1930-05-06

[Stage Direction]
Sixth report of the select standing committee on banking and commerce.-Mr. Hay.
Third report of the select standing committee on railways, canals and telegraph lines. -Mr. Cahill.


Mr. ALFRED GOULET (Russell) moved:: That the petitions of John Franklin Crandell, and others, presented on the 1st instant, praying for the passing of an act to incorporate the British Columbia Alberta Western Railway Company, and also an act to incorporate the Hudson Bay Western Railway Company, together with the report of the clerk of petitions thereon, be referred to the select standing committee on standing orders for the purpose of considering the suspension of order 92 in relation thereto.


[Stage Direction]
Motion agreed to.

Mr. D. M. KENNEDY (Peace River):: I
rise to a question of privilege. The Prime Minister (Mr. Mackenzie King) is reported in Hansard, page 1807, as having yesterday made the following statement:
If hon. gentlemen opposite between them wish to draft an amendment with a view to trying to embarrass the government politically, that is their own lookout, but I can tell the people of this country and particularly the people of western Canada that as far as this Peace River outlet is concerned, the government does not believe that tactics of the kind will help the project.
I do not think there is anything wrong in an hon. member seeking the advice of any other hon. member, but it happens in this case that I did not submit the amendment to any other member of the House of Commons, and until it was read from the Chair I believe the Speaker was the only member of the house who knew what the nature of the amendment was.



HIS MAJESTY THE KING


[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, this being
the twentieth anniversary of the accession to the throne of His Majesty, King George V, I felt it would be the wish of hon. members of parliament and of the people of Canada that some word of greeting and good wishes should be extended to His Majesty. Accordingly, at an early hour this morning I sent the following message to Lord Stanfordham, Buckingham Palace, London:
Ottawa, May 6, 1930.
Will you kindly convey to His Majesty the King the following message:
On this twentieth anniversary of your Majesty's accession to the throne may I be permitted respectfully to tender the cordial greetings and good wishes of the government, the parliament and the people of Canada for a long and happy continuance of your Majesty's reign. The British commonwealth of nations is only beginning to understand how7 much it owes to the position and personality of its reigning sovereign. In the great war your Majesty stood as the symbol of the common effort of all your subjects, the rallying centre of all the forces that fought in the name of British liberty. In the difficult post-war period of reconstruction, your Majesty's understanding and steadfastness have been an indispensable factor in the solution of the many problems which arose. The Canadian people offer their fervent hopes for the health and happiness of your Majesty and her gracious Majesty the Queen.
W. L. Mackenzie King,
Prime Minister.
importation of Furniture

Shortly after half past nine o'clock this morning, I received the following cable: Buckingham Palace London
May 6, 1930.
The Right Honourable W L Mackenzie King Ottawa
I warmly thank you, the government, parliament and people of Canada for your greetings and good wishes on this the 20th anniversary of my accession. I heartily appreciate the sentiments of gratitude and devotion which inspired the terms of your message.
George R I


Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, I need hardly say
that the message which the Prime Minister transmitted this morning to London represents the sentiments not only of those with whom he is associated but of those who sit to the left of the Speaker, in fact, of all parties and members in the house as well as of the people of Canada, and I join with the right hon. gentleman in trusting that His Majesty, who has rendered great and distinguished service not only to his own empire but to mankind, may be long preserved, that in peace and happiness he may continue to reign over a contented people.



IMPORTATION OF FURNITURE

[Stage Direction]
On the orders of the day:
Mr. F. WELLINGTON HAY (North Perth):: I see the Minister of National
Revenue is in his seat. As I represent a section of the province of Ontario in which a number of people are interested in the manufacture of furniture, I would like to ask if the minister or his department is aware that very large shipments of American furniture are coming into Canada, and have been for some ;onsiderable time, and if there is not anything ,hat the minister can do to assist those who ire engaged in that industry in Canada by applying either the dumping clause or some other clause.


Mr. CHAPLIN:: What is the duty on furniture?


Hon. W. D. EULER (Minister of National Revenue):: The department has had complaints of importations of furniture from the southern states at prices which were, it was claimed, less than cost. The department had certain investigations made, and these claims were to some extent substantiated. As a result of that, believing that fair market value means at least the cost of goods, instructions have been given to re-appraise furniture that is coming from that source pending further investigation.


Mr. ARTHURS:: Will the minister apply
the same rule to other importations into Canada?


William Daum Euler: If conditions were precisely the same.


Hon. R. J. MANION (Fort William):: May I ask the minister if it is true, as I have heard it stated, that the re-appraisal means an increase of about 40 per cent in the valuation of the lumber which is coming from certain states which compete in the manufacture of lumber with that section of Ontario whence this question was raised.


William Daum Euler: There is no re-appraisal of anything but furniture.


Robert James Manion: I meant furniture. What is the increased value put upon furniture.


Mr. SPEAKER:: I would remind hon. gentlemen on both sides that the budget debate will commence shortly.



LACASSE AND FONTAINE

[Stage Direction]
On the orders of the day:
Hon. ERNEST LAPOINTE (Minister of Justice):: My hon. friend from Fort William (Mr. Manion) asked a question yesterday concerning the case of two men, Lacasse and Fontaine, who are now serving a sentence in Kingston penitentiary. I have inquired into the matter. It appears from press reports that three other men have admitted participation in the robbery in question, subsequently pleaded not guilty, and then later pleaded guilty, and two of them are now awaiting sentence. The case has been referred to by the press as one of the most puzzling in local police annals. Be that as it may, the Department of Justice has as yet received no official report from the attorney general and action of any kind by the Minister of Justice while the case is sub judice would appear quite inadvisable and might be interpreted as an interference with the jurisdiction of the courts or the administration of justice, with which the attorney general of the province is charged. No doubt as soon as the situation is cleared up the department will be advised accordingly by the provincial authorities, and there will then be no delay in reaching whatever decision may seem justified in the circumstances as they then appear.


Robert James Manion: In view of the fact that the Minister of Justice (Mr. Lapointe) admits that these other two men have pleaded guilty and are now awaiting sentence, surely it is only justice that the two men who have apparently been unjustly

The Budget-Mr. Bennett
condemned to the penitentiary should be given the benefit of the doubt and be released from the penitentiary until this case is settled.


Ernest Lapointe: Unfortunately I have to await the report of the attorney general rather than act upon a report from my hon. friend.


Robert James Manion: Then I think we had better change some of the laws of this country.


Ernest Lapointe: May be.



THE BUDGET


[Stage Direction]
The house resumed from Thursday, May 1, consideration of the motion of Hon. Charles A. Dunning (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Richard Bedford Bennett: Mr. Speaker, when this debate was adjourned a few days ago I had made a few preliminary observations with respect to the statement then made by the Minister of Finance (Mr. Dunning). I am sorry that I cannot call it a budget statement. When this house meets, it has been its custom for years to set up two great committees. One is the committee of supply, and the other is the committee of ways and means. The committee of supply is to determine what sums shall be expended by the government of the day during the fiscal year under consideration. The committee of ways and means is the committee that determines how the supply voted shall be made good, what taxes shall be imposed, what probable revenues will be raised, in order that there may be, if possible, an equalization between expenditures and revenues. I have under my hand, for instance, the speech delivered a few days ago by the Chancellor of the Exchequer in London, and when one realizes the time and effort that he took to make it apparent to that house that he had to meet a deficit, and the means to which he would have recourse for the purpose of meeting that deficit, one can readily understand why I am not now applying the term budget statement to the speech of the Minister of Finance to which we listened the other day.
If my hon. friend the Minister of Finance will turn to Murray's Oxford dictionary, he will find that the word budget is defined as follows:
A statement of the probable revenue and expenditure for the ensuing year, ivith financial proposals founded thereon, annually submitted by the ministry, for the approval of the House of Commons. Sometimes put for the condition
of the national finances as disclosed in the ministerial statement; also for the financial measures proposed.
In view of that definition of the word budget, a definition held in high regard in practice by every member of this house, I would think that there would be little or no difficulty in realizing that we have had no budget statement for the year ending March 31, 1931. Will any member on the opposite side of the house indicate where in the statement of the Minister of Finance one can find any estimate of the revenues for the year ending March 31, 1931? Will any hon. member deny that that is the year for which we budget, and not the year that is past? Will any hon. member deny that when the hon. Minister of Finance used the word " estimate " with respect to revenues, he was dealing with a year which had passed and which closed on the 31st of March last? So far as this house is concerned, we have had no budget speech with respect to the fiscal year now under review, and I say that I regret that I cannot congratulate the Minister of Finance with respect to that because, being an old treasurer in one of the provinces of this country, he knows that there is no province, however small, in Canada in which there would not be a budget statement submitted indicating the prospective revenues and the proposed expenditures for the year under consideration. I ask the minister where in all these pages of his speech that are now on Hansard there is a single indication of what the revenues are to be for the year ending March 31, 1931. Find it if you can. I challenge any man to find where it is in that statement, and yet you call that a budget statement. It is no more a budget statement than the speech that was made by the Minister of Finance last evening on the Peace River question is a budget statement. I challenge any member of this house to say whether he knows within hundreds of millions of dollars what the revenues of this country will be during the present fiscal year. Will any hon. member say that he knows? If he does, he will have to perform a surgical operation for the purpose of ascertaining it in the mind of the Minister of Finance.
To some this may seem a trifling matter, and yet it strikes at the very foundations of our institutions. It goes back to the earliest days when from a reluctant sovereign redress for grievances was obtained before supply was granted, and the amount of the supply that was granted was determined entirely by the ability of those who were taxed to make good that supply. For this year we know the increased charges that must be put on the taxpayers of this country under the main estimates. We have not yet received the
The Budget-Mr. Bennett

supplementary estimates, we have not, yet had communicated to us, as we had a right to, what the charges will be with respect to statutory claims against our revenue. That has not been communicated to the house. Nor, sir, have we had communicated to us in any way, shape or form just what the charges will be with respect to undertakings with which we are connected. Yesterday we were called upon to provide 361,000,000 for our railway enterprise. But tell me where within the four corners of that document you will find any indication of just what the revenues are to be forthcoming from taxation. We do not know what the customs revenue will be as a result of the changes that have been wrought by the alterations in the tariff. These things we do not know. I submit that under the conditions that now prevail with shrinking revenues, with diminishing trade, with lower railway earnings than have been recorded within recent years of the history of our railways-I submit that under those conditions this house had a right to know what the effect would be upon the revenues of the changes made in the ways and means by which supply is to be made good. I say this further, sir, that if the hon. gentleman will take as a model those great budgets that have been delivered in times past in this house or in the British house he will find that it could not be regarded as worthy of the name unless there was an indication of the estimated results of the taxation imposed for the purpose to meet the demands made upon the treasury. That, I think, is fundamental.
Having said so much with respect to that omission-and I think there can be no question of the correctness of the observations that I have made-I now proceed for a few moments to deal with the result of last year's operations, that is, the year ending on the 31st day of March, 1930, with respect to which the minister was pleased to say that he gave estimates. No chancellor in England, no treasurer in the provinces nor in a small city would venture thus to endeavour to becloud the issue with respect to the question of the financial position of his country, or his province, or his town.
Now, what were the operations of the past year?	The hon. gentleman made
perfectly clear that during the past year we received large sums of money, we made large disbursements, we had a surplus and we reduced the national debt. In that we rejoice. But I should like to ask hon. members by what method do they suppose a surplus was obtained, and by what means do they suppose that the debt was reduced? There are three methods by which the revenues of this country were obtained. They were 
obtained, first, by taxation, secondly, by interest upon and dealings with our cash balances, and, thirdly, by receipts which came to us from reparations and from interest upon our investments. Broadly those are the three sources of the revenues of Canada.
With respect to the first, taxation, the hon. gentleman a few days ago was pleased to read to this house the results of the imposition of taxes upon the people during the year that has passed. I will not repeat those figures beyond saying this, that whatever the tax may be, it must in the end be paid by the taxpayers, and that whatever taxes are imposed for the purpose of raising the money necessary to meet the requirements made upon the exchequer must come out of the nine or ten million people who inhabit the Dominion. If hon. gentlemen will take the trouble to look at the figures they will observe that during the last few years, ever since this government came into power, we have had in most instances increasing revenues until this year when we have had a diminishing revenue. I do not say that the lessening of that revenue is very important at the moment except as indicating that we have reached a position where it is highly desirable that the greatest possible care should be exercised in the administration of our finances, and that economy should prevail not only because of the value of economy itself, but because it is absolutely essential for us to do so if we are to conduct our affairs without a deficit. For instance, had this house not a right to know what the estimated revenues would be during the current year, from excise sources? We know the money we received from those sources during the past year. We know that the legislation we have recently enacted will diminish those revenues. Had we not a right to be told exactly what the expectations of the government were in that regard? Is there any other legislature of an overseas dominion in which you could have such a statement masquerading under the name of a budget? This house had a right to know what the effect of the recent legislation will be upon the excise revenues of this country; we had a right to know what the diminishing customs revenues will be; we had a right to know what the effect of the new legislation will be upon other branches of the public service; we had a right to know what we had received from reparations, and we had a right to know whether the interest from investments might be continued during the coming year. We have not received this information, but we know what the revenues

The Budget-Mr. Bennett
were in years past. We have before us in a tabulated statement which the minister has placed on Hansard-which I will not take up the time of the house to read-figures indicating that during the years that are past we have increased our revenues, although the hon. gentleman says that he has diminished taxation.
Now, when I point out to the house just what has been the result of our fiscal operations during the last twelve months in connection with the revenues that come to us from other sources than pure taxation, namely, from reparations, from investments and from sources of that kind, I think it will be agreed that no statement such as that which the hon. gentleman made the other day, a statement that this country had reduced taxation, can for a moment stand the acid test of investigation. Whenever you impose upon the people taxation which produces additional revenue, you have placed a greater burden upon the people, and however cleverly you may disguise it the fact remains that it means taxation. You cannot change that. For instance, in the year ending 31st March, 1923, the total revenues of this country raised by taxation from all sources amounted to $335-453,000-without giving the odd figures; next year, $341,718,000; then came 1925 with a shrinkage of taxation revenues below $300,000,000; in 1926, slightly above $327,000,000; in 1927, slightly over $346,000,000; in 1928, slightly over $364,000,000; in 1929, slightly over $395,000,000; but last year, that is, according to the figures given to this house on Thursday last by the hon. Minister of Finance, it will be observed that we have already collected through taxation-although it may be increased when the figures are finally adjusted-$378,321,000. In other words, from taxation there was collected from the Canadian people last year a larger sum than in any year since the government came into power except one. That means that the taxation per capita was larger last year than in any year since 1922 when this government came into office.
Now, what is the purpose of endeavouring to mislead public opinion, or to induce the country to believe that the taxes have been less upon the people. The backs of the people have borne a greater burden because they have paid larger siums, and the methods by which those sums were obtained were methods peculiarly and entirely within the government's power and control; for during the last seven years, that is, since 1922, this government, and none other, have had complete control of taxation methods, and they,
and they only, are responsible for the methods employed for the purpose of collecting the revenues of this country.
Let us look for a moment at what the other revenues have been apart from taxation. The other revenues of this country, were in 1930 practically the same as they were in 1923.
In 1923 they were $67,600,000 and in 1930 they were $69,000,000 Those revenues came from interest on investments, from premium discounts and exchange-that is from our cash balance-from special receipts and credits- that is from the repayment of loans-and from other sources, such as post office and the grain act, which I will not include in the summary. What does that mean? It means that the interest on investments-investments, mark you-from all sources during the years this government has been in power, from the year ending 31st March, 1923, to the year ending 31st March, 1930, amounts to the very large sum of $93,270,000. The premium discount and exchange, that is, the banking operations of our country, brought us in an additional $8,629,000. From special sources, the repayment of loans, etc., we received $45,43^,000, which makes a total of $147,000,000. There are other sums in addition to that in connection with British debts, and in that respect debits and credits were about equal and we will not utilize any amount at all in this statement. However we have $147,000,000 :n the hands of the government from other than taxation sources for reducing the national debt of this country. That was not obtained by taxation but it was money that came from banking operations, money that came from the repayment of past debts and interest on our investments. The minister told us the other day that the total reduction in the national debt amounted to $257,000,000, commencing with the year 1925-26 because in the years preceding that during which this government was in power there was an increase in the general debt in two years. During six years the government has paid off a total of $257,000,000, including sums used for acquiring stocks and bonds for the sinking fund. They had $147,000,000 without imposing a dollar of taxation upon the people of Canada. So that the total amount raised by taxation and used in reducing the debt amounted to something like $110,000,000.
Let us see where that amount came from, and for that purpose we shall turn to one particular item, namely, the sales tax. When this government came into power the sales tax for 1921-22 was 3 per cent; in 1922-23 it was 44 per cent; 1923-24 it was 6 per cent, and then it was reduced to 5 per cent the next
The Budget-Mr. Bennett

year. It remained at 5 per cent the year after, and the year after that, and in 1927-28 it was reduced to 4 per cent; in 1928-29 it was reduced to 3 per cent, and this year, 192930, it stood at 2 per cent, and has now been reduced to one per cent.
I wonder if the hon. gentleman realizes what the books show as to the total collection of sales tax in Canada since 1921-22. The total amount of tax collected by sales tax in that period amounted to the enormous sum of $612,556,000, in round figures. Had the rate remained at 3 per cent to the end of 1929 it would have amounted to only $424,000,000; in other words, $188,000,000 more were taken from the people of Canada by this government on the sales tax than would have been the case had it remained at 3 per cent. I wish to remind the house that these are figures furnished by the department. That is all I can say on the matter. Let me repeat the fact that the sum collected was $612,556,13157, to be exact, and that the tax would have been $424,400,026.92 had the rate remained at what it was in 1921-22, namely, 3 per cent.	You can see that there is a
difference of $188,000,000, and $78,000,000 less than the amount required to effect the reduction that has been made in the national debt. So that the additional sum taken from the taxpayers of Canada by sales tax over the tax imposed by the former administration was $188,000,000, and the total reduction of debt was only $257,000,000. As I have pointed out, the amount received from sources other than taxation during that period was $147,000,000. So that the government not only has not reduced the national debt to the extent to which it has increased taxation under the sales tax, together with revenue other than taxes, but it has failed to realize that the money available for the purposes which I have indicated would have reduced the national debt by at least another $75,000,000. There, shortly, is the story with respect to the national debt. If the figures supplied by the department over which the minister himself presides are to be relied upon there is no gainsaying these facts; but, sir, there are other matters.


William Lyon Mackenzie King: Oh, yes.


Richard Bedford Bennett: Well, the figures are
available for the right hon. gentleman if he wishes to look at them.


Mr. STEVENS:: The right hon. gentleman always wags his head.


Richard Bedford Bennett: I shall hand these figures to one of the page boys, so that the hon. gentleman may have an opportunity of perusing them personally.


Mr. DUNNING:: My hon. friend knows
where he misused the figures.


Richard Bedford Bennett: The figures are exactly
as they are given.


Charles Avery Dunning: The figures are.


Richard Bedford Bennett: Yes, the figures are, and I have made a correct statement. For the information of the Minister of Finance, who has raised some question about my statement, I will just put the figures on Hansard. The amount collected from sales tax in 192122 was $61,518,751.13, at 3 per cent. The amount which would have been collected if the tax had not been increased is the same. In the next year the amount collected at 4i per cent was $91,262,254.13. With the same volume of business at the rate-


Charles Avery Dunning: Does my hon. friend
say that the department supplied the identical statement he is reading?


Richard Bedford Bennett: These figures came from the department.


Charles Avery Dunning: My hon. friend knows
that the incidence of the sales tax was completely changed.


Richard Bedford Bennett: The incidence of the
sales tax, because it was raised to 6 per cent.


Charles Avery Dunning: No.


Richard Bedford Bennett: Next j'ear they raised
the sales tax to 6 per cent with the result that the amount obtained was $100,990,07780, which was twice as much as would have been raised if it had remained at 3 per cent. The three following years the rate remained at 5 per cent, producing the sums I have mentioned. That continued down to 1928-29 when it stood at 3 per cent. The total amount raised was $424,400,026.92. I shall place this statement on Hansard so that the hon. gentleman may have the opportunity to study it as I have done:

The Budget-Mr. Bennett
Amounts Collected from Sale Amount collected	Tax	Amount which would have been collected if tax had not been increased]Q?l-9	... $ 61,518,751 13	3 %	$ 61,518,751 131922-3	91,262,254 13	44%	60,841,502 751Q92-4	100,990,077 80	6 %	50,495,038 40] 924-5	66.707,369 96	5 %	40,024,421 981925-fi	74,025,093 31	5 %	44,415,055 9982,305,670 60	5 %	49,383,402 361097-8	.... 72,100,244 12	4 %	54.075.183 091928-9	63,646,671 22	3 %	63,646,671 22$612,556,131 27	$424,400,026 92 .. $612,556,131 27A.iuOUiit of Scilf Amount which	would have been collected if tax had not been increased	.. 424,400,026 92Amount raised on account of increase	
$188,156,104 35
But, sir, that is not all. It must have occurred to the hon. members of this house that the government of the day imposed additional taxation upon the Canadian people since it came into power in the year 1922. That additional taxation however has to some extent been removed. Some of the nuisance taxes have been abolished. For instance, the tax on telegrams has been taken away; the tax on steamship tickets, receipts, promissory notes, and the graduated taxes on cheques have also been abolished. These are taxes most of which were imposed by the administration and which have now been taken away. However, as I have indicated the result is that had the sales tax remained as it was there would have been $188,000,000 less collected from that source alone. My hon. friend has said that there has been a change in the incidence of the sales tax. Essentially the principle was a tax on sales, and that tax which was at one time increased to 6 per cent has been reduced to 1 per cent. By the way, it is amusing to hear the "chancellor of the exchequer" talking about reduction in taxation. He said: Look what we have done this year; we propose to cut the sales tax in half. Hon. members must know that what they did was to reduce it by 1 per cent.


Charles Avery Dunning: No. no.


Richard Bedford Bennett: Yes, just 1 per cent.


Charles Avery Dunning: No, no, it was reduced
by 50 per cent.


Richard Bedford Bennett: He has cut it in two, and it my calculation is correct two into two goes once. All I can say is that the hon. gentleman himself made the observation that he would cut the sales tax in two.


Charles Avery Dunning: That is correct.


Richard Bedford Bennett: And it will now be 1
per cent. Previously it was 2 per cent. That is all there is about it. I merely mention that in passing because it accentuates the point I desire to make, that notwithstanding the alleged decreases in taxation it must be remembered also that the government increased taxation, and the result is indicated by the revenues to which I referred. How else did you get the money if you reduced taxation to a greater extent than you increased it? From where did the money come?


An hon. MEMBER:: Bigger business.


Richard Bedford Bennett: But the figures show a
diminution of business; the figures show that during the year ending March 30, 1930, there has been a diminution of the national business; the volume of trade has lessened and the adverse balance against Canada is over $100,000,000. That is the answer.
Now, sir. as I have said I do not propose to deal with the national finances beyond traversing what the hon. gentleman said the other day. When he claims great credit for the reduction of taxation I only venture to remind him again that last year the taxes were larger than in any single year but one since this government came into power; that the amount of diminution of the national debt is only $110,000,000 out of moneys that did not come from interest on investments, from banking transactions and from special sources such as the repayment of our debts. That does not take into account the matter mentioned by the right hon. Prime Minister in connection with the collection of the $83,000,000 of British indebtedness through the late Mr. Larkin, which really consisted of an adjustment as between debits and credits. They surrendered certain bonds, which were cancelled, which they held in connection with the debt we owed
The Budget-Mr. Bennett

to them, and so the debt was wiped out. That was the end of that transaction.
I will leave that for the moment, for I think it serves no useful purpose beyond just pointing out the facts. The public can draw the inference; public opinion can decide. Those who have to contribute the taxes know they had to raise $369,000,000 last year from taxation, and they know this was a greater amount than was raised by this country in any year but one since the Liberal party came into power. So we may leave that point, with the statement that the income tax has been increased in its incidence, because dividends were taxed by this administration that previously had not been taxed. Under the former administration they were taxed in the hands of the companies and then were free from normal taxes when in the hands of the taxpayers, but now they are taxed. However, there has been a reduction of 10 per cent in two years and there have been other adjustments which amounted to increases, so by increasing taxation the government was able to take up the slack so that the increases and the decreases about equalled each other and the amount taken by taxation from the people of this country remained at the figure I have indicated, about $370,000,000.
That is a statement of the situation of this country at the end of March, 1930. What was the condition of trade at that time? Trade, as the hon. gentleman said, is a decidedly important matter. I turn to the summary of trade for the twelve months ending in March of this year and I find that the total trade of this country with the British Empire during that period amounted to $632,446,000, in round figures. As the hon. gentleman indicated the other day, I find that this was a very great diminution from the volume of trade during the preceding year. I also find that the volume of trade with the United States of America was $1,362,423,000 disregarding the odd dollars, which represented a decrease in importations from the United States of a little less than $21,000,000 and an increase in exports to the same country of a little less than $15,000,000. It is not necessary to retraverse the figures which the hon. gentleman already has indicated as showing the adverse balance of trade of this country during that period; it is sufficient to say that the importations into Canada show a distinct increase of something more than $100,000,000 over the preceding year. There is a school of economists who say that it matters not if a country has an adverse balance; there is a school of thought in this country which writes often to the public press indicating that is desirable to have
Mr. Bennett.]
greater importations than exports, that in any case the imports pay for the exports and that there must be an adjustment of these in some way in order that the country may flourish at all. Well, we live side by side with one of the greatest countries in the world, where there are 120,000,000 people living under one form of government. I find that last year the favourable trade balance of that country was upwards of one billion dollars; the year before it was also upwards of one billion dollars, and during the periods of time which we have had under discussion the balance of trade in the United States has fluctuated between one-half billion dollars and upwards of one billion dollars.
It is not necessary for me to express an opinion as to what may be the true view with respect to the matter, but this I will say: If the late Minister of Finance and his predecessors were correct in claiming that a favourable balance of trade was an indication of the flourishing condition of this Dominion, then it must be that an adverse balance of trade equally is an indication of a poor condition in this country. There can be no half wray position about it. Certainly, sir, it is somewhat difficult to have it both ways; you cannot do it. If last year hon. gentlemen opposite cheered so lustily, as I recall they did, when the late respected minister deolared that we had a favourable balance of trade, I wonder what their views are now. If the government created the favourable condition last year then the government is equally responsible for the adverse condition now; if the government claims credit for large harvests and favourable trade balances, equally it must accept responsibility for poor prices and adverse trade balances.


An hon. MEMBER:: A poor harvest.


Richard Bedford Bennett: I beg your pardon? Do not hesitate to speak up. In that regard I point out a matter which hon. gentlemen opposite to the right of the Prime Minister always should recall, that during the campaigns which they conducted in 1925 and 1926 in western Canada they laid great stress upon the customs duties and the necessity of lessening them. Yet for the twelve months ending in March, 1929, the total duty collected, according to the document I hold in my hand, was only $479,000 more than $200,000,000, while for the year ending March 30 last it amounted to $199 011. So that despite the circumstances to which these hon. gentlemen alluded in their election campaigns, the great basis of taxation from the Canadian people still remains the customs taxes, and during each of the last two years about $200,000,000

The Budget-Mr. Bennett
has been taken from the people of Canada by those taxes, although hon. gentlemen opposite led us to believe that if only they were able to make their influence felt upon the government of the day the customs taxes would almost disappear and direct taxation would take their place.


Mr. VALLANCE:: My hon. friend will admit that the influence was felt, would he not?


Richard Bedford Bennett: If by that statement the hon. gentleman is saying they were able to coerce a reluctant government into acknowledging them as adherents, I suppose it was felt, and I apprehend that the government would say it was not only feLt but was apparent.
At any rate, we may now leave for the moment the question of our trade. It would be a very interesting matter to discuss at length, but it would serve no useful purpose. The Minister of Finance has indicated that we are now confronted with an adverse trade balance, with diminishing trade and falling revenues, and that we must prepare for a situation which some of us ventured to point out to the house would one day arise. Are there any hon. gentlemen here who recall that I was received with some scoffing when I endeavoured two years ago to point out that the era of speculation in this ocuntry was reaching a stage where it would involve Canada in very great losses. If the gentlemen are interested in reading Hansard, they will find the warning which I then gave. I stated at that time that those of us who felt these things to be true might be jeered and laughed at, but the moment might come when people would look back and say: At least there were some public men who had courage enough to point out to the people of Canada what would be the inevitable result of overinflation. I little dreamed at that moment when I listened to the then Minister of Finance, that I would hear another minister of finance rise in his seat and point out to the people of this country that one of the difficulties we are now labouring under is the great fall in values on the stock .market.
The fall in values did not touch this government except in so far as it may have touched the mining tax which my hon. friends yonder were so insistent upon. The shrinkage in values upon the exchanges of this country from the high point in 1929 to the low point in 1929, excluding bonds and debentures, amounted to very nearly $5,000,000,000. That shrinkage included oil stocks, speculative mining stocks, and various securities of that kind traded in on the regular exchanges as well as 2419-115
on the curb exchanges. If the Minister of Finance had pointed out that that did no<t in any sense touch the matters with which he was dealing, but that it restricted the credit facilities of the people, it would have been within the mark.


Charles Avery Dunning: I said that.


Richard Bedford Bennett: That is not the way it was put; no doubt the hon. gentleman intended to say that. The collateral securities with which men receive credit from financial institutions, whether they be banks or otherwise, were lessened to that extent and therefore there was a lessening of the borrowing power of the people. Of course, it involved enormous losses in other instances; it involved a change in capital values and men who thought they had something of worth found themselves suddenly confronted with something which was worth little or nothing and upon which they could not borrow. This did not touch the national life of the country except in so far as it restricted the credit power of the people. However, a few moments later the hon. gentleman said that he was happy to say that the credit power of the people had not been interfered with and that the monetary institutions had been able to take care of every reasonable demand made upon them. It would then follow that this great restriction and contraction in the value of stocks did not in any sense affect the borrowing powers of the people because the credit facilities at their disposal were sufficient to meet every reasonable demand made upon them. That appears to be the situation, as indicated by the hon. gentleman himself.
Leaving the matters of trade and debt, we come to .the real purpose of the motion made to you, Mr. Speaker, that is that you do leave the chair to enable the house to resolve itself into a committee of ways and means by which this House of Commons under our constitution and under the direction of the government of the day will indicate to the country the methods and means it proposes to resort to for the purpose of providing the funds necessary to carry on the business of Canada. That is what a committee of ways and means is, and I again come back to the fundamental principle, that this house should not be asked to go into committee of ways and means unless it knows how much money it has to raise. Up to the present moment that has not been indicated, except as to the interest on the national debt, the service of the debt, the items mentioned in the main estimates and the statutory obligations placed upon the Dominion. How does the government now

The Budget-Mr. Bennett

propose to raise revenue? That is the question for consideration. The Minister of Finance came here, as did the Minister of Railways (Mr. Crerar), as great advocates of the principle of free trade. Let us assume that they did not come here as advocates of free trade; that they came here as advocates of tariff for revenue. They cannot get away from that, although they may try to escape free trade. The Minister of Finance comes here as an advocate of protection. I shall deal with the case of the Minister of Railways later; it is unique and stands separate from any other case in this house. He left the government for conscience sake; he came back to it because of lack of conscience.
Now, sir, we come to an investigation of the conditions under which the government proposes to raise its revenue. First of all it proposes to have recourse to customs duties. Then it proposes to have recourse to excise duties as heretofore in force, because no changes have been made. It then proposes to ask from the incomes of companies and individuals a contribution to the national revenue by way of income tax and it has in addition the non-taxable items to which I have referred, namely, reparations, interest on investments, and banking transactions.
The changes with respect to the imposition of customs duties are numerous and far-reaching and involve a very careful consideration of the whole economic structure of the country. They divide themselves into three classes: those imposed against the world, those imposed against the British Empire and those imposed against countries with which we have treaties. With respect to the trade of this country apart from the trade with the British Empire, the government has made substantial changes in the tariff. The hon. gentleman read them the other day and as I listened I realized that although the voice be the voice of Esau, the hand is the-


Some hon. MEMBERS:: Hear, hear.


Richard Bedford Bennett: I mean to say that although the voice be the voice of Jacob, the hand is the hand of E6au. For the moment my scripture was a little mixed, but who, contemplating such a budget, would not find that happening?
As I have said, the government put forward tariff and customs proposals, and I wonder if anyone hearing the minister read them had any difficulty in determining the author and origin of these proposals. Those of us who remember the bond guarantees given in days gone by by the western provinces to the Mackenzie and Mann enterprises, recall that at the end of the statement issued there often

appeared the name "W. H. Moore, Secretary." We have no difficulty in realizing that it is the same W. H. Moore, chairman of the tariff board, who is speaking through the Minister of Finance. Whatever difficulties there might have been in that regard were entirely removed as he proceeded with his statement, for this reason: hon. members will recall that when flotations were made upon the market of securities guaranteed by the provinces, there were no railways then built. In fact the bonds in connection with the railway from Calgary south to Maoleod were sold, but the railway has not yet been built although that is over fifteen years ago. When one realizes the principle that governed the issue of prospectus one has no trouble in appreciating the origin and the author of this budget on the customs side of it. It will be seen there is no indication as to what the result of these changes is to be or what revenue will be earned. That was always the case with the sale of these guaranteed securities and while the secretary of the Canadian Northern at that time was always sure to have these securities underwritten and guaranteed at least by the provinces, in this instance he substituted in some cases the Conservative party for the province in the guarantee that the hon. gentleman has given as to the benefit to be derived with respect to some customs items.
Let us examine the underlying principles in connection with the budget. There are changes in some five or six hundred items. It is said that the number of free items has been vastly increased and that there have been great changes in many of the schedules. Suffice it at this time to say, as was said in the British House of Commons the other day, that when we consider these matters in committee we must necessarily deal with them in 'detail and then the minister will have to be prepared to furnish us with information as to the effect on the revenue in any particular case Where there has been a change in the customs duties. Let us however deal with a few of them, because they become somewhat important.
The iron and steel schedules, the minister said, were perhaps the most important that would be considered by the house. They are very important; they have been important now for seven years, for more than seven years, and I assume that were it not for the fact that our constitution provides that there must be a general election every four or five years, they would not be important yet so far as the government is concerned.
In the field of manufacturing iron and steel constitute a basic industry. They enter into every branch of the industrial activities of the

The Budget-Mr. Bennett
country. Everyone in Canada is affected by them and the first question we have to ask ourselves in connection with these customs changes is this simple one:	Will these tariff
changes aid in the development of the natural resources of Canada: Will a single man more obtain employment in Canada than before these changes were made? "In Canada" are the important words to remember. In the absence of information as to what the effect upon the revenue may be, it is only necessary for me to repeat what the Conservative party has on previous occasions said so frequently, namely, that we desire by every means in our power to aid and assist in the development of the great natural resources of this Dominion. Those resources, varied and rich as they are, must be developed if we are to take our rightful place amongst the self-respecting and economically independent nations of the world. Nearby great deposits of iron ore we have coal; we have limestone for fluxing; we have, so far as iron and steel are concerned, all the resources that go to make a great nation. About a year ago I visited the great rolling mills at Sydney and I saw steel rails being rolled. As an hon. gentleman reminded us a few days ago, I saw steel products being loaded for transportation to New Zealand. Some time ago I saw at the Soo great mills rolling steel rails of eighty pound sections or greater and I saw some structural steel being manufactured. At another point I saw nails and other articles of iron and steel being produced. I realized then how great and important this industry was. Is a farmer to build a house on the prairies? He must have recourse to iron and steel. Is a great building to be constructed in a city? Recourse must be -had to angle iron and structural steel to give it strength. In this way you find that every activity in the Dominion is linked up with the iron and steel industry.
When the minister said the other day that $120,000,000 were being paid for wages to this industry I realized its greatness, its importance and the far-reaching consequences of its development. No one who is familiar with the history of this country will fail to remember the great struggle which was made by Sir Charles Tupper, in which he was later assisted, it will be recalled, by Mr. Fielding, for the development of an iron and steel industry on the island of Cape Breton. But who, in dealing with a matter of this kind, will venture to forget for a moment the report of the Duncan commission which was made in September, 1926, with respect to that industry? This is 1930. The session of 1926-27, the session of 1928 and the session of 1929 went by, and now in 1930 some relief is to be 2419-115i
afforded by placing a bounty of 49-J cents per ton on coal used for the purpose of producing primary steel and iron. That was demanded not to-day nor yesterday, but in 1926, and ever since that time we have endeavoured to induce the government to have regard to their obligations in that respect. Have they done so? They have not. Why now suddenly do they yield to what was a just claim four years ago or more? Why is it only to-day that this is done? Why was it not done years ago? Someone has said that in matters of this kind you have a death-bed repentence and the malefactor who died at the beginning of our civilization found heaven quite as well as one who had espoused the Christian cause all his life. But may I remind the hon. gentleman that that is not quite a sound analogy, for there were five, it will be remembered, who were unwise enough to be too late in trimming their lamps.


Charles Avery Dunning: The hon. member is
mixing malefactors with virgins, is he not?


Richard Bedford Bennett: I am glad to see that the hon. gentleman's biblical knowledge is still not wholly impaired, but it is a little doubtful yet.


Mr. McLEAN (Melfort):: Burning.


Richard Bedford Bennett: Not burning, trimming,
and certainly there has never before been greater evidence of trimming on a budget than on that which we are now discussing. I wish to point out what the Duncan report was in connection with this matter. It will be recalled that Sir Andrew Rae Duncan and his committee declined to enter into any discussion with respect to political matters. They said that they were not in a position to deal with the political phase of the situation, but that certain representations had been made to them. May I read the words, in order that they may be placed on Hansard, and then I will request hon. gentlemen to ask themselves whether or not in this tardy recognition of a claim four years after it had been adjudicated upon and they were directed to meet it, they have done justice to the maritimes. Paragraph 23, page 36, of that report reads:
Several features of the customs tariff in its relation to coal were brought to our attention, both by the government of Nova Scotia and by the operators of the coal mines. These we feel ourselves precluded from dealing with, since they are a matter properly to be considered by the Tariff Advisory Board; but we may be permitted to say that we are impressed with the need for reconsideration of the customs tariff in its relation to coal, anthracite and coke, and we recommend that the Tariff Advisory Board should be asked to give immediate consideration to the subject.
The Budget-Mr. Bennett

Not three years later, not two years later, but that immediate consideration be given to the subject, and the only authority under the present regulations who could seek the opinion of the Tariff Advisory Board was the government itself. For three and four long years this government has paid no attention *whatever to the recommendations of the Duncan report, has entirely failed to observe its terms, and now it regards the recommendations made in September, 1926, for immediate action as having been carried out by action taken in May, 1930.
I turn to the item of steel and the customs tariff. This is dealt with in paragraph 25, page 37, of the report. It reads:
It was submitted that the tendency of the tariff, as affected by successive alterations, has been to lessen the protection upon the primary products of iron and steel and to encourage their importation from other countries as being the raw materials of iron and steel-fabricating and finishing industries in Canada.
In respect of this matter, we do not conceive it to be our duty to express any opinion, since the question is, as we were informed by the chairman of the Tariff Advisory Board, who met us at our request, at the present moment under the consideration of that Board. But we do regard it as our duty to record that the significance of this industry to the maritime provinces was forcibly brought home to us, not only in the manufacturing towns we visited in the maritimes but also throughout the agricultural districts of the maritimes. We record this in order to emphasize the need for prompt action.
Prompt action! In that regard, sir, let me point out again that this party, the Conservative party, is the party that took the onus and responsibility for urging that maritime claims be considered by this house. It is too long to review that now except to say that in the end it resulted in the Duncan commission being appointed, and before that commission there appeared representatives of the various parties affected, and as a result of the work of that commission certain recommendations were made for immediate consideration for prompt action. Is it immediate consideration, is it prompt action, when taken four years after the report was submitted? What has happened in the meantime Let the Minister of National Defence (Mr. Rals-' ton) say that in the meantime there has not been unemployment in the maritimes, that conditions have not existed there that might nave been remedied bef6re this. If the remedy applied to-day is to benefit the steel industry, why was it not applied three years ago? A government is the true custodian of the national welfare, the true author of great national policies. Here we have a government which in 1930 says:	We have now

solved the problem, and here are the benefits that will accrue by reason of the action that we are now taking. It takes this action now after three years with all the resultant injuries to this country, without moving a hand to remedy the conditions. Is that their idea of government? Is that the reason why Mr. Cromie, who spoke here yesterday, sent throughout Canada an advertisement directed to the Prime Minister, headed " Seven Years Too Late"?
Sir, let me remind you that this country is at the moment faced with conditions which it has not had to face for many long years, conditions which are admitted by the Minister of Finance and by every student of economic conditions. The strength and vigour of this young country will respond if the people to-day are given an equal opportunity with their competitors to assert themselves. Instead of in the days of plenty having the opportunity afforded to them to prepare for the conditions that are now upon us, instead of the great steel industry being strengthened as it should have been not only at the Soo, in the maritimes, and in Upper Canada, by the application of principles which the government now say is the panacea for our ills, instead of that being done at a time when the industry might have been enabled to prepare for the conditions of hardship prevailing today, only now when the tide has turned does the government come along and say: Here is the remedy to apply. Is that their conception of government? Is that the idea that the Prime Minister has with respect to this matter? Let the people answer.


Some hon. MEMBERS:: Hear, hear.


James Dew Chaplin: Bring on your election.


Richard Bedford Bennett: Let me turn for a moment to the Consumers' League, the Consumers' League which during the last summer has been sending literature broadcast throughout Canada, to western Canada under the frank of the Minister of the Interior (Mr. Stewart), and to other parts of this country under the frank of other ministers. That literature I have in my possession. Of that league the hon. gentleman who just applauded was a member. The hon. member for Swift Current (Mr. Bothwell) was the admired president at one time, and I believe that he is yet. Let us see where the Consumers' League stands to-day.


John Vallance: Do not1 read it. It won't do you any good.


Richard Bedford Bennett: Here is the last letter
issued by the league, by R. J. Deachman, dated

The Budget-Mr. Bennett
April 28, 1930. This is the way in which he contemplates the budget that is to come:
Taking a guess at the budget has been a popular amusement for some time. One guess is as good as another. There is no reason why people should not find amusement that way. Conservative papers are quite sure what the document will contain. It will in their opinion be a protectionist budget-so strongly protectionist that only the modesty of Mr. Bennett will prevent his acceptance of it with cheers and a glad amen!
Now I read these observations, which will carry great balm and solace to the Minister of Finance:
It will not be thus that the budget will be revised. Minor upward changes may take place. In trying to adjust a tariff downward it would be remarkable if there should not happen to be odd items which called for the reverse process. The general trend of the budget, however, will be downward, not upward. It will be thus because this is a Liberal government. No Liberal government could walk up to the penitent bench and pretend conversion at the request of Mr. Bennett or sell its convictions to the highest bidder and expect to cash in on the transaction.
And mark you, sir, that is after dealing with the iron and steel schedules. The correspondent deals with the profits of the British Empire Steel Corporation, of the Steel Company of Canada, and of the Soo enterprise, and he says in conclusion that there will be a downward revision of the tariff. Did I hear some hon. gentleman cheer that sentiment? Did I hear some hon. gentleman cheer the idea that this was a downward revision? Let me read what the hon. Minister of Railways and Canals (Mr. Crerar) who left the administration of Sir Robert Borden, and whose resignation in such touching terms I have under my hand, said at the time of his resignation, dated June 4, 1919, not quite eleven years ago. Let us read his own words, always desirable:
My dear Sir Robert,-
The government, in its consideration of the budget to be placed before parliament tomorrow, has reached, I take it, definite and final conclusions as to the form it will take. As you are aware, I am not in accord with it and therefore cannot support it, either in the house or in the country. Having reached this decision, there is only one course for me to follow, and I therefore tender you herewith my resignation as a member of the government. The reason for my decision shall be given more fully when the subject is under discussion in the house.
Then follow other paragraphs. He gave his reasons in the house why he could not stand a $3 tariff or less on steel. He could not stand the tariff of S3 on iron and steel; but he swallows the $6 one now proposed.
But that is not all. In days gone by the party now sitting to the left of the Speaker, has been charged with being a high protectionist party. Look at the schedule here. Look at cast iron pipe.


Some hon. MEMBERS:: Oh, oh.


Richard Bedford Bennett: Why do you laugh? Look at cast iron pipe,-the duty has been raised only 100 per cent. When did you ever hear of a Conservative government that raised the duty on iron and steel products 100 per cent.


An hon. MEMBER:: Never.


Richard Bedford Bennett: Now, sir, in this schedule the government have raised that duty 100 per cent. What has the hon. gentleman to say about it? Does he resign or stay? Where is the hon. gentleman who in 1925 and 1926 as premier of Saskatchewan painted in glowing terms the evils of protection? Why, he is here and raises the tariff 100 per cent. Another item is raised 80 per cent, another only 60 per cent. And these are the good old days of low free trade tariffs! We must not overlook in that regard that the dumping duties still obtain. The little byplay this afternoon was so encouraging to those who desire to secure protection.


James Dew Chaplin: Especially on furniture.


Richard Bedford Bennett: Of course, on furniture with a protection of only 30 per cent. Now we must save it from dumping. Just imagine low-priced furniture from the southern states, where labour and wood are cheap, coming in here to interfere with the 30 per cent industry of the Minister of Trade and Commerce (Mr. Malcolm).


James Dew Chaplin: The Minister of Railways (Mr. Crerar) can stand for that too.


Richard Bedford Bennett: I am coming to that too. And the Minister of Railways sits cheek by jowl now with him without thinking of resignation, although he was not asked to undergo any such great offence to his reason and intelligence on a former occasion in 1919 as he now is. He accepts it all and glories in it. Oh, well, those who have read Pilgrim's Progress may still have hope for him.
Now, sir, there are several hundred items dealing with iron and steel. I saw some alloys of steel being made last year at the Soo, and the men there told me that those alloys could not possibly be produced in open competition with the plants engaging in mass production in the United States. I assumed that that argument influenced the government as it did me, and that the 5 per cent surtax placed on
The Budget-Mr. Bennett

alloy steel will enable the Soo people to carry on their business. I read in the paper the day before yesterday that the great United States Steel Corporation would probably open a mill at Ojibway, across the river from Detroit, by reason of this tariff, and that at the Soo probably' a new mill would be erected for rolling structural and angle steel. How splendid a prospect 1 But I want to ask the government what they have been doing the last nine years that they did not do it in 1922? If this surtax will bring a new steel mill to Ojibway and another to the Soo. giving employment to Canadian working men, to be fed by Canadian farmers, where was the government nine years ago; why did it not do then what it has done now? That is the question the Canadian people are asking, those who had to seek employment elsewhere, those who had to leave Canada. I found at the Soo mills a man from Nova Scotia. He said to me: " I am back here to work in Canada. I have been working during the last two years in steel mills in Pittsburgh, making commodities to send to Canada. I am here now. but I don't know how long I can stay here under the conditions that now exist.'' I hope this customs tariff makes it possible for him to remain in Canada. But I should like to ask the government, what do they think of the responsibility that, is theirs for not doing what would have brought us a new mill at Ojibway and another at the Soo any time during the last nine years? Go and tell your constituents that, have had to seek a livelihood elsewhere than in their own country that but for the supine indifference of your government they would have had employment at home any time during the last nine years.
With relation to the iron and steel industry in all its complicated schedules. I have only this further to say. In committee we will have the fullest opportunity to hear explanations with respect to every item, the relation of one item to another, and the revenues that may be expected from the application of the tariff in the particular way indicated. It would be a waste of the time of this house for me to endeavour to go over these items in detail. It suffices to say that a large number of the items which appear to be free when coming from Great Britain under the British preference are items that never have been imported from any part of the British Empire. I think it well to place upon Hansard a fair statement with respect to the situation. Let, us look, first of all, as to wbat is involved in the British preference. Let us see exactly what it means. There are some hon. members in this house who think that fMr. 'RpnnHt.l
when the words "British preference" appear, they mean Great Britain, and Great Britain only. Well, let us remove that, illusion from their minds. I have taken the trouble to secure from t.he government a statement of the countries to which these British preferential tariffs apply. Let, me give them to the house:
(a)	the United Kingdom;
(b)	the British colony of Bermuda;
(c)	the British colonies commonly called the British West Indies, including the following.- the Bahamas;
Jamaica;
Turks and Caicos islands;
the Leeward islands (Antigua, St. Cihri?-topher-Nevis, Dominica, Montserrat, and the Virgin islands);
the Windward islands (Grenada. St. Vincent and St. Lucia);
Barbadoes;
Trinidad and Tobago;
(d)	British Guiana;
(e)	British India;
(f)	Ceylon;
(g)	Straits Settlements;
(h)	New Zealand;
(i)	Union of South Africa;
(j)	Southern Bbodesia;
(k)	any other British colony or possession admitted to the benefits of the British preferential tariff in Canada, in the manner hereinafter provided;
Provided, however, that goods entitled to the benefits of the British preferential tariff shall be accorded such benefits when such goods are shipped on a through bill of lading consigned to a consignee in a specified port in Canada when such goods are transferred at a port of a British colony or possession not enjoying the benefits of the British preferential tariff, and conveyed without further transhipment into a sea or river port of Canada.
Extension of preferential tariff to other British countries as follows;
Swaziland,
Basutoland.
Bechuanaland Protectorate.
Northern Bhodesia,
Nyasaland Protectorate.
Uganda Protectorate,
East Africa Protectorate,
Protectorate of Northern Nigeria.
Colony and Protectorate of Southern Nigeria, Gold Coast.
Sierra Leone.
Gambia,
Somaliland Protectorate,
Federated Malay States.
British North Borneo.
Sarawak.
Brunei,
Mauritius and dependencies thereof. Seychelles,
St. Helena.
Ascension,
Friendly or Tonga islands.
Fiji,
Falkland islands.
British Honduran.
In effect on and after 1st February. 1913. Order in council, 25th January. 1913. Memo. 17] 1B.

The Budget-Mr. Bennett
Australia, with respect to sugar enumerated in tariff item 134. Effective October 1, 1925. Memo. 61.
Irish Free State-Effective on and after October 1, 1923. Order in council, September 21, 1923. Circular 278-C.
Territory of Western Samoa-Effective October 1, 1924. Order in council, October 1, 1924. Circular 362-C.
Newfoundland-Effective June 30, 1928. Order in council, June 26, 1928. Memo. 94.
So it would appear that under the British preference practically the whole of the British Empire is included so far as tariff matters are concerned.


Some hon. MEMBERS:: Hear, hear.


Richard Bedford Bennett: Certainly. It may also
be said that it does not apply to some communities with which treaties are outstanding where those treaties are at variance with the provisions of the British preference. So that on the British preference items we have a very large number of countries affected. I took the trouble to endeavour to ascertain just what it meant with respect to goods that might be imported thereunder. Now, bearing in mind what the hon. minister said the other day as to the quantity of goods to which the British preference applied, just let me read what our importations have been of these items during the past year. To show what an illusory thing it is, to show you how deceptive it is, and to show how loud-sounding it is and how little there is in it-


An hon. MEMBER:: And how dishonest it is.


Richard Bedford Bennett: I shall read the following information as to the value of goods purchased from empire sources on which the preferential duty is altered in the budget of 1930:
Animals, live-
Cattle	 None
Hogs	 None
Horses	 None
S'heep	 None
Meats (fresh) n.o.p.-
United Kingdom	 $ 29,246
Australia	 159.250
New Zealand	 178,883
Meats (canned) -
United Kingdom	 54,566
Australia	 None
New Zealand	 27,594
Extracts of	beef	
126,997Meats, pork	in	barrel	
NoneTallow	
NoneBeeswax	
2,010Eggs, in shell	
98Eggs, n.o.p	
989Eggs, albumen, egg yolk	
1,658
Butter-
United Kingdom	 638,313
That is the butter which the Minister of Agriculture (Mr. Motherwell) stated had been transhipped.
Australia	$	118,741
New Zealand	 11,885,498
Total tea	15,711,754
Yeast cakes, tablets	 68
Yeast cakes, packages not less than 50
pounds	 146
Yeast cakes, packages less than 50
pounds	 55
Beans, n.o.p	 59,181
Buckwheat	   None
Buckwheat flour	 None
Barley	 202
Cornmeal	 None
Oats	 2,837
Oatmeal	 454
Rye	 None
Rye flour	 None
Wheat, flour	and	semolina	 5,500
Rice bran	 None
Macaroni and vermicelli	 56
Hay	 None
Ah, how splendid it is! I wonder if the farmers of western Canada realize the true benefit of the gift conferred upon them by the present government when they put hay and straw upon this list.
Mr. DUNNING. You have forgotton natural gas on which commodity it would be more ridiculous to have a tariff.


Richard Bedford Bennett: It is not there.


Charles Avery Dunning: Oh yes, it is.


James Dew Chaplin: And what is more ridiculous, cider is there.


Richard Bedford Bennett: The hon. gentleman has
said that it would indicate that there was a tax on natural gas in Great Britain. There is nothing in it to that effect.


Charles Avery Dunning: That was among other
absurdities, in addition to those which the hon. gentleman is now reading which I thought fit to remove.


Richard Bedford Bennett: I am reading only the ones now printed. I am reading the value of goods purchased from empire sources on which the preferential duty is altered in the budget presented this year. I shall continue:
Flowers, natural and cut	$	3,112
Potatoes, natural state, sweet, etc.. None
Mushrooms	 None
Beets for sugar	 None
Vegetables-
Asparagus	 None
Beans, green	 None
Brussels sprouts	 None
Cabbage	 None
Carrots and beets	 None
Cauliflower and eggplant	 None
Celery	 None

The Budget-Mr. Bennett
Vegetables-
Cucumbers	
Lettuce	
Parsley	
Peas, green	
Rhubarb	
Spinach	
Tomatoes	$
Watercress	
None
None
None
None
None
None
None
These are items which the government held up to the people of Canada when they said: Look what we have done for you under the British preference!


Charles Avery Dunning: I would like the authority for the figures on vegetables.


Richard Bedford Bennett: I wish to tell the hon.
gentleman that I got those figures from the department.


Charles Avery Dunning: Do you mean to tell this house that none of those items came from the West Indies?


Richard Bedford Bennett: They had not, up to
March 31.


Charles Avery Dunning: My hon. friend has not
the complete information.


Richard Bedford Bennett: My reply to that is that
I got it from the Department of Trade and Commerce. Of course it may have been prepared in a hurry and there may have been some inaccuracies.


Charles Avery Dunning: My hon. friend knows it
is wrong.


Richard Bedford Bennett: Bananas are not included in this list. Until this new tariff came into force we did not receive any substantial quantity of vegetables from the West Indies. There is an item here:
Vegetables, n.o.p	$	2,032


Charles Avery Dunning: You left the West Indies out when you made your calculations; that is what is the matter.


Richard Bedford Bennett: I shall continue with
the items:
Seedlings-
Cabbage	 None
Cauliflower	 None
Onions	 None
Vegetables, prepared-
Beans, baked, in can	 None
Corn or tomatoes	 None
Not otherwise provided	 294
Vegetables, prepared or preserved.. None Vegetables, pickled or preserved in
salt	 None
Vegetable extract	 None
Vegetable paste, hash or similar products	 None
Soups	   None

Fruits-
Apricots	 None
Cherries	 None
Cranberries	 None
Peaches	 None
Pears	 None
Plums	   None
Strawberries	 None
All of these commodities have figured so largely in western Canada!
Berries, n.o.p	 None
Quinces	   None
Apples	 None
Grapes	 None
Cantaloupes	  None
Melons, n.o.p	 None
Fruits, n.o.p	 None
Dates and figs	 None
Grapefruit	 None


Charles Avery Dunning: None?


Richard Bedford Bennett: No.


Charles Avery Dunning: Then, my hon. friend's
figures are wrong.


Richard Bedford Bennett: I am giving the figures
as I got them.


Charles Avery Dunning: And your information is
entirely wrong.


Richard Bedford Bennett: Coming to manufactured items we have:
Milking machines	$	676
Cultivators	 94
Ploughs	 155
Mowing machines	 None
Spraying and dusting machines.. ..	3,356
Hay-loaders	 None
Incubators	 140
Hay presses	 None
Scythes	 2,594
Fanning mills	 None
Windmills	 None
Portable engines with boilers	 487
Equipment for generating electric
power	 335,613
Pumps and vacuum pumps	 None
Machinery for concentration or
separation of ores	 6,174
Heavy duty mine hoists	 3,902
Typewriters	 8,241
Dictating machines	 None
Automatic teletypewriter	 None
Adding machines, etc	 None
Electric vacuum cleaners	 None
Refrigerators	 36
Washing machines	 14,378
Clothes wringers	 None
Sewing machines	 138,709
Machinery for use in the manufacture of clay products	 None
Street or road rollers	 96,018
Road-paving machines	 None
Electric dental engines	 None
Fire engines and other fire machines	329
Lawn mowers and complete parts
thereof	 8,420

The Budget-Mr. Bennett
All machinery composed wholly or in part of iron or steel of a class or kind not made in Canada, n.o.p..	1,172,413
Traction engines	 9,326
Automobile engines	 1,206
Engines or boilers of a class not made
in Canada	 None
And so on down this entire list which I shall now hand to the reporter. Then there is further reference made to-
Needles	$	141,610
Pins	 74,812
Skates of all kinds, roller or other,
and parts	 1,85/


Mr. RYCKMAN:: They are on skates now.


Richard Bedford Bennett: Then I find-


Charles Avery Dunning: My hon. friend is only picking some of them.


Richard Bedford Bennett: I am not giving all of
them, because I would not have sufficient time to read them. The total importation of metals in the last twelve months ending January 1930, was $29,435,319. That total is from the United Kingdom; the remainder of the empire contributed none of that. The total imports were $427,815,683. Following these figures which I find on the table before me there are details. As it would take some time to read them I shall not do so just now. These figures are as nearly correct as the officials could make them in the limited time they had to prepare them; I have accepted them as being correct.
Let us consider what this means. First of all it means that a large number of items which now appear on the free list or appear with greatly reduced tariffs are just as meaningless so far as practical trade and commerce is concerned as though we were dealing with something in a foreign country. So far as British preference is concerned it means nothing, because they do not trade with us.


Charles Avery Dunning: Oh, oh.


Richard Bedford Bennett: None whatever. A large number of these items-


Charles Avery Dunning: Do you mean to say
they cannot, even if they are free?


Richard Bedford Bennett: The hon. gentleman says he has made some of them free, but a large number of them were already free and the rest of them, generally speaking, had a duty of about 5 per cent, and that is all. The maximum duty in the list was 15 per cent British preference and that has now been overcome. That is the information I have obtained from the printed schedules whether or not they
are printed correctly I cannot say. As they are now printed they give the information I have outlined.
In a spirit of frankness I ask the hon. gentleman: Does he not think that it is high time we ceased to indulge in such a form of deception?


Mr. HEPBURN:: I should like to ask a question. An article appeared in the Ottawa Citizen yesterday, and it has a direct reference to the intimation just given by the hon. gentleman that there is no possibility of developing this trade.


Richard Bedford Bennett: Oh, no; I am coming to that.


Mitchell Frederick Hepburn: I have here a clipping from the Ottawa Citizen of yesterday stating that the first boat load of Bermuda vegetables arrived in Montreal yesterday and was completely sold out. It also states that several Ottawa dealers made the trip to Montreal in order to inspect the vegetables.


Richard Bedford Bennett: I would say, in the
words of the Prime Minister, that the hon. gentleman rose to give rather than to get information; I think that would be a fair statement. I have not said that such business may not be developed; I am now about to deal with that phase of my case. I have not as yet mentioned that point. This I will say, in order that there may be no misunderstanding about it:	If a dollar goes to the
West Indies that should go to a Canadian it is no better than if the money went to the United States.


William Lyon Mackenzie King: Shame.


Richard Bedford Bennett: Oh, no; we are not talking about five-cent pieces.


Charles Avery Dunning: I hope that is correctly reported.


Richard Bedford Bennett: I want to repeat it. I stand for Canada, and upon that issue of Canadians before any other people in the world I am prepared to seek the suffrage of my fellow men.


William Lyon Mackenzie King: What about the British Empire?


Richard Bedford Bennett: I am for the British
Empire next to Canada, the only difference being that some gentlemen are for the United States before Canada. I am for the British Empire after Canada. Let me put this question to the Minister of Finance, and let me put it also to the unemployed walking the streets to-day: If we buy steel in Pittsburgh
The Budget-Mr. Bennett

and those men are deprived of employment; if we now shift the buying of that steel to another country, what boots it the unemployed? If this country has attained equality of status with respect to constitutional matters, this country stands to maintain its economic life as against the world. What is more, the development of the British Empire lies in the development of each unit comprising that empire.
Now sir, at last the hon. gentlemen have indicated what really is in their minds and what has been in their minds all the time in connection with this tariff. It is not a tariff in which they are concerned about Canada or Canadians; it is a tariff by which they hope to get large headlines in English papers; by which they hope to be talked about as being the saviours of empire; by which they will be talked about as bringing about empire solidarity. What have they done for Great Britain? Well, sir, I think I have a record which will yield to that of no hon. gentleman opposite in my love and devotion to that empire, but I would be indeed a poor Britisher if I were not a Canadian first. "That man's the best Britisher that loves Canada most." That is the story. That man is the best Britisher who loves Canada most, and any legislation that subordinates this country either constitutionally or economically to any other country, whether it be within or without the British Empire, is bad legislation.


Charles Avery Dunning: Does my hon. friend think this budget does that?


Richard Bedford Bennett: Certainly.


Ernest Lapointe: I am gratified at my hon. friend's conversion.


Richard Bedford Bennett: A conversion has taken place within the last few weeks greater than any conversion such as that; for behind me I have a lifetime of effort for the British Empire, which consists primarily of regard for Canada. That is the story. Now let us pass on.


An hon. MEMBER:: Hear, hear.


Richard Bedford Bennett: The hon. gentleman's
record on New Zealand butter should induce him to say that, for he knows I am coming to that next. This, sir, is the story of the British preference as indicated by the tariff: Hundreds of items are marked free from countries from which we bought nothing and are likely to buy nothing, while hundreds of items are reduced from countries from which we cannot buy anything. It sounds so good; it enables your name to be blazoned so large in the newspapers as the young Lochin-

var from the west who has now saved and solidified the British Empire. It plays second fiddle in the election at Fulham to-day. That is the real essence of this budget, or rather of this statement, because it is not a budget.
In the closing paragraph, hon. gentlemen will find mention of an economic conference. Who first suggested an economic conference of the different units of the British Empire? Did the right hon. Prime Minister? Did the Minister of Railways and Canals? Did the Minister of Finance? Well, I have in my hand a return brought down the other day, and I observe that the Prime Minister of our country sent an invitation for an economic conference in Canada some time after I had on the speech from the throne suggested that there were two great problems with which the British Empire was concerned, the one fiscal and the other the migration of peoples, and that the only method by which these matters could be satisfactorily dealt with was by having a great economic conference here in Ottawa. I have no objection to my hon. friends accepting my suggestion in that regard; I am rather pleased that they did so, but I want them at least to render credit, shall we say, where it is due. I do not expect them to endeavour to deprive us of the credit of having made the suggestion. It was not a suggestion made suddenly; it represented a considered opinion with respect to this matter, which I conceive to be the most important matter that can engage the attention of any citizen of any one of the great portions of the globe which comprise this empire. Anyone who thinks at all must realize that as we have developed there have been increasing difficulties, wfhich can be overcome only through some method brought about by a common unity of thought and a desire to improve conditions. Preferences, whatever they may be, must be preferences which are mutually advantageous. Let us have no differences about that. Even from the days of Sir John A. Macdonald, when he put the matter as clearly as he did and from the days of Tupper and others it has been made abundantly clear that preferences, to be valuable, must be mutually advantageous. When I read what I said in this house with respect to this matter a few short months ago I feel quite satisfied that hon. gentlemen will realize that I at least was on the right road with respect to this matter.
At that time I said there were two great problems which were now the concern of the British people, as hon. gentlemen will find by consulting Hansard, and that these problems affected, on the one hand the development of trade and commerce and, on the other,

The Budget-Mr. Bennett
the migration of peoples. Here we are inhabiting a quarter of the world's area and with a quarter of its population, having resources of every kind that possibly could be of interest to men, and the problem is how we are to utilize them. I made this suggestion on February 11, 1929, only a little over a year ago, and it will be found at page 28, volume 1, of Hansard for that year. Did any hon. gentleman suggest approval of it at that time? Was there one hon. gentleman opposite who rose in his place during that debate or subsequent debates and expressed approval? Where was the Prime Minister? Where was the Minister of Finance? Where were the other hon. gentlemen? Hardly had parliament risen until the Prime Minister was sending out invitations to an economic conference to be held in Ottawa. These are my words which appear on page 28 of Hansard:
There is one other matter I wish to suggest to the administration, and with it I have concluded my observations. There are two great problems that confront the people of the British Empire; they are the largest problems that have ever been offered for the solution of men and women in any age. We inhabit one-fourth of the world's area; we have one-fourth of its population; we have the greatest unoccupied spaces ever given to a people in trust. These great spaces came to us through the toil, the effort and sacrifice of men and women of ages long since past. W7e have a population congested in some sections, and a sparse population in others. Why should not the congested areas be relieved of their population, and the sparsely peopled areas be-populated? That is one problem. The other problem is that of development. I will not at this time endeavour to point out what the resources of this empire are, nor how great a part Canada plays in any development of these resources. In nickel, asbestos, lead, tin. gold, silver, metals, minerals, wood products-in all these there are abundant resources in Canada as well as in other parts of the empire; copper in Rhodesia, diamonds in South Africa and great cotton fields in India and Egypt.
I then concluded with the suggestion that representatives of this great empire should meet in Ottawa and deal with the problems of settlement and development, because one-fourth of the world's people are not trustees for nothing. I repeat that it is desirable and necessary that there should be a conference of representatives from every part of this empire, and that conference cannot be held successfully in Great Britain. That is the position which I would expect to be taken by a government having the interests of the empire at heart. But this government is following its old policy; there never has been a time when the Liberal party was not prepared to gamble with Canada and with the British Empire.
Look through the pages of history for the last few years. Take the railway problem; they guaranteed the securities of the Canadian
Northern Railway and then those of the Grand Trunk Pacific railway, to compete with the former railway and destroy both. That is the history which appears upon the records of this country. Take the matter of lake traffic and the control of rates; they experimented by passing a statute, and then coaxed American ships to violate that statute in order to carry our goods. They were going to sweep the gigantic north Atlantic Shipping trust off the sea; they made the Petersen contract, but they were so ashamed of it that they repudiated it in this house.
Come to more modern days, to this present session. What has been done? Look at the experiments of former years that we are now legislating about for the purpose of meeting difficulties which have occurred. It will be observed that much of our time has been taken up with the discussion of the natural resources agreements. Twenty-five years ago they denied the western provinces their resources, and they hand over those resources only because they are compelled to do so.
Take the New Zealand treaty. Hon. member after hon. member in the Liberal party rose in his place to speak in favour of that treaty. I have their speeches here, one after another, and perhaps it would not be fair to take up too much time in reading them. There is the speech of the hon. member for Hants-Kings (Mr. Ilsley). He said that we should not give up this magnificent treaty with all its advantages. There was the speech made by the hon. member for Elgin-Norfolk, in which he said that he hoped the government would stand pat upon its tariff policy.


James Dew Chaplin: A stand-patter.


Mitchell Frederick Hepburn: It was not the member for Elgin-Norfolk. I represent the constituency of West Elgin.


Richard Bedford Bennett: Pardon me, I should have said the hon. member for West Elgin. He said:
I am going to ask this government to stand pat on their tariff policy, despite the protectionist propaganda that is coming through all the papers of this country.
One after another they spoke, and then came my dear old friend, the hon. member for Weyburn (Mr. Young). Then followed the hon. member for Qu'Appelle (Mr. Millar); and then the hon. member for Queens (Mr. Sinclair). They all expressed their complete conviction that this important treaty should not be interfered with. The hon. member for Hants-Kings said:
Certainly no steps should be taken which might have the effect of terminating the very satisfactory, profitable and successful treaty which we have with our sister dominion of Australia.
1S2S
The Budget-Mr. Bennett


Mr. ILSLEY:: That had reference to Australia.


Richard Bedford Bennett: That is what I said.


James Lorimer Ilsley: The hon. member said New Zealand.


Richard Bedford Bennett: Perhaps the hon. gentleman could not hear because of the noise. I said, "which we have with our sister dominion of Australia."


James Lorimer Ilsley: The hon. member is reading it now.


Richard Bedford Bennett: Those words were read. The hon. member for Queens said:
The amendment proposed by the hon. member for Haldimand (Mr. Senn), which I think is the official voice of the opposition on this matter, asks that the present treaty as it applies to our sister dominion of New Zealand be rescinded, while the government desires to negotiate with New Zealand in the hope of concluding a treaty which will supersede the one now in effect.
And again:
Hon. gentlemen opposite say we should take the extreme ground of rescinding the present treaty, but what does that mean? Our hon. friends opposite suggest by their amendment that we ignore our solemn treaty. I cannot subscribe to anything of that nature, something which treats our signed agreement as a scrap of paper. Such action will not commend itself to those in the country whom our hon. friends have sought to interest by means of this amendment.


James Lorimer Ilsley: Whom is the hon. gentleman quoting now?


Richard Bedford Bennett: The hon. member for Queens. Let me put this question to my hon. friend the Minister of Finance. If you are right in rescinding the New Zealand treaty on October 12 next by notice, it will involve the previous repeal of the order in council. When we asked that that should be done, why did you vote your forces against it? Why is it that this appears in the correspondence of the secretary of the consumers' league? Why is it that you are all called up to the penitent bench to admit your professed conversion to protection? This Mr. Deachman appears to have seen the light.
Does this proposal protect the butter industry of Canada? Does a duty of 7 cents per pound general, and 4 cents per pound preferential, protect the butter industry? Answer that. If it does protect it, where were you when the motion was before the house the other day?


Mr. HANSON:: They are nailed to the 3ross.


Richard Bedford Bennett: The language of the president and directors of the consumers' .eague is as follows:

If they had any such inclinations there are signposts of folly warning them what not to do. Lloyd George and the British Liberal party lost its head in the great war and has not yet regained its balance. An even more striking example is A1 Smith.
The hon. gentlemen who marched up to the penitent block only a few days ago, are now going to march up and say: When we voted with our government, when we accepted their leadership, when we voted for the New Zealand treaty, we were all wrong because in the meantime they have changed their minds. On October 12 the treaty will perish.


Charles Avery Dunning: No one voted for the New Zealand treaty.


Richard Bedford Bennett: Did they not?


Charles Avery Dunning: Oh, no; they voted that it be superseded.


Richard Bedford Bennett: Exactly, but the hon. gentleman said:	You must not supersede it,
you must not terminate it until you have a new treaty. This was the motion on which the house divided on the 18th of March, 1930:
That in the opinion of this house, order in council No. 1757, passed on the 26th day of September, 1925, respecting certain trade arrangements with the Dominion of New Zealand, should be rescinded forthwith, and immediate steps taken to negotiate a treaty with that Dominion on fair and equitable terms.
The amendment was:
That in the opinion of this house, order in council No. 1757, passed on the 26th day of September, 1925. respecting certain trade arrangements with the Dominion of New Zealand, should be superseded as soon as possible by a treaty with that dominion and that immediate steps should be taken to negotiate such treaty.
I pointed out then that rescinding the order in council meant giving the notice under the statute, and the minister has now said that notice has been given that on the 12th day of October this treaty disappears. That is the story. The hon. member for Qu'Appelle (Mr. Millar) will recall his speech on that occasion. To its loyal and devoted followers who supported it in the belief that it was all wrong to give notice of the abrogation of the treaty until a new treaty was arranged, the government now say that on the 12th day of October next this treaty, willy-nilly, whether a new one takes its place or not, is to vanish from the face of the earth. That is what we are told by the Minister of Finance. It is the old, old story.
The next matter is that of fruit and vegetables. Year after year we endeavoured to induce the government to place a seasonal tariff on vegetables and fruits. They passed legislation in this respect in 1923. The Hon.

The Budget-Mr. Bennett
Jacques Bureau and the Hon. Mr. Fielding put that legislation through the house with the aid of the Conservative party and against the efforts of the Progressives at that time. It provided for an order in council, and under it an order in council was passed by which a seasonal tariff was to be established by the fixing of values. The hon. member for Wey-burn (Mr. Young) did not believe in this and he gave notice to rescind the order in council. It was rescinded. To a great delegation that came here the Prime Minister indicated that action would be taken when necessity arose, and now we are told, to save the face of the government, that a seasonal tariff is not to be put into effect, but that an ad valorem and specific tariff will protect the interests of the fruit growers. All I can say is that it is at its highest when it is least needed and it is at its lowest when it is most required.
How do the government propose to deal with butter, eggs, fruit and commodities of this kind that the United States have been dumping upon our markets? They propose to deal with them by a countervailing tariff. I wonder whether the house and the country realize just what that means. It is a countervailing tariff that comes into operation not because Canada has so declared, but because other countries have passed tariff legislation to safeguard and protect their own markets. When they do that, automatically the same tariff applies against them in our market. In other words, congress makes Canada's tariff. The only difference between the "brick-for-brick" policy that was laughed to scorn in this country by hon. gentlemen opposite is that in Mr. Meighen's case he proposed to build the brick into the wall himself, but now the United States congress builds the brick into both sides of the wall. There is no word that will adequately describe what the government is doing with respect to this matter. I wonder whether the house and the country realize that when the government went through the gesture of putting a tariff of seven cents a pound on butter, they knew that the tariff of the United States was twelve cents a pound. So they put on not a seven cent but a twelve cent a pound tariff.


Charles Avery Dunning: No.


Richard Bedford Bennett: The Minister of Finance does not know what, the chairman of his tariff board has provided for him, because he shakes his head. All I can say to him is that what he has said in his speech is this: that the tariff that prevails in another country with respect to importations from Canada
shall be the tariff that obtains in Canada against imports from that country provided that such tariff shall not be less than the tariff fixed by Canada.


Charles Avery Dunning: That is right this time.


Richard Bedford Bennett: We have fixed a tariff of four cents a pound on butter under the preference and seven cents a pound on butter from the rest of the world, and when the minister proposed a tariff of seven cents a pound he knew that the United States tariff was twelve cents.


Charles Avery Dunning: That is right. It may be fourteen cents a little later.


Richard Bedford Bennett: The minister says that it may be fourteen cents a little later. Therefore the Canadian tariff on butter is twelve cents to-day and it may be fourteen cents next week.


Charles Avery Dunning: Against the United States only.


Richard Bedford Bennett: Against the United States or any other country that imposes the same tariff. I put this to the house and the country: What do you think of a government that calmly sits down and tells the people of Canada it has imposed a seven cent duty on butter coming from the United States when all the time it knew it was a twelve cent duty?


Charles Avery Dunning: I did not tell them that.


Richard Bedford Bennett: It has imposed a twelve
cent duty or else it did not know what the United States tariff is. Let us consider the interference and uncertainty this will cause to business. There are the elastic provisions of the United States tariff that have been taken out and put back again. If that sort of thing continues, what will be the result?


Charles Avery Dunning: Our tariff will be equally elastic.


Richard Bedford Bennett: That is what I am trying to point out. In other words, we shall have a tariff from month to month, depending on what the United States does. The president of the United States has to sign the executive order on the recommendation of his tariff commission and any increase up to 50 per cent comes into force thirty days later. Thus Canada's tariff is to be made by the president of the United States.


Charles Avery Dunning: As against themselves.


Richard Bedford Bennett: Against the attitude I
protest. I ask these men to leave the treasury benches and give place to Canadians who
j 830
The Budget-Mr. Bennett

are prepared to enact a tariff for Canada. Suppose Germany has another tariff, Austria another and Czechoslovakia another with respect to every one of those items mentioned in the countervailing tariff, this country will have a new tariff with respect to all those items. That is what happens. Just as rapidly as they change their tariff, under this countervailing provision we get a new tariff also, so that Ganada no longer has with respect to those designated articles a fixed or stable tariff. It has a tariff that mas' be amended in Czechoslovakia or Austria or the United States or Latvia or Esthonia, we know not which, depending on which country we import goods from within the list mentioned. There is no getting around that. All the sophistry in the world cannot disguise a fact which is so patent to everyone. What do the government say? They say: "We will not retaliate." Oh, no! One minister says: "We will not retaliate." The Prime Minister says:	"We will not
provoke." But what do they do? They "countervail!" It is difficult to understand a government that will so presume upon the intelligence of the Canadian people as not to realize that they are trying to do by indirect means what they have not the courage to do directly. They had not the courage to do it, but the people of this country have shown in no unmistakable way that they no longer propose to be serfs for anyone and that they are not going to have their markets con- ' tinually filled with goods dumped upon them from the mass production of the United States, whether it be from the factory or the farm. Against that growing tide of disfavour the government realized that they were powerless unless they did something, and so abandoning all their past protestations and forgetting the Prime Minister's fine frenzy about not provoking the United States by putting up the British preference, and his fine frenzy against retaliatory measures against the United States, they say: All this is forgotten. Just let the president of the United States sign the order, and then that becomes the tariff of Canada.
Now I proceed to the item of tea, which has been put on the free list. In 1018 this country imposed a tax on tea as a war measure. In 1019 there were certain modifications of that tax, but only modifications. That tax has been on the statute book ever since this government has been in power. Why did they not make tea free before? Why did they not have a free cup of tea in any year since 1921? Why? Because it yielded some little revenue. But now, just on the eve of an election, they suggest how farreaching 
might be the consequences if they only take the duty off tea. Well, Mr. Churchill took a duty of fourpence a pound off tea in a budget in England just on the eve of an election.


An hon. MEMBER:: And see what happened to him.


Richard Bedford Bennett: He did it because he
thought it was good policy to do it. He thought it would get some votes. I have here the language of Mr. Lloyd George in that regard, which I fancy will be somewhat interesting to hon. gentlemen opposite. This year Mr. Lloyd George was dealing with that very question, and in the course of his observations. he found it necessary to refer to the action of the Conservative administration in England in that regard. He said that it was purely an election dodge on the part of Mr. Churchill to take fourpence a pound off tea just before an election, and he said it did not do Mr. Churchill much good. It did not. Do hon. gentlemen opposite think that it is going to do them much good? Let me read the figures, showing the revenue we have been receiving from tea:
1910		$	7,032
1911		 4,251
1912		 4,463
1913		 4,236
1914		 5,506
1915		 8,957
1916		 7,931
1917		 4,952
1918		 15,648
1919		 11,801
There was little tea imported in 1919, because the year before vast supplies had been purchased, over 58,000,000 pounds, and only
17,000,000 pounds were bought in 1919. But from 1920 up to March 31, 1930, the tax on tea has brought this country roughly $2,-
500,000	every year, and most of that time this government has been in power. In 1922 the revenue from tea was 82,900,000; 1923, $3,000,000; and for the present year ending March 31, 1930, $2,596,000. Now I ask hon. gentlemen this question:	When the government have lost, mark you, the excise tax, when they have lost the customs tax, and when they have lost other forms of taxation by reason of business conditions, why do they now take the tax off tea? Do they do it for the good of the country or for votes? Well, Mr. Lloyd George used these words on the 17th of April of this year:
Mr. Churchill complained that taxation was concentrated upon a small portion of the community. Who set the example there? Last year Mr. Churchill took 4d. off tea. Was he going to say that there was no bribery in that? Was that done as a great financial measure, or was it done in contemplation of an election which was about to take place?

The Budget-Mr. Bennett
I commend that to the government opposite: Go and tell the housewife that you are taking the duty off tea now; that last year you took the duty off cheques, parlour and sleeping car tickets; and that this year you are taking the duty off tea on the eve of an election. I cannot without having before me the figures express any opinion with respect to the condition of the revenue generally but I should say that if there is one war tax in all the world that should have been dealt with as soon as possible it was the tax on tea. Every member of this house will say that. But, as a matter of fact, the government had not seen fit to take the tax off tea until now, on the eve of an election. Who will say, in the words of Lloyd George, that there was no bribery in that? Those were his words, not mine.


An hon. MEMBER:: Let him mind his own business.


Richard Bedford Bennett: I should say that that
would be the general attitude of the hon. gentleman. I only quote the words of Mr. Lloyd George because in England fourpence a pound was taken off and seven cents a pound here.
I come to the income tax. How many people in Canada do you think pay income tax? I have not yet, of course, the figures for 1930, but for the year ending March 31, 1929, the total number of individuals in this country who paid income tax was 129,663 out of a total population of nearly 10,000,000. That figure was divided by provinces as follows:
Prince Ed \va rd Island	 367
Nova Scotia	 3,693
New Brunswick	 2,682
Quebec	 28,918
Ontario	 55,743
Manitoba	 10,174
Saskatchewan	 7,799
Alberta	 8,221
British Columbia	 11,732
Yukon	 334
That makes a total of 129.663 individual income taxpayers. The government now propose to grant some relief to the income taxpayer with respect to gifts given to charity, tc churches and eleemosynary institutions. I wonder if the government recall how strongly we urged them to take action last year. I wonder if they remember that we pointed out that the income tax was having the effect of drying up private benefactions? Now they agree and are sticking to the old biblical rule that the exemption shall not exceed one-tenth of the income. We have urged it invariably for years, and I rejoice that the government has at last taken this action.
Let me point out one of the difficulties in connection with the income tax. Did it ever
occur to the government that there must be something wrong when only 129,000 individuals out of 10,000,000 people pay income tax in this country? There was something wrong in Lethbridge not long since, as the Minister of National Revenue knows. There must be something wrong in other parts of Canada. How is the tax being evaded? If there are only 129,000 people paying income tax in this country, it is obvious that there is something wrong. One of the reasons is this, that money in the hands of the taxpayer is taxed three times. First, the moneys from which they receive their dividends, and many of them receive their money from investments in joint stock companies, pay the corporation tax on income. Secondly, the taxpayer is called upon to pay a full tax upon that money which he receives as a dividend. That is the second time that that dividend pays a tax. not only is it double taxation, but the taxpayer has to pay a tax upon the very money with which he pays the tax. He gets no exemption for the tax he paid last year out of this year's income. So his money is taxed in the hands of the company, in the hands of the individual, and the money with which he pays the tax is taxed. Now I submit that the time has come when the minister should revise the whole theory of income tax to see that more than 129,000 people in receipt of an income of 83,000 or over make some contribution to the revenues of the country. Placed upon an equitable basis the income tax in Great Britain has been the greatest source of revenue. In this country, administered on a just and equitable basis, it would yield increasing sums. In years past the largest sums from income tax have come, not from individuals, but from corporations, for the income tax paid by individuals last year amounted to only a little over $24,000,000 of the total. I suggest this as a matter worthy of consideration by the government. The adjustments that have been made have tended not to lessen, but rather in some instances to increase the tax, apart altogether from the exemption of gifts to churches, hospitals, and institutions of that kind. I am glad the minister has made that exemption applicable to the 1929 period, because many efforts have been made to induce men of means to make large contributions, to universities, schools, hospitals and churches, but they found themselves unable to respond on account of the burdensome taxation imposed. This is a step in the right direction. It is long overdue. We urged it on the government last year and the year before, and it is satisfactory to us that the minister has at last yielded to our representations.
1S32

The Budget-Mr. Bennett
Here is another question that I desire to ask the hon. minister as well as the right hon. Prime Minister that rises out of this. When you are dealing with taxation why was no effort made to deal with problems that arise in connection with the duties imposed by foreign countries against importation of Canadian wheat? It is true that under the provision of the countervailing duties, the tariff on our now going into the United States being 42 cents, any wheat we buy from them will also pay 42 cents. It is also very useful legislation to suggest that wheat brought from France will now pay 53 cents, from Italy 73 cents, and from Germany 87 cents a bushel. The figures I obtained yesterday from the department were that the United States duty on imported wheat was 42 cents per bushel, the French 53-454, the Italian, 73-63, the German 97-363 cents per bushel. Why have not the government done something about countervailing in those cases? Why have they not done something to provide that when any country in Europe imposes a prohibitory tariff against our wheat we will impose a supertax on their exports to this country? Why has not something been done to protect our wheat growers? Look at what happened the other day. France with her wheat tariff was able to dump 18,000,000 bushels of wheat on the British market. As the hon. Minister of Trade and Commerce knows, the effect was that wheat on the Winnipeg market dropped between 5 and 6 cents a bushel. The direct result of those European tariffs against importations of Canadian wheat has been, as I indicated; that is, our market has been restricted and more or less destroyed, and the British market, which of right was ours in days gone by, has been taken from us. Wheat from Germany and from France, grown under subsidies in some instances, has been sent to Great Britain to the exclusion of our wheat; but this government has done nothing to deal with that situation. Is human ingenuity beyond dealing with it? Any government that lets the president of the United States make its tariff might permit some of us to suggest measures that would safeguard our wheat.
I think, sir, that I have dealt with the problems arising out of this budget. I have not yet endeavoured to go into them in detail -the five hundred and eighty odd items; they must be dealt with in committee, as they are in England. In England some of the most important speeches by Mr. Lloyd George and By Mr. Churchill were made in committee when considering the resolutions themselves,

because they required detailed knowledge and an ability to deal with the technical questions that arose thereon.
Now, sir, I propose to indicate in a summary way the attitude of this party with respect to the problems with which we are dealing. I would regret to think that it was not the duty of the official opposition to indicate what the fiscal policy of the country should be when it has been entrusted to the president of the United States to do so. Our duty is to point out what the proposals of the government involve and to ask the people to accept or reject them in the light of fair criticism urged against them.
The Conservative party stands for the safeguarding and stability of agriculture and industry, and to that end. for protection by laws made in Canada. The countervailing duties of the hon. gentleman are in truth a renunciation of his party's creed; but they are as well an ineffectual attempt to embrace the doctrine of Conservatism; for they do not safeguard and they do not stabilize. They constitute an acknowledgment both of the futility of Liberalism and the impotency of its present proponents to legislate for the good, not of other countries, but of our own. The government, alarmed at the signs of the times, forsake the faith of Laurier and, failing the usurpation of the Conservative doctrine, finds itself suspended midway between the two, shorn of its old faith and doctrine denied the solace of its new,-a warning of the nemesis that awaits those who subordinate principle to personal advantage.
Tested by the laws of political morality or of good business, his action stands equally condemned. To the great Liberal party I offer my sincere sympathy. Before this time of industrial world strife, in the days of lesser competition, the Liberal party was encouraged to prosecute its principles by leaders faithfully, though mistakenly, dedicated to their advancement. But now, when economic battle is joined between the nations of the earth, when every country is raising or preparing to raise its tariff walls higher and yet higher, when we have left behind the calm of slow growth and find ourselves in the storm and stress of rapid development, when the very existence of our industries demands a moderate tariff imposed in our own interests, does the Liberal leader rally his followers for one last fight in the cause he has sworn to espouse? Does he say to the tens of thousands who have been loyal to him? "The cause is in desperate plight, but we will fight it through."

The Budget-Mr. Bennett
No! He calls to them over his shoulder as he speeds from the battlefield, "Recant, recant; the cause is lost; every man for himself."


William Lyon Mackenzie King: What is this
document my hon. friend is reading?


Richard Bedford Bennett: Some notes I have made. And where is he speeding? Anywhere so long as it is away from Liberalism. And in his desperate flight he seeks as his only hope-protection behind the strong arm of the Conservative party. He rushes to us and cries, "I am of the faith. Behold! I bring with me as proof of that my countervailing duties." But there is no place among us for the right hon. gentleman and his government. A steadfast Liberal we can, and do, honour and respect. If he has fought bravely a losing fight, we for that reason the more honour and respect him. But to the leader, who, to save himself, is willing to forswear his faith and disguise his meanness in the mantle of Conservatism, we will lend no aid; we will endure no compromise. We can do no other in duty to our friends, in fairness to our foes. Countervailing duties! Free trade had at least a meaning. But to surrender our sovereignty-the right to make our own laws for our own good-to hand over the conduct of our agricultural and industrial affairs to the tender mercies of competing nations, is an insult to Conservatism, a mockery of Liberalism and a catastrophe to agriculture and industry alike which we as citizens with no interest at heart but the welfare of Canada will forever oppose.


An hon. MEMBER:: Hurrah!


Richard Bedford Bennett: Go down to the province
of Quebec and tell them that is your faith. Go down and explain the seasonal tariffs; when they hear the details of them as they apply in actual operation they will be greatly surprised. It is unthinkable that a responsible ministry to save itself will prostitute its country to the interest of others.


Some hon. MEMBER:: Oh, oh.


An hon. MEMBER:: That is a good word


Richard Bedford Bennett: My right hon. friend will
talk of the welfare of industry and agriculture, of his measures for the orderly advancement of Canada. If he means this he must have forgotten what every schoolboy knows, that our national prosperity is founded on stability of trade, on freedom from change, on an assured market for our natural and fabricated products. That will suffice for countervailing duties.



&quot;Ml 9-116

[Stage Direction]
In order that there may be no misunderstanding as to our position with respect to British preference, I wish to say the following: As an earnest of our affection and goodwill, as an expression of the hope we all have that some day a closer economic alliance of empire states may find being, I commend the measures for British preference which the minister proposes.
Some hon. MEMBER:: Oh, oh.


Richard Bedford Bennett: Wait a minute, until I finish my statement. I do not however approve of the practice of making that appear to be a preference which in reality it is not. A sound partnership is founded on mutuality of interest. Good business is predicated upon reciprocal benefits. This is neither. Here is a great principle being destroyed in the manner I have already indicated. There is no true Canadian who would not gladly surrender some personal advantage to help the people of the parent state; Britain however neither needs nor asks for help like that. What she wants is what we want-broader areas of trade developed through an alliance to which we each bring the powers which have made us what we are. She wants with us a greater empire of the future, and for that we Canadians must build a greater Canada. I say now what I have said from my youth, that the future of empire depends upon the upbuilding of Canada; it depends upon the development of the great resources of Canada. Any sacrifice that we may make of our position whereby we oease to be autonomous in the development of this great state is fraught with the gravest disaster not to us alone but to the empire of which we form a part. What is good for one is good for both, and what is bad for one cannot avail the other. Is that not clear to hon. members? To grant trade preference to another state or empire without forming those preferences on a mutually helpful treaty is unsound business, profitless and filled with ill will and misunderstanding. Can there be any doubt about that? The New Zealand experience proves the case.
The budget in so far as it endeavours to deal with trade preferences within the British Empire, which trade preferences are in reality nothing, is nothing more than mere deception of the body politic; to my mind there can be no doubt with respect to that. The development of this country is the development of the empire and we constitute an autonomous unit in the empire. I turn to the words of a great Conservative statesman who said that a woollen mill in Canada is as great an

The Budget-Mr. Bennett

asset to the British Empire as a woollen mill in Yorkshire. The empire must be founded on common advantage, stabilized by the unhampered cooperation of its component parts and sustained by the boundless strength of this great nation. That is the position which we submit to the people of this country. I realize that the present government has experimented with the most priceless possessions of this country, such as the railways; it has formulated various policies and has attempted the operation of policies from time to time. I have heard its professions of faith, which professions are wholly lacking in effectiveness so far as practice is concerned. Time will not permit me to read the speeches made by the Minister of Railways (Mr. Crerar), the Minister of the Interior (Mr. Stewart, Edmonton) and the Prime Minister (Mr. Mackenzie King) in the Canadian west. There may be an occasion when those speeches may be read. In the speech of the hon. Minister of Finance (Mr. Dunning) delivered on October 8, 1925, as reported in the Regina Leader, dealing with the proposal of Mr. Meighen, we find the expression:
-in my judgment such a proposal would ruin the agricultural interests of western Canada.
To-day we find ourselves in the position where there is a duty of 42 cents a bushel imposed on American wheat, 42 cents on butter and 8 cents on eggs. We have given effect to the words of Mr. Meighen as quoted by the hon. gentleman (Mr. Dunning).
After the United States raised their tariff I would have raised the Canadian tariff to the same height. All the farmers, with the possible exception of the wheat producers, would have benefited.
Mr. Dunning further then stated:
I have said before, and I say again to-night in the most solemn way that in my judgment such a proposal would ruin the agricultural interests of western Canada.
Well, he has himself proposed it to this parliament; he had not the courage however to do it directly, but he has left it for the United States to do.


Mr. DUPUIS:: Mr. Meighen wanted to be led by congress.


Richard Bedford Bennett: No; he said he would
take action, but the present government said that they would fix the tariff at 7 cents on butter and 4 cents on eggs, knowing when they did it that the tariff in the United States was 42 cents on wheat, 12 cents on butter and 8 cents on eggs; that is the tariff to-day in Canada as well as in the United States. The hon. gentleman probably knows that.


An hon. MEMBER:: Probably he does not know it.


Richard Bedford Bennett: Nothing could be more
destructive of or injurious to the body politic than that throughout this country men should say there is no difference between the parties, and that it is only a question of a party being in or not. It is neither fit nor meet that a government in order to retain power, for pure expediency should sacrifice the cherished faith of its followers which has existed generation after generation. The party which now proposes this tariff in days gone by has denounced in no uncertain terms the very measures which it now supports. Its leaders have gone throughout the country; they have sat in this parliament and have placed on the pages of Hansard their observations as to the injuries which would come to this country by the adoption of policies such as they now propose in part. They now champion the policies which they have not the courage to resort to in full; they hope however to divert public attention from the lack of confidence now facing them to the acceptance of these principles. I submit, sir, that such an attitude on the part of a government is injurious to this country and it destroys any confidence the public may have in such a government. In this connection may I repeat the words of another:
What is it, Mr. Speaker, that works havoc in human lives, that destroys the noblest of friendships, that blights all that is most sacred in our human relations? It is the loss of confidence that comes through disillusionment, through the broken pledges, the shattered ideals, the lost visions, the vanished faiths, cruel, indeed, it is when that breach in confidence comes between man and man, between friend and friend, between race and race, between nation and nation; but when it comes between a people and its government there is no saying what injury it may ultimately work.
Is there nothing binding in conscience and in honour between those who rule a people and those who have permitted them to be ruled?
Those are the words of the present Prime Minister of Canada, spoken on February 15, 1924. Hon. members opposite do not seem to be booing so loudly. Bearing in mind this solemn admonition of the Prime Minister in other and happier days I now move, seconded by the hon. member for Vancouver Centre (Mr. Stevens):
That all the words after "That" in the motion be struck out and the following substituted therefor:
"while this house welcomes and approves of every measure that will afford to Canadian agriculture, industry, and labour an equal opportunity and fair competition in the development of the rich and varied natural resources of the Dominion, and provide for the extension of inter-empire trade by mutually advantageous

The Bridget-Mr. Mackenzie King
preferences and agreements, with due regard in either case, to the interests of consumers, it is of opinion that the proposals which were submitted by the Minister of Finance on May 1st, are in several important respects so completely at variance with the policies of this government, as heretofore declared by its official leaders in parliament and elsewhere, that this administration having lost the confidence of the country, cannot safely be entrusted with the direction of the fiscal policy of Canada nor the carrying into effect of proposals to which it has heretofore been opposed and which constitute a breach of its solemn pledges to the electorate, and which are deceptive, fail to estimate the financial results of their operations and which create distrust of and contempt for representative institutions."


William Lyon Mackenzie King: Mr. Speaker, I do not
intend at this moment to reply to the speech of the hon. the leader of the opposition (Mr. Bennett) except in so far as the speech just delivered and the amendment which my hon. friend has moved in the house this afternoon assert that the government has lost the confidence of the people of Canada, or does not enjoy that confidence to the full with respect to the budget which has been brought down by the hon. the Minister of Finance (Mr. Dunning) and with respect to its other policies.
Perhaps the present is an opportune moment at which to make an announcement to parliament which I think should not be longer delayed.
In the opinion of the government, Mr. Speaker, it is desirable that a general election should be held this year, rather than that we should delay dissolution until the conclusion of another session of parliament during the course of next year. It is true that under the constitution the present administration is entitled to remain in office until November, 1931, provided that meanwhile it continues to enjoy the confidence of parliament, but uncertainty with respect to a general election always is apt to be more or less prejudicial to the business interests of the country, and uncertainty with respect to an election also has its unsettling effect upon the business of parliament. Inasmuch, therefore, as there appears to be general expectancy of an election this year, I venture to say that it is in the public interest that it should be brought on at the earliest possible date.
We are fortunately in the position, with my hon. friend speaking on behalf of the opposition and I myself speaking on behalf of the government, of apparently being in agreement in this particular. My hon. friend to-day, in speaking on the budget, has given the budget itself as a reason why there should be an immediate appeal to the people. Speaking 2419-116i
on the address in reply to the speech from the throne my hon. friend indicated that since there was to be an imperial conference this year he thought there should be an appeal to the people before that conference was held, and on Thursday of last week, referring again to the imperial conference and the imperial economic conference, he stated that he thought it advisable that the people should be given an opportunity to say what administration should send its representatives to those conferences which are to be held in London next September.
May I say, Mr. Speaker, that having in mind the representation of Canada by the present administration at the imperial conferences of 1923 and at the imperial conference of 1926, as well as at the subsidiary conference held in London last year, I believe the people of Canada would be wholly agreeable to having this country again represented by the present administration in the ordinary course of events without the necessity of any appeal to the people in the interval. However, the imperial conference and the imperial economic conference are all-important events, and I believe that the voice of Canada at those conferences will also be most important. I feel sure that the authority of Canada's voice will be the greater by virtue of its being expressed by an administration which has just been honoured with the confidence of the people of the country.
Under the circumstances, I would suggest to my hon. friend the leader of the opposition that he and I meet together as soon as may be convenient to him to see if we cannot come to some agreement whereby the business of this present session can be brought to an orderly and speedy conclusion. It would be my wish to meet as well with my friend the hon. member for Acadia (Mr. Gardiner) and discuss with him the matters which he would wish to have considered for the group which he leads and for those who sit about him. As far as the business of parliament is concerned, I think the house has now before it practically all the legislation which it is the intention of the government to introduce. I understand that there still remain to be introduced some amendments to the criminal code; there may be one or two treaties and features of the report of the subsidiary conference in London of which we would wish to ask the approval of parliament. There are possibly one or two other bills which may be introduced, and there remains of course the work of the committees of the house from which we would hope to have reports, upon which reports certain bills will be based.

The Budget-Mr. Mackenzie King
There are the supplementary estimates still to be brought down, but apart from these items I think the house has now before it a pretty complete indication of all the business which may be expected.
Now that it is known that a general election is to be held this year, having regard to the date upon which the imperial conference and the imperial economic conference are to be held, and the necessity of ample opportunity being given after an election for the preparation of matters to be presented on behalf of Canada at these conferences, I would say that the speedier we can bring to a conclusion the work of this session, and the sooner we can make the appeal to the people, the better it will be for all concerned.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



GOVERNOR GENERAL'S SPEECH


Rodolphe Lemieux: I have the honour to inform the house that I have received a message from His Excellency the Governor General, signed by his own hand, reading as follows:
I have received with great pleasure the address you have voted in reply to my speech at the opening of parliament, and thank you for it sincerely.
Willingdon.
Government House, Ottawa.



DIVORCE COURT FOR ONTARIO

[Stage Direction]
Mr. J. S. WOODSWORTH (Winnipeg North Centre) moved the third reading of Bill No. 20, to provide in the province of Ontario for the dissolution and annulment of marriage.
Mr. A. N. SMITH (Stormont):: I beg to move in amendment:
That the said bill be not now read a third time but that it be referred back to the committee of the whole with instructions that they have power to amend the same by inserting the following therein as section 3 of the bill, and renumbering section 3 as section 4:
"3. Upon receipt by the Secretary of State of Canada of a duly certified copy of a resolution passed by the legislative assembly of Ontario requesting that this act be brought into force in that province, the governor in council may, by proclamation, declare that this act shall come into force on a date to be named in the said proclamation, not less than three months after the date of the receipt of such request by the Secretary of State."
And that section 3 of the bill be renumbered as section 4.


Rodolphe Lemieux: main motion.
Smoke,
Speakman,
Spence,
Spencer,
Steedsman,
Stewart (Leeds), Stinson,
Stirling,
Thompson,
Thorson,
Ward,
White (London),
White (Mount Royal), Woodsworth,
Young (Saskatoon), Young (Toronto Northeast).-94.
The question is on the


James Arthurs: In view of the events that transpired this afternoon, I would suggest that this bill 'be left over until another session so that it can be thoroughly digested by the people of the province of Ontario. I still believe that the great majority of the people of Ontario are not in favour of the principle of this bill, and therefore I move, seconded by the hon. member for M usbok a-On ta.rio (Mr. Mc-Gibbon), that this bill be not now read a third time but this day three months hence.


Mr. G. H. PETTIT (Welland):: I move, Mr. Speaker, seconded by the hon. member for Toronto-Scarbaroaigh (Mr. Harris), that the question be now put.

Divorce Court for Ontario


Rodolphe Lemieux: the main motion.	The question now is on
Mr. McGIBBON	: Mr. Speaker, I direct
vour attention to o'clock.	the fact that it is nine


Mr. WOODSWORTH:: Mr. Speaker-	
Mr. McGIBBON	: Mr. Speaker, again I
direct your attention to the fact that it is now nine o'clock.


Rodolphe Lemieux: Standing order 15 of the House of Commons provides that the business of the house on a Tuesday, being a government day, starts with government notices of motion and continues with government ordeis, public bills and orders, questions and notices of motion, and from 8 to 9 o'clock p.m. private and public bills, the former having precedence.
The motion adopted by the house a moment ago was that the previous question be now put. What is that previous question? Standing order 55 states:
The previous question, until it is decided, shall preclude all amendment of the main question, and shall be in the following words, "That this question be now put." If the previous question be resolved in the affirmative, the original question is to be put forthwith-
Note the word "forthwith."
[DOT]-without any amendment or debate.
I consider that the vote of a majority of the members of the house on the motion which has been put in my bands by the hon.

Divorce Court for Ontario
member for Welland (Mr. Pettit) is of the nature of a mandate, and that whether or not it is after nine o'clock the procedure must be completed and the vote on the main motion must be taken forthwith. I shall therefore now put the main motion. It is moved by Mr. Woodsworth and seconded by Mr. Evans that Bill No. 20, to provide in the province of Ontario for the dissolution and annulment of marriage, be now read a third time. Is it the pleasure of the house to adopt the motion?


Mr. MERCIER (St. Henri):: I was paired with the hon. member for West Hamilton (Mr. Bell). Had I voted, I would have voted against the third reading of this bill.


Mr. SANDERSON:: Mr. Speaker, I wish respectfully to draw to your attention the fact that it is now 9.30 o'clock; when the vote was recorded it was past nine o'clock, the time allotted for private bills.


Some hon. MEMBERS:: Order.


Frederick George Sanderson: For the moment I have the floor and I have not finished.


Mr. SPENCE:: You are wasting time.


Frederick George Sanderson: Will the hon. member sit down for a moment? All I want is the Speaker's ruling.


Rodolphe Lemieux: I already have given a ruling. In my own knowledge, when considering matters of urgent importance, the House of Commons has sat even on Sunday,
1S40

Divorce Court for Ontario
though the house does not sit on Sunday. Notwithstanding standing order 15, in view of the announcement which has been made that parliament will soon be dissolved, I think that it is only fair to the house and to the sponsor of this bill that the procedure should be completed.


Mr. McGIBBON:: Will Your Honour be good enough to say whether you consider this bill a matter of urgent importance?


Rodolphe Lemieux: I have no desire to discuss my ruling.


Mr. ERNST:: I was paired with the hon. member for Bellechasse (Mr. Boulanger). Had I voted, I would have voted for the bill.


Mr. GEARY:: I was paired with the hon. member for Laurier-Outremont (Mr. Mer-cier). Had I voted, I would have voted against both amendments.


Mr. BOTHWELL:: I was paired with the hon. member for East West Peterborough (Mr. Peck). Had I voted, I would have voted for the third reading of this bill.


John Vallance: I was paired with the hon. member for Vancouver-Burrard (Mr. Clark). Had I voted, I would have voted for the third reading of this bill.


Mr. BOURGEOIS:: I was paired with the hon. member for Westmorland (Mr. Price). Had I voted, I would have voted against the third reading of this bill.


Rodolphe Lemieux: Mr. Woodsworth moves, seconded by Mr. Evans, that the said bill do now pass and the title be as on the order paper.
Motion agreed to on division and bill read the third time and passed.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Charles A. Dunning that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Bennett.
Mr. WILLIAM IRVINE (Wetaskiwin):: Mr. Speaker, a strange thing has happened- at last the calm of unanimity has fallen upon the troubled sea of Canadian politics. I have never seen a budget as safe as this one; it is going to be safe whether we defeat the government or whether we do not. That is a rather extraordinary situation.
I would refer for a moment to the classical and shall I say sacred allusions of the hon. leader of the opposition (Mr. Bennett). When 
one sees the malefactors of one party consorting so intimately with the five virgins on the front line benches on the other side, one is at a loss to know just exactly what attitude to take. I have not been able to accommodate myself to this extraordinary situation. I have been so accustomed to the clash of arms on the old historic battlefield that at the moment I am not quite sure how to acquit myself. The budget, however, is with us and it seems to be fairly safe. All budgets of my experience in parliament are political documents rather than business statements. The present budget, drafted as it was by a very astute politician having a view to a coming election, might be expected to serve certain interests, and indeed it would be almost a miracle if there were not found here and there through it a certain amount of political humbug. I cannot work myself into any kind of frenzy over any budget. In my opinion parliament and the people of Canada as a whole attribute to budgets a great deal more than they merit. If we strip them from their political significance and inquire as to what the actual economic position will be in the Dominion of Canada after the application of the budget, we shall find the alterations to be so in-signfieant as to be almost unworthy of mention.
I am free, I think, to speak quite frankly about the budget notwithstanding the rather unusual alterations in the incidence of taxation, because of the fact that I have never been a doctrinaire either of the Manchester school or of protectionism. I have always regarded that question as being not an economic one. Indeed, I have said more than once-and I will say it-that the way in which we raise our revenue does not affect the economic situation in a fundamental way although it does make a great deal of difference as to how the burden of taxation is distributed among the classes within the Dominion of Canada. I have never been able to see how we can bring prosperity to Canada either by raising the tariff a little or by lowering it a little either on this or on that. The politico-economic policy which Canadians are looking for to-day will have to be much more fundamental than merely a tinkering with the tariff, whether that tinkering be up or down. Who will say that the economic solution for the problem which confronts Canada, and for that matter all countries of the civilized world to-day, can be found by merely working with the tariff?
The budget before us just missed being clever by being a little too obvious. The Minister of Finance (Mr. Dunning) may, I think, be congratulated upon his herculean efforts to please everybody, even the Tories.

The Budget-Mr. Irvine
I am reminded of this situation:	the
Minister o.f Finance says to the people of Canada: Hang up your socks; Santa Claus is about to appear. Then he points to a huge pile of beautiful parcels put up in nice gilded paper and tied with suitable ribbon, and he says:	You will get one of those in your
sock, but you must not open it until after the election. I am just afraid that when they open those parcels they will be somewhat disappointed with the contents. I do not mind saying frankly to the minister that the quicker the election comes the better for the budget; for when we begin to investigate its details it does not turn out to be quite as good as it sounded when the minister was delivering his budget speech. It is part of the irony of fate that it should have fallen to the lot of the first western Minister of Finance to drop the cut flowers of British preference on the mangled corpse of free trade. But I have great sympathy with the hon. gentleman in that regard. I am not going to charge him with inconsistency. If I did, I would of course have to quote his classical utterance about going forward cautiously, and so forth. But I am not interested in his consistency in political matters.
The Liberal party in its present policy is, I think, for once at least frankly honest so far as the tariff is concerned; it has come out squarely for protection. The question in Canada is no longer whether we want to have higher or lower tariffs, whether we shall vote for a party that is going to increase the tariff to a very high degree or for one that is going to reduce it gradually until it reaches the vanishing point. The only question before the people of Canada when we go to them very shortly is whether we regard the present Prime Minister (Mr. Mackenzie King) or the leader of the opposition (Mr. Bennett) as the better man to carry into effect a protectionist policy in the Dominion. I believe that is rather a good thing in itself in one way, that is that we shall get away at least for one election from the old humbug of tariff discussion which has befuddled the minds of the Canadian .people for sixty years. On the other hand, I frankly state I expected a good deal more from the Liberal party than that. It is probable, however, in view of all the circumstances they have done all they could do with the tariff. But what shall I say of Liberalism?


Miss M ACPHAIL:: It has disappeared.


William Irvine: The Prime Minister some years ago described Liberalism as a facing forward. Every little Liberal was bom with his face to the front and every little Tory
was born with his face to the rear. That was the description given by the Prime Minister, if I recall correctly, in telling us what Liberalism stood for. If Liberalism is a facing forward, I wonder where it is in Canada now.
I am asking and I hope that many Canadian people to-day are also asking for a leadership in a new economics that will bring Canada into the forefront of the nations of the world in solving the great problems which the industrial processes have left right on the very step of our door. I am looking for leadership that will break with the past, diutsy, musty, mediaeval policies which have rung through every election of my memory and that for once is really looking forward and is courageous enough to apply a policy which will fit the economic necessities of Canada at this hour.
Where shall I find that leader? May I expect the present Prime Minister to be that leader? I hardly expect the Prime Minister to accept a suggestion from a back bencher in a group which he may regard as an alien one. Nevertheless, I hope that as a reasonable man, when he reads Hansard to-morrow, he will not disparage a suggestion even from such a source without that degree of reflection which he owes to his own intelligence. When he does examine Hansard, as I .have no doubt he will, to discover the pearls of wisdom and truth which I am about to give him, I want to ask him if I may regard him as the new leader of the new economics in Canada, or must I turn to the leader of the opposition for that leadership, or must I come to the little group that sits around me here to find the germ of that new .political philosophy which we have been awaiting for so long?
I insist that Canada needs a new economic policy, and she needs it so badly that some of these days someone is going to arise to provide it. Why not the Prime Minister? He does not lack in courage. He does not, I think, lack in vision. He can see an opportunity waiting for him. If he fails, I hope that the Conservative leader will not fail. But if he does, then all I can say to the people of Canada is that we, the cooperative groups, shall have to take charge of the situation in the future.
Let me indicate very briefly that the old policy of tinkering with tariffs as a means of solving the economic problem would have to be abandoned, I think, if partisans would study conditions in other countries, some of which are protectionist and some of which have been trying to get along with free trade. I have here figures from Great Britain.. I do not think that I shall have time to read them to the house, but I will indicate their import.
The Budget-Mr. Irvine

These figures show that gradually the wealth of Great Britain is being concentrated more and more into the hands of a very few people, leaving the country in general poverty, with a great number of unemployed and millions of people living on the border of starvation. That is an example from a free trade country.
Then I go to the United States and I find that so far as the .concentration of wealth is concerned, the situation there is the same. I find that they also have a very great number of unemployed and that conditions there are similar to those that we find in Great Britain in so far as the masses of the people are concerned.
There you have the fruits of both policies which have hitherto been advocated i^ Canadian politics, and neither of which has proven to be satisfactory, so surely, I say, it is clear from the facts before us that a new policy must be found in Canada.
Let us look for a moment at the situation, for the situation must determine what the policy shall be. I shall enumerate some of the factors which must enter into our studty of a matter of this kind. First we must take cognizance of the vast wealth which Canada possesses in the form of natural resources. These have been talked about at great length all over Canada for many years. The next factor is that we have highly skilled labour, as highly skilled, I believe, as that of any other country in the world. Next we have the plant equipment, real or potential, that is equal to producing all of the goods that are required by the people of Canada. Surely then in the face of these circumstances no Canadian should ever go hungry; no Canadian should ever lack fior a place to sleep; no Canadian should ever lack for an occupation in the production of these necessities of his own life; and1 yet last year in Canada many Canadians did not have enough to eat and had to exist on charity, and' there were very many in this country who had no place to sleep, and very many who had no work to do.
The problem, therefore, to be solved is how to feed a population of nine millions of people and maintain them in comfort and reasonable happiness in ,the midst of our almost incalculable natural wealth. Being heirs as we are of all the ages of industrial wealth and equipment, that dioes not look to be a very difficult problem as we state it, and yet so far it has baffled the Canadian parliament. It has baffled all governments in Canada so far, and hem we are launching into another election with the same old plaster that we stuck on the body politic sixty years ago. It is true that there is an agreement between the 
Conservative party and the Liberal party in respect to this policy, but I wish to tell both parties very frankly that I do not agree with that policy. I might agree that they have both perhaps found the very best way of imposing a tariff, and that the tariff in some instances may be necessary. I am not discussing that. But I say that as an economic policy the tariff is pitiably inadequate, and it. certainly canuot satisfy the hon. members who sit around me here. Neither can I see how it will meet with any approval on the part of the working masses in Canada. Certainly it contains little if anything for the agricultural population of the country.
Let me insist, Mr. Speaker, that one of the things that we lack much more than a protective tariff is consumers' purchasing power. To-day, under the financial system in vogue in this country and supported by both parties in this house, a financial system which I think neither of the party leaders dare take issue against, credit is issued only in channels of production. Credit is never issued1 to assist consumption, and yet consumption is the only intelligent aim of all production whatsoever. Lacking the purchasing power to make consumption possible, we defeat the ends of production and bring on unemployment and economic chaos, piling up always a surplus of goodls that cannot be soldi; and a surplus under the present system unfortunately means starvation for many. So I say that we need an efficient industrial organization so that we may be able to produce all the necessary goodls. We require a proper and equitable distribution of the opportunity to labour so as to tide ourselves gradually over the period of unemployment which is connecting the individualist and competitive system with the approaching commonwealth.
We need next adequate distribution, providing sufficient purchasing power to buy our production at any given time. That involves the socialization of credit. It involves the socialization of credit because the individualistic control of credit from its very nature cannot give us consumers' purchasing power. I shall not stop to go into an explanation of that, .assuming as I always do that hon. gentlemen of this house are students of credit and understand precisely the implications of the socialization of credit. The present means of issuing credit under private ownership, under which credit is issued not for the purpose of performing its function as a distributor of goods, but for the purpose of performing a particular and specific function for the controllers of credit, namely, the provision of interest and profit, cannot for that very reason give us the necessary purchasing power to

The Budget-Mr. Irvine
which I have referred. So I say that we require a new policy. The present policy is responsible for many of the difficulties of agriculture. What is the use of producing wheat that cannot be sold? What is the use of producing boots that cannot be sold? That is the problem in Canada. The problem really is not whether we should raise the tariff on hay one cent or let straw in free from somewhere else. That is really not the economic problem of Canada. I do not hesitate to say that seriously, even challenging the opposition of my hon. friends opposite-or to my right for that matter. By the way, sir, there is no opposition in this house to-day except myself. I am the opposition; the house has agreed on the national policy of Canada.
Now, the present budget of course is an election budget, as I have pointed out. The election has been announced. I have described how these various parcels have been made up and how the people are in great expectancy respecting them. Let me turn now to brief consideration of some of the main phases of the budget.


An hon. MEMBER:: Open the parcel first.


William Irvine: I am afraid to open the
parcel as my hon. friend suggests, because I would not spoil the joy of surprise. You know, sir, anticipation in many things is really a much greater pleasure than realization, and far be it from me to destroy any joy which may come to any individual from anticipating the budget benefits that may accrue to him.
Let us look first of all at the extension of the British preference. Before I criticize the principal details of the budget, may I say, in fairness to the administration, that I have to congratulate them on having given some consideration to the voice of this house in some matters mentioned in the budget. I am not forgetting that last session we asked for the removal of the tax on a certain type of oonds; the government has now removed that tax. I am also keeping in mind the fact that we asked for the cancellation of the Australian treaty chiefly on the grounds of its extension to New Zealand by order in council, and I am not forgetting that in this matter the government has to a very large extent met our request. I want also to say that we moved last year for an extension of the British preference. I supported the motion myself. To-day the government has provided for its extension in a certain measure.


An hon. MEMBER:: No, no.


William Irvine: Someone says, "No, no." I presume he read the budget in detail. At any rate he has opened the parcel. They have at least extended the scope of the British
preference sentimentally. Having done so, I must give them credit for having listened to some extent to the voice of the house. That, I think, is a creditable thing for any government to do, otherwise this house would be much more foolish than it is,-I hesitate to say how much more.
With regard to the extension of the British preference, while I favoured this last session, as I have just said, I am not as enthusiastic over it now as I was then. I was not at all pleased with the reception of Canadian wheat in the British market. It is all Very well to talk of kith and kin, but I do not think we can build up trade on kith and kin. It appears that the people of the Argentine were more kith than we were kin, for they sold more of their wheat to Great Britain than we were able to. As to the extension of the British preference, when the best that can be done has been done, I am afraid it will remain more of a sentiment than a commercial reality. Nevertheless, I am glad to buy any commodity from Great Britain which I can receive at a price and of a quality equal to that which I can get anywhere else. Without that there can be no trade with any country.
While I am in favour of the sentiment underlying the British preference, and would go as far as may be practicable in extending it, yet I do not think that any legislative means of bringing about imperial trade is likely to be of very great value. However, it must be said that our people desire the British preference extended, they have expressed themselves in favour of it on numerous occasions, and I cannot see that the government could do anything but respond to their demands in this respect. Moreover, it does provide a very effective reply in some respects to the raising of the tariff by the United States against Canada; at least it provides a sentimental reply.
But the extension of the British preference as announced in the budget unfortunately is much more apparent than real. There are, I think, over five hundred items mentioned by the Minister of Finance as being on the free list. Now, I intended to give that list to the house, but as the hon. leader of the opposition gave it very fully this afternoon, I shall merely refer to a very short list as illustrative of some things hitherto dutiable that are now admitted free: hogs, tallow, buckwheat, buckwheat pancake flour, barley, cornmeal, oats, rye, rye flour, wheat, hay and straw. Now, hon. members will readily see that these things have no meaning except as they enter into the total number of the five hundred items put on the free list; so far as having any value in relation to trade, they have none
The Budget-Mr. Irvine

now, and I cannot conceive a time when they will have any. Does anybody expect that we shall ever import large quantities of hay and straw from Great Britain? I hope that hay and straw are not suggestive in the minister's mind of the animal which he regards imperial trade to exemplify.


Charles Avery Dunning: My hon. friend will permit me? He will at least do me the justice, I am sure, of admitting that I stated in the budget address that I proposed making free some fifty items in connection with which the trade with Great Britain had been and probably would be ineffective, because I regarded it as an absolute absurdity to have a tariff against Great Britain on hay and straw, or, for instance, on natural gas piped into the country. The purpose was just to eliminate that absurdity.


An hon. MEMBER:: Why mention them?


Charles Avery Dunning: Because I was eliminating them.


William Irvine: I hope, Mr. Speaker, you
are paying attention to the time, because time is a very important element in a private member's speech. May I say to the hon. minister that it is not my intention to leave the impression that these are all the commodities that are given the benefit of the British preference. I am not trying to make an absurdity out of the entire budget. I am merely pointing out that a great number of these articles have no meaning, but may be counted in the pending campaign as having real significance when you merely total them up. On the other hand, I quite agree that the minister has not confined his revision to matters of this kind. There are other things that will count I hope, and I am very glad to congratulate the minister on having made the alterations.
Now, I have something to say about the other feature of the budget, that is, the increases; these have not yet been touched on at all. Let us take, for instance, tea. True, something has been said about tea already. I imagine the housewives of Canada think they are going to have a cheaper cup of tea than ever before, and yet when they put a certain kind of sugar in it they will have a much dearer cup of tea than they have had for many years. The tariff on sugar, I understand, has been raised 325 per cent.


Charles Avery Dunning: My hon. friend is quite wrong; sugar has not been touched at all.


William Irvine: I have here, I think, the
actual quotation. Somebody says it is a different kind of sugar. I am not questioning

what kind of sugar it is; I said it was sugar; and that is all I have to say about it.


Charles Avery Dunning: Does my hon. friend
know what invert sugar is?


William Irvine: Yes, I like it in my tea.


Charles Avery Dunning: Invert sugar!


Some hon. MEMBERS:: Oh, oh.


William Irvine: The tariff on invert sugar is raised 325 per cent. At any rate when you put the tea with the sugar it is a bad proposition.


Charles Avery Dunning: It surely is.


William Irvine: I would call attention also
to the fact that the 50 per cent empire-wages-and-materials regulation has not been touched at all. I may also point out to the minister that boots and shoes and textiles remain as they were. We might do with some trade from Great Britain in these matters; such trade might cheapen the purchase of boots and shoes by the Canadian people. Also it is altogether likely that if the British preferential tariff applied clothing might be supplied a little cheaper. I do not think however that such a policy would be popular in Montreal; in fact I have an idea that it would not be. I do not suggest for one moment that that is the reason why the hon. minister did not include it; perhaps he did not notice it when he was hastily preparing the budget. I am sure, however, that it would make a great deal of difference to the consumers' league and it no doubt would be beneficial to the hon. member for Weyburn (Mr. Young). At any rate the tariff reductions on goods from our natural market have been apparently abandoned; there are increases in this regard.
I wish to refer particularly to iron and steel, and I take those commodities because I believe they afford a good example. The hon. minister mentioned that they were two of the most important items. I am not opposing the statement made by the minister and I am not opposing the companies whose names I shall mention in regard to it, but I merely mention these industries in order to get information from the minister as to why he made the tariff increases which he did make in respect to them. To my mind the reason for the raising of this tariff would be of extreme interest and would be quite illuminating. I wish to quote certain facts in connection with some companies which will be affected; and I shall first refer to steel stocks. During the last few years steel Stocks have done very well. Taking $100 as the average price in 1926 ithe value to-day is represented by the figure $231; that is, they are worth

The Budget-Mr. Irvine
two and one-third times as much as they were worth in 1926. Let us look at the real profits of some of these companies; take as one example the British Empire Steel Corporation. They show a profit in 1929 of $6,046,647, which has risen from $4,187,403 in 1928. These are gross figures from which interest on bonds, and so on, had to be deducted. The company laid aside for sinking fund, depreciation and depletion the neat sum of $2,093,344 as compared with $1,478,017. After paying bond interest and bond discount they arrived at a net profit of $2,226,636 in 1929 as against $855,938 in 1928, an increase in net profit alter these generous allowances, of $1,370,698. This represents a substantial gain.
Someone has said that the man with the millions wonders from where the next million will come. Meanwhile let us see how some of the other companies wore doing; lot us take as another example The Steel Company of Canada Limited. You will be shocked to learn that it was struggling along with an income slightly in excess of $5,335,000. The following extract from the Financial Times will be illuminating:
Manufacturing profits for the year amounted to $4,936,067 as compared with $4,051,705 m 1928 and $3,166,280 in 1927. To this was added investment income of $399,189 making a total income of $5,335,256. After deduction of sinking fund at $325,828; depreciation at $1,158,897; bond interest at $312,264; preferred dividends at $454,741; common dividends at $805,000 and pension reserve for employees at $300,000, there remained a surplus for the year of $1,978,520. Previous balance was brought forward at $12,042,376, making a profit and loss balance in the current report of $14,020,902.
There is the situation in respect to some of the companies which are affected by the extraordinary increase in the tariff on steel products.


An hon. MEMBER:: There is no protection for steel workers.


William Irvine: I hear of none. When I reviewed the budget, to my mind there appeared to be one class of people who did not seem to profit; I refer to the labouring class. I cannot find that the minister had them in mind at all.


An hon. MEMBER:: WTiat about tea?


William Irvine: 
Mir. DEPUTY SPEAKER:: The hon. member has exhausted the time at his disposal.


William Irvine: I do not think, Mr. Speaker, that you made allowance for time taken off, but I shall submit to the order of the house.


Mr. R. S. WHITE (Mount Royal):: Mr. Speaker, at the opening of the session I gave notice of a resolution in regard to the discrimination in taxation as between privately owned and publicly owned utility companies, having particular reference to light, heat, and power companies. Opportunity, however, did not present itself for the discussion of that resolution, so I avail myself of this opportunity to address the house on the subject for a few moments.
As hon. gentlemen are aware, publicly owned utility companies are exempt from income tax. In the case of provincial enterprises that exemption is provided for by the British North America Act, which states:
No lands or property belonging to Canada or any province shall be liable to taxation.
Of course, so far as that exemption is concerned, nothing can be done by this parliament, but this exemption was extended to municipally owned utilities as well. On the other hand all privately owned utilities are subject to income tax, thus creating a discrimination which not only in my judgment, but also in the judgment of every fair-minded man, is unfair and indefensible.
Certain remedies have been suggested; one is to abolish the exemption which has been extended to municipally owned companies, but I fear that if such a course should be pursued the municipalities would hand over to the province the properties owned by them to be administered by the province, and so taxation would be escaped. Another suggestion is that the income tax should be levied upon the gross and not upon the net earnings, but in that case also I fear that municipal enterprises of this character would 'be handed over to the province, and so an attempt of this kind to equalize taxation would become ineffective.
In a word, in my judgment the only way to bring about equity in taxation-and surely that is something desired by every member of this house-is to abolish the income tax entirely with regard to public utilities. I do not intend to weary the house wiith extracts

from the reports of privately owned companies bearing upon this question, except for just a brief moment. Taking it on t'he basis of the gross sale of electricity for municipal stations the result would be 3 per cent of $32,000,000, with regard to Ontario, or 3 per cent of over $44,000,000 with regard to the whole of Canada, so that there would be an increase of $1,320,000 annually in respect of income tax in the event of that tax being imposed upon publicly owned utilities. The gross revenue from the sale of electricity in Canada amounts to over $104,000,000 annually. Of this amount over $44,000,000 is derived in the province of Ontario and over $33,000,000 in Quebec. Of the Ontario receipts over $32,000,000 is furnished from publicly owned *municipal stations, which pay no income tax at all, -while in Quebec only a little over $1,000,000 is received in respect of municipal stations. The consequence is that the people of Ontario pay no tax on over $32,000,000 worth of electricity purchased, while the people of Quebec pay no tax on only about $1,000,000 worth cf electricity purchased. This obvious discrimination is one I ask the Minister of Finance and the government to remove in justice to the people of the various provinces.
If it is not removed, what fair deduction can be made? We can only take it that the government desires to aoerce t'he people of the province of Quebec who, in the exercise of their own free will and judgment, prefer privately owned corporations to publicly owned corporations; to compel the peicple of that province to turn over privately owned utility properties to the municipality or to the province. If that end were effected the whole income tax revenue now derived by the government so far as these corporations are concerned would disappear. It has been wittily said of the late naval conferences held in London that the delegates were actuated by "faith, hope and parity; these three, but the greatest of these is parity." Sir, what I ask this government, the members of this house to consider, with a view to bringing it about, is parity or equality of taxation upon public utitlities both publicly and privately owned.
Now I crave the indulgence of hon. members, Mr. Speaker, and ask the permission of the house, as I turn to the budget speech, t-o allow me to depart from the rule of the house which declares that a member shall not read his speech. I dlo that chiefly because I rarely take up the time of this house, so perhaps for that reason I may be granted this indulgence.

The Budget-Mr. White (Mount Royal)
I desire to extend my personal congratulations to the Minister of Finance (Mr. Dunning) on the manner in which he discharged the onerous task laid upon him last Thursday. Much had been expected from him and I am sure that in this respect he did not disappoint his friends. In arrangement of matter, in avoidance of undue detail, in clarity of expression and in force of delivery, his speech was most admirable, confirming the confidence of his political supporters in his great ability and large capacity for work. Having said this much in deserved praise, I hope I shall be pardoned if I add, employing the words of a critic, that there was much in the speech that was new and much that was good; but what was new was not good and what was good was not new.
I most heartily applaud that portion of the hon. minister's speech which announced the adoption in part by the government of the protective features of Conservative policy-protection to agricultural interests, protection to iron and steel industries, and reduction of sales tax. These things have been for a long time pressed incessantly upon the government and never more strongly than during the present session of parliament. Now the coon lias come down. These admirable features of the finance minister's speech are good but not new. What is new but not good is the handing over to other countries the making of the Canadian tariff of duties on certain classes of goods when imported into this country. Call the scheme countervailing, retaliation or what you please; by any name it smells as rank. If the flexible duties provision is retained in the tariff about to come into operation in the United States, it will continue to invest in the president the power to alter tariff rates by proclamation. Under the government proposals the plain inescapable position would be this: that neither customs officer nor importer would know with absolute assurance from day to day what rate of duty should be collected on these specified articles when imported into Canada. That assertion may seem to some be a grotesque exaggeration, but it is a fact. In my judgment the proper course would be to enact in the tariff such rates of duty as are required for the welfare of the agricultural classes of Canada in order to preserve to them their home market. The purpose of the countervailing duties can be neither concealed nor camouflaged. They are aimed at the United States and, as such, I certainly have no objection to them. What I do contend is that the variableness to which they are exposed should be removed and fixed definite rates adequately protective of Canadian farmers substituted.
There was an omission in the budget speech of the hon. the finance minister, which cannot have escaped observation. I refer to his failure to make any forecast of the financial results of the current fiscal year. Such forecast is almost invariably made by ministers of finance, chancellors of the exchequer, provincial treasurers, when making their annual financial statements. I do not wonder, however, at the silence of the finance minister on this point. He is heading for a deficit. The days of great surpluses of which worldwide prosperity permitted this government to boast and which were hailed by its supporters as evidence of heaven-born financial genius, are gone; I will not say never to return, because other men will soon occupy and other measures come from the treasury benches; but I am as certain as I am of my own existence that when the current fiscal year closes not a surplus of $44,500,000, but a deficit, will be shown in the public accounts. How can it be otherwise? From customs and excise taxes alone the revenue decreased by $14,100,000 in the last half of the fiscal year as compered with the coresponding period of the preceding year. The finance minister estimates a loss of $22,000,000 in sales tax from the reduction in rate just made; the income taxes based on 1929 incomes, a leaner year than 1928, may reasonably be expected to decline $10,000,000, and then there are tariff reductions w'hich will involve a loss of revenue of an unknown but certainly not an insignificant amount. If the finance minister pulls through the current fiscal year with a net loss of revenue on consolidated account of less than $45,000,000, he will be lucky.
And then the expenditures; they have a persistent habit of going up. In the last fiscal year they were $22,500,000 more than 192829. The main estimates for the current year reveal no evidence of economy but quite the contrary-and the supplementary estimates have yet to come. Estimates are always large when an election is in the offing. Soldiers' pensions, which this house is gratefully and willingly extending, will make a further drain on the public revenues. So, Mr. Speaker, from the government standpoint the finance minister was well advised in withholding from the house and the country the information that the day of deficits has come.
I have referred to the sales tax. Greatly do I regret that this war impost has not been abolished this year as it should have been. There was force in the argument that to remove the tax in whole when it stood at 5 per cent would involve rather serious loss of merchants carrying stocks of tax paid goods, but that argument does not apply when the
1848	COMMONS
The Budget-Mr. White (Mount Royal)
tax has been cut down to 1 per cent. Hon. members looking into shop windows may have seen articles marked down from $1 to 99 cents, a reduction made without serious loss to the merchant. It costs as much to collect 1 per cent as to collect 10 per cent and in retaining the low rate-one-half per cent in the case of boots and shoes-the government also retains the cost of collection, to say nothing of the nuisance to merchants. It would have been infinitely better and more economical in the net, had the finance minister followed the course pressed upon him by the Conservative party, to abolish this war tax altogether.
Then, sir, we have the piece de resistance, the head and front of the new departure in fiscal policy, namely, enlargement of the preferential tariff. History again repeats itself. I have to take memories of members, older men particularly, back four decades to the years 1889, 1890 and 1891, when the Liberal party fought the fight and staked its political fortunes upon a policy of unrestricted reciprocity with the United States. I know whereof I speak, for I was engaged in those struggles, and as I looked up in the library recently the utterances of Liberal leaders at that time, wandering, it may be among the tombs, it was melancholy to find that in a division list on unrestricted reciprocity in 1891, only one member of the 202 who voted, namely, myself, remains in this house. Interesting, indicative and informative as extracts from Liberal speeches and Liberal resolutions at that time are, I do not intend, Mr. Speaker, to weary the house with much quotation. The policy of the Liberal party upon which it fought the election of 1891, was commercial union, or as it was termed, unrestricted reciprocity with the United States. The tariff wall was to be swept away between the two countries and a common tariff erected against all other countries, including Great Britain. Two brief quotations will suffice to show the attitude of the Liberal party at that time, quotations taken from speeches by their financial adviser and one-time finance minister, Sir Richard Cartwright. Speaking in the House of Commons in the session of 1890, he said:
If unrestricted reciprocity does discriminate against Great Britain, we have a right to. Our own interest is paramount. We owe Great Britain nothing hut charity for her atrocious blundering against our interests. There never was a time when Canada could not have bettered her condition by joining the United States.
We must remember these are the words of an official leader of the Liberal party, declaimed in the House of Commons and loudly cheered by his supporters in that chamber.
[Mr. R. S. White.}
Again on February 4, 1891, speaking at Oshawa, Ontario, Sir Richard said:
If free trade with the American nation will be good for us, let us vote for it, though it should involve discrimination against Great Britain twice over.
Mr. Speaker, I could continue to make quotations ad nauseam from Liberal leaders breathing the same disloyalty to Great Britain, the same eagerness to annex Canada commercially to the United States. Then what happened? The electors of Canada rejected the Liberal policy in 1891. Edward Blake gave it the finishing blow and then, in desperate plight, in hope of deodorizing the policy which literally stank in the nostrils of the Canadian people, the Liberal parliamentary party in 1892, less than twelve months later, turned a complete somersault, a volte face unprecedented in political history, and put forth the doctrine of preferential duties on British goods.
The Conservative party was not alarmed at this futile attempt of the Liberal party to wash away its sins. As Sir Robert Borden declared in the House of Commons on January 26, 1911:
The Conservative party stands to-day as _ it stood in the past for the policy of reciprocity within the British Empire.
Time passed. In 1896 the Conservative party went down to defeat and the Liberals came into office. Fifteen years later they were again looking to Washington where Hon. Mr. Fielding and Hon. Mr. Paterson, acting on behalf of the Laurier government, entered into a reciprocity pact with the United States government that literally in respect of its durability was not worth the paper it was written on, a pact obnoxious to the people of Canada as had been the unrestricted reciprocity policy of twenty-one years before. Observe what the whirligig of time 'brings about with a political party of unstable principles:
(1)	Opposition to fiscal protection.
(2)	Commercial union with the highest protectionist country in the world.
(3)	Preferential duties upon British goods.
(4)	Again, reciprocity with the United States, and now,
(5)	Extension of preferential rates upon British goods.
Surveying these gyrations in policy, this jumping from one extreme to the other, this blowing hot and blowing cold upon preferences in promotion of British trade, one is reminded of the lines of James Russell Lowell:
A marciful Providence fashioned 'em holler,
In order that they might their principles swaller.
Before I dismiss this branch of the subject, let me point out that, greatly as we on this

The Budget-Mr. While (Mount Royal)
side of the house desire to promote trade within the British commonwealth of nations, efforts thus far made have not brought successful results. The preferential tariff, as we have had it under Conservative and Liberal governments for more than three decades, has not enabled Great Britain to displace United States commodities with her own in the Canadian market. In 1896, the year before the preferential tariff came into operation, Canada imparted from countries within the British Empire, including, of course, the United Kingdom 33.4 per cent of her total imports and imported from the United States 50.8 per cent of her total imports; whereas in 1929, the percentage of Canadian imports from the British Empire had fallen to 20.3 per cent of the total, while imports into Canada from the United States had risen to 68.6 per cent. The table shows a steady trend, decade after decade, uninfluenced by tariff changes, preferential or otherwise, and it is a regrettable fact that in 1928-29, a year of abounding prosperity in Canada, our imports from the United Kingdom were only 15.3 per cent of the whole, as compared with an import of 68.6 per cent from the United States.
These figures, melancholy to those in whose breasts beat British hearts, prompt the thought: Why not try a policy of preference to Candian products? He who lives and labours in Canada is quite as important a member and as ardent a supporter of the British commonwealth as he who dwells in Great Britain or any other part of the Empire. Why not give him a chance? Why not frame the fiscal policy so that he may find work in farm, factory, forest, fisheries and mines? Should charity not begin at home? Yet, I have examined the revised tariff submitted by the hon Minister of Finance, have scanned its provisions with some care, and have yet to detect in it that open, frank, avowed creed that the Britisher domiciled in Canada has claims superior to a Britisher elsewhere; that, in a word, the policy of this country should be to encourage, assist and protect Canadians first and foremost, and after that, our fellow-subjects in other parts of the Empire. True it is that in a minor degree, some Canadian industries are sought to be helped in the tariff proposals, but in my judgment the gesture in this direction is inadequate. Yet, I do commend, as an adoption of the Conservative fiscal policy the words with which the Minister of Finance introduced the changes in the iron and steel schedule, when he said:
In raising the schedule, the government has kept in mind, first, the national necessity of maintaining an efficient and self-reliant iron and steel industry supplying Canadian consumer demand at reasonable prices.
Not much "death-knell of protection'' in that, Mr. Speaker; not much "free trade as they have it in England." I rejoice that the young low-tariff Lochinvar who came out of the west to lead to the support of the government the free traders of these provinces has at last partially seen the light, has at last changed his fiscal convictions-or should I say has temporarily submerged them, and has gloatingly, with the zeal of a convert, proclaimed "the national necessity of maintaining an efficient and self-reliant iron and steel industry."
Preferences, Mr. Speaker! In the course of his speech, the Minister of Finance declared:
This budget is frankly framed to enable us to buy more freely from those countries which buy from us most freely those commodities which are of vital importance to us and in the confident belief that by this means we shall help to develop and stabilize export markets for our surplus products.
Does it ever occur to hon. gentlemen opposite that the country from which Canadians should buy most freely and to which Canadians should sell most freely is Canada? In doing this, we reap a double profit on the trade-the profit of him who produces, and of him who consumes. What above all is needed is preference for Canadians in the Canadian market, for all sorts and conditions of Canadians, whether they work with their hands or their heads, for the tiller of the soil, the toiler of the sea, the mechanic in the mill, the labourer at the loom and the maker of merchandise.
The removal of the duty on tea is not now made for the first time. As long since as 1882, nearly half a century ago, the Conservative government of that day struck off the duty which had been placed on this article by a Liberal government and gave the people what was called a free breakfast table. Tea remained free until 1918, when a duty was imposed as a war revenue measure, and for eight years, from 1922 to 1930, the present government retained the tax despite large surpluses of revenue. I am heartily glad that there has now been done what long ago should have been done when war taxes were being remitted or reduced.
Before I close, I have a tip for the finance minister which he may find useful. The Canadian merchant marine is still very much of a white elephant. Its operating loss last year was $879,000, and its profit and loss deficit has now reached the formidable sum of $52,-
722,000.	My tip to the finance minister is to adopt the sage course of the Minister of Trade and Commerce (Mr. Malcolm) and so increase the subsidies out of the national treasury to vessels of the merchant marine

1850	COMMONS
The Budget-Mr. White (Mount Royal)
that the balance sheet of the 'latter will be enabled to show an operating profit, and, if the subsidies are made large enough, even a profit sufficient to pay interest on the debt due the Dominion government. Or course, the treasury position is not bettered, nor the burden on the people lightened, but the deception may deceive some.
Mr. Speaker, an election impends; an issue had to be found. The expected moral one failed, and so another is sought in a budget whose principal features have been appropriated from Conservative policy. It is all very amusing and very characteristic of politicians whose principles can be changed when they do not suit. I recall, as apt to the situation of the government, the story of the hunter who related to a friend how he had taken his gun and his dog and started out for game. Soon the dog unearthed a rabbit. Off they ran, over the plain, down the glen, and uip the hill and over the plain again, with the dog steadily gaining, and just as it was about to pounce upon its prey the rabbit climbed a tree. "But," said the friend to whom the hunter was telling this story, "a rabbit cannot climb a tree." "I know that," he replied, "but this one had to."
On motion of Mr. Thorson the debate was adj ourned.
On motion of Mr. Dunning the house adjourned at 10.50 p.m.
Wednesday, May 7, 1930.