1928-02-29

INDUSTRIAL AND INTERNATIONAL RELATIONS

[Stage Direction]
Mr. C. R. McINTOSH (North Battleford)
presented the first report of the select standing committee on industrial and international relations as follows:
Your committee recommend that 750 copies in English and 250 copies in French of papers and records of evidence to be taken be printed, and that standing order 64 be suspended in connection therewith.
Mr. McIntosh moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
Second report of the select standing committee on miscellaneous private bills.-Mr. Parent.

[Stage Direction]
Mr. F. W. HAY (North Perth) presented the first report of the select standing committee on banking and commerce as follows:
Your committee recommend that 750 copies in English and 250 copies in French of their proceedings and evidence which may be taken respecting consideration of the improvement of the banking system of Canada be printed from day to day for the use of the committee and of the House of Commons, and that standing order 64 be suspended in connection therewith.
Privilege-Mr. Esling
[Stage Direction]
Mr. Hay moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
lion. ROBERT FORKE (Minister of Immigration and Colonization): I rise to a question of privilege. As reported on page 851 of yesterday's Hansard the hon. member for Frontenac-Addington (Mr. Edwards), speaking of the closing days of the session of 1926, made this remark:
The present Minister of Immigration and Colonization (Mr. Forke) gave his solemn written pledge to the Governor General that he would stay with the session and with the government until the business of the session was finished and supply voted. It is also true that the pledge was violated.
This is an entire misstatement of the facts and were I permitted under the rules of parliament to do so, I would use a very much stronger term. No pledge was ever asked of me and no pledge was ever given. Mr. Meighen was sworn in as Prime Minister of this country before I ever saw the Governor General. The Governor General asked no pledge; I gave none. He did give me some information in confidence, a confidence which I have never violated.

Mr. W. K. ESLING (West Kootenay):: I rise to a question of privilege. Under date of August 5, 1927, there is a despatch from Victoria, British Columbia, stating:
Definite arrangements for a survey to map out the route of the Golden-Revelstoke road were made at a conference here this morning between Hon. Dr. J. H. King, federal Minister of Health and Hon. W. H. Sutherland, provincial Minister of Public Works.
That is for British Columbia. The despatch proceeds:
The province and the Dominion will undertake the surveys jointly under present plans.
Then under date of February 14 of this year there is another despatch from Victoria stating:
Construction work on the Revelstoke-Golden highway will be commenced during the present season.
On February 16 I placed on the order paper two direct questions.


Mr. SPEAKER:: I should like the hon.
member to understand that so far I do not see any question of privilege. Is there in those statements anything which affects the hon. member personally?


William Kemble Esling: Yes. I am just coming to it. It is a question of the veracity of one of the

members of this house. I placed on the order paper these two direct questions:
1.	Did the federal government or any department thereof, enter into any agreement with the government of British Columbia, during the year 1927, for the survey of the road between Revelstoke and Golden in British Columbia?
_ 2. If not, has an agreement for such a survey in the present year been arranged for?
After eleven days I get the answer simply:
The subject is under discussion.
I consider that I am entitled to a direct answer to a direct question.


Hewitt Bostock: This question might come up before the estimates are taken up, but no question of privilege is involved.


Hon. R. B. BENNETT:: Mr. Speaker, there is involved in this a question of the privileges of this house, not a question of the privilege of individuals. The rule is clear that when an answer is given to a question which affects the honour of this house, or when a minister of a provincial government makes a statement which is at variance with that, we have a right as members to raise the question of the privilege of the house when its honour is impugned by the answer to that question.


Mr. LAPOINTE:: Surely there is no question of privilege in that. The hon. gentleman has asked a question, which has been answered, and then he quotes an item in a newspaper which says that something else may be the case. Where is the privilege in that?


Richard Bedford Bennett: No. The answer was given a year ago by the minister himself m the province.


Ernest Lapointe: I assume that the person who furnished the answer-


Richard Bedford Bennett: The minister says it was concluded by the province?


Ernest Lapointe: Which minister? It is the newspaper that says that.


Mr. STEWART (Edmonton):: As the minister who furnished the answer, speaking for the federal government-


Richard Bedford Bennett: It is not concluded then?


Charles A. Stewart: -I say the answer I gave is in accordance with the facts.


Richard Bedford Bennett: That is what is wanted.


Hon. J. H. KING (Minister of Soldiers' Civil Re-establishment):: Just because I happen to be the minister from British Columbia, and knowing that my hon. friend from West Kootenay (Mr. Esling) has directed his question at me, I would say for his information

Questions
and that of the house that there were conferences between myself representing the federal government and the Minister of Public Works in the province of British Columbia.


Richard Bedford Bennett: Mr. Speaker, the discussion that is taking place now is wholly out of order.


Mr. KING (Kootenay):: I think I have the right to answer.


Hewitt Bostock: Order. There is nothing before the house so far, and my ruling is that according to the authorities there is no question of privilege involved.



TARIFF ADVISORY BOARD


Hon. J. A. ROBB (Minister of Finance):: Yesterday the hon. leader of the opposition (Mr. Bennett) asked for the evidence taken by the tariff advisory board in the fruit and vegetable inquiry. The hearing of this application has not yet been completed, but I have copies of the evidence taken by the board in the last three hearings which I now table.


Richard Bedford Bennett: Thank you.



JOINT COMMITTEE ON PRINTING

[Stage Direction]
of public money, I presume that it should be preceded by a resolution, and I therefore ask that this order be dropped. I will give notice of proceeding with the matter by way of a resolution.
Order dropped.

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

Mr. SMITH (Cumberland):: 1.	What portions of pier No. 9, in the city oi Halifax, Nova Scotia, are leased?
2.	By whom are said portions leased?
3.	To whom are said portions leased?
4.	Was any quantity of American coal unloaded at this pier during 1927 for any department of the government or any other person or persons?
5.	If so, for whom?


Mr. DUNNING:: 1.	Two areas of 17,000 square feet each.
2.	His Majesty the King, as represented by the Minister of Railways and Canals.
3.	Alfred T. O'Leary and S. Cunard & Co., Limited.
4.	Not by the Canadian National railways or the Department of Railways and Canals. No information as to coal handled by lessees.
Right Hon. W. L. Mackenzie King (Prime Minister) moved:
That a message be sent to the Senate to acquaint their Honours that this house has substituted the name of Mr. Price for that of Mr. MacLaren on the select standing committee on printing.
Motion agreed to.


LAKE OF THE WOODS REGULATION ACT, 1921 REPEAL
[Stage Direction]
On the order:
First reading of bill to facilitate the provision of storage in Lac Seul in the province of Ontario, and to repeal the Lake of the Woods Regulation Act, 1921:
Hon. CHARLES A. STEWART (Minister of the Interior): With respect to this bill, Mr. Speaker, as it involves an expenditure
cove'* island radio beacon
Mr. THOMPSON:: In view of the marine disaster of last fall on the great lakes, and to make navigation of these lakes safer, is it the intention of the government to establish forthwith a life-saving station on Cove island in the channel connecting lake Huron and Georgian bay, and to install there a position or direction finder?


Mr. CARDIN:: Decision has been taken
to establish a radio beacon on Cove island.


EGG IMPORTATIONS
Mr. GOTT:: 1.	How many eggs were imported into Canada during 1927 ?
2.	Where from?
3.	What amount from each country?


Mr. MALCOLM:: Imports of Eggs into Canada during the Calendar Year 1927
Countries Whence Imported
United Kingdom United States ..
China	
Germany	 Hong Kong .. . Newfoundland ..
Eggs in	the Shell	Eggs,	n.o.p.Quantity	Value	Quantity	ValueDozen	$	Pound	$85	197	70,994	17,7603,171,116	1,382,516	728,918	177,862125	35	1,224,927	267,153-	-	200	12255,315	21,414	-	-4	2	-	-
Total
3,226,645	1,404,164	2,025,039	462,897
88U	COMMONS
Questions as Orders for Returns


PICTOU-CHARLOTTETOWN STEAM SERVICE
Mr. MACDONALD (Kings):: 1.	What steamer or steamers were engaged in the service between Pictou, Nova Scotia, and Charlottetown, Prince Edward Island, during the season of 1927?
2.	What amount of subsidy was paid for this service, and to whom?
3.	What was the total traffic carried on this service: (a) freight; (b) passengers; (c) automobiles ?
4.	What was the total of receipts from carriage of such traffic, including mails and express ?
5.	Has contract for this service been renewed for the season of 1928?
6.	If not, what is the intention of the department with regard to it?


Mr. MALCOLM:: 1.	S.8. Hochelaga.
2.	$35,000.
3.	(a) 554.07 tons of freight; (b) 6,060 passengers; (c) 882 automobiles.
4.	All particulars of receipts and expenditures on subsidized steamship services are considered by the department to be confidential.
5.	The present contract does not terminate until November 30 1928.
6.	Answered by No. 5.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. GARLAND (Bow River):: 1.	What was the total cost of the enforcement of the restricted area plan to date?
2.	What is the total area covered in the plan?
3.	What is the total number of cattle inspected?
4.	What is the total number of cattle in Canada?


Mr. GARLAND (Bow River):: Mr. Speaker, I cannot for the life of me see any justification for having this question passed as an order for return, but I shall not raise any objection if the minister will undertake to see that the replies are brought down as quickly as possible.


Mr. MOTHERWELL:: The first section
of the question entails a tremendous amount of work and we have been working on it ever since it appeared on the order paper. It will take a considerable time longer before the information will be ready, and that is why we do not want the question to remain on the order paper; there is no advantage in having it there under the circumstances. The information asked for involves so much work that it will probably be more than a week before it is completed.


Edward Joseph Garland: As the
minister probably understands, this is a question which must be answered if there is to be any intelligent discussion of his estimates, and I trust he will have the answer down before his estimates are brought up.


TARIFF ADVISORY BOARD
Mr. SPENCE (Parkdale):: 1. What amount has been paid in: (a) salary; (b) expenses and allowances; (1) during the fiscal year ending 31st March, 1927, and, (2) during the period from the 1st April, 1927, to January 31, 1928, to the chairman of the tariff advisory board?
2. What amount has been paid in: (a) salary; (b) expenses and allowances, to each member of the tariff advisory board during the periods mentioned in above question?
3.	What staff is employed by the tariff advisory board?
4.	What are their names, date of appointment and salaries?



UNOPPOSED MOTIONS FOR PAPERS


Mr. JOHNSTONE (Cape Breton):: For a copy of all documents and correspondence on file in the Post Office department concerning the dismissal of the mail carrier between Englishtown and Ingonish Ferry, Victoria county, Cape Breton, including all complaints, if any, received by said department.



IVERA FARM POSTMASTERSHIP

Lewis Wilkieson Johnstone: For a copy of all documents and correspondence on file in the Post Office department concerning the dismissal of Malcolm McRae, and the appointment of the new postmaster at "Ivera Farm" post office, Upper Middle River, Victoria county, Cape Breton, Nova Scotia.



NATIONAL REVENUE DEPARTMENT -SEIZURES

Mr. W. G. McQUARRIE (New Westminster) moved:: For a return of seizures from 1925 to 1928 inclusive, by the Department of National Revenue, or the former Department of Customs and Excise, showing the following particulars:-
1.	(a) the date of each seizure; (b) the description of the property seized; (c) the value of the property seized.
2.	The person from whom each seizure was made.
3.	The person by whom each seizure was made.
4.	The penalties imposed in respect of each seizure.
5.	How the seized property in each case was disposed of, and the amounts, if any, realized out of the same.
6.	The cost of making each seizure and of holding the seized property.
7.	In respect to each seizure, the amount of moiety awarded, and to whom awarded.

Rural Postmasters-Salaries


James Alexander Robb: In the absence of the Minister of National Revenue (Mr. Euler) I would say there is no objection to this motion being passed, subject of course to the reservation that some confidential payments may have been made to people who gave information.


Richard Bedford Bennett: I think that is perfectly
reasonable.


[Stage Direction]
Motion agreed to.
William Garland McQuarrie: For a return in respect of seizures by the Department of National Revenue or the former Department of Customs and Excise from 1925 to 1928 inclusive, showing the following particulars:-
1.	The name of each person employed by the department for the purposes of seizures.
2.	The locality in which each person making seizures acted on behalf of the department.
3.	The salary of each such person and his expenses in 1925, 1926, 1927, and 1928.
4.	(a) The number and value of seizures made in 1925, 1926, 1927. and 1928, by each person; (b) and the penalties imposed in each case.


James Alexander Robb: There is no objection to this motion passing, subject to the reservation I made with regard to the previous motion.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Mr. A. A HEAPS (Winnipeg North):: On the 16th of February the house passed a motion asking for the production of all papers regarding the breaking off of relations between Canada and soviet Russia. Haa the minister received any reply from the imperial government regarding that matter?


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I am as anxious as my hon. friend to receive a reply, but I am sorry to have to tell him that none has come as yet. I will send another communication.



SALARIES OF RURAL POSTMASTERS

[Stage Direction]
On the orders of the day:
Mr. W. T. LUCAS (Camrose):: Mr. Speaker, when Canada returned to penny postage the salaries of country postmasters were lowered by reducing the commission on the sale of stamps. I should like to ask the Postmaster General (Mr. Veniot), if he has remedied this situation; and if so, has he made any provision for an increase in the salaries of these postmasters?


Hewitt Bostock: Notice should be given of such a question.



NOTICE OF COMMITTEE MEETINGS

[Stage Direction]
On the orders of the day:
Sir GEORGE PERLEY (Argenteuil):: Mr. Speaker, I should like to call your attention and the attention of the house to the question of notice of meetings of committees. I know there is nothing in the rules in regard to it, but it seems to me that we should have at least twenty-four hours' notice of these meetings. I hold in my hand two notices of meetings of committees held this morning. I am a member of those committees, but these notices were not in my box at three o'clock yesterday afternoon. I submit it is not fair to members of committees of the house that they should be given such short notice, and I would suggest that at least twenty-four hours' notice be given of these meetings.


William Lyon Mackenzie King: I speak subject to correction, but my impression is the notices of meetings of committees appear in the votes and proceedings. If my hon. friend will look at the votes and proceedings from day to day he will, I think, get the the twenty-four hours' notice which he desires.


George Halsey Perley: The notices of
these committee meetings are contained in the votes and proceedings of yesterday, but we did not receive these votes and proceedings until to-day. There is no notice of these meetings in Monday's issue.


William Lyon Mackenzie King: I think my
hon. friend will find that the notices were published in the votes and proceedings of Monday as well as in yesterday's issue. Nevertheless, Mr. Speaker, it would be advisable to have the notices sent to the post office as quickly as possible.


George Halsey Perley: They are not in my copy of Monday's votes and proceedings.


William Lyon Mackenzie King: I will send my hon. friend my copy.



TOBACCO GROWING INDUSTRY

[Stage Direction]
On the orders of the day:
Mr. E. J. GOTT (South Essex):: Mr. Speaker, yesterday, in his absence, I put a question to the Minister of Agriculture (Mr. Motherwell). It related to the tobacco growing industry in western Ontario. I should like to know if he is now prepared to give me the information I then asked for.


Hewitt Bostock: The question should b* placed on the order paper.

882	. COMMONS
The Budget-Mr. Cantley


William Richard Motherwell: Will my hon. friend repeat the question?	[DOT]


Eccles James Gott: I want to know what attitude the government is taking in appointing a commission to investigate the condition of the tobacco growing industry in western Ontario, what proposals are contemplated in regard to handling the situation, and upon whose recommendation the commissioners were appointed.


William Richard Motherwell: Mr. Speaker, I think that is a very proper question to put on the order paper.



THE BUDGET


[Stage Direction]
The house resumed from Tuesday February 28 consideration of the motion of Hon. J. A. Robb (Minister of Finance), that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, the proposed amendment ' thereto of Mr. Cahan and the amendment to the amendment of Mr. Fansher (East Lambton).
Mr. THOMAS CANTLEY (Pictou):: Mr. Speaker, the budget proposals of the hon. Minister of Finance (Mr. Robb) now being discussed-


Some hon. MEMBERS:: Louder.


Hewitt Bostock: Order please. There is
too much conversation in the house; I cannot hear the hon. gentleman.


Thomas Cantley: Mr. Speaker, the budget of the hon. Minister of Finance now being discussed by all sections of the house does not suit me either as to what the minister proposes or as to what he has omitted from its provisions; in short I do not like it at all and I wish now to state why I do not like it.
First:	It fails to give fair and necessary
protection to important industries which would, if properly safeguarded, provide a large measure of employment for our people. Another reason for my dislike is that the minister attempts to save an important industry from the disabilities which this budget imposes on it by lowering or removing the duty on some of the material employed in that particular industry here again resorting to tiie tactics employed in the case of the agricultural implement industry, and later the automobile industry, when, in each case, one of the great basic industries of this country was sacrificed in the effort to save from extinction industries he had directly attacked

by the tariff changes then introduced. And, mark this, that in most, if not all of recent Liberal budget changes, the industries most hurt were those basic industries, particularly those of my native province-coal and steel. These were most unfairly and flagrantly attacked and a quite indefensible advantage given industry located in another province.
I am sorry the Minister of Finance is not in the house, as I desire to make some further remarks that I think should be of interest to him. The minister, I am convinced, is not naturally a hard-hearted tyrant or wholly indifferent to the claims of those engaged in industries outside of his native province. Rather, I choose, to think that his seeming indifference and total failure to give any practical assistance to the coal, iron and steel industries, is due to a lack of knowledge of the facts, and failure to appreciate their importance or the scope and magnitude of the injury vThich the policy of the Liberal government has inflicted on the chiefest industry of my native province, Nova Scotia.
The hon. member for St. Lawrence-St George on Monday of last week referred to the steel situation and gave the house some startling facts as to the position of the industry, supporting his arguments by figures as to employment and production and the dire effect of the policy of the government as regards what undoubtedly is the greatest basic manufacturing industry of this country, and I shall not weary the house with a repetition of the facts, figures and arguments so ably presented by him at that time.
But may I now further direct the attention of the Finance minister to the matter and remind him that in 1913 we had in Canada twenty-three more or less active blast furnaces. Of these, nine were situated in Nova Scotia, three in Quebec, and eleven in Ontario. Of these, only three, or possibly, to-day, four are in operation.
Our imports of raw iron and steel are now more than double what they were in 1923, when they were, in round figures, 123 millions of dollars; in 1924, 140 millions; 1926, 158 million, and last year-1927-approached a quarter of a billion of dollars, or, to be exact, $248,151,564. May I also remind him that in 1924 there was mined and smelted in Canada a million and a half tons of Ontario iron ore, and last year not a single ton.
Ontario blast furnaces are now depending on and are smelting iron ore mined in the United States, aided in one instance at least by the lowest railway rate in existence on this continent. Not a ton of Canadian ore is now mined in the central provinces of

The Budget-Mr. Cantley
Canada and this, despite the fact that both Quebec and Ontario have vast deposits of workable ores situate in many cases close to the main trunk lines of these provinces.
Our Nova Scotia blast furnaces work entirely on Wabana red hematite ores which lie some 400 miles from the harbour of Sydney, Cape Breton, where at Sydney Mines and Sydney, our great iron and steel producing plants are situate.
Now, I want to refer to the tariff. I have in my hand the customs tariff of Canada for 1907, with amendments. It is twenty-one years old. It contains more amendments than original items, and it is very difficult without the expenditure of a large amount of time to determine from this book what the tariff is on any particular item of goods imported into this country. It is a crying disgrace to the two ministers interested, the Minister of Finance (Mr. Robb), who fixes the duty, and the Minister of National Revenue (Mr. Euler), who collects it. We have a tariff commission which is supposted to have been operating for nearly two years, and I hope the ministers will give them something practical to do, because up to the present time I know of nothing practical they have done. They might take in hand the revision of this document, which is a disgrace to the country. And I say this without any fear of contradiction.
If we had a logical iron and steel tariff we should not have a condition of affairs under which pig iron is given a duty of $2.50 a ton and billets made from pig iron, converted first into steel in the melting furnace and afterwards put through the rolling mill, is given a lower protection than that which is accorded the raw material from which it is made. The duty on steel billets is actually 11 per cent less than it is on pig iron. The conversion of pig iron into steel billets costs probably about $10 a ton. This outlay includes the fuel used as producer gas in the open hearth furnace and in the reheating furnace, as well as expenses connected with repairs, scrap losses and so forth. All these are elements which enter into the conversion of pig iron into steel billets, and notwithstanding this considerable expenditure the fact is, as I have stated, that the duty on the finished product, the billets, is about 11 per cent less than that on the raw material, pig iron.
I will ask the house to consider the sectional factors of the tariff. Pig iron is made in Nova Scotia, in Hamilton, and in Algoma. The Nova Scotia producer uses coke made from domestic coal produced by the miners of that province, while the Hamilton and the Algoma iron and steel plants use United States coal, receiving a drawback of 99 per cent on the 56103-56*
duty. Let us consider the situation from this point of view. On each ton of pig iron made Algoma spends within the Dominion, say $2.50, Hamilton about $3 and Nova Scotia about $9. It follows from this that the labour involved in the production of pig iron in Nova Scotia i3 three times as great as in the case of Ontario, and in spite of this fact the Nova Scotia product enjoys only the same rate of duty. We put three times as much labour into the production of pig iron as the manufacturers employ in Ontario and we have exactly the same protection, so that in effect the Nova Scotia coal miners and a large body of iron and steel workers have absolutely no protection whatever. Let us take another case. One Ontario manufacturer gets duty free spring steel, his raw material, for use in his factory, and he had on his output a protection of 25 per cent; a Nova Scotia manufacturer, using exactly the same grade and size and kind of steel, pays a duty of $6 a ton and has a protection on his harrow teeth of 6 per cent. Is there anything fair as between these two cases? I ask the house to consider our position, due to the provisions of a sectional and unscientific tariff, under which relatively unimportant secondary industries requiring little equipment are able to import raw material at the low rate of duty of 5 per cent-in one case duty free-while enjoying a protection of 25 per cent and in some cases 30 per cent. I will give an instance. Take tariff item No. 383, iron and steel skelp sheared or rolled in grooves, duty 5 per cent. I want to point out two different features in relation to this item. Under the general tariff the rate of duty is $7. The ordinary consumer of iron of this class pays $7 a ton while, on the other hand, the manufacturer of pipe imports it in the form of steel skelp in one case at 5 per cent and in the other duty free. This 5 per cent skelp duty is the same under the British preference, the intermediate and the general tariff.


Mr. CHAPLIN:: Will the hon. member give the meaning of the word skelp, so that the house may understand the matter more clearly?
Mr. CANTLEY': Skelp is the trade name given iby steel and pipe makers to strips of steel intended to be rolled or drawn through dies in the forming of ordinary merchant pipe. If I want to produce pipe with an internal diameter of one inch, I purchase or roll, as the case may be, a bar of steel, say, one-eighth of an inch thick and say four inches wide. For larger pipes I roll the steel wider, and for still larger pipes wider still, and so on, using an increasingly heavier material. The
The Budget-Mr. Cantley

material may be rolled to the width and thickness suggested, or it may be rolled first in the form of sheet steel of the required thickness and afterwards sheared to the desired width. Material produced in either of these forms is known to the trade as steel skelp for pipe making. I am at present referring to an industry which is able to import skelp at a duty of 5 per cent while it is protected by a tariff ranging from 274 to 30 per cent. I contend that there is class discrimination in this matter, and I say this for the reason that if material of exactly the same dimensions is imported by the users of steel for any other purpose they pay $700 per ton under the general tariff, whereas the concern which is using it for the mSnufacture of pipe gets it at 5 per cent and enjoys a protection on his pipe by way of a duty of 274 to 30 per cent. The products of the furnaces, forges and mills in Germany, of all continental Europe, and the surplus of the United States, are in this case accorded equal treatment with the British product, the principle of preferential treatment being entirely ignored. The whole productive capacity of Great Britain, of Europe and of the United States is placed at the disposal of the merchant mill operator and the steel pipe producers of Montreal and elsewhere, and they are able to import steel billets and steel skelp at the lowest possible world's figure, assisted by ballast rates of freight, the product being admitted into Canada at a duty of 5 per cent, irrespective of any interests save their own. It would appear to be a matter of no concern to the Minister of Finance or to the government that our Nova Scotia coal miners are to-day idle, or that many of our blast furnaces, coal washeries, open hearth furnaces and the great steel producing plants, each unit costing millions of dollars, are silent, with thousands of former operatives idle. On the other hand, the pipe manufacturers, whose raw material is imported skelp and whose operations are often carried on in a building little more than a glorified shed, equipped with a few small heal'-;:-furnaces possibly using waste gas from the city gas works and requiring only the simplest type of machinery, enjoy a protection of 30 per cent under the general tariff and 274 per cent under the intermediate tariff. This
Persons
employed
Blast furnaces and steel mills	 13,874
Subsidiary plants	 101,887
merchant pipe so produced and so protected by the tariff finds itself in the centre of the consuming area of Canada and in the chief distributing centres of this country with a consequent low distribution cost.
The whole tariff history of the world cannot supply such concrete evidence of the total lack of a rational tariff policy or a more unfair, unjust and illogical application of the taxing powers resting in the Minister of Finance. . I invite the minister to consider all the facts relative to item 383; his commissioner of taxation has been thoroughly acquainted with the situation for a long time, and can readily give him all necessary information.
In 1920 the investment in primary iron and steel plants in the Dominion amounted to $120,000,000 in round figures, or 18 per cent of the total manufacturing investment of Canada; by 1926 this had fallen to about $88,000,000. or 144 per cent of our total manufacturing investment. In 1920 the value of our primary iron and steel products was about $139,000,000, or 21 per cent of the entire manufacturing production for that year, while during the three years 1924, *1925 and 1926 the value of these primary iron and steel products had fallen to an average of less than $37,000,000, or a drop of 70 per cent. To put it in another way, the value of the primary products of iron and steel in 1926 was only 8i per cent of the entire industrial production of this country. Looking at it from still another point of view, about 92 per cent of the value of the secondary iron and steel products of Canada is based on the fabrication of raw forms of iron and steel imported into this country, -while some of these secondary products enjoy the highest rates of duty imposed by our tariff.
The fundamental value of this great Canadian industry lies in the pig iron and steel produced; in other words the products of our blast furnaces, open hearth plants and rolling mills which should and1 under a properly graded tariff would provide the raw material for the secondary metal industries. I should like at this point to place on record the relative positions of the primary and secondary divisions of the industry as shown by the operatives employed and the wages paid during the years 1920 and 1926. The figures are as follows:
1926
Wages and salaries paid
22.824,530
135,860,417
Persons
employed
6,014
75,400
Wages and salaries paid 8.934,536 125.229.867

The Budget-Mr. Cantley
As shown by these figures, the secondary plants are about holding their own with regard to earning power, but certainly this is not the case with the blast furnaces and rolling mills.
I invite the Minister of Labour to consider the fact that in 1913 Canada had nineteen blast furnace stacks in operation with only five idle, while to-day we have but four producing furnaces, with SO per cent of the investment and employment capacity of Canada's iron and steel industry idle and unremunerative. This has been the case for several years past, and the wages earned have been only 40 per cent of those earned six years before. Is not the Minister of Labour (Mr. Heenan), interested in that situation? Let the minister ask the people of Sydney Mines, Glace Bay, Sydney, New Glasgow and Trenton to give him the facts with regard to empty houses, municipal bank overdrafts, distress assistance and the emigration of thousands of our best artisans, and having done this, I ask him to impress upon the Minister of Finance the gravity of our position.
Then I would invite the government to consider the matter from another angle. In Nova Scotia we did all the pioneer working out of the intricate and difficult problems of the steel trade as it is now practised in this Dominion, and I would remind the house that pioneering in industry is expensive. The first open hearth steel plant in Canada was put into operation at New Glasgow, Nova Scotia, in 1882, when the Scotia Company, to give it the short local name, in August of that year made the first open hearth steel and poured the first steel ingot produced in Canada. Here I would like to pay a tribute to the courage, faith, indomitable energy and Scottish persistence of three men, all natives of New Glasgow, who were the real fathers of the steel trade in Canada. They successfully overcame all the pioneering difficulties which came up in the establishment of the steel industry based on the use of native ores, fluxes and fuel, aided wholly by native workers. I refer to the late Graham Fraser, George Forrest Mackay and Simon A. Fraser, men with whom it was my great privilege to be intimately associated over a long period of years.
The New Glasgow Iron, Coal and Railway Company, organized by Graham Fraser and some intimate friends in 1890, shipped abroad trial lots of Pictou coal. These were not hand samples, bag samples or ton lots, but consisted of some hundreds of tons. This coal was sent to the Westphalen or black country district of Germany, where exhaustive
washing and coking tests were carried ont. The knowledge thus gained enabled us to determine the type of washery and coke ovens best suited to our fuel conditions. This information was put into practical effect in 1891, at Ferroma in the county of Pictou, where the first commercial coal washer and also the first rectangular retort coke ovens designed to produce blast furnace coke from washed coal were built and put into successful operation. This coal washery and these ovens were the first of their type on the North American continent. Ten years later followed the great development at Sydney and Sydney Mines, where eight modern blast furnaces with coal washing and coke oven equipment and by-product plants were established. During the war these plants first produced the toluol which made possible our great contribution to the demands for explosives for our armies and those of our allies from 1915 until the end of the war. Connected with these blast furnace plants, situated one on each side of Sydney Harbour, are seventeen open hearth melting furnaces with capacities of fifty, seventy and one hundred tons, some of which are of the most modern design on this continent. Those at Sydney Mines are fitted with secondary plant for fluid compression of steel, where great hydraulic presses exert a pressure of 4,000 tons per square inch on the plastic steel contained in reinforced ingot moulds thus displacing the inert gases and consolidating the metal, eliminating blow holes and surface cracks, and ensuring a more homogeneous, better and safer material for railway car and locomotive axles and large marine forgings, giving to these a degree of safety and dependability not otherwise obtainable. This magnificent plant with its accompanying ore piers, coal washers, coke ovens and blast furnaces, and refractory brick works, representing an outlay of many millions of dollars, and half our coal mining capacity, is to-day all idle, with a consequent lack of employment, lessened purchasing power for our people, less traffic for our railways, and a loss of one-half the population from a town of 10,000 people boasting large brick public schools with modern public utilities of water, lighting, sewerage and tram car service. There, where formerly visible and tangible evidences of success, optimism and progress prevailed, depression, discontent and despair now exist, due, Mr. Speaker, to the fundamental change in the former tariff structure of this country. These changes at first were small, but were followed year by year by others, all of the same unpatriotic and fundamentally vicious type, and all gradually but surely producing their dire effects on the great basic industry
The Budget-Mr. Cantley

of Canada. This is the situation which now exists and which the Finance minister to-day refuses or neglects to remedy in the slightest degree. He fiddles with cotton thread's and offers our coal and steel workers duty free foreign woollen yarns with which to dam their mitts and moccasins, while they and the spinners of Canadian yams go idle and in want. And that, Mr. Speaker, is the sum total of the relief offered the coal and steel industries by the tariff changes which the Finance minister has just presented to the house.
The facts as to the position of the iron and steel industry, and the paralyzing effect of the tariff, discriminating sis it does against this Nova Scotian industry, were presented to the tariff advisory board on May 26, 1926, now nearly two years ago, but, so far nothing is known as to the action taken by the board or the advice given by them. Meanwhile, incalculable loss of capital and wages has resulted, population has declined, distress, disappointment and unrest have followed, and we are yet without even any suggestion of sympathy or practical help from the Finance minister or the government.
As to coal, I shall not delay the house with any lengthy reference to the coal mining industry of Nova Scotia, the main facts as to which have already been fully put before the house, but will merely say that that industry as now carried on in Canada does not provide the continuity of employment desirable and necessary to the well being of those employed in it, and a radical readjustment of our dealing with the industry is imperative.
I should like to draw the attention of the house to a considered statement made by the Dominion Bureau of Statistics at the suggestion of the royal commission on maritime disabilities, which directs attention to the intimate connection between the coal and steel industries and the population of Nova Scotia.
Coal mining, while carried on in Nova Scotia for more than a century, received its greatest stimulus when the steel industry was taken up, first at New Glasgow in 1882 and further extended in 1891, followed by a great advance in production in 1900, due to the construction of large iron and steel plants on both sides of Sydney Harbour.
The relative importance of Nova Scotia as a producer of coal and steel is shown by the fact that up to about 1880 virtually all the Canadian coal output came from Nova Scotia, and up to a still later date, or about 1895, virtually all the pig iron and steel produced in Canada was made in Nova Scotia. Now while the tendency of later years has been to'diminish the relative importance of Nova Scotia

as a factor in coal, iron and steel production in Canada, it cannot be forgotten that these allied and basic national industries first attained importance in Nova Scotia. It is the chief misfortune of that province to be overshadowed now by the more rapid, if more superficial, progress of central Canada, greatly due to unfair legislation.
The extent to which the Nova Scotia coal and steel industry has suffered may be gauged by constrasting the continuous increase in the coal output of the province for twenty years prior to the great war and the disappointingly opposite trend shown since the close of the war, which downward trend is largely a reflex of the difficulties attending steel manufacture in Nova Scotia, arising out of unsatisfactory and unfair tariff and railway freight conditions. Notwithstanding these discouraging features the striking fact is that the only local increase in population that has occurred in Nova Scotia since confederation was due to and associated wth the coal and steel industries.
The increase of population in the municipalities in which the coal and steel operations were carried on during the thirty years period between 1891 and 1921 was approximately 74,000 persons. The total increase of papulation in the province between these two decades was 73,000, namely, an increase from 450,000 to 523,000. I ask hon. members to note this: but for the increase in the coal and steel districts, there would have been no growth in the population of Nova Scotia during the past thirty or forty years. The growth of the coal industry has created several new towns and greatly enlarged others, something which has not occurred in connection with any other industry in that province. But the emigration from the maritime provinces, and especially, from Nova Scotia, has cancelled the combined increase due to immigration and natural increase. But for the employment and the creation and distribution of wealth connected with the coal and steel industries, with which undoubtedly is associated all the growth in population in Nova Scotia in forty years, the emigration from Nova Scotia would have been even greater than it has been. The census of 1931 in all probability will reveal a decline in the population of such towns as Sydney Mines, Sydney, New Glasgow, and Trenton, which have been affected by the lack of employment in the steel industry, and to a lesser but no means negligible extent in the coal industry. This fact makes still more understandable the real sense of fear that assails the Nova Scotian who witnesses the decline year by year of the steel industry and the effect of this decline upon the production of coal.

The Budget-Mr. Dunning
These startling facts should command the attention of our friends in other sections of the Dominion, and especially the government, a'nd my respected friend, the hon. Finance minister to whom I appeal primarily. It is to him we look for that succor and relief which he can give, and that without permanent injury to any legitimate Canadian industry.
We on this side of the house are sometimes taxed with failure to present any constructive suggestions although we indulge in criticism of the government. The Finance minister intimated that he would welcome any workable plan looking to provision for a sinking fund or any suggestion that will contribute to the earlier retirement of our national debt. I now venture to suggest that he impose a duty of a dollar and a half per ton on all coal and coke imported into Canada. That duty would not exceed, say, 20 to 25 per cent ad valorem, taking the average value of such fuel at the point of entry, and the total tax collected could be placed to the credit of a sinking fund for the extinguishing of the national debt. Were this done, the minister would be able to retire annually from that source say twenty-five or thirty millions of dollars of our outstanding national obligations. Of course the sum thus available for debt reduction would be gradually lessened in proportion as our domestic coal replaced imported fuel. A further great advantage would be to increase largely the range of consumption of Canadian coal, develop our own enormous western coal deposits, provide employment for a large mining population, go far to prevent seasonal unemployment in our eastern mining districts, and within a reasonable time put Canada in an independent position in the vital matter of fuel for both domestic and industrial purposes.


Mr. RALSTON:: How does my hon. friend
propose to keep out American coal and at the same time collect duties to be applied to the reduction of the national debt?


Thomas Cantley: I will answer that. I
have said that the amount available would gradually diminish as we replaced foreign coal with coal mined in Canada. That statement stands. Were this proposal adopted, the bonus on coke as provided by bill No. 123 of 1927, to encourage the production of domestic fuel from coal mined in Canada, might be abandoned1, it is of no practical use anyway. This suggested rate of duty may appear unduly burdensome to our Quebec and Ontario friends; but perhaps I may be permitted to remind them that they have been the greatest gainers by the protective policy of the past and such as yet
remains of that policy, and they have enjoyed a measure of prosperity not shared to anything like the same degree by the outlying provinces, either those of the east or those of the west. May not we, therefore, now appeal to their generosity and ask them to aid their less fortunate compatriots? Further, I know I can appeal to the deep and oft expressed sentiment of Quebec and Ontario as to Canadian unity and remind them that the consolidation of this great Dominion can be assured only by the removal of recognized handicaps and the providing of opportunity for each of the provinces to develop their natural resources and to provide adequate outlets for the energies of their people.
In conclusion I have just this to say:
In view of the past history of the coal, iron and steel industries of Nova Scotia, and the important contribution those industries and the men who created and developed them have made to the national and industrial life of Canada; in consideration of the gravity of the present position of those industries and those dependent on them, I again appeal to the Finance minister to amend his budget proposals now before the house and to give to these great Nova Scotia industries the protection and assistance necessary to their successful operation and due them by virtue of their primary importance to Canada, and of the prosperity and contentment of so large a portion of our maritime population, whose well being, I am convinced, is desired by our compatriots in every province of this Dominion.
Hon. CHARLES A. DUNNING (Minister of Railways and Canals):	Mr. Speaker, I
am sure the hon. member for Pictou (Mr. Cantley) will forgive me if I do not follow his speech in detail. It is one of the same general type as the others that have come from members on that side of the house, and in my general discussion of the subject matter of one of them I need make reference but rarely to any individual speech, because they are practically all along the same line, dealing with the same matters in precisely the same way.
I think it is due to the Minister of Finance (Mr. Robb) to say that few men have been privileged to present to parliament a succession of such satisfactory budgets as those which have become known from coast to coast in Canada as "Robb" budgets. The man on the street finds it much easier to understand t'he mind of the present Minister of Finance and what the present Minister of Finance has for an objective, than is usually the case in connection with budget statements by min-
The Budget-Mr, Dunning

isters of finance. I need not refer to the respect in which the Minister of Finance is held in this house. Every member on both sides will agree that his genial personality and his fine treatment of all of us are universally admired and respected. We may not all agree with him. I usually do; members on the other side do not; but in the references which have been made to the minister personally, the respect in which he is held by all parties in this house is apparent.
In criticism of the budget there has been constant repetition from the other side of the house of the statement made by the hon. member for St. Lawrence-St. George (Mr. Cahan), in opening the debate, regarding the treatment by the Minister of Finance of the debt due by the Canadian National Railways to the public. Other speakers, notably the hon. member for Leeds (Mr. Stewart), have developed the same theme along similar lines. In fact the hon. member for Leeds went so far as to say that the present Minister of Finance had adopted a different method from that of Mr. Fielding in the treatment of railway financing in the budget speech. Previously the accusation by the hon. member for St. Lawrence-St. George was that a different method had been adopted from that followed by the Conservative government in 1921-22.
I shall endeavour to deal with both. The hon. member for Leeds showed that Mr. Fielding, in considering the decrease or increase of public debt, took into account cash advances to the railway. That I think is correct. May I point out to my hon. friends opposite that the present Minister of Finance does exactly the same thing, and has done exactly the same right along? The fact of the matter is that all the debt of the Canadian National Railways to the people of Canada is now treated as part of the net debt of the Dominion. AM the debt of the Canadian National Railways to the outside public is not and has never been treated as part of the net debt of Canada by any minister of finance or any government, and I propose later to discuss the reasons why.
What the hon. member for St. Lawrence-St. George referred to the other day-and the hon. member for Leeds sought to support his contention-was the guarantees of the Dominion on railway account. The hon. member for St. Lawrence-St. George said-and I think I am quoting him correctly-that on a proper basis of accounting the bond guarantees on railway account would have appeared as a direct liability of the government of Canada. Those, I think, are his exact words. That argument was not supported by the quotation from Mr. Fielding's budget speech of 1922-23

quoted by the hon. member for Leeds, because it so happened that in 1922-23 there were no railway guarantees and during the present fiscal year there have been no cash advances on railway account. The hon. member for Leeds therefore cannot properly compare the two cases. Let me for a moment quote the hon. member for Leeds. This is what he said:
The explanation is found in the fact that m the year 1923 an amendment to the Canadian National Railways Act was passed, permitting the government to guarantee securities issued on behalf of the system; and since that legislation was enacted the government have adopted the principle of guaranteeing the obligations of the national railways and then forgetting all about it when coming to deal with the liabilities of Canada at the end of the year.


Mr. HANSON:: Hear, hear.


Mr. DUNNING:: My hon. friend says
"hear, hear." Like the hon. member for Leeds; he seeks to make it appear that the present government, has altered the accounting method of the Department of Finance to enable it to make a better showing. That is what my hon. friend meant.


Richard Burpee Hanson: The minister forgot about, it in presenting his budget.


Charles Avery Dunning: The Budget-Mr. Dunning
friend produced a certificate of one of the leading firms of chartered accountants in Canada to demonstrate that fact. Does anyone argue that the firm of P. S. Ross & Sons would give a certificate to that effect if it were not true. Does anyone argue that a firm of auditors of their reputation, a firm which I believe I am correct in saying has been engaged by the province of Nova Scotia, the province of New Brunswick, and many large business organizations in this country-


Mr. STEWART (Leeds):: Would the minister allow me a question?


Charles Avery Dunning: If the Speaker will allow me the time I take to answer it, yes.


Hugh Alexander Stewart: How much of that 1921 guarantee to which the minister refers was for refunding of existing obligations?


Charles Avery Dunning: I do not think I have the figures of refunding here but a large portion of the amount in any case was not for refunding, and if I follow my hon. friend from St. Lawrence-St. George correctly, he would not draw any distinction in his treatment whether it was for refunding or not. He would have it all charged to the net debt of Canada without any distinction whatsoever.
Now as to the propriety of the matter, for, after all, we are here considering the business of this country, is this a correct business procedure, no matter whether or not the Conservative government did it, no matter whether the Liberal government continued the practice? The question is, is it a sound and a correct procedure? I submit that it is a quite correct procedure on the ground, first, that it is a procedure which is followed by every single government in Canada with respect to similar undertakings. I would cite first the government of the province of Ontario, which has outstanding a very large amount, some fifty million dollars, of securities guaranteeing the financing of the Ontario Hydro-Electric Commission, a public-ownership utility analagous in some degree at least to our Canadian National Railways.


Mr. RYCKMAN:: They have assets for every dollar of guarantees.


Richard Bedford Bennett: There is the answer.


Charles Avery Dunning: I will come back to mj* hon. friend in a moment. I am not saying, not for one moment, that they do not have assets for every dollar of guarantees. The same method is followed with respect to every guarantee behind a public utility in every province in Canada.


Hugh Alexander Stewart: Would the minister permit me a question?


Charles Avery Dunning: I am ready to answer the question, if I am allowed the extra time.


Hewitt Bostock: It is not within my privilege to extend the time of any hon. member. I have to see that the forty-minute rule is observed.


Charles Avery Dunning: If I am not to be allowed the time I hope my hon. friends will allow me to use my own forty minutes, not that I do not like interruptions.


Mr. MANION:: We were all up against that, you know.


Charles Avery Dunning: With regard to the Ontario hydro, exactly the same policy is followed by the government of the province of Ontario. The hydro debt guaranteed by .the government is not taken into account as part of the net debt of the province.
May I go further in connection with the province of Ontario and say that the example of the Dominion with respect to railway financing has been thought so highly of by the government of that province that a short time ago, in 1925, the Ontario government amended the Timiskaming and Northern Ontario Railway Act to give power to the government of Ontario to do with the Timiskaming and Northern Ontario railway exactly as we are doing with the Canadian National railway. Not only that, Mr. Speaker, but during the current year, $6,000,000 of Timiskaming and Northern Ontario railway bonds, the bonds of the provincial government-owned railway in the province of Ontario, have been issued by the Timiskaming and Northern Ontario railway commission and guaranteed by the province of Ontario.


Mr. McGIBBON:: The railway is paying
the interest.


Charles Avery Dunning: My hon. friend at last
sees it. That indeed is the whole point. That portion of the debt of the Canadian National Railways which is owed to the government of Canada, and upon which the taxpayers of Canada as such are paying interest, is a part of the net public debt. That portion of the debt of the Canadian National Railways which is owed to the public and on which the railway is earning the interest, is not a part of thel net debt of Canada, but is a charge against the railway. Every province of Canada-I need not take up my time to run over all the examples-treats similar institutions in a similar manner. There might be some criticism if any part of the Canadian National indebtedness to this government did not ap-
The Budget-Mr. Dunning

pear as part of the net public debt, but there can surely be no valid criticism of the pro-ceedure of not charging against the net public debt of this country moneys on which as stated by my hon. friend from Muskoka (Mr. Mc-Gibbon), the railway itself earns the interest and pays it.


Richard Bedford Bennett: The only trouble is that it does not.


Charles Avery Dunning: My hon. friend will have an opportunity to prove that before the special committee. I can only say this:	My hon.
friend the Minister of Finance sits by my side at this moment and he has not this year paid out of the public treasury interest on any part of the Canadian National debt due to the public.


Richard Bedford Bennett: He lent them $15,000,-
000. '


Charles Avery Dunning: Will my hon. friend please permit me to make my speech? He will be unlimited himself as to time.
* Mr. BENNETT: I apologise; I am very sorry.


Charles Avery Dunning: After all, Mr. Speaker,
what is the objective of the attacks to which I have been referring? The objective is to attempt to deprive the Minister of Finance and this government of the credit Which the statement of the independent auditors gives to the Minister of Finance for having reduced the net deadweight debt of this country by $106,000,000 in five years. After all, Mr. Speaker, it is clear to the average man at least that the taxpayers of Canada are to-day paying interest on $106,000,000 less than they were paying interest on five years ago, and that so far as the Canadian National railways are concerned they are earning now year by year sufficient to pay interest on their obligations due to the public. After all, Mr. Speaker, the deadweight debt of this country is represented very largely by the wastage of the war, leaving behind it no tangible assets which can be taken into a balance sheet, although, of course, we have the great asset of personal liberty and all of those things we cherish, which, while they cannot be taken into a balance sheet, are, nevertheless, very important intangible assets for the people of a nation to enjoy. Our deadweight debt, I say, largely consists of the wastage of war. On the other hand, the increase in the Canadian National railway indebtedness to the public represents this nation's investment in the peaceful development of Canada-branch lines, betterments of all sorts, new equipment-and the 
road, as I say, is now earning sufficient to meet the interest payments upon its obligations due to the public.
What is this new investment of money in the Canadian National accomplishing for Canada? It is facilitating the development of the country and producing more business for the railway; and instead of being an added load upon the public, the railway is increasingly able, out of its earnings, to bear the charges on the debt due to the public.


Richard Burpee Hanson: Does that apply to the
Intercolonial railway and the Transcontinental?


Some hon. MEMBERS:: Order.


Charles Avery Dunning: It applies to the Canadian National Railways.
Now I want to refer shortly to the Conservative amendment to the budget-a very interesting amendment. My own opinion of it is very well expressed in an editorial which I will quote for the benefit of the house. My opinion could not have been better expressed if I had written the editorial myself; but it is not my production, it is from that well-known Tory publication, the Financial Times of Montreal. This is the opinion of St. James street:
The budget amendment presented by the Conservative opposition at Ottawa is of course intended for the constituencies rather than for parliament. It is drafted with extraordinary dexterity, so as neither to mention nor to hint at protection, except in the case of certain agricultural industries; so that Conservative orators in Saskatchewan will be able to talk as if nothing was further from the minds of their party leaders than the making of any increases in the tariff except on butter from Australia and eggs from China, while in Ontario the same speakers or their colleagues will naturally take it for granted that "providing increased employment in Canada" means putting up the tariff on everything that Canadians import.
That, Mr. Speaker, expresses in a few words my opinion of the Conservative amendment. And I submit this to the judgment of the house, that every speech we have listened to from hon. gentlemen opposite, in spite of the omission of the word " protection " from the amendment, has been the old, old plea of higher and higher protection-the one remedy which my hon. friends put forward for every disease, or every imagined disease, of the body politic. If unemployment is the disease, my hon. friends have taken hours to tell us that higher protection would cure it. If our immigration is not sufficient, my hon. friends say higher protection will build up the country.


Thomas Cantley: So it will.

The Budget-Mr. Dunning


Charles Avery Dunning: I am glad my hon. friend agrees, but I regret he did not put it in his amendment. Perhaps, while he is interrupting, he might explain whether his proposal to put a duty of $1.50 a ton on coal has the support of the Conservative party.


Thomas Cantley: I hope so.


Charles Avery Dunning: If people are leaving
Canada in too great numbers, my hon. friends say: Raise the tariff higher and keep them here. In fact every ill from which this country suffers, or is said to suffer as stated by my hon. friends opposite, is, they say, curable by the application of higher tariff taxation. While my hon. friends in this house are speaking in that fashion, their very amendment is being quoted back in the province of Saskatchewan as evidence that the Conservative party has at last abandoned the principle of higher protection as the cure for all our ills.


James Dew Chaplin: I suppose-


Hewitt Bostock: Order.


Charles Avery Dunning: My hon. friend will have his opportunity. I have only forty minutes in which to give him his medicine. I sat and listened to my hon. friend from Fort William (Mr. Manion) with the utmost cheerfulness.


Robert James Manion: And, incidentally, interrupted several times.


Hewitt Bostock: Order.


Charles Avery Dunning: If the people of western Canada ever require to be convinced that the present government is a low tariff government, surely the speeches that have been delivered in this debate from across the way carry conviction along that line. If we are not a low tariff government, why in the world are we taking the abuse from across the way for ruining every industry in the country by lowering the tariff; or, in the alternative, allowing them to be ruined because we refuse to raise the tariff sky high in order to keep them going? A low tariff government indeed! We have heard speech after speech from across the way which can only be described as excellent immigration propaganda for the United States. That country is painted by hon. members opposite in such glowing colours, and Canada in such dismal colours, that the effect is actually to encourage our people to go there.
Now, Mr. Speaker, I am not in the business of boosting immigration to the United States, so I have been making a little examination of the newspapers of that country and culling a few extracts from them in order to demonstrate what are the real conditions there comparative to the conditions in this country, which, according to my hon. friends, is so miserable a place to be in. I find that a committee of the United States senate reported only the other day that conditions in the Pennsylvania coal belt are a "blot upon American civilization." The report states:
The committee found men, women and children living in hovels which are more unsanitary than modern swine pens. They are breeding places for sickness and crime.
And this, Sir, in the heart of the country which my hon. friends opposite depict as so alluring to our Canadian population, taking them away in their thousands to live under conditions of that sort!
The New York Charity Organization Society recently made an announcement in the press that it is receiving more calls for help from the unemployed than at any time since the war, and that it has found it necessary to borrow a substantial sum to enable it to meet its obligations.
The New York State Labour Department reports a net decrease during 1927 of 66,000 factory wage earners in the state, and in December its employment index number dropped almost a full point below the level of December, 1921.
The United States federal Department of Labour reports factory employment throughout the whole of the United States as about 5 per cent less last autumn than during the same months of 1926.
A comparison of the percentages of employment as between these two countries certainly does not bear out the contention of my hon. friends that the United States is a good place to go to, and that Canada is such a poor place to stay in. I should like to put on record the percentages of employment figures given by the departments of Labour of both countries from 1921 on, which will illustrate the growth of employment in Canada and the decrease of employment in the United States:
Canada United States
1921	
81.1	85.11922	
81.6	88.41923	
89.3	100.1924	
85.3	90.31925	
86.	91.21926	
92.1	91.91927	
95.6	88.5


Robert James Manion: Most of our unemployed
have gone across the line.


Charles Avery Dunning: Again, the Bureau of
Labour statistics of Illinois reports a decline of 8 per cent in industrial employment in that state during the year, with the total
The Budget-Mr. Dunning

number of wage earners at the lowest point since 1921. In reply to my hon. friend's interjection, there would not be so many Canadians going across to the United States if he and his colleagues did not depict it as such an alluring country to go to.


Some hon. MEMBERS:: Oh, oh.


Hewitt Bostock: Order.


Charles Avery Dunning: I am glad my hon.
friends appreciate it. A recent Associated Press despatch from Chicago, which appeared in all Canadian newspapers, stated that bread lines were forming in that city such as had not been seen since 1913. Will anyone who knows the condition of United States agriculture argue for one moment that the state of that industry in the country to the south of us is more prosperous than the state of Canadian agriculture? No observer will argue for a moment that the United States farmer is in a better economic position to-day than the Canadian farmer, although many of us are dissatisfied, and properly so, with the present economic condition of Canadian agriculture. Nevertheless, looking across the line we must come to the conclusion that the only thing which keeps thousands and tens of thousands of American farmers from coming to our Canadian west is the load of debt which they have around their necks and which precludes the possibility of their getting a reasonably good start in a new country.
The last United States quotation I want to use is the statement recently made by the Roger Babson statistical organization, one of the most important statistical organizations of the United States, that Canada presents the most favourable opportunities for business and industry during the year 1928. While speeches from directly opposite represent high protection as the great cureall, the subamendment moved by the four parties in the corner, and the speeches of the members supporting it, express dissatisfaction that the tariff reductions were not greater, and also criticize the reduction in the income tax. Apparently the only agreement between the parties in the far corner and the Conservative party is with regard to the sales tax; both of them, having noticed the policy of the Minister of Finance in that respect, desire to anticipate him and take credit in the future for what is the declared and actual policy of the government.
I should like to deal at some length with the criticism offered by my hon. friend from St. Lawrence-St. George respecting the sales tax, and his repetition of the same old misrepresentation that this government has doubled it. As a matter of fact, my hon. 
friend does know, I think, that under the sales tax as it existed at the time the Conservative government was in power pyramiding of the tax was not only possible but actually did take place. To quote the rate of the surtax as it was then as against the rate now in force is not telling the whole story. My hon. friend from St. Lawrence-St. George lectured the Minister of Finance on not revealing the whole of the truth; yet, in almost the next sentence, he fell into the same error himself. Notable instances will occur to the mind of every hon. member who has studied the matter; illustrations of pyramiding were given to the house at the time, showing for instance that before reaching the consumer, in the case of woollen clothing, the sales tax could be and actually was pyramided to 15 per cent, while in the case of boots and shoes it reached 12J per cent, and on many other commodities an amount three or four times the rate indicated. The reform introduced by this government was the application of the tax once; there was no pyramiding. The people, therefore, knew what they would have to pay. In this regard my hon. friend does not treat us with his accustomed fairness.
Reference has been made to the Dominion-provincial conference, and that brings me to the subject of the income tax. Many comparisons have been made by speakers in various quarters of the house between this country and Great Britain in the matter of direct taxation. It has been stated that Great Britain derives a large proportion of its revenue from inheritance and income taxes and that the policy of this government is bad in that respect by reason of a slight reduction in the income tax. Might I ask critics on this point to be fair enough to remember that in Great Britain there is one self-contained government for the whole country, levying taxation in all its forms, so far as governmental taxes are concerned, whereas in Canada we have a federal system of government with two classes of taxing bodies but actually ten taxing bodies in all. My hon. friends know also that in this country succession duties are levied by the provincial governments; it is within the power of the provinces to levy succession duties and they do derive a considerable amount of revenue from that source. Indeed, it is implied in the British North America Act that the provinces shall use the method of direct taxation for the raising of revenues for provincial purposes.


Ernest Lapointe: They cannot use any
other method.

The Budget-Mr. Dunning


Charles Avery Dunning: No. The specific form of revenue allocated to the Dominion is indirect taxation, the federal government not being excluded from the application of the other method.


Richard Bedford Bennett: Or any other form.


Charles Avery Dunning: Yes. But that very fact introduces a very complicated situation with regard to taxation in this country as compared with any country in which there is the single form of government instead of the federal. At the last Dominion-provincial conference it became quite apparent that there was not one province which did not object to what was called the invasion by the Dominion of fields of taxation properly provincial. This was the subject of a lengthy discussion, and every province took the ground that so far as possible the Dominion government should work in a direction which would leave the provinces free to secure their revenues, for provincial and local purposes, by the method to which they are limited by the terms of the British North America Act. I for one would not advocate, and I do not advocate, that the Dominion should surrender or leave the field of income taxation as relating to corporations. That is indeed our greatest source of revenue under the income tax; $32,000,000 out of $48,000,000 comes from corporations. In the nature of things the Dominion is, in my judgment, the proper body to tax the income of corporations, inasmuch as corporations secure their income from all parts of the country. Moreover, it would be difficult indeed successfully and equitably to apply provincial taxation of corporations. On the other hand, there is much to be said for the contention made by some of the provinces that, so far as income taxation of individuals is concerned, the provinces should have the full field. I am not in a position to propound a definite policy in this respect, but I do say that it is worthy of consideration by the members of this house. We have a responsibility in relation to the federal system of government which obtains in this country; we have a measure of responsibility to the provinces. On the other hand, we must retain adequate sources of taxation in order to enable us to meet the interest on our war debt and to carry on the business of the Dominion as a whole. In this matter I think it would be useful to the Minister of Finance if, on an occasion like this, the members of the house, regardless of party, would turn their attention to the question of the relationship between fields of taxation by the Dominion, on the one hand, and by the provinces on the other.
As to the criticism which has been uttered with respect to the intimation by the Minister of Finance that in future it was proposed to ask that all goods coming in, taking advantage of the British preference, should have a 50 per cent British or empire content,
I desire to say just this: the Minister of Finance gave that intimation in no sense intending thereby to limit the British preference in the slightest degree. We do know, howeveT, indeed many members of the house are aware, that people on the continent of Europe are at the present time, by means fraudulent or semi-fraudulent, using the British preference in order to get their goods into this country. Some hon. gentleman in the far corner-I forget who it was-instanced the possibility that the raising of the limit to 50 per cent might have the effect of debarring British goods. I can assure my hon. friend on the authority of the Minister ol Finance that there is no intention to permit it to be used for any such purpose, and if as a result of experience it is found necessary to provide a different percentage of content for different classes of goods, as other British dominions have done, it is quite within the competency of the government to work out the solution along those lines.
Just before I conclude I would like to say a few words with reference to group government, which was advocated so forcibly, so wittily and so cleverly yesterday by my hon. friend from Southeast Grey (Miss Macphail). I will not attempt to follow her in any sense; We always enjoy her witticisms even at our own expense, but with respect to this advocacy of group government I do believe it is time the people of Canada realized and faced what group government means and what it would mean to this country. We were told by my hon. friend that it is a Progressive measure but, Mr. Speaker, I regard it as one of the most reactionary moves it would be possible to make. Is this a new thing? Why, Mr. Speaker, Europe is trying now to overcome the effects of group government in many countries. The development of this so-called group system has gone so far in Italy as to produce a chaos sufficient to make the people even welcome a dictator, and it produced the same result in Spain. I know my non. friend will say she does not mean that kind of group; she means an economic group, but she did not explain how she would prevent people from organizing under any group, name or designation. If we have a Labour group, a Progressive group or a Farmer group, why not a Catholic group, a Methodist group and a Presbyterian group? That system has been the curse of Europe.
The Budget-Mr. Dunning

Certainly the party system has demerits, but an impartial examination of the history of those countries which have tried this group system reveals the weakness of the very position adopted by my hon. friend. What does she say? She says what they want is a little group in that corner of the house just large enough to bludgeon the larger group across the floor into carrying out their wishes, and in so saying she poses as an advocate of democracy! I say, Mr. Speaker, that group government is the negation of democracy. Then I know my hon. friend will say that she means cooperative government. That is a very good phrase, but we have an example of cooperative government in this house to-day, and the men who are cooperating receive nothing but abuse from hon. members in tEe far corner. There are some men in this house who, while holding strong views with respect to fiscal policy and other matters of principle, believe they can best accomplish their duty to this country by cooperating with others who are substantially like-minded, to move the wheel of progress forward even a little. They do not sit up on the fence and howl like my hon. friends in the opposite comer.
In conclusion-and I say this with the utmost good humour-I would not deny my hon. friends the right to organize in any way they see fit, but I would point out that once the virus of the group system starts to spread in this country it will be found to be a great breeder; it reproduces very rapidly. The experience of years in Europe indicates that once there is a division beyond two or three parties in a great parliament it soon spreads until government is only possible by a species of log-rolling and dealing which I feel sure would be repugnant to the Canadian people and would not redound to the credit of the country.


Some hon. MEMBERS:: Oh, oh.


James Dew Chaplin: We have experienced an
example of it.


Charles Avery Dunning: My hon. friends opposite laugh at very little; they forget the spectacle which they presented on this side of the house such a short time ago. Surely that should make my friends reasonably humble and reasonably courteous to those of us who only hand back a very little of what we have received from across the way. We are very patient.
I know you have been very generous with me with regard to my time limit, Mr. Speaker, presumably because of the interruptions I have received, but in conclusion I would say that in

my judgment the country is satisfied with the policy enunciated for this year by the Minister of Finance and with the continuance of his past policy of reducing taxation and at the same time reducing the dead weight of debt which lies so heavily on the country.


Mr. H. C. HOCKEN (Toronto West Centre):: Mr. Speaker,-


Some hon. MEMBERS:: Oh, oh.


Horatio Clarence Hocken: The hon. gentlemen
opposite flatter me. I have very little to say.


Some hon. MEMBERS:: Oh, oh.


Horatio Clarence Hocken: I highly appreciate this
compliment; but before commencing1 what I have to say on the budget I should like to depart from my usual practice in one regard. As a rule I do not scatter compliments over the house, because I assume that those who speak so well are satisfied with their performance and are not anxious to receive any flattery. I should like, however, to compliment very highly the hon. member for Southeast Grey (Miss Macphail) on her speech yesterday. I have listened to many speeches in this house in the course of which the Progressives have attempted to justify their existence, but I have never heard it elucidated so clearly as was the case yesterday. I could not help thinking, Sir, that if the Progressive group which entered this house in 1921 had possessed the sincerity and courage displayed yesterday by the hon. member, they might have been a formidable influence in the affairs of Canada. But the hon. member was frank enough to tell us that the group were so strongly divided in their political allegiance as between the two great parties that dissension was the predominant feature of their councils for several years in this house. Whether or not we agree with the hon. member she has at least given us cause to think and has perhaps helped us understand why she is in the house, whether or not anyone else holding similar views follows her. I appreciate the evident sincerity and earnestness of the hon. member, even though I may differ very sharply with some of her views.
Now I want to discuss for a few moments, the subject of immigration. I am glad the minister is in the house because I do not want to say anything that will add to his perplexities. I have a great deal of sympathy for the difficulties which confront him, and what I shall say will be said in kindness and in an admonitory way, with the idea of endeavouring to advise him somewhat as to certain changes that should be made. First

The Budget-Mr. Hocken
of all I wish to direct the attention of the minister to an incident which occurred during yesterday's debate. In four or five different places Hansard reports the minister as stating that the act forbids him. to give a permit in sucfh a case as that of Mrs. McConachie and her baby. I want to read, sir, section 4 of the Immigration Act and regulations, not for the purpose of criticizing the minister but in the' hope of informing him as to just what powers he possesses. The clause in question reads as follows:
The minister may issue a written permit authorizing any person to enter Canada, or having entered or landed in Canada to remain therein without being subject to the provisions of this act.
Such permit shall be in the form A of the schedule to this act, and shall be expressed to be in force for a specified period only, but it may at any time be extended or cancelled by the minister in writing; and such extension or cancellation shall be in the form B of the schedule to this act.
These schedules are set out in the final pages of the act. Perhaps the minister has overlooked the powers given to him by the act, because if that act means what it says he certainly has the power to issue a permit for the admission of Mrs. McConachie and her child.


John Warwick King: For a specified
period.


Robert James Manion: The minister said yesterday he could not do it at all.


Horatio Clarence Hocken: According to Hansard the
minister said yesterday:
Mr. Forke: The act forbids me to admit that girl.
Mr. Cahan:	But it gives the power to issue
a special permit.
Mr. Forke: No, it does not.
Having set the minister right in that regard, I hope he will do what I am sure his humanity prompts him to do, issue a permit to Mrs. McConachie and her baby.
I wish to talk for a few minutes, Mr. Speaker, about child immigration. I have spoken to a good many agriculturists on this question and there is general agreement among them that the very best type of immigrants that can be brought into this country are the young men and women who are more likely to go on the farms and more easily adjust themselves to the conditions in Canada than older people are. There is a difficulty in inducing adults with families to emigrate because of the disinclination of men settled in England to remove from a locality where they are firmly planted and come to Canada with young children. Such people suffer from homesickness and' loneliness in their new
environment, which makes it difficult for them to become absorbed in the country until after the expiration of a long period of time. They are never quite satisfied that they are going to stay in the country until they have been here three or four years. That is not the case with young people or children who come out here .as immigrants. In the case of children they go to a Canadian school, are brought up as Canadian children are, and are taken into homes and taught occupations enabling them to take their -places in the social and industrial life of the country. If they come out at a later age, say at the age of sixteen, eighteen or twenty, they are very easily provided for on farms. If they begin the occupation of agriculture at the adolescent period they are more likely to continue in it than- any other class of people that come here. This fact is fully recognized in an order in council that was passed in 1920. I find it set out very fully in that order in council that because this class of immigrants was so desirable, the grant paid to receiving and distributing homes taking juvenile immigrants should be raised to $1,000 for every one hundred children brought out, or $10 instead of $2 per capita, and for every additional one hundred the grant was $5 per capita. The Immigration department of 1920 was fully seized, therefore, of the value of children as immigrants to this country, otherwise it would not have increased the amount paid for their care and maintenance. That is an entirely different policy to the one which prevails in the Immigration department to-day. I want to refer particularly to the recent instruction issued with respect to this class of immigrants-I do not think it is a regulation of the department or that it is any part of the act. I have searched in vain to find anything in the act or in orders in council prohibiting children under the age of fourteen years from coming to this country. So far as I can learn-I will allow the minister to correct me if I am wrong-the instruction in question was issued by the deputy minister of the department.


Mr. FORKE:: No, it is an instruction from the minister.


Horatio Clarence Hocken: It is an instruction from the minister?


Robert Forke: Yes.


Horatio Clarence Hocken: It is not a regulation?


Robert Forke: It is a regulation.


Horatio Clarence Hocken: It is a regulation? I have not been able to find it. If it is a regulation I think it should be repealed with the least
The Budget-Mr. Hocken

possible delay. It strikes particularly at two or three agencies that have been bringing out children to this country for fifty or sixty years, and whose record is so good that it cannot be impugned even by those who have a settled determination to do so. I speak particularly of the Bamardo Homes, an institution which has been in existence for sixty years. That institution has brought to this country about 100,000 children. It has a record of every child brought out from the day the institution started until the present time, and the minister or any person else may go to the filing department at their headquarters, which is one-third the size of this chamber, and turn that record up for himself. That indicates a care and assistance on the part of these homes which I think is worthy of all praise. This institution has brought out thousands of boys and girls, has educated them, has taken care of them until they reached the age of 21 years; and many of them to-day occupy positions in high walks of life. A not inconsiderable number of the girls have married into splendid homes and are taking their part in the life of this country as well as those of native birth. From all I can gather, the attack upon the Bamardo Homes has been started by Charlotte Whitton, at whose instigation I do not propose to say. If I am not mistaken she is paid by the government of Canada as secretary of the child welfare council. Here is an employee of the department who goes to Toronto and tries to dig up such information as will warrant the piohibition of these children from coming to Canada. She reports to the child welfare council that a large number of children who claim to have been the wards of the Barnardo Homes have been in hospital, that some of them are unmarried, some immoral, and some feeble-minded. This statement is broadcast throughout Canada as a result of the actions of a paid official of this country. No more serious or slanderous statements could be made than have been made against this home, and by some form of manipulation that I do not understand it was possible to get a professor of the university of Toronto to support this attack upon the Barnardo Homes, an attack which was unfair and for which, when the matter was brought to the attention of the professor, he felt bound to apologize. I should like to read to the house the apology that Professor MacPhee sent to the Barnardo Homes for the injustice he had done them and the injury he had attempted to do to their institution. This is a long document, but the gist of it occurs in the last two paragraphs which I will read in order to put them on the record. Professor MacPhee, after his attention had been drawn to the in-

accuracies and to the injustice that he had done to this institution and an apology was demanded, wrote this:
That which makes me regret the publicity I have caused in this matter is that all but three of the cases came to Canada before Mr. and Mrs. Hobday were appointed as Canadian manager and lady superintendent, and before Professor Carless offered his distinguished services as medical director to the organization.
And I particularly desire that the house, or such of the house as is present, will take note of this:
1 am assured from conversation with these authorities that changes have been made in the method of study and selection of cases which will provide as effective guarantees as are humanly possible that Canada will get only physically and mentally fit boys and girls from this source. Coming as my statement did after these safeguards have been set up, and referring as I did to cases which were brought out before their regime, my action was both ungracious and discourteous.
Yet it is upon the statements of the man who makes this humble apology that the Department of Immigraton has acted in preventing the entry to this country of children under fourteen years of age. I submit that apology in itself is as complete a vindication of the work of the Barnardo Homes as anything could be. I should like, however, to add to that the statement of Sir Robert Falconer, President of Toronto university, the president under whom Professor MacPhee is working. Sir Robert Falconer wrote this to Mr. Hobday:
I have to thank you for your letter and the advanced copy of the advertisement which appeared this morning in the press containing an apology from Professor MacPhee in regard to sweeping statements that he made as to the results of the work of Doctor Barnardo'a homes. I greatly regret that a member of our staff should have given currency, without such accurate investigation as one would expect from a professor in a scientific field, to statements which have brought criticism of the good work of Doctor Barnardo's homes. I hope, however, that his honourable and perfectly frank apology *null in some way counteract the harm that has been done.
There is only one way in which the harm that has been done can be counteracted, and that is for the Minister of Immigration and his department to repeal this regulation, or instruction, or whatever it may be called, against the entry to this counry of children selected in the old country by the Barnardo Homes organization. It is, I think, reasonably clear that the action of the department rested upon statements made by Miss Charlotte Whitton and Professor MacPhee, and if I am not mistaken she felt herself backed up by what this eminent professor had published; so that the whole thing rests upon

The Budget-Mr. Hocken
statements made by Professor MacPhee, for which he apologizes publicly and in connection with which the president of his university hopes the apology will be sufficient to counteract the harm. There has been no satisfactory reply to all this attack from the secretary of the child welfare council; she has evaded the letters that have been written to her, and she has refused to be as courteous as Professor MacPhee and make the same kind of apology. But if the Department of Immigration listens to the advice of representatives of voluntary organizations-because this is a voluntary organization with a paid secretary, paid by the government of Canada-and neglects to take the proper steps to inform itself as to the actual conditions that exist, it must be said that the department is acting in a very inefficient manner.
There is no better class of immigrants to bring to this country than the children, and no organization that could be created could be more careful in its selection, more serious in its supervision, or hope to have better results than those which have been obtained by Dr. Barnardo's homes. For the department to step in and by regulation or instruction to stop the work into which millions of pounds have been put in the old country and into which hundreds of thousands of dollars are going every year in the interest of both the empire and the children themselves, is not in line with the expressed desire to populate the country with those who are likely to become good citizens. I have had a good deal of experience in my position in the city of Toronto with the wards of this home; I have had them, both boys and girls, in my employ, and I can testify in this house that they are at least equal to and in many cases above the average of children born of Canadian parents in Canada. When the home has such a record as that, why the department should attempt to stop this flow of children who will within the next few years be wage earners and productive citizens of Canada, is beyond my comprehension. If the Minister of Immigration will go over his own experience, if he will recall those who have come out through that agency-and he must have known many of them-and will consider what they have done in the way of good citizenship, I think he will agree with me that that particular instruction should be repealed and that that steady flow of prospective good Canadian citizens should be allowed to be resumed.
I have one other criticism, and that is with regard to the treatment that has been meted out to the Salvation Army by the department.
No other agency operating for the settlement of newcomers to Canada has been so efficient and successful as the Salvation Army. They do their work in a very scientific way. They do not pick any boy off the street and send him out, but they first give him a course of training. They maintain in the old country homes where these boys or young men can go for a stated period and learn all the elementary procedure of operating farms. That costs them a great deal of money, and I presume they get some grants on that account from the British government. But I say that the army, having given such splendid results as it has, is entitled to all the assistance and support that this federal government can see its way clear to give.
The excuse that was given for withdrawing the grant to the Salvation Army is to my mind quite inadequate. Let us suppose that the army does require that those it brings out shall contribute something by way of repayment for some of the training given them. That does not affect the value of their work to Canada. It simply gives to them additional resources with which to bring a larger number to this country. The young people that they bring out here know the conditions under which they are coming; they have no complaint; indeed they have no ground for complaint, because this thing is not done under cover. Everybody concerned is dealt with frankly, and if the army can do that kind of work for Canada I submit that no $25,000 the government can spend will produce such splendid results. It will produce much better results than the $50,000 that is proposed to be given to the different provinces for repatriation. You are going to spend $50,000 in the province of Ontario to try to repatriate those who have gone away. I venture to say that that $50,000 will be pretty well thrown away for all the good that will result from its expenditure. If the young men who have left Ontario for the United States want to come back, they will come back. They cannot be coaxed back except by the assurance of employment and by some evidence that will show them that conditions here are going to be better than when they left. If they are engaged in steady employment at good wages in the United States it will take a good deal of persuasion to induce them to come back to Canada- the land where they were born, it is true, but the land where they could not get a living and which they had to leave and go across the border. To my mind there is no justification whatever for withdrawing that grant.

The Budget-Mr. Hocken

I just want to point out in conclusion, Mr. Speaker-and I have not consumed anything like my forty minutes-that those two organizations are one hundred per cent British, and if there is any immigration agency that ought to be encouraged. I submit that it is the British immigration agency. Instead of running all over Europe to get men to come out here and settle on the scrub lands of the west, it would be better for this country to bring out that surplus young population who can fit into the life of Canada and in a very short time, almost at once, find themselves adjusted to the conditions under which we live here. But why these two one hundred per cent British agencies should be penalized on such flimsy excuses, and on falsehoods, I am not able to comprehend. I say to the minister, having due regard for all his difficulties and sympathizing with the perplexities of the position in which he finds himself- and I know they are very great-that he should take these two organizations into his careful consideration. He ought to make some endeavour to find out what proportion of the immigrants they have brought out have made good; he could get reports from the army and from private homes. If he will look at this thing in a sympathetic way I am satisfied that the future will produce more Canadian citizens of that age than it will produce of adults that we are trying to bring out under the three thousand family scheme. I am not going to criticize the three thousand family scheme because I think it ought to be a splendid thing, and I congratulate the minister upon its adoption; but if we want to be sure that those we bring out will stay, we have to get them young, and the younger the better, in my opinion, so long as they are not infants. When they come here, bring them under the sympathetic care of earnest Christian men and women who will teach them at school and in church, and give them moral training. That is the class of people that we ought to try to bring to Canada. I venture to say that hundreds of thousands, if not milFons, of that class living in the British Isie,j are available to come here if the proper measures are taken to bring them out. But, above all, see to it that those who are striving to accomplish this end shall not be strangled by departmental regulations.


Mr. H. E. SPENCER (Battle River):: Another item which is of interest is included under maritime freight rates, +he estimated amount reo.uired being $3,843,000. The amount estimated by the Minister of Railways a year ago was about $2,000,000. It has grown, as we in this corner of the house feared it would. I will not comment on this amount given to the maritime provinces, which is in the nature of an extra subsidy, but I think that every province in the Dominion, whether old or new, which is struggling to make both ends meet, with a thin population and with huge expenditures brought about very often through no fault of their own, should be given similar consideration.
There is another item, assets written off as non-active, including soldier land settlement loans amounting to $14,000,000 and the revaluation of soldier lands involving an amount to be written off of $8,000,000. On the resale of stock and equipment on the farms which have reverted to the board-these farms have been sold, according to the Minister cf Finance, although some 3,000 properties remain to be disposed of-the expected loss is some $6,000,000. Besides this we have to remember that in 1922 we wrote off some $11,000,000 interest in connection with this same undertaking. It is about time we realized that there has been something wrong either in the initiation of this vast scheme or in the carrying out of it. I am not going to criticize any of these rebates so far as relief to returned soldiers is concerned, but I do want to say a word with respect to the launching of the scheme. Governments that claim to be all powerful should have known, when the scheme was launched, that deflation would ensue in 1920 and 1921, which deflation has been really the cause of many losses sustained by the country under this scheme. Governments have access to all the expert advice they desire, and they should have known, if they did not, that the deflation would take place. If they did know this, then the scheme should not have been launched, particularly as we are sinking a hundred million dollars into it. If they did not know, then they have to admit that governments only play second fiddle to finance, because finance certainly brought about the deflation in 1920 and 1921.
Much is said in the budget regarding our favourable trade balance. What does it mean? From this corner various speeches have been made, pointing out that a country might have a very large trade balance in its favour and yet exist under a very low standard of living. In quoting the extent of our exports and imports-and there is a large

margin in exports-we have to remember that out of Canadian investments abroad we bring into Canada only about $63,000,000, while foreign investments in Canada have a call on this country of about $254,000,000. The balance has to be made up in goods sent out of the Dominion, and therefore when we simply put exports against imports in actual goods it is no proof that this country is in a particularly healthy state. Allow me to quote from the Minister of Finance, where he says:
But it is also apparent that our ability to produce still exceeds our capacity to consume by a broad margin, and that our exporters annually market over a billion dollars of goods in other lands.
I wish the minister had gone a little further and pointed out how, under the rapid development of science and invention, more goods are being turned out per day, per week, per month and per year than were manufactured in the past, and with less man power. In other words we are rapidly lifting the work from men's shoulders and having it done by machines. I would the minister had pointed out that every industrial country is up against this same problem. It has been shown by well known economists that, inasmuch as the money paid in cost cannot possibly buy back the goods at cost plus profit, constituting price, every country has a problem on its hands.
When in England last summer I visited, amongst many factories and foundries, one establishment at Sheffield where I learned what tremendous changes are taking place in industry. This was a steel concern which had built in 1919 a very up to date plant, where in one shop alone they could turn out eight hundred tons of steel a day. They easily got orders because they could produce cheaply. Two other large firms at once built similar factories and Germany soon followed suit, with the result that last summer when I visited the plants they were lying idle several days of the week because there was no demand for the quantity of steel that was being turned out. Anyone who visits industrial establishments in the old country, in the United States or in Canada will find that in these various factories there are the most complicated machines doing the work required with very few men in attendance. One can visualize only a few years hence factories being run with the aid of exceedingly few overseers. In my opinion this is one of our greatest problems, and in future budgets I hope this will be placed before the house by the minister.
We know that the economic struggle now going on between the different countries to

The Budget-Mr. Spencer
find markets for their goods is simply an economic war, and in this connection I would quote a few words from a letter written from
one of the college- of Oxford, England, which I noticed in the Ottawa Citizen this morning:
The underlying causes of war, it is generally agreed, are economic, the actual political state of war following commercial antagonisms. The last war is a notable illustration. Germany had to find an outlet for the bursting industrial activity of her people. These economic conditions pre-existing, the war mentality was soon created and its logical outcome ensued.
Do not present world conditions contain, in embyro at least, even more potent seeds of conflict? And are not these underlying causes of war to be found at the very root of our industrial structure?
We must know that the economic war being carried on by every country to find markets in other countries is leading in only one direction, and I am sorry that this condition is not faced openly in this House of Commons.
The Minister of Finance stated that Canadians were returning from the United States, but his statement did not seem to be accepted by a number of hon. members opposite him. I would like to make a suggestion which I believe would help keep some of our people in Canada: I think we should give Canadians from far eastern and central provinces the same opportunity to look over the western part of Canada, so far as railway fares are concerned, that we now give to people coming from other countries. It is quite natural that a man who has not a large surplus of pocket money, and who is not content with his present conditions, should pay a small fee to get into the United States when he cannot afford the somewhat heavy fare to western Canada, and I believe if assistance were given these men we would retain a great many of them in this country.
A few days ago the Minister of Finance stated that there were $220,835,000 of Dominion notes outstanding as of December 31, 1927, while bank notes in circulation at the same date amounted to $182,747,000, intimating that we have a surplus of Dominion notes in circulation. I questioned that statement at the time and said:
Did not the greater part of that $220,000,000 comprise notes of large denominations used by ;he banks alone?
To this question the minister replied:
It meets the requirements of the country and the government receives a revenue for it.
Not being content with that answer, I placed some questions on the order paper which gave very valuable information; the figures show the following:
Total Dominion notes, Dec. 31,
1927	$220,808,365
Total Dominion notes Dec. 31,
1927, in circulation comprising-
25c., $1, $2, $4, $5, $50, $500,
$1,000	 34,369,943
Balance being "legals" ($5,000 and $50,000) used between banks only	$186,438,422
Bank notes in circulation Dec. 31,
1927 (as stated by the Finance
Minister Feb. 13, 1928)	 182,747.000
Amount of Dominion notes in
circulation, as above	 34.369.943
Balance being amount of private bank notes over Dominion Government notes in circulation.. $148,377,057
Why should not the Dominion of Canada exercise its right to put more notes in circulation than are used by the private banks? Why give over a special privilege, which can save a good deal of money to the taxpayers of this country, to private interests? I would like to point out that a Dominion note and a Dominion bond are based on exactly the same assets; they each carry a government guarantee, the only difference being that one bears interest while the other does not. The more Dominion notes we can safely put into circulation instead of bonds, the more money is going to be saved to the taxpayers of this country.
Let me here advance another suggestion which I have made before and which in former years the minister has been kind enough to promise to consider. I hope this year he will go even further than that. My suggestion is that he should offer a little higher interest on the savings in the post office savings bank, which carries a government guarantee. In that way I am sure he will get millions of dollars at a very low rate of interest should he need to borrow money in that way.
I would now ask you to call it six o'clock, Mr. Speaker.


[Stage Direction]
At six o'clock the house adjourned without
question put, pursuant to standing order.
Thursday, March 1, 1928