1933-05-03

[Stage Direction]
House of Commons debates
[Stage Direction]
Wednesday, May 3, 1933

Hon. W. A. GORDON (Minister of Labour) :: Mr. Speaker, I desire to lay on the table of the house an order in council passed pursuant to the relief legislation.



REPORT OF COMMISSIONER

Wesley Ashton Gordon: I also beg leave to move:
That three hundred copies in the French language of the report of the commissioner of unemployment relief, 1933, be printed, and that standing order 64 be suspended in relation thereto.


[Stage Direction]
Motion agreed to.

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

[Stage Direction]
Mr. LaVERGNE:
1.	Has the contract for the unloading of grain at the port of Quebec been renewed for the present season of navigation?
2.	If so (a) were tenders called; (b) to whom was the contract awarded?
3.	If not, why?
Mr. DURANLEAU:: The following information has been furnished by the harbour commissioners of Quebec ;-
1.	Yes.
2.	(a) No. (b) Messrs. Albert G. Baker, Limited.
3.	Messrs. Albert G. Baker, Limited, had the contract for the season of navigation of 1932. It was felt that no advantage would be gained by calling for tenders this year as their services were satisfactory in all respects in 1932.


INCOME TAX COLLECTIONS
Mr. ROBERGE:: What amount of money has the government collected by way of income tax during 1932 53719-287
from individuals, companies, corporations or others who pay a tax on an income ranging from $500,000 to $1,000,000?


Mr. RYCKMAN:: 


$20,764,572.05. GOLD PURCHASES
Mr. COOTE:: Since October 1, 1931, what amount of gold has been purchased by the government and what is the total amount of premiums paid for such gold ?


Mr. RHODES:: Gold purchased from October 1, 1931, to March 31, 1933:
Ozs. Fine	Value Premium Paid
4,228,136 739_	$87,403,340.14	$12,236,962.81


LIVINGSTONE CHANNEL-USE OF AMERICAN WORKMEN
Mr. HEENAN:: 1.	Has permission been given the contractor engaged in deepening the Livingstone channel in the Detroit river to bring workers into Canada from the United States?
2.	If so, how many stationary and hoisting engineers have thus been granted entry?


Mr. GORDON:: 1.	No.
2.	Answered by No. 1.


MOTIONS FOR PAPERS
Mr. CASGRAIN:: For a copy of all letters, telegrams, petitions, resolutions and other documents exchanged between J. G. H. Duperron, president of the Delorimier Independent Labour Club, of Montreal, and the Prime Minister of Canada and the Minister of Marine, respecting the manner in which direct relief is distributed in the city of Montreal, and protests against taxes imposed by the Rhodes budget on sugar and other foodstuffs.

Coal Inquiry


BOVINE TUBERCULOSIS, RESTRICTED AREA
Pierre-François Casgrain: For a copy of all letters, telegrams, petitions and other documents, in the possession of the Department of Agriculture, respecting the establishment of a restricted area for the eradication of bovine tuberculosis embracing the agricultural districts of Chicoutimi, Roberval, Charlevoix and Saguenay, from January 1, 1930, to date.


MEAT AND CANNED FOODS ACT REGULATIONS
Mr. NEILL:: For a copy of all documents, correspondence, letters, petitions and telegrams passing since September 1, 1932, between any member of the government, or official thereof, and any other government, persons, or associations in connection with the request for the change in the regulations of the Meat and Canned Foods Act which was embodied in P.C. 206 passed on February 3, 1933, whether before or after the passage of the said order in council.


NEW GOVERNMENT BUILDING
[Stage Direction]
On the orders of the day:
Pierre-François Casgrain: Mr. Speaker, may I ask the government if there is any truth in the report which appeared in the paper yesterday to the effect that the government was to begin construction of a $5,000,000 block on Wellington street, such construction to be financed by the issue of notes?


Right Hon. R. B. BENNETT (Prime Minister) :: Any information of that sort will be made known to the house in due course, as no action can be taken without consent of the house.


COAL INQUIRY
[Stage Direction]
On the orders of the day:
Wesley Ashton Gordon: Mr. Speaker, some days ago I intimated to the house that I had received the report of the registrar appointed under the Combines Investigation Act with respect to his inquiry into the importation and distribution of British anthracite coal into Canada. I intimated at that time that as soon as I had an opportunity to review the report I would make a statement to the house. The inquiry was set in motion by reason of a complaint made by a member of the other chamber, and was not instituted, as is usually the case, by reason of a complaint having been made by the requisite number of consumers or others interested.

At any rate, I instructed the registrar to make an investigation or an inquiry, as the act provides. That was done, and a great deal of evidence was taken in connection with the matter. As I indicated to the house a few days ago, the practice, and in my view a very proper one, has been not to make public the findings in inquiries under the act into business concerns. The reason of course must be obvious, namely, that if it is found after inquiry that the provisions of the act have not been invaded, then it would be highly improper that the business of anyone lie made known to his competitors and others. On the other hand, if it is found that the business under inquiry falls foul of the provisions of the act and it is desirable to have a further review, that further review would of course be based upon the evidence secured by the registrar or commissioner as the case may be, and if the evidence were made public it might easily defeat the objective sought.
The importation and distribution of British -anthracite coal in this country has been a subject of interest for a number of years. Efforts have been made in the past to introduce that fuel into Canada because of -the fact that the supply of that sort of fuel was being obtained entirely from outside our boundaries. Until 1929 those efforts were not efficacious for reasons that probably are fairly well known to members of this chamber. Beginning with 1929 the importation of British coal was apparently made possible, and today the importation of that fuel is very considerable. No question arises as to contracts made or understandings arrived at between the importers of British anthracite and their other foreign competitors, so in that respect the inquiry made by the registrar is quite different -from the usual inquiry made into matters arising under the act. The question that does arise is whether or not in the formation of the organization that is distributing the British anthracite in Canada those engaged have complied with the terms of the act. Many questions of law are involved. The registrar's report indicates that the importers' net profit for the four years, 1929 to 1932 inclusive, ranged from 39 cents a ton to 64 cents a ton. The registrar also finds that there has not been a contraction of that profit in the same ratio as retailers' profits and matters of that character. He has concluded, however, that the arrangements

Coal Inquiry
perfected by the importers of British anthracite coal do not in his view conform to what is contemplated by the Combines Investigation Act. Therefore, there being, as I have indicated, questions of law involved that are difficult of determination, I have decided that I will refer the matter to the appropriate authorities in the province or provinces affected, to take whatever action they think desirable in the light of the registrar's report, the evidence, and the exhibits upon which it is founded; and further review of the matter by this chamber probably will not be necessary.


Mr. RALSTON:: Mr. Speaker, may I ask the hon. minister if the .registrar's report contains any statement with regard to the advisability in the public interest of making the report public? As I remember it

I have not the act before me, but I have sent for it- the act requires that publicity be given to the report unless the registrar expressly states that it is not in the public interest that the report be published.


Wesley Ashton Gordon: Mr. Speaker, the hon.
member's recollection is not correct with respect to what the act contemplates. Section 27, which deals with reports of this character, says that the registrar at the conclusion of every investigation which he conducts shall make a report in writing which he shall sign and without delay transmit to the minister. Then, dealing with the report of a commissioner, who is an entirely different officer under the act, subsection 2 says:
Every commissioner who conducts an investigation shall at the conclusion thereof make a report in writing which he shall sign and transmit to the registrar, together with the evidence taken at the investigation, certified by the commissioner, and any documents and papers remaining in the custody of the commissioner; and the registrar shall without delay transmit the report to the minister.
Then with respect to publicity, section 28 says:
Any report of a commissioner, other than an interim report, shall within fifteen days after its receipt by the minister be made public, unless the commissioner is of the opinion that the public interest would be better served by withholding publication . . .
That deals entirely with a report by a commissioner, and not an inquiry by the registrar.


James Layton Ralston: The registrar was not sitting as a commissioner?
53719-287J


Wesley Ashton Gordon: No.


Mr. WOODSWORTH:: May I ask what
the decision of the department has been in regard to an application for an inquiry in reference to the combine in the city of Winnipeg?


Wesley Ashton Gordon: I assume that the hon.
member has reference to an alleged combine in connection with the coal industry in Winnipeg. The distribution of coal in Winnipeg has been under review by the officials of the department. An interim report has been received. I expect to have the matter investigated further.


James Layton Ralston: In that connection may
I ask a further question? While it is true that the imperative section of the act with regard to publicity refers to a commissioner, I understand there is nothing in the act which prohibits the minister from making public the report of the registrar; in fact there is no suggestion that it shall not be made public'... Will the minister lay the report on the table -of the house?


Wesley Ashton Gordon: The hon. member is quite right in saying that the act is silent with, respect to making public a report of the.' registrar. As I have already indicated, having regard to the fact that I am transmitting the report of the registrar and the evidence and exhibits upon which it is founded to the provincial authorities affected, in order that they may take such action as they deem advisable, in my view it would not be desirable to make the report or the evidence public.


Mr. YOUNG:: Why not?


Wesley Ashton Gordon: Because it might defeat
any action which the attorney general of the province to whom the report is submitted might take.


Edward James Young: In what way?


Wesley Ashton Gordon: If there should be a prosecution the evidence would be in the hands of anyone who might be subjected to that prosecution. That has not been the practice in the past, and I think the practice that has been followed is sound.


Mr. SPENCER:: May I ask to what provinces the report will be submitted?


Wesley Ashton Gordon: The only provinces affected would be Quebec and Ontario, and Ontario would be affected much less than Quebec.
Race Track Employees


CANADA-GERMANY TRADE AGREEMENT
[Stage Direction]
On the orders of the day:
Mr. SAMUEL FACTOR (Toronto West Centre):: I should like to ask the Minister of Trade and Commerce (Mr. Stevens) if the trade agreement between Canada and Germany, which I understand expired last month, has been renewed by the government and, if so, when it was renewed and for what term.


Hon. H. H. STEVENS (Minister of Trade and Commerce):: The understanding with
Germany-it is not a trade agreement-was extended about a month ago, and some statement in that connection was made in the house. I think it has been extended for a period of six months.
RACE TRACK EMPLOYEES On the orders of the day:
Mr. ECCLES J. GOTT (South Essex): Mr. Speaker, according to press reports of yesterday the Minister of Immigration (Mr. Gordon) is expected to modify the restrictions against United States citizens entering Canada to work on Canadian Racing Association tracks as pari-mutuel operators. I should like to ask the minister what is the intention of the government with regard to the employment in Canada of United States citizens in this connection, in view of the fact that Canadian citizens are barred from employment on the tracks in the United States.


Wesley Ashton Gordon: Mr. Speaker, the question of the interchange of labour between Canada and the United States, as I think every hon. member knows, has come up with respect to many industries and activities. It is difficult to adopt any course that will not at times give rise to irritation or cause some people to feel that the division is not fair as between the two countries. With respect to the employment of people on race tracks-and I may tell hon. members that I am not at all acquainted with race tracks and their operation-I had this question before me last year and again this year. I am not prepared to subscribe to what my hon. friend says with regard to the exclusion of Canadians from United States tracks, though I would not care to deny that there has been some restriction in that regard. There are many more tracks in the United States than there are in Canada, and Canadians are employed on United States tracks. The number of United States citizens employed on Canadian tracks the year before last was about one hundred. Last year that 
number was greatly reduced, and this year a further reduction has been made, so that there will not be more than fifteen such officials employed.
Hon. members must realize that the operation of a race track is a highly specialized business, and one cannot become acquainted with all its complexities in the course of a few weeks. For instance, a steward is a very special man, and so also is a starter; these men are trained for their work. An assistant starter does dangerous work at times, I am told, and it has been suggested to me also that sometimes the finisher finds himself in a very precarious situation. I can assure my hon. friend, however, that the whole subject has been given very careful review, having regard to the possibility of employing Canadian labour and also having regard to the fact that huge sums of money have been invested in race tracks in this country. I do not think it would be advisable for the government to adopt such a course as would be likely to render impossible the carrying on of the sport, so called. Yesterday I did take some action; it was indicated to me that a special man was necessary, and I allowed that man to enter on condition that the race track employ at once four unemployed Canadians who would be taught how to do the work. We must take action such as this at times, and as each case arises the responsibility is mine to see that the best course is followed, having regard to the interests of everyone concerned and particularly the interests of those unemployed in Canada who are capable of carrying on the work.


TARIFF BOARD-APPLICATIONS
[Stage Direction]
On the orders of the day:
Mr. F. G. SANDERSON (South Perth):: I should like to direct a question to the Minister of Finance (Mr. Rhodes) in regard to the new tariff board. Could the minister tell the house what applications for hearings have been received from Canadian and British firms? If the minister has not the information before him perhaps he would give me an answer to-morrow.


Edgar Nelson Rhodes: Obviously I will have to ask that my hon. friend's question stand as a notice, and I will give an answer to-morrow.



INTERIM SUPPLY

Edgar Nelson Rhodes: Mr. Speaker, it is desirable that we should have interim supply. Therefore I would ask the unanimous consent of the house for the

Business oj the House
purpose of voting one-twelfth of the estimates. I accordingly move, Mr. Speaker, that you do now leave the chair for the house to resolve itself into committee of supply.


Mr. POULIOT:: I would ask the minister
whether, when this amount is voted, he will make a second motion for the house to resolve itself into committee of ways and means.


Edgar Nelson Rhodes: Yes.


Right Hon. W. L. MACKENZIE KING (Leader of the opposition):: I imagine that
the minister's motion is made for the purpose of obtaining what is necessary for the payment of the civil servants on the 15th of the month?


Edgar Nelson Rhodes: Yes.


William Lyon Mackenzie King: If I might avail myself of this opportunity to say so, this motion rather brings up the question of whether this house will not conclude its business by that time. I may say quite frankly that so far as the opposition is concerned we have no desire to protract the session. If we could come to an agreement with regard to the business for the remainder of the session I think it might not be necessary for my hon. friend to ask for this interim supply. I just make this suggestion as an indication of the attitude of the opposition provided we can reach an agreement as to the business for the balance of the session.


Edgar Nelson Rhodes: Even in that event, Mr. Speaker, there would be some inconvenience because under the new control and audit act we are practically without funds for purposes which require funds from day to day. In view of what has been said by my right hon. friend, however, and in anticipation of any possible announcement that may be made I think perhaps the motion may be withheld until to-morrow. Therefore I would withdraw it.
Motion withdrawn.



BUSINESS OF THE HOUSE


William Lyon Mackenzie King: I should like to
ask the Prime Minister (Mr. Bennett) if there has been any change in the intention of the government to proceed with the redistribution bill this session. I ask the question because there seems to be some uncertainty with regard to the matter.
_ Right Hon. R. B. BENNETT (Prime Minister) :	I think perhaps I can answer that
question with more authority to-morrow, but so far as I know at present there is no change.



INQUIRY AS TO POSSIBLE DATE OF PROROGATION

William Lyon Mackenzie King: I have no intention of asking the government to discuss a matter which they may or may not be ready to take up at the moment; if however the Minister of Finance (Mr. Rhodes) intends to take up interim supply to-morrow perhaps I might ask the Prime Minister if, between now and to-morrow, he would not consider whether it might not be possible to arrange matters so that by sitting mornings or giving up Wednesday night adjournments, or something of the sort, we may have an approximate time fixed for prorogation.
Right Hon. R. B. BENNETT (Prime
Minister): We have what I suppose is a most disputatious measure to consider in connection with redistribution. The discussion of redistribution might take some time, from the indications I have heard. I have not had an opportunity to investigate the matter fully, but I have been told that may be so.


Mr. LAPOINTE:: Hear, hear.


Richard Bedford Bennett: I thank the hon. gentleman from Quebec East (Mr. Lapointe); he says it is so. Therefore it follows that there may be a lengthy discussion on the question of redistribution. Apart from that I know now of no measure that will take any considerable time of the house. There is a short measure which I indicated I might introduce but which I have not yet discussed fully with my colleagues. It is probable that we shall ask the house to approve of a trade agreement between now and prorogation, and that is the reason I have not made any statement, because I cannot do so to-day with any degree of certainty. I shall endeavour, however, between now and to-morrow to get as full information as possible on all these matters and communicate it to the house.


William Lyon Mackenzie King: My right hon. friend refers to a trade agreement. Is it the one with France he has in mind?


Richard Bedford Bennett: Yes.



WAYS AND MEANS


[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee of ways and means.
Mr. JEAN-FRANOOIS POULIOT (Temis-couata): The other day I was unfortunately compelled to submit to the house complaints made by certain settlers and, commenting upon
Settlers in Rouyn District
[Stage Direction]
this, the Minister of Labour (Mr. Gordon) said that these complaints had come from people other than those who had been settled by the federal government. To-day I have received complaints again, and every one of the settlers concerned has been assisted by the federal government as well as by the provincial authorities and the municipality. This matter is of the utmost importance and I would direct the attention of the house and of the country to the condition of these poor people who are now in dire distress. Depending on them are babies and young children who have no tnilk.
The Minister of Labour, the day after I brought this matter up, read the following telegram which he said he bad received from Mr. J. E. Enforce, who acts for the Canadian National Railways on the committee with respect to this work:
Relative statement the Gazette this morning. No families back to land were placed Rouyn or immediate surroundings. No back to land families province Quebec in distress provided they have shown willingness to work.
J. E. Laforce.
The day before the minister read that telegram to the house I had read a telegram received from Mr. Marcel Essiambre. I will now read the letter I received from this man. I regret very much that I have not an English translation at hand, but I may say that the letter has been sworn to before a commissioner of the superior court. It speaks for itself:
(Translation)
I, Marcel Essiambre, previously residing in Montreal, married and father of nine children, residing at Riviere-Solitaire since October 0 of last year-
Mr. CASGRAIN (Translation):: Where is
Riviere-Solitaire situated? In what district?


Jean-François Pouliot: In the county of Pontiac, twenty miles from Rouyn.
-do hereby swear on the Holy Bible and make the following statement:
On October 6 last, I left Montreal to establish myself at Riviere-Solitaire, as a settler. On October 26, my wife and my nine children joined me there. I had to pay $15 for the transfer of my household effects from Ville-Marie to Riviere-Solitaire. Instead of delivering them on my lot, the driver spread them over a distance of about 12 miles. In connection with this transfer I lost for at least $100 worth of my household effects, namely, two large boxes containing new clothes which we had purchased before leaving and which were to last, at least, over two years; I also lost a mattress. No one ever reimbursed us for this serious loss. My lot is situated at a distance of half a mile from the highway. The road leading to it was cleared, that is the trees were cut, but the road bed is soft. Therefore, it is impossible to reach my lot with a summer vehicle; however, it can be reached with a
i Mr. Pouliot.]
"log-sled" (a kind of a sled made of logs which is dragged along the ground). Since our arrival here, we have, so to speak, no mail service, that is, any one coming from Rouyn brings us our mail. Last Sunday, Mr. Leroux, the parish priest notified us in his sermon that, in the future, those who wanted their mail, would have to get it themselves at Rouyn, as he did not intend to bring it any more.
I have not been able, for more than fifteen days, to obtain goods from the store of Mr. Bellehumeur, at Riviere-Solitaire. My account amounts to $421.53, the balance completing the $500, I am told (Mr. Joseph Morin, who is one of the agents of colonization here, so informs me) is held to cover the travelling expenses to this place, of my family and myself, also to cover the freight rate on my household effects. Yet, previous to my departure from Montreal, I was informed at the C. P. Ry. offices, Windsor station, that our train fare and freight for household effects would be free of charge. I am charged seven fares at $10 each, or $70. The only food we have had in the house, since fifteen days, for my wife, children and myself, is flour. To-day, I arrived at Rouyn on foot, after having walked 32 miles, in order to obtain some work. As we had not eaten anything, I had to beg for my food. My friend and myself, have enough for another meal before returning, on foot, to Riviere-Solitaire, as no work can be had at Rouyn.
I now appeal to Mr. Jean-Fram;ois Pouliot, M.P., and ask him to draw the attention of the House of Commons to the sad plight of my family and myself and to request the government to supply us with food.
I know a number of families who are also starving; the following are the names of a few of them, all residents of Riviere-Solitaire.
Names of families: 1. Octave Laroeque; 2. Amable Laroeque; 3. Joseph Levasseur; 4. William Laviolette; 5. Jeremie Trepanier. There are many others who have no food whatsoever.
I would request the government to send an inspector here, you will then be able to judge whether I have given false evidence. Many of us are in a weak state and unless the government acts immediately, there will be deaths to register.
I sign,
Marcel Essiambre, Rivi5re-Solitaire, Temiskaming, (Signed) Marcel Essiambre.
iSworn before me, this 25th day of April, 1933.	.
(Signed) Nelson Pinder,
(Justice of the Peace for the district of Pontiac).
Note.-I have an infant 8 months old to whom milk is refused.
(Signed) Marcel Essiambre.
I forwarded this letter to the hon. Minister of Labour enclosing also mine which is as follows:
Ottawa, April 28, 1933. Honourable W. A. Gordon,
Minister of Labour,
Ottawa, Ont.
Dear Mr. Gordon:
Referring to your statement of yesterday (Hansard, p. 4644) on the condition of settlers

Settlers in Rouyn District
in Rouyn and other parts of Quebec, Mr. Laforce has wired me that "no families back to the land were placed Rouyn or immediate surroundings."
Mr. Marcel Essiambre's telegram which I have read on April 26th (Hansard, p. 4615-6) was sent from Rouyn and it mentioned that a letter was to follow.
I have received that letter only yesterday and I forward you a copy of it.
You will see by that letter that Mr. Essiambre or Essiandre is one of the settlers at La Riviere Solitaire, and that man walked the whole way, about twenty miles, from La Riviere Solitaire to get some work in Rouyn wherefrom he sent his telegram.
I did not mention in the house that Mr. Essiambre was living at Rouyn, but it appeared by the telegram itself wherefrom it was sent.
Mt. Laforce, who, as you said, "acts for the Canadian National Railways on the committee with respect to this work" has added: "No back to land families province Quebec in distress provided they have shown willingness to work."
You will note that Mr. Essiambre's letter has been sworn before a justice of the peace. The only thing he asks, and it seems very fair, is the visit of an inspector. He writes: "You will then see if I perjure myself."
Therefore the sworn statement made by that man is most serious and deserves every consideration.
Mr. Essiambre says that he is the father of an eight months' child and who is refused milk. Can you expect from such a child "the willingness to work" mentioned by Mr. Laforce?
You have stated that only two settlers had been assisted by your government in my constituency and that you believed that the other settlers there had been placed by the province of Quebec; but the above mentioned wire came from Rouyn and the sender was a settler from La Riviere Solitaire.
Therefore, will you kindly let me know at once if your government had anything to do with the settlement of La Riviere Solitaire? This is my first question.
My second question is: What are the settlements to which your government has made any contribution in the province of Quebec?
My third question is as follows: If your government had anything to do by contribution or otherwise with the settlement at La Riviere Solitaire, will you kindly see to it at once that an inspector from your department is sent there to interview Mr. Essiambre and the people mentioned in his letter, in order to have a true, complete and impartial report on the matter which seems to be very serious.
In fact, this morning I have received another wire from J. D. Valiquette, dated Rouyn, but I presume that that gentleman is one of the settlers of La Riviere Solitaire. You will note that he says that his children are very weak.
I am anxious to receive his letter and I will send a copy to you as soon as I get it.
I regret not to have the time to translate some of the documents which I send you but it is easier for you to have it done at once by your staff.
My only appeal is to your sense of justice and to your good heart. This is why I expect a fair answer with great eagerness.
I wrote another letter to the hon. gentleman on May 1 but as yet I have received no answer. I desire to take this opportunity to thank the newspapers which have published the letter written by Mr. Essiambre. I refer particularly to the newspapers La Presse, La Patrie, Le Devoir and Le Droit which have brought these facts to the notice of the public. They must be known to everyone. Only this morning I received another letter, also sworn to by the same gentleman, which reads:
Sworn Statement
I, Marcel Essiambre, a settler of Riviere-Solitaire, hereby swear on the Holy Bible and make the following statement: I arrived this evening from Riviere-Solitaire, together with my nephew Frederic Larocque, after having walked 32 miles. As we had no money and had not eaten any food, we had to make up our mind to beg for food. After having, explained to a Rouyn citizen that we were poor settlers having come from Montreal and settled at Riviere-Solitaire, and that we had not eaten any dinner that day, he gave us our supper, and a bed for the night. He showed me in the newspaper "La Presse" what the minister, W. A. Gordon, had said regarding the statement I had made in my telegram; the newspaper contained the following: That my name did not appear on the files of the department, that in the back to the land scheme under the Dominion government, no settler was located in Rouyn or surroundings. I deem it my duty to furnish to the one who defends our cause in the House of Commons, Mr. J. F. Pouliot, the facts such as sworn to, in order to make known the truth and prevent those charged of resorting to lies justifying their actions. I left Montreal on October 6 last, and after reaching Riviere-Solitaire, I settled on lot 7, range 8, township of Desandrouin; my family left Montreal on October 26 to join me and ever since then we have been residing on my lot, located at a distance of 32 miles from Rouyn. To-day I am looking for work because I am certain that if I remain on my lot we shall all starve to death. I have no hesitation in advising my relations and friends who reside in Montreal not to come and settle at Riviere-Solitaire, it is a real snare and the best place to starve to death. All our surroundings here consist in deceit and hypocrisy. We are shamefully robbed of the few dollars granted to us by the city of Montreal and the Dominion government. The provincial government does not seem to have paid its quota, because the drivers who transferred our household effects have not, according to them, been paid.
I eamnot vouoh for these facts; I simply quote the sworn statement such as it is:
Food and other articles were sold to us at twice their value. Our letters are unsealed, taken out and lost, while the goods sent to us through the mail are stolen. We have no mail service, we must depend on every one. If the minister, Mr. Gordon, wishes to be better informed, let him send some one to hold an inquiry (some serious person) and he will discover quite a number of poor settlers who had their goods stolen, their letters opened or stolen. For months past our member, Mr. Bel ex, has been promising us that mail service

Settlers in Rouyn District

Mr. Essiamlbre makes certain comments about the hon. member for Pontiac (Mr. Belec) and out of deference to the latter I shall not read them.
If federal inspectors have held inquiries, I do not hesitate to state, under oath, that they did not fulfil their duty, they made false statements and did not endeavour to discover the truth.
First, our member, Mr. Charles Belec, in the grand speech he recently delivered, was bold enough to state publicly that we had a well equipped hospital; I wish to state, under oath

Mr. Essiambre uses language which I shall not repeat, however, he absolutely contradicts the statement of the hon. member for Pontiac.
-we have no hospital or even a doctor. Although I am but a poor settler, I shall take the liberty of telling our member, Mr. Charles Belec-
Neither shall I quote the words Mr. Essi-ambre uses.
-that he should defend in the house his constituents so that we would not be forced to ask an outside member to request on our behalf charity for our families and ourselves.
Sworn before me, May the second, the year of our Lord, nineteen hundred and thirty-three, at Rouyn, witness,
(Signed) Nelson Pinder, Commissioner of the Superior Court of the province of Quebec, Abitibi district.
I sign,
(Signed) Marcel Essiambre.
I took the trouble to communicate with the Post Office department to verify the statement of Mr. Essiambre, in connection with the mail service; the following is the letter received, dated May 1, last, from Mr. Maurice Grondin, private secretary to the hon. Postmaster General.
Mr. Jean-Frangois Pouliot, M.P.,
House of Commons,
Ottawa.
Dear Mr. Pouliot:
I am instructed by the hon. Mr. Sauve, to acknowledge receipt of your letter addressed to him on March 28 last,'in connection with the mail service at Riviere-Solitaire-Rouyn. There is not yet any post office located at Riviere-Solitaire. A request for one has already been made, however, the necessary arrangements have not, so far, been completed.
As the list of addresses published by the Post Office Department is arranged by each local post office, this wall explain why no list of addresses has yet been made. As to the transport of mail, tenders were asked for a semi-weekly service between Riviere-Solitaire and Arntfield. The contract has not yet been awarded.
I remain, sir,
Yours sincerely,
(Signed) Maurice Grondin,
Private Secretary.
I think it shameful, sir, that the 2,800 people who reside at Riviere-Solitaire, since October last, have not yet any mail service. Is it to prevent these poor people from broadcasting their legitimate complaints against the way they are treated by the governments and municipalities? If that is the reason there is not only Mr. Essiambre who has to complain.
I also received such a complaint from Mr. Joseph-Donat Valiquette in a telegram dated at Rouyn, however, this gentleman resides at at Mont-Bayard, in the neighbourhood of iRiviere-Solitaire. This telegram was also sent "C.O.D." on April 27, last.
Mr. Jean-Frangois Pouliot, M.P.
Ottawa, Out.
My family and myself nothing to eat. Ask you to rise in house and request the government to send food. My children are in a weak state. Writing to-day.
(Signed) J. D. Valiquette. Sworn Statement
I, Joseph-Donat Valiquette, previously residing in Montreal, father of four children, settled at Rivifere-Solitaire, Temiskaming, on October of last year, do hereby swear on the Holy Bible and make the following statement:
I left Montreal on October 6 last to settle at Riviere-Solitaire, under the system which grants $600 to a settler. After reaching Riviere-Solitaire, I decided to take my lot at Mont-Bayard. which is the next parish, situated 12 miles from Riviere-Solitaire.
My account, I am told, amounts to $499. Now, the store of Cote. Limited, refuses to give me food for my family and myself. When I left home this morning, all my wife had in the house was half a kettle of beans and bread. We have been living for the last fifteen days on nothing else but boiled beans, without grease or pork.
Our boots are all worn out. We still have flour and beans to last us about three or four days.
I appeal to Mr. Jean-Francois Pouliot, M.P., to rise in the house and request the government to send us food in order that we may not starve to death.
The following are the names of a few families who, like myself, are starving. These families reside at Mont-Bayard: Messrs. Gravel, Gagnon, and many others whose names I cannot recall, at present.
Sworn before me, this 26th April, 1933, at Rouyn, Quebec.
(Signed) Nelson Pinder, Commissioner of the Superior Court for the province of Quebec, Abitibi district.
I sign,
Josepli-Donat Valiquette, Mont-Bayard,- Temiskaming, Que. (Signed) J. D. Valiquette.


An hon. MEMBER:: Carried.


Jean-François Pouliot: Mr. Speaker, I always try to be lenient towards those who ask questions

Settlers in Rouyn District
when I am making a speech, but the other day when I was saying that it was a crime to let the children of our race die of hunger, some hon. members opposite dared to shout "Hurrah." There may be some excuse for their not understanding fully what I was saying but they should not make fun of these distressing cases. It is not a pleasure to me to bring up these matters before the house;
I do it because I feel it to be my duty to defend these families who have been placed in the middle of a wilderness, cut off from everyone. I feel that my action is not only in accordance with the rules of this house but in accordance with the rules of humanity. I feel sure that no man or woman in this country wants to see a human being go hungry. These men do not ask for money; all they ask is that a fair investigation be made of their cases. They do not want this investigation to be held by those who are paid according to the number of settlers they place on the land; they want it to be held by someone who is fair, impartial and independent. They want someone who will tell the truth to the Minister of Labour in Ottawa and the Minister of Colonization in Quebec. That is all I ask of the minister here and all I have been asking of the Minister of Colonization in Quebec. The latter writes me under date of the first of this month that he intends sending a man there to make an investigation. I ask the government-and I urge upon them the necessity of doing this- to send there a man who is competent, independent, fair, who will interview those people who are starving in the wilderness and report as to their condition. Then we shall find out whether Mr. Laforce is telling the truth when he says that no one is dying of hunger in Quebec. I want the minister to understand what I say. Mr. Laforce says that no one who is willing to work has been in distress. Can you expect a starving man to show unwillingness to work?


Mr. OANTLEY:: Better go home and put
your head to soak.


Jean-François Pouliot: I am sorry, but I shall put the hon. member for Pictou in the same class as those who shouted "Hurrah" the other day. I pity him. A man of his age, who must have a heart in his body, should not say anything like that when I am speaking of human misery. If the hon. member for Pictou were bringing to the attention of the house the sad case of those who are suffering in his constituency, he may be sure I should not jeer at him, but I would sympathize fully with him, and I promise, when he speaks in the house I shall pay attention to him. If he has a stone instead
of a heart in his body, I shall leave him alone and I shall not mention him again in my speech as I would not honour him by paying any more attention to his gibes.
I have made an appeal to the sense of justice and good heart of the minister. I am asking him something that is fair and reasonable, something that any man who has a heart in his body would do at once. I urge him to see to it immediately that an inspector is sent there to find out whether those men who sent sworn letters about their miseries and grievances, are telling the truth or not. The minister must take with a grain of salt those reports that are sent to him or to the provincial government stating that everything is well in those newly settled districts. That is all I have to say, and I say it in all earnestness and sincerity, hoping at least that the minister will believe I am not playing petty politics; that all I wish to do is to open his eyes and tell him that those who have already made reports to him have not told the truth.


Mr. J. A. BRADETTE (North Timiska-ming):: Mr. Speaker, on account of the fact that the hon. member for Temiscouata (Mr. Pouliot) has brought up this matter, I wish to say that the policy of the government in connection with the back to the land movement has placed a number of families in my constituency. I believe during the coming summer the number who will be placed by the government in conjunction with the provincial government will be nearly 400 families, so that on account of these facts the house will allow me to say a few words on this important question.
I am absolutely in favour of the movement because I believe out of it will come a great deal of good as ultimately it will help to bring about a balancing of population between urban and rural centres. I said, I believe five weeks ago, that the government should have a better follow-up system, but taking the movement as a whole, I think it is good and that some benefit has been accomplished. Of course it is always easy to single out certain individual oases and on them build up an argument before parliament, but, as I say, the movement as a whole will be of benefit. For one thing, it makes the governments, both federal and provincial, realize the serious situation that exists in our rural sections. I believe I mentioned a few weeks ago to the Minister of Labour (Mr. Gordon) the case of a man named James McLean, a very fine type of Canadian, at Frederickhouse, who has taken up a lot under that scheme, but who finds it almost impossible to make both ends meet.
Settlers in Rouyn District

In a letter which I read to the .house he mentioned that he was allowed only $1.40 a head. He has eight children, so that with his wife and himself, there are ten of a family who have to live on $14 a month. Every hon. member will realize that it is absolutely impossible to keep body and soul together on such an amount. I could cite two or three others cases, but I do not believe it would be in order to do so at this time. Again I repeat: No family and certainly not a single man should be allowed to settle on the land after the end of June. No matter how well administered the scheme may be, no one should be allowed to go on the land in the fall or winter. In the last two years we have allowed many people to settle in the northern sections in the fall or late in the summer and it is impossible for those fine people to make a success. On that score, however, I believe the government is well seized of the situation.
There is another case which I want the government to understand. A number of those new farmers who have been taken away from their previous occupations and thrown into a new one are finding it impossible, even under the $600 scheme, to finance the buying of seed grain so as to put in a crop on the land which they cleared last year. I believe the government out of either the equalization fund or in some other way should find it possible to get some of the surplus grain which has been accumulating in the west for a few years and which must deteriorate, and distribute it in the northern section of Ontario. I have in mind hundreds .of cases of farmers and settlers who find it impossible to put any seed into the ground for the simple reason that they have not the money to do so. I believe $500,000 would be quite sufficient to meet the requirements of those people. I have under my hand a newspaper dispatch in which I read that the provincial government is sending Hon. Doctor Robb to make an inquiry into the situation, and really this is praiseworthy because a minister of the Ontario government will find out for himself the actual situation and will see that some help must be given. The provincial government go further; they say that they are going to give to some of the settlers who at present are on relief, from ten to twenty bushels of seed grain. This is a move in the right direction. I believe the federal government in this back to the land scheme should enlarge its policy by allowing a sum of $500,000 to be voted by parliament so that not a single settler placed on the land under this scheme will suffer from lack of seed during the present season. As regards the view that they should be self-supporting,

we all know that on new holdings or farms, it is impossible for these people for a number of years to make the thing go with the crop that they find there. Unless they have some seed grain placed in the soil this season, they will be in a worse position next fall than they are at the present time.
There is another matter which I believe will come under this heading, and which has a great deal to do with public health, particularly in the unorganized sections of our country, especially northern Ontario and northern Quebec. We know the doctors in the organized localities are looking after the population not only in the districts in which they live but also in the unorganized sections. I have in my hand a regulation issued by the provincial government last fall whereby it has curtailed the amount that is to be paid to the doctors for their services, extending to every section in which they are giving medical attention. I said in the house early this session, and I repeat that this regulation is actually prejudicial to the health of the individual. It is very harmful to the rural sections and every member will readily understand that a sum of $100, where each doctor has to look after a population of at least
6,000	people, is ridiculous. I 'believe it is in order to read the regulation so that the house may be fully seized with the situation. It reads:
Regulations as to medical services and medical supplies. This statement is issued in order to clarify in the minds of the municipalities and the doctors the proper interpretation of the phrase "medical services and medical supplies" which appears in the order in council dated the 19th of September, 1932.
At the outset, it must be clearly understood that the government is not forcing any policy upon the municipalities with regard to this matter. Each municipality has the right to decide for itself whether it wishes to undertake any medical services in connection with direct relief, and also as to the nature and plan of such medical assistance.
2. As set out in the Public Health Act (section 51, clauses 1. 2, 3 and 4) municipalities are directly responsible for the medical attendance and medical supplies of their indigent population.
This new regulation might well apply to other sections of the province of Ontario. The Minister of Labour is familiar with the northern part of that province, and must realize fully that it cannot apply to the section of the country from which I come. In that part of the province there are only a few organized rural districts. Most of them are in the colonization stage, and there are no municipal bodies to take care of them. A doctor from Timmins giving services in one of the surrounding rural districts would find

Settlers in Rouyn District
it absolutely impossible to collect fees for any such services rendered. The same would apply to the district surrounding the town of Cochrane. That applies as forcibly to other sections, such as those surrounding Kapus-kasing and Hearst. Then, regulation No. 3 is as follows:
Any municipality wishing to undertake the furnishing of medical [DOT] services and medical supplies and desiring to secure government assistance in connection with such work under the order in council above referred to must comply with the following requirements:
(a)	All medical treatment to indigent patients in their homes or in doctors' offices is included, also maternity services at homes, as well as after treatment, in major emergency operations outside of hospitals; the doctors furnishing the necessary medical supplies.
(b)	For such services as outlined in the previous subsection the doctor may be allowed one-half the established prevailing fee for such service in the community.
(c) Surgical and	medical treatment in hospitals or other institutions for treatment of disease and surgical operations outside of hospitals are not included.
(d)	Before the medical services and supplies are given an order in writing for same must be obtained from the relief officer, except in very emergent cases where the relief officer can give such an order after some part of the services required has been performed.
(e) Accounts	for medical	services and
supples must be rendered by the doctor in an itemized statement, and each account must show the details of the prevailing charges in the locality for such services upon which the one-half claim is based. Such account must be rendered to the relief officer and forwarded by him to this department with the monthly statement.
(f)	In rural municipalities a maximum mileage fee of twenty-five cents per mile, one way, may be allowed.
(g)	An amount in excess of $100 in a doctor's account for any one month will not be allowed.
(h)	It will be observed that "medical services and medical supplies" is one of the items of direct relief that must be included in the forty per cent as set out in the order in council.
This rule, Mr. Speaker, is of absolutely no use to our section of the country. If my information is correct, in the city of Ottawa medical men giving their services under the relief act are allowed a minimum of $400 per month. I suppose they attend an average of
2,000	people. In our section, however, in the unorganized districts the doctors have to look after the health of at least 6,000 people. Travelling conditions are poor in a good many cases, he would have to go fifty miles each way, making a round trip of one hundred miles, for which he is allowed twenty-five cents a mile one way. While that may be fair enough in the summer months when automobiles can be used, in the winter months the amount allowed by the government is not sufficient. We know that doctors in the newer sections have a more difficult task than those in the more populated areas. I do not know of any doctor in my section of the country jwho through lack of money has refused to give service. Let us visualize what would happen for instance, in a maternity case: The doctor is called, but on aocount of the fact that the government is not willing to pay fifty per cent of the fee, he refuses to attend. Supposing that on account of such refusal death follows; who would be responsible, or who would receive the blame? It would be the doctor. I put this fair question to the house:	Is a doctor more obliged to
give public service than any other citizen? Must he make more sacrifice for the public than any other citizen? A hundred dollars a month to attend to 6,000 people, and to supply them with proper medicaments, is wholly inadequate. To be fair I must say that in some cases the provincial government has given more; still the payment is inadequate. We have the spectacle of that splendid profession being compelled to make a sacrifice which is not asked from any other section of the population. I know of a cause where a doctor in the town of Jlaspuskasing received a call from an adjoining locality. In that instance the poor settler did not have money enough to pay for the phone call, and the doctor had to pay the reversed charge of $1.40. The doctor never hesitated, but went to attend the patient. He took his car, knowing that he would never receive a single cent for the services he was going to give. Surely a government could not object to helping pay a fee in an instance such as that. The minister may urge that this is a matter with which the provincial legislature should deal. I maintain however, as I said previously, that since we are voting money for relief, out of the federal treasury something should be done by the federal authorities, and it should take a lead in such matters.
To make my point clearer, and so that the house may be fully seized of the seriousness of the situation, I am going to read a letter from one of the doctors which is typical of several letters I have received from doctors in my section of the country. As I said a while ago, we all know that professional men, whether they be doctors or lawyers, never expect to get the full amount of their fees. This applies more forcibly to doctors, because in addition to giving their personal attention they have to supply the necessary
Settlers in Rouyn District

remedies for treatment. The letter before me, dated February 2, 1933, is addressed to Mr. J. A. Ellis, of the Ontario Unemployment Relief Department, and is as follows:
Two weeks ago your representative, Mr. Tackaberry, at the Northern Development office, sent me a copy of regulations as to medical services and medical supplies, dated December 29, 1932, asking me for comments on same by return post. Hurriedly, I gave him my impressions.
The flu epidemic has not given me time to go further into the subject. To-day, however, financial conditions urge me to come to you for information.
I was this morning asked by a man on relief to go ten miles to attend to his wife sick in bed for the last six days. This man walked in ten miles and back ten miles, which is not unusual here. I called the relief department for the $5 livery pay in the ease. Receiving no satisfactory answer I at first refused the husband. Eventually I went, driving twenty miles with team and driver, and opened an abscess in the mouth.
The problem that presents itself is "How deep shall I sink before I stop." My expenses are so very heavy and the present returns so insignificant that I have had to borrow. My limit at the bank has been reached. I can no further risk the welfare of my family and go deeper into debt without assuring myself of the reimbursement of my expenses, and money to keep my wife and seven children going.
Like everybody else, doctors are willing to make sacrifices, but in return expect a living. On account of the population under our care, the amount of work done, and the hardships encountered in this climate, covering the distances over roads, full of impediments, the inevitable expenses are such that the amount of money allowed in the south is altogether inadequate here: and just lately the flu epidemic has intensified that condition.
Whereas I concur with subsections a, b, d and e. of regulation No. 3, I must point out that subsections c, f and g, are not at all suitable to the district. Doctors with mixed practices of medicine and surgery can, as a rule, fairly well forego their surgical fees, but when patients are so far apart that doctors cannot possibly make the round, or where homes are so unsanitary that patients cannot be left there - (settlers' homes are all of pioneer age here, log shacks, all of them, many tumbling down, previously discarded homes even being at times used)-and must of all necessity be brought to hospital for care.
The hospital here takes the place of the home down below, and we should be paid for such services. Unlike the southern hospitals there are no house surgeons here to assume responsibility of patients and our attention is constant. As corroboration to my assertions I might tell you a maternity case of mine died in her home lately because no doctor could reach her. The coroner had to investigate.
Personally I care for about 6,000 of a population in a radius of 50 miles. During this flu epidemic my professional expenses (drugs and supplies, auto or livery, office rent and care, tax, insurance and inevitable expenditure, train, travelling bills) vary between $500 and $600 a month.

To one who does not know our circumstances I will say "not one drop of medicine or one article of medical supply has been handed out that should not have been." In most cases I should have given more.
Unfortunately I have reached my limit financially and physically. (I have been practising my profession twenty-four years). It is not to be forgotten that three or four doctors in Cochrane do incomparably more work than southern doctors, and, if I may say so, undergo hardships unknown in the south.
I am now asking for information and fair treatment, commensurate with the relief work done. I only want my expenses, on relief work, and fair compensation.
I would not wish my letter to be construed as a threat, but in all justice I cannot work all day in one municipality and all night in another one, spend $20 a day to receive $3.33.
Keep in mind that there is one doctor in a city to every 600 or 800 people in a small radius, whereas I attend seven or eight times that number in a radius twenty-five times as large.
This letter is written explanatory to our conditions, and imbued I believe with good intentions. I should be pleased to give any information one might wish, any time.
I have gone to homes where five, eight or ten had la grippe, and three or four such houses in succession, fifty miles from my office. I have had to furnish those poor but honest people with requirements deemed necessary to effect a cure in as short a time as possible. There is no drug store in any of the twenty communities I have to attend to. It is absolutely out of the question to give such patients medicine for two or three days, it must be for eight, ten or fifteen days as the ease may be, and for the number that are affected.
Men have skied or hiked eighteen miles each way to my office. Mothers have pulled babies six or eight miles behind them to my office and other mothers have walked ten miles to my office. One mother, chilled, drove eighteen miles at 15 degrees below zero with a sick infant in her arms to my office. That is only a few, and they must be looked after, and looked after with humanity, and I cannot support the cost alone, or any more.
I have given thirty-two ounces of cough medicine to a family of ten, fifty miles away, and as much tonic; that was not enough, it only lasted four days, and rightly so. The cost may seem high, but it is both expensive and sad in the community to see a few cases developing tuberculosis or a young father dying. I have seen both in this present epidemic. It is very heart-rending at times, but most of those people on relief do not deserve to, must not be left unattended, especially now.
Whatever it may seem to cost, I don't get it. 1 would welcome a relief agent from Toronto to go my round and investigate.
My yearly income tax reports to Ottawa show my expenses, professional only, at from $5,000 to $6,000 a year. They are the same now.
Quite correctly you have assumed 25 cents a fair remuneration for mileage. This is commensurate with conditions where a car can be used. Herein you will find affixed a cartoon of the country physician. Now that has happened often to me, but for displacements it is worse yet, as we have to hire a team of horses

Special War Revenue Act
and driver whom we must pay 50 cents a mile one way (and it is very fair). You cannot allow us less than we actually pay.
There was a bad apostle among the twelve, and there must be an odd doctor who will forget himself sometimes, but our cases here are bona fide. Our neighbouring doctors are by rail 70 miles west, 92 miles east, 125 miles south (Timmins 60 miles southeast) and the north pole limit north. We cater to the municipalities of Cochrane, Glackmeyer, Fauquier, Moonbeam, besides the unorganized districts which comprise Frederick House, Hunta. Driftwood, Holland, Devonshire, Abitibi, Brower, Norembega, Genier, Clute, Gardiner, and a few others.
To fix an amount equitably for doctors' services one must take into consideration the situation as it arises in the district. There are no industries, no manufactures, no regular pay here, but what comes from the community. Nine-tenths of the settlers are on relief, and the other one-tenth has no money. This is a railway junction but the railway has its own doctor who is paid per capita.
I depend for living on the work I do, which is 95 per cent relief, requested by the relief officer, with the clear understanding of a 50 per cent usual fee.
If the minister wishes the name of the doctor I shall be glad to give it; I believe he knows him personally. I think that the health of our fine pioneer population is at present jeopardized, and that we cannot expect further sacrifice by the medical profession in the new sections of our country.
I appreciate, Mr. Speaker, the attention that the house has given me. In closing I want to correct a statement which I believe has been prejudicial to our section of the country, made by a controller of the city of Ottawa a few days ago. I understand that controller visited some sections of northern Ontario and Quebec to see the progress made in the back to the land movement, and he came back here and made statements which I think are not fair to northern Ontario. In the first place, if he wanted to make a thorough investigation he should have gone to the north country when the snow was not on the ground, so that he could see the quality of the soil and the facilities we have to clear land. But he went there when the ground was covered with two or three feet of snow and then came back and said that no citizen of Ottawa should be sent to that country. I protest against that statement which cannot go unanswered. It is true that at present many of them are on relief, but I believe that with a proper policy of direction and assistance on the part of the federal and provincial authorities they will again know days of prosperity and comfort. As a representative of the new sections of Ontario 1 deny the statement made by the Ottawa controller, which was given much
publicity, in the press of this city at any rate, because I state again that there is a future for agriculture in our northern country.
Before resuming my seat I voice the fervent wish that the federal and provincial governments will have a better follow-up system in connection with their back to the land operations. I am going to study the situation through that country all summer; I am going to spend most of my time among these new settlers to find out on the ground their requirements. I know that the great majority of those who have gone there have gone with the same spirit that animated our pioneer fathers. But again I repeat that the government will have to do more for those fine people than they have done in the past. I hope the matter will be given attention so that there may be no failure in the policy so well inaugurated two years ago, being certain that its success will prove most beneficial to the whole of Canada.
Motion agreed to and the house went into committee, Mr. Morand in the chair.


SPECIAL WAR REVENUE ACT AMENDMENT
The CHAIRMAN:: Paragraph 10 of the resolution, schedule III, articles exempt.
10. That schedule III to the said act, as enacted by chapter fifty-four of the statutes of 1932, be repealed and the following substituted as schedule III:-
Schedule III
Bread, not to include rolls, buns or similar goods, whether sweetened or not; flour, not including self-raising flour; animals living; live poultry; meats and poultry, fresh; meats salted or smoked; milk, including buttermilk; condensed milk, evaporated milk and powdered milk; cream; butter; cheese; lard, when produced in Canada; eggs; vegetables, fruits grains and seeds in their natural state; shorts; bran and middlings when for use as cattle, hog, poultry or other stock feed; alfalfa meal; oil cake, oil cake meal; grains mixed or crushed for cattle or poultry feed; hay; straw; hops, when produced in Canada; nursery stock; vegetable plants; other farm produce sold by the individual farmer of his own production; bees; honey; sugar; maple syrup; salt, when manufactured or produced in Canada; ice; fish and products thereof; ores of metals of all kinds; fuel other than in liquid form; gold and silver in ingots, blocks, bars, drops, sheets or plates unmanufactured; British and Canadian coin and foreign gold coin; logs and round unmanufactured timber; split fence posts; fence posts, railroad ties, pulpwood, tan bark, and other articles the product of the forest, when produced and sold by the individual settler or farmer; newspapers and quarterly, monthly, bi-monthly and semi-monthly magazines and weekly literary' papers unbound; materials for use only in the construction, equipment and repair of ships; ships licensed to engage in the

ing boxes and bottles containing the same; maps, photographic reproductions, casts as models, etchings, lithographic prints or charts; mechanical equipment of a class or kind not made in Canada. All articles in this item, when specially imported in good faith for the use and by the order of any society or institution incorporated or established solely for religious philosophical, educational, scientific or literary purposes, or for the encouragement of the fine arts, or for the use and by order of any public hospital, college, academy, school, or seminary of learning in Canada, and not for sale, under regulations prescribed by the minister;
700.	Animals and articles brought into Canada temporarily and for a period not exceeding three months, for the purpose of exhibition or of competition for prizes offered by any agricultural or other association: Provided a bond shall be first given in accordance with regulations prescribed by the minister, with the condition that the full duty to which such animals or articles would otherwise be liable shall be paid in case of their sale in Canada, or if not reexported within the time specified in such bond;
701.	Menageries, horses, cattle, carriage and harness of, under regulations prescribed by the minister;
702.	Carriages for travellers, and carriages laden with merchandise, not to include circus troupes or hawkers, under regulations prescribed by the minister;
703.	Travellers' baggage, under regulations prescribed by the minister;
704.	Apparel, wearing and other personal and household effects, not merchandise, of British subjects dying abroad, but domiciled in Canada; books, pictures, family plate or furniture, personal effects and heirlooms left by bequest;
Articles and materials to 'be used exclusively in the manufacture of goods enumerated in customs tariff items: 281, 281a, 391a, 406a, 406b, 409a,	409b,	409c,	409d,	409e,	409f,	409g,	409i,409j,	409k,	409n,	410b,	411,	411a,	411b,	439c,
440k, 442, 442a, 476, 476a, 480, 538, 663, 663a, 663b, 666, 667, 696.
Materials, not to include plant equipment, consumed in process of manufacture or production, which enter directly into the cost of goods enumerated in customs tariff items: 281, 281a, 391a,	406a,	406b,	409a,	409b,	409c,	409d,	409e,409f,	409g,	409i,	409j,	409k,	409n,	410b,	411,
411a, 411b, 439c, 440k, 442a, 476, 476a, 480, 538, 063, 663a, 666, 667, 696.


Edgar Nelson Rhodes: Mr. Chairman, before we
proceed I want to take this earliest opportunity to refer to a difference of opinion between the hon. member for Shelburne-Yar-mouth (Mr. Ralston) and myself when the committee was in session yesterday, with respect to the total amount involved in the taxes imposed under the recent budget. Upon inquiry I find that my hon. friend was correct, and that I was in error. Perhaps I may be permitted to use language which is familiar to my hon. friend, "by way of confession and avoidance," that I was compelled suddenly to resort to my recollection, without the opportunity to refer to the actual figures. It serves only to illustrate the fact that- on a
[The Chairman.)
spring evening after many weeks of arduous work during the session it does not do to trust to one's memory for figures. I feel that I owe it to my hon. friend as well as to myself that I should make this correction, and also for the purposes of accuracy of the record.


James Layton Ralston: I think my hon. friend
will find in the record that when I corrected him last night I gave him credit for not attempting in any way to mislead the committee.


Mr. DUFF:: Mr. Chairman, clause 10,
which includes a very long schedule of articles, refers to items which are exempt from the sales tax. The sales tax at the present time on certain articles is fixed at 6 per cent. Last year, if I rememibeT correctly, in addition to the items enumerated on pages 12 and 13 of this resolution, another commodity that is commonly used in the household was not subject to sales tax, an article which is used by nearly every one in greater or less degree, and I am going to appeal to the Minister of Finance to have it included in this schedule of exemptions. Yesterday the minister gave certain reasons as to why it was necessary to impose a special tax of 2 cents per pound on sugar; in fact he has been giving those reasons for the last two or three days. I am not going to argue with the minister with regard: to that tax, because I would be out of order and also because of t'he fact that last night the house passed on division that section of the proposals. But in view of the fact that a tax of 2 cents per pound is being collected from the people of this country, who have consumed sugar in much larger quantities in recent years, I appeal to the minister to exempt molasses from the tax. I remember that in my younger days molasses was used to a much greater extent than is the case at present, and I am very much afraid that as a result of this 2 cent tax on sugar the ordinary people in this country will have to use molasses to a greater extent once more. Even with the increased consumption of sugar molasses remained a household necessity. In going over my constituency and meeting the boys and girls of three, four, five and six years of age, especially between ten and eleven o'clock in the morning and four and five o'clock in the afternoon I find that nearly every child has a piece of bread covered with molasses. This makes a very palatable meal and promotes the health of the children.


Mr. MULLINS:: Molasses and sulphur.


William Duff: In addition molasses is used
largely by the fishermen and lumbermen together with beans and other articles of food.

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I do not object particularly to the tax on sugar, but I suggest to the minister that in view of the fact that this tax will result in a greater use of molasses he should include molasses in schedule HI, where it has been in previous years. This is the first time in a number of years that molasseis has been subject to this tax, and I strongly urge upon the minister that after having imposed a tax of 2 cents on sugar he should not also tax the molasses which many people will be compelled to use in future.


Edgar Nelson Rhodes: I have every sympathy
with the viewpoint held by my hon. friend from Antigonish-GuySborough, but speaking solely from the point of view of revenue I may say that he weakens rather than strengthens his argument when he intimates that if there were no tax placed upon molasses the consumption would be increased, with the consumption of sugar becoming less. My hon. friend will recall that the object of the tax was to raise revenue, and it was felt that since sugar was taxed molasses should properly bear at least a small tax, not comparable in any degree with the tax applied to sugar. The sales tax, as applied to molasses, based as it is upon the wholesale price, would mean an additional cost of only 2^ cents per gallon, and I fancy that a gallon of molasses would last that young lad whom my hon. friend saw on the street with a slice of bread spread with molasses, for at least a year. Even at that, however, if it were possible to devise a regulation which would permit the use of molasses by the poorer families without payment of a tax, small though the tax might be, I should be entirely agreeable to that being done. Unfortunately, however, molasses is capable of being used and is used in manufacturing processes and in many ways other than for household table use, and there is no method of division by which we could make the tax apply in the one case and not in the other. I may tell my hon. friend that I have recognized for some time that the tax would be open to the objections voiced by the hon. gentleman, but having regard to the circumstances I have briefly outlined I do not see how it is possible, in justice to those who have to pay such a heavy tax on sugar, to afford an exemption in the case of molasses.


William Duff: I quite see the point raised
by the minister, and if he were exempting from the operation of the sales tax every article of common consumption used in the country that argument would be good. It seems to me, however, that when he exempts 53719-288
a great many other articles, some of which do not seem so important as molasses, his argument is not so strong. Not satisfied with putting a tax on sugar, which is one sweet, he is also putting a tax on molasses. I suggest to the minister that if he must raise revenue by putting a 6 per -cent sales tax on molasses surely that tax should apply also to phonograph records, prayer books, hymn books and a number of other articles included in the schedule. Surely molasses is much more important to the people of this country than even hymn books or prayer books. We can go to church and listen to someone else pray and sing. I have sat behind people in church who did not know one note from another; it would have been a great deal better if they had not opened their mouths, and the same thing applies sometimes in this chamber. So I think the minister's argument would be sound if the 6 per cent sales tax applied generally, but it does not. If the minister puts a sales tax on molasses while he leaves phonograph records, prayer books and other items free of that tax his argument does not hold water. I think he should give some consideration to my plea. I am not speaking simply to take up time; I know from my own experience that hundreds of thousands of gallons of molasses are used every year by the poorer people in this country, and I think the minister would be doing God's service if he added molasses to the list of exemptions.


Edgar Nelson Rhodes: Special War Revenue Act

done, but I do not wish it to be understood that 1 give any undertaking in that respect. I do not think I can add anything to what I have already said except this. My hon. friend speaks about phonograph records; they are subject to the Sales tax, the only exemption made being those used for educational purposes.


William Duff: The minister says he cannot exempt molasses because it is used for a great many purposes other than domestic consumption. But the same thing applies to flour; flour also is used in the manufacture of candy. Flour is exempt from the sales tax and if the minister is not going to exempt molasses for the reason he has given, then I suggest he should not exempt flour. I will leave the matter with him. I have made my plea as strongly as possible on behalf of the poor people of this country who are going to be called upon to pay 2 cents a pound on their sugar. They will have to use more molasses and I do think that they should be given some consideration. While I see the force of the minister's argument, that molasses is used for purposes other than domestic consumption, it seems to me that molasses when used by people for tlheir tea or coffee should be exempt. I know that it is used in alcohol; I understand that you can make rum from molasses if you know how; and I do not object to the tax being imposed when the molasses is used for making candy. I agree that candy is a luxury in these times and is already taxed, but the ordinary 'householder is the person I aim thinking of-the fishermen in the county of Richmond and in other parts of Canada as well as the lumbermen working for twenty dollars a month. They use molasses in their tea and I think that the officials of the department could devise some means whereby this very necessary commodity might be placed on the list of exemptions when used for certain purposes. In line 10 of schedule HI reference is made to salt, which is exempt when manufactured or produced in Canada. We had some controversy over this last year, and perhaps the minister will say something about it. On page 13 reference is also made to salt-"Salt for use of the sea or gulf fisheries." That is exempt.


Edgar Nelson Rhodes: Yes.


William Duff: Why is it necessary to specify it in the other item? Why not simply say salt and leave out the words "when manufactured or produced in Canada?" The words "for use of the sea or gulf fisheries" should also be omitted. There as no necessity for the

exemption to appear in both places when apparently the item is altogether free. As the minister knows, of course, I am in favour of abolishing the tax on salt.


Edgar Nelson Rhodes: The explanation is that there are other forms of salt imported which are not used in the sea and gulf fisheries, and they are subject to the tax.


Joseph-Arthur Bradette: 
Alan Webster Neill: The minister says that he
will consider this item, and I should be glad if at the same time he would give his attention to a minor aspect of it not touched upon by the hon. member for Antigonish-Guys-borough. I refer to cheap molasses used for cattle feed.


Edgar Nelson Rhodes: That is exempt.


Alan Webster Neill: Nowadays, when dairying is
so much in the red, it is necessary to economize at every turn, and in British Columbia they have adopted a system of supplementing the more expensive feeds by the use of screenings, which must be made palatable by the addition of molasses. The lower grades of grain and hay, off colour, can also be made palatable in this way. The molasses used for this purpose is of a low grade that could not be used either in the manufacture of candy or for domestic purposes. I know that the minister has been approached by different dairy bodies, the dairymen's association of British Columbia, for one, and I would ask

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him to consider very carefully their representations in this regard. There are two distinct grades, one of which I know is cheap. It could not be used for anything but cattle feed, and if* the minister cannot give way in regard to molasses used for domestic purposes as a substitute for sugar, I am sure he could exempt this other grade of molasses without any loss to the treasury. Can he not see his way to exempt that grade?


Edgar Nelson Rhodes: If my hen. friend will look at the sixteenth line on page thirteen he will find that calf, cattle, hog, fox and poultry feed are all exempt from the tax. Where the type of feed is not specified, the interpretation can be so broad, I am advised by the officials, as to include that low grade of molasses which is used for feed purposes. In fact, it is included.


Alan Webster Neill: Even when brought in in
bulk by itself, when not mixed?


Edgar Nelson Rhodes: Yes. The administrative
difficulty does not arise there as it does with molasses used for human consumption. It is therefore quite possible to classify it as tax-exempt under these provisions.


Alan Webster Neill: Thank you.


Mr. REID:: I notice the words "beet pulp." The Minister of National Revenue is present and I would direct his attention and also his colleague's to an important point in connection with this item. In the Fraser valley we have no beet sugar factory, but beets for sugar purposes are grown extensively and taken across the line for manufacture. The farmers are paid so much per ton for their beats plus the return of some of the beet pulp. That beet pulp is returned to them in part payment, but when it comes back the customs department imposes a duty of twenty per cent plus three per cent excise. On taking up this matter with the department I was informed that regulation 709 would apply. This regulation reads:
Articles and other goods, the growth, produce or manufacture of Canada, returned to the exporter thereof after having been exported without having been advanced in value or improved in condition by any process of manufacture or other means;
When it was drawn to the attention of the department that the beet pulp being returned to Canada had not advanced in value or had not been improved in condition, the officials began immediately to scan the act in order to protect themselves, and so they found a clause under which they could impose the
53719-288J
duty. This was clause 1 in regulation 709, which reads:
All articles for which entry is claimed as returned goods must be returned within five years to the person by whom they were exported, and in the case of articles the produce or manufacture of Canada the property in such articles must have continued in the person by whom they were exported.
I might say that it is impossible for a farmer who has exported beets to staite that the beet pulp being returned has been manufactured from the particular beets which he exported. When this regulation was put into effect I do not believe it was ever contemplated that the farmers should be taxed upon the beet. pulp which was returned to them after being manufactured from beets which were exported. The committee which investigated the investigating of sugar from beets did not approve of the building of further factories at this time. If there was a factory in the Fraser valley it could well be said that the farmers could have their beets processed in this country, but they must send their beets across the line to be manufactured into sugar. I ask both the Minister of Finance and the Minister of National Revenue to consider seriously the allowing of free entry to beet pulp which has been manufactured from beets grown by Canadian farmers and exported from this country. The farmers receive this pulp as part payment for the beets which they export. This pulp now pays a twenty per cent- duty plus a three per cent tax and there is some doubt whether or not the present sales tax will apply.


Edgar Nelson Rhodes: The complaint of the hon. member for New Westminster has to do with customs administration and has no reference to the clause under consideration. Under the schedule now before us, dried beet pulp is specifically exempted from sales tax. I shall be happy to confer with my colleague the Minister of National Revenue upon the representations made by my hon. friend.


Thomas Reid: There was no other item under which I could discuss this matter, and I took this opportunity as well as availing myself of the presence of the Minister of National Revenue.


Mr. EULER:: It is not my desire to revert again to the matter of the tax on sugar, but I note that while bread is still on the exempted list in connection with the sales tax, rolls, buns or similar goods produced by bakeries are not exempt. I suppose this classification would also include cakes. Why should these articles be subjected to a tax in
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addition, to that imposed on sugar? Cakes, buns and articles of the kind are used as food and a sales tax must be fairly difficult of collection. I should like to know just how much revenue is derived from the tax upon these articles. I think the minister should consider placing them upon the exempted list. I understand that representations have been made and I believe that these people have a good case to offer. Has the minister any intention of acceding to their request?


Pierre-François Casgrain: I have received requests similar to those referred to by the hon. member for North Waterloo, and I should like to know just what tlhe government intends to do in this connection. Could the minister give us any idea as to how much money he expects to receive from the tax upon the articles mentioned?


Edgar Nelson Rhodes: The subject raised by the hon. member for North Waterloo and referred to by the hon. member for Charlevoix^Sague-nay is by no means an unimportant one. I think there have been more representations made in connection with this one matter than have been made in connection with any other dozen articles in the list. In the first place, I might tell my hon. friends that it is not a minor item so far as revenue is concerned. We receive about 8600,000 per year, the great bulk of which is received from the large bakeries. Collection is free from difficulty and is made without friction. The difficulty which does arise is encountered in the case of the small bakeries. These men are in the same unfortunate position as many other small shop-keepers in the country. That is not only true to-day but it was true when times were more prosperous. The small baker who has to face the competition of new merchandising methods is the one who complains most bitterly against the sales tax on cakes and pies but it would be a manifestly unfair form of competition to exempt him to a greater extent than the heavy taxpayer. Last year the man whose business did not exceed $5,000 per year was exempted, and it was found that this exemption created a very unfair situation as regards those who were paying the tax. As business became restricted in the regular bakeries, many hands were laid off. Many of these men started up a business of their own and became keen competitors with the regular manufacturers who were heavy taxpayers and large employers of labour. This year the exemption has been lowered from $5,000 to $3,000 in an endeavour to prevent a good deal of this unfair competition. I refer to competition only from the point of view

of revenue. Even though we were in a position to forego the receipt of a revenue of $600,000 per year, the matter would not stop there. In justice we could not exempt cakes and pies and impose a tax upon biscuits, cookies and other forms of confectionery. The tax upon these other articles brings in a revenue of $750,000. When we consider the sales tax as it is applied to cakes and pies, we are really dealing with a revenue-not in prospect but actually existing even under today's conditions-amounting to $1,350,000. That is a considerable item. I may say that I have had no deputation representative of those small bakers. I sympathize with them very keenly, but their difficulty is not the sales tax. It is one which is common to the small merchant and which has been increasing in recent years because of new methods of merchandising. Even if the sales tax were removed entirely, they would still do business subject to the same difficulties. I imagine we would find just as much flux and change in the case of email bakeshops under the old condition as we would under the new one where the sales tax obtains. If it were not for the need for revenue and for the large figures involved, this would be one of the first taxes I would wish to see removed, but in the circumstances and having regard to our necessity for revenue, I do not see how we can very well do away with it.


William Daum Euler: I do not desire to prolong
the argument, but I should like again to impress upon the minister the very thing which he has admitted, that is that the situation as regards these small bakers is very difficult, even for those whose annual output is above $3,000. What makes the situation more difficult is the fact that the minister is imposing a very heavy tax on sugar which also enters into their costs. It is almost impossible for those people to add the additional cost to the value of their product. In that particular line of business there are standard prices and it is difficult in the case of buns, cakes and so on to charge the consuming public an increase in price commensurate with the increase in cost as a result of the tax on sugar and on their products. In, view of the fact that the minister has imposed a tax on sugar, the fact that these people have particular difficulties now and the additional fact, which I think is of extreme importance, that these are articles of food and we should tax them as little as possible, I urge upon my hon. friend to consider doing something by way of relief for these people.

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George Gibson Coote: There is a little difficulty in hearing some of the conversation carried on between the minister and the hon. member for North Waterloo, and perhaps for the benefit of hon. members who may have just come in, the minister might explain why rolls, buns and similar goods are not exempted from the sales tax. In the last line or two of schedule III, it reads:	[DOT]
Bakers' cake and pies when produced by any one manufacturer or producer to the value of not more than $3,000 in any one calendar year.
These are exempt. Do I understand from that that rolls, buns or similar goods if made by a producer where the value of such production does not exceed $3,000 in a year, would be subject to a tax, but pies and cake would not be?


Edgar Nelson Rhodes: No; if produced by a baker whose annual production is under $3,000 a year, none of those commodities would be subject to tax.


Mr.   GOOTE@: Not even the rolls or buns?


Edgar Nelson Rhodes: No, because they are
classed as cakes or pies.


Mr. STEWART (Edmonton):: I should like to inquire of the minister the reason for amending the section and enumerating the exempted list, while leaving out of consideration altogether, except that he has been good enough to furnish us with a list, the goods removed from the exempted list and now taxable. That is one question. The other is this: Are there any additions to the exempted list that prevailed last year? I apparently cannot get that information.


Edgar Nelson Rhodes: Will my hon. friend look
at the bottom of page 4 of the typewritten copy which I gave to the hon. member for Shelburne-Yarmouth? Perhaps he has it before him.


Charles A. Stewart: I have it in my hand.


Edgar Nelson Rhodes: He will see there:
Complete parts for goods enumerated in tariff item 409i.
That is scythes, sickles or reaping hooks, hay or straw knives, edging knives, hoes, pronged forks, rakes, n.o.p. These are added to the exempted list; they are not taxable.
460. Materials to be used in Canada for the construction of bridges and tunnels crossing the boundary between the United States and Canada, when similar materials are admitted free under similar circumstances into the United States, under regulations prescribed by the minister.
That provision is included by reason of international arrangement. Those are the only two which are added to the list.


Charles A. Stewart: There is a considerable reduction in the exempted list. By the courtesy of the minister we have been furnished with the list of goods now taxable. The complaint I wish to register is one similar to that which has been so prevalent against the sugar tax. I have not said a word against it, but I wish to register my complaint about taking from the exempted list so many articles of food. I shall not raise so much complaint about the steel, piping and all the rest of it, although I notice shovels and forks now come under the taxable list. My objection is chiefly in regard to food used by every householder in the country. I suppose the minister's answer will be that he must have revenue. I am not going to take time this afternoon to point out where he may obtain that, because that question has been dealt with by other hon. members on this side in connection with the discussion on the sugar tax. I wish merely to supplement, if I. may, the suggestion made by the hon. member for North Waterloo that the minister might very well forego the bonus-ing of some thirteen articles which, if I remember correctly, the minister stated might involve a charge on the revenue of from $6,000,000 to $10,000,000. As one of those who do not believe in protection but who thoroughly believe in a tariff for revenue, I also am not in favour of bonusing. I know of no reason for granting that bonus other than for the purpose of furnishing some relief to those who are perhaps taxed so heavily, by way of tariffs, on their purchases. That, however, is by the way. What I am protesting against is this:	In the list furnished by the minister,
we find flour, oatmeal, rolled oats, com meal and practically all breakfast foods if the packages are five pounds or over. As the question of molasses has been discussed, I shall not say anything about that. Then I find "fuel in liquid form." I presume that means fuel oil?


Edgar Nelson Rhodes: Yes.


Charles A. Stewart: That already bears a tax recently imposed in Ontario and this will be an additional tax.


Edgar Nelson Rhodes: There is no tax in Ontario.


Charles A. Stewart: There must be something wrong, because I have been buying fuel oil and I have had to pay the tax. It was added to my last two bills for fuel oil in Ottawa.


Edgar Nelson Rhodes: That was this tax.


Charles A. Stewart: No, it is a
tax by Ontario, supplemental, I imagine, to the tax on gasoline. However, I am not going to complain about that, because if we
Speciat War Revenue Act

wish to have the luxury of using fuel oil we must pay for at. But I must object to the tax on food. Sago and tapioca are two very important items. Then we turn to the list where one-half the tax is imposed, or only three per cent, on such articles as boots and shoes, including rubber footwear. These are taxes which I believe the minister might very wedl have left alone. Then, there are several other items of canned vegetables, such as "vegetables, prepared; beans, baked or otherwise prepared; com and tomatoes." These are foods used by the ordinary citizen. Instead of being taxed at only half the rate, as formerly, they are placed under the full rate. The list so dealt with is formidable. I should like to know from the minister if he would be good enough to have the list of articles printed in order that we may have it before us for ready reference. I am very grateful to him for what he has already done, but in order that we may know exactly what commodities are removed from the free list, particularly articles of food, and placed under the sales tax regulations, we should have the information before us. Again I protest vigorously against the tax on foodstuffs.


Edgar Nelson Rhodes: The merit which may be attached to the principle underlying the stabilization fund, is one matter. I believe a disoussion of that principle at this moment would not be advantageous. I mention the matter only in reply to the remarks of the hon. member for Edmonton. Whether it be good or bad, such funds as may be necessary in consequence of its establishment are not taken out of revenue. They come out of unemployment relief funds. Although if may not be an important point, for the purpose of accuracy I believe I am justified in making the statement.


Charles A. Stewart: I believe I
have not understood the minister.


Edgar Nelson Rhodes: Any money which is expended under the stabilization fund comes out of the unemployment relief vote, and not out of current revenue. Then, with reference to the list of commodities which have been taken out of the free list, the fact is that with a few unimportant exceptions most of the commodities were taxed up to and including the year 1926. Speaking from the standpoint of revenue, conditions to-day are far more necessitous than they were at that time. I make this reference to show that in this form of taxation we are not breaking new ground. Further, I could give a list of rather important commodities which were taxed in 1926,
[Mr. C. A. 8tewart.l
but which even under the necessitous conditions of to-day are not being taxed under the present proposals.
The request that a list be printed is in my judgment most reasonable, and I shall endeavour to see that some convenient form is arranged which will enable hon. gentlemen to have possession of the facts.


James Layton Ralston: With the consent of the committee would it not serve the purpose if that information were inserted at this time in Hansard, without reading it. It would become part of the minister's budget speech.


Edgar Nelson Rhodes: Is the hon. member referring to the list I have in my hand?


James Layton Ralston: Yes.


Edgar Nelson Rhodes: If the committee is prepared to give unanimous consent, I shall give the file to Hansard. As a matter of strict procedure, however, I believe it is not competent for the committee to do so.


James Layton Ralston: It may be put in as part of the budget.


Edgar Nelson Rhodes: However, if the committee would give unanimous consent I am content that the list should be printed in Hansard. Perhaps this would be a good time to do so, because Wednesday is a short day, and we would not be unduly encumbering the record.


Some hon. MEMBERS:: Agreed.
1933 BUDGET
Resume of Changes in Sales and Excise Taxes
The following goods, formerly exempt from tax, now taxable at the full rate in force:
Self-raising flour, oatmeal, rolled oats, corn-meal and rolled wheat, when in packages exceeding five pounds each in weight; buckwheat meal and pea meal; pearl barley; split peas; barley meal; pot barley; rice, cleaned; macaroni and vermicelli; bran and middlings when sold for human consumption in packages exceeding five pounds each in weight;
Molassescorn syrup; sugar cane syrup;
Fuel in liquid form;
Calcium carbide;
Carbolic or heavy oil, to be used only in creosotoing logs and round unmanufactured timber;
Materials, not to include plant equipment, consumed in process of manufacture or production, which enter directly into the cost of goods subject to the consumption or sales tax, manufactured or produced by a licensed manufacturer or producer;
Articles and materials, not to include permanent equipment, which enter into the cost of manufacture or production of goods manufactured or produced by a licensed manufacturer or producer;
Wrought, seamless or lap-welded iron or steel tubing, less than four inches in diameter,

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threaded and coupled, or not, when used only in oil wells, and materials used in the manufacture of such tubing;
Machinery and apparatus used only in the pumping of crude oil out of wells, and articles and materials used in the manufacture of such machinery or apparatus;
Goods enumerated in customs tariff items:
64. Sago and tapioca;
*219a. Non-alcoholic preparations or chemicals for disinfecting, dipping or spraying, n.o.p.;
*219e. Non-alcoholic preparations or chemicals, such as are used for disinfecting, dipping ot spraying, when in packages not exceeding three pounds each, in weight;
Dry preparations used for the same purposes as goods enumerated in items 219a and 219c;
391a. Castings, of iron or steel: being ingot moulds for use in the production of steel;
409o. Equipment for generating electric power for farm purposes only, viz: engine, gas tank, generator, storage battery and switchboard; and complete parts of all the foregoing;
410c. Machinery and apparatus and complete parts thereof for use exclusively in producing unrefined oil from shales, not to include motive power, of a class or kind not made in Canada;
410d. Well-drilling machinery and apparatus, and complete parts thereof, of a class or kind not made in Canada, and seamless iron or steel tubing over eight inches in diameter, for use exclusively in drilling for water, natural gas or oil, and in prospecting for minerals, but not to include motive power; including goods enumerated in this item of a class or kind made in Canada;
410e. Well-drilling machinery and apparatus and complete parts thereof, and rope twenty-one hundred feet and over in length, capable of drilling wells of two thousand feet and over in depth, of four inches and over in diameter, and of raising and lowering casing over four inches in diameter for such wells, for use exclusively in drilling for water, natural gas and oil, and in prospecting for minerals, not to include motive power;
410f. Machinery and appliances of iron or steel, of a class or kind not made in Canada, and elevators, and machinery of floating dredges, for use exclusively in alluvial gold mining;
410g. Articles for use exclusively in^ the metallurgy or smelting of iron, viz.: machinery and apparatus for sintering or nodulizing iron ore, concentrated or not, or flue dust; machinery and apparatus for use exclusively in the construction, equipment and repairs of blast furnaces for smelting iron ore, such machinery and apparatus to include hot blast stoves and burners, blast piping and valves connecting the blowing engines with the furnace, scale cars, charging and hoisting apparatus, blast furnace gas piping, cleaners and washers; and integral parts of all the foregoing, but not to include wrought iron pipe or valves 104 inches and under in diameter, nor structural iron work;
410k. Machinery and apparatus, of a class or kind not made in Canada, for use exclusively in handling ore and other materials to be charged into the blast furnace, from the dock, car or stock pile, at the smelting works;
4101. Ore crushers, rock crushers, stamp mills grinding mills, rock drills, percussion coal cutters, coal augers, rotary coal drills, n.o.p.,
* See under " Unenutnerated" next column for changed item.
and ' complete parts of all the foregoing, for use exclusively in mining, metallurgical or quarrying operations;
410m. Diamond drills and core drills, not including motive power, and electrically operated rotary coal drills, of a class or kind not made in Canada, and integral parts of the foregoing, for use exclusively in mining operations;
410n. Diamond drills and core drills, not including motive power, and electrically operated rotary coal drills, n.o.p., and integral parts of the foregoing, for use exclusively in mining operations;
410o. Coal cutting machines, n.o.p.; coal heading machines; electric or magnetic machines for concentrating or separating iron ores; automatic scales for use with conveyors; and integral parts of all the foregoing, for use exclusively in mining or metallurgical operations;
410p. Sundry articles of metal as follows, for use exclusively in mining and metallurgical operations, viz.: furnaces for the smelting of ores; converting apparatus for metallurgical processes in metals; machinery for the extraction of precious metals by the chlorination or cyanide processes, not to include pumps, vacuum pumps or compressors; blast furnace blowing engines for the production of pig iron; and integral parts of all the foregoing;
410q. Pumps and vacuum pumps, and complete parts thereof, for use exclusively in the extraction of precious metals by the chlorination or cyanide processes;
410s. Amalgam safes; automatic ore samplers; automatic feeders; retorts; mercury pumps; pyrometers; bullion furnaces, amalgam cleaners; and integral parts of all the foregoing, for use exclusively in mining or metallurgical operations;
410z. Machinery and apparatus, n.o.p., and complete parts thereof, for the recovery of solid or liquid particles from flue or other waste gases at metallurgical or industrial plants, not to include motive power, tanks for gas, nor pipes and valves 10J inches or less in diameter;
431. Shovels and spades, of iron or steel, n.o.p.;
431a. Axes;
439d. Freight wagons, drays, sleighs, n.o.p., and complete parts thereof;
1017. Lap-welded tubing of iron or steel, not less than four inches in diameter, threaded and coupled or not, when used in casing water, oil and natural gas wells, or for the transmission of natural gas under high pressure from gas wells to points of distribution;


UNENUMERATED
[Stage Direction]
Iron or steel pipe, not butt or lap-welded, and wirebound wooden pipe, not less than thirty inches in internal diameter, for use in alluvial gold mining; including articles and materials used exclusively or consumed in the manufacture of the said pipe.
Articles and materials to be used exclusively in the manufacture of goods enumerated in customs tariff items:
219a, 219c.-Dry preparations used for the same purposes as goods enumerated in items 219a and 219c, 391a, 409o, 410d, including goods enumerated in this item of a class or kind made in Canada; 410e, 410f, 410g, 410k, 4101,
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[Stage Direction]
410m, 410n, 410o, 410p, 410q, 410s, 410z, 431, 431a, 439d, tubing enumerated in customs tariff item 1017.
Materials, not to include plant equipment, consumed in process of manufacture or production, which enter directly into the cost of goods enumerated in customs tariff items:
391a. 409o, 410d, including goods enumerated in this item of a class or kind made in Canada, 410e, 410f, 410g, 410k, 4101, 410m, 410n, 410o, 410p, 410q, 410s, 410z, 431, 431a, 439d, tubing enumerated in customs tariff item 1017.
The following goods, formerly taxable at the half rate, now taxable at the full rate in force:
Schedule IV
Boots and shoes, including rubber footwear; Creosoted railroad ties;
Printing paper for use exclusively in producing newspapers and quarterly, monthly, bimonthly and semi-monthly magazines, weekly literary papers unbound, bibles, missals, prayer books, psalm and hymn books, religious tracts and Sunday School lesson pictures;
Moist mince meat;
Y east.
The goods enumerated in customs tariff items as follows, when produced or manufactured in Canada:
89.	Vegetables, prepared, in air-tight cans or other airtight containers;
(a)	Beans, baked or otherwise prepared;
(b)	Corn and tomatoes;
(c)	Peas;
(d)	N.O.P.
90.	Vegetables, prepared or preserved;
(d) Pastes, bash and all similar products, composed of vegetables and meat or fish, or both, n.o.p.;
105.	Fruit pulp, with sugar or not, n.o.p., and fruits, crushed or frozen;
105d. Jellies, jams, marmalades, preserves, fruit butters and condensed mince meats;
106.	Fruits, prepared, in air-tight cans or other air-tight containers;
(a)	Apricots, peaches and pears;
(b)	Pineapples;
(c)	N.O.P.
The following goods, formerly taxable at the full rate, now exempt from sales tax:
Complete parts for goods enumerated in tariff item 409i;
460. Materials to be used in Canada for the construction of bridges and tunnels crossing the boundary between United States and Canada, when similar materials are admitted free under similar circumstances into the United States, under regulations prescribed by the minister.
The following goods were formerly exempt under customs tariff items 219a and 219c and dry preparations used for the same purposes; the exemption is altered to read as follows: Preparations or chemicals sold for disinfecting, dipping or spraying and so used in agriculture or horticulture and materials for use exclusively in manufacture or production of such preparations.
The following goods were formerly exempt under tariff items 410m and 410n, now specifically exempt:
364. Diamond dust or bort and black diamonds, for borers.

The exemption for bakers has been reduced from five thousand dollars ($5,000) per annum to three thousand dollars ($3,000) per annum.
Special Excise Tax
The following goods are added to the list of exemptions from the special excise tax on importations:
Schedule V
Bibles;
Fertilizers;
Goods enumerated in customs tariff items 173, 364 and 460.
George Gibson Coote: What is contained in the list?


Edgar Nelson Rhodes: It contains a resume of the changes made in the sales tax, with respect to the budget.


Alan Webster Neill: The minister mentioned something about the stabilization fund. It seems to me desirable that there should be some opportunity to discuss this matter. As the payments are going to be made out of relief moneys, it appears to me that unless the minister is kind enough to provide an opportunity, we will not have one.


Edgar Nelson Rhodes: After we have concluded our several items in committee, and just before reporting, I should be perfectly content if by unanimous consent there should be a discussion in committee of the stabilization fund. In response to a word the right lion, leader of the opposition had with me to-day I made the suggestion that we might move the house into committee on Monday or Tuesday, thereby affording an opportunity. However, I agree with the view taken by the right bon. gentleman that perhaps we could have a better discussion in committee, when we would not be confined to a single speech. If that arrangement suits other hon. members I am content that such procedure should be followed.


Alan Webster Neill: Thank you.


Mr. ANDERSON (High Park):: I wish to revert to the matter which has been raised by the hon. member for North Waterloo (Mr. Euler). As hon. members may recall, the sales tax was discussed last year. If I remember correctly, the movement was initiated from a complaint made by the biscuit makers, who had been taxed three per cent. The cake and pie makers were not taxed. For that reason the biscuit makers felt they had suffered an injustice. A complaint was made, and as a result the whole matter came under consideration. To the chagrin of the biscuit makers, instead of the tax remaining at three

Special War Revenue Act
per cent it was raised to six per cent. They are to-day feeling the pinch, the same as other manufacturers.
The minister has said that the greater part of the tax is paid by the larger manufacturers. Since Friday I have been approached by representatives from the three largest baking concerns m Toronto. They state that although they have paid the tax and have not made any abjection that, as a matter of fact, it has not come out of earnings but, as one put it, has come out of capital account. As the other one said, "It is simply adding to our deficits, so that it is not coming out of earnings at all." While not objecting, the firms are paying the tax, and as a result a very large amount of money has been received by the treasury. They complain, however, that for their type of industry the tax is altogether too high. I believe they are correct. It is only necessary for us to follow the annual statements made by large bakery concerns in recent weeks or months to learn that in the majority of cases dividends have been passed not. only on common stocks, but on preferred stocks and in some cases on debentures. That will show the condition of the baking industry. These men say that a tax of six per cent on the finished product is altogether too high, and the industry cannot stand it. I asked what their remedy would be, and I find it is the same as that put forward by smaller bakeries to which the Minister of Finance referred, that is that the tax should be placed upon the ingredients that are now taxable and not upon the finished product.
Now the industry to-day is not in good condition. These bakers tell me, not only the large ones but the small ones, that their greatest competition is that of the housewife who is doing her own baking. That is competition that they cannot possibly meet, it is a matter of necessity with these people, and that is where the great competition is. These small bakers are complaining that they are being forced into bankruptcy right and left. The larger bakers are finding difficulty. All that has been done this year by way of remedy as far as I can see-and it is not a remedy; I do not say that in any disrespect to the minister-is to add to the number who now pay the tax. Heretofore it was confined to those having a turnover of more than $5,000 a year; now that figure is reduced to $3,000. Those who under the new legislation enjoy exemption from the six per cent tax on ingredients are those who have a turnover of less than $3,000 a year; and two other classes concerned in
the baking industry, namely the hotels who do their own baking of cakes and pastry, and the restaurants doing the same thing. They pay not on the finished product but simply on the taxable ingredients. The large bakers say they suffer from that competition and that it is an injustice to them. I have made strong representations to the minister, as strong as I could. I feel yet that he might give the question further consideration and gran.t to these bakers what they ask. They suggest that the government put the tax on the ingredients, that is ingredients no-w taxed, and if the government want to add to that list, say powdered milk or frozen eggs that enter into the manufacture of these products, they say the government would not only get all the revenue chargeable but would get it without cost and without irritation. At the present time the collection of this tax is causing a great deal of irritation among the baking fraternity. It seems unfair that that class should be unnecessarily irritated over a tax that they cannot possibly pay, because it is not coming out of revenue, it is coming out of capital or, as one individual said, it is adding to our deficit yearly. In the city of Toronto many of these smaller bakers are finding it impossible to pay this tax, large amounts of arrears have accumulated against them, and the department have found it necessary to give them some leeway. I have no doubt the minister knows it, at any rate it is true that they are accepting small weeldy or monthly payments as the revenue of the concerns makes it possible to pay. In many cases even these instalments are not being paid. I know that one of the large concerns in Toronto is not paying the tax to-day because it cannot, yet it is threatened with action or penalty under the act. That is, action is taken in the exchequer court, judgment is filed against the firm and the sheriff put in if necessary. But I must give this credit to the Minister of National Revenue, that he has not pursued that course to the limit. He is extending leniency as I have just suggested, taking weekly or monthly payments.
I think the proper method would be to place that tax upon the ingredients. The department would get every cent of it because it would be collected at the source, everyone would pay, the housewife would pay. the bootlegger in the trade would pay, and it would not be necessary to have so many agents of the department out trying to collect the tax. I appeal to the minister to make a concession to these men. On Saturday they came to me in all earnestness and wanted to know
Special War Revenue Act

whether the minister would give them a further appointment that they might discuss it with him again. I said I did not think it would be much use, that the representations had been made. But if the minister thinks his mind might be changed in that regard I would like him to give these men an opportunity to make the representation, because they feel that it is a great burden that they cannot possibly carry.


Edgar Nelson Rhodes: Mr. Chairman, I try to exercise the virtue of patience. I have had three if not four deputations, taking a considerable time, presenting the views of the bakers of cakes and pies, and I can assure my hon. friend from Toronto-High Park (Mr. Anderson)-who has been most persistent in this matter; he has followed it up almost daily in the interests of those whom he seeks to serve,-that I can see no useful purpose in repeating ad nauseam representations which have already been made time and time again, especially by these very gentlemen in question. Of course if necessary and if time permits I will do the best I can to allow them to rake over the same straw they have raked over on previous occasions.


Charles A. Stewart: Can they not pass it on to the consumer?


Edgar Nelson Rhodes: I do not know that there is much that I can add to what was previously said in response to the query put to me in the first instance I think by my hon. friend from North Waterloo (Mr. Euler), except to say this, and I say it with all respect to my hon. friend from Toronto-High Park and to the bakers, that when they say, put the tax upon the ingredients, they are just begging the question. The ingredients, now taxable, that go into cakes and pies are currants, raisins, peel, baking powder, flavourings, jams and yeast at the half rate. They represent a trivial fraction of the revenue which is involved in the sales tax. Of course if they say, tax all the ingredients, it means that they would like to put the sales tax on flour, salt, sugar, lard, eggs, milk, etc. We can fancy how popular that would be with the people. So I say to my hon. friend with all respect, and without desiring to say anything to which exception can be taken, that the suggestion to tax the ingredients in lieu of sales tax on these articles is simply begging the question.
I am advised by the Department of National Revenue that some of these small bakers are in arrears. But the sheriff has not been put in; they are being given reasonable latitude to enable them to pay their tax. I repeat briefly what I said a moment ago, thalt 
if this sales tax were removed to-morrow the small baker, as the small shopkeeper, would have the same difficulties they have now in conducting business in competition with the chain stores and the big establishments that have arisen in recent years. Their difficulties do not arise out of the sales tax.
Then my hon. friend says with respect to some of the larger manufacturers, who are paying their sales tax, many of them without complaint, that it is either a case of adding to their deficit or taking it from their capital. I may say that that is one of the regrettable features of taxation in many cases to-day. We are imposing income tax this year, as we have other years, not upon the income which the man receives in 1933, but the income which he had in 1932, and has spent. That income tax is being taken from people who to-day have not one cent of income. In one instance I was advised by letter that a man had to borrow the money by mortgaging his house. He may or may not have told the truth, but I know there are some extreme cases. I may say to my hon. friend that I have myself had the experience of paying income tax in one year on an income that had vanished, and I was obliged to go to the bank to borrow the money to enable me to pay the tax. But that experience is not new or unusual. If we could devise a form of taxation which could be applied by means of some instrument which we could place upon a man's head and by means of which we could tell exactly how much taxation he could pay, that might be an ideal method, but we cannot do that; we have to lay down taxation principles along some general lines, and the best designed form of taxation will cause hardship in individual cases; there is no question of that.
Then my hon. friend said he hoped we would reconsider this matter. I would give him the same reply I gave the hon. member for Antigonish-Guysborough, who made a plea with regard to the sales tax on molasses. Without giving any undertaking I am quite content that the matter should be thought over further, but the committee will bear in mind that it involves no less than $1,350,000 of revenue, based upon the business of last year, which is a very considerable item.


Charles A. Stewart: Before the minister sits down may I ask him how it happens that these gentlemen are so generous that they make it a charge against their business? They have the privilege that is exercised by everyone else of passing it on to the consumer. Surely the competition of the

Special War Revenue Act
housewife does not prevent them from doing that. I am rather glad to see an instance of this kind; it is the first that has come to my notice.


Alexander James Anderson: In reply to that very suggestion may I say that the bakers tried that. The Consolidated Bakery Comr pany tried it, but it only lasted a week; it could not be done.


Charles A. Stewart: For what
reason?


Alexander James Anderson: I would ask the minister what was the reason for exempting the hotels and restaurants, who pay only on the ingredients. Why are they exempted? We have many large hotels such as the Chateau Laurier and the Royal York who do their own baking, and the bakers want to know why they should be exempted when the men who do nothing but baking are taxed.


Charles A. Stewart: The bakers want a monopoly of the business.


Alexander James Anderson: No, they want to be on the same basis as the hotels and restaurants.


Edgar Nelson Rhodes: I can hardly give a complete answer to my hon. friend at the moment, but I think the answer in a general way is comparatively simple. The hotel is not in competition with the baker; it cooks for its patrons. That is a recognized matter of hotel practice. I do not know that any other answer is necessary; they are not merchandizing cakes and pies, as are the bakers. You might as well say that we should walk into a house where the housewife is baking and apply the sales tax to the cake or pie in the oven.


Alexander James Anderson: She is paying on the ingredients.


Edgar Nelson Rhodes: And so is the hotel. That is a mere bagatelle.


George Gibson Coote: I have been much impressed with the statements of the Minister of Finance and I think we all should have a good deal of sympathy with him because of the deputations which he must receive in protest against these taxes. But the minister has brought it on himself.


Edgar Nelson Rhodes: I am not complaining.


George Gibson Coote: I heartily agree with the sentiments expressed by the hon. member for West Edmonton; I protest against the sugar tax and against the inclusion of all these articles under the sales tax. I want to point out to the minister what I think is a fact,
that if he devoted his time and thought to the question of raising price levels in this country he could balance the budget without these drastic increases in taxation. I know some hon. members do not agree with that idea, but may I point again to the fact that Australia, which two years ago was in a worse position than Canada, balanced her budget largely through the rise in price levels. In Canada the commodity price level has dropped from 80 to 63 in the last two years, but in Australia it has remained at 80, and as a result the government of Australia is collecting more revenue, in proportion, than the government of Canada is collecting.
If the Minister of Finance will look back at the budget of 1928 he will find that the money collected that year would completely balance the budget this year, including the Canadian National deficit, the expenditures on unemployment relief and the advances to the provinces. If we could get back to anything like the 1928 price level the Canadian National deficit would not be so great, because there would be more traffic and the receipts would be greater and the expenditures for unemployment relief would not be so large, because the greater amount of money in circulation would provide more employment. I seriously recommend this suggestion to the Minister of Finance, and I hope that during the coming year he will give his attention to the problem of raising price levels. He can do it by means of a different money policy, and then we will be able to get rid of many of these taxes of which I am sure he does not approve.
One of the great difficulties in connection with a tax like that on sugar, as an illustration-and I hope I may be pardoned for referring to it because twice while it was under consideration I tried to make some remarks but did not have an opportunity to do so- is that the tax is proposed by men who do not realize what it may mean to the average family. I am sure the Minister of Finance and some of his officials do not realize that, because it is such a small item in their expenditure. To many thousands of families in Canada, however, it simply means that they will not be able to buy all the sugar they really need. Last year many families gathered wild fruit and put it down without sugar, hoping that when they came to use it they would be able to buy sugar. With the money they have at their disposal now they can buy only perhaps sixty per cent of the sugar they could have bought if this tax had not been imposed. I know this seems a small matter to many hon. members, and they get
Special War Revenue Act

impatient when others protest, but I want to repeat that to thousands of families it means that they will not be able to purchase all the sugar they really should have. I say again that one trouble is that these taxes are imposed by men who do not realize what will be the effect on many consumers throughout Canada. I think it is absolute folly to impose a tax on buns, on self-rising flour and similar articles. Let us raise the general price level in Canada by 25 per cent; then we will be able to wipe out all the extra taxes imposed this year and the budget will be in much better shape than it is at present. I do not want to labour the point, but I think the minister would be far better employed if he devoted his time and attention to that question instead of bothering with such trivial matters as a tax on buns, self-rising flour, cakes and pies, cigarette papers and so on.
Before I sit down I should like to ask the minister a question in regard to the limitation of this tax to -those producing goods to the value of more than .$3,000 in a year. In deciding that question of production will the $3,000 include bread, in the ease of big bakeries, or will that amount include only cakes, buns, pies and so on?


Edgar Nelson Rhodes: My hon. friend said that
if we had the 1928 price levels we would not require these new taxes, and that we wo-uld have a surplus. I hope he will -think me neither facetious nor disrespectful if I say to him that the reply made on one celebrated occasion is, I think, strictly in point; I refer to that of the Irishman, who said that if he had the lakes of Killarney in Hades he could sell them for a shilling a glass. It is idle to say, "If we -had the price levels of 1928." That is obvious, and if my hon. friend is serious when he suggests to me that I had better address myself to the raising of price levels, I thank hi-m deeply for the compliment because, if I could do that, I should be worthy of a place in history along with Atlas. I say -that in the kindliest spirit and without the slightest intention of making a remark to which the hon. gentleman could take exception. I submit, however, that the reply is absolutely in keeping with the nature of the suggestion. I must take exception not only to what my hon. friend has said but to his attitude in saying it. He says that the men who make up these taxes do not realize what taxes mean. I do not know whether he thinks that we dwell in a world apart. I had the idea that I occupied a common Canadian citizenship along with other members of the house.
[Mr. Coote.l


George Gibson Coote: Will the minister permit me to correct him? I was referring to the thousands of families who have to pay the tax.


Edgar Nelson Rhodes: I will not yield to my hon. friend from Macleod in asserting my sympathy with the people. I say to him that my human sympathies, my desire to be of service to the people of Canada, my knowledge of conditions in Canada and of the homes and lives of the people are just as complete as his own.


George Gibson Coote: I never suggested anything
to the contrary regarding the minister's attitude to the public; not at all.


Edgar Nelson Rhodes: That is the reply I feel
bound to make to the hon. gentleman's suggestion that he has a superior knowledge of conditions in the country, that we are looking at those conditions from a different plane from himself. Let me say to him that I know the homes of the people of this country, the common people. I sprang from them myself and I do not like the imputation from the hon. gentleman that these taxes are harshly imposed by those who have neither a knowledge of conditions nor any care about them. I do not mind telling my hon. friend that during the time I have been a public servant, and one with some experience, I have had to do many distasteful things, and nothing has been personally so distasteful to me as to be associated with many forms of taxation which we are called upon to impose at the present time. But I regard my personal feelings as something that must be submerged into what I conceive, either rightly or wrongly, to be that which is for the common good of the country. In imposing these taxes, harsh though they may be, I have in mind the welfare of those for whom the hon. member for Macleod professes to speak. I have in mind their welfare just as much as that of any individual anywhere in the whole farflung breadth of Canada.
My hon. friend asked a question as to whether the deadline of $3,000 with respect to bakers was applicable to their whole business, including bread, or only to bakers' cakes and pies. The computation is based entirely on that portion of their business which consists of cakes and pies.


George Gibson Coote: I did not intend for a moment to suggest that the minister had no concern about the hardship which taxation would impose upon the people. I do not want the committee to misunderstand what I had in mind. I was suggesting that men who are sitting in Ottawa, engrossed in this very diffi-

Special War Revenue Act
cult task of trying to balance the budget, were not in my opinion as closely in touch with certain classes in the country who are finding it hard to carry on as those of us who have to return to our constituencies and there see exactly the problems which the people have to face for six or eight months of the year. I did not wish to insinuate that the minister did not care as much about the welfare of the people as I do, or is not just as much a humanitarian as I am. Certainly I do not want to create that impression. I must say however that the minister was not quite fair to me when he suggested that it was as difficult to raise price levels in this country as to transplant the lakes of Killarney to the region he spoke about. I cited Australia, and again I would point out that the price level there has stood approximately at eighty during the last two years, while in that period it has fallen in Canada from eighty to sixty-three. If the minister does not wish to reply to that point, it is quite all right; but I do not think he should suggest that it is impossible now to do anything about raising price levels in this country. And I think he will agree that if price levels were raised the receipts of the government through ordinary channels of taxation would also increase.


James Layton Ralston: The thing we object to,
and the thing I feel sure the minister finds most distasteful, is the fact which has been mentioned by one or two members of the committee, that two large classes of commodities are now being removed from the list of exemptions from the sales tax, namely, implements of production-at least a large number of implements of production-and the necessaries of life. My hon. friend is quite right in saying that many, perhaps quite a number, of these articles were taxable up to 1926-I have not had an opportunity to compare the records. He mentioned that date, I presume, as the date when they were taken off.


Edgar Nelson Rhodes: That is right.


James Layton Ralston: I would remind him, if I remember rightly, that they were also taxable in 1921. In other words, I think they were put on when the original Special War Revenue Act was passed, or very soon after the war. They were on in 1921 and in 1926 they were removed from the taxable class, and we had hoped that we should not find it necessary once more to tax these two particular classes of goods. In the list of implements of production I find spraying materials, materials used for disinfecting, electrical power machinery for farm uses, mining machinery, shovels and spades, and as regards the necessaries of life there appear in the list oatmeal, rolled oats, cornmeal, barley, split peas, rice, molasses, sago and tapioca, canned vegetables and fruit, boots, shoes and rubbers. We are sorry to see these things again taxable. Assuming that my hon. friend finds it necessary to impose further taxation-let us leave aside for the moment the reasons-may I ask whether he has oonsidered the possibility of leaving goods of this description non-taxable and increasing if necessary taxation in connection with goods that might be regarded either as luxuries or as less necessary than these.


Edgar Nelson Rhodes: My hon. friend has misunderstood the reference to the sales tax on spraying materials. The situation remains precisely the same as it was prior to this budget, except that we have taken out those processed and fancy commodities which in many instances sell at prices out of all proportion to the ingredients used-disinfectants for spraying, such as household insecticides, and that sort of thing; the range is comparatively small. But spraying materials used in agriculture are not subject to the tax at all. My hon. friend will find on careful analysis that, with the exception of some items, the items which we tax to-day are those which were taxed in 1926.


James Layton Ralston: And 1921 too.


Edgar Nelson Rhodes: Quite so. I mention 1926 for no special purpose except that it was the last year during which the tax was imposed.


James Layton Ralston: And the year it was taken
off.


Edgar Nelson Rhodes: Yes; I mentioned it for no political reason. I was not suggesting any political significance. I just desired to indicate that as recently as that this tax had been imposed. Earlier in the afternoon I stated that the necessities of the treasury are greater to-day than they were at that time. Even as we have the list in the schedule to-day we still do not tax the number of commodities which were taxed under the sales tax as it was applicable from 1921 to 1926 inclusive. I might say to the hon. member for Shelburne-Yarmouth that I was rather surprised to find that canned fish was subject to the sales tax during that period. It is exempted under the present proposal.


James Layton Ralston: I think it was under the original act.
Special War Revenue Act


Edgar Nelson Rhodes: Parts of farm tools, such as reaping hooks, rakes, et cetera, were subject to the sales tax at that time while they are not to-day. Split fence posts are also in the same category. The hon. member for Comox-Alberni will be surprised to know that sinkers and floats, including trawlkegs for use in the fisheries were subject to sales tax at that time; they are not to-day. Phonograph records for educational purposes and fox feed were also subject to the sales tax at that time; they are not to-day.


James Layton Ralston: Gopher poison.


Edgar Nelson Rhodes: Yes, the ingredients for
use exclusively in the manufacture of gopher poison. Apples, dried, desiccated and evaporated; hospital supplies and materials; these were all subject to the sales tax during that period while they are exempted to-day. Despite all the necessities of the case, these articles remain exempted in the list which is now submitted. I mention this only to impress upon hon. friends the necessity of considering this matter from all angles and to ask them to bear in mind the list of articles to which I have just referred. The hon. member for Charlevoix-Saguenay has just returned to the chamber and I am reminded of a question he asked and which I inadvertently failed to answer. I know his absence was necessary because he happens to be the chief whip of the opposition. The articles which we have included in the list to be subject to the sales tax and which have been exempt since 1926 will, according to the best estimate which can be made by the officials of the Department of National Revenue, yield $13,000,000 per year in revenue even under existing conditions.
Paragraph agreed to on division.
11.	That schedule IV to the said act, as enacted by chapter fifty-four of the statutes of 1932 enumerating articles exempt for fifty per cent of the sales tax, be repealed and the following substituted as schedule IV:-
Schedule IV
All articles manufactured or produced by the labour of the blind in institutions in Canada established for their care or under the control or direction of such institutions.


[Stage Direction]
Paragraph agreed to.
12.	That schedule V to the said act, as enacted by section sixteen and referred to in section twelve of chapter fifty-four of the statutes of 1932, be repealed and the following substituted as schedule V:-
Schedule V
Articles on which other excise taxes are imposed on importation by part XI of this act; raw leaf tobacco when imported by licensed tobacco or cigar manufacturers;

material for the manufacture of binder twine for export, when imported by the manufacturers thereof; British and Canadian coin and foreign gold coin, bullion and unmanufactured gold; fish and other products of the fisheries of Newfoundland; fish caught by fishermen in vessels registered in Canada or owned by any person domiciled in Canada, and the products thereof carried from the fisheries in such vessels; donations of clothing for charitable purposes; bibles; fertilizers; animals for the improvement of stock; boards, planks and deals of fir, spruce, pine, hemlock or larch, in the rough or not further manufactured than planed or dressed on one side, when imported from a country which admits free of duty similar lumber imported from Canada; goods enumerated in customs tariff items 173, 364, 460, 700, 702, 703, 704, 705, 705a, 706, 707, 708 and 709.
Paragraph agreed to.
13.	That any' enactment founded on paragraphs five, six, seven, eight, nine, ten, eleven and twelve of this resolution shall be deemed to have come into force on the twenty-second day of March, one thousand nine hundred and thirty-three, and to have applied to all goods imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
Paragraph agreed to.
14.	That any enactment founded on paragraphs two, three and four of this resolution shall be deemed to have come into force on the first day of May, one thousand nine hundred and thirty-three.
Paragraph agreed to.
Resolution reported.

[Stage Direction]
Resolved,-That it is expedient to amend the Income War Tax Act and to provide:-[DOT]
1.	That the exemption granted to a married person or a widow or widower with a dependent child be reduced to $2,000 and the exemption for all other persons be reduced to $1,000;
2.	That the exemption heretofore afforded to householders as defined shall be abolished;
3.	That the exemption for a dependent child or grandchild be $400;
4.	That the exemption for a dependent parent, grandparent, brother or sister be the actual amount expended by a taxpayer up to a maximum exemption of $400 for each such dependent person;
5.	That the exemption of $2,000 heretofore afforded to corporations and joint stock companies be abolished;
6.	That the graduated rates of tax applicable to persons other than corporations and joint stock companies shall be the rates set forth in the following schedule;
7.	That the rate of tax applicable to corporations shall be twelve and one-half per centum;
8.	That where a corporation elects to file a consolidated return, the corporate rate of tax shall be thirteen and one-half per centum;
9.	That the additional rate of tax heretofore provided in respect of incomes in excess of $5,000 shall not apply to corporations;

Income War Tax Act
10.	That all bearer coupons, coupon certi-cates or dividend warrants issued by Canadian debtors in respect of which any interest or dividends are payable and all similar bearer coupons and dividend cheques issued by British or foreign debtors which are cashed by residents of Canada must have attached thereto a duly completed ownership certificate on the form prescribed;
11.	That a tax of five per centum shall be imposed at the source on all dividends or interest paid or credited by Canadian debtors to non-residents of Canada;
12.	That a tax of five per centum shall be imposed at the source on all dividends or interest payable by Canadian debtors and cashed by Canadian residents at a premium over par of Canadian funds;
13.	That rents and royalties which are payable by Canadian debtors to non-residents of Canada shall have deducted at the source a tax of twelve and one-half per centum subject to adjustment on assessment of the income tax return filed by the non-resident;
14.	That provision be made to clarify and to render more certain and effective section 13 of the said act;
15.	That provision be made for the limitation of certain allowances and expenses charged by companies in respect to amounts paid to relatives of shareholders, bonuses to officers and fees to directors;
16.	That interest on indebtedness and taxes on productive property shall be rateably apportioned between income from sources exempt and those not exempt from income tax, provided that in no case shall such interest or taxes be apportioned against a taxpayer's income from his chief occupation or business;
17.	That any enactment founded on paragraphs one to nine, both inclusive, and paragraphs fifteen and sixteen, shall be deemed to have come into force at the commencement of the 1932 taxation period and to be applicable thereto and to fiscal periods ending therein, and to all subsequent periods;
18.	That	any	enactment	founded	on	the
provisions of paragraphs ten, eleven and twelve of this resolution shall be deemed to have come into force on the first day of April, 1933, and shall be applicable to all payments made or received on or after such date and to any coupons, coupon certificates or dividend warrants which are redeemable on or after the said 1st April, 1933;
19.	That	any	enactment	founded	on	the
provisions of paragraph thirteen of this resolution shall be deemed to have come into force on the 22nd day of March, 1933, and shall be applicable to all payments made on and after the said date.
William Daum Euler: Mr. Chairman, I should like to refer to paragraphs 5 and 7 of this resolution.. Ordinarily I do not attempt to defend corporations but I would like to point out to the minister, as I have done already in private, what I regard to be as an injustice in the present enactment. Under the present proposals the $2,000 exemption which applied previously to corporations has been abolished. Last session the family corporation was abolished and this year the rate of taxation on private corporations has been increased to
twelve and one half per cent. I am making no complaint of the principle of income tax or as to the tax as it applies to corporations, because, as I said last night, I appreciate fully the difficulty faced by the minister in raising revenue. When the minister answers me, as 1 believe he will, I am quite sure he will give as a reason for doing what I am complaining about the fact that he needs the money. I admit that that is a strong argument but 3 submit to him and to the committee that it the raising of money by way of taxation whether it be by income or any other sor1 of tax, some regard should be given to the principle that there should be no discrimination as between persons of the same class. The minister has wiped out the exemption of $2,000 for corporations. I have no complaint to make of that action so far as large corporations are concerned, but I want to point out that in the case of small companies which are in effect the property of one man or of one family, the present legislation practically doubles the income tax. I should like to give the committee a few figures. A corporation which makes a profit of $5,000-I think every hon. member will agree that that is not very much-will pay an income tax of $713.75 under the present proposal. I think my calculation is correct. A private person operating a similar business and making a similar profit will pay an income tax of $126. I claim .that the difference is entirely too great. The man who chooses to operate his business as a corporation must pay over $700 in income tax on a profit of $5,000, whereas his competitor who is operating his business as a private concern will pay an income tax of only $126 on the same amount of profit. It seems to me that such a difference is entirely inequitable and unfair. The only result of this legislation will be that the small corporations will give up their charters and revert to ordinary partnerships or single proprietorships. If a man finds it convenient to operate his little business as a joint stock company, there is no reason why the tax should be so great. Where the annual profit is $10,000, the corporation pays a tax of $1,667.38, whereas the private concern pays a tax of only $546. I could continue my calculations but I do not propose to do so. I make no plea for the large corporation but it seems to me that my argument is sound as fa.r as the small corporations making a profit of as low as $5,000 are concerned. The one is paying between five and six times as much income tax as .the other.
I would also like to point' this out to the minister: by reason of wiping out this exemp-
Income War Tax Act

tion and reducing the rate, in the case of tihe small corporation that is making only $5,000 a year, you are under the present proposal practically doubling his tax as compared with that the man would have paid on $5,000 last year. I aim not objecting to an income tax; let those pay who can. What I am objecting to is the difference and discrimination existing as between these various businesses, and against the one that is run as a little corporation for its own purposes, its own convenience, and it is entitled to run it in that way; the law provides for that. I do not see why there should be such a tremendous increase in the income tax of a man carrying on business in that way.


Edgar Nelson Rhodes: May I at once thank my hon. friend for his courtesy in discussing this matter with me personally the other day in my office and for leaving with me the figures, some of which he has just mentioned. He takes the case of a man who has an income of $5,000 and who, if he were taxable as an individual, assuming he was a married man with an exemption of $2,000, would pay an income tax of $120. The figure that my hon. friend submitted was, I think, $126.


William Daum Euler: I added the surtax.


Edgar Nelson Rhodes: The tax is $120. If the same man were an incorporated company with an income of $5,000, according to the figure as submitted by my hon. friend the tax would be $713.75. That is correct, but my hon. friend has overlooked the fact that the man, with the income of $5,000, when he pays his income tax, receives his exemption. If he becomes incorporated, as in the instance prepared by my hon. friend, he has no provision in that to pay his own salary; he has worked for nothing.


William Daum Euler: No.


Edgar Nelson Rhodes: Then my hon. friend is not comparing comparable things. He has given the case of an income of $5,000 obtained by an individual and that of an income of $5,000 obtained by an individual who has become an incorporated company. In the one case he is giving the instance of a married man with an exemption of $2,000 and in the other that of a company which has a straight income of $5,000-


William Daum Euler: No.


Edgar Nelson Rhodes: -but in that case the man has to pay himself a reasonable salary as manager of the business which he owns himself. If he does that, he will find that he is in precisely the same position as the individual with the married man's exemption. That is 
the fact. But let me point this out to my hon. friend, and I take no exception to his remarks: he is making a plea confined to a restricted number of individuals. He is taking the case of a man who becomes an incorporated. company. The number of instances of that character would be negligible, but even if it were not, the situation would be met by the man receiving a reasonable salary and the income tax officials advise me that a reasonable, fair salary would, in those circumstances, be allowed. Otherwise, why incorporate? While my hon. friend, and quite properly, is making his plea with respect to this restricted class of companies, he must bear in mind that at the same time we are dealing with thousands of companies who, by reason of the exemption of $2,000 being removed., will pay an additional income tax and this means a substantial sum in revenue. Even if the injustice, which I do not admit, were apparent in the case instanced by my hon. friend, he must look at the picture in the large and realize that we are dealing with all companies in Canada; that they are all treated alike, that the $2,000 exemption ds obliterated in every case, and lastly, and what is very important from my point of view at least as Minister of Finance, this involves a considerable increase in the revenue derivable under the income tax.


William Daum Euler: I cannot let the minister get by with the statement that the matter of salary-and perhaps his officials have so said, and I make that remark without any offence- must be considered. The matter of salary does not appreciably affect the picture that I have drawn. In the figure I gave, there was $5,000 profit in each case and I took it for granted that in each case the business had paid a salary. Supposing the salary is $3,000 a year; all you need to do in each of those cases is to add to the man's income for taxation purposes that $3,000 and the picture will not be appreciably changed at all. You cannot get away from the fact that that $5,000 for the little joint stock oompanjr is immediately subjected to a tax of 12!J per cent, or $625, which is far greater than that borne by the single proprietor. I am not making a plea for the big corporation because, the larger the profits, the less is the discrimination. I am speaking only on behalf of the smaller one and I deliberately took the figure of $5,000, as a modest figure, to show what a tremendous discrimination there was. I would ask the minister to have it figured out. The matter of a reasonable salary in both cases, say $3,000 if you like, will not greatly alter the tremendous discrimination that exists in the two instances.

CJV.R.-Wages
The minister has made a point of the fact that he is quite consistent; that you must look at the larger picture; that this applies to big corporations. That is quite true; I am in favour of that. He also says that this means a considerable sum of money in revenue. That is very good; he needs it. But I would like to point out to him the very thing he did in a sales tax item under discussion not so long ago when he made an exemption in favour of the small baker. Even last year the small producer of cakes, pies and so on was exempted. I think in this case he will find his own argument turned against him. This year he gives an exemption to the baker who does a business of under S3,000 a year, saying that he is passing the tax on to the higher one. Should he not make the same concession to the little fellow who happens to be conducting his business as a joint stock company? As I say and as I am sure his officials will tell him, when he takes the big corporations with large profits, if there are any to-day that have large profits, he will find this difference very largely disappears or at least is not nearly as great, but it is very formidable and trying to the small chap who is endeavouring to run his little business as a joint stock company for quite legitimate reasons and not with the purpose of making tremendous profits. I would like the committee to bear that figure in mind-and I am allowing for salary paid in both cases-that the tax to the man who is running his business as a joint stock company and who earns $5,000 profit, is over $700, while to the man who is running his business as a single proprietor, the tax is $120. The difference is entirely too great; it is unfair, inequitable, and I think some change should be made to afford some relief.
Progress reported.


[Stage Direction]
At six o'clock the house adjourned without question put, pursuant to standing order.
Thursday, May 4, 1933