1931-06-11

ROYAL ASSENT

Mr. SPEAKER:: I have the honour to inform the house that I have received the following letter:
Ottawa, June 11, 1931.
Sir,'-
I have the honour to inform you that the deputy of His Excellency the Governor General will proceed to the Senate chamber this day at 4.30 p.m., for the purpose of giving the royal assent to certain bills.
James F. Crowdy,
Assistant Secretary.



NATURAL R ESOURC ES-A LB E RTA

[Stage Direction]
Hon. T. G. MURPHY (Minister of the Interior) moved for leave to introduce Bill No. 84, to amend the Alberta Natural Resources Act.
Mr. MACKENZIE KING:: Explain please.


Mr. MURPHY:: I may say with respect to this and the following bill, that these amendments are to confirm the agreements made between the dominion and the provinces of Alberta and Saskatchewan, whereby the effective date for the transfer of the natural resources was postponed from August 1, I960, to October 1, 1930. The provincial governments of both Alberta and Saskatchewan passed legislation at their recent sessions confirming these supplementary agreements.
Motion agreed to and bill read the first time.
NATURAL	RESOURCES-SASKATCHE-

Hon. T. G. MURPHY (Minister of the Interior) moved for leave to introduce Bill No. 85, to amend the Saskatchewan Natural Resources Act.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. MERCIER (St. Henri):: 1.	Will the automobiles of the cabinet ministers, property of the state, be sold soon?
2.	If so, where will they be exhibited for inspection?
3.	Will they be sold at auction or by tender?
4.	What person will have charge of the sale?


Mr. BENNETT:: Might I say to the hon. gentleman that this question is not in proper form. I had hoped that I might be able to speak to him, but I had not the opportunity. These cars will be sold in the manner in which government property is sold, to the best advantage by those charged with the responsibility of doing so.


CENSUS ENUMERATORS IN PRESCOTT COUNTY
Mr. BERTRAND:: Considering that out of thirty-four census enumerators just appointed in Prescott, seven only are French Canadians, will the government order the immediate rectification of this situation?


Richard Bedford Bennett: The form in which this question appears, having regard to the question that immediately follows it, would seem to me to be improper. Questions Should not allege facts. They should seek information. They should, to quote the language of the right hon. leader of the opposition, seek to secure rather than to give information. I remember his observation last year with respect to a question which I thought was very apt, and which to-day I think is very apt in regard to this question.


Pierre Édouard Blondin: The question being irregular in form will be dropped.
Question dropped.
Questions


CENSUS COMMISSIONER FOR QUEBEC SOUTH
Mr. POWER:: 1.	Who is the census commissioner for the electoral district of Quebec South?
2.	What salary and fees does he receive?
3.	What are the names of all the census enumerators appointed for the district of Quebec South?
4.	What is the civil occupation of each enumerator?
5.	What is the electoral district to which each one has been allotted?


Mr. STEVENS:: I ask that this question stand as an order for return, which I now table.


Pierre Édouard Blondin: Question passed as order for return.


CENSUS ENUMERATORS IN CITY OF OTTAWA
Mr. CHEVRIER:: Considering that out of the 94 census enumerators recently appointed in the city of Ottawa, ten only are Prench Canadians, will the government order the immediate rectification of this situation?


Richard Bedford Bennett: This question is objectionable for the same reason as question No. 17.


Pierre Édouard Blondin: Being irregular in form this question will be dropped.
Question dropped.


STE. LOUISE POSTMASTERSHIP
Mr. FAFARD:: 1.	Was the postmaster at Ste. Louise, l'Islet county, dismissed, and if so, for what reason?
2.	What are the names of those who applied for the position?
3.	Were there any ex-service men, and if so, what are their names?
4.	Who was appointed postmaster?


Mr. SAUVE:: 1.	Dismissal authorized on account of active political partisanship, but not yet effected.
2 and 3. The vacancy has 'been advertised but report on applicants has not yet been received.
4. No appointments made.


SUPERANNUATED GOVERNMENT EMPLOYEES
Mr. SPENCER:: 1.	Are there any government employees reengaged who have been superannuated?
2.	If so, how many, and in what capacity are they employed?
3.	Why were they reengaged?


Mr. CAHAN:: 1.	No.
2 and 3. Answered by No. 1.


WHARF CONSTRUCTION OVERSEERS
Mr. MARCIL:: 1.	Have overseers been appointed for the works at the wharves of Fleurant, St. Omer, St. Charles de Caplan and Carleton, Quebec?
2.	Are these works being proceeded with at the present time?
3.	Who is in charge at each place?


Mr. STEWART (Leeds):: 1.	(a) Yes; (b) Yes; (c) Yes; (d) No.
2.	(a) No; Ob) Yes; (c) Yes; (d) Yes.
3.	(a) Arthur L. Landry; (b) H. Godlbout; (c) J. A. Briere; (d) Louis L. LeBlanc (Temporary inspector pending regular appointment by Civil Service Commission).


ST. JOHNS MILITARY SCHOOL-BREAD CONTRACTS
Mr. RHEAUME:: 1.	What were the names of the tenderers for bread contracts for the military school, at St. Johns, Quebec, during the years 1928 and 1929, and what were their respective prices?
2. What were the names of the tenderers and their respective prices in the month of March, 1930?
3.	In the month of September last were the calls for tenders sent to those who tendered in 1928, 1929 and 1930, and if not, at whose request were they not so sent?
4.	In the month of March last were the calls for tenders sent to all those who tendered in 1928, 1929 and 1930, and if not, at whose request were they not so sent?
5.	How many pounds of bread were furnished in 1928, 1929 and 1930?


Mr. SUTHERLAND:: 
MEGUASHA-DALH0USIE FERRY SERVICE
Mr. MARCIL:: 1.	Did Adelme Bernard, the contractor for the Meguasha, Quebec, and Dalhousie, New Brunswick, ferry service offer to renew his contract for another term, and at what price?
2.	Has a contract been entered into with Capt. Frank Allard, of Carleton, for this service ?
3.	If so, what boat is proposed to be used on this route? Is the boat the same one as that used by Bernard?
4.	Is there to be any improvement in the new service, and what rates are to be charged?


Mr. STEVENS:: 1.	Yes at $3,000 per annum.
2.	Yes.
3.	(a) The Hiawatha.
(b) No.
4.	The frequency of trips and the ports of
call are the same as in last year's contract. The Hiawatha is slightly faster than last year's boat. The passenger rates are:	Dalhousie to Meguasha, 25 cents; Ditto-return same day, 40 cents; Dalhousie to St. Omer, 75 cents; Dalhousie to Oarleton, $1.
Freight rates: apples, per barrel, 25 cents; automobiles, each $1; beef, per pound, 25 cents; biscuits, per 100 pounds, 10 cents; butter, per 25 pounds, 5 cents; beans, per bag, 10 cents; bran, per bag, 5 cents, beans, canned, per case, 5 cents; barrels, empty, each, 25 cents; coal, per bag, 10 cents; cement, per barrel, 10 cents; corn meal, per barrel, 5 cents; cattle, each, $1; casks, empty, each, 25 cents; dry goods, per 100 pounds, 5 cents; drums, gasoline, empty, 20 cents; eggs, per case, 10 cents; flour and feed, per bag, 5 cents; fish, per 100 pounds, 10 cents; fertilizer, per 100 pounds, 5 cents; gasoline, per barrel, 20 cents; gasoline engines, per 100 pounds, 10 cents; brooms, per barrel, 25 cents; hogs, dressed, per 100 pounds, 10 cents; horses, each, $1; hardware, per 100 pounds, 5 cents; junk, per 100 pounds, 5 cents; laths, per bundle, 3 cents: lard, per pail, 5 cents; lime, per cask, 10 cents; molasses, per puncheon, 50 cents; oil, lubricating, per cask, 25 cents; paper, 3-ply, per roll, 5 cents; rope, per 100 pounds, 10 cents; stoves and ranges,
per 100 pounds, 25 cents; shingles, per M, 5 cents; sugar, per barrel, 20 cents; trunks, mt., each, 10 cents; turpentine, per barrel, 25 cents; weight goods, not otherwise specified, 5 cents; vinegar, per cask, 25 cents.


AUSTRALIAN TREATY
[Stage Direction]
On the orders of the day:
Hon. IAN MACKENZIE (Vancouver Centre):: The other day I directed a question to my hon. friend the Minister of Trade and Commerce (Mr. Stevens) in regard to the Australian treaty. I do not in any way wish to anticipate the statement of the Prime Minister, but as I am in receipt of numerous inquiries from British Columbia, I should like to put this simple question:	Has the Australian treaty been signed yet?


Richard Bedford Bennett: The information with respect to that
matter will be given just as soon as it is possible to do so. I am sure that the hon. member realizes that a statement cannot be made by this government except the other party concerned is agreeable to such action being taken. As soon as that moment has arrived this house, if it is in session, will be made acquainted with the facts.


STAMP TAX ON CREAM CHEQUES
[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: Yesterday the hon. member for Lisgar (Mr. Brown) asked a question with respect to the application of the stamp tax to cream cheques. As this tax is paid, not by the farmer, but by the user of the cheques, there is no reason why the ordinary rule should be departed from.


CRIMINAL APPEALS-DUTY STAMPS
[Stage Direction]
On the orders of the day:
Mr. ARM AND LaVERGNE: I put a question some weeks ago to the Minister of Justice (Mr. Guthrie) with reference to duty stamps being imposed on all appeals in criminal matters in the province of Quebec, and in his answer the minister stated that he was in correspondence with the attorney general of the province. I should like to know if he has yet received an answer from the attorney general with respect to the duty stamps imposed on all appeals in criminal matters.
Hon. HUGH GUTHRIE (Minister of Justice) :: The question which my hon. friend
The Budget-Mr. Neill

has now raised is not the easiest one to decide. The matter is still under consideration by the law officers of the Department of Justice, and I hope by to-morrow, or at all events by Monday, to give my hon. friend an answer.


MR. F. C. T. O'HARA RETIREMENT OP THE DEPUTY MINISTER OF THE DEPARTMENT OF TRADE AND COMMERCE
[Stage Direction]
On the orders of the day:
Hon. FERNAND RINFRET:: May I
ask the Minister of Trade and Commerce if he is in a position to confirm the announcement of the retirement of his deputy minister, Mr. O'Hara, and if he has anything to communicate to the house as to Mr. O'Hara's eventual replacement.


Henry Herbert Stevens: Mr. O'Hara is on leave of
absence for three months, and his retirement is not effective until the end of that period. No action regarding his replacement will be taken until that time.


RETURNS TABLED
[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: With reference to a question asked
yesterday by the hon. member for Temis-couata (Mr. Pouliot) in connection with some twenty returns outstanding, I find that the information which I had received some days ago is still correct, that the Department of Railways and Canals is endeavouring to secure by correspondence from the Board of Railway Commissioners and from the railway affected the necessary copies of documents to complete the returns. It has taken some time to get this correspondence, and in some instances it is voluminous. If I might be permitted to revert to the order of motions I would table the two returns requested by the hon. member. One is a copy of an order in council appointing Sir George Perley as Acting Minister of Railways and Canals and the other is a copy of an order in council p.c. No. 2292 by which the Minister of Labour entered into an agreement with the Canadian Pacific Railway and the Canadian National Railways.


THE BUDGET
[Stage Direction]
The house resumed from Wednesday, June 10, consideration of the motion of the Right Hon. R. B. Bennett (Minister of Finance)
^Mr- Guthrie.]
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. Ralston.
Mr. A. W. NEILL (Comox-Alberni):: Mr. Speaker, the forty minute limit accorded to private members is so short as to render it impossible for me to deal with all the various subjects covered by the budget. Therefore I shall have to omit all matters with which it will be possible to deal at some future time. Unfortunately two I shall have to omit are of great importance to the constituency I represent. The first one concerns the question of unemployment. I will crystallize my observations in that connection into one sentence. I have had several occasions to speak concerning this subject, and at this time I would simply say without collusion with any other hon. member of the house, that I believe it is the duty of the official opposition and the independent groups in this corner of the chamber, together with private members on the government side of the house, if they have any regard for the interests of their constituents, to exercise the only power they have by refusing to vote supply until the government of the day has brought down a statement of the policy they propose to pursue to deal not only with the immediate distress confronting us but also with the .situation which we will have next winter. We should secure also an assurance that they will bring down a measure-as bring it down they must-providing money for such relief at a time sufficiently previous to the close of the session that hon. members may be in a position to discuss the measure in a fair and proper manner. The practice is played out of bringing down a measure only about twenty-four hours before the close of the session and threatening that if the money is not quickly voted the measure will not be passed. That plan worked all right in the short session but it will not be accepted a second time.
The next matter I had intended to discuss was that of coal which in my district is a most important one. Unfortunately the facts in connection with this commodity are too lengthy to deal with to-day, but I will have an opportunity at a later time. I pledged myself both publicly and privately to vote for the budget, no matter what it contained, if it contained a measure in relief of our coal industry, so desperate are conditions. I do not mean to say I made a deal with the government or any member of it but I merely made a voluntary statement to that effect. The question now before me is: Must I, or

The Budget-Mr. Neill
should I, vote for this budget? True, we have received a measure of assistance, if that can be called assistance which with one hand gives a dollar and with the other takes away ninety-nine cents, or to 'be exact 98.3 cents. I wish I had time to go more fully into the matter of coal. I would' like to say however that the government have produced and laid down in their budget the frame work of a national fuel policy which will be quite satisfactory to many parts of Canada and would be satisfactory to us, if we were put in line with the said policy. The fact is, however, that we have not been. To illustrate briefly, may I say that Nova Scotia under the terms of the fuel policy may get assistance to the extent of S2.25 per ton whereas we can get only 1.7 cents per ton. I do not wish to be misunderstood by the press and repeat that I am not stating the figure to be $1.07, but one cent and seven-tenths of a cent per ton. We asked for $1.50 and probably would have been satisfied with $1.25 so that we would have been in a position to get into the South American market. I ask hon. members how far will 1.7 cents take us into that market.
I feel almost inclined to vote for the budget for one reason, namely, that it will afford no opportunity for an alibi and no excuse to say, "Well, we brought down the framework and if the hon. member for Comox-Alberni had done his share and voted for it we would in committee have adjusted any details." That statement would be too absolutely absurd on the face of it. I can point to the situation in the adjoining constituency of Nanaimo, represented by an hon. member who is well known to be a very staunch supporter of the party in power (Mr. Dickie), where a condition exists very similar to that existing in the district I have the honour to represent. I think the policy of the government will affect my hon. friend's constituents worse if anything than it will affect mine. I know the Prime Minister has received during the last few days a great many telegrams and without further comment I shall leave the question of coal in the hope that he will meet faith with faith and put us on a par-we do not ask anything else; we dio not ask for privileges or preferences-but so far as the fuel policy is concerned to put us on a par with the other sections of Canada. I think I am not asking too much.
Now I come to the budget. The budget reveals an enormous deficit for which I do not blame the Prime Minister.


Richard Bedford Bennett: When my hon. friend
refers to par does he mean %o of a cent per ton mile from the seaboard?


Alan Webster Neill: No, I do not refer to the
same rate per mile, but that we should be given the same consideration by way of more bonus. For instance, on a percentage basis, the total cost is reckoned at $1,800,000. We would be entitled to or about $257,000 or $258,000. As a matter of fact we get only $20,000. A policy which will enable us to do the thing advocated by the government, that is, which will let us get into the foreign market, by granting $2.25 to Nova Scotia, $2 to Alberta and-


Richard Bedford Bennett: No, not foreign markets, but quite the opposite.


Alan Webster Neill: Well, what is the difference?
What is the use of quibbling about a word. We want a market, and in our case we have to take a foreign market. In Alberta they have the opportunity of trading in a Canadian market. I should suppose we would be more entitled to a preference in order to get into a foreign market than to get into a domestic market. The object of the change is undoubtely to open a market. Alberta and Nova Scotia are amply provided for, but in the province of British Columbia the matter is a jest, not even a gesture.
Concerning the budget I have already said there is an enormous deficit. Certainly I cannot blame the Prime Minister for that. There is an enormous increase in taxation and for that I do not blame him. He has stated that the unsatisfactory condition is due to world-wide causes; certainly that is true, and I agree with him. I told my electors that and also told them that the Mackenzie King government was not responsible for the worldwide depression. Unfortunately the right hon. the Prime Minister placed himself in a false position when he did not tell the same thing to the electors. He told them that the fault could be traced to the Mackenzie King government and that if he were placed in power a cure would be effected. "Not a man idle in 1931" was the rallying cry in my constituency. "This I will do." Unfortunately that statement has now to be translated in the terms, "This I cannot do unless you give me unlimited time." I wonder if those people who elected Moses to lead the children of Israel out of Egypt into the Promised Land would have been so unanimous in their choice had it been known that they were to spend forty years in the wilderness, and that every adult would die and none of them would enter the Promised Land. I wonder if the electors of Canada had been similarly informed what the result would have been. Of course, I admit frankly, and any reasonable
The Budget-Mr. Neill

man must, that times will improve. In time, with the turning of the wheel, the cycle, inevitably, conditions will be improved. I would be quite willing to guarantee that. However, for the moment I am going to accept the argument put forward by the right hon. Prime Minister. He says the conditions are world-wide; I grant that. He says they are not due to the late government or to his own government; I grant even that, although there is some suggestion that as conditions have gotten worse since the new government took office it is to some extent responsible. But I will go the whole length and say, yes, he is blameless. But you must allow me this logical sequence: At the next election when conditions must inevitably be better than they are now, it will not be in order for him to take credit for the change and say that it is the result of his policies. I want it to be written in capital letters in Hansard: The understanding is that he is not responsible for bad times now, and consequently he will not be responsible for the improved conditions when they come.
I propose to deal very briefly with some of the items of increased taxation, which I am afraid will be open to very much criticism. There will be a great deal of dissatisfaction with that portion of the budget which substantially cuts down the income tax of the rich man. My hon. friend from North Winnipeg (Mr. Heaps) in a very admirable speech estimated that 80 per cent of the increased taxation will be paid by the man of small means. I hope it will not be as bad as that, but it will be substantially so. I am thinking of the man of small income where the woman of the house is the chancellor of the exchequer. She gets her husband's salary week by week, or month by month, and she is going to get a horrible shock when she next tries to budget her husband's week's wages or month's salary. She is going to run up against the heavily increased sales tax, she is going to find a substantial increase in the tax on tea, and a very heavy increase in the tax on rice-I do not know why. She will also find that there is a very heavy increase in the tax on raisins and oranges, amounting in the aggregate, it is claimed, to $4,000,000 on oranges. I do not know as to that. It is said that oranges are a luxury and need not be eaten by poor people. I would remind hon. members that oranges are no longer a luxury; doctors prescribe them very freely and they enter very considerably into the diet of babies and young children. I presume raisins and oranges are taxed to enable 
us to dicker with the Australian government in negotiating the new treaty that we have heard a good deal about. If so, I sincerely hope that there will be a provision inserted in the budget that if the negotiations for the treaty fail, these heavy taxes will cease to be effective.
The farmer who deals nowadays largely with cooperative concerns is going to be severely hit by the cheque tax, and also by the heavier postage rate. As the right hon. gentleman says, the man who issues the cheque pays the tax, but I fear the farmer will find it deducted from his monthly cheque. The tax has been substantially increased on vegetable and farm seeds, just at the time of the year when money is hard to obtain.
In regard to the poultryman, I thought he had reached hell's deepest hell, but it appears that the government of the day has discovered a still deeper level-a sort of basement. They have put a duty on corn, which means that the man raising chickens will have to pay $2.90 instead of $2 for a sack of corn-probably by the time the duty is pyramided the sack will cost him $3, or 50 per cent of a tax. Now we are told, "You must use barley." It would be about as reasonable to say, "We will encourage the sale of pyjamas by putting a heavy tax on nightshirts." Then the hon. member for Lincoln (Mr. Chaplin) said that we ought to feed the hens barley instead of corn. The trouble with the hon. gentleman is that he never was a hen, and does not know the hen psychology. Unfortunately the hen is not open to tariff considerations. There are three things you cannot fool in this world so far as I know: You cannot fool with Mother Earth-if you don't feed her she won't respond; you cannot fool a milking cow; you cannot fool a laying hen.


An hon. MEMBER:: What about chickens?


Alan Webster Neill: My experience with chickens of the type my hon. friend refers to is somewhat ancient, but in my young and salad days I remember associating with them under conditions when I learned a good deal of their reaction to foods and particularly expensive foods, also generally connected with a cover charge of about $9. The loveliest chicken but excuse me, Mr. Speaker, I do not think I have time to go into the subject any further, especially with my wife in the gallery.
Now I come to an item in the budget to which considerable space and time were given,

The Budget-Mr. Neill
that dealing with the 87 concerns that have allegedly come into this country by reason of the budget changes last September. It is good propaganda of its class, it is a statement that may easily be carried around. It will be discussed at tea tables and in stores and in beer parlours, and it will be easy to say, "It is perfectly true because I saw it all in print." The trouble is you cannot believe all that appears in print. Let me quote a few words of the right hon. Prime Minister, who was cautious in his reference:
It will be some time before full details in regard to capital invested, number employed, etc., can be secured since some are still in process of organization,-
Truer words were never written. I wonder how many of those concerns are in that condition. I notice a good many of them are not even incorporated. My hon. friend who sits next to me and myself can go down the street, hire an office and put up a sign: "Company for the Extraction of Gold from Sea Water." We do not need to have any capital or any gold, we do not even need to have any sea water. All we need do is call ourselves a company and we will be eligible to enter into this select circle. Don't you think, Mr. Speaker, that before we accept these 87 concerns we should know whether they were operating and how many men they were employing-and if they are employing men I would want to know why the unemployment figures are going up instead of down. Don't you think, sir, that the usual fluctuation of business has something to do with it? I have a record somewhere that I took out of the Gazette where it says that three substantial companies, one of them nationally known, were giving up their charters in Canada and going out of business. Look at the Gazette and you see on one page the number of companies that have become bankrupt or disincorporated and on the next page the number of companies incorporated and starting up in business. It is simply one against the other. It would be as reasonable to claim credit for the number of births since the introduction of last session's tariffs without taking into account the number of deaths. Indeed, no credit could be claimed even then for a high tariff means a low birth-rate. It is a well-known fact in Britain that the price of bread has a direct relation to the number of marriages. I may say that since I saw this budget I have determined not to have any more of a family; I simply cannot afford it.


Mr. CHAPLIN:: What about hens?


Alan Webster Neill: I am past hens. I notice that in the list no less than three out of the eighty-seven concerns there named are pencil companies. Our imports of pencils are very small. There was no increased tariff on pencils during the special session. Therefore these three companies are not going into the business on account of the benefits offered them last September. Why they are starting operations is best known to themselves, but certainly that is not the reason. I see in this budget they are to get an increase to 35 per cent instead of 27J per cent. Surely it will not be asserted that they knew beforehand what the budget was going to contain I If in the last eight months those three companies thought it wise to start up on such a small output as is represented by the imports, why is it necessary to give any more tariff protection? Tariff protection is supposed to be necessary to help a new and struggling industry.
Then I find in the list, the Hump Hairpin Company-not limited. We will suppose it deals primarily with hairpins; that is reasonable. We do not expect to find them dealing in cement or coal, any more than we would expect to find a coal company dealing in watches. This company does not even deal in celluloid combs, which are much used by ladies nowadays; these hairpins are made of iron, because they are mentioned in that category in the budget. The imports are very small; they are not segregated, but as far as I can make out a fair estimate of the value of the imports of hairpins during last year would be some $42,000. There was no change of tariff during the short session, so this is not a case of a company being established through the tariff proposals of last year. I do not know anything about the Hump Hairpin Company; I have not had time to investigate them, but I venture to predict that the basement of the plant will not be dug before they will be here howling for more protection. They will not be able to put up the tariff very much higher, so it is reasonable to suppose they will ask -the government to compel the ladies to give up bobbing their hair, so that they will be compelled to use more hairpins. I want to say to the leader of the government that this absolutely will not do. It is all very well to talk about blasting a way here and there; he may get away with it for a time here or at the Imperial conference, but as there is a heaven above us, if he interferes with those people who bob their hair, he is headed for trouble. It may be all very well to interfere with men, but do not dare interfere with the ladies or
The Budget-Mr. Neill

they will bury the Prime Minister under a pile of his unwanted hairpins.
Of these 87 alleged cases of manufacturers coming to Canada, I find by the most casual, trival inspection that five per cent have not gone into business on account of the increased tariff. How many more there are, only time will show. Nearly every hon. member who gets up on this side of the house punctures one of these toy balloons in his particular district. Might I ask why we should encourage the foreigner to come and why we should not encourage Canadians to start in business? If I began an industry I would have a disposition to buy Canadian machinery and to employ Canadian workmen, but my name would not be embalmed for all time in the records of the government of Canada. These foreigners, however, who have established plants in Canada, are to be given a place of honour. Would it not be better to encourage Canadian capital to develop these industries?	,
I notice in this list only one plant located west of Ontario. That is what I warned my electors against; I told them the last campaign was to be a battle between the eastern manufacturers and the primary producers of the west. What have the farmers, the fishermen, the lumbermen and the coal men been given by the budget? I have already mentioned the blow to the poultrymen. The farmers have been given another body blow, little as they deserve it, in connection with the five cent bonus on wheat, which only applies to wheat for export and not for domestic use. The result will be this: The associated cooperative pools of British Columbia will send a man to Calgary, let us say, to buy six or seven carloads of wheat. He will make a deal at a fixed price f.o.b. Vancouver, say of 70 cents per bushel, and everything will be lovely. However, when he turns to leave the vendor will say, "I suppose you are going to export this wheat? The buyer will say, "No, I am not." Then the other man will say, "I am sorry but you will have to pay an extra five cents per bushel, because if I exported the wheat I would get five cents per bushel from the government." Under the previous discrimination-I might almost say infernal discrimination-between domestic and export freight rates we demonstrated that we could ship export wheat to China and pay sixty cents of the rate back for the same rate for which we could ship wheat to British Columbia, but this will be worse; it will be $1.65 per ton more. We will be able to ship export wheat to China and all the way back to Vancouver for the rate on domestic wheat.

That is 6,000 miles. Since then I have seen in the home papers-and although it is perhaps an unpatriotic thing to say, I wish them more power-that it is proposed to form a combination of buyers of wheat in British Columbia and send seven thousand miles away to Australia, of all places, for wheat. It is alleged that if they take a whole ship load they will be able to lay it down in British Columbia for less than they can buy it in Alberta, where they are burning grain for fuel. A government which makes conditions under which things of this kind are possible will be the laughing stock of the British Empire. Let me revert to a suggestion I made previously. I have personal reasons for being anxious to finish this session as quickly as possible, but I am willing to join the British Columbia members in refusing to vote supply until this gross injustice, which cannot be defended by any logic, is remedied.
Now we come to the fishing industry. Last session the hon. member for Shelburne-Yarmouth (Mr. Ralston) and myself begged the government not to put a higher tax on gasoline used by fishermen; we asked them to follow the example of the provinces, which gave a rebate. However, they put on this tax, and they also put on the dumping duty which is fixed by the minister. He fixes anything he likes. The other day his department refused to accept the well known fact of the low prices of gasoline in the United States, and the reason given was that these prices were due to a rate war. How did the minister know it was a rate war? The price was universal and we were entitled to the advantage of that low price in the United States, but he said it was a rate war. Where he got that idea I do not know, but it resulted in a heavy dumping duty being applied. I know of one enthusiastic official who not only put on the dumping duty, which he was not entitled to do, but tried to go back six months and collect something like $300. I have here a wire from a fisherman, which I will just summarize. He says they are getting nine cents for their fish in Seattle, the only market for that class of fish. There is a duty of two cents, and freight and brokerage amounts to four cents, and he says he can buy gasoline in Seattle for 8 cents per imperial gallon, while at home he has to pay 26 cents per gallon. Remember, these men are competing in the same extraterritorial waters with American fishermen, who do not have to pay the two cents duty on the fish brought to Seattle, and who have the advantage of this cheap gasoline. This fisherman says they cannot keep it up, that

The Budget-Mr. Neill
operations will have to be discontinued unless the dumping duty is lifted. In addition, the United States government, probably the state government, in an attempt to do what was fair and just has recently agreed to take off a five cent tax in order to help the fishermen. I think our government might do the same thing, but will they do so? Here is another item from a local paper.
Spring salmon gill-netters on the Skeena river have suspended operations, because it is impossible to meet expenses on five cents per pound straight basis.
And with the price of gasoline 26 cents per gallon. This is what we are suffering from. I should have liked to say something more on this subject, but I must hurry on. This is crippling the fisherman who has his own little boat and who makes his living in that way. I have no doubt, Mr. Speaker, it will be quite all right when the spell-binders of our friends opposite go around and tell the fisherman that on the first $10,000 of his income he will not have to pay income tax if derived from dividends. Once he gets that fixed in his mind of course everything will be all right.
The government, with their policy, have lost the New Zealand preference for our salmon. That will cost us $65,000 this year, on the basis of last year, because the New Zealand government has cancelled the British preference so far as we are concerned. It may be said, and I admit, that I voted with the present government, then in opposition, in favour of doing away with the New Zealand agreement with regard to butter, and the then Minister of Finance, Mr. Dunning, did cancel that agreement and put on a tax of four cents per pound. New Zealand was quite satisfied, because they were conscious that they had been getting rather the best of the bargain. The National Dairy Council, who are accused by some of my Liberal friends of being Tories, warned the government not to go beyond four cents per pound. This government put on a duty of eight cents per pound, and it is that which has cost us in British Columbia our New Zealand market and our preference of $1.25 per case. Now the prime minister of New Zealand says they had to take this action because there was no hope of further negotiations. I want to tell you this, Mr. Speaker: the government of the day will have to keep these fishermen next winter; there is no other way out of it. They did not get any relief last winter; they struggled through as best they could. They will have to get some relief this year.
The lumber and paper industry will be largely dependent on the terms of the Australian treaty. I will not say anything in that regard that might hamper the minister in his negotiations. Until we get the treaty we cannot know what the terms are. I hope our fish, lumber and pulp interests will be taken care of.
I wish now to discuss old age pensions, but there is another matter I should like to speak on and I may have to sacrifice that question. However, in case I am called off in the middle of a syllable by the turning-over of the official hour-glass, I wish to summarize the things which we in my district want. We want the coal bonus increased in line with the aid given to other portions of Canada-only justice, and not any favours or anything of that sort. We want the farmers protected against any further handicap by the discrimination against the domestic rate in regard to the 5 cents bonus. We want the unemployment policy brought down. And we want the matter I am.going to speak of now, attended to-that is, in regard to pilchards.
The matter of pilchards is a long story. Pilchards are a species of herring and the industry is entirely confined to the west coast of Vancouver island, where they reduce the fish into oil and meal. At one time there were twenty-seven expensive plants operating on that coast whereas to-day there are possibly only six, most of which have either gone bust or are shut down. Now, the people engaged in this industry asked the government to put a duty on raw vegetable oil brought in for the manufacture of domestic shortening. Cocoanut and palm oils, etc,, are brought in from the United States, and the people whom I represent want a duty imposed to check the importation of these oils. These oils are used in the manufacture of shortening such as Crisco and so forth, and if a duty were imposed it would curtail the importation of these oils and encourage the use of pilchard oil. At one time this oil sold at 50 cents a gallon; now it is 15 cents a gallon with a duty of 5 cents a gallon going into the United States. Almost the only market now is in the United States, where it is used for the very purpose for which we in Canada are not allowed to use it. There is another aspect to this matter. In addition to the request for the duty on vegetable oils, we are asking that we be allowed in Canada to sell shortening made with pilchard oil instead of from palm oil or cocoanut oil, and that we be allowed to describe it as an article made with edible oil. This is what is done in the United States. But the officials in some department here have so far refused this permission. I am not blaming this government; the same atti-
The Budget-Mr. Neill

tude was taken under the former administration. The fact is, however, that some moss-backed official said, "No; the traditions of the past are good enough for me and mine." It has always been considered that oil produced from fish must develop a rancid odour and be objectionable and therefore any shortening made from such oil must be branded "Made with fish oil," and that damns the whole thing; the housewife will not buy it. But, Mr. Speaker, time Moves. It does not appear to move with the officials here but it moves in the United States; for in that country they have discovered a process known as hydrogenation, oy which, at large expense, with a plant costing a million and a half, they have entirely removed the possibility of pilchard oil becoming rancid or having any disagreeable odour. The result is that in the United States the manufacturers are permitted by the government to use this oil for this particular purpose. And surely they are. just as punctilious in the United States as we are in regard to the purity of foodstuffs. There the manufacturers are allowed to sell shortening made from this oil under the description "Made with edible oils," and that very product is brought into and sold in Canada. We buy it here; yet we are not allowed to use the same oil, produced in Canada, for the same purpose, notwithstanding that this would build up a prosperous business in this country and give employment to our fishermen. We cannot do this because someone in the department thinks that the product ought to be marked "Made from fish oil." This attitude taken by the officials has resulted in two thousand men being out of employment, men who are in dire need of work. These companies have wired the Prime Minister, and I have a telegram from them to the same effect. If their request were granted it would make a tremendous difference and would provide work for two thousand men. And there is no reason in the world why this should not be done except that someone declares that inasmuch as it has always been regarded as objectionable to have fish oil used in this way, it must necessarily continue for all tame to be objectionable, notwithstanding that, as I have pointed out, the reason for the objection has been entirely removed. It has been absolutely demonstrated; samples have been submitted to the government analysts, and they have agreed that there is nothing objectionable in the oil. But the departmental officials will not allow the product to be sold under the label "Made with edible oils." At the same time, however, they will allow any stuff to come in from the South Pacific islands 
because it is represented as a vegetable oil product. I trust the government will see its way to meet the request of these companies in this matter. All the Prime Minister need do is wave his hand, and it will be done. It will not involve any question of protection, it will cost no one anything, simply to have the article designated properly. I am informed that a company is willing to put up money and build a hydrogenation .plant right away in Canada, and this would be a splendid thing indeed for the fishing industry. There is hardly anything I can think of that would be better just now for the industry.
I should like to say a word or two in connection with old age pensions. We were told that the maritime provinces could not give their aged people pensions unless this government contributed 100 per cent, and the present government made a promise to that effect. Let me show the absurdity of the demand for a 100 per cent contribution from the dominion government. How were the old people of New Brunswick and Nova Scotia taken care of in the past? Did they starve? Were they thrown out on the dust heap? No; those provinces took care of their old people who were in need. Perhaps they did not take care of them as adequately as they can be assisted by the payment of $20 a month, but they took care of them nevertheless. And it cost them money. Did they need 100 per cent from this government to help them? They did not. They are now being offered 75 per cent by the government. Now, here is the point. Let us suppose that they do not accept it. Suppose they say they cannot afford to pay these pensions unless they get 100 per cent. Well, Mr. Speaker, in that case they will be worse off than they were before, for they will have to take care of their old people just the same, and moreover they will have to pay their share of the 75 per cent which will be paid in British Columbia and other provinces that accept the offer. On the other hand, if they decide to accept the 75 per cent and go ahead, it shows that it was not necessary to offer them more. The fact is, the government has simply made a political bargain, offering them 25 per cent too much. We are giving away the people's money to make ourselves popular with the provinces. It is so much easier, Mr. Speaker, to be generous than just. The other provinces knew that under the British North America Act they were obliged to take care of their own poor and they were glad enough to get 50 per cent. The government now say, "We are giving you

The Budget-Mr. Matthews
three million dollars more to play with", and if you lived in British Columbia, Mr. Speaker, you would know that "play" is the right word. Now that we are paying this extra money, to which the provinces are not by any process of law entitled, they ought to take care of their people between the ages of sixty-five and seventy, thus making a substantial reduction in unemployment and helping deserving old people. This extra money, spent in unemployment relief or insurance, would be better spent than handing it out to provinces who use it on the principle of- light come, light go.
To sum up again, we are only asking for justice: coal justice, grain justice, unemployment justice and, if I might put it that way, pilchard justice. What we want is plain, ordinary, common justice-not preferences or favours at the expense of anybody else. What we want is that measure of justice which from the beginning of time Providence ordained should prevail as between man and man. Man has fought and died for it ever since he was a man, and with God's help will continue to fight until he gets what he is entitled to, namely, justice.


Mr. R. C. MATTHEWS (Toronto East Centre):: I do not take up very much time in this house. My batting average is rather low. But I do want to say one or two things to-day with regard to some features of the budget to which reference has been made, and which possibly have not been dealt with as fully as they might have been. Before proceeding to do so, however, I think I should compliment the Minister of Finance (Mr. Bennett) on the splendid speech he made when delivering the budget. It was, I believe, the most comprehensive review of the affairs of Canada which I have had the pleasure of hearing or of reading. I am very doubtful whether at any time since confederation there has been brought down in this house so comprehensive a review of the affairs of the country. The budget is a different 'thing to-day from what it was years ago. Thirty years ago the presentation of the financial affairs of the country was rather a simple matter, dealing as it did with forty or fifty millions of dollars.
' Up to the beginning of the century the total revenue of Canada was, I think, always under $50,000,000-about the first of the century it crept over that figure-to-day, not only is it a complex matter in regard to finance, but the broadening interests of government and social legislation have made the budget very comprehensive. The functions of government
have increased enormously and cover a range to-day which in days gone by was not thought of. The Prime Minister has dealt with Canadian affairs in a way that has commanded the attention and met with the approval of the country. From every standpoint his speech was courageous, clear and convincing and, therefore, before proceeding further with my remarks, I would like to put myself on record as congratulating him on his excellent presentation.
The interesting thing after the budget is presented is to ascertain the course which the opposition will take, and that is particularly true this year. We have a new parliament and a new opposition; one expects the opposition to oppose because that is their function and their privilege and sometimes it is not a very difficult thing to do, but it seems to me that this year, without looking too much to an ideal, we might have had at least a suggestion of cooperation in view of the difficult times with which we are faced. I have never been able to see what was to be gained in parliament by reading for comparison different trade reports, one set dealing with depression and the other dealing with times of expansion and good business. We go pretty far in this country in the way of partisanship but there are times, and I believe this is one of them, when there might be a little cooperation for the good of the country, instead of opposition at every turn.
If any hon. member thinks that this country is suffering more than others I would advise him to go to such places as Detroit, Pittsburgh or New York, and talk with the business and professional men in those cities, talk with the bankers and with the ordinary people, find out the condition of trade and see the anxiety with which those people are looking to the future. Anyone who will do that cannot but be convinced that Canada is not in as bad a position comparatively as we are led to believe.
My own opinion is that times of expansion and depression come regardless of governments. I do not believe the fiscal policy of Canada has had much to do with the present depression, and I have never believed that. The stage was all set, it was an inevitable result following a given cause. For some years the world has been on a credit spree led by the United States. This began, as it almost always does, with very easy money conditions. Between 1921 and 1925 the United States acquired $1,500,000,000 in gold. What followed? There was an abundance of long term credit, the commercial banks discharged their indebtedness to the federal reserve sys-
The Budget-Mr. Matthews

tem and the preliminaries of expansion were clearly in evidence. There was easy credit, low rates and lack of demand for money in the domestic market in the United States. What was to be done with that extra money? With the swift enthusiasm characteristic of Americans, they went into foreign markets and began pressing loans upon foreign governments, and between 1924 and 1930, the United States loaned to foreign governments the enormous sum of $6,047,000,000. This created a credit of over six billions of dollars, which amount of spending money was placed in the hands of other nations. Naturally, much of this money was spent in the United States and it created a demand for goods such as the world had never known. The stage was all set. for the greatest boom on record. Goods manufactured and in process of manufacture were bought up and more demanded. Prosperity grew and expanded and so did the demand for credit. Industry became very prosperous and a stock market rise of long duration resulted with unprecedented profits to speculators. A very considerable percentage of the population got into the stock market and if I may be allowed to do so, I would remark that the grain market was not altogether neglected. Profits real and anticipated were used to buy more goods; thus the. stock market, the creature of prosperity, itself created more prosperity.


Mr. DUPUIS:: Mr. Speaker, I would like
to ask if you will be as lenient with the hon. members on this side of the house in the reading of their speeches as you are with the hon. member now on his feet.


An hon. MEMBER:: Every hon. member
has been reading them.


Robert Charles Matthews: I have notes, but I am not reading.


Vincent Dupuis: I am not protesting but I
am just calling His Honour's attention to that fact so that he will be as kind to us.


Mr. DEPUTY SPEAKER:: I did not
notice that the hon. member was reading his speech; if he is, I will certainly call him to order.


Robert Charles Matthews: Mr. Speaker, I have not a written speech before me; I have notes to which I am referring; I find it very difficult to see them and perhaps that is why the hon. member thinks I am reading.
Prosperity continued to increase until the demand for credit became so great the world

over that interest rates went up and commerce and industry could not pay the rates asked for funds. The door was shut to foreign borrowing. International trade suffered to the extent of billions of dollars. Commodities declined in price. The market broke, and a depression of the first magnitude set in, which I fear is now being prolonged by influences which time does not permit me to specify.
Now, Mr. Speaker, I do not personally hold the view that the general situation was caused by, or very appreciably affected by, Canadian fiscal policy, although the effect of it might have been minimized if we were manufacturing our own goods, and were not the victims of dumping. But it left us in a position where business is comparatively flat, and revenues decidedly so. It is evident to everyone that more revenue must be raised to pay the expense of carrying on the government of the country. Business men know this. They expect it. There was some discussion of new taxation to take the place of the sales tax, and from hundreds of conversations I had with business men, I learned that they were all in favour of raising the sales tax-Liberals and Conservatives alike. Some have told me since the budget address that they favoured a higher sales tax than 4 per cent. They understand the tax; they wanted it; and it does not appear to me that it is a party question at all, because I am sure that if my hon. friends opposite me were in power, their first move to raise money would be to add to the sales tax-raise it as they did before.
The Prime Minister is to be congratulated on the success of the conversion loan of 14431. Asking for $250,000,000, he received $640,000,000, the strongest evidence of the faith of the Canadian people in the stability and credit of their country. Indeed, but for the desire of important holders of government bonds to keep their funds in short term liquid securities, there is no doubt that the conversion figures would have been greatly enlarged. With the knowledge of this condition, the loan can be said to have been a complete success.
The hon. the ex-Minister of National Defence (Mr. Ralston) made some comments on the conversion loan, and while he said that on the one hand there was great satisfaction in Canada that the loan had been so well received, still there was nothing extraordinary about it-it was a simple, everyday operation.

The Budget-Mr. Matthews
He also claimed that the rate of interest was not satisfactory, and pointed out that the province of Quebec a few days ago sold 7 or 8 millions of bonds on a 4.38 per cent basis; that British Columbia had made a sale on a 4.49 per cent basis; and that the state of New York tax-free serials were selling on a 3.45 per cent and 3.30 per cent basis. He did not say, however, that the Canadian tax-free bonds were selling on an equally favourable basis to those of the state of New York. In regard to his emphasis on the sale of small amounts of Canadian provincial bonds on a basis slightly more favourable than the interest on the new 4i per cent bonds, I would say that this is a matter of no significance whatever. In financial transactions one of the most important things is the magnitude. Almost any province of Canada could go into the market and dispose of a few millions on a slightly more favourable basis than that at which the dominion of Canada could expect investors to accept 600 or 700 million dollars of bonds. There is no comparison between the two cases at all, and I respectfully submit that there is no argument in the hon. gentleman's comparison in this regard.
Looking at it from a practical standpoint of marketing securities in a country with as large a territory as Canada, I am afraid the hon. gentleman is !not familiar with the difficulties to be encountered. Holders of government securities are scattered over the whole dominion, some of them in very obscure places, and the mere announcement of a conversion loan would not accomplish the desired end. I believe it was good business on the part of the government to invoke the services of the bond dealers, who would search their records for names of holders of these bonds, and get into communication with them by long distance telephone, by despatching salesmen to see them, or in other ways that would place before them the desirability of conversion. An organization was set up that was a credit to the country, and if the hon. gentleman had been sufficiently interested to ascertain the facts he would have found that the transaction was not as profitable to the sellers of the bonds as one might infer from his statements. In the first conversion loan of magnitude that the country has attempted, I think what was done was well worth the expense that attended it.
The practical effects of this conversion are very important. In the first place:
It removes from the almost immediate future the greatest financial problem that this
country has ever had before it. The clouds of financial necessity have been gathering on the horizon to the extent of more than $1,000,000,000, which required to be refunded or converted within a short time. The vast amount of government securities falling due in the early years of this decade have been referred to before in this house. As early as 1927 I drew the attention of the then Minister of Finance to the magnitude of the financing to be done. I also pointed out the disturbing influence of those clouds. Happily the Prime Minister has dissipated all fears by a most courageous and successful conversion loan, sold at par and yielding to the investor 4| per cent instead of 5 per cent and 5^ per cent, which the retiring loans bear. The removal of the greatest financial problem this country has ever faced-is one of the most encouraging steps that could be taken toward a return to better business and economic conditions.
In the second place:
The success of the conversion loan increases the nation's credit. The whole financial fabric is strengthened. The world knows that Canadians have the utmost confidence in their country and in its future, and good as the credit of Canada has been in recent years, it is even better to-day, because while other countries are having grave financial difficulties-in some cases even default has taken place, and there are suggestions of further default and repudiation filling the air-this country, through the conversion loan, has been able to take care of her own finances in a way satisfactory to her, and most creditable to her in the eyes of the world. Canada's credit has been enhanced, and the way is now open for any supplementary financing that may be necessary in connection with the retirement of the balance of the loans.
As an important Montreal paper said a few weeks ago:
If Canadians in times like these, when elsewhere there is depression and discouragement, can demonstrate their confidence in their own country's destiny by binding their fortunes to it, what is to be the effect upon Canadian credit in the eyes of the world? Can any action inspire greater confidence in Canada as a place for investment? Premier Bennett's plan is not only sound finance-it is sound psychology as well.
In the third place:
The success of this conversion lightens the public burden. Bonds that bore interest at the rate of 5 per cent and 5J per cent are being converted into securities yielding 4i per cent. I have only to give a compari-

The Budget-Mr. Matthews

son of the figures between the amount of amounts that are now being paid on the old interest to be paid by Canada, and the bonds:
Loan
5 per cent War Loan, 1916-31..
5| per cent Renewal Loan, 1922-32 5i per cent Victory Loan, 1918-33. 5| per cent Victory Loan, 1919-34.
Amounts
converted at 4J per cent $ 38,403,800 37,037,200
278,244,000 273,242,300
Yearly
saving in interest $ 192,019 370,372 2,782.440 2,732,423
Total


Mr. CAYLEY:: Does not the hon. member think it possible that one of these issues,, say for $250,000,000, could have been floated for less than 4i per cent?


Robert Charles Matthews: It might be possible
to float a small loan in the market at the present time for less than 4J per cent, but it is doubtful if a loan of that magnitude could have been. The amount would be too large to expect a high market price.


Thomas Merritt Cayley: Could it not have been
floated in New York, say?


Robert Charles Matthews: I am thinking of New York.
Furthermore, the conversion raises the national revenue, because all the 4J per cent bonds are to be taxable after the date of maturity of the tax-free bonds. Perhaps this can best be illustrated by a holder wrho has, say, $10,000 of tax-free 51 per cent bonds, maturing in 1933. At the present time his income from these is $550 per annum, free of income tax. Having converted these bonds, he will have $10,000 of 4| per cent bonds, vielding annually $450. Assuming that he comes within the 25 per cent income class, his income tax on the $450 will be $112.50, which will be deducted from the $450. His net return, therefore, on the investment is $337.50, instead of $550. That is to say, the state is benefited by $100 in interest and $112.50 in income tax, or $212.50, and the investor, instead of receiving 51 per cent net, receives 3-371 per cent net on his investment, the balance going to the state.
It is axiomatic in public finance that the interests of the state surpass and transcend the interest of the investor, the holder of public securities. This results in two obligations; one on the borrower-that is, the government -and one on the investor. On the government the obligation is so to arrange maturities of funded debt that it will be in a position to take advantage of cheap time money to save interest to the state. This is accomplished by converting outstanding bonds into 
new bonds bearing a lower rate of interest. If the maturities are not so arranged, then the bonds should be made callable at prices not higher than par.
The obligation of the investor on the other hand is to recognize the right of the state to make such conversions and be prepared to accept the time loan rate on new bonds that the government might issue in exchange for the securities he holds.
The income tax for the year ended March 31, 1931, was $71,048,022.45. There is a good deal of confusion in the public mind in regard to this tax. Many persons, knowing that the income tax runs in the neighbourhood of 70 million dollars, have come to the conclusion that this figure represents the personal income tax, and they are astonished when they find that a much larger part of it is not the personal tax, but the corporation tax. The corporation tax was $44,423,840.93 on last year's assessment, and the personal income tax, $26,624,181.12.
The income tax in Canada is paid by two classes: (1) Those whose incomes are easily ascertainaide. And (2) those who put in a complete return taxable income to the government.
In the income tax there are several outstanding new features. Family companies become extinct; exemptions are increased; and the progressive rate is limited to 25 per cent.
The exemption increase affects a large body of income taxpayers, or former taxpayers. The figures are rather startling. They show first that the total number of taxpayers last 3'ear was 142,154. Thus it is seen that about 1-42 per cent of the population pay the total income tax. A more remarkable thing is that
6,000	persons carry 76i per cent of the whole Canadian income tax burden.
, Mr. EULER:	How much would they be
reduced?


Robert Charles Matthews: I will give the figures
in a moment.

Royal Assent
But if the 142,154 income taxpayers were individually to have the same income as last year, no less than 100,696 would find that their income taxes were reduced. And these
are all small income taxpayers. Does that sound like a rich man's budget? Let me give the figures:
Taxable income
Under $2,000	
$2,000 to $3.000	
$3,000 to $4,000	
$4,000 to $5,000	
Number of taxpayers 38,709 20,090 24.429 17,408
100,696
Decrease per taxpayer $11.50
11.00
8.00
3.00
Decrease

The total number of taxpayers who have been relieved by the revision of the income tax is 100,696, and the total amount of relief is S913,979.50. All of these reductions are in the lower brackets, and the decreases affect the lowest incomes. Therefore I question the fairness of the charge that the government is increasing income taxation on the smaller income taxpayers. The progressive rates which have been inaugurated become effective in increasing taxes, in the $9,000 class. That is to say the taxpayer with an income of $9,000 is the first to have his taxes increased, and the amount of increase on the $9,000 income is only $4. The new progressive rate continues to yield more tax until the sum of $130,000 has been	passed.	On	the $140,000 incomethe tax is	$163 less	than	it was	under the old
rate. According to the 1930 returns there were in Canada in 1929 individuals to the number of 69 whose incomes were $140,000 or more.
Let me at this time demonstrate the result of the graduated scale in incomes. The taxpayer with an income of $10,000 none of which is from dividends pays a tax of $245. A taxpayer with an income of $100,000, or ten times	as much,	will	pay a	tax of $21,125or over	86 times	as	much.	I hope, Mr. Speaker, that hon. members will not confuse the progressive rate with the Progressive party. The progressive rate advances much faster, but is not quite as vocal.


Mr. SPEAKMAN:: And we have not got
the income.


Robert Charles Matthews: Before I leave this
point I desire to quote the following lines from a report of the Treasury department of the United States:
We depend to-day largely on two sources of revenue; first, internal revenue taxes, including individual and corporation income taxes and such other taxes as those on tobacco and estate taxes; and, second, customs _ duties. Customs duties are fairly stable and, in spite of all we hear to the contrary, may be relied on to produce an even flow of revenue except
in the most abnormal years. Taxes on tobacco are also a very dependable and important source of government revenue. The individual income tax, however, has become so restricted in its application that it has become a class rather than a general tax, with its incidence limited to a comparatively small number of taxpayers. Out of a total population of 120,000,000 some 380,000 individuals pay about 97 per cent of the total amount received from individual income taxes.
I think that in this country 6,000 people pay 76i per cent of the. total personal income tax.


Mr. EULER:: May I ask my hon. friend a question? He made a very illuminating analysis of the increases in taxation on moderate incomes up to the point where advances cdmmence. Would he care to continue that progression and ^how how in the higher bracket taxes have been reduced and to what extent? The information would be interesting.


Robert Charles Matthews: I shall be delighted to furnish that information. I do not think I can do it better than by indicating to the house where the decreases occur and what they are.


THE ROYAL ASSENT
[Stage Direction]
A message was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the deputy of His Excellency the Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, the house went up to the Senate,
And having returned,
Mr. SPEAKER informed the house that the deputy of His Excellency the Governor General had been pleased to give in His Majesty's name the royal assent to the following bills:
An Act to ratify and confirm certain agreements respecting the joint use by Canadian
2532
The Budget-Mr. Matthews
[Stage Direction]
National Railways of certain tracks and premises of Canadian Pacific Railway Company at Regina.
An Act to amend the Canadian National Railways Act.
An Act to amend the Canada Evidence Act.
An Act to amend the Ticket of Leave Act.
An Act respecting Northern Alberta Railways Company.
An Act to amend the Salaries Act.
An Act to amend the Royal Canadian Mounted Police Act.
An Act to amend the Government Employees Compensation Act.
An Act respecting The Essex Terminal Railway Company.
An Act respecting The Burrard Inlet Tunnel and Bridge Company.
An Act respecting the construction and maintenance of a bridge over the river St. Lawrence at Caughnawaga.
An Act respecting The Restigouche Log Driving and Boom Company.
An Act respecting a certain patent of A. R. Wilfley & Sons. Inc.
An Act for the relief of Agnes Sarah Evelyn Ballard McNaught.
An	Act	for	the	relief	of	Dorothy Helen
Marie Debnam Almon.
An Act for the relief of Rosa Maud Thomson Checketts.
An Act for the relief of Mary Ellen Margaret Montague Burrows.
An	Act	for	the	relief	of	Olive Hamley
Fraser Mann.
An	Act	for	the	relief	of	Eleanor Fritz
Lawson.
An Act for the relief of Ellen Jane Easton Graham.	,
An Act for the relief of Joseph Norman Berger.
An Act for the relief of Joan Marguerite Loggie.
An Act for the relief of Alice Boyne Ostiguy.
An Act for the relief of Eileen Sybil Wolfe.
An Act for the relief of Helen Borland Beattie MacNicol.
An Act respecting The Algoma Central and Hudson Bay Railway Company.
An Act to amend the Armistice Day Act.
An Act respecting Grain Insurance and Guarantee Company.
An Act respecting The Subsidiary High Court of the Ancient Order of Foresters in the Dominion of Canada.
An Act to incorporate Acme Assurance Company.
An Act to amend the Copyright Act.


[Stage Direction]
The house resumed consideration of the motion of the Right Hon. R. B. Bennett (Minister of Finance) 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. Ralston.
Robert Charles Matthews: Mr. Speaker, I was requested by hon. 
members opposite to give certain figures which I have in my possession. I will be delighted to do so if I may be permitted to place them on Hansard, because I have not time in the few minutes at my disposal to read them. They have regard to the increases and decreases in income tax from all taxable income in tens of thousands up to $1,000,000.


Pierre Édouard Blondin: I am afraid they can be only placed on Hansard if read during the course of the remarks of the hon. member.


Some hon. MEMBERS:: By consent.


Mr. MATTHEWTS:: The decreases begin
on incomes of $140,000, and at that figure the decrease is $163-


William Daum Euler: Do I understand my hon. friend to say increase or decrease?


Robert Charles Matthews: The decrease amounts to $163. I would also say that I have a statement of the number of individuals in Canada who paid income tax on incomes of $100,000 or over, covering the last ten years. I will read the figures:
Fluctuations Of Large Incomes Individual incomes of $100,000 and over fiscal year ended March 31st-
Individuals
1920
1922
1924
1926
1928
1930
60
107
40
49 37
50 75
129
1931-Number of incomes over $140,000-69.
I have obtained the figure for 1031, which shows a decline in the number of incomes over $140,000, the number being 69.
Now, my time has about expired, or I would argue the question of the advisability of increasing the progressive rate over 25 per cent. I hope that those gentlemen who have these large incomes will continue to be domiciled in Canada, but the high rates have done something to create domiciles elsewhere.


Sir EUGENE FISET:: I wonder if the hon. gentleman would be kind enough to complete his very interesting statement by telling us whether the 20 per cent deduction approved last year still applies to the new schedule.


Robert Charles Matthews: I think not.

The Budget-Mr. Spencer
Sir EUGENE F1SET: It was not mentioned by the Prime Minister when he introduced his budget.


Robert Charles Matthews: I do not think so.
Now, Mr. Speaker, I would say that in my recollection of budgets, I have never known one concerning which there has been less dissatisfaction on the part of the public. Additional taxation is never very welcome, but the Canadian people had made up their minds that more revenues were necessary, and were prepared for such proposals as the government has made. Now that they have been made, there is evident satisfaction throughout the country, as voiced by the public and by the press. They believe that the taxation proposals are as fair as they could possibly be in the circumstances surrounding Canadian conditions, and whatever criticism there may be in the House of Commons, the public have accepted the new taxation with good grace. I therefore find myself in the happy position of being able to congratulate the Prime Minister and the government on the feeling of goodwill and confidence that the public are showing.


Mr. H. E. SPENCER (Battle River):: this very much, although I think the government will find they are in rather a difficult position if they apply this only to wheat for export. The 5 cents should apply to all wheat; otherwise it is going to be very hard on British Columbia, as pointed out by the hon. member for Comox-Alberni (Mr. Neill). The 5 cents a bushel on wheat is going to be offset, however, largely if not entirely by the extra taxation which the farmer will be called upon to pay. To-day the farmer is in the position of operating what is probably the least-paying business of any in, this country. As a general rule the farmer has to pay all the freight both ways. He pays most of the taxes because he is the one man who cannot pass on taxes either in the price of his products or his services. He has to sell in a wholesale market, largely under world competition, and he has to buy in a retail market and that a protected one. With these drawbacks the farmer finds himself to-day in a position where although he is receiving the advantage of the five cents per bushel on his wheat, on the one hand, he finds himself having to pay a share of the 300 .per cent increase in the sales tax, a share of the tea tax, the stamp tax, the postage tax, the excise and the tariff tax, and when he has finished paying his share of those taxes he will find himsedf in no better position than he was heretofore. The prices' of agricultural products to-day are at a very low level; it is not necessary for me to mention this fact in this house because it has been brought up many times during this session. The price of meat products, such as hogs, sheep and cattle, is very low. The price of wheat is the lowest in 133 years, the price of butter on the prairies ranges from 12 to 15 cents per pound, while eggs are down to five cents per dozen. I have in my hand a voucher which shows figures even worse than that. This is a statement sent to a man in the Peace River district. He had forwarded thirty dozen eggs to the Pat Burns company, the gross return for which was $1.44. The express amounted to $1.05, which netted the fanner for thirty dozen eggs the handsome sum of thirty-nine cents. If any hon. member desires to see this voucher I shall be very glad to let him have it. It is a good thing the stamp tax had not come into effect, otherwise this farmer would have received only thirty-seven cents. The man who wrote out the cheque must have had a sense of humour because he filled it in with the words "thirty-nine cents only."


Mr.   GOOTE@: The farmer would need to have a sense of humour when he opened the envelope.
(Mr. Spencer.l
Mr. SPENCER; I regret to find that eighty per cent of these new taxes are being imposed upon the consumer. The figures given in the budget show that during the last five years the amount received by means of the income tax has increased from forty-seven to seventy-one millions of dollars, showing a gradual and steady increase. As only three per cent of the people in this country are in a position to pay income tax, it shows that wealth is going more and more into the hands of the few, the rich are becoming richer while the average "man on the street" is having difficulty in making both ends meet. The hon. member for Toronto East Centre (Mr. Matthews), who has just preceded me, gave some figures with regard to the income tax. A reduction in the income tax has been made on incomes UP to $9,000, from then on there is an increase until we reach $130,000, and from then on there is a decrease. A man receiving $130,000 per year must pay $513 more in taxes this year, but the man who receives $140,000 or $10,000 more, is better off to the extent of $163. A man receiving $300,000 benefits to the amount of $15,923, and the one receiving $500,000 has a reduction of $41,827 in his tax. The hon. member for Toronto East Centre gave the number of people receiving these large incomes, I think it was around one hundred, but even if there were ten only receiving these large incomes it would show the injustice being done to the small salaried men in allowing these men a further reduction in their tax.
Another item in the budget which attracted my attention was the statement that Roumania and Greece owe this country an amount of $30,609,720, upon which loan they are paying interest rates of four per cent and five per cent respectively. To those of us who attempt to speak for the basic industry of Canada, that is agriculture, it seems strange that with the present need of some sort of credit for the farmer at a reasonable rate of interest, to find that the most the federal government has done-I do not blame this government any more than any other -for agriculture is to advance $5,500,000 to tile farm loan board, while they are able to advance $30,609,720 to Roumania and Greece at a rate of interest from four to five per cent. Surely a similar amount of credit could be granted to our own people at a similar rate of interest.
The Minister of Finance mentioned that he expected that $52,500,000 would be raised by means of the sales tax, and $9,500,000 by means of the income tax. I do not think that is the way it should be; it ought to be

The Budget-Mr. Spencer
reversed. I would like to quote a statement entitled "Impressions of U.S.A. Conditions'' by Mr. Stephen Graham, which appeared in the Manchester Guardian, and which should apply to Canada because our conditions are somewhat similar. It reads as follows:
In America, as a result of the great Wall street bubble, the rich have become much richer and the poor have become poorer, while the purchasing power of the middle class has been ruined. The abyss between the rich and the rest of the community is rapidly widening. In truth, this process was already noticeable before the slump. It is fraught with great social danger and must result in revolutionary ferment. I am not a socialist, far less a Marxian; but it is difficult to deny that capitalism as evidenced by the present _ system in America bears in itself the seeds of its own destruction.
We were informed by the Minister of Trade and Commerce (Mr. Stevens) that some eighty-seven new factories have been established in Canada because of the policies adopted by the present government. I think it would be far better for this country if the people had a purchasing power which would enable them to buy the goods already manufactured, rather than to attempt to bring in more factories simply to create a glut of goods. As has been pointed out already, only two of these eighty-seven factories are outside the provinces of Ontario and Quebec. The Minister of Trade and Commerce commented upon the wheat which had been exported by this country since this government came into power; he seemed pleased, and rather boasted of the fact that a much larger quantity had been exported this year as compared with the one previous. Does anyone in this house realize that on the exports of wheat from this country our farmers lost about 40 cents on every bushel? When that is known, I do not think it is anything to be proud of, and certainly the farmers are not shouting about it.
He made a further statement with reference to the decision of the federal government to keep used automobiles out of Canada, and mentioned that they were so numerous in the United States that they were actually being taken out in large quantities and dumped into the ocean. Now if it is the proper thing to take automobiles out and dump them into the sea, the same thing might be done with regard to manufactured goods, or food or anything else. Personally I am absolutely against such a procedure. I think that as long as there is anything that we have which the people need, whether it is food, manufactured articles or anything else, there should be some means of getting
them to the people. To-day we have poverty in the midst of plenty and such new factories as are brought into this country will only intensify the situation. I am quite sure in my own mind that the system of protection which is the policy of the government, sincere as they are, no doubt, will never be a solution for unemployment. At the same time I am frank to say that I do not think free trade is a solution, but I do think that the greater the freedom of trade that we can have, either between province and province, or internationally, the better for all concerned. Today we are in the position of having the country flooded with goods. The trouble is that we need buyers. To-day we find ourselves in the position of having, on the one hand, large quantities of goods, and, on the other hand, a lack of purchasing power, or a shortage of the medium through which to transfer one to the other. Those in control of finance appear to have no system by which sufficient money is created at any given time, to take care of the goods produced.
There are two things it seems to me to which we should devote a great deal more attention. One is the financial question, and the other the land question. I am not going to say much about the latter except that I think we shall have to take more and more of the unearned increment of land and give it to the community to whom it belongs, rather than allow it to go as at present to the speculator.
To-day we find that those who control finance are so powerful that they regulate goods to money. Rather, to my mind, the amount of goods and services in a country, that are needed by its people, should regulate the supply of the medium of exchange. Our aim should be to make it possible for the people to purchase the needed goods which can easily be produced.
Although the budget on the whole is complete in its way, more so than previous budgets, at the same time it is not as full as we should have it. For instance, I think the finance minister when he brings down his budget should give to the house a complete statement of the total annual production and the total annual consumption of goods in Canada.
Again the finance minister in his budget speech did not say anything this year about providing a solution for unemployment. Perhaps he thinks that that is not necessary, because the tariff will do it. Unfortunately as a solution I think that it will be a failure. Nor did the Minister of Finance say anything with regard to giving the people greater purchasing power, which I think is the solution
The Budget-Mr. Spencer

to a great extent. He said nothing with regard to changing the financial system, and until we do change it I do not think we have much hope of going through this crisis. He said nothing with regard to what brought on the world crisis. Although Canada is not wholly responsible for that, she has to carry her share of responsibility for any world crisis.
To-day we have what we might term an elastic yardstick with regard to money. Under the control of the present financiers there seems to be very little effort to coordinate their work, to put out sufficient of the medium of exchange at any given time.
I should like to quote two short statements in this connection, one from Lord Milner, in his book "Problems of the Hour," in which he gives one probable reason for the deflation. He says:
Just as the productive industry welcomes rising prices, the moneyed interests must always be in favour of falling prices, because they render its own wares-money-more valuable.
That is possibly one reason why we have a deflation at the present time. Again, I quote from the Right Hon. Reginald McKenna:
How car. the supply of money be increased? The amount of money in existence varies only with the action of the banks in increasing or diminishing deposits. We know how this is effected. Every bank loan creates a deposit, and every repayment of a bank loan destroys one.
Those two short statements confirm what I said, that the financiers to-day-although I think the government should have this function-largely govern the amount of money or purchasing power in. the hands of the people at any given time.
I want to compliment the hon. member for Maeleod (Mr. Coote) on the very able speech he made to this house a week ago. It contained one of the most constructive proposals we have listened to this session, and with his statements outlining it I entirely agree. I shovdd also like to bring to our support a statement by Sir Basil Blackett, a director of the Bank of England, who speaking in Ottawa some months ago and referring to the gold basis, said that there was not the slightest need for a country to hold any gold behind its currency that was used within the country, that the matter of currency and credit used by a country' as a medium of exchange should be regulated only by legislation, and that in regulating it there should be sufficient of the medium of exchange, it does not matter whether it is bank credit drawable by cheque or by currency, to enable 
the people to transfer all the goods and services needed by that nation. He said that there is a value for gold, however, in settling international balances, but even then it is looked upon as a commodity and not as coin. The Prime Minister in presenting his budget and in referring, I believe, to statements made earlier in the session by the hon. member for Maeleod, stated that we have more gold behind our currency to-day than we had a year ago, and, intimated that on that account we were so much safer. In reply to that I want to put on Hansard a brief statement from the Saturday Night of Los Angeles headed "When Gold is Unwelcome." The article is as follows:
It is estimated that the amount of gold stored in the United States is close to $4,700,000,000 and a little less than half that sum is held in France. Combined, the huge pile represents more than half the coined gold in the world. We have so much gold on hand in this country that new shipments are unwelcome, witness the arrival last week of $16,000,000 from France, much of which was derived from London and the Transvaal.
Looking to the United States we do not find conditions of enormous prosperity, in spite of their huge quantities of gold. On the other hand there is much poverty and unemployment.
Every hon. member knows that the great difficulty to-day lies in the mechanization of industry. Certainly mechanization of industry is something to be wished for; it represents a definite advance. At the same time however this same mechanization is rapidly transferring the load from the shoulders of men to machinery. The payroll of the people represents largely their purchasing power. If their work is done by machinery they are deprived of that purchasing power to buy the increased amount of goods made by machinery, and the result is an army of unemployed such as we see to-day. Unemployment coupled with money is called leisure. Unemployment without money, however, is enforced idleness and want, and there is a distinct difference. So that at each end of the scale we have unemployment. I think I am safe in saying that under our economic system all the moneys paid out to-day in the cost of production cannot possibly buy back the goods produced because, first there is inequality of income; secondly, a large amount of money is continually being put into capital investments; and thirdly, money is being reinvested in interest bearing securities. In other words our purchasing stream is being continually short circuited and the result is that there is not sufficient money to buy the goods

The Budget-Mr. Spencer
on the market. If we require money to-day we have to go to the financial houses and obtain further credits, in other words go further into debt, because when credits are advanced an equal amount of debt is created. In that connection there is one interesting point which I do not think has been sufficiently brought to the attention of the public, namely that all debts carry interest, and that interest is not payable in goods. When there is interest to pay on money, and only one place from which money can be secured when the loan or debt is to be paid, another debt has to be incurred to take care of the interest on the loan first made. So long as this situation exists we are simply multiplying debt individually, municipally, provincially and federally. A debt on a 5 per cent gilt edged security will double itself in twenty years. With reference to the position in which the farmers find themselves owing to the large interest they pay, a debt may easily double itself in fifteen years, and that is one of the reasons for the present difficulties in regard to agriculture.
Under our present system, a glut of goods is always accompanied by unemployment. As soon as a glut occurs factories shut down, and when factories are closed men are thrown out of employment. Such unemployment means lack of purchasing power, and the people who are employed have to stand the cost of those who are not employed. Purchasing power drops, prices go down and the farmer who is the least organized of all has to bear the brunt of conditions because his prices have dropped the lowest of all. Owing to the fact that my time has nearly elapsed I shall have to bring my address to a close.
I have in my hand a statement from a paper printed in England which bears the title of "Age of Plenty." This article expresses in a * few words my sentiments in regard to the financial side of the subject I have endeavoured to present to the house. I read as follows:
The amount of money in circulation to-day is not sufficient to purchase one-fifth of the goods we are able as a nation to manufacture. The present money system places industry and the people in a straitjacket, leaving no room for natural expansion. This is a condition of not being able to buy what is and could be produced in all modern countries. Hence, the struggle for foreign markets:	hence, trade
warfare, which engenders military warfare; and wars will continue as long as the present false money and economic system lasts.
Our country tries to get rid of surplus goods by methods of export. However, our country is not only a home market to ourselves but at the same time a foreign market to others.
because every country is trying to do the same thing. If, however, we have not sufficient money in the aggregate to buy the total goods made at a given time, how are we going to have money to buy imports sent to us?
Feeling as I do on this subject, Mr. Speaker, and following up the outline I have given to the house, I beg to move, seconded by Miss Macphail:
That all the words after "whereas" in the amendment be stricken out and the following substituted therefore:
This house recognizes that while certain commendable features are contained within the present budget, it is to be regretted that no provision has been made for unemployment relief, and this house further regrets the proposed decrease in the income tax as applied to the larger incomes as a retrograde step and wholly unwarranted in the present state of the national exchequer, and especially in view of the heavy additional taxation imposed upon the consumers of the country.
And whereas the general economic situation in the dominion as reflected in the financial statement contained in the present budget is extremely serious and indicates shrinking revenues consequent on business stagnation, and a tremendous decrease in commodity values accompanied by a corresponding decline in general purchasing power;
And whereas a further result of this condition is to greatly increase the burden of public and private indebtedness to a point where repayment would appear to be almost hopeless;
This house is of the opinion that the present economic conditions demand intelligent and intensive study and definite planning upon a national scale, with the view of substituting well defined cooperative principles in respect of production and distribution, together with the mobilization of our natural resources, technical equipment and financial machinery, in place of the highly competitive system under which wc are suffering at the present time.
As it is apparent that these fundamental changes cannot be put into effect in the immediate future, and that the present situation requires some prompt action.
And as the present financial situation is in many respects similar to but more serious than that which prevailed in 1914, at which time extraordinary measures were taken by the government, including the suspension of the redemption of dominion notes in gold:
This house is of the opinion that it is expedient to again suspend redemption of dominion notes in gold in order thatfa)	Commodity price levels may be raised, thus increasing the purchasing power of those engaged in agriculture, mining, forestry, fishing and other primary industries, and in this way promoting a corresponding increase in the volume of employment;
fb)	That the burden of both public and private debts and the interest thereon may be lightened:
(c)	That the amount of currency and credit available for the purposes of trade and commerce within the country, may be increased;
(d)	That through the increased volume of trade thus secured there might result larger revenues without any increase in the rate of taxation.
The Budget-Mr. Marcil


Hon. CHARLES MARCIL (Bonaventure):: now being adopted by the administration is bound to be disastrous. What Canada needs is a moderate policy and a moderate tariff in order to bring about an exchange of goods with other nations. We must strive to bring about trade within the empire, of course, but also we must deal fairly with other countries, as we expect them to deal with us. How can we expect other countries to trade with us if we put a high tariff on all the goods they produce? That policy is bound to bring disaster.
I do not want to refer to the promises made during the last campaign; everyone is familiar with them. I do not want to refer to the promises made in my own constituency, which were perhaps even more numerous. I regret to say, however, that many of those promises have not been fulfilled. My people are still without employment; agriculture in the eastern part of Quebec has received no benefit from the budget, and there is nothing which will help our lumber industry. Last winter, in the counties of Bonaventure and Gaspe, in what we call the Gaspe peninsula, there were thousands of men out of work; the shanties were all closed down, and this year all but one or two of the sawmills are closed. There is no market for the potatoes grown in the lower part of Quebec, and conditions are worse than they ever have been. I am sorry the Postmaster General (Mr. Sauve) and the Minister of Marine (Mr. Duranleau) are not here. The only activity in my county since the last election has been the employment of commissioners for the purpose of firing every Liberal in the county. "To the victors belong the spoils" is an old maxim; the present government have their friends, for whom they are trying to find positions, and I do not blame them. That practice has been followed by all parties. I have seen this game played from all angles; I have seen men take one stand when sitting to your right, Mr. Speaker, and take a diametrically opposite stand when sitting to your left. Times change. I remember when the right hon. Prime Minister came to this house and made his debut as a promising member from western Canada, but my experience and my memory go far beyond that. I have seen a dozen governments change, and as I said before I have taken an active part in every contest since 1878. The policy has always been the same-to hold out prospects that will gather the most votes, and once you are in office try to get along as best you can.
Promises have been made which so far have not been fulfilled. There are, for example, such promises with regard to the 
railway situation. I feel it necessary to say a word in this regard because it is one of the outstanding questions at the present time. Our railways in Canada are our barometers. We have had many policies with respect to them. The government first entered upon public ownership by the construction of the Intercolonial railway. That venture was the result of confederation, and we all know how it succeeded. There was a deficit year after year and the railway had to be kept going. Then Sir John Macdonald, in his day, decided to try private ownership. He brought about the creation of the Canadian Pacific Railway, which to-day is the greatest railway company in the world. It is a world business and is an honour to Canada and to the man who brought it about. I remember, away back in 1882, listening to a speech delivered by Sir Charles Tupper in the old Queens hall in Montreal, when he came to explain the Canadian Pacific Railway contract. He could make his explanation only with the greatest difficulty, because the people were convinced, seeing that this came so soon after the Canadian Pacific scandal, that the government had sold to the Canadian Pacific Railway. In 1885 I described, for the Montreal Gazette, the first train that left Viger square station in Montreal on its way to Vancouver. Many things have happened since then. When Sir Wilfrid Laurier came into power he had a request from western Canada to open up that country, and he was faced with a difficult railway situation. There was one line of railway and people wanted a second line. He could have done what Sir John Macdonald did: he could have incorporated a private company. But he thought he would try both private ownership and government ownership with company operation. We have not been very successful so far, but I hope that better days are coming and that many of us will remain in the land of the living to see Canada still more prosperous, because she is bound to be prosperous with all that Providence has bestowed upon her.
I uphold government ownership for the reason that there are many districts that could not be served by private railway companies. Private railways are always willing to operate in districts from which revenues are certain; they are always prepared to build railways there. But there are other districts in this country which would never pay from a railway point of view but which must have railway communication inasmuch as they contribute to the revenues of Canada. They must be served by railways. After all, the government is not a money-making concern.

The Budget-Mr. Marcil
We maintain many services that are absolutely indispensable. For example, we must keep up the postal service, we must maintain lighting services all along our coasts, we must provide life saving apparatus, and so forth. Those people who live in the remote parts of the dominion, those who are far away from the glare of the cities and who do not enjoy the luxuries which are available to the people of central Canada, must have means of communication with the rest of the country. Take for example, Mr. Speaker, the people who live in the far west in the constituency you represent, or those who live in the constituency which I have the honour to represent in this house. These people must be given their fair share of the good things that are available, and to this end railway communication is necessary in parts of Canada that would not be served by private enterprise. The Gaspe peninsula, for example, is the oldest part of Canada. There in 1534, four hundred years ago, Jacques Cartier, the discoverer of this country, planted the Cross of Christ in the old town of Gaspe and opened up this land of Canada which has since become one of the greatest countries in the world. Without government ownership of railways such parts of the country would never be served.
Now that we are having a hard time with our railways there is a question of merging the two. I should be opposed to that from early morning until late at night. Monopolies are to be feared in this country; they are to be feared in railways as in trade. Imagine a government in office with a single railway system dominating the whole country: what a monopoly, wffiat a merger that would be. We would not stand for it; the country would not stand for it.
There was some question, when the Liberal party came into office in 1901, as to the stand it would take with respect to government ownership. The Canadian National Railways, as we know the system, is the creation of the Conservative party, and I must give credit to the Right Hon. Arthur Meighen for the splendid work he did in that connection. He certainly rendered valuable services to the country, because on the downfall of the Mackenzie-Mann regime, we found ourselves in a difficult position. On coming into office in 1921 we found a deficit of $60,000,000 a year, and it certainly needed some courage to bring about public ownership. However, that gentleman did the best he could, and government ownership is still on trial. Government ownership will be successful when things improve. When the country is prosperous the Canadian National Railways will feel the effects just as will the Canadian Pacific. If the shareholders of the Canadian Pacific Railway can afford to lose a portion of their dividends in the hard times through which we are now passing, the Canadian people, as shareholders in the national system, can at least face the situation in the same spirit.
There are other things I should like to have touched upon but time will not permit. I am sorry the government has taken the retrograde step it has in regard to the penny postage. Penny postage was the work of Sir William Mulock, now the leading citizen of Ontario, in the highest court of which province he has the honour of presiding. He was immensely proud, and he had reason to be, of the fact that he was the father of penny postage, which advertised Canada throughout the world. We sent letters throughout the empire and the system which he established has been of very considerable advantage to the country at large. WThen he took over the department with three cent postage there was a huge deficit, and in the course of a few years there was a large surplus. He extended the postal service, opening thousands of offices. When I was first elected there were post offices in Canada, the postmasters being paid $10 a year. This was increased to S25, then $35, and later on to ?60; and finally, under the late administration, the rate was increased to $100.
Now, Mr. Speaker, the facilities afforded by the postal service for communication with the outside world are the only means which very many people have of getting in touch with what is going on in other parts of the country. There are people who live far from railways and they' must therefore depend upon correspondence. And the low rate of postage encourages correspondence. One cent additional on a letter does not seem much, but for poor people who have many letters to write it is a considerable item; they will think twice before writing. I regret this retrograde step on the part of the government; penny postage should have been allowed to stand. Canada has set an example to the rest of the world in many things, and this is one institution to which we should have adhered.
Shall I mention old age pensions and unemployment? The house is familiar with these topics; I will not take up time discussing them. Nor will I discuss butter. Why are there so many members opposite representing the province of Quebec to-day? Quebec is a dairy province and in my own constituency there is a butter factory in every
The Budget-Mr. Marcil

parish. In the last election the promise was made openly-not by the leader of the Conservative party, because he would not make such a promise, but by members of the party -that if hon. gentlemen opposite were returned to power butter would sell at 40 and 50 cents per pound as soon as the New Zealand treaty was done away with. Well, in Bonaventure to-day the farmers are receiving 15 cents per pound while eggs are being sold at 10 cents a dozen. Pulpwood is not selling at all. And as regards fish, the people are drying their fish or salting it, waiting for better prices later on.
Another promise made was in connection with the old age pensions. This promise was broadcast in the province of Quebec, and in my own constituency canvassers went from house to house making the formal promise on behalf of the incoming administration that there would be an old age pension paid of which the federal government would pay one hundred per cent. The province of Quebec is one of the oldest provinces in the dominion. The position there is somewhat different from that pertaining in the other provinces. We have many religious institutions for the purpose of looking after the lame, the infirm, the blind, the orphan and the old man and woman; we are equipped already with institutions to look after all classes of unfortunates, and to knock down and destroy this system overnight is an act which should receive serious consideration. The provincial government has appointed a royal commission to make a report on these institutions, but in the meantime Quebec will have to pay 75 per cent of the cost of these pensions, whereas the other provinces have to pay only 50 per cent.
I thank the house for the patient attention it has given to my remarks. The right hon. the Prime Minister (Mr. Bennett) has been working night and day, and in my opinion there has never been a public man who has applied himself so devotedly to the public interest as has the right hon. gentleman. I hope he is equal to the task, and I trust he will live long enough to admit the great mistake which he has made. I hope that many of these resolutions which bear so heavily upon the poorer classes will be modified before they are presented to the house.
At six o'clock the house took recess.

After Recess
The house resumed at eight o'clock.


Mr. J. L. BOWMAN (Dauphin):: May I be permitted, Mr. Speaker, to extend to the hon member for Bona venture (Mr. Marcil), who has just taken his seat, a very sincere tribute to one who by the fairness and courtesy with which he always addresses the house sets an example which we young and newer members might well follow. The hon. member is, I believe, with the present Minister of Justice (Mr. Guthrie), one of the oldest members of this house, and one can see from the very able manner with which at this time, after thirty years of public life, he has addressed the house, why he has continued to represent the one constituency continuously for thirty years. I trust that he may continue for the rest of his life, if he so desires, to represent that constitnency, even though it be on the opposite side of the house. Perhaps, Mr. Speaker, I might also be allowed to pay a tribute to the Minister of Justice, who has sat in this house for thirty years and has devoted the best years of his life to the public service of this country.
It is with considerable diffidence that as a new member I rise to speak in a budget debate. First let me join with the other members of the house in extending to the Prime Minister (Mr. Bennett) my most sincere congratulations upon the very comprehensive financial statement which accompanied his address. It is something which the new members of the house appreciate very much as it affords a basis upon which calculations may be made when future budgets are brought down. The Prime Minister's budget speech sets forth in one concentrated statement a true picture of the financial position of the country.
The first thing which strikes one with respect to a budget is whether there is a deficit or a surplus. This budget shows a deficit of some 884,000,000. It is rather interesting to note that when the previous administration came into power in 1921 they were faced with almost the same deficit, amounting as it did to some $S1,000,000. It does seem to me, and I think I am fair in saying this, that the deficit with which the present administration is faced is not attributable to the government now in power. I think that is clear. The hon. member for Comox-Alberni (Mr. Neill) and the hon. member for Battle River (Mr. Spencer) frankly admitted this afternoon that this government could not be held responsible for that deficit.

The Budget

Mr. Bowman
A glance at an item or two will clearly show how the deficit did arise. First of all there was a reduction in the receipts of customs revenue of $48,000,000, which was evenly distributed over the first six months and the latter months of the year, the details of which are given in the budget speech. There was a drop of $7,000,000 in excise duties on alcoholic beverages. I think perhaps the King administration should be given some credit for that, rather than be charged with a portion of the deficit there. There was some $24,000,000 less in sales tax, and $3,000,000 less in post office revenue. These items total $82,000,000. There was increased expenditure on account of old age pensions amounting to $4,000,000, $5,000,000 for subsidies to Manitoba, $7,000,000 for war pensions and after care, and $4,000,000 for unemployed relief. These reductions in receipts and increases in expenditure total $102,000,000. I am not attempting to show the exact debits and credits. I am showing in a very simple manner the financial situation with which this government has been faced.
The hon. member for Shelburne-Yarmouth (Mr. Ralston) stated that there was something which this budget did not contain, namely, a surplus. Quite true, but there were budgets of the former administration which did not contain a surplus, If we go back to the year 1922, we find the following-I quote from the public accounts of last year:
Fiscal	Increase	Decreaseyear	of debt	of debt1922.	. . .$ 81,256,818.04	1923.	. . . 31,641,067.01	1924.	$ 35,993,593.861925.	345.589.291926.	27,706,586.171927.	41,896,729.331928.	50,984,137.171929.	71.345,527.821930.	47,740,746.39$112,897,885.05	$276,012,910.03
That table shows a total increase of debt during those years of $112,897,885.05 and a total decrease of debt of $276,012,910.03 making a total net decrease of debt during that period of nine years of $163,115,024.98. It might be noted that the increase of debt for 1931, without taking into consideration the write-off which was allowed for in the matter of soldiers' loans and so forth, was $83,844,358.
So this government to-day stands very much iD the same position in which the former administration stood when it came into office. There had been a period of deflation following the war, and our citizens from one end of the country to the other were facing hardships. Times were difficult. In the west the farmers were burdened with debt, having purchased land at high prices. Conditions were almost the same as those with which the country is faced to-day, and it is rather a remarkable coincidence that when the King administration took office in 1921 they were faced with a deficit which was almost the same as that with which this government is faced.
Being faced with this deficit, the government of the day had to do one of two things. The deficit was there, and the government either had to capitalize that indebtedness and go on collecting the same taxes they had in the past, or levy increased taxation if they were to make the budget balance. There is a very notable silence on the other side of the house in that regard. Nobody on the other side has suggested that that deficit be capitalized; not at all. That was done in the United States, but we in Canada have apparently made up our minds that we are going to pay our way as long as we can, and in arriving at that decision I think the government adopted the proper course.
There is another similarity between what happened when the King administration came into power and the conditions prevailing when the present government took office. I refer to the manner in which a deficit was guarded against in the following year. We find that the King administration levied very much the same additional taxes that this government is levying to-day, yet we hear objections from hon. members on the other side of the house. Mind you, we hear objections, but not one constructive suggestion of any kind looking to the substitution of fairer or more equitable taxes.
As might have been expected, this of course was termed the rich man's budget. No hon. member on this side of the house expected to hear anything else. That has been the cry from time immemorial. In 1925 the cry was, "If you put the Conservative party in power you are placing St. James street in power." To-day we are faced with the criticism that the budget now under consideration is a rich man's budget. I say no government in Canada to-day would dare to bring in a budget favouring the rich man, and I say further that this government has not done so. During the short session last fall the right hon. leader of the opposition (Mr. Mackenzie King) said that the legislation then enacted favoured special interests and capitalists. Turning to page 419 of Hansard of the special session I find Mr. King stated that the tariff legislation favoured special interests. He said, "It
The Budget-Mr. Bowman

is apparent that the capitalist, the man who had his capital invested, has benefited." Unfortunately. however, the right hon. leader of the opposition went too far and in an attempt to prove his argument, placed figures on Hansard. He asked hon. members to look at the stock market and to consider Dominion Textile, Coekshutt Plough and Steel of Canada He said that the low figure for the year of the Dominion Textile stock had been $61, that when the Conservative government assumed power it. had gone up to $70, and on September 16, two days before the time the right hon. leader of the opposition spoke, it had gone up to $84.50. He attempted to show how special interests and capitalists had been favoured. May I ask the right hon. leader of the opposition what he says to-day when the stock has gone down to $66.25? He went on to state at that time that the low figure in 1930 for Coekshutt Plough had been 14 J. On July 28, the day of the elections the stock stood at 16L and on the 16th of September when the tariff resolutions were introduced it stood at 20J. I wonder what the right hon. gentleman has to say now that that stock is quoted at only 51? Giving the figures for Steel of Canada he said that the low figure for 1930 had been 39J, that on July 28 last year, it had stood at 45 and on September 16 had risen to 47; to-day this stock is down to 26J. Is that the way the special interests and capitalists have been favoured by this government?


James Dew Chaplin: Probably hon. gentlemen opposite will suggest that those prices were forced down deliberately.
Mr. BO.WMAN: At this point let us consider the taxes the present government proposes to levy in an attempt to balanoe the ibudget for the next fiscal year. Referring to ithe sales tax the hon. member for Shelburne-Yarmouth (Mr. Ralston)-and may I pay a (tribute to the hon. member for his most admirable address-stated at page 2294 of Hansard:
It is the ordinary, everyday consumers, the men and women who are hard put to make ends meet, men who are out of work, who are now called upon to pay the extra amount in connection with the sales tax. One gets a real idea of what the sales tax means wdien one looks at my right hon. friend's list of additional taxes. Out of $78,000,000 in additional taxation the sum of $52,000,000 will be raised by the sales tax alone.
Reading the speech of the hon. member for Shelbume-Yarmouth one would think that he *had never heard of a sales tax in the Dominion of Canada that would realize $72,000,000. (Let us for a moment look at the sales tax

Statistics from the time that tax was first levied. I wish to place on Hansard a table showing the record of this particular form of (taxation:
Years	Amount
1920-21			$ 38,128,063
1921-22			 61,518,751
1922-23			 91,262,254
1923-24			 100.990,076
1924-25			 66.707.369
1925-26			 74.025,093
1926-27			 82,305.670
1927-28			 72.100.244
1928-29			 63.646.671
1929-30			 44,858,701
1930-31			 20,783,944
Or a total amount, since the sales tax has (been levied, of $716,326,840. Taking out the first 'and last year we have a total collected (during the nine years of the King administration of $657,414,832. I wonder how the King administration would have obtained their net surplus of $163,000,000 if they had not levied the sales tax which they are now condemning? If we take the total figure levied for the nine year period just mentioned and divide it by nine, we find that over that period there was an average sales tax collected from the people of Canada of about $73,000,000 per year, or at least a million dollars every year they were, in power more than this government proposes to collect in the coming fiscal year. To divide the total figure by eleven to cover the total number of years I have mentioned, we get the figure of about $65,000,000 which has been collected yearly since the first year the sales tax was imposed. So that after all we are not dealing with a new form of taxation. It is not an unfair tax, if we are to judge fairness by what has taken place under other administrations. At this point it may be noted that in May, 1930, when the late administration was preparing for the election, about $24,000,000 was lopped off this tax. I presume that if the sales tax was fair under the. former administration it is equally fair under the present one.
For a moment let us consider the income tax. Again we are told the budget we are now considering is a rich man's budget because it favours the. very, very rich. I do not 'believe that is a fact and I have made rather a close examination of the provisions contained in the budget. This afternoon a very able address was delivered by the hon. member for Toronto East Centre (Mr. Matthews). I regret I was not in the house during the first part of his speech, and if I duplicate what he has said I hope hon. members will excuse me. In connection with the sales tax we have what appears to be an attempt by hon. members opposite to show that we are dealing with a rich man's budget. I am rather

The Budget-Mr. Bowman
surprised that a man like the hon. member for Shelbume-Yarmouth should have made the following statement, which is contained at page 2302 of Hansard:
The next point is the elimination of the forty-nine per cent maximum. Formerly large incomes were taxed to a maximum of forty-nine per cent.
Note the repetition.
Under the new Income Tax Act, for some reason which has not been explained as yet, the maximum to which an income can be taxed is twenty-five per cent.
The implication clearly being that under the old act there is a tax of approximately fifty per cent, but that under the new act you have a tax of only twenty-five per cent. I do not accuse the hon. member for Shelbume-Yarmouth of deliberately making an incorrect statement, but undoubtedly he has done so. There was the ten per cent reduction in income tax in 1927, and a similar reduction in 1928. So the maximum tax was not forty-nine per cent as stated by the hon. member, but forty per cent.
Personally I have no hesitation in saying that I am against favouring any multi-millionaire. But as I read the numerous changes in the Income Tax Act I fail to see wherein they favour the rich man, and I will explain why. First of all, let me deal briefly with the exemptions on the lower incomes. The exemption in the case of a married man is increased by $500, so that a married man with a family of three children now enjoys an exemption of $5,000-and every married man should have at least three children.


Some hon. MEMBERS:: Hear, hear.


James Langstaff Bowman: The exemption in favour of a single man is increased by $250, giving him a total exemption of $1,750. And there is this significant fact, that by those changes 25,000 out of approximately the 135,000 people estimated to be subject to income tax are now entirely exempt from this tax. Those changes in the Income Tax Act at least do not favour the rich. Another 75,000 with incomes between $5,000 and $10,000 have their income tax reduced. Roughly speaking, the income tax is increased on incomes starting at $10,000 and going up to $130,000. I do not know how it is in other ridings, but in my district a man who has an income of $10,000 is considered to be pretty well off, and when he gets up to $25,000 or $50,000 we look upon him as a wealthy man, but when he enjoys an income of $75,000 to $100,000 we consider him to be a very wealthy man indeed. Well, the income tax on all incomes from $10,000 to $130,000 has 22110-162
been increased, which is as it should be. So there is no favouritism to the rich man there. With respect to incomes over $140,000 there is a decrease-I have not figured out exactly what it amounts to-but there is something which offsets that decrease. Some peculiar statements have been made in this house during the course of this debate regarding income tax. The hon. member for Beauce (Mr. Lacroix) speaking on June 4, is reported at page 2321 of Hansard as saying that:
There is also a group of about twenty-five citizens who are taxed on a revenue of $1,000,000 or more yearly.
May I say to the hon. member that for the last ten years not a single person in Canada has been paying income tax on $1,000,000 yearly-not one; and last year not a single taxpayer paid the tax on an income of over $500,000. I do not think hon. members should make such statements without being mighty sure that they are right. Of course they may be made with the idea of showing that this is in reality a rich man's budget. The hon. member for South Huron (Mr. McMillan) is reported at page 2502 of Hansard in these words:
But what happens to a man with an income of $50,000 per year? Under the old income tax he had to pay $10,530 more.
I do not know where the hon. member got those figures, but as a matter oif fact under the old act that man paid $6,704 while under the new act, instead of a decrease as stated by the hon. gentleman there is an increase of about $1,900, and on that income the correct tax actually is $8,615. But the hon. member goes further and says:
According to the 1929 return there were 523 in this country who were in receipt of an income this large or larger. If these men were taxed as they were taxed previously-
According to his figures.
-it wrould increase the revenue of the public treasury by over $5,500,000.


Mr. HEAPS:: A slight exaggeration.


James Langstaff Bowman: Yes, a slight exaggeration. As a matter of fact under the new act the gain to the country in respect of income tax on incomes of $50,000, of which my hon. friend says there are 523 in Canada, will amount to approximately 523 times $1,900, or about $1,000,000, instead of a loss of S5,500,000 as stated by my hon. friend.
There are other provisions in this budget with respect to income tax. The corporation income tax is increased from 8 to 10 per cent. And may I ask hon. members where the rich man puts his money? Does he not put it into corporations?

The Budget-Mr. Bowman


Miss MACPHAIL:: Into the conversion
loan.


James Langstaff Bowman: If he has sense, yes. If a lot of us had our money in the conversion loan we would be better off. I say that a tax on people rvho put their money into corporations is a tax against the rich man. Then the family corporation is now wiped out altogether. All you had to do formerly was to incorporate yourself, your wife, son, daughter, cousins or other relations and you escaped the eight per cent corporation tax. That has 'been wiped out. Is that in favour of the poor man or of the rich man?
Personal corporations came in Canada a few years ago from the old country I believe.
I admit that the evasion of income tax as permitted by these corporations was largely done away with by the 1026 amendments to the Income Tax Act, but those personal corporations are now w'holly abolished so far as income tax payments are concerned. Then in addition to all these charges the rich man has to pay, when a company is wound up or a merger goes into effect, a direct charge of. four per cent on as much of the sale price as can be classified as income, and that must be taken out before the transfer is legally complete. It is extremely difficult for one to foretell what will be collected under an income tax act, but I think we will all agree that while 'there may be the provisions to which I have referred which will assist the immensely rich man, there are others which more than compensate for that.
In concluding my argument with respect to the income tax, may I point out that the old act has been abolished. A new act is being put into effect, giving power to the excise officers to go into every detail of the finances of the individual or corporation in order to see that everything is paid that should be paid. Personally I have no hesitation, therefore, in supporting this administration with respect to its income tax proposals.
Then there is the question of the tax on cheques under S10. One would imagine it was something new. It must be borne in mind that for five and a half of the nine years of the previous administration we had to put stamps on cheques under $10. Surely we can get along with it a little longer. Who really pays that tax? I will admit that the tax should be wiped out with regard to cream cheques. But who really does pay it? Is it not largely paid by the business and professional man? It is not paid by the poor man. Most of us are glad these days to have a cheque to stamp.
There is also the increased postage. Why should there not be an increase in the postal

rate from two to three cents? The Post Office Department is faced with a deficit of $6,100,000, so why should it not try to make up that deficit? I think it is being done in the proper way. In the statement made by the Prime Minister in this house he said that the rates on newspapers and magazines were to be increased, that the treasury of this country had lost millions of dollars in handling newspapers and magazines below cost. Why should not the newspaper concerns of this country pay at least the actual cost of transportation? With regard to the duty on magazines, I think that this is a mighty fine thing. This country will be a whole lot better off without many of the trashy magazines which come in from the United States; they should be barred from this country forever.
Just for a moment I should like to deal with unemployment. No one in this house can speak too strongly with respect to conditions of employment as they exist in Canada to-day, but I believe things are at their worst. We may have a bad winter ahead of us; I am quite frank in saying that I believe we will, and I think this government should marshal its resources in order to relieve the poor and needy of Canada. I do not think any man will begrudge extra taxes in order to relieve the poor or starving people, particularly at a time when our granaries are filled with wheat and other grains. However, I think there is some hope. These periods of depression come in cycles. The Prime Minister pointed out in his speech that a great number of business concerns had located in this country since last August. If conditions in Ontario and Quebec improve, that will help the west; perhaps we might envy you a little, but nothing more. We hope old Ontario and Quebec will'come back with a bang. Give the west decent prices for her wheat and you will see how quickly we can come back.
There is one thing for which I think this government should be given credit. Within seven days after they took office they passed an order in council restricting immigration. Allow me to give the figures in that respect. Beginning with September of 1929-30 and 1930-31, the immigration figures are as follows:
Decrease
1929-30	1930-31	per cSeptember. .	. .. 11,101	5,922	47October.. ..	.. . 8,817	4,445	50November.. .	. . . 7,286	3.267	55December.. .	. . . 4,943	2,090	58January.. ..	.. . 3,366	1,480	56February.. ..	. . . 3,963	1,429	64March	. . . 14.576	2,413	83April	.. . 19,309	3,201	83
The Budget-Mr. Brown
Those figures speak well for the policy of this government with regard to immigration.
My time is about up, and I hasten to deal briefly with one or two other matters. Mention was made by the Prime Minister of the sum of $1,225,000 being expended in connection with air mail service. Let me say emphatically that at a time like this, when every letter sent by air mail costs $30 it is time we cut out the air mail service. The Prime Minister has indicated that notices of cancellation of the contracts have been sent out, and I trust that they will not be renewed, or that if renewed will be on a more equitable basis.
There is the question of old age pensions, in connection with which the federal contribution has been increased from 50 per cent to 75 per cent. Last year the province of Manitoba paid $670,275 in old age pensions, and this increased contribution by the federal treasury will mean a direct saving to Manitoba of some $335,000. That will be a saving to every farmer and every taxpayer which will be much appreciated. I trust that by the time another session is called we will get the other 25 per cent promised by the Prime Minister.
I have not time to deal with the tariff changes, except to say that speaking for my own province, and I think also for the provinces of Saskatchewan and Alberta, the increase in the tariff on corn is welcome. I trust that the people in the east and in British Columbia will make a real test of feeding barley and observe carefully the results. I will say this for the people of the west: If barley does not prove a satisfactory feed for the poultry of British Columbia and the hogs of Ontario and Quebec, then the people of the west will say, take off the tariff and import corn. That is as fair a proposition as I can make. Let me remind hon. gentlemen from British Columbia that the people on the prairies purchase coal and fruit from that province.


An hon. MEMBER:: And lumber.


James Langstaff Bowman: Yes, and lumber, and
we do purchase a considerable quantity of coal and a great deal of fruit. Let them give us a square deal on matters of this sort and they will find that we are willing to meet them half way on any reasonable proposition. I cannot help paying a tribute to my colleague the hon. member from Souris (Mr. Willis) for the very able address he delivered in this house on March 23 and the equally splendid
address he made on May 20 with respect to barley. I believe it is due largely to the material contained in those speeches that this protection is given the farmer of Manitoba to-day.


Pierre Édouard Blondin: The hon. member has
spoken forty minutes.


Mr. J. L. BROWN (Lisgar):: One of the
unfortunate effects of the forty minute rule is that it precludes a member from following the one who has immediately preceded him: that is, if he is to give the speech he has himself prepared. I shall not at the moment say anything in regard to the remarks made by the hon. member for Dauphin (Mr. Bowman), although a little later on I do expect to refer to one matter he dealt with.
It would seem to be the custom to extend congratulations, and I should like to congratulate both the Prime Minister (Mr. Bennett) and the hon. member for Shelburne-Yarmouth (Mr. Ralston). Both of these hon. gentlemen dealt with the economic conditions of the country in a very comprehensive way: that at least is one quality they had in common. But here the similarity ends. The Prime Minister naturally ascribed to his predecessors all the evils of the present time and took credit to himself for any bright spots that might exist; and naturally, also, he emphasized his own policies as the ones that were likely to bring prosperity to the people of Canada. Naturally the hon. member for Shelbtirne-Yarmouth dissented from those views; in large measure he ascribed the present conditions to the policies of the government now in office and contended that if that government were to continue pursuing those policies it would mean disaster. As between the two, I have no hesitation in saying that I heartily agree with the sentiments expressed by the hon. member for Shelburne-Yarmouth.
In another respect we might congratulate the Minister of Finance. The budget is not as bad as it might have been. We had been given reason to believe that the whole scale of customs items would be raised all along the line. That has not been done and I wonder what the reason is. The reason may be found, perhaps, in the physical inability of the Minister of Finance to accomplish that work, and the fact, perhaps, that he is somewhat hesitant about making a change the effects of which he cannot foresee-such a change, for instance, as that in respect to the glass duty of unholy memory with which the hon. member for West Hamilton was so closely associated. The reason the budget is not as bad as it might have been may be
2548
The Budget-Mr. Brown

however, that possibly the shadow of a doubt crept into the mind of the Minister of Finance as to the effect of that cure-all which he has presented to the people, that panacea that is to remedy all the ills of the body politic. If such be the case, I am sure it will be very welcome to us on this side to learn that there was that shadow of a doubt as to the efficacy of the right hon. gentleman's policy. We should certainly be very much pleased to discover that in his mind and in the minds of his followers there was such a doubt.
Something else upon which I would congratulate the Minister of Finance is that he has evidently come to a recognition of the fact that the volume of revenue does not necessarily depend upon the rate of taxation, or at least that the rate of taxation is not the only factor in determining the volume of revenue. We have listened for the past four or five years to speeches from hon. gentlemen opposite, when they were on this side of the house, denouncing the government of the day for the large volume of revenue. Again and again they complained of the vast sums taken out of the pockets of the people through taxation. That was the complaint they were making. Now they are faced with a deficit, the complaint is that the former government reduced taxation. Turning to the remarks of the Minister of Trade and Commerce (Mr. Stevens) I find that he pointed to the fact that, faced with a deficit, the Hon. Mr. Dunning had in the last parliament reduced taxation. I believe the minister used the expression that Mr. Dunning had interfered with a number of sources of taxation. That has been emphasized a number of times in the course of this debate. The hon. member for Toronto Northeast (Mr. Baker) referred to the same fact and claimed that instead of reducing the sales tax by 1 per cent last year the government of that day should have increased it. It is rather amusing to us on this side of the house now to hear new members -the old ones would scarcely dare to do it- declaiming against the reduction of the sales tax last year, when we remember the attitude of those on the opposite side of the house during a number of years: they contended that the sales tax should be completely wiped out. It is a wonderful illustration of the way circumstances alter cases.
As I have said, the Minister of Finance has evidently learned, speaking generally, that all he is able to do is to fix the rates of taxation, for the volume of taxation will be determined by the amount of business that is done when those different rates are in effect. The right hon. gentleman contended-and hon. members
[M Brown. 1
opposite supported him in the contention- that the government of the day was responsible for the volume of revenue that accrued from the imposition of particular rates of taxation. At page 2168 of Hansard, now he says:
On the basis of existing taxation rates, the anticipated revenues in the present fiscal year will be $325,120,000.
And on page 2169, he says:
On the basis of the present volume of business, it is estimated that these additional taxes will yield $94,000,000 in a twelve months period.
It is worth something if hon. gentlemen opposite have learned that maximum rates do not necessarily produce the maximum amount of business, and certainly not the maximum amount of revenue. The Minister of Trade and Commerce, speaking on the income tax, said, as reported at page 2312:
My second point is this: that a sound tax must result in revenue to the country; otherwise, it is not desirable.
I think it would be well for the Minister of Trade and Commerce to carry that argument into other fields of taxation and to remember that a tax is not sound unless it produces revenue. If hon. gentlemen opposite would apply that principle when dealing with tariff matters, they would perhaps realize that high rates of tariff taxation do not necessarily increase the amount of revenue. As a matter of fact, it seems to me that revenue is the last thing in the minds of hon. gentlemen opposite.
Last September we had a short session and went into committee of ways and means. According to my understanding of committee of ways and means, parliament is supposed to consider means of raising revenue to carry on the government of the country. And yet during the session of last fall no one gave the slightest thought to the effect upon the revenues of the country of the tariffs which they were imposing. I think the same principle is very largely true of the present tariffs.
The hon. Minister of Trade and Commerce (Mr. Stevens) took occasion to taunt those who sit on this side of the house with the fact that they never would say at just what point they wanted the tariff fixed. I think we might very well retort that hon. members on his side of the house have never stated at what point they want the tariff fixed or how much consideration they will give to the questions of revenue and protection. The maximum amount of tariff will not produce the maximum amount of revenue.

The Budget-Mr. Brown
For a few moments I would like to deal with the income tax. The hon. Minister of Trade and Commerce sought to justify the exemptions on dividends up to a certain amount on the ground that this tax is being paid by wealthy men. He urged that wealthy men put their money into these corporations, and that the tax on the corporation also was a tax on the wealthy man. We distinguish between the wealthy man as an individual and the wealthy man as a member of a corporation. This country is not composed of corporations, it is composed of individual men and women. I do not intend to speak against the tax on corporations or contend that the government is wrong in imposing it, other than to point out that this corporation tax is a tax on the doing of business and in a great many instances it is counted simply as overhead and is passed along to the consumer either for the services or the products furnished by the corporation. That may not be true in every case, but it certainly is true in a large number. I believe that the individual citizens of this country should bear their share of taxation and they ought to bear it in proportion to their ability to pay. Much has been said about this being a Christian country; many hon. members opposite have stated that we should not deal with Russia because it is not a Christian country. While I have not urged my views very strongly in the past, I do remember 'the statement:
. . . .unto whomsoever much is given, of him shall be much required.
I think that rule could be applied in connection with the income tax. If ability has been given to a man to accumulate great wealth, that should be considered as one of the talents given to him to be employed for the general good.
I would refer the hon. member for Dauphin (Mr. Bowman) to the speech made by the Minister of Trade and Commerce. While defending the changes in the income tax the minister admitted that it was relieving the wealthy man. He said that that had been done because heavy taxation was driving capital out of the country. The hon. member for Dauphin and the hon. Minister of Trade and Commerce should get together and try to reconcile their views upon that point.
I am not at all impressed by what has been said with reference to double taxation. As I have said, corporations are one thing and individual taxpayers are another. The fact that a person with an income of $10,000 from dividends is granted exemption does not appeal to me at all. Much has been said in the past about the hypothetical widow who might
have a few thousand dollars left to her by her husband and who would be unjustly taxed by having to pay on those dividends. I am not very much concerned about a hypothetical widow who has an income of $10,000, but I am concerned about the widows out on the prairies. Some of the constituents of the hon. member for Dauphin have no hope of ever having an income of $10,000 per year; they are forced to count every cent and see that it is used to the very best advantage. I have very little sympathy with the objections made to double taxation.
I listened with some interest to the remarks of the hon. Minister of Trade and Commerce in connection with the conversion loan. We are all glad that that loan was a success, but after all it was a comparatively simple piece of financing. It was a large transaction it is true, but it was very simple in its essential elements. It was recognized that some provision would have to be made in regard to the debt of this country-Mr. Dunning mentioned it last year during the course of his budget speech when he said that special attention would have to be given by the government to the obligations which were maturing. The very period of depression through which we are passing made the financing of this loan an easier matter. Why? The people had no place else to put their money. An article which appeared in the Atlantic Monthly states that time money is bringing only two per cent, and call money only li per cent. It is not hard to understand why men should be quite willing to exchange bonds bearing 5i per cent interest for those bearing 41 per cent interest. We are glad it turned out in the way it did, but, as I have said, it was a comparatively simple transaction and the circumstances of the day lent themselves to it in a special measure.
During the course of his remarks the hon. member for Shelburne-Yarmouth Mr. Ralston) stated in connection with the automobile industry that the public got the benefit of the application of the tariff of 1926 and that the automobile industry was not hurt. The hon. member for East Essex (Mr. Morand) undertook to combat that statement, and I would refer to the argument which he advanced on that occasion. I regret that I will have to quote somewhat fully from Hansard and repeat the figures given by the hon. member for East Essex, but I must do so in order that they may be seen side by side with the figures which I intend to give. The hon. member's statement is as follows:
1 am sorry, but I have only a few minutes left. In contradistinction to what happened
The Budget-Mr. Brown

in 1926 when the tariff on automobiles was changed-the ex-Minister of National Defence who spoke this afternoon said that the people had profited by it and the automobile industries had not suffered-it may be interesting to hon. members to have these figures on Hansard:
Importations of Automobiles from 1918 to 1929
1919
1921
1923
1925
1927
1929
10,490
11,445
8,603
7,016
11,323
11,384
8,975
14,291
28,174
36,200
46,941
44,053
Just at that point the hon. member for Ontario (Mr. Moore) interrupted and asked if the hon. member for East Essex had the production figures for those years. I do not know whether it was the intention of the hon. member for East Essex to put on record the production figures if he had not been interrupted by the hon. member for Ontario, but as he had not much time, if he did it voluntarily, we must give him credit for good intentions in that respect at least. He gave the production figures for automobiles from 1918 to 1929, as follows:
So that a very definite increase in percentages was shown immediately after the lowering of the duty in 1926. The total value of automobiles and trucks imported for each of the above years was:
1918		 $ 9,168,265
1919		 12,741,699
1920		 13,861,600
1921		 10,504,699
1922		 13,160,453
1923		 12,326,619
1924		 9,641.309
1925		 14,549,309
Then immediately after the lowering of the duty we find the following:
1926		 $24,381,602
1927		 31,542,416
1928		 40,832,876
1929		 39,423,134
And yet the hon. member for Shelburne-Yarmouth says the industry did not suffer!
We frequently listen in this house to long columns of figures and sometimes they seem to prove the thing that has been set out to be proved, but just as often they fail absolutely to prove the point that is at issue, and I think perhaps the worst offender I have seen in that respect is the hon. member for East Essex who put those figures in regard to the automobile industry on Hansard the other day. Just at the close of his speech the hon. member for East Essex was interrupted by the hon. member for Ontario, who put this question:
Production of Automobiles from 1918 to 1929
1918		 72,047
1919		 64,886
1920		 71,132
1921		  55,520
1922		 63,049
1923		 77,282
1924		 75,925
1925		 87,819
1926		 130,403
1927		 121,640
1928		 162,666
1929		 160,914
He went on:
I know what the hon. gentleman proposes to suggest, that the volume of importation increased in direct ratio to the volume we manufactured or used. But here are the percentage figures, which are also somewhat illuminating:
Percentage of imports to total domestic consumption for the years 1918 to 1929 inclusive:
Mr. Moore (Ontario): Did the figures given by the hon. gentleman include the export trade?
Mr. Morand: No, the figures did not include the export trade.
Mr. Moore (Ontario): Would my hon. friend give us the figures including the export trade?
An hon. Member: Let him finish; he has only five minutes.
Mr. Moore (Ontario): I should like to have the hon. gentleman continue to-morrow; his remarks are very interesting.
The figures of the export trade in automobiles have not been put on Hansard yet, and so I propose to give them now. I have not the figures for the fiscal year 1931, because we do not seem to have complete statistics up to date, but I have figures of the export trade in automobiles for the fiscal years from 1926 up to March 31, 1930, and I think hon. gentlemen will find them very interesting:
Export of Automobiles Year	Value	of cars	No.1926	$500 or less than $500	48,264$500 up to $1,000	9,155More than $1,000	4,080
61,499
1927	$500 or less than $500	38,019
$500 up to $1,000	9,963
More than $1,000	4,080
Per cent
1918		 12|
1919		 15
1920		 11
1921		 11
1922		 15
1923		 13
1924		 10J
1925		 14
1926		 171
1927		 23
1928		 23
1929		 211
fMr. Brown.]
52,062

The Budget-Mr. Brown
1928	$500 or less than $500 $500 up to $1,000 More than $1,000	17,683 9,566 4,398
		31,647
1929	$500 or less than $500 $500 up to $1,000 More than $1,000	54,561 15,723 1,824
		72,108
1930	$.500 or less than $500 $500 up to $1,000 More than $1,000	36,220 13,023 936
50,179
The grand total of cars exported in those five years is 267,495. Now let us take the money value of those cars. I shall give only the totals, although I have here the figures for the cars of various prices:
Value of cars
Year	exported
1926		 $ 29,434,358
1927		 24,865,539
1928		 19,248,717
1929		 31,264,999
1930		 23,230,766
Total	 $128,044,379
What about the imports of automobiles in those five years? The figures are as follows:
No. cars
Year	imported	Value1926	
14,935	$ 14,022,8141927	
29,202	23,882,4551928	
35.783	29,234,6031929	
42.447	34.173,5471930	
33,834	28,060,872156,201	$129,374,291
But note this in regard to the revenue received on the importation of those cars, and this is very important. We received a revenue on that importation of $6,483,592. When I got just at this point in my investigations I noticed that the hon. member for East Essex had included auto trucks in his figures. In order to give a fair picture of the trade I had to go into the statistics again and obtain the figures for auto trucks. I find that the trucks listed for export were divided into less than ton and over ton weight, and I believe that is the way they are listed for sale:
	Ton	
Year	and less	Value1926	19,210	$ 6,258,464More than ton. .	14	24,6161927	20,405	6,870,927More than ton. .	6	14,7861928	15,079	5,569,890More than ton. .	12	22,0681929	22,165	7,871,430More than ton. .	9,263	3,923,3041930	21,447	8,465,601More than ton. .	8,235	3,611,278115,836	$42,632,364
To this total figure of $42,632,364 we must add the value of passenger cars, $128,044,379, making a total export trade in automobiles of $170,676,743.
I now come to the figures showing the imports of auto trucks:
Imports of Auto Trucks
Year	Number	Value1926	
1,189	$ 1,772,4141927	
2.548	3,200,6461928	
4,208	5,187,8891929	
7,417	8,795,9291930	
5,078	6.403,794

We must add to that total value the figure $129,374,291, the value of passenger cars imported, making a total import value of $154,734,923. Taking these figures we find that we have an excess of exports over imports of $15,341,820. On this automobile trade in the year 1930 there was a revenue of $7,701,744. The probability is that the revenue for five years would be at least $30,000,000.


Mr. MALONEY:: I must say. Mr. Speaker that the figures quoted by the hon. member are most complicated. Do I understand my hon. friend to say that in 1926 we imported $14,000,000 worth of automobiles?


John Livingstone Brown: In 1926 we imported over- oh well, my hon. friend will be able to read the figures in Hansard.


Martin James Maloney: I am asking the question so that I may have the information before me now.


John Livingstone Brown: Now?


Some hon. MEMBERS:: Order.


Martin James Maloney: For the sake of information I ought to be given this figure.


John Livingstone Brown: Well, if my hon. friend will give me a minute or two-


Mr. BEAUBIEN:: He will get the figures
later.


Mr. YOUNG:: The hon. member opposite
could get the information in Hansard, anyway.


John Livingstone Brown: I have given the figures.


Martin James Maloney: I would like to have
the figure for 1926.


Edward James Young: Order.


Martin James Maloney: In 1926 what was the
total number of automobiles imported?


John Livingstone Brown: The automobile trucks in
1926 were-
The Budget-Mr. Brown


Martin James Maloney: No, I want to know the number of automobiles; I am not talking about trucks.


Some hon. MEMBERS:: Order.


John Livingstone Brown: In 1026 our imports were valued at $14,022,814.


Martin James Maloney: In 1926-


John Livingstone Brown: Oh, I am not going to answer a lot of questions now.


Martin James Maloney: But I am only asking-


Some hon. MEMBERS:: Order.


John Livingstone Brown: I have placed the figures on Hansard.


Martin James Maloney: Mr. Speaker, I would like the hon. member-


Some hon. MEMBERS:: Order.


John Livingstone Brown: I ask for order, Mr. Speaker; I have the floor.


The ACTING SPEAKER (Mr. Spence):: If the hon. member does not wish to answer I am afraid the hon. member for South Renfrew (Mr. Maloney) will have to take his seat.


Some hon. MEMBERS:: Sit down.


Martin James Maloney: Mr. Speaker, I would like to ask the hon. member a question.


Some hon. MEMBERS:: Put him out.


Martin James Maloney: I am sorry, but I am quite certain the hon. member would answer.


Some hon. MEMBERS:: Order.


An hon. MEMBER:: Do not listen to him.


John Livingstone Brown: I have stated that during the five years I have mentioned, the exports in automobiles were valued at $170,676,743 and that our imports for the same period were valued at $164,734,923. Our excess of exports over imports was $15,341,820. During the fiscal year 1930 we had a revenue from our trade in automobiles of $7,701,744.
I want to ask hon. gentlemen opposite if I have not given a fairer picture of the automobile industry than the hon. member for East Essex (Mr. Morand) gave. Think of it-


Martin James Maloney: Dream of it.


John Livingstone Brown: Think of it! Imagine any hon. member trying to rebut the statement of the hon. member for Shelburne-Yarmouth Who said that the automobile industry had not suffered, and then not quoting the statistics in connection with the export trade. In 
addition to our exports, which show an excess over imports of about $15,000,000, there were also 160,000 cars or more manufactured in 1909 for home consumption. It is true that the hon. member for East Essex did say a little later on:
I may tell the house I am not interested in whether manufacturers of automobiles suffered or not. I am interested in the number of men that will secure work now that did not secure work to the extent that we paid money to the United States for those importations. Every car that was manufactured in Canada gave $456 worth of work to some Canadian workman.
I suppose that statement meets with the approval of hon. members opposite. It proves, however, what I have already said, that in the minds of my hon. friends opposite revenue is the last consideration. If an importation of 44,053 in 1929 was too great an import, how many should have come in? Do hon. members wish to shut out entirely our imports of automobiles?


Martin James Maloney: Surely.


John Livingstone Brown: My hon. friend says,
"surely." Well then, from where will we get our revenue? My hon. friend says, "Shut out entirely the importation of automobiles." All right, but whence shall we derive the revenue? If we are to shut out entirely the importation of automobiles why bother about juggling the rate of discount or fixing value for duty purposes? Now let us be honest about the matter and say we will not import any automobiles, that we will place an embargo on them. If hon. gentlemen opposite take the position that the importation of automobiles should be stopped, let them take that position. If on the other hand an importation of 44,000 in one year is too many, let them say how many should come in.
I cannot allow the occasion to pass without saying a word or two concerning the proposal to pay 5 cents a bushel on export wheat. Frankly, it is a kind of legislation that I do not like, but under the circumstances I do not think it is any more than is coming to the farmers of the northwest. The grain growers more than anybody else have suffered from the great depression that has overtaken the country. I do not know how the government is going to apply this freight rate adjustment to wheat destined for export and not to wheat used for home consumption. I am afraid that it is a problem that they will have difficulty in solving. Indeed, the only way in which that benefit can be assured to the farmer is to pay a bounty on all wheat, whether for export or for home consumption. I believe that is the only way by which you

The Budget-Mr. Picket
can foe certain that the money will go to the farmer and that no other person will benefit. In regard to the duty on corn, I assert the position that I have assented so often in this house: I do not believe that ultimately the farmer can benefit by the application of the principle of protection, and he is foolish when he falls for it.
Now, if there is one thing more foolish than another on the part of this government it is their dumping legislation. Perhaps one of the funniest things that has happened is the order in council changing the tariff item from "potatoes" to "radishes." I think the Prime Minister has but little sense of humour. Hon. members will recall the puzzle sometimes seen in the newspapers, known as letter golf, in which by making a change letter by letter you eventually form a new word. The Prime Minister has gone one better; he managed to change potatoes to radishes at one move. This agility of his reminds me of another story. Two Swedes had agreed to go aboard a boat at a certain time. Ole got aboard. Yonnie came running down the hill just as the boat was pulling away from the wharf. Ole shouted to him, "Yonnie, yump, yump. You can make it in two yumps." If the Prime Minister could show as much agility in athletics as he does in changing tariffs he would have made it in one "yump."


Mr. F. H. PICKEL (Brome-Missisquoi):: Mr. Speaker, until the .first of this month it had never been my good fortune to listen to a budget speech in this house, but I had read many of them. To my mind the budget brought down by the right hon. Prime Minister (Mr. Bennett) is the best resume of the financial condition and structure of this country that I have ever read. It goes into the whole subject in detail, shows us our indebtedness, our income and our expenditure, and makes provision for increased revenue.
Before proceeding further I should like to make one or two corrections of statements by the member for Sherbrooke (Mr. Howard). Some time ago in a speech delivered in this house he referred to what I said about the increased number of factories in my riding. I did not intend to convey the idea that all those factories were built as a result of the tariff policy of this government. I simply stated that some of them had closed down and that after the special session last September they had begun to function again. I made no reference whatever to the Vilas Company at Cowansville, I merely referred to the largest sign manufacturing company in Canada which doubled their capacity and the number of their employees after the September session.
I congratulate the members who have already taken part in this debate for the high order of their speeches, but I am afraid I will not be able to maintain the standard they have set. Particularly do I desire to mention the hon. member for North Waterloo (Mr. Euler) and the hon. member for Bona venture (Mr. Marcil) for the moderation of their criticism. In addition to the moderation of his speech I think the hon. member for Bonaventure gave the house a very fine historic review covering the last thirty years.
If, as the hon. member for Shelburne-Yar-mouth stated, those on his side of the house are sincere in their convictions, I want to assure him that we on this side are just as sincere, and all we ask is that we be allowed to give our policies a thorough trial. From our point of view this country has suffered for many years from lack of the policies that we advocate. Never since 1878 until last September have we had a man at the helm of affairs who had the stamina and the backbone to carry out his convictions.
As the hon. member for Bonaventure stated, in 1878 things were pretty flat in Canada. I can remember that cheese was selling at 5 and 6 cents a pound and butter at 10 and 12 cents a pound, and the outlook indeed was blue. The commercial treaty of 1866 had been abrogated by the United States, and their action put us in the hole. In 1878 the national policy was enunciated, and Sir John A. Macdonald stated that it would bring about the development of industries in this country. And it did; factories were erected and we began to manufacture. At that time the agricultural community objected to protection, and for years afterwards there was a large class in this country who did oppose the national policy. For that reason I suppose the tariff was never increased as it should have been.; rather there was a tendency on the part of Liberal governments to reduce the tariff a trifle. But at the present time there is no doubt the farming community are perfectly in accord with the tariff policy of this government. They have seen the need of protection, and they feel that great good may come to this country out of the evil done to our dairy industry by the Australian tariff treaty. Up to that time our farmers did not think they required protection. But they did. From 1900 to 1914 tons of American butter and American pork were dumped into this country, carload after carload, and the farmers did not for a moment think of protection. These products should have been protected, in which event the income of the agricultural com-
The Budget-Mr. Picket

munity would have been materially increased. After experiencing hard times since 1925, the date of the Australian trade treaty, the farmer is a thorough convert to protection. He knows he requires it in his business. From a country exporting 27,000,000 pounds of butter we became, in five or six years, a country importing about 50,000,000 pounds, or almost one-third the amount of butter manufactured in this country.
Much has been said about the old cow- and I am sorry the hon. member for Marquette (Mr. Mullins) is not here. Much has been said about butter, and on this side of the house we admit that Australian and New Zealand butter was the lubricant which slipped the Liberal party out of power. We admit also that if we do not do something for the farmer that same lubricant will be used to slip us out. For once the farmers of this country were united; they spoke as one man. They asked for protection; they require it; they demand it, and they must have it. We must keep for the Canadian agriculturist the Canadian butter market, and also the egg market, the cheese market and the meat market. Notwithstanding the fact that we have lost our bacon market in England, to which we shipped formerly one hundred million pounds; notwithstanding the fact that we brought in $30,000,000 worth of meat and meat products from the United States, the bureau of statistics tries to tell us that we have a great many more hogs, that we produce more eggs and more bacon, but that we are consuming our own products. I do not know how they arrive at that conclusion; I should like to know how they take the census of these commodities. I know in my section of the country, and all through the eastern townships, we have only 25 per cent of the hog population we had seven or eight years ago, and this is so all through the province of Quebec. I will grant that probably there are more in the west; probably the hog population in that part of the country has increased, but on the whole we have lost markets for meat and meat products, butter, eggs and cheese. New Zealand has ousted us from those markets.
As far as the tariff is concerned, I should like to quote just a few figures with regard to imports. Of iron and steel, and iron and steel products, we imported over $350,000,000 worth; of agricultural implements, more than $35,000,000; of agricultural products, over $72,000,000, and of textiles over $137,000,000. In this country we are quite capable of producing three-quarters of these commodities and thereby giving employment to many

thousands of workmen. If we had adopted a sane policy of protection in this country there is no reason why to-day we should be helping the unemployed.
Hon. members opposite have laid great stress on the fact that for the past five or six years we have had great prosperity. What are the facts? Let us look at the amount of money spent in connection with immigration. In round figures the expenditure by years was;
1921- 22	$ 1,897,000
1922-	23	
2,363,0001923-	24	
4,261,0001924-	25	
4,101,0001925-	26	
3,518,0001926-	27	
3,500,0001927-	28	
3,307,0001928-	29	
3,635,000Total	$26,584,000
What was the result? During that same period we lost over 1,200,000 people. During that great period of prosperity we spent over $26,000,000 on immigration and lost 1,200,000 people, who went from Canada to the United States to seek an opportunity to make a living, which was denied them here. These are the facts. It seems to me that during that period of great prosperity we should have been giving employment to those people here, and should have been making conditions in this country more livable so that people would come here without being bought. That should be the immigration policy; we should make our country livable so that people will want to come here without being paid.
The tariff policy, to my mind, should encourage competition, but not, as the hon. member for Shelburne-Yarmouth (Mr. Ralston) stated, external competition; it should protect our home industries in such a way as to encourage competition at home. That is the kind of competition we want, competition among our own manufacturers which will keep down prices. The west complains a great deal about the cost of manufactured goods, but I should like to tell hon. members from the west that they are going through the same experience endured by the western part of the United States in the seventies and eighties. It will not be long, as the hon. member for East Calgary (Mr. Stanley) said yesterday, before manufacturers will be located in the west, and the farmers will be able to buy a mowing machine, a plough or a harvester just as cheaply as these articles can be bought in the east. That is what we want; we should like to decentralize our manufacturers and spread them over the country where they will do the greatest amount of good.

The Budget-Mr. Gershaui
Last year, the year ended March 31, 1930, we sent nearly $900,000,000 into the United States. Mr. Speaker, there is one great consolation a man derives from the fact that he is a member of this house; he has the privilege of speaking in millions. I do not know whether other hon. members are like myself in this regard, but I frankly confess that if I began to talk in such stupendous sums I should not really know what I was talking about. But the fact is striking, nevertheless, that last year we sent into the United States something like $3,000,000 a day. One can hardly grasp it. Let me put it in a more tangible, a more realizable form. I live in a small village of 350 or 400 people-a nice little village which is rated at a valuation of about $100,000. Well, we sent to the United States each day in the year that ended March 31, 1930, an amount equal to the total valuation of 30 villages such as mine. That is what we have done, and we sent a goodly number of Canadians to populate them.
During this great period of prosperity between 1921 and 1929 we have been spending our money on immigration to help to build up the United States and to help to make the people there prosperous. We are just as old a country as the United States. Is there any reason, therefore, why we should occupy the northern half of this continent with a population of 10,000,000, while there is a population of 120,000,000 to the south of us? It seems to me that there has been mismanagement in some direction; I do not believe that the proper policy has been followed. I am quite sincere, Mr. Speaker, in my policy of protection. I want to see it tried, and I am perfectly willing, if it is not successful, to perish in the attempt, as the Prime Minister has put it. I have always contended that with proper protection this country would prosper and grow and Canada would become the boom country of the world. That is my firm conviction.


Mr. F. W. GERSHAW (Medicine Hat):: 1 hope the hon. member who has just concluded will pardon me if I do not follow his argument. The budget, with its proposed amendments, has been before us since June 1. It has been thoroughly discussed in this house and I believe the people of the country understand it fairly well. There is one thing in the budget with which I think we can all agree, something that has struck a responsive chord in the hearts of all people, and that is the extract from the Chronicles of the Pilgrim Fathers:
It wonderfully encourageth men in their duties, when they see the burthen equally borne; but when some withdraw themselves, and
retire to their own particular case, pleasure, or profit, what heart can men have to go on in their business? When men are come together to lift some weighty piece of timber, or vessel, if one stand still and do not lift, shall not the rest be weakened and disheartened?
Those are the sentiments, and that is the spirit which enabled that little band of pioneers to conquer so many hardships. In that spirit they carried on and endured and accomplished much. We have that sentiment in the budget, but you will search in vain for very much evidence of its application in legislation. We find that taxes have been increased. Of course, we all expected that taxes would be increased. We knew it was necessary'. But unfortunately we find that some taxes have been made easier for those best able to pay, while the taxes which the great mass of the people pay have been increased. We had been expecting something different in these times; we had expected something in the nature of a conscription of wealth. We should not have been much surprised if something in the form of a capital levy had been proposed. But nothing of that sort is seen in the budget. The sales tax is increased from 1 to 4 per cent; postage has been increased from 2 to 3 cents; a stamp tax has been put on all cheques, even those below $10; and taxes have been imposed on oranges, tea, rice, raisins, and very many other articles in common use. The Minister of Trade and Commerce (Mr. Stevens) said that there were
142.000	people paying income tax in this country, and he declared that of that number
100.000	would pay less in the future. The burden will be lightened so far as that number are concerned.
Now, in these days when there are so many people out of work, so many people close to the bread line, does it seem fair that the man or woman who holds a steady position with a salary of $300, $400 or $500 per month should be relieved of the necessity of paying something in the way of income tax? And if we look into the situation a little more closely we shall find that while the income tax is reduced on lower incomes, those in the middle brackets who are actively engaged in the business of the country have to pay more. Very' unfairly, I think, 100 or more of those who pay on large incomes find they are saved large sums of money in settling their income tax accounts. If a man had an income of $500,000, he would save at least $41,000 by this new arrangement. Carry it further and you will find that there is a difference in the way the tax is imposed, depending on whether a man earns his income or gets it from investment. A man receiving dividends is re-
The Budget-Mr. Gershaw

lieved of paying taxation on half his income up to $10,000, and the man who works for his money must pay on all. I believe that this is a step in the wrong direction; I think it is a backward step and one which will not make for happiness and contentment among the Canadian people. We in Canada do not want conditions that prevail in Russia, but the British people in this country are alive to these things at the present time, and they will not indefinitely and indifferently submit to what seems to them to be an injustice, under present conditions.	.
Even as a protectionist budget, it seems to me that there are a few things lacking in this one which is before us. The question of agricultural .production has been a big one, and the tariff problem has been before the people for ages. We believe that such articles of agriculture as we possess in abundance and are on an export basis are not helped by a protective tariff. This country with ten millions of people grows sufficient to feed eighty, ninety or one hundred millions. We must export wheat, bacon, cheese, butter, and other articles of that nature, and a tariff does not help those particular products. Those who sold butter at forty to fifty cents a pound before the tariff was increased and must sell it now at twelve or fifteen cents a pound will agree with that statement. There are other articles which are not on an export basis, and I desire to draw the attention of the house to one or two which are not mentioned in the present budget.
We use in Canada about 60,000,000 pounds of wool, and of that amount we produce about 25,000,000 pounds. We must import a great deal of wool, and I remember hearing Conservative members make long speeches deploring the fact that our sheep population was gradually becoming smaller. Very definite promises were made that something would be done for those in the sheep business when the Conservative party came into power. But we find that nothing has been done in this budget. It is true the textile manufacturers have received a protection of from thirty to thirty-five per cent, but I contend that that protection should be contingent upon the manufacturer using a generous quota of Canadian wool in the manufacture of his goods.
Another problem which I would like to bring to the attention of the house is that which confronts the sugar beeit industry. Every man, woman and child in Canada consumes about 92 pounds of sugar per year. The total yearly consumption in Canada is about 900,000,000 pounds, and of that amount the most we have ever produced locally is around 70,000,000 pounds. I am sorry the Prime Minister (Mr. 
Bennett) is not in his seat because he is familiar with this subject. He promised definitely at the special session of 1930 that this matter would receive his attention. He said that he would not hesitate to do it at that time were it not for the complicated schedules which would have to be prepared. Other countries have at different times done much to encourage the production of sugar beet. For instance, the United States has imposed an import duty of eleven shillings per hundred pounds against sugar entering that country, except from her own colonies such as Porto Rico, Hawaii and the Philippines. Czechoslovakia has placed an import duty of twenty-one shillings per hundred pounds; Poland, 14s. 2d.; France, 8s. 3d.; Germany, 7s. 6d.; Sweden, 5s. 7d.; Belgium, 4s. 9d.; and, as I have said, the United States, 11s. As I read the tariff schedules, the British preferential rate in Canada is about 35 cents and the general rate about SI-47 per hundred pounds on sugar exceeding ninety-eight degrees of polarization. In 1925 this country entered into a trade agreement with the West Indies. They gave us a preference in their markets for flour, apples, cement, beef, lumber, butter, cheese and other products of that kind, and in return we established a steamship service and gave a preference in our markets for cocoa, eocoanuts and cane sugar. This treaty was to last for twelve years from 1925 and could be abrogated on either country giving one year's notice after that time. I have indicated that about 830,000,000 pounds of sugar are imported into Canada to supply our needs, and of that amount I find that 100,000,000 pounds come from the Fiji islands. I have been unable to find out how far west in Canada the West Indies sugar will reach, but I think it is fair to assume that most of the sugar which goes into the western provinces comes from the Fiji islands and other countries which are not part of the empire. We have 43,464 acres under cultivation for sugar beet growing, with an t average production of eight and a half tons, which gives only 364,000 tons. If the government does not wish to increase the price of sugar by imposing a higher tariff on that commodity, a subsidy of say one dollar per ton could be paid which would allow this industry to prosper and give encouragement to those trying to make a living on the irrigated farms of Canada. Granting a subsidy is not a new thing because other countries have taken this action to increase production. England and the Irish Free State have granted generous subsidies to the sugar industry, and in some countries of Europe cartels have been formed to ensure that sugar would sell for a

The Budget-Mr. Gershaw
reasonable price within the country. For instance, between 1924 and 1928 the government of Great Britain assisted the sugar beet industry by giving a subsidy of 19s. 6d., as well as a subsidy of 3s. lid. on molasses. The difference between the excise tax and the duty on imported refined sugar amounted to about 4s. 3d. The government of Great Britain insisted that refiners use locally grown sugar, and the subsidies paid were contingent upon a fair price being paid to those who were producing sugar within the country. In view of the potential greatness of this industry and in view of the relief which is needed to stabilize the farming industry, it seems to me most regrettable that some assistance has not been given at the present time.
One of the great problems which confront us is that of unemployment. We have always a certain number of unemployed, but at present the number is larger than usual. There are many men out of work who would be glad to do any kind of labour. While it is not true that the world owes every man a living, it probably is true that the world owes every man an opportunity to work. I have just one suggestion to make, which I think might temporarily relieve the great unemployment problem, and that is to make the working hours shorter. If you have one hundred men working and twenty-five men idle you can easily see that by shortening the hours of labour from eight to six hours a day you will give an opportunity to all to work. You may say it will increase the burden on industry. True, it will, but we shall have to pay more money in any case. During the last winter the federal, provincial and municipal governments paid out upwards of 870,000,000 for unemployment relief, and if some of this were used to help to shorten the hours of labour and give employment to more men, much benefit would result. Conditions regarding unemployment have become very acute. Stephen Leacock, writing in 1921, said that the productive ability of the average worker had increased forty-fold in 125 years, and we know that in the last few years with the introduction of labour-saving machinery the average productivity of the individual is continuing to increase. In view of the circumstances some definite steps must be taken.
We speak of this as an ordinary period of depression, but who is there who can see much light ahead at present, and who is there who will say that it will gradually pass away unless we definitely study the problem and take steps to relieve the situation? We have large inventories in many lines of production, but when you go into the homes of the
people you can see that lumber is required to improve these homes, that furniture and washing machines, sewing machines, clothing and other ordinary necessities are required. The difficulty is that while on the one hand we have large stacks of material, on the other hand we have those who require that material but have not the purchasing power to procure it.
There is some difference of opinion as to whether the collapse in wheat prices was the cause of the depression, or whether it was just the victim of it, but we do know that the fall in the price of wheat was one of the greatest factors in prolonging the depression. We do know that there is a serious distribution problem to be faced by the people of this country. This problem of distribution requires the -best thought that the age produces, and we should look to the government and ask what is being done to help to solve these problems. The government have initiated and persisted in a policy of high and higher protection. They hope that by shutting out all goods, our local factories will get the home market, and through mass production be able to produce more cheaply and sell more cheaply. But is this working out? In what direction are the signs pointing? We had the hon. member for Bonaventure (Mr. Marcil) speaking in the house this afternoon. He speaks from a point of vantage. He has had a wealth of experience. He has lived through cycles of inflation and deflation. He has seen a dozen governments come and go. By virtue of the high position which he has occupied he has been intimately associated with the legislation which has been enacted during all those fifty years, and we were glad and proud to see him stand up in his place to-day. We listen to him when he says that protection will never cure our economic ills.
But other signs are not lacking. Chambers of commerce, yes, and even the League of Nations, have come to the conclusion that high tariff bariers are doing much to check the natural flow of international trade. Even here in Canada some signs are coming into evidence that prices are not kept down when the tariff is increased. I believe, Mr. Speaker, that we would be getting our gasoline more cheaply now if we had not a tariff against it. I hold in my hand a list of prices for repairs for machinery, which was sent out by a large manufacturer of farm implements in this country, dated April 7, 1931. Thirty-six of the articles enumerated in this list have been increased in price, and only four have been decreased. Article listed
The Budget-Mr. Gershaw

as 1387 carried an old price of 11.85, and the new price is $4.85. The next article carried an old price of $18, and the new price is $20. The next article carries an old price of 35 cents, and the new price is 45 cents. If we go down the list, we will find that prices are increased in almost every ease. In fact if you bought one of each of the articles listed here it would cost at the old prioe $84.41, and at the new price $98,56, an increase of 20 per cent in the cost of the producer who requires these machinery repairs.
We see difficulties in other directions as well. It has been stated by the Labour Gazette that the price of raw material between January, 1930, and January, 1931, decreased 32 per cent and wholesale prices 15 per cent. We know that field products have come down by 60 per cent, prime beef by 40 per cent, select pork by 43 per cent, while the cost of living has come down, roughly, only 6 per cent. The farmer finds that the price of the article he has to sell has been greatly reduced, and the price of the article he has to buy has hardly reduced at all, and so he is put in a position in which it is quite impossible for him to pay his ordinary debts.
In conclusion, we find that we have elevators bulging with grain, and warehouses in which the shelves are piled high with wearing apparel and food. We have vast unused hoards of capital, and yet in the world at large we have sixty million of people unemployed. I do not know how great the restlessness and dissatisfaction is throughout Canada. I do know that it will be worse during the coming year, and facing these problems we can easily understand why people see inadequacy in our social system to meet human needs. We do not approve of collectivism or communism or bolshevism, or other forms of chaos and disaster, but we know that there are a great many people who are thinking in that direction, and we know that the best way to meet the menace is to introduce and make good some sound alternative. During the great war the rich as well as the poor were willing to make sacrifices for the country. The rich and those in a position to help are not now any less patriotic than they were at that time, and I believe they would not falter if they were asked to share a greater burden to-day. We find, however, that the government has been standing pat to the old system, by introducing a budget that is perhaps more retrograde and reactionary than ever because it pursues the old line of protection, which is being questioned in so many places. I believe that we

have a right to expect something different, from the government. Armed with their recent verdict from the people the government should present a policy which will give equal opportunities to all and work towards harmony and unity among the Canadian people, a policy which will not tend to widen the breach between one class and another. The government has a clear majority of 29 over all, and I believe it should head right into the storm and demonstrate its courage by some policy which will hold out a hope of solving the problems which face them, a policy which will bring about a greater measure of peace, happiness and contentment among the Canadian people.


Mr. JOSEPH THAUVETTE (Vaudreuil-Soulanges):: Mr. Speaker, as a new member of the house I should like to have been able to address the house in the language of the majority of its members. As this is the first occasion, however, upon which I have spoken, I think it is my duty to speak in the langugage with which I am most familiar.
(Translation) Mr. Speaker, before broaching the subject matter of this debate, allow me in my turn to congratulate you on the exalted post you occupy in this house. The dignity and great deference with which you acquit yourself of important functions makes it an agreeable task for me to state that you are worthy of our highest consideration.
I also wish to equally congratulate you on the willingness shown in reading the documents of the house and the prayers in French. I must acknowledge that I was deeply moved by this act of deference on your part. We pray with more fervor and we believe ourselves in closer touch with Divine Providence when we pray in our mother tongue.
May I, sir, offer my thanks to my constituents of Vaudireuil-Soulanges for the mark of confidence reposed in me and which affords me the opportunity, to-day, of taking part in the debates of the house. Realizing my responsibilities towards them, I shall be guided by their interests in all my actions as representative of the people. In the last Parliament the constituency of Vaudreuil-Soulanges was represented by a man whose memory, to his own county, is imperishable. No one in need, in the county, was ever left without help, orphans were specially the object of his zeal; the educational institutions both of his county and the diocese of Valleyfield were the recipients of subscriptions which contributed considerably to enlarging their respective establishments and giving an educa-

The Budget-Mr. Thauvette
tion on easy terms to a greater number of young men, sons of workers or farmers.
I shall not add more for fear of wounding his averseness to publicity. On behalf of his fellow-citizens-my constituents of to-day-I offer my best wishes of better health, longevity and happiness among his own people to the Hon. Lawrence Wilson, a former member of the house, and now the representative of the division of Rigaud in the Senate. Yes, a long life and happiness among his own people so that he may carry on his good work so noteworthy and appreciated in these times of general distress. It is well to remind all those on whom fortune smiles of the lofty deeds of this great philantropist, this eminent financier, who remembers his humble beginning and lavishes part of his wealth on the people with whom he has mingled, and this for the common cause. What a fine achievement sir, when it is done at a time when the people seem to harbour in their souls feelings which, grouped together, are known under various names, but which may give rise to anxious moments for those who are in a position to help, yet do not follow the example of my predecessor in this house.
Allow me now, sir, to refer to other matters. By virtue of the privilege which the rules of the house confer upon me, I deem it my duty to express the feelings of regret and deception which are manifested by the citizens of Canada, especially those who are on the farm. I still recall the charges made by the Conservative candidate, my opponent, against the King government which he stated was responsible for the depression felt in Canada. Tears were in his eyes when he told the farmers of my county that the cause of all their trouble was the New Zealand treaty. He announced the coming of a famous doctor who held the secret of a panacea to all their ills. He contended that with a dose of this serum, unemployment would vanish in three days; that factories would spring up all over Canada; that agriculture would find new markets abroad, because this remedy possessed sufficient explosive power to blast an avenue through which would flow all the surplus of farm products, especially the western wheat. What was the result of this policy from July last to this day? Let us study this policy and its results with reference to the interests of the farming class-that part which interests almost all my constituents. From the very first day of the session-supposed to be an emergency one-in September last, we recognized the dangers of this policy of protection and its prejudicial results to the farming class. I was somewhat disappointed at the various changes which the government made
to the tariff at that session, without giving the house the opportunity of seriously studying the effects of these changes. For instance, out of 28 items referring to agriculture, 14 only are of a nature to benefit the farming class.
It is inconceivable that the present government has not better understood the sad plight in which are placed the farmers. It is nevertheless the labouring class which is most vulnerable to the uncertainty of success, exposed as they are to the sudden changes of weather, over which they have no control. I have listened to numerous speeches from both sides of the house, and I am sorry to say that all agree that agriculture is threatened at its very foundation. I am especially grieved at this unfortunate state of things, because I live among those toilers of the land and I know their joys and sorrows. I have heard the sad complaints of the western farmers. It seems to me, however, that our people are as much to be pitied. It is true that farming in the west is carried out on a larger scale, the farms are vast, while with us their areas are but 60 to 80 acres, and, generally, have been handed down from generation to generation and have become, so to speak, an inheritance which must be kept up at all cost. Alienation is considered almost equivalent to a sacrilege; it is therefore pitiful to hear the crier, on Sunday after mass, in our old Canadian villages, announce to the local people the stipulations governing the public sale of a farm and its equipment Within the last few months these public sale notices have increased to an alarming degree.
The reason for these mishaps and farm desertions, sir, can be traced to the negligence of the present government in not giving sufficient encouragement and hope to the farming class. Quite the opposite, the first act of the government, at the special session in September, resulted in increasing the amount of capital required to operate the farms, by levying duties of 25 to 35 per cent on farm implements, when the sale price of their products had decreased from 50 to 100 per cent. I could quote a number of magazines and newspapers which have collected statistics establishing the truth of this statement.
I shall, however, compare the prices of certain agricultural products in my county for the years 1929 and 1930, they are the retail prices.
In December, 1929, butter sold at 40 cents per pound; in December, 1930, 30 cents. Oats, sold at 1 to H cents per pound in 1929; they sold for J of a cent in 1930. Potatoes sold at $1.25 per bag in 1929; in 1930, the
The Budget-Mr. Thauvette

price was 75 cents. Yet the New Zealand treaty had been abolished in December, 1930, and the King government was no longer in power. Hay is sold at present $7 to $9 per ton in my county, and there is hardly no market for it. Do you suppose that it is encouraging for the farmer to raise hay when he is obliged to pay $3 for the pressing and transport of a ton of hay to the nearest railway station, when he receives but $7 to $9 per ton. This is the exact situation of the farmer and I think that it is the same in almost all counties of our province.
We quite realized, sir, that a Tory government was at the helm of the affairs of this country when we listened to the budget speech for the year 1931-32, by the right hon. Minister of Finance. This statement of increased taxation on almost all articles which are necessary to sustain life, especially among the working and farming classes confirm our fears.
I recall the request made by the right hon. leader of the Opposition (Mr. Mackenzie King) to the right hon. Prime Minister, at the short session, known as an emergency session, last autumn, in which he asked him not to adopt tariff changes without allowing us sufficient time to duly consider them; the Prime Minister promised at the time that these tariff changes would be discussed at the first regular session. However, I have searched through all the speech of the Minister of Finance on the budget and nowhere do I find a single tariff item which was changed at the September session. What has become of the Prime Minister's promise? It has had the fate of all the others.
In going over the list of the tariff items Which were changed last autumn, I note that they all favour the manufacturers and that an increased duty on farm implements was not forgotten. As a result of this protection, farm implements have not been made any cheaper while the prices of all farm products have dropped 100 per cent since then. Let me quote a few examples as regards dairy products. The following prices were obtained by one of my fellow-citizens, a farmer of Vaudreuil who deals with the milk distributors of Montreal: 3,112 pounds of milk sold in December, 1920, to J. J. Joubert & Co. of Montreal brought in a net profit to this farmer of $102.88. In December, 1930, when Mr. Bennett was in office and the New Zealand treaty had passed out of existence, 3,890 pounds of milk brought in $91.74. In May, 1931, 5,204 pounds of milk gave a return of $66.31. And this milk was sold to distributors. However, most of my fellow-citizens 
are unable to bring their milk to Montreal, and they must sell it to the butter factories. This milk, at present, sells in my county for 4 cents a gallon or 40 cents per 100 pounds. This means, that a farmer wishing to send a letter by mail, enclosing his cheque to pay his taxes, at the rate proposed in the budget, would have to sell two gallons of milk in order to despatch that letter.
Eggs sold in January and February from 23 to 25 cents per dozen, that is for strictly fresh eggs, classified as No. 1. They sell at present 15 cents per dozen.
Potatoes retail at 50 to 60 cents per bag. As to this farm product, it would be quite in order to give the house some particulars in respect to the effect of the high tariff adopted by the government. Our best market for the sale of our potatoes is the United States which bought from Canada, during the years 192829 and 1930, for an amount of $11,291,723. While the potato purchases for the whole of Canada amounted to $18,464,584. However, we also import potatoes from the United States. For the years 1928, 1929 and 1930, we imported $2,685,587 worth of potatoes; the balance in our favour being in the ratio of 4 to 1. The regular tariff is 75 cents per 100 pounds; the United States tariff is the same as ours.
A barrel of potatoes sells in the United States $5.70 and contains 3 bushels or 180 pounds. The usual duty would be $1.35 per barrel. The Bennett government for tariff purposes, fixes the price of potatoes imported from the United States at six cents per pound and informs the Canadian importer that he must pay that price to the American exporter, or pay the difference between six cents per pound the value fixed by the government and the market price, by means of an additional duty at the port of entry.
The situation is as follows:
1.	The net price of potatoes is $5.70 per barrel of 180 pounds.
2.	The regular duty is $1.35.
3.	The government fixes the value of a barrel of potatoes for tariff purposes at $10.80.
4.	A special duty is levied on the difference between the market price of $5.70 and the fixed price of $10.80, which means a difference of $5.10.
5.	Adding this special duty of $5.10 to the regular duty of $1.35 we have a duty of $6.45 or 113 per cent of the market price, which simply means that the duty on a barrel of potatoes amounts to $6.45 while previously they were $1.35. Under these conditions a barrel of potatoes would cost $12.15, .previously it cost $7.05. The tariff schedule on this

The Budget-Mr. Thauvette
product before the levying of these new duties was on a basis of 23 per cent; it has now been raised to 113 per cent. This is a sequel to this discretionary power entrusted to the Minister of National Revenue (Mr. Ryckman).
Owing to the prohibitive duty on potatoes levied by the United States^ this country resorted to retaliation. The state of Maine and neighbouring states used to buy their seed potatoes from the maritime provinces, and the latter which supplied the Americans with excellent seed potatoes, received no more orders from those states. Those clients who once ordered 50,000 bags at a time, have discontinued their purchases. The result is that the price of this starchy product has dropped in the United States as it has done here, and the .potato growers of my county cannot obtain more than 50 to 60 cents per bag.
Who benefited by this? A few Canadian truck gardeners who grow early potatoes. These are a few results of this high tariff policy as applied to farm products.
We now come to the gasoline tax. The right hon. Minister of Finance increased by li cents the previous 1 cent tax on gasoline in order to allow a few refiners of gasoline to settle in Canada. Most of these refining companies are controlled by American capitalists. In 1929 we consumed 606,934,668 gallons of gasoline. If you figure out the fixed price and the duty on this gasoline entering the country, that is 3 cents, the amount obtained is $18,208,039.04. Deduct the expenses for refining, wages, etc., which amount to exactly $8,208,039.05, we find that there is an overcharge of S10,000,000. This amount is exacted from us in order to benefit American capitalists. Is it reasonable to make the farmers pay their quota of this amount for the work they perform on their farm-because the farmer uses gasoline for most of the work performed on the farm: tractors at sowing time, tilling, pressing and threshing; motors for sorting and wood sawing machinery, etc. The transportation of these farm products is mostly done by motor trucks. These are some of the uses to which gasoline is put on the farms of my county. Does the Prime Minister think that he helps agriculture when he levies a duty on a product so useful to farmers? Moreover, are there not instances of governments doing away with all taxes on gasoline when used for agricultural purposes? The Quebec government, for instance, has a 5 cents tax on gasoline; however, when it is used for agricultural purposes the tax is deducted. I fail to see why the Minister of Finance could not have inserted in his budget a clause similar to the one inserted on behalf
of our western friends in respect to wheat, thus dispensing the farmers of paying a gasoline tax when the latter is used on the farm. I do not think, sir, that the farmers of Ontario or Quebec are jealous of their western brothers 'because the generous Prime Minister grants them a big five cent piece for each bushel of wheat exported, but why were not the eastern farmers also given a rebate on the freight of their butter, cheese or milk to large centres or for purposes of export? It. would be a way of encouraging the farming class.
I consider that the farming class is not sufficiently protected in the present budget. Notwithstanding the fact that the farmers are in majority in this country, making up 53 per cent of the population. Agriculture is the basic industry of Canada. The other manufacturing industries are unable to make substantial progress, unless agriculture is encouraged and flourishes.
Unemployment will not disappear from cities as long as the farmers do not find the means of obtaining a certain amount of comfort from the results of their labours, thus inducing their families and children to follow in their footsteps. The rural population will not then to such an extent desert the farm in order to find a livelihood in cities. A just proportion between the population of cities and that of the rural districts will only be achieved when the farmer becomes more prosperous. The return to the land will then take place, and our countryside will become a real market supplying cities with its products and freeing the towns of their surplus population by putting them on the land to help the farmer.
The newspaper La Presse announced in its last evening issue that in Quebec, among the farmers, the pioneers of agriculture who settled parishes in the most remote corners of our province and that of Ontario, a movement has been started to help the farmer who is in distress. It takes the shape of subscription to help freeing cities of the sons of farmers who deserted or abandoned the land and placing them in new settlements of Quebec, Ontario, or in the other eastern provinces. I doubt whether this can be achieved in the near future because of the ruinous high tariff policy of the present government.
I state that the policy of protection advocated by the government will in no way better the lot of the farmer and the workman. What has happened since the Prime Minister has started this high tariff policy. Notwithstanding the vote of $20,000,000 in September last, the number of unemployed is increasing and



The Budget-Mr. Thauvette
cases of distress have become more numerous within the last eight months. The industries which were to spring up on every side have not resulted in an increase of the capital invested comparable with its increase in the preceding years.
The following are the statistics of the Department of Trade and Commerce, published in a Liberal newspaper, in answer to the contentions of the Conservative press that the increase of capital investments in industrial institutions since September, 1930, had been $14,000,000 in four months; however, the statistics of the same department, according to the same newspaper show that:
That capital invested in our industries which was $3,244,302,410, in 1922, increased to $3,380,000,000, in 1923; to $3,358,000,000, in 1924; to ' $3,808,000,000, in 1925; to $3,981,000,000, in 1926; to $4,337,000,000, in 1927; and finally to $4,780,000,000 in 1928. The figures for 1929 are not out, but it is estimated that the increase must have been 10 per cent, as in 1928. We therefore note an increase in capital investment of about $200,000,000 per year. From $136,000,000, in 1923, the increased value of capital investment in industry passed to $158,000,000, in 1924 and reached $440,000,000 in 1928. These figures must be placed side by side with the Conservative party's results to judge of the true economic view of the protective policy of Mr. Bennett.
Following this quotation I think it is necessary to briefly give the statistics which the Trade and Commerce department has just given out as to the quantities of grain accumulated in Canada:
The lack of sale of our grain and cereals, which so heavily burdens the Canadian farmer, has not only persisted during the fiscal year which ended on March 31, but has become more accentuated, as one may realize by looking over the statistics which have just been published by the Department of Trade and Commerce.
At this date last year, we had in our elevafhrs, 228,646,367 . bushels of wheat, 105,666,003 bushels of oats, 44,865,123 bushels of barley, 1,221.706 bushels of linseed and 11,040,353 bushels of rye, which amounted to the grand total of 391,439,552 bushels.
To-day, we have 593,664,582 bushels made up of 275,190,987 bushels of wheat, 210,272,666 bushels of oats, 84,630,228 bushels of barley, 2,797,116 bushels of linseed and 20,773,585 bushels of rye.
This is far from encouraging, when one considers the failure of the recent wheat congress, and the small chance of its success to restrict production in the near future.
These statistics cannot afford much hope to the farmer who is at present busy sowing for the next crop.
How does it happen that this unfortunate state of things exists and is getting worse from day to day? In my opinion it is the inevitable result of the high tariff protection which Canada has sought. Another expla-

nation which I also deem important is this unlimited discretionary power with which [DOT]the Ministers of National Revenue (Mr. Ryckman) and Trade and Commerce (Mr. Stevens) were invested at the last September session. The instability of the tariff which results from this discretionary power has created in the country's commerce a hesitation, a trade uncertainty which, I think, is the great cause of the decrease in our imports and exports, and which will indefinitely prolong this economic depression as long as this instability of the tariff continues. I think, sir, that the government did not foresee the dangers connected with this extraordinary power granted to a minister.
The citizens of Canada expect another solution to the great problem of the day. I have no faith in this system of economic seclusion enforced by an unlimited high tariff, for a young country like ours, a country so vast with a popoulation relatively small. We feel the need, as it is natural to youth, of more expansion commercially, we feel the need of enlarging the circle of our friends and making ourselves known by all possible means, in keeping with the spirit of the Canadian people: courtesy, cooperation and diplomacy.
It is through those means that men and nations will find the solution to the great problems which interest the whole world, problems in the solution of which rests the happiness of humanity.
These considerations emphasize more so the importance of the stand taken by the right hon. Prime Minister, as representative of this country at the Imperial conference.
The self-confidence with which the right hon. Prime Minister presented himself at this meeting of distinguished statesmen, the frame of mind of which he had already given proof at the so-called emergency session, by enact- . ing tariff changes against the country which was to welcome him, and the form of challenge which he gave to his proposals, only resulted in creating among those from whom he was seeking favours, feelings of resentment and defensive measures. This attitude on the part of our Prime Minister brought forth from the lips of one of the distinguished British cabinet ministers the expression which has become famous of "humbug," and which has greatly humiliated members of the government. But what has more serious consequences for Canada, is that as a sequel to this -momentary friction between the Canadian Prime Minister and the British cabinet, the latter have made overtures of bonne entente, it is said, to certain European coun-

Trust Companies Act
tries in order to promote closer trade relations between them, and, these European countries will attempt to take advantage of the tense situation existing between England and Canada.
The right hon. Prime Minister had announced another conference for the autumn, but according to the statement he gave out a few days ago, this conference will not take place this year. A number of delegates who were to take part gave as a reason for being unable to attend, that they had not had sufficient time to study the proposals which were to be submitted to the conference. Should not Canada, herself, knowing the insignificant results of the policy of unlimited high protection and being fully aware of the results obtained through this policy by our neighbours to the south, abandon this policy unsuited to her and adopt without hesitation that of the golden mean, the broadminded policy which has given the country in the past-under the government of Sir Wilfrid Laurier-years of prosperity heretofore unknown and which also restored confidence and placed the credit of Canada on a sound basis at the advent of the King government, when the Canadian dollar was only quoted at 80 cents.
Notwithstanding the enormous debt then burdening the Canadian people, thanks to this economic and good will trade policy towards foreign countries, the King government brought the Canadian dollar to par on all financial exchanges of the world; by degree it was able to pay off the obligations entered in by the preceding administration; it greatly relieved the nation of taxation and ended its mandate in 1930 by a surplus of almost $50,000,000.
Are these considerations, sir, not sufficient to incite the government to foster the general interest of the Canadian people, instead of continuing and being wedded-so as not to appear ridiculous and be thrown out of office -to a policy too restrictive and contrary to the interests of a very large majority of the people of this country.
I have submitted to the house these few remarks with an open mind and to the best of my ability. May I assure you, sir, that I have done so in the interest of those citizens who, like myself, have no dearer country than Canada,"and in the interest of the class which comprises half the population of this country, the farming class, which I am privileged to represent in the house.
On motion of Mr. Rhodes the debate was adjourned.
On motion of Mr. Stevens the house adjourned at 10.52 p.m.
Friday, June 12, 1931.