28.4 in 1926 and 49.7 per cent in 1927. In that same period of four years, on the other side of the picture, see the exports of raw material of the same class extracted from the mines in Canada. Mr. Speaker, every time a train load of these raw materials goes to a foreign country to be manufactured you will find that from one to ten of the best workers of this country go also, to devote their energies to the manufacture of these goods and to produce the completed article, which will supply the home markets of the great industrial nation to our south, whose surplus will be returned to us and others in the form of fully manufactured goods. I say it is not fair to the artisans of our land and to our youth that this should be allowed to continue. It is not just; it is not right that those thousands graduating from our technical and commercial institutions should have to face these conditions and follow our raw material to a foreign land to find a vocation.
But we need not consider only the nonferrous group of metals. We will go a step further, and review the situation as it applies to iron and its products. I see the minister is busily engaged in studying some other schedule, but I would question the candour of his statement that the increase in importations is largely due to greater importations of raw materials. That statement will not bear analysis. I would like to put this whole schedule on Hansard but I am afraid the rules will not permit me; I know the hon. member for Winnipeg North Centre (Mr. Woodsworth) will rise in his place and protest if I ask the house for .permission, so I will just run through it hurriedly. First, I will give you some conception of -the magnitude of the manufacture of iron and steel as shown in the four years from 1924 to 1927 inclusive:
Imports into Canada for Consumption Nine months ending December Iron and its Products
1924	1925	1926	1927Total imports	
99,768,341	131,656,976	170,035.322	188,757,391Raw iron	
2,312,856	1,995,329	2,828,593	2,869,058Per cent of total.. ..	
2.32 1.51 Partially Manufactured Imports	1.66	1.52Pigs, blooms, etc. . . .	
1,440,668	1,242,471	1,244,288	1,499,969Scrap	
402,010	391.670	676,419	984,248Castings	
2,531,701	3.761,854	3.357.837	3,072,946Rolling mills products,	pipes, etc.. 26,199,171	29,549,423	36.678,138	34.097,419Tubes	
1,869,435	2,587,761	2.940,492	2,825,945Wires	
1.916.143	2,012.223	2,351.865	2,525.567Chains	
476,863	472,589	701,505	616,960Sub. total	
34,835,991	40.018,091	47.950.544	45.623.054Per cent of total.. ..	
34.92	30.40	28.20	24.16
nvir. Harris.]

The Budget-Mr. Harris
Manufactures of Iron Imported
1924	1925	1926	1927Sub. total	
62.619,494	89,643,556	119,256.185	140,265,279Per cent of total	
62.76	68.09	70.14	74.32
Increase of Imports of Manufactures of Iron Compared to 1924.
100.0%	143.1%	190.4%	224.0%
Importation of Non-ferrous Metal Manufactured
Total	
30,377,773	35,943,532	39,016,152	45,463,966Per cent of total	
100.0%	118.3%	128.4%	149.7%
Importation of Glass and Glassware
Total	
5,099,246	5,593,858	6,811,224Per cent of total	
100.0%	109.7%	133.5%
All these latter products, Mr. Speaker, as the hon. member for West Algoma fMr. Simpson) has said, we are able to manufacture to-day in our own steel mills.
Our Liberal friends were wont to go around the country preaching low tariff, and yet we find that the government are taking more money in customs duties this year than last by some $11,600,000. Our friends from the prairie provinces and some others who talk free trade say:	"Well, how can this be?"
They need only study the policy of the government to see how this seeming paradox is brought about. It will be found that on almost each and every occasion when they lower the duty on some manufactured article, simultaneously they see to it that all the parts which enter into the manufacture of that article are made subject to a lower duty. With what result? That some of our manufactories throughout the towns and cities which in years gone by have filled m slack time by manufacturing parts for a large concern now find themselves unable to compete against the influx of these parts from the United States. More and more of these parts are coming in, and more and more of our artisans find themselves out of employment. Then of course their only recourse is to migrate to the United States to find a livelihood. That is the reason why the minister this year expects to extract $11,600,000 more under the customs tariff than last year.
It is very interesting to note that the minister backed up his statement with regard to the importation of raw materials by giving some concrete examples. He told us that in 1921 we imported seven thousand auto engines whereas in 1926 we imported fifty-nine thousand. Some of my hon. friends who are interested in labour and know what an advantage it is to keep our artisans in the Dominion will find it instructive to estimate the number 56103-414
of artisans that might have been employed in this fair land of ours manufacturing those engines. In like manner, Mr. Speaker, as an example of raw material, mark you, coming into this country, the minister told us last year that auto parts to the value of six million dollars odd had been imported in 1921, whereas these imports had increased to over twenty million dollars in 1926. Again, I call attention to the fact that he terms these parts "raw materials". How many of our artisans would have enjoyed the privilege of working in the machine shops and foundries of their native country manufacturing that extra fourteen million dollars' worth of so-called raw material? The Minister of Finance in his budget speech backed up that ridiculous and unsound statement, so far as the facts are concerned, by saying that we were importing more and more raw material .to keep our factories busy I Last year he also drew attention to the fact that in 1921 we imported 7,784,980 pounds of raw wool, while in 1926 our importations had risen to 11,049,723 pounds. He took great pride in advising us that we had imported four million pounds more of raw wool in four short years. I see some of my farmer friends who perhaps know more about the sheep and wool industry than I do, but in all sincerity, Mr. Speaker, I ask since when have we convinced ourselves that we have not sufficient pasture land to produce from year to year millions and millions of sheep? Why is it that our sheep population dropped from 3,650,000 in 1921 to only a little over 2,500,000 this year? One reason is that we have imported four millions of pounds more of raw wool. The Minister of Justice seems to enjoy this, and even the Prime Minister, I notice, is very busy reading his paper. But what is he going to do with his own sheep? Not long ago I saw in the Star Weekly a picture of the Prime Minister tending his
The Budget-Mr, Harris

sheep. I wonder if he is going to put the sheep industry entirely out of business, and then find himself without a vocation during his summer holidays tending his sheep. We have 898,000 acres of pasture land ready for sheep to graze on, and instead our sheep population has decreased by one million in five short years. It should have increased by that number; and instead of our importations of wool having increased by four million pounds-and the minister taking pride in the fact-those importations should have decreased, and the product of our farmers should be competing with that of the farmers of other lands.
In like manner the Minister of Finance last year took pride in the fact that our importations of raw hides had risen from 22,000,000 pounds in 1921 to 42,000,000 pounds in 1926, and last year the figure reached 49,680,200 pounds. The average weight of a steer's hide is 50 pounds, which means that we are importing the hides of one million cattle. Yet the minister takes pride in the fact that our farmers are having their home market curtailed to that extent. The farmers of this country need some protection against the inroads of these raw materials, and in my humble judgment it is not good business for the minister to take pride in these disquieting facts, for they spell national disaster.
Last year the minister also put on Hansard figures showing the importations of leather unmanufactured, showing importations to the value of three million dollars odd in 1921, rising to $3,909,000 in 1926, and according to the figures this year given me by the Bureau of Statistics there has been a steady increase for the past year giving a total of $4,124,793. I ask the Minister of Customs-he is not in his seat I regret to observe-since when has it been necessary for us to import these tremendous quantities of leather, since when have our tanneries been unable to supply us with the leather that we need to manufacture into various articles? He comes from the good town of Kitchener where several of our largest tanneries are located, and it would be interesting to have his views on this subject.
The amount of money received from the customs tariff by this government has been augmented by the application of the antidumping clause, and also by placing on the reduced duty list those various parts which enter into the manufacture of all kinds of machines. The net result is that our factories, which a few short years ago were factories in the true sense of the word are now largely becoming assembling plants and distributing warehouses.

During the debate on the address, Mr. Speaker, I was interested to hear the Prime Minister enlarge on the great prosperity the country is enjoying due to the building boom in all the large centres of population. But if this boom is analyzed it will be found that of the eight hundred million dollars' worth of contracts he had in mind at least seven hundred million dollars' worth represented office buildings and hotels. What are these office buildings and hotels for; who are housed in them? They are chiefly for the accommodation of manufacturers' agents and others that come here to convince us that we should be buying their products instead of manufacturing our own. In addition to the office buildings the erection of new hotels is responsible to a large degree for this building boom. Why do we need new hotels? Simply to house the agents of foreign firms who come here to sell us the products of their factories. I see the Minister of Justice is enjoying this very much.


Mr. LAPOINTE:: Extensively.


Joseph Henry Harris: 
Mr. MALCOLM:: Will my hon. friend
tell me whether the merchandise represented by the invoice is sold by the pound or by the bag?


Joseph Henry Harris: It was sold by the pound.


James Malcolm: What difference does
it make how much is in the bag?


Joseph Henry Harris: The hon. gentleman has
missed my point. Let me explain it again so that he may grasp it. We are not worrying about the two pounds we are losing on each bag. We are worrying about this fact; if this man was unscrupulous, he brought those goods from the continent to England and there transhipped them to us, and thus got the full benefit of the British preference.


James Malcolm: I cannot see my hon.
friend's point. If the merchant is scrupulous enough to state distinctly how much is in each bag, I fail to see how he is deceiving.


Joseph Henry Harris: It has nothing to do with
the bag. The point is that the bag containing 50 kilos did not originate in England but at a continental 'point. Surely the minister knows that the English hundredweight is 112 pounds. I am sorry that in
order to illustrate my point I have to tell the minister that the English hundredweight is 112 pounds and the continental hundredweight 110 lbs.
On the whole, Mr. Speaker, I think the country is rather disappointed in the speech from the throne, in that there is too much said of an international nature, and not enough of a domestic nature. I fear that the government is leading us too far afield in our international relations, for we are too small in population to be dabbling in such affairs. The cost will steadily increase, and we already have sufficient evidence of this fact.
I do not think it is necessary for us to spend $225,000 this year in having diplomatic representatives in Tokyo, Paris and Washington. Instead of increasing our expenditure unnecessarily in this direction, in my judgment it would be much better to establish more trade commissioners throughout the world, as I have already tried to illustrate to the hon. Minister of Trade and Commerce. But apart from the mere expense, I say this dabbling in diplomatic services is fraught with great danger to this country. We have not the experience of a thousand years enjoyed by Great Britain. Much of her diplomtic skill to my mind is hereditary. Besides, Great Britain is backed by empire resources, she is backed by her navy; but we are backed by nothing on the sea. As long as we have the backing of the British navy, in my humble opiinon we shall enjoy another hundred years of peace. If we must spend this money, there are other and better ways of using it.
The time is too short for me to enumerate those channels of expenditure, but I am going to make one suggestion for the government to think over. This year I understand the government are going to bring down some legislation to give further effect to the Canada Highways Act. I hope that that legislation will be broad enough to embrace a fixed policy for the gradual elimination of level crossings on our highways. You are spending money under the Canadian Highways Act. See to it that it is spent in a way which will inure to the protection of the people by gradually eliminating level crossings. That is just one suggestion I have to offer in that connection.
Increased importation of goods of all kinds is bringing about a steady economic penetration of this country by the United States. The more our American friends penetrate this country and the more we buy of their materials the more and more dependent Canada will become upon the United States. I would prefer to see Canada more dependent on the British Empire than on the country to the
The Budget-Mr. Harris

south of us. Every time you open up a new embassy or establish more direct diplomatic representation in other countries you weaken the bonds which unite us with the motherland.
I have only about three minutes more to speak, and I shall have to draw my remarks to a close. Let me say to our friends from the western provinces that Ontario has given you of her sons and daughters, everything you asked for in the way of statutory freight rates, and other concessions of all kinds. In like manner let me say to our friends from the maritime provinces that we want to grant you almost anything that you like to ask us for in order that we may hold confederation together. We are spending money on your behalf under the Maritime Freight Rates Act, and we want to give you everything we can within reason. We are with you in demanding the full implementation of the Duncan report.
To our friends from Quebec I would say that I do not know of any other land where you would enjoy the freedom and privileges which you enjoy in Canada. I know that to-day your hearts bleed for those of your fellow countrymen who find themselves in Massachusetts and in the New England states generally. I know you want them all back, and so I say to you one and all: See to it that you adopt in this country of ours a policy that will provide employment for the minds and hands of all classes of people not only that unity may prevail in Canada but that we shall attain to that position in the future which a kind providence has set apart for us. I have much pleasure in supporting the amendment moved by the hon. member for St. Lawrence-St. George.


Edmond Antoine Lapierre: Mr. Speaker, I am wondering what the people of Canada will be thinking to-morrow when they read the speeches of hon. gentlemen opposite which we 'have heard this afternoon. I was very much surprised to hear the remarks of the hon. gentleman who has just taken his seat (Mr. Harris) with respect to the city of Toronto from which he comes. If there is any city in Canada which has benefitted by the policy of the Liberal government during the last six years it is the city of Toronto.


Joseph Henry Harris: I hope the hon. gentleman will be good enough to cite any statement I made with regard to the city of Toronto.


Edmond Antoine Lapierre: If I understood my hon. friend aright he stated that the hotels built in Toronto were erected for the accommodation of foreign business agents. I would tell, my hon. friend those hotels were built to ac-{Mr. Harris.1
commodate the tourists that are coming from all parts of the United States to see the prosperity which prevails in Canada. That same tourist movement has been very beneficial in the province of Quebec.
The time allotted to me this evening, Mr. Speaker, will not permit me to follow in detail the remarks of the last speaker, but in answer to him, I will quote one whose opinion should be acceptable to my hon. friend from Toronto-Scarborough. I have before me a copy of the supplement to the annual financial review of the Toronto Globe of January 3, in which appears a statement from Mr. A. E. Ames, well known to all the Toronto members, reading as follows:
Retrospect of year 1927 shows large-scale progress throughout the Dominion.
An inventory of prosperity surpasses in proportion to population any other nation's-Canada's funded debt lowered-More income tax reductions seen advisable-Canadians spent fifty million dollars for foreign securities, and bought half domestic bond issues-Canadians in mood for real adventure-"Steady does it".
A cool retrospect of the year 1927 recognizes large-scale progress throughout the dominion. Perhaps the most notable features of the year in Canada have been the following, which are not intended to be listed in order of importance:
Reduction of federal funded debt in the last nine months by, say $42,000,000;
Increase in bank deposits of over $200,000,000;
Abundant harvests;
Notable development of hydro-electric power;
Important increases in paper and pulp making capacity;
Heavy increase in mining operation, construction and exploration;
General business prosperity;
A marked beginning of real estate activity, particularly in the larger cities.
That is the opinion of a gentleman in Toronto who is in a position fully to realize the great progress that Canada has made during the last six years. The Minister of Finance (Mr. Robb) is to be congratulated upon the budget which he has presented. Year by year we have seen the nation's prosperity increase until to-day we occupy, as a nation, one of the proudest positions in the world. That prosperity has not been confined to the cities but has been enjoyed by every class of our population. For the benefit of our western friends I should like to read an article from the same publication containing a statement by one who is known to them all. I refer to the Hon. T. A. Crerar, president of United Grain Growers:
During the past five years tile farmers of western Canada have produced and sold farm produce to the value of $2,000,000,000, taken at country points. Government statistics are not available with respect to all of this, but the government figures show the wheat crops alone in that time to have been worth almost $1,650,000.000 at country points, and to this is to be added the value of other crops, dairy products,

The Budget-Mr. Lapierre
live stock, and other products sold. These figures take no account of the enormous business in handling and transporting this produce, which would amount to many millions more.
Now, Mr. Speaker, we have had the opinions of those who are close to us, but I value very much more opinions from an independent source, and I have here the financial and industrial page of the Literary Digest, from which the following is taken:
In international trade, we are reminded, Canada now ranks fifth among the commercial nations of the world. A writer in The World's Work tells us that Canada's per capita wealth is excelled only by the United States and Great Britain, "being $2,406, compared with their $2,918 and $2,459, respectively." Roger W. Babson, we read further in The World's Work, has recently estimated that Canada leads the world in the number of homes owned by her own people, namely, 70 per cent.
For one thing, "the 2,278 miles of railway in 1867 have now been expanded to 40,352, and no country in the world has as large a railway mileage per capita."
"To-day", continues Mr. Stevenson, "Canada leads the world as an exporter of wheat, newsprint, nickel and asbestos, and her command of raw materials and water-power resources, which can cheapen the costs of the manufacturing processes, insures her steady industrial expansion."
This should be sufficient to meet the arguments that have been put forward that Canada is not to-day a prosperous nation.
As my time is limited, I should like to refer now to another item of the budget, which is much more interesting and which has not received during this debate the attention which it really deserves, having regard to its importance. During the discussions that have taken place this session reference has frequently been made to the visits to Canada last year of several distinguished personages, but there was one group which came to our country during 1927 whose visit had perhaps more to do with the future development of our mining resources than anything else that happened during that year. I have reference to the British Mining and Metallurgical Congress which met in Canada in 1927 and which was composed of some of the most eminent geologists, mineralogists and mining engineers in the British Empire. They were accompanied by a large number of distinguished men engaged in the same callings in different parts of the world. They were entertained and shown the wonderful mining resources which this Canada of our possesses.
I regret to say that the tremendous development of our mining resources is not receiving at the present moment the support and attention that it really deserves from the people of Canada. Our mining industry is one of the most hopeful features of our economic development. Canada possesses one of the most marvellous deposits of minerals in the
known world, and more than ninety-five per cent of the mineral wealth produced in this country has been produced within the last twenty-five years. That wonderful precambrian shield, which has often been referred to in this house, is one of the largest exposures of mother earth's natural wealth; containing 260,000 square miles, encircling Hudson bay and practically blanketing the whole of North America, it has already become one the largest producers of minerals in the world. In order that we may fully realize just how much this means in the future development of Canada I wish to cite a few figures which will, I am, sure, demonstrate to the satisfaction ol everybody that we are on the eve of one of the largest mineral developments the world has even known.
In 1927, the Dominion produced $243,000,000 worth of minerals, of which Ontario produced
$90,000,000. In Ontario the mineral production is as follows:
Gold	 $31,000,000
Nickel	 14,374,000
Silver	 5,760,000
Platinum	 1,000,000
Our tremendous mineral development will be realized when we remember that twenty-five years ago we had but one mine in northern Ontario; that in the last twelve months that northern country produced more than $32,000,000 worth of gold alone; that we now have in northern Ontario the second largest mine in the world, a mine which since 1921 has produced $121,000,000 worth of gold and distributed more than $50,000,000 in dividends. This is just the commencement of a new era; already new mines are being discovered throughout that northern section.
Let me describe the situation which exists in my constituency. We have in the Sudbury district, within a radius of ten miles, three of the most startling discoveries in the mining world. We are now producing 95 per cent of the world's nickel, and within the last few years discoveries have been made which promise to be of even greater value to Canada than our wonderful nickel deposits. We have in the Frood mine one of the largest copper deposits on the American continent; it is now estimated that there is on this property an ore reserve of more than 100,000,000 pounds of high class copper. When we stop to consider that this copper was localized through diamond drilling at the bottom of a nickel mine, assuring profitable mining for many years to come at greater depths, and when we consider that in nickel alone the mines that are now being operated have a reserve of ore for the next fifty or sixty years, we are just commencing to realize the value of our mineral products. To us who have
The Budget-Mr. Lapierre

waited all these years with faith in the future development of that mining country it was a source of the greatest satisfaction to hear those visitors from Europe express their astonishment that these tremendous mining deposits should have so long remained idle. They evinced the greatest interest in these wonderful deposits, and they were amazed at the variety of valuable minerals which are found within such a small area.
Another discovery which has been a revelation even to the oldest geologists and mining men in our section is that recently made in the centre of that great nickel deposit of one of the largest lead and zinc deposits on the American continent. This deposit means another producing mine in the centre of our nickel and copper country. The development work done' prior to the present assures us of a continuous supply of high grade lead and zinc ore for the next fifty years. We are assured of an expenditure of at least fifty million dollars for equipment, machinery and construction within the next two or three years. I need only refer to what has happened in my own part of the country. Those who have followed mining development in this country within the last few years must have heard of the great developments that have taken place in northern Ontario. There again we have a very wide area which is rapidly coming to the front as one of the largest producing areas on this continent. There has also been made recently a very interesting discovery in Manitoba, and to my friends from the west I would say that the development in the' northern section of that province would alone warrant the construction of two railroads to the Hudson bay. The amount of ore which has been exposed and is in reserve amounts to over four hundred million dollars. The ore blocked out or visible in the* Flin Flon, the Sherritt-Gordon and the Mandy mine assures for Northern Manitoba a development equal to that which we have seen in northern Ontario. Those of us who can remember twenty-five years ago when that entire area in northern Ontario, then given over to the lumber industry but today dotted with thriving towns and large productive areas of agricultural land, can draw a mental picture of what is going to happen in northern Manitoba. Every operating mine means a new settlement, the opening up of new agricultural land. It means a market close at hand for the farmer's products; it means the employment of thousands and thousands of Canadians in an industry that pays ample salaries and is a source of great wealth to any nation. These are some of the possibilities of the near future. We can 
see within the next ten or fifteen years an expansion in this country such as has not been seen in any other civilized countiy in the world.
Besides the minerals which I have mentioned we have as well very large deposits of iron ore. This is a question that will soon demand the attention of the government. The iron deposits of the lake Superior district of Michigan are now within calculable distance of exhaustion, and it will take but a short time before the ore reserves of that part of the United States will not be available for the Canadian market. We have at the present time several iron deposits which have been successfully operated. We have large deposits of siderite, which can be beneficiated, by which I mean any treatment which will remove the impurities or the sulphur and prepare the iron ore for the furnace. Our resources of iron ore are almost inexhaustible and the small margin that now exists between the price of the high grade Michigan ore and the low grade siderite and hematite ores that we have in northern Ontario assures us that the time is rapidly coming when these ores will be treated in this country, and that we shall have here an iron ore industry. What that will mean for Canada, what it will mean to our transportation problem,' and what it will mean to the future richness of the nation, can only be realized when we see what has taken place in the United States. Undoubtedly it will help us to solve our transportation problem. It will also help us to solve our unemployment problem, and it will add very largely to our national wealth. The development of these copper mines in northern Manitoba will mean a great deal to the industry all over Canada. For the treatment of these ores in Canada we' require a very large amount of machinery and equipment. Most of that equipment at the present moment can be and is being manufactured in Canada; in fact, the activity which has been quite noticeable within the last few years in the mining equipment business and allied industries is due entirely to the mining development that has taken place.
We must bear in mind that the future of the mining industry depends very largely upon foreign capital. For years our mines remained undevolped for want of capital. I have heard some severe criticism and some doubts expressed as to the wisdom of attracting American capital to develop our Canadian mines. Mining differs in a great many ways from ordinary business. It is a business that is more or less speculative; it is a business of great hazards, and only those who are in

The Budget-Mr. Dickie
the business and have successfully developed mines are inclined to invest the immense amount of capital required to develop a mine. As I said a moment ago, the International Nickel Company in the installation of plant and equipment necessary to develop their new copper deposits will spend in the neighbourhood of fifteen to eighteen million dollars. There are very few corporations and very few individuals who are disposed to invest such a large amount of capital in an enterprise in connection with which they will have to wait possibly five or six years for any returns. That, Mr. Speaker, accounts in very large measure for the large amount of foreign capital which is coming into our mining areas. We would have welcomed a great deal more of English capital, but, unfortunately for us, the first English corporations which came to Canada and invested in our mines were unfortunate in their selections. They came into the mining area before the geology had been thoroughly explored, but to-day those areas are coming into their own. The holding in Canada of the 1927 convention of the mining congress has demonstrated to those learned men what great mineral deposits there are in this country.
The mining industry is one of those activities which unfortunately attracts but little attention, Though it is but rarely referred to in this house it is pregnant with wonderful possibilities for the future development of this country. It is predicted by those who are best in a position to know that within the next decade the products of our mines will be our largest source of wealth. We in the north have hope and faith in the future of this nation. We have seen the rapid transformation which has taken place in that part of Ontario, and we can see that with the continuous increase in the productivity of the west, with our industrial expansion due to the development of the natural resources and our increasing world trade, in the near future, Canada will be called upon to take her place among the leading industrial nations of the world.


Mr. C. H. DICKIE (Nanaimo):: I am sure we alii listened with great interest to the address of the hon. member for Nipissing (Mr. Lapierre). We were very glad to hear of the wonderful progress which has been made in the north country, and I am sure the indomitable people who first went in there deserve all the success which they will doubtless achieve. There is a wonderful mining country in northern Ontario; another is coming into being in Manitoba, and we have the mines of Quebec as well. Wherever the Laurentian shield extends minerals will be
found, and wherever the precambrian rocks exist will be found gold. The geologists tell us that in two years Canada will outstrip the United States, and that in less than five years we will produce more gold than South Africa. That is a wonderful tribute to a wonderful country.
We also have great mines in British Columbia, among them the biggest copper mine and the biggest lead mine in the British Empire, and in British Columbia mining is also experiencing a revival. Canada has great forests, immense potential waterpowers and wonderful agricultural land, and the sad thing is that with all these possibilities we are drifting along, lagging behind with a population of only nine million people. There is something wrong with the directorate of this country or we would not have this state of affairs. Look at the situation with regard to our forests: each year wood, wood products and paper to the value of $240,000,000 go to the United States; we export to the markets of the world a great quantity of grain; we have these great mineral deposits. Why then, are we simply marking time while other nations outstrip us in the race for nationhood? I think we should devote a little more attention to economics and waste less time worrying about our status within the British Empire. We should make a sound economic study of this country, but I am afraid the present government is unfit for the task.
It was a pleasure to listen to the last speaker (Mr. Lapierre), but it was painful to listen to the budget speech this year. The minister fulfilled a very difficult task, but he presented a very serious aspect of affairs when we come to analyze it. Canada is not going ahead as she should. We say times are better here, and that everyone in Canada is prosperous. That may be so to a certain extent, but if you ask two or three thousand people in this beautiful little city whether they have experienced any prosperity, and ask the same question in Vancouver, Montreal or Toronto, I am quite sure they will all tell you the same thing. We cannot be a prosperous nation unless the rank and file are prosperous, and unless people are employed. Why are they not employed? Why are they going to the United States year by year, as has been the case ever since I can remember? Our manhood and womanhood are the only finished products the United States will accept from us, and they take our young men and women without question because we are known to be a resourceful, honest people. They would rather swell their population with Canadians than perhaps any other race on the face of the earth. I can remember that in the early days in California the best recommendation
The Budget-Mr. Dickie

any man could have was to be a Canadian, and almost the same situation exists there today. As I have said, we were known to be resourceful: we were accustomed to frugality and were not given to many of the habits which prevailed in that careless western country, so people wanted Canadians in their employ if they could possibly get them. At present in the cities of Seattle, Portland, San Francisco and Los Angeles, I venture to say one-half the bank employees are Canadian boys who have drifted down from Vancouver Island, and their fondest wish is that some day they may be able to return. Of course they cannot go down there under contract to work, but they write to a manager of a bank to ask if he requires any additional help. They will then receive a letter telling them to call in if they happen to be going past the bank, and when they do so almost invariably they secure employment at wages much better than those paid by Canadian banks.
We speak of an immigration policy; let us get right at the root of the matter and see on what we can found such a policy. There is only one sound principle, and that is to make this country a place where workingmen can exist and rear their families in comfort. Let us provide an outlet for our children, so that when they graduate from the universities and commercial schools they will be able to find employment and remain in the country they love so well. As it is now, what prospect is there for any of these men in the west, let us say? They are all raising families, only to see them depart for the United States as soon as they attain manhood and womanhood. That can be prevented by making this country just as good to live in as they find the United States. We still have plenty of raw material, although we are waging a relentless fight against our forests. The forests of the United States, together with a good many mines, have become nearly exhausted; as you all know, there is very little pulpwood left in the eastern United States. If we do not continue our foolish policy of sending them $15,000,000 worth of pulpwood every year, their paper mills will have to close down and they will probably come to Canada to carry on the manufacture of paper. I say we can make this country as attractive as the United States; it could be done if we had the proper directorate, but today, when we should be riding on the crest of the wave of prosperity, we find ourselves wondering whether times really are good in Canada.
What have we been doing; what has been our policy? After looking over the figures I wonder that we find ourselves as well off as
[Mr. Dickie. 1
we are. Let us consider the trade of Canada with the British Empire. In 1926 our exports to the United Kingdom amounted to about $459,000,000, while in 1927 they fell to 8409,000,000, in round figures. That represented a loss of $50,000,000 in our exports in one year. In 1926 we imported from the United Kingdom goods to the value of $164,000,000, roughly, and in 1927 about $182,000,000, which meant that we imported $17,000,000 more in goods and exported $50,000,000 less. In 1926 our favourable balance of trade with the United Kingdom was about $299,000,000, while in 1927 that figure fell to about $217,000,000. That represented a loss in trade of $82,000,000, although of course we still have a very favourable trade balance with the United Kingdom. Bearing in mind that $217,000,000, let me give the figures with reference to our imports and exports. From the United States in 1926 we imported goods to the value of $668,000,000, and in 1927, $707,000,000. There we have an increase. In 1926, on the other hand, we exported $465,000,000 and in 1927, $474,000,000. That may not seem very bad on the face of it, but our unfavourable balance of trade in 1927, compared to 1926, shows a loss of trade of $39,000,000. We received $217,000,000 from the United Kingdom of a favourable balance in our trade, whereas we paid to the United States $232,000,000 more than we received from our friends in Great Britain. In other words, our balance from the United Kingdom is wiped out completely and we have to dig down into our pockets for sufficient money to offset the difference in respect of the United States.


Mr. ADSHEAD:: How is that unfavourable trade balance paid?


Charles Herbert Dickie: In trade.


Herbert Bealey Adshead: By further trade?


Charles Herbert Dickie: It is paid by trade to a
great extent. But let me ask my hon. friend this question: Is it necessary in order to have trade relations with the United States that we should have an unfavourable balance of $232,000,000?


Herbert Bealey Adshead: I was asking the non.
member how the difference in trade was made up and he said, by further trade.


Charles Herbert Dickie: Yes, but a trade that is
unfavourable to Canada. Were it not for the products derived from our diminishing forests, forests that are being rapidly depleted, we should have an unfavourable balance of trade with the United States such as would alarm even my hon. friend from East Calgary (Mr. Adshead). I can understand a gentleman of my hon. friend's point of view wishing to buy

The Budget-Mr. Dickie
from the United States where he can buy on the cheapest terms; and that possibly is a good argument for a western man if he has no desire to do anything for Canada as a whole. But surely the people of this country, we in this House of Commons, should view the Dominion as an entity and be prepared to make some compromises for the common good. I believe we can make times good in Canada and build up manufactures in Ontario and Quebec, and also make Winnipeg and Calgary manufacturing cities. But in order to do this our people must cultivate the spirit of compromise. Is it not worth it to bring about a state of things whidh will make a home for our children when they have graduated from our schools, rather than have them drift away from us to enhance the prestige and enrich the coffers of the country to the south of us?
I have no fault to find with the policy of the United States; indeed, I only wish that we in Canada would copy it. I can well remember the time when the United States imported from England all the iron and steel it required. England had built up an admirable manufacturing industry in this line through the employment of the best scientists in the world. And she had coal and iron ore lying side by side, sufficient to supply the demands of all nations for iron and steel. At that time she supplied the needs of the United States in this direction. But what happened? Broadminded men in that country saw that too much money was leaving the United States, and they took this view:	"We have the raw
materials; let us build up an iron and steel industry in this country. Let us supply our own needs." But people with small minds who did not view things with a broad outlook said, "You will have to pay more for your iron and steel." Well, those of foresight in the United States admitted this, but they pointed out that they would be able to provide employment for a larger population. With this object in view the United States imposed an almost prohibitive duty on iron and steel, increasing it still higher until the duty conr stituted practically an embargo. And under that embargo was built up the great iron and steel industry of the United States, the barometer of trade in that country. Armies of men were employed in the iron and coal mines; cities sprang up; thousands of people came from other countries, and a vast population was accumulated. What argument was there against the means which they adopted to build up that industry, which could not have been created unless the people had been willing to pay more for their product for a time at least? When they had their industry in full working order then they were able to compete with the world in iron and steel.
But it took them many years to accomplish this. Now, I have no doubt that we could do the same in Canada if we only tried. We need to use good judgment in considering the question, but I see no reason why my hon. friend from East Calgary, and for that matter any gentleman living say in the interior of Saskatchewan, should lose one dollar through the development of trade in this manner. I can conceive the possibility of a government with actuarial ability and broad common sense quite easily devising some scheme whereby if one part of the country suffered unduly by reason of something that made for the prosperity of the Dominion as a whole the discrimination might be offset in gome compensatory way. I see no reason why this should not be done.
I know no argument that can be advanced against a larger population for Canada; certainly we must have a population. But as things are being carried on in Canada at the present time I dislike seeing any immigrant come to these shores. Let us get the country ready for immigrants; let us so arrange our economic affairs that if a man, for some reason or other, cannot take up farming he may go into some manufacturing centre and find work not only for himself but for his children as well. A policy of this sort requires sensible, careful handling, and above all we must look at things from a broad national standpoint. Let us take pride in this great country, about which we have heard from my hon. friend who preceded me. Let us see whether we cannot make this nation worth while. I have not the slightest doubt that with a sound economic policy we could bring millions of people here to augment our population, having them knocking at our doors for admission.
We are spending millions of dollars to induce immigrants to come into Canada while at the same time the Americans are spending vast sums to keep them away from their country. Canada for the last twenty-five or thirty years has been an immigration agent for the United States; I make that statement without the slightest fear of contradiction. The very best of our young men have been pouring across the border year after year, with the result that while the Americans are securing all the immigrants they can assimilate we are losing the cream of our population. So rapidly, indeed, is the population of the United States increasing that that country has found it necessary to enact a quota law to keep foreigners from its shores. Our Canadians, on the other hand, are admitted into the United States without let or hindrance. Why can we not take a leaf out of their book? Why can
The Budget-Mr. Dickie

we not adopt some sound, vigorous policy which will promote our own interest? We need not be bound by mere words; let us shun the term "'protection" and "free trade" and simply get down to a common sense basis. Let us enact some common sense legislation which will foster various enterprises in this country. In may be perhaps that under some form of protection a manufacturer here or there may profit unduly. But we can take steps to remedy any evil that may arise in this direction. Nevertheless I am firmly of the belief that our manufacturers must be protected if we are to get anywhere; they must be enabled to make such profits as will render it possible for them to pay fair dividends, to lay by something against lean years, and to pay their employees as good wages as are paid in the United States, and even better.
Give our manufacturers Canada for a market and they can do this; and we can see to it that they do not profiteer to any unreasonable extent. As things are to-day, our industries are fighting against odds: the boot and shoe manufacturers and the textile people are Struggling along, not knowing what they will do from day to day. The textile industry of Canada supplies ju'st thirty per cent of the wants of our people, working only fifty-eight per cent of single shift time. And the same condition exists in other industries; the cloth industry is in serious straits to-day. It may be asked: What about the textile industry of the United States? It also is in bad shape; it is not making any profits. But the situation is entirely different in the United States. Over there they have ninety per cent of the home trade in addition to the trade they secure from Canada. The industry in the United States is over-machined; it has too much equipment. We in Canada on the other hand have an equipment which is sufficient to supply the needs of a far larger market than we enjoy at the present time; we could supply 75, 80 or 90 per cent of the people of Canada with cloth if only the conditions were favourable.
I might discuss other industries but I will not do so; the story is very largely the same in respect of them all. We must give our manufacturers a chance tc make good. Do not let us think that every manufacturer, because he makes a profit, is diabolical, as I have heard him characterized on the floor of this house. Our manufacturers must make money. There must be some goal for them to strive towards, otherwise they will not invest in industrial enterprises in Canada. With our wonderful water-powers, and with

natural resources such as we have in this country, Canada should be highly prosperous. Let us see whether we cannot ride on that wave. I have every sympathy with the people both of the province of Quebec and of the prairies. Indeed, so far as the prairie provinces are concerned, all you have to do is to visit that country in the winter and you will realize the conditions that confront those people. Possibly they are not living the kind of life that makes for a broad point of view; conditions there may have a tendency toward narrowness of view.


Mr. McMILLAN:: It is the opposite.


Charles Herbert Dickie: Nevertheless, they are conditions that make for honesty of purpose. I give the people of the west credit for that virtue.
In conclusion, may I ask that we forget everything but, the important fact that we are all Canadians living in a great country which we can make still greater, a country of which we should all be proud? Let us not give up to politics that which was meant for mankind. And too many of us are inclined to do this. I mentioned the people of Quebec. Let me say, so far as they are concerned, that they are a fine industrial people who are willing to work, and it is unfortunate that for years and years their population should have been drifting across the line. As a good old priest remarked to me one day, "When our people go across the border away from mother church they lose the religion they learned at their mother's knee." Why should this be necessary? Quebec, with its wonderful resources, should be able to retain all its population and repatriate manjr of those who have left the Dominion to help to make the United States a great nation. Let us do something to remedy this condition of affairs.


Mr. G. L. DIONNE (Matane):: This is
practically the first time, Mr. Speaker, I have addressed the house, because I had not an opportunity to speak in the previous debate. However, I will now take occasion to make a few remarks on the motion before the house, and before discussing the subject matter of the present debate I wish to congratulate you, Mr. Speaker, on the manner in which you have presided over the deliberations of this chamber. I do not want to throw bouquets or burn too much incense, but I think I may safely say that your presence is an invaluable asset to the house.
I would also congratulate the Prime Minister (Mr. Mackenzie King) on the splendid document we have in the speech from the throne, now disposed of, while at the same time commending the mover and the seconder

The Budget-Mr. Dionne
of the address in reply thereto. Let me also compliment the leader of the opposition (Mr. Bennett) on his elevation to the position he now holds. It is a matter for gratification that the members on this side of the house show such good will and understanding in the support they give to the government, while I admire at the same time these qualities in hon. gentlemen opposite, who support their chief with equal loyalty. And while I am offering congratulations, I must not forget the ministers of the government, who have so wisely managed the affairs of the country.
As a member from Quebec, I rejoice in the elevation of Archbishop Rouleau to the office of cardinal, and as one interested in the diocese of Rimouski I take very great pleasure indeed in the appointment of Bishop-elect Courchesne.
Now, Mr. Speaker, I do not intend to review all that has been said since the beginning of the session; interesting though it would be, I have no inclination to travel all over the globe following ail those who in their speeches have been making excursions into other countries. We have heard a good deal about emigration and immigration. As regards emigration, I have read that the Chinese at one time built very high and thick walls around their country and erected ponderous iron gates to keep the insiders in, but after a number of years they were obliged to remove the gates and very largely demolish the walls to let those insiders out. I presume it was getting too warm from overcrowding, and now the Chinese are scattered pretty nearly throughout the entire world. It is a very difficult matter, Mr. Speaker, to prevent emigration; indeed, it is almost an impossibility. But emigration can be to some extent moderated by means of -laws not only enacted but strictly enforced.
As regards immigration, we have been acquiring considerable experience over the years, not without some success, and at a considerable expenditure. I am in favour of immigration, but I do not think that we should restrict it to people from the British Isles; we should get immigrants from France, Belgium and Sweden. When we are discussing the types best suited to this country, surely we must realize that the peasants from these three countries are well adapted indeed to conditions in Canada; they are farmers who have been brought up to an agricultural life and they would certainly do well here. What we need is, of course, an increase of population; our population instead of being nine or ten millions should be anywhere from seventy-five to a hundred millions. It is all very well to aim at an increase in population by means
of immigration; but, Mr. Speaker, what is far more desirable is a natural increase. I would advocate the marriage of men between the ages of twenty and forty-five, and if we could raise families of five, ten and fifteen, yes, and even twenty children, our immigration problem would soon be solved. I would even encourage the marriage of the youngsters, those between eighteen and twenty. These youngsters marry, it is true, but unfortunately they ignore the responsibilities of the married state and have no children.
Coming now to the budget, I must congratulate the Minister of Finance (Mr. Robb) on the very able speech he delivered to the house. In view of what that speech discloses, there is not only hope of prosperity; we are actually in an era of prosperity. Agriculture is our main industry in Canada and we should encourage it by every means at our disposal. The farmers deserve every assistance we can give them. I have heard a good deal about the development of our natural resources, and much has been said in regard to mines, minerals and ores. This is all very well, but we must have the courage to develop those resources.
I have here a newspaper despatch quoting the comment of the London Express on the Robb budget:
The Budget Makes One's Mouth Water
London, 20 (S.P.A.). The newspaper "The Express" commenting on the Robb budget, says that it is one of those which makes one's mouth water. It is a further proof that Canada is one of the most enviable countries of the world, and that its prosperity, born from its natural resources, is permanent. After all. this is but a small issue if we are to compare it to the future possibilities which awaits it. Young men and girls should have no hesitation. The inheritance of the Empire and of good fortune await them on their arrival."
The Sunday Observer remarks that Mr. Robb prepared his budget in view of rousing the envy of the finance ministers of Europe. "The tariff" it states, is of a nature to safeguard the interests of the country in a movement which is making great progress. The principle of British preference is always maintained and is established as solidly in Canada as it is in England. In a word the budget and the conclusions which they draw from it show up the opportunities of an energetic and coherent policy of immigration.
Now I return to the subject of immigration. There are some sons of Canada that have been in the United States for a number of years and they would be happy to return to this free country. By all means let us encourage the repatriation of Canadians now resident in that country. Some of them may not be able to come back, but others will be very glad to settle cun farms in this Dominion. At the same time while it is a good thing to encourage immigration, it is far better to
The Budget-Mr. Dionne

keep in Canada those who are now here. Hon. gentlemen opposite have spoken of the exodus to the United States, and they say it should be checked. By all means let it be checked. I remember, however, the period from 1882 to 1896, although I was very young then, when the Conservatives were at the head of affairs in this country. There was quite an exodus to the United States at that time, and what did the government of that day do to check it? Absolutely nothing.
I am not going to enter, Mr. Speaker, upon the discussion of the complicated tariff items dealing with woollens, textiles, silks, worsteds and so on. The hon. member for St. Law-rence-St. George (Mr. Cahan) undertook that task this afternoon and got considerably twisted in his subject. I should not like to meet with the same experience.
Hon. gentlemen opposite talk about the national policy. Their policy used to be "Liberal-Conservative"; now they have dubbed it " national." It will only be necessary to add i-s-t for it to become " nationalist."
Some hon. members have spoken here about the banking system. The banking system in this country is all right enough; it works fairly well for those who can get money from a bank, but the farmer cannot get it. So far as he is concerned the system is no good. I will not speak about capital, because since 1925 I have been more used to paying interest than accumulating capital. I will not speak about capitalism because I know nothing about it. What I am familiar with is capitalized interest. Neither will I venture an opinion with respect to capitalists. I know some of them and they are very nice, decent " socialists."
Talking about repatriating Canadians from the United States, there is a nice opportunity for promoting this laudable movement. I refer to the building and operating of a railroad from Gaspe to a point in the Mate-pedia valley and then on to Edmundston. This line would run through a well timbered territory, through country rich in minerals. There are rivers and lakes in that district which would prove a paradise to the sportsmen. I do not hesitate to say that tourists would pour in by the thousands to that district if it were made accessible. Here is an opportunity to settle repatriated Canadians, along the route of this new railway. It would help in the opening up of new parishes, and would develop the natural resources of this part of Canada, to say nothing of yielding millions of feet of lumber and millions of cords of pulpwood. Taking

all the prospects into consideration, this railway, if it were built, would in my opinion, be one of the most profitable in the whole country.
Something has been said about encouraging the raising of sheep. Now that sheepskins are entering into the manufacture of furs of
all kinds, here is an additional incentive for the raising of sheep.
I should like to say a word or two to those who fear the occurrence of another war. There is a cloud in the sky, but it not a cloud which portends danger. It is a cloud full of good will and understanding, if I may use that expression, and it will burst in an expression of good will over the entire world. Let there be no fear of the coming of another war. If one should occur it will not be fought with deadly weapons but with pop-guns and peashooters.
I have already spoken of the natural resources which await development in my constituency. There are wharves also which need filling, and I hope the Minister of Public Works (Mr. Elliott) whose generosity is so well known, will make generous expenditures for this purpose, not only in my constituency but in other constituencies also. May I say in conclusion that I trust the government will not exercise the pruning knife too rigidly when it comes to making provision in the supplementary estimates for works of various kinds calculated to meet the necessities of the community and to promote in every way the development of the country. I hope to have other opportunities of explaining the needs of my constituency.


Robert James Manion: While it is a little earlier than usual to rise, there was an understanding between the whips that upon the conclusion of the speech of the hon. gentleman who has just resumed his seat, the debate should be adjourned. I therefore move the adjournment of the debate.
Motion agreed to and debate adjourned.
On motion of Mr. Mackenzie King the house adjourned at 10.10 p.m.
Tuesday, February 21, 1928