1937-03-02

[Stage Direction]
The house' resumed from Thursday February 25, consideration of the motion of Hon. Charles A. Dunning (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, I desire to congratulate the Minister of Finance (Mr. Dunning) upon the very complete statement he made a few days ago and for the clarity of his exposition of the position of the country with respect to its finances.
I derived some satisfaction from listening to him, for I recall that in his budget speech delivered on May 1, 1930, his only endeavour to make it into a budget speech was to estimate in May what the revenues and expenditures had been during the year ending the previous March 31. I suggested that it was desirable that in this house we should have a real budget speech in the true sense of the term, and on June 1, 1931, I suggested five factors that should be considered in the making of a budget speech. They were: first, that the financial operations of the dominion for the fiscal year should be shown; second, *that the balance sheet of the dominion as of the preceding March 31 should be shown, together with assets active and non-active and liabilities direct and indirect; third-, that reference should be made to trade and commerce; fourth, that there should be an estimate of the revenue and expenditure for the twelve months ending March 31 following; and fifth, the ways and means which would be adopted for the purpose of providing the necessary revenues to meet the proposed expenditures. It is a matter of some satisfaction, Mr. Speaker, to know that since that date every budget speech has followed that practice. So that I can congratulate the Minister of Finance the more readily in that he adopted suggestions made in 1931.
It does not occur to me that there is any very good reason why we should take any great length of time, considering all the circumstances, in discussing details of revenues and expenditures. There will be ample opportunity in connection with estimates and matters of that sort to discuss questions of expenditures; but presently I shall have some-

The Budget-Mr. Bennett
thing to say with respect to the revenues, and the effect that the raising of them has had upon the capacity of the people to pay.
So far as I can see, the minister was quite right the other day when he said that taxation had been imposed upon the Canadian people to raise a sum nearly as large as, if not larger, than at any time in their history. I can say only this, that it is my firm conviction that any effort to raise from the Canadian people by taxation any substantial sum in excess of 8400,000,000 is to put upon them a strain which they cannot bear. I think that is not an unfair statement to make, having regard to our general economic conditions, and the views expressed by economists as to conditions in new countries such as this, and their ability to stand taxation.
In this regard however I should like to revert to just one observation made by the financial critic of the party now in office, when it sat in opposition, with regard to the general raising of taxes. On April 23, 1934, speaking for the then opposition, Mr. Ralston said:
But if my right hon. friend the Prime Minister is looking for the privilege of having it said of him that he imposed taxation in this country surely his ambition is satisfied in the increase of the sales tax from one to six per cent, in the imposition of an excise tax which did not exist when he came into power but which lias been put up to three per cent, in the imposition of a two cent tax on sugar, in taking away exemptions from the sales tax, in the reduction of exemptions in the income tax; in these and in every other field of taxation I think my hon. friends opposite will be given full marks and will be held fully responsible when they come to the people of Canada, for having invented and imposed many new and onerous forms of taxation.
I wonder what Mr. Ralston, would have said if he had seen the sales tax raised to eight per cent? I wonder what he would have said had he known that this government, which has now brought down two budgets, still retains the same taxation? I wonder what he would have said had he known that hon. members who declared that a three per cent excise tax was another form of protection, as a government in its second budget would still retain that three per cent excise tax? I mention that because it is amazing, if nothing else, to find a government which in opposition so loudly declaimed against the tax on sugar, so loudly declaimed against the increase in the sales tax and the imposition of an excise tax of three per cent, now in its second budget making the declaration that it proposes to make no changes with respect to ways and means for raising the revenue of the country.
With respect to the income tax, charged as we were with increasing it, the minister was frank the other evening in saying that he had increased it slightly. And so all along the line we have the same position.
Now. I was apprehensive, remembering as I did the history of the matter, when the hon. gentleman said he proposed to make no changes with respect to taxation; for I recalled that on the first of May, 1930, standing in the place he now occupies, he reduced the sales tax from two per cent to one per cent, in the face of a deficit in this country, in the face of abnormal conditions, in the face of 824,000,000 less revenue than had been expected in the last six months of 1930, a condition which must have been known; in the face of dwindling trade in every country of the world. Why was it done? Does anyone suggest it was done to balance the budget, when a deficit was known to be inevitable? Was it for any purpose other than merely political, and was it not because of the knowledge that an election was not far off? When I hear that declaration made that we will make no concessions to the taxpayer I wonder if the same idea is in the mind of the minister and the government which pervaded their minds in 1930, and if in due season, when the occasion offers, they will make a great gesture to the people with respect to a reduction of taxation, even as they did in 1930? Those are the facts to which attention I believe might fairly be drawn.
All that may be said with respect to the balance sheet is that we have an increase in the national debt of something less than
8100.000.000. If we left out the 88,000,000 to which reference was made as coming from the profits on grain sales, we would have a deficit of approximately $95,000,000. The minister budgeted for a deficit of 8100,000.000, and this little windfall of 88,000,000 to which I shall presently refer means that the deficit is 887.000,000 instead of 895,000,000.
I do not propose therefore, Mr. Speaker, to deal at length with the balance sheet items, except to point out that we are increasing by leaps and bounds the responsibilities of the consolidated revenue fund in connection with many funds for which we are really trustees. The minister is not to blame for that. It has been the practice in this country for a generation, if not for more than that, to put into the consolidated revenue fund moneys received for superannuation funds, for annuities, for Indian lands and from the sale of school lands, and they provide working capital for the country, on the theory-


Mr. DUNNING:: And the Post Office savings bank.



The Budget-Mr. Bennett


Richard Bedford Bennett: Yes; and they provide working capital for the country on the theory that whenever called upon we shall be able to repay them. In theory that is unsound. In practice it has been useful. Whether or not having regard to the magnitude of the fund the time has come when we should carefully consider our position I leave it for this house and the future to determine. But I think it only fair to direct attention to the fact, because the sum has assumed very large proportions. I can conceive of a position where it might be difficult to obtain the necessary moneys to meet the demands which might suddenly be made upon the treasury. For instance, with respect to the school fund bonds which we gave some years ago, when the resources were turned over to the provinces, it might have been difficult, if a province had the right to demand that the money be paid, to have paid it readily. It might be difficult, too, with respect to many other matters to which reference might be made.
As to the estimated revenues and expenditures I think it is fair to say that having regard to the forms of taxation to which resort has been had the revenues have shown a buoyancy that was to be anticipated and expected. With respect to the expenditures I shall have something to say presently. But that we had a satisfactory surplus on ordinary account is quite apparent, from looking at the figures, even as the predecessor of the minister had a surplus on ordinary account during his last year of office. The present minister has a much larger one, because he has resorted to other methods of taxation, although the expenditures, as I shall presently point out, are in my judgment out of keeping with the present conditions in Canada.
Then the other question arises, namely the ways and means to be resorted to for the purpose of making good the expenditures contemplated for the next year. I have already pointed out that the minister has declared he has no intention of departing from present taxation, except in some slight items, and that he proposes to maintain the present scale of taxation.
Mr. Speaker, it must be the opinion of most hon. members that the eight per cent sales tax has worked a great hardship upon many people in Canada and that, applied as it is by wholesalers and utilized as it is by the retailer, in the sum total of the price upon which he makes his mark-up, it amounts more nearly to twelve per cent when it reaches the consumer than the eight per cent as enacted by parliament. This is a stupendous tax. As I pointed out last

year it is a strain that I do not believe the people of the country can long endure. And when I recall Mr. Ralston's vigorous denunciation of the raising of the sales tax to six per cent I can readily understand why so many complaints are heard from various parts of Canada with regard to the increase to an eight per cent rate. Under normal conditions an eight per cent rate should result in much larger revenues than we are now receiving. I recall Mr. Robb saying that he believed that in normal times in this country every one per cent of sales tax was equivalent to $20,000,000. He spoke of the remission of $20,000,000 of taxation when he reduced the sales tax by one per cent. Having regard to present price levels I do not think under existing conditions the sales tax can be said to be equal to $20,000,000 for every one per cent, but I do believe that under the normal conditions that now prevail in connection with price levels and matters of that kind it is not too much to say it is worth somewhere between $15,000,000 and $17,500,000 for every one per cent. In other words, for every one per cent of sales tax imposed upon the people of this country I think we can expect to realize at least $15,000,000, and perhaps a little more, depending upon the price of goods that are imported. That is a stupendous charge to make upon the Canadian people. I suggest it is a charge which cannot long be borne when, in the hands of the retailer, it is translated into a figure which more nearly approximates twelve per cent than eight per cent.
Closely associated with the raising of revenue is the question of trade and commerce, as has been pointed out by the minister in the speech which he made. Before one deals with that he must realize that the income tax is one of the large sources of our revenue. While the customs tax did not fall last year, it has fallen as being the principal source of Canadian revenue. At one time it was not thought possible that the income tax would yield any such sum as $100,000,000. This tax as imposed against corporations and individuals last year yielded more than that amount. It is difficult to discuss these matters in detail in view of the fact that our figures are for only ten months; however, the estimates of the minister must be taken to be reasonably accurate. I am not objecting to the budget having been brought down at an early date, having regard to the demands made upon the time of the government for other reasons, but it is difficult to discuss these matters as they should be discussed in view of the fact that as to two months we are dealing with estimates and not with realities. I

The Budget-Mr. Bennett
realize the minister had this fact in his mind in making the statements he did, but I am handicapped in what I really want to say with respect to some of these matters.
The income tax collected this year was collected on the incomes of last year. It came to me as somewhat of a surprise that this country had the measure of prosperity that it did have in 1935. Not that I was so greatly surprised in one sense, but I was surprised in view of the statements to which I used to listen from hon. gentlemen opposite. In view of the statements made by hon. gentlemen opposite when in opposition it seems almost impossible to imagine that this country could have been prosperous enough to produce
S100.000.000 from income tax; nevertheless the fact is that the largest sum of money ever realized from the income tax was realized last year.


Charles Avery Dunning: The current year.


Richard Bedford Bennett: The current year, but
from the incomes of last year. It is true that there has been an increase in the tax on corporations, but there has been no change in the tax against individuals. The increase in the tax against corporations has not been very large. Corporations whose fiscal year was not the calendar year may have had higher earnings during the latter part of their year than they had in previous years, and this may have accounted for some of the large increase in the income tax. This is a striking illustration of the extent to which a tax which in the early days yielded but a small sum of money has been made to yield a very large amount. Last year I think this was the largest single item of revenue.
I am not unmindful of the fact that the provinces have complained that the income tax is an encroachment upon their jurisdiction. Those who recall the early days of the imposition of this tax will remember that Sir Thomas White in the early part of 1917 declared that he would not impose an income tax because it was something which really was within the powers of the provinces and should be left to them to impose. Later on in the year, before the close of the session, he found it necessary to introduce into this parliament the first income tax, the effect of which was to raise a very substantial sum of money. I can remember that a previous minister on the Liberal side was of the opinion that there might be a division between individual income taxes and corporate income taxes, the provinces to secure one and the dominion the other. I think the view was then expressed that it was desirable that the provinces should secure and collect the taxes 31111-88i
on individual incomes, leaving to the federal power the right to recover taxes from corporations. No such division has been made and no such steps have been taken. It is only necessary to point out that the result has been the application of two income taxes in many of the provinces of this dominion. For instance. we have two income taxes in British Columbia, where such has been the case for many years; we now have two in Ontario and in most of the western provinces. But it goes further than that. In reality we have a third income tax because the tax now imposed operates to impose taxation upon the tax itself. The tax itself is included in the taxable income and the levy is made against the whole. Instead of its being double taxation. in reality it is treble taxation.
I suggest to the minister and to this house that the time has come when we must consider this matter. If we are to make this country attractive to new capital; if we are to induce people to invest their money in this country, we shall have to have regard to the fact- that taxation is a very important item in the minds of those who are sending their capital to new countries. For instance, I was amazed at the number of people who have gone into Kenya and other districts of South Africa to settle there because the burden of taxation is less than in most other parts of the British Empire. In all new countries great effort is being made to lessen the burden of taxation, not for the benefit of those who are there already, but in order to induce additional people to make their homes there. I received a letter the other day consequent upon a casual observation made by the Minister of Mines and Resources (Mr. Crerar) He stated that S200.000.000 had been spent in wages in the mining districts of Canada and that about S71.000.000 was all that had been paid in dividends.


Mr. CRERAR:: Wages and supplies.


Richard Bedford Bennett: This gentleman who had been in communication with a western citizen in connection with investments in this country then said, "I am not going to risk my money if it costs that much to make a dollar." It must be known that that factor is ever in the minds of those who are seeking new fields for attractive investments. While it is very unpopular with my hon. friends to my left to suggest that there should be any lessening of the burden of income taxation, you have to choose between two things: on the one hand, the attractiveness of the country for the investment of capital, and. on the other hand, the question of the raising of revenue, or, to use a euphonious term now so current in the
The Budget-Mr. Bennett


Charles Avery Dunning: But it is paid for.


Richard Bedford Bennett: It is paid for, of course,
but it does not show in the exports of the country because no licence for its export has been issued. Therefore reliance should not be placed on the figure of $71,000,009 as indicating the amount of gold which has been actually sold, as compared with $95,000,000 in 1935, because in point of fact, I believe, the amount sold by this country in 1936 was somewhat larger than in the previous year.


Charles Avery Dunning: That is right.


Richard Bedford Bennett: realize that export trade is challenged and will be challenged more in the next few years than it ever has been before, because we shall have to meet an ever-increasing competition of wages and standards of living which do not prevail and I trust never will prevail in this country. That is the position which I put to the house at the moment, and it is one that I regard as of tremendous importance.
There are other matters that will come up during the progress of the discussion on the resolutions, and I shall not labour the point longer. But I should like to impress upon my fellow members, as far as it is possible for me to do so, the fact that we are confronted with an actuality and not with a visionary position. Some of us do not always approve of the fiscal policies or the economic set-up of other countries, but I know that in parts of the king's dominions they realize the truth of the statement I have just made. They are putting forth ever-increasing efforts to ensure to their people every possible security from the standpoint of labour by utilizing all the machinery of government to provide for themselves to the extent of their ability. That may be economic nationalism; it may be any-think you are pleased to call it, but if we take it that governments are responsible for the welfare and happiness of the people I think it is clear that unless governments can supply the people with work there can be no happiness and no ultimate prosperity. The reason the hon. member for Davenport (Mr. MacNicol) has dwelt so much upon the question of work; the reason he has visited these factories and looked into the actual conditions that prevail in order to see at first hand the conditions that exist, has been to ascertain the extent to which work may have been added to or, by reason of the policies that have been followed, taken away.
This leads me to the discussion of the next matter I desire to mention, the trade agreement recently negotiated between Great Britain and Canada. Well, Mr. Speaker, if I were given to the use of violent language I think it would be justified as I look at hon. gentlemen opposite. I wonder if they have forgotten their record with respect to the trade agreement with Great Britain. I am not going to do more than merely recite the facts. An agreement was entered into between Great Britain and Canada, which agreement was presented to this house for ratification, and at pages 72 and 73 of the journals of this house for 1932-33 it will be noted that Mr. Coote, seconded by Mr. Mitchell, moved in amendment that the following words be added to the proposed resolution:

and subject also to establishment of parity of the Canadian dollar with the British pound.
In other words they wanted to tie the dollar to the pound. Among those who rose in their places and supported that amendment were the present Prime Minister (Mr. Mackenzie King); the hon. member who is now Minister of National Defence (Mr. Mackenzie) and every other member of the Liberal party then in the house. Then came the second reading of the bill embodying the agreements, and again members of the Liberal party voted against it. The division will be found at page 92 of the journals of the house for 1932-33. Among those who voted against second reading of the bill I find the present Minister of Justice (Mr. Lapointe), the hon. member for New Westminster (Mr. Reid), the Minister of National Defence (Mr. Mackenzie), the hon. member for Macdonald (Mr. Weir), the hon. member for Winnipeg North Centre (Mr. Woodsworth), the hon. member for Skeena (Mr. Hanson), and the hon. member for Swift Current (Mr. Bothwell). In fact it might be well to read their names, in order that they might become immortal:
Beaubien
Blair
Bothwell
Bouchard
Boulanger
Bourassa
Bradette
Brasset
Brown
Butcher
Casgrain
Cayley
Chevrier
Coote
Denis
Deslauriers
Desrochers
Donnelly
Dubuc

Dumaine Elliott Fafard Ferl and Fournier
Garland (Bow River) Goulet
Hanson (Skeena) Heenan
Howard
Howden
Irvine
Jacobs
Jean
Lacroix
Lapointe
Maclnnis
Mackenzie (Vancouver Centre)
MacLean
Taylor
Macphail (Miss)
McPhee
Marcil
Motherwell
Munn
Neill
Perras
Pouliot
Ralston
Raymond
Reid
Roberge
Seguin
Totzke
Vallance
Weir (Macdonald) Woodsworth
Then on the third reading a vote was once more recorded, which appears at pages 116 and 117 of the journals for that year. Hon. members opposite became a little confused with the different agreements. There was the agreement with the Free State. Then there was a little difficulty about the Rhodesian agreement; part of the Liberal party voted for that. Then came the agreement with South Africa and there were some little diffi-

The Budget-Mr. Bennett
culties about that as well. Then at page 119 I find the vote on the United Kingdom agreement, which was 84 to 42. It is just as well that the names of the immortal crew who manned the ship of state at that moment in opposition to the government should be preserved for history. They were as follows:
Bertrand
Blair
Bothwell
Boulanger
Bourassa
Brown
Butcher
Casgrain
Cayley
Denis
Deslauriers
Desrochers

Elliott
Euler
Factor
Ferland
Fiset, Sir Eugene
Fournier
Golding
Hall
Howard
Howden Hurtubise King, Mackenzie Maephail (Miss) McIntosh
McKenzie (Assiniboia)
Munn
Neill
Perras
Ralston
Reid
Rheaume
St-Pcre
Sanderson
Seguin
Stewart (Edmonton West)
Thauvette
Verville
Woodsworth
Young
Those were the immortal forty-two. They voted against the United Kingdom agreement, an agreement which now in terms they ask this house to adopt. In order that there may be no question on that point I propose to put the deadly parallel upon Hansard; I propose to compare the paragraphs from the agreement of 1932 and the paragraphs from the agreement of to-day, to show that they are the same; the same in principle and almost identical in words. But in order to endeavour to save their faces they make some change in the relation of the words one to the other, ihough the principles have not changed and cannot change. I doubt whether, in the long history of our institutions, we have ever seen the spectacle of a government asking within the short period of less than five years the acquiescence and approval of members of the house to a document that was in terms similar in every principle to a document they had voted against just a few years before.


Mr. MACKENZIE KING:: If there had been a different agreement in 1932 there would have been a different parallel now.


Richard Bedford Bennett: Ah, yes; if the fox had not been a fox it might have been a cat. It is hardly in keeping with general principles to say that if you had not done that and something else had been done we would not have what we have to-day. What a tribute to pay to those who negotiated the agreement of 1932!


William Lyon Mackenzie King: We would have had something a great deal better.


Richard Bedford Bennett: Well, we will see whether or not it is better; it is identical.


William Lyon Mackenzie King: I say we would have had something better.


Richard Bedford Bennett: Well, Mr. Speaker, I regard that as a great compliment. The right lion. Prime Minister says that if we had been able to do better he would have been able to do better. That is a very nice way to put it. Well, there is this distinction between us: the right hon. gentleman says he did his best and the Minister of Finance says he did his best, and I assume that each in his allotted sphere did his best. I will assume that; it must be so. But the general principles that governed them in their approach to the problem are somewhat different from those which governed us. We were charged with being bargainers and hagglers, and now the Prime Minister says, "If you had only done a little better before,
I would have done better." If I had been able to bargain better before, he would have been able to do better now. But I will tell you what the trouble is: he had written a record across the pages of Hansard, for the country to read. He told the people of Great Britain he was opposed to the bargain made by the late government, because they were too hard upon dear old England. He told them he was prepared to give them far more latitude than we had given them-greater opportunities. greater freedom of opportunity than we gave them. Now he says, "Oh, if you had only done better, I would have been able to do better." That is amusing; but it does not end there. Let us look at it for a minute. I will lay the clauses of both agreements section by section upon Hansard so that we may look at them.
In 1919 the Liberal party had a convention, and one of their declarations was that the British preference be increased to fifty per cent of the general tariff. That was the declaration of the Liberal party made to the people of England. That was the declaration they made to the world. "Give us power and office and we will give you a fifty per cent preference over the general tariff for entry of your goods in Canada." And it did not end there. During the debates in the house, on October 17, 1932, as reported at page 264 the present Prime Minister said:
May I go a step further and say in connection with that, so that there can be no mistake as to where we stand in the matter of British trade, and the British preference, that we would undertake to give to the trade of the United Kingdom, where goods are imported through Canadian ports, a British preference averaging fifty per cent of our general tariff. If there is anything in this particular
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agreement that is comparable to that of advantage to ourselves and to British peoples in trade, I hope we will find it out before this discussion is over.
That is the declaration-not away back in the days of 1919, but one that was made when we were discussing the agreements themselves. That was made in 1932. Is it any wonder the British people realized that they had the promise of the Liberal party, and that they would have a fifty per cent reduction over the general tariff as a preference upon their goods? That was the promise given to them at that time. Far be it from me to suggest that the Prime Minister would not endeavour to keep his word in that behalf. I know how anxious he would be that it should be so, how anxious he would be that they should have at least a fifty per cent reduction.
Now I turn to the agreement tabled the other day. I can hear him say, in a moment of great mental perturbation, " I must keep this promise and see that they have a reduction of fifty per cent, so that the farmers in the west may feel that the promise I solemnly made in 1919, repeated in the house in 1932 and again in 1933, has been kept and honoured." And so I look at the document. I turn to item 160 and I find these words: Alcoholic perfumes and perfumed spirits, bay rum, cologne and lavender waters, lotions, hair, tooth and skin washes, and other toilet preparations containing spirits of any kind (a) when in bottles or flasks containing not more than four ounces each, 30 per cent.
And the old rate was 60 per cent. There is a fifty per cent reduction. There has been no trouble about eyewash. "Alcoholic perfumes and perfumed spirits, bay rum, and cologne"-so the farmer can say the Prime Minister has kept his word and reduced the rate by fifty per cent.
Now for a moment let us consider the agreement. Article 1 states:
The government of the United Kingdom undertakes that goods grown, produced or manufactured in Canada and consigned from any part of the British Empire which are now tree of duty, shall continue to enjoy entry free of customs duty into the United Kingdom, subject, however, to the reservations set forth in schedule I appended hereto.
The old agreement, Article 1.
His Majesty's government in the United Kingdom undertake that orders shall be made in accordance with the provisions of section 4 of the Import Duties Act, 1932. which will ensure the continuance after the 15th November, 1932, of entry free of duty into the United Kingdom of goods consigned from any part of the British Empire and grown, produced or manufactured in Canada which by virtue of that act are now free of duty subject, however, to the reservations set forth in schedule A appended hereto.

Schedule I, new agreement:
As regards eggs, poultry, butter, cheese and other milk products, the government of the United Kingdom reserve to themselves the right, if they consider it necessary in the interests of the United Kingdom producer to do so, to review at any time the basis of preference so far as relates to the articles above enumerated and after notifying the Canadian government either to impose a preferential duty on Canadian produce whilst maintaining preferential margins, or in consultation with the Canadian government to bring such produce within any system which may be put into operation for the quantitative regulation of supplies front all sources in the United Kingdom market. "
The old agreement, schedule A:
As regards eggs, poultry, butter, cheese and other milk products, free entry for Canadian produce will be continued for three years certain. His Majesty's government in the United Kingdom, however, reserve to themselves the right, after the expiration of the three years, if they consider it necessary in the interests of the United Kingdom producer to do so, to review the basis of preference so far as relates to the articles above enumerated and, after notifying His Majesty's government in Canada either to impose a preferential duty on Canadian produce whilst maintaining preferential margins, or in consultation with the Canadian government to bring such produce within any system which may be put into operation for the quantitative regulation of supplies from all sources in the United Kingdom market.
Word for word, differently placed. Not one change in meaning; only a transposition of words. There you have the old agreement and the new agreement.
It is true that at page 270 of Hansard of 1932 the leader of the government, then in opposition, made an attack upon this schedule.
Listen to his words dealing with the schedule identical with schedule I in the new agreement which he signed the other day. Listen to this:
The right hon. Mr. Amery, who represented the agricultural interests of Britain at the imperial conference in Ottawa, has made the statement since his return to England that they ought to begin the work of protecting British agriculture immediately, and not wait for any conference fn the matter. They have the principle of protection endorsed, and they ought to go ahead immediately with further protection for agriculture in Britain. What does this agreement say? It says that the British government will reserve to itself the right to impose increased duties with respect to all these dairy products. The only obligation with regard to Canada's possible benefit is that a certain margin will be preserved in the form of a preference: that is to say, the duties against Canada and other parts of the empire will not be as high as those imposed on European countries.
Is that right now? It was denounced in 1932, at page 270 of Hansard. It is now

The Budget-Mr. Bennett
submitted to the House of Commons for approval in 1937. His supporters were asked to vote against it, and, obediently responding, they voted against it. Now, asked to vote for it, immediately responsive they vote for it.
Then we turn-


William Lyon Mackenzie King: My right ton. friend introduced an entirely new system.


Richard Bedford Bennett: I should think so, a new system-heads I win, tails you lose. That was the opposition against the government of the day. Then at page 270 of Hansard:
Mr. Mackenzie King:	Notice is served
in black and white in this agreement that it proposes to impose such duties at the end of three years.
We got free entry for three years certain. There is no certain term here. The Prime Minister of to-day says that that language means that that is the notice they are going to serve, and on which they will pay duties. At no previous time did the agitation with respect to protection of agricultural interests in England rise to the point it has now reached. In its infancy then, it has now developed into almost a tidal wave of sentiment in favour of it. We were told by the present Prime Minister, when leader of the opposition, that England had served notice that she proposed to impose these duties at *the end of three years. Now it is the end of no time-any time she feels like it. If the Prime Minister meant what he said then-and surely he did'-it means that to-day we have received notice that England intends to impose duties on these products. He went further than that when he said:
Let me answer the hon. gentleman who says they have that right now. What they have not at the present time is the endorsation of hon. gentlemen opposite of the imposition of a duty on agricultural products from this country. They will have that endorsation after hon. gentlemen opposite have given their support to this agreement, and any delegation of Canadian farmers that may go to Britain to protest against anything of the kind will be told, as quick as a flash, "Your own Conservative members in the House of Commons voted in approval of the reservation, indicative of an intention of the British government with respect to the imposition of extra duties on agricultural products."
Just change "Conservatives" to "Liberals" and you have it. Then he proceeds to close with these words, as reported on page 271 of Hansard:
This provision is simply prophetic of the intention of the British government to levy duties against our dairy products inside of three years. I wonder how the farmers of this
country will view this agreement as they see the gates gradually closing against their dairy products as they go towards the British market;
With those prophetic words the right hon. gentleman closes his observations. Obviously if they were true then, they are much truer now. We go on to the next page of the agreement. Article 2 of the new agreement reads:
The government of the United Kingdom undertake that the goods the manufacture of Canada enumerated in schedule II appended hereto when consigned from any part of the British Empire shall not on importation into the United Kingdom be subjected to duties of customs higher than those specified in that schedule.
Schedule II covers motor cars, the rate of duty being 22% per cent ad valorem, and stockings and socks of natural silk at 28% per cent ad valorem, or eight shillings per pound, whichever is the greater. Reed organs, including harmoniums, are free. That is the new agreement; but did not the old agreement provide specifically the same? I shall not take the time to Tead it. I come now to article 3 of the new agreement, which reads:
The government of the United Kingdom undertake in respect of the goods the growth, produce or manufacture of Canada enumerated in schedule III appended .hereto that the difference between the rate of the duties of customs on such goods on importation into the United Kingdom when consigned from any part of the British Empire and the rate upon similar goods the growth, produce or manufacture of any foreign country shall not be less than the rates set out in that schedule:
The margin of preference is then indicated in favour of Canada. Schedule III provides for wheat, in grain; butter; cheese; apples, raw; pears, raw; and canned apples. These items were all in the old agreement. Dried fruits was in the old agreement, but it is not in the new. Then there are eggs in shell and condensed milk, both of which were in the old agreement. Honey is a new item in the new agreement. A large quantity of honey comes from New Zealand and Australia. The new schedule contains an item, " fish, fresh, sea," which was in the old agreement. Then there is an item, chilled or frozen salmon, which is supposed to be new. The old item provided for fish, fresh, from the sea. I do not know whether you would say that frozen salmon came out of the sea. Then the new agreement provides for asbestos, zinc, lead, all of which were in the old agreement. A new item in the new agreement is patent leather. With the exception of the one or two new items, all the others will be found in the agreement of 1932. Schedule B of the old agreement provides for wheat, butter, cheese, raw apples, raw pears, canned
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apples, dried fruits, eggs in shell, condensed milk and unwrought copper. Article 2 of the old agreement reads:
His Majesty's government in the United Kingdom will invite parliament to pass the legislation necessary to impose on the foreign goods specified in schedule B appended hereto, the duties of customs shown in that schedule in place of the duties (if any) now leviable.
Is there any difference between the two? I turn to Hansard to find what the right hon. gentleman said about it. Schedule C of the old agreement provides for fresh sea fish, canned salmon, asbestos, zinc and lead. I put it to this house if it is made any clearer when we say frozen salmon?


Charles Avery Dunning: Distinctly so.


Richard Bedford Bennett: The minister says that that makes it clearer. Article 3 of the old agreement reads:
His Majesty's government in the United Kingdom undertake that the general ad valorem duty of 10 per cent imposed by section I of the Import Duties Act, 1932. on the foeign goods specified in schedule C shall not be reduced except with the consent of His Majesty's government in Canada.
Mark you, the new agreement puts the same thought in a different language. The old agreement provided that the ten per cent would not be dealt with except with the consent of the government of Canada, and there was incorporated in the old agreement a provision under which the two governments could mutually agree to change the agreement in any way which was thought desirable. Listen to what the Prime Minister, speaking then as leader of the opposition, said:
"We have fixed certain duties on timber, which has to do with all the work of construction. houses and the like, we have fixed certain duties on fish and othe'r forms of food, and on copper and zinc, and we will not allow these duties to be changed except with the consent not of our own parliament but of the British government." How would we feel? Is there one member of this house who would support that?
I venture to say there is not one hon. member m any of the parties who would support it. Then how can we ask the British government to support a measure which we in our own parliament would not be prepared to support if the situation were reversed?
What is the answer to-day on March 2, 1937? Is it any different from what it was in October, 1931? Have conditions changed?
I admit that the transposition of words is complete, but the meaning is the same. The right hon. gentleman goes on to say:
But the point of greatest significance in this article is this, and remember in endorsing an agreement we are above everything else endorsing the principles that underly it. This duty of ten per cent shall not be reduced except with the consent of His Majestv's government- where, in Great Britain? No, in Canada. This (Mr. Bennett.]
duty of ten per cent which is being put upon some of the food and other necessaries of the British people cannot be reduced except with the consent of the government of Canada. Can anyone defend an action of that kind?
No wonder the Minister of Justice (Mr. Lapointe) smiles. Could anyone defend that action? These are not my words; they are the words of the present Prime Minister speaking in his place as leader of the opposition. I am certain there are a hundred and some old members who are going to defend it to the hilt. Then on page 273 the right hon. gentleman goes on to say:
I ask hon. members to note that article with great care. What is schedule C? Schedule C is timber, fish, salmon, and other fish canned, asbestos, zinc and lead. I have already pointed out that as far as zinc and lead are concerned they are in the same category as wheat, the duty only remains as long as Canada is willing and able to sell in the first instance her supply to Great Britain, and so long as she sells it at the world price, otherwise the duty goes off. Now, as to timber, there is a small duty at the present time and that is being continued. That is practically all schedule C signifies as regard timbers.
Those are the pearly words of wisdom which were spoken by the right hon. gentleman, but the hon. gentlemen who cheered so loudly then will not cheer so loudly now.


William Lyon Mackenzie King: The application is not the same to-day.


Richard Bedford Bennett: There is a great change; the right hon. gentleman is prime minister and I am not. At least I am frank enough to admit that there has been that great change.


William Lyon Mackenzie King: I was not referring to the agreement. I was referring to conditions as they were at that time.


Richard Bedford Bennett: opposite who went throughout the country and said, when the farmers were beginning to raise pigs, that it was a mistake, that there was nothing in this agreement for them, that Mr. McLean of Canada Packers, one of their strong supporters, said that that provision in the agreement of 1932 meant over thirty million dollars to the Canadian farmers? That was the position taken by Mr. McLean of Canada Packers.
Let us go a step further. The new agreement, article 6, provides:
The government of Canada undertake that the goods the growth, produce or manufacture of the United Kingdom enumerated in schedule IV appended hereto, when conveyed without transhipment from any part of the British Empire enjoying the benefits of the British preferential tariff into a sea, lake or river port of Canada, shall not be subjected to duties of customs higher than those specified in that schedule.
We have bound ourselves in the new agreement with respect to that matter. Article 6 of the new agreement continues:
The government of Canada undertake as regards goods the growth, produce or manufacture of the United Kingdom other than those enumerated in schedule IV that, under the British preferential tariff, no new protective duty shall be imposed and no existing protective duty increased except after an inquiry at which United Kingdom producer's shall enjoy full rights of audience.
The old agreement, article 13, provided:
His Majesty's government in Canada undertake that on the request of His Majesty's government in the United Kingdom they will cause a review to be made by the tariff board as soon as practicable of the duties charged on any commodities specified in such request in accordance with the principles laid down in Article 11 hereof and that after the receipt of the report of the tariff board thereon such report shall be laid before parliament and parliament shall be invited to vary wherever necessary the tariff on such commodities of United Kingdom origin in such manner as to give effect to such principles.
And article 14, of the old agreement:
His Majesty's government in Canada undertake that no existing duty shall be increased on * United Kingdom goods except after an inquiry and the receipt of a report from the tariff board, and in accordance with the facts as found by that body.
And article 15 of the old agreement provided :
His Majesty's government in Canada undertake that United Kingdom producers shall be entitled to full rights of audience before the tariff board, when it has under consideration matters arising under Articles 13 and 14 hereof.
Again the provisions are identical in terms except as to this: a large number of items are not bound in the new agreement that were bound in the old. Why? Because they were

articles that were dealt with by the provisions of other paragraphs of the agreement whereby, when no benefit accrued to the United Kingdom, they agreed to drop them. Article after article was so dealt with by the finance minister during the years, by asking Sir William Clark to communicate with his government to ascertain whether there was* any reason why the article in question should continue to be bound when it served no useful purpose, and in every instance where no benefit accrued to the United Kingdom they agreed. Those are the circumstances in which these items have been taken out. They are taken out now instead of waiting for cases to arise from time to time. Do hon. gentlemen say that this affords them a wider opportunity for future negotiations? It may, but so far as my knowledge goes there was not a single article in the schedule with respect to which a request was made to the British government, and which we desired to deal with in some other manner, on which they were not ready to meet us if it had not been found beneficial to them, and they did so.
Why is the tariff board eliminated here? Why is there no provision with respect to it? Why is it wiped out when the agreement with the United States provided that the tariff board should prevail? Why is it eliminated when we placed on the statute books last year this section:
In the case of any value for duty which may be established under authority of section 43, other than those provided for in schedule I of the trade agreement signed to-day, opportunity will be afforded for appeal to the tariff board respecting any such value in order to ascertain and make public the finding whether, to what extent, and for what period, such value may be required to prevent the importation of the goods into Canada from prejudicially or injuriously affecting the interests of Canadian manufacturers and producers.
And in section 6 of chapter 19 of the statutes of last year these words appear:
In the case of any value for duty established under the provisions of this section after the first day of January, 1936, any interested person may apply to the tariff board by way of appeal therefrom.
"Any interested person may apply to the tariff board." The United States has the right to go to the tariff board-the United States or any interested person. But in the other instance, so far as England is concerned it does not state what tribunal, or any tribunal ; it says, " except after an inquiry at which United Kingdom producers shall enjoy full rights of audience." Why was it left out? Has anyone suggested a reason?


Charles Avery Dunning: Oh, yes-a good reason.

The Budget-Mr. Bennett


Richard Bedford Bennett: Why is that good for the United States and not for the United Kingdom ?


Charles Avery Dunning: It is not the same thing at all.


Richard Bedford Bennett: Well, it may not be the same thing, but it reads the same and sounds the same.


Charles Avery Dunning: Oh, no.


Richard Bedford Bennett: I judge it is a good deal like the attitude of hon. gentlemen opposite towards the Ottawa agreements; it is a little different now from what it was in 1932. The fact of the matter is that this is to be an inquiry, but His Majesty's government in Canada have undertaken under the new agreement that they will not do certain things, that is impose new protective duties-


Charles Avery Dunning: That is it.


Richard Bedford Bennett: -unless there has been an inquiry and the United Kingdom producers have enjoyed full rights of audience. In the old agreement it is provided that His Majesty's government in Canada undertake that " no existing duty shall be increased "- that is the same thing, if it means anything-


Charles Avery Dunning: Yes.


Richard Bedford Bennett: -" on United Kingdom goods except after an inquiry and the receipt of a report from the tariff board, and in accordance with the facts as found by that body." Why have we wiped out the tariff board? Is it because this combination of tariff experts from three departments

trade and commerce, external affairs, and finance- have thought, that they would be far better able to deal with this matter than the board would be? Is that the reason? Is that the reason that the expert draftsmen have so endeavoured to express the same meaning in different language? Here you have the same thing expressed in the old agreement, a provision that the matter shall go before the tariff board. Here you have a provision in the agreement with the United States for an appeal to the tariff board. But in this instance what have we?


Charles Avery Dunning: The provision in the United States agreement is not the same.


Richard Bedford Bennett: Well, it says, the "value for duty," and if there is much difference between the value for duty and a tariff as operated by my hon. friend the Minister of National Revenue (Mr. Ilsley) on cabbage and lettuce and cucumbers and asparagus, I do not know what it is. Perhaps the minister will be able to elucidate that.
Let us read what the Prime Minister said in those days. I am not taking the utterances of anybody less than the Prime Minister, not even members of the government such as the Minister of National Defence, whose strong and vigorous denunciation will always be remembered. This is what the Prime Minister said:
Well, Mr. Speaker, I need not. draw attention again to the fact that here it is not the people of Canada that are thought of in this agreement. It is United Kingdom producers who are to have the right to appear before the tariff board. Why have not the producers of Canada and the consumers of Canada the right to appear before the board? May I remind the house in this connection of one important clause in the Tariff Board Act as it now stands, and that is that only those matters are to come before the tariff board which the Prime Minister wants to have placed before it. . .
I venture to say that if my right hon. friend thinks he has met with success in that endeavour he is very much mistaken. I do not believe that any parliament of Canada-
Note, Mr. Speaker-"I do not believe that any parliament of Canada-"
-will agree to surrender to any tariff board which is to be regarded as a judicial tribunal the say as to what the tariff in Canada is to be with respect to any commodity whatever.


Charles Avery Dunning: That is the whole point.


Richard Bedford Bennett: Yes. Well then, the hon. gentleman might explain why he has agreed that an inquiry at which the United Kingdom producers are to enjoy full rights of audience is to determine these questions, rather than the tariff board.


Charles Avery Dunning: Oh, no; the government of Canada.


Richard Bedford Bennett: The minister is a very intelligent gentleman, but at times he makes the fatal mistake of assuming a knowledge of the interpretation of statutes which he does not possess. The language is this:
The government of Canada undertake as regards goods the growth, produce or manufacture of the United Kingdom other than those enumerated in schedule IY that, under the British preferential tariff, no new protective duty shall be imposed and no existing protective duty increased except after an inquiry at which United Kingdom producers shall enjoy full rights of audience.


Charles Avery Dunning: That is it.


Richard Bedford Bennett: The old section was this:
His Majesty's government in Canada undertake that no existing duty shall be increased on United Kingdom goods except after an inquiry and the receipt of a report from the tariff board, and in accordance with the facts as found by that body.


Charles Avery Dunning: That is it.
The Budget-Mr. Bennett


Richard Bedford Bennett: There is the distinction without the difference.


Charles Avery Dunning: A very important one.


Richard Bedford Bennett: Yes, but here is the
amazing observation, in view of this paragraph; let the supporters of the right hon. gentleman (Mr. Mackenzie King) listen to this:
What does that mean, Mr. Speaker? It means that the tariff board of Canada is to be moved into action at the instance not ot Canadians, not of consumers who are affected by our tariff's, not of any classes in this country, but at the instance of the British government. In other words we are to have a government of another part of the empire say when our tariff machinery is to be put into motion where it relates to matters pertaining to the tariff board. That comes back to the old question as to how far we want the affairs of this country interfered with by the governments of the other parts of the empire. I venture to say that if we are looking for trouble that is the best direction in which to seek it. If we are going to put upon the British government the onus of moving our tariff board into action, and put upon our own government the onus of having its board take up investigations whenever the British government wish to have an inquiry made, it seems to me we are going out of our way to make difficulties between the governments of the two countries and between the two countries themselves.


Charles Avery Dunning: He was a true prophet.


Richard Bedford Bennett: We are to have another inquiry like the Turgeon commission, with Mr. McRuer, at $150 a day and expenses, reading free trade pamphlets. Is that the idea?
So that is the story up to that point. Then we come to article 7 of the new agreement:
The government of Canada undertake that goods the growth, produce or manufacture of the United Kingdom enumerated in schedule 1Y, when not of a class or kind made in Canada and when subject to duties of customs on importation into Canada, shall, when conveyed without transhipment from any part of the British Empire enjoying the benefits of the British preferential tariff into a sea, lake or river port of Canada, enjoy the benefit of preferential tariff margins which, in the case of any such goods, shall not be less than the difference between the rate of duty provided for in this agreement and the rate of duty now levied upon like goods the growth, produce or manufacture of any foreign country, provided however that, if the duty on foreign goods becomes less than such preferential tariff margin, no duty shall be levied on the like goods of United Kingdom origin.
Then, article 8:
The government of Canada undertake in respect of the goods the growth, produce or manufacture of the United Kingdom enumerated in schedule V appended hereto that the difference between the rates of duties of customs on such goods on importation into Canada, when conveyed without transhipment from any

part of the British Empire enjoying the benefits of the British preferential tariff into a sea, lake or river port of Canada, and the rates upon similar goods the growth, produce or manufacture of any foreign country shall not be less than the ^margins set out in that schedule.
Under the old agreement, article 9, "His Majesty's government in Canada will invite parliament." You see, the late government were more respectful towards parliament. They did not know they had a certain, solid majority. The government of Canada's undertaking under this present articje is without reference to parliament, but the old agreement recited:
His Majesty's government in Canada will invite parliament to pass the legislation necessary to substitute for the duties of customs now leviable on the goods specified in schedule E the duties shown in that schedule, provided that nothing in this article shall preclude His Majesty's government in Canada from reducing the duties specified in the said schedule so long as the margin of British preference shown in that schedule is preserved or from increasing the rates under the intermediate or general tariff set out in the said schedule.
I explained a moment ago that with respect to the articles that were bound the British government had accorded its consent without any difficulty, and I pointed out further that with respect to the items mentioned here we put them on the free list; and when the bill is in committee we will mention the articles that were placed on the free list between 1932 to 1935.
Let me refer now to the language of the present Prime Minister at page 281 of Hansard of 1932.
The feature that is all important for this parliament to consider is whether it is going to adopt the principle of allowing one government to say what the tariff of Canada must be for a given period of time irrespective of what the wishes of the electorate may be. Whether we are to he bound for a term of years to the high tariff rates which a government that may be in office one day and out of office shortly after, may fix. That is the most serious feature of all. When we consider that this is an effort to raise tariffs not only so far as Canada is concerned but so far as other parts of the British Empire are concerned against the rest of the world, this iron clad arrangement of high tariffs existing around the British Empire for a period of years becomes a rather serious international as well as national problem.
Is there any change? Changes in numbers of items, but not in principle. If you have five articles you have the number, and the right hon. gentleman said the thing to remember was the principle that underlies it. The principle is embedded in these documents; for here is the old agreement, article 9:
His Majesty's government in _ Canada will invite parliament to pass the legislation neces-

The Budget-Mr. Bennett
sary to substitute for the duties of customs now leviable on the goods specified in schedule E the duties shown in that schedule...
As I point out, this was, as we said at the time, an experiment, and as it became clear from time to time that certain items were not required, reductions were made or they let us deal with them as we pleased, on consent.


Charles Avery Dunning: With respect to guaranteed margins?


Richard Bedford Bennett: Certainly, when England could not supply. Some articles for instance came up during those years which England could not supply at all.


Charles Avery Dunning: One or two cases.


Richard Bedford Bennett: Well, one or two is sufficient for the principle involved. Whenever it was found necessary they always met our offers. And the right hon. gentleman pointed out that the essential question to consider is the principle involved.


William Lyon Mackenzie King: The principle involved at the time was the question of duration. In other words my right hon. friend bound his successors; we bound ourselves but left our successors free.


Richard Bedford Bennett: The right hon. gentleman might not say with certainty that he bound even himself. A period of time of three years is not materially different from five years.


William Lyon Mackenzie King: But it is.


Richard Bedford Bennett: The right hon. gentleman made some point about that. He approved of the tobacco item, which he had made, which was a ten year agreement, and which he did not desire to have changed. The fact that the term is three or five years I do not consider to be of great importance having regard to the fact that the government of which he was the head made a bargain with the West Indies for ten years and bound us so that we were not able to deal with the West Indies by reason of that agreement. And I pointed out others in which the same thing was done. So it is not a question of time; it is a question of the essential principle, and the principle is manifested as well by five or six items as by fifteen or twenty.
I have dealt with articles 7 and 8. Article 13 of the new agreement is one to which considerable importance has been attached. The two agreements are substantially the same in that regard. The mandated territories I will take as read-
.. .the government of Canada shall not be bound to continue to accord any preferences to any colony or protectorate...
Here is what the old agreement said, article 20:
Nothing in this agreement shall prejudice or diminish any of the benefits enjoyed by any of the parties thereto under the Canada-West Indies trade agreement dated July 6, 1925.
The new agreement and the old are identical in meaning,, although there has been a change of words. It must have required all the genius that the government could import to be able to utilize these words in a different way by transposition so as to make them fit in differently from the way they were in the old agreement and still mean the same thing.	.


Charles Avery Dunning: The other party to the agreement had something to say.


Richard Bedford Bennett: Quite, but not in the
language used here. Now, let us see. It is not as though it ended there. One would have thought that the present Prime Minister would have denounced that, but he accepted it. Let us look at Hansard, page 277:
Let us consider the next article.
And then he deals with the colonies, and continues:
I have not time to go into that matter at the moment, but I invite the attention of the house to the fact that here is a new departure with respect to the whole matter of taxation of colonies and dependencies. Under this agreement the governments are making, so far as the countries of the rest of the world are concerned, a closed preserve of the dependencies and the colonies. Heretofore they have been free to trade with these colonies and dependencies. We on this continent as colonies, sought for years to get freedom of trade, and not to have the government of Britain impose duties for us. Under this agreement, however, we in this parliament who have fiscal freedom in these matters, are to sanction a course which states that whether they wish it or not, these dependencies and colonies in order to provide preferences to other parts of the empire must have certain duties against the rest of the world imposed upon them. There is another principle which I do not believe we in this parliament ought to support for one minute.
And already several days have passed.
I shall not touch the larger issues raised, but it raises further far-reaching questions when we consider what other countries of the world are likely to think, those countries which are not only being shut out of the markets of the British dominions and Great Britain herself, but shut out of the great colonial empire as well, in consequence of the agreements. Those are matters which may well be very carefully considered.
That was the attitude of the then leader of the opposition-that not for one minute should

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Britain. Our imports of textiles from Great Britain made up one-third of our entire imports from that country last year.


Charles Avery Dunning: That was all textiles, not only woollens.


Richard Bedford Bennett: Quite so; that is what I said. Under those circumstances I do invite the attention of the house to a careful consideration of the items concerning woollens, knitted goods and hosiery.
There is one other article which I think is important, having to do with vegetable oils. I am not going to labour the matter at the moment, but in the agreement we made in 1932 we bound that article at ten per cent. Long before we left office, however, it became painfully apparent that changed world conditions had created a situation which required the closest examination and investigation; for we have been importing into this country tremendous quantities of vegetable oils, and the market we had to the south of us with respect to animal oils has gone. The United States have placed an excise tax against the importation of our animal fats, so that we are no longer able to utilize that market for the sale of our surplus products. The importation into Canada of vegetable oils has assumed a magnitude of which I had no idea until I looked it up a little while ago. The quantity coming into this country is amazing. We have surplus butter and other fats; we are increasing our pig production; we are selling bacon, and we have lard. We used to have a ready market for lard and still ship a large quantity of it to the United Kingdom. The evidence given before the price spreads commission indicated that the profits accruing to Canada Packers from vegetable oils was enormous. I think in one particular year it was nearly one-half of their profits. I mention this because it seems to me we should give this item very careful consideration. It affects our butter and fat production, and our ability to sell it.
There is one other item dealt with in the minister's speech to which I think we should pay some attention, namely that of furniture. I do not propose to do more than say that as there is a strike in the industry at this time, as indicated by newspaper dispatches, it would probably be undesirable to discuss the matter at this time. There are, however, phases of it which warrant the closest and most careful consideration by the government of a situation which now threatens the industry. I pointed this out last year when we dealt with the United States tariff, and I think if the minister gives it careful consideration and attention he will find there is-


Charles Avery Dunning: It is still before the tariff board.


Richard Bedford Bennett: Yes, I know it is. I believe oils are also before the tariff board, judging from the dates on documents I have. I think probably it had been settled, so far as the ten per cent is concerned, before it reached the tariff board. But the minister has referred it to the board.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: I make these observations with respect to tariffs not in any censorious manner, but really in the hope that I may be able to suggest to the government the desirability of a more careful study than has yet been made. I cannot but point out that while in multiplicity of counsel there is wisdom, it also follows that too many tariff experts sometimes have the effect of emphasizing the truth of that other old proverb, that too many cooks spoil the broth. I merely mention that in passing.
For the moment, leaving the tariff, there is another matter to which I should like to refer, and that is the question of our financial relations with the provinces. The other day the minister dealt with the matter briefly. In amplification of the position 1 desired to present at that time I wish to say only this: the determination of a policy, I found by experience, is a matter of profound importance, because the implications of it sometimes are not foreseen. When the minister said to the province of Alberta that he would not help them out of their difficulty by advancing them, through loans or otherwise, sufficient money to enable them to pay their maturing obligations, his statement was regarded as a policy. Many people scattered throughout the province in which I have long lived, as well as people residing in other pants of Canada, found themselves in straitened and difficult circumstances because their investments had been wholly in those securities the market value of which fell to a very low figure, and the interest upon which was reduced to half of what the coupons carried. If that policy is reversed, if it is not applied to the provinces of Saskatchewan and' Manitoba, obviously a situation is created in which the people of Alberta have just cause to say they have been discriminated against. Because if the minister will accept what I think he will, namely that the implication of his refusal to assist Alberta involved the thought that the same policy was to be applied to all the provinces-


Charles Avery Dunning: And it was.


Richard Bedford Bennett: No, no.

The Budget-Mr. Bennett


Charles Avery Dunning: I refused British Columbia and Saskatchewan at the same time and on the same grounds, in connection with the same class of matter.


Richard Bedford Bennett: Yes, but the provinces of Saskatchewan, Manitoba and British Columbia have not defaulted. The province of Alberta defaulted.


Charles Avery Dunning: If the right hon. gentleman will permit, on the maturity which was the occasion of the default, both British Columbia and Saskatchewan had maturities at the same time and received precisely the same answer.


Richard Bedford Bennett: Yes, but I am pointing out that Alberta defaulted.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: And the others did not. Alberta defaulted because it was unable to secure money from the dominion government to prevent it from defaulting; that was regarded as an indication of a policy which I believe, rightly or wrongly, should not have been put in force at that particular time.
Before resuming my seat there is one other matter to which I must refer, and that is the windfall which the minister received from the wheat board. Mr. Speaker, I find it a little difficult to express myself in moderate terms with respect to this matter. Prior to this government's assuming office there was outstanding a guarantee in these words:
The minister, in addition, recommends that such guarantee shall become operative and payment thereunder, out of the consolidated revenue fund, of the respective balances, if any, then due or accruing due, shall be made, after Wheat Producers have sold and realized upon all or practically all of such wheat and other grains in its possession or control, and have sold or disposed of all or practically all such contracts for future delivery of wheat and other grains, and application of the amounts realized, less expenses, has been made against such advances and interest, and thereupon the governor in council, on the recommendation of the Minister of Finance, shall determine the date at which payments are to be made in pursuance of this guarantee.
The wheat board) act provided for the taking over by that board of the wheat held by the wheat producers. They took it over on a given day. Unfortunately under the negotiations they did not take it over as the statute provides. The provision is that it shall be taken over after negotiations, but they took it over in consequence of these words:
The government herewith makes formal request that the Canadian Cooperative Wheat Producers Limited transfer forthwith to the Canadian wheat board "all wheats or contracts to purchase or take delivery of wheat in respect of which the government of Canada
has given a guarantee" on the terms of my letter November 12, 1935, to you. Stop. A similar request has been sent to Mr. McFarland.
Ultimately the threat was made that if they did not do so, credit would be stopped. That was the threat. It was done under duress, and as a result the wheat was taken over at almost the lowest price at which wheat had sold. Then they came to parliament and asked for
815.000.	000 to cover the loss. Parliament voted the money, against my protest, When I read the language of the Minister of Finance with respect to it I am amazed that such language should be used, because he points out that this was a loss which was irredeemable; there was no possible chance of retrieving it.


Charles Avery Dunning: No, no.


Richard Bedford Bennett: Look at the language.


Charles Avery Dunning: I think my right hon friend should quote it exactly. It is perfectly true I had little hope.


Richard Bedford Bennett: I thought I had the book before me, but apparently it has been misplaced.


Charles Avery Dunning: The loss was greater by the end of the fiscal year.


Richard Bedford Bennett: He said the loss would be greater. In the middle of the year, without waiting for the end of the crop year, he got
88.000.	000. How much more wheat is held? Is there or is there not to be a further profit? If so, how much? It is impossible to say-exactly.


Charles Avery Dunning: But it is within more manageable proportions now.


Richard Bedford Bennett: Yes, of course it is within more manageable proportions, but the principle has not changed. That is the story, so far as I can see, with respect to it. I thought I had the volume of Hansard containing the minister's statement, but it is a matter which may be considered later.
I once heard a gentleman say it was difficult to understand any parliament doing what was done last year with respect to this matter. How can we justify having paid out $15,000,000 and getting only $8,000,000 back, with some more to go, the amount of which I do not know? Then we have the government, through the present Prime Minister, claiming at Brandon that they were the real framers of the wheat board act. Speaking at Brandon, the Prime Minister, then leader of the opposition, pointed out that the Liberal party must take the credit for the wheat board act.


William Lyon Mackenzie King: Some features of it, not the whole act.
The Budget-Mr. Bennett


Richard Bedford Bennett: He pointed out that anything that might be of any value was the result of the efforts of the Liberal members of the committee.


Charles Avery Dunning: I think that is fair.


Richard Bedford Bennett: If that is fair, then let me ask both the Prime Minister and the Minister of Finance why it was they made it impossible for the farmers to use it in 1936-37. The language of the statute provided the farmer with an opportunity to have a second market; he could sell to the wheat board and get participation certificates. Through the action of the government of Canada he was prevented from being able to sell his wheat to that board and receiving participation certificates. We now know that not thousands but millions of dollars have been made by speculators in that same wheat. One man told me that his profit was half a million dollars and I know he was stating the facts. Four large buyers took the wheat and instead of the participation certificates being in the hands of the farmers, they reaped the benefit of the rise in price from 90 cents to $1.30 per bushel. It was in the hands of the grain exchange. There is no denying the facts as they are there upon the record. I mention this in passing without going into it in detail, because another opportunity will be afforded to discuss the matter fully.
I am deeply concerned about the operations and the effect of the operations of the wheat board. When I was standing in the place now occupied by the right hon. gentleman opposite, I pointed out that that meant that there were two markets possible, the one being the board and the other the ordinary channels of the grain trade. The farmer had his choice of going to the market and getting participation certificates. If he had good fortune he could participate in the increased price that came about. If wheat went lower, the government guaranteed him the fixed price. He got that price. But he was not afforded that opportunity in 1936-37. Great fortunes have been made while the farmer has had to dispose of his wheat at a price which did not permit his utilizing the machinery of the rvheat board.
There is another problem in connection with which I think the hon. gentleman should have given some indication of his views, the problem touching the railways of this country. I am not going to review again the history of these railways. There are two problems of transcendent importance facing this country and one is the railway problem. It was pointed out that the effect of the agreement would be to increase the business of the railways to such an extent that they would be able

rapidly to overtake their difficulties. Of course that is not so and it could not be so in the very nature of things. The short hauls would not enure to their benefit to that extent, or to any other extent that would be perceptible. Of course improved conditions have improved the takings of the railways. Take our national railway, for example; there are still three questions which remain unanswered. The annual report of 1935 showed a cash deficit of $49,000,000; the balance sheet shows a loss of $S3,000,000, while the bureau of statistics shows the loss of the railways to be $115,000,000. The reconciliation of these amounts has not taken place. The same thing may be said with respect to other matters connected with this one. There is no problem to which the Minister of Finance could give his attention comparable with the problem that arises from the railway situation. There is no problem which is so closely connected with the economic condition of this country.
Another related problem

and it is connected also with tariffs, with the development of our industrial life, with the lessening of the opportunity for men to find work-is the problem of unemployment. In connection with this I propose to say a few words. I have not forgotten the denunciations hurled across the floor of this house during the years that we held office. I have not forgotten the statements which were made during the general elections. I have not forgotten the fierceness of the attacks made upon myself and upon all those who had to deal with the problems then before us. On an occasion such as this I cannot help but refer to the language of the Prime Minister at the beginning of the elections of 1935, when he said:
Since Mr. Bennett came into office, you have had even stronger reason for believing that unemployment is the most urgent of Canada's national problems. Each year you have seen its menacing shadow creep nearer and nearer your own doors; more and more you have felt its cruel privations in your homes. Everywhere to-day its terrors stalk abroad in our land. I doubt, however, if even this experience has been sufficient to cause you to realize to what proportions the problem has grown in the years of Mr. Bennett's administration. Let me give you the figures of the numbers of unemployed and of persons dependent upon relief, so far as it is possible to obtain them from government records.
Taking the latest figures on employment supplied by the Bureau of Statistics, it can be shown that, on the most conservative basis, there are to-day over 400,000 wage earners out of work. If we go by the estimates of social workers, labour organizations and labour leaders, we shall not be far out if we place the number of unemployed at approximately half a million. To avoid the possibility of any exaggeration, I shall leave the total at over
400,000.

The Budget-Mr. Bennett
I have been speaking only of the unemployed. I have said nothing of the numbers on relief. You must be careful to distinguish between the two. Fortunately, it does not follow that, because men and women are unemployed, they go automatically upon relief. Similarly, it must not be supposed that, because men and women are employed for a part of the time, sooner or later, they may not find it necessary to accept relief for themselves and for those dependent upon them for support. Figures on direct relief are available from May, 1932, to May of this year. These figures, which include dependents and those receiving partial and part-time relief, reveal a startling increase, from year to year, of persons who have been compelled to receive state assistance. In May, 1932, there were 597,000 who, in this manner received direct relief. In Alay of this year there were 1,272,000.
They are, however, far from revealing the true picture. It is not with statistics, but with human lives, that we are concerned. You cannot measure fear, privation and want by any yardstick or adding machine. Who will venture to estimate what the enforced idleness of hundreds of thousands of human beings, and the enforced acceptance of relief from the state by a very much larger number, over a period of two, three, four and, for some, five years, has meant in the way of physical suffering, of mental anxiety, and of human anguish to lives and homes of which there is no record whatever? Who will venture to estimate what the effect of all this may be upon the health and morale of the nation? Is it any wonder that to-day there is widespread unrest and discontent throughout the land, and that, in the case of young and old alike, many are in a condition of despair?
Then followed a statement of the remedy proposed. There was to be the appointment of a commission and cooperation with the provinces which, with the exception of one, were governed by Liberal administrations. The Prime Minister continued:
The services of all departments of the federal government will be made available to the commission in any and all phases of its work. The Liberal party has no reason to doubt that the services of all departments of provincial governments will be made equally available. A guarantee of provincial cooperation is to be found in the fact that, save in one province, out of nine, Liberal governments are already in office.
The right hon. gentleman referred to the movement for a national government, and stated that in his opinion there could be no finer example of a national government than a Liberal government at Ottawa and Liberal governments in all the provinces. The right hon. gentleman then referred to the hon. member for Winnipeg North Centre (Mr. Woodsworth) and myself and concluded by stating that his program was to have a national commission which would be asked by the Liberal government to secure cooperation in dealing with this problem.
I shall now give a short statement of the results. The bureau of statistics defines an unemployed person as follows:
The unemployed person in the following estimate is the person who could tell a census enumerator that he had worked as a wage-earner or that he had a wage-earning occupation, but is at present out of work (not through illness, accident, strike or lock-out, etc.)
This definition excludes the boy or girl of working age who has never worked at a steady job, also the boys or girls on the farm who would be wage earners under better circumstances.
The leader of the government used the figure of 400,000 on which he based his statistics. Here are the figures of the bureau of statistics brought up to date:
May	 440,000
June	 437,000
July	 431,000
The figures for the different months are given, and when we get to August, 1935, the bureau puts the figure at 492,000. The figures for the following months are:
September	 455,000
October	 435,000
November	 479,000
December	 546,000
Then coming down to January, 1937, the bureau gives the figure of 500,000. That is the figure that is now given.
Turning to relief, the leader of the government used the figure of 1,272,000, although the bureau's figure is different. Before I come to that, I will give the figures that the leader of the government gave in his speech on October 8, when, nearly overcome with emotion after listening to eight Liberal premiers in the Maple Leaf Gardens, Toronto, he referred to the unemployed as having reached figures for different months of 1,322,668; 1,197,657; 1,103,690, and so on. These figures may or may not be accurate.
At any rate the government came into office and appointed a national employment commission consisting of Arthur B. Purvis, as chairman; A. N. McLean, Alfred Marois, Tom Moore, Mrs. Mary M. Sutherland, W. A. Mackintosh and Mr. E. J. Young. Major Hugh Spencer Relph was secretary; Miss C. Whitton, co-ordination of aid, and Ray Brown, director of publicity. V. C. Phelan, former private secretary of Mr. Heenan when he was minister, was made director of registration. A youth employment committee was appointed, as follows: Alan Chambers, chairman; Robert F. Thompson, Joseph McCul-ley, W. C. Nickerson, Andre Montpetit.
The Budget-Mr. Bennett

Sessional paper 128A, filed on January 29, 1937, covers approximately thirty-five orders in council dealing with appointments. We have no record of the amounts that may have been expended for adding machines and the like. But I want this house to take note of what has been done by this government since it came into office to solve the unemployment problem, and when hon. members hear it I think they will have a better appreciation of just what is involved than they now have. First is the order in council appointing the National Employment Commission. Next is an order in council of June 6, 1936, appointing Major Relph secretary of the commission at a salary of $400 a month to be paid from moneys provided by parliament. Then on July 9, 1936, another order in council was passed, and listen to this:
The committee of the privy council, on the recommendation of the Minister of Labour, advise that, under the provisions of the National Employment Commission Act 1936, the following persons be appointed to the staff of the National Employment Commission:
Mr. Oscar F. Martin, clerk messenger, grade 2, at a salary of $1,080 per annum;
Miss Betty Brice, stenographer, grade 2, at a salary of $1,080 per annum;
Mr. H. P. Gardiner, head filing clerk, grade 4, at a salary of $1,680 per annum;
Mr. Harry Baldwin, superintendent in charge of relief division, at a salary of $4,500 per annum;
Next is an order in council dated July 17, 1936, appointing Mrs. Hazel C. Binks to the staff of the commission as a stenographer, grade 2, at a salary of $90 per month, effective from and including July 14, 1936. Next is an order in council dated August 1, 1936, recommending that-
-authority be granted for payment of the sum of $113.66, being expenses incurred in connection with a conference of members of the Canadian Welfare Council, on the question of national registration and classification of persons on relief-the amount in question to be paid from vote No. 332.
Next is an order in council of August 7, 1936, appointing a bilingual assistant secretary to the National Employment Commission and recommending that-
-Edward Fournier be appointed at a salary of three hundred dollars per month, less statutory deductions, chargeable to vote 332 of the special supplementary estimates, effective upon assumption of duties.
Next is an order in council of August 7, 1936, appointing Mr. John A. Bethune clerk on the staff of the commission at a salary of $1,500 per annum.
The next order in council is dated August 21, 1936, appointing Mr. T. W. O'Neill secre-

tary to executive at $145 per month, and Mary Alberta Veniot, stenographer grade 2, at $90 per month.
The next is an order in council of August 21, 1936, appointing Mr. Phelan as director of registration at a salary of $3,960 per annum -and he is already a civil servant.


Mr. ROGERS:: A number of these employees are transferred from other branches.


Richard Bedford Bennett: Quite. The salaries were not, though. Next is an order in council dated August 21, 1936, recommending that authority be granted

-to pay to the National Employment Commission the sum of $1,000 out of vote No. 332, as an advance to the commission to cover expenses of individuals or groups whose services may be required by the commission.
Then on August 21, 1936, this order in council was passed, and this is a jewel:
The undersigned has before him recommendation from the National Employment Commission that it is considered that the tabulations of relief scales, etc., first prepared by the Canadian Welfare Council, in 1935, provide information which the commission should have.
That to obtain this information through the commission's own offices would involve not only considerable expense but also loss of time, and that its revision up to date and the incorporation of similar information respecting a number of smaller relief authorities, not dealt with in the tabulations already prepared, can most efficiently and cheaply be secured from the Canadian Welfare Council. The commission considers that a fair estimate of the cost of this revision would be approximately $750 but recommend that $500 be paid to the welfare council therefor.
And where did the information come from? From the bureau of statistics.
Then on August 20, 1936, an order in council was passed appointing Mr. David Shepherd as a special adviser to the National Employment Commission at a salary of $625 a month, to date from September 1,	1936. On
September 2, 1936, an order in council was passed recommending the appointment of a youth employment committee, consisting of the following: Alan Chambers, R. F. Thompson, Joseph McCulley, Andre Montpetit, W. Clifford Nickerson, and they are to receive a living allowance of $15 per diem and travelling expenses while engaged on the work of the committee, such allowances and expenses to be in effect from the date of appointment, and to be chargeable to vote 332, special supplementary estimates, 1936-37.
On September 10, 1936, an order in council *was passed approving of the appointments which had been recommended of T. W. O'Neill and Mary Alberta Veniot. On September 11, 1936, an order in council was

The Budget-Mr. Bennett
passed authorizing Mr. Thomas Moore to act as vice-chairman of the commission when Mr. Purvis is away. On September 17, 1936, an order in council was passed appointing Miss B. Campbell, stenographer grade 2, at $90 per month, and J. M. Wyatt, supervisor of statistics, registration branch, at $175 per month. On September 17, 1936, an order in council was passed appointing Adelaide Guylist, stenographer grade 2, at $90 per month; Helen Mary Ross, typist grade 1, at $65 per month, and Grace Daniels, stenographer grade 2, at $90 per month.
On September 30, 1936, the board recommended the following appointments:
1.	J. F. Fitzpatrick, supervisor, machine section, at a salary of $175 per month, from September 4, 1936.
2.	Clerk, grade 4, at a salary of $135 per month: P. Stuchen, from September 1, 1936.
3.	Clerks, grade 3, at a salary of $115 per month: K. Marsh, and J. W. Valiquette, from September 1, 1936; Misses L. Corbett and M. Weston, from September 4, 1936.
4.	Clerks, grade 2, at a salary of $90 per month: A. J. R. Ash, Miss L. Bonnell, I. Bodie,
S.	Charet, J. E. Jolin, M. A. Keating, H. C. Manning, E. Richer and E. C. Roquet, from September 4, 1936; C. B. Costello, Mrs. I. Legault, R. W. Scott and R. C. Woolam from September 9, 1936; W. J. Blake, Mrs. A. M. Craik, H. Dunne, Miss M. Ewart, E. R. Jackson, J. Leslie and F. Pain, from September 10, 1936; T. G. Bailey, Miss B. Quilty and C. J. Sly, from September 11. 1936: A. J. Saunders, from September 12, 1936; R. H. Borehan and
S.	Karam, from September 15, 1936; R. H. Braman, X. C. Donoghue, J. E. Drinkwater, A. G. McLeod, D. Moorman and C. de Salaberry, from September 17, 1936; H. G. Latham, H. L. Osborne and C. G. Parmelee, from September 21. 1936: S. L. Morrissey from September 23, 1936; and E. F. Lyons, from September 25, 1936.


Norman McLeod Rogers: These are all connected with registration.


Richard Bedford Bennett: The order in council continues:
5.	Office appliance operators, grade II, at a salary of $85 per month: Miss A. Devine, W. W. Lester, G. Chene and Misses H. Cal-ladine, H. Doyle, G. Lanthier, M. McCarthy, M. Martin and Mrs. G. Giroux; Miss S. Donohue, Miss B. Huard and Mrs. H. M. Cairns; Misses J. Andrews, F. Ellard. L. Gouin, M. Noonan, M. Macdonald: Mrs. A. Gagnon, Mrs. V. M. Gorman, Mrs. B. O'Malley; Misses G. Cosgrove and D. Macdonald.
And the following between the dates mentioned: Garneau, Byrnes and Lipman, at $85 per month, as appliance operators.
Then we come to the next order, September 30, 1936, chargeable to the same vote: clerks, grade II, at $90 per month, Black, Ferguson, Fraser, Grainger, Ketchum, Morrisette, Cog-hill, Coghlan, James, Marselis, Richard, Tank, Lett, Prestly, Richard. Office appliance operators, grade II, salary $85 per month,
Dennis, Gallant and McCadden. On October 7, 1936, special supplementary estimate, office appliance operators, grade II, salary $85 per month, McLaughlin, Aubry, and Dumoulin. On October 8, 1936, salaries to be charged as follows: Raoul Landriault. $80 per month, Florence Morris, and Marie Miller, $90 per month.
The minister further recommends that Miss Charlotte Whifeton, executive director of the Canadian Welfare Council, be appointed in connection with specialist work on the relief sections of the act, such appointment to be effective from November 15, 1936, to March 31, 1937, at a remuneration of $25 per diem plus actual travelling expenses, same to be chargeable to vote No. 332. Ray Austin Brown becomes a director of publicity for the department at a salary of $4,500 per annum, to be paid out of the same vote subject to the provisions of the Salary Deduction Act, the appointment to date from October 14, 1936.
On November 3, 1936, Mrs. Ferguson of Westville, N.S., Madame Cormier of Montreal, Miss Ruth Low, of Kitchener, Mrs. Walter Lindal of Winnipeg and Mrs. A. J. Currie of Govan, receive appointments from that date. An order of the same date appoints Mr. Arthur Hemming as clerk, grade 2. Then we have Paul Masse, "who has been attached to the staff of the Employment and Social Insurance Commission since April 1, 1936" to be appointed to the staff of the National Employment Commission at a salary of $115 per month; this order is dated November 3. On November 12, 1936, it is stated that a youth employment committee has been formed, and that the members of that committee are eligible to receive, in lieu of a detailed accounting, a living allowance of $15 per day, and that when travelling outside of Ottawa the living expenses of the chairman, Mr. Alan Chambers, may be larger than those incurred by the ordinary members; that his work will involve travelling to various points, and therefore it is recommended that he be paid an increase of $5 per diem more than the other members, to be charged against the vote. On December 17, 1936, the board recommend the appointment of one Wyatt as supervisor of the coding section, whatever that may be.


Norman McLeod Rogers: It is all connected with registration as provided in the statute.


Richard Bedford Bennett: It gives as clerks, grade 4, at $135 per month, Stuchen, and Roquet; clerks grade 3, $115 per month, Marsh, Valiquette, Corbett and Weston and Pain; stenographer, $90 per month, Campbell, and a number of clerks, grade 2, and office appliance operators. By an order in council of January
The Budget-Mr. Bennett

8, 1937, McKinnon and Latremouille are appointed stenographers at $90 per month. On January 8, 1937, the salary of O'Neill, $145, is increased to $200 per month; Gardiner, at $140, is increased to $150. On the same date Maysie Roger is temporarily appointed as supervisor of social statistics at a salary of $115 per month. Then follow, on January 15, Bethune and Landriault, at $160 and $90 per month respectively.
These are the contents of the orders in council brought down to January 15. My purpose in directing attention to these is to show that, instead of utilizing the existing machinery of the bureau of statistics, what has been done is to endeavour to build up another bureau of statistics, with adding machines, with machines for computation and various other equipment, so taking the place of the bureau of statistics. What is more-


Norman McLeod Rogers: That was looked into most carefully.


Richard Bedford Bennett: And the information
which is utilized by the department itself comes from the bureau of statistics and is handed out by officials who are connected with it. A long distance telephone call comes from Montreal to the bureau of statistics for the purpose of getting information, and it is given as though it were new information by the department over which the minister presides. The bureau of statistics is the place to which one would expect to look for the purpose of getting the information which we require. We have not been permitted, heretofore at least, to have any doubt about the fact that that was the place to which figures were sent from all parts of the dominion for the purpose of enabling information to be obtained. Why build up this second institution? Why establish a second organization? What has this organization done since it came into office?


An hon. MEMBER:: Nothing.


Richard Bedford Bennett: What has this commission done? It has employed all these people I have mentioned, from a director of publicity at $4,500 to a vice president, down in Montreal, at $625 per month, and other officials beyond number. I wonder what the right hon. gentleman would have said, had he been in opposition, in face of a record such as this, the supplanting of the bureau which was created for the purpose of providing the very statistics which are utilized to enable this new body to function, and which statistics, I repeat, have been collected and collated by that bureau and not by the organization which has now been set up

The Prime Minister said at the opening and frequently during the course of the last election campaign that this unemployment problem is the most serious of all the problems that engage the attention of the Canadian people.


Mr. LAPOINTE (Quebec East):: Hear, hear.


Richard Bedford Bennett: That was his view, and the Minister of Justice (Mr. Lapointe) very properly says, " hear, hear." Yet in the face of that statement, and in spite of what was to result from the cooperative effort of eight Liberal governments in the provinces with this dominion Liberal government, we have thus far only the appointment of this commission, and the record of the long months during which it has laboured, at a cost to the country which I cannot yet indicate because I do not know-in this return we have only a portion of the cost. And the Minister of Finance the other day, in the estimates which he gave for the succeeding year, in reviewing the problems with which we had to deal, left that problem to be dealt with by itself.
I therefore move, seconded by Mr. Cassel-man;
That all the words after the word "that" in the said motion be struck out and the following substituted therefor:
"This house regrets that the government has failed to take effective measures to deal with the problem of unemployment.
In so doing I realize that it is the amendment with which the present government in opposition met us when we were struggling with that problem in 1931, 1932 and 1933. It was then that the Minister of National Defence used to wax so eloquent and become so violent in his denunciation of the government of the day. But the amendment embodies the hopes and aspirations of the people of this country who looked to this government, and have looked in vain, for a solution-not an academic principle, by the gathering of figures that already exist, the accumulation of machines which can be worked by paid operators at large expense when we already have the machines and the men working on these matters in other branches of the public service; not the duplication of existing facilities; not the reckless expenditure of public moneys. With confidence therefore I submit that the problem of unemployment, named by the Prime Minister as the most important of all the problems that confront this country-a sentiment greeted with " hear, hear " from the Minister of Justice himself-should be given

Employment and Social Insurance
the freest possible discussion in this house and the policy of the government disapproved or vindicated.
Before I take my seat may I now give the quotation respecting the wheat estimate which I was unable to find. At page 4147 of Hansard of June 23, 1936, the Minister of Finance, in answer to a question I asked him as to why he was putting in a vote fixing the loss at $15,000,000 wfithout knowing what it was going to be, said: " Because the money is going to be lost." That is what I wished to say about the $15,000,000.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



EMPLOYMENT AND SOCIAL INSURANCE ACT

[Stage Direction]
Mr. JEAN-FRANCOIS POULIOT (Temis-couata) moved the second reading of Bill No. 30, to repeal the Employment and Social Insurance Act.
He saidi: Mr. Speaker, we have with us tonight a gentleman who has given his life to the study of labour problems and who is considered, wherever he is known as an international expert on the matter. I have before me a book which was kindly given me some years ago, from which I should like to make the following quotation, which appears at page 345:
Social insurance, which in reality is health insurance in one form or another, is a means employed in most industrial countries to bring about a wider measure of social justice, without, on the one hand, disturbing the institution of private property and its advantages to the community, or, on the other, imperilling the thrift and industry of individuals. Social insurance looks upon industry as in the nature of social service. It regards the owner of land or capital as a capitalist, but also as a public trustee. It looks upon the worker in industry ,as a wage 'earner, but equally as a necessary member of the community. It places the emphasis on personality rather than on property, and on life rather than on wealth.
I could proceed further and read more from that book, but I refer every hon, member of this house to pages 335, 345 and 347 of Industry and Humanity, the book written nineteen years ago by the leader of the government (Mr. Mackenzie King). I said the right hon. gentleman was known as an international expert on labour problems. I wonder if in 1935, when he introduced his social legislation, the then prime minister sought any advice from the right hon. gentleman to whom I have referred. I do not think so. Who was the honorary precursor to the big broadcast of 1935, with regard to social insurance in particular? On the first page of the Montreal Gazette of September 20,
1934,	several months before the big broadcast of January, 1935, there appeared a great scoop. It was entitled:
Insurance for Jobless Plan Waits Bennett.
Premier to Launch Scheme on Return, Pitfield Announces.
That is the very same Pitfield who sold a picture to the Tory government for $45,000.
Combat Unemployment.
Success Depends on Provincial Agreement, New Conservative Head Declares.
I wonder who was the Conservative head. I have never seen one. Now let us come to the big broadcast of 1935, and I should like to quote from our esteemed contemporary, the Ottawa Journal. I am not speaking now; this is the big broadcast. Listen to it. The old order was gone; we were seeing the dawn of the new order. This is how the big broadcast put it:
We are going to do away, as quickly as possible, with emergency relief measures and put in a permanent system of sound and scientific insurance against unemployment.
On February 23 of this year the hon. member for St. Lawrence-St. George (Mr. Cahan) said, according to Hansard at page 1137:
. . . the remarkable thing about this proceeding is that the leadership of this house has evidently passed to the hon. member for Temiseouata.
That statement is so ridiculous that it does not need to be contradicted. In labour matters in particular the leader of the Liberal party is my leader and I am proud to be his disciple. What struck me, however, was that the hon. member for St. Lawrence-St. George was adopting the line of the hon. member for Winnipeg North Centre (Mr. Woodsworth), who on March 4 of last year blamed the member for Temiseouata for submitting to this house legislation to repeal the non-existent economic council.
In view of what has been said by these hon. gentlemen, Mr. Speaker, I should like to quote as briefly as possible what the member for Temiseouata has said about the social insurance scheme which was advertised in January,
1935,	by the leader of the Tory party, the hon. member for Calgary West (Mr. Bennett). Before that, however, no one should forget that at the time the social insurance bill was introduced into this house the then prime minister stated that it was not a relief measure. Now I should like to give some quotations
[Stage Direction]
Employment and Social Insurance
from what was said by the member who has the honour to address the house at the present time:
This parliament is supreme within the bounds of its jurisdiction, as the provincial legislatures are also supreme within the bounds of their own jurisdiction. There is a supremacy in each domain. There are certain things that this parliament alone can do and there are other things that the provinces alone can do. . . . I am not going to repeat what has been said by the hon. member for Quebec East (Mr. Lapointe) and the hon. member for Shelburne-Yarmouth (Mr. Ralston), but the point that is to be made in this regard is that it is not because a convention has been signed by Canada that the provinces are necessarily bound by it. We have the proof of this in the fact that the previous government did not take and would not have taken action on that, as was said by our leader, without consulting the provinces.
After having made a careful study of the constitution of this country and of the jurisprudence which interprets it, I have come to the conclusion that no tribunal will declare that the legislation which is now submitted to us is intra vires. Any judge, free from political affiliation, with a free mind, will hold that this legislation is ultra vires of this parliament. . . . This legislation will surely be brought before the courts and there is no court that will declare it intra vires. But in the meantime we shall have elections and the prime minister
I meant the then prime minister, not the present one-
-his colleagues, his supporters and his ambassadors-*
At the time I said "his canvassers"-
-will say: This is what we have done for the unemployed; we have given you unemployment insurance. Forty weeks! In the meantime we shall have elections. For the time this legislation will be approved by the Governor General until the election day. canvassing will have been done throughout the country. After the legislation is declared ultra vires by the courts, the Prime Minister, who will then be leader of the opposition..
The prediction was right.
-if he succeeds in being elected in his constituency-	'
And he was, because he was not opposed by the Social Credit group.
-will say: This is not my fault; the judiciary have given a wrong interpretation to my legislation-[DOT]
Was it not said? The quotation is from Hansard of February 18, 1935. I knew the leader of the Tory party well enough to predict two years ahead what he would say when the legislation was declared ultra vires by the privy council.
An hon. MEMBER:: Wonderful.
Mr. POlULIOT:	I know the hon. member
for Lanark, and 1 would make the prediction that he will surely be defeated at the next election.


Mr. THOMPSON:: Thank you.


Mr. POULIOT:: I continued:
But I did my best;

The leader of the Tory party would have said-

I submitted it to the House of Commons; it was passed by the house and by the senate and was approved by the governor general; I can do no more; it is not my fault. In the meantime it will be used as an argument for canvassing people who are in distress.
That was true, because I have in my hand a sample of the canvassing that was done. The gentleman in the upper part of the picture is the present Prime Minister. He is represented as sitting with his feet on his desk. Lower down is Mr. Bennett, the businessman of 1935, with a sheet of paper in his hand. It must have been a speech prepared by Herridge, Finlayson or Brooks of the Bank of Canada. Here we see social insurance, as a means of canvassing people in distress, and showing them a bait which had no value.


An hon. MEMBER:: Hear, hear.


Jean-François Pouliot: Employment and Social Insurance
And from page 115:
In other words, the dominion cannot merely by making promises to foreign countries clothe itself with legislative authority inconsistent with the constitution which gave it birth.
I draw the attention of the house to the following very excellent comparison:
While the ship of state now sails on larger ventures and into foreign waters she still retains the water-tight compartments which are an essential part of her original structure.
That ruling is the preamble or the prefatory notice to the other rulings given by the privy council. I should like to quote some extracts from the decision of their lordships with regard to the social insurance act, as follows:
In the present case their lordships agree with the majority of the supreme court in holding that in pith and substance this act is an insurance act affecting the civil rights of employers^ and employed in each province, and as such is invalid. The other parts of the act are so inextricably mixed up with the insurance provisions of part III that it is impossible to sever them. It seems obvious also that m its truncated form, apart from part III, the act would never have come into existence. It follows that the whole act must be pronounced ultra vires, and in accordance with the view of the majority of the supreme court their lordships will humbly advise His Majesty that this appeal be dismissed.
It was after reading those judgments that I gave notice of these bills to repeal these enactments. The other day the Minister of Justice (Mr. Lapointe) strongly supported my argument when, as reported on pages 1235 and 1236 of Hansard of February 23, he stated that this so-called social legislation was a dead letter and would never be incorporated in the new revision of the dominion statutes.
In order that a piece of legislation may serve its purpose it must be declared valid by the courts. Theoretically I am in favour of social insurance, but social insurance must be established in times of great prosperity in order to secure a larger number of contributors to the insurance fund. But, sir, enactments in this regard must be passed by the proper authority, and when the privy council formally decided that this parliament had no authority to pass legislation of the kind, it meant that exclusive jurisdiction lay within the provinces.
We must be honest with the representatives of labour who come to Ottawa to communicate their grievances to the government. Some of them are advocating social insurance. Let us be frank with them and tell them that they are knocking at the wrong door, that if they want to have proper legislation, legislation that will mean something and that will be upheld by the courts of the land should there come before the courts the case of a contributor refusing to make his

contribution, the legislation must be passed by the provincial legislatures. That is clear. Why receive their representations in the matter if we can do nothing for them? Would it not be rendering a service to labour to tell them that if they have any wrongs to be redressed they must go to Quebec or Toronto or Halifax or Edmonton or Victoria, to the capitals of every province, and ask the premiers of the provinces and the members of their governments to consider, and pass if they wish, the legislation that labour asks for? Honesty is the best policy, and members of parliament will be honest with themselves and honest also with the representatives of labour if they pass the bill which is now before the house for its second reading.
I shall not say anything about the commission which has been appointed in virtue of the act which is about to be repealed. When the dried and sterile fig tree is cut, the dead branches fall, and therefore it is unnecessary at the moment to speak of the commission which was supposed to administer that act, but which had nothing to do.
In conclusion, Mr. Speaker, I ask every member to take the trouble to read the rulings of the privy council which will be found in Votes and Proceedings No. 20, of February 10 last, and I am sure that all of them will come to the conclusion that the bill which is now before the house for second reading is timely, is necessary, and should be passed.


William Lyon Mackenzie King: Mr. Speaker, now that my hon. friend (Mr. Pouliot) has given to t'he house the benefit of his views and also his argument with respect to the legislation, each of which presentations has disclosed much erudition and great industry, I hope he will not deem me discourteous if I move the adjournment of the debate.


Jean-François Pouliot: Not at all.
Motion agreed to and debate adjourned.



WEEKLY REST IN INDUSTRIAL UNDERTAKINGS ACT

[Stage Direction]
Mr. JEAN-FRANQOIS POULIOT (Temis-couata) moved the second reading of Bill No. 31, to repeal the Weekly Rest in Industrial Undertakings Act.
He said:	My remarks on this bill, Mr. Speaker, will be very brief. I would just refer every member of the house to the Sunday legislation and to the judgments of the privy council already referred to.
On motion of Mr. Mackenzie King the debate was adjourned.

Minimum Wages Act

[Stage Direction]
Mr. JEAN-FRANGO'IS POULIOT (Temis-couata) moved the second reading of Bill No. 32, to repeal the Minimum Wages Act.
He said: Mr. Speaker, I am delighted that I have time to say a few words on the second reading of this bill. The labour members of the house know very well that the member for Temiscouata was very much interested in the minimum wage legislation for men as well as for women. The other day I saw in a Quebec paper that the provincial government was about to introduce legislation of the kind. That is good news, provided the legislation is well drafted.
May I refer you, sir, to Hansard of March 19, 1935? We have our vindication here now. It is a feast day to-day, thanks to the privy council. First of all, there is something that I do not understand very well. It is that some pillars of light who have discussed this legislation have spoken of conventions. There were no conventions respecting the matter. They were just draft conventions which were quoted to the House of Commons and the Senate as treaties, but actually they were not conventions or treaties, just draft conventions, and they were accepted by the late government after the limitation of time provided in each of these draft conventions had expired.
I refer you, sir, to Hansard of March 19, 1935, and of April 12, 1935, which contain quotations of the communications forwarded by the Liberal government before 1930 to the League of Nations respecting the matter of minimum wages. The member for Temiscouata was fortunate enough to discover those forms in a small book that was in the library. By referring to Hansard one will see that the previous Liberal government had sent to the League of Nations, not their own answer, but the answers of the provinces themselves, thus respecting the decision rendered by the supreme court in 1925 in similar matters. When the Secretary of State for External Affairs (Mr. Mackenzie King) was communicating with the League of Nations he was sending, not orders in council passed by the dominion government, but answers given by the following provinces:	British Columbia,
Manitoba, Ontario and Quebec. The ex-minister of Justice, Mr. Guthrie, could never answer that point, which showed that the late government's legislation with respect to minimum wages was as much a fake as that relating to social insurance. The Liberal government before 1930 was logical, as I hope it is now, and acted in conformity with the views expressed in public by the Prime Minister and his colleagues in the cabinet. What
is the use of passing legislation in the House of Commons and the Senate if it is not enforced by the courts? And how can a tribunal of first instance decide that such legislation is valid when the highest tribunal has decided that it is ultra vires and void? In such matters the decision of the last tribunal serves as a rule of guidance for the lower courts.
On June 28, 1935, the present Prime Minister spoke as follows:	On the item-
Administration of hours of labour, weekly rest and minimum wages acts, $100,000.
Mr. Mackenzie King:	The government
seems now to be showing some concern about the constitutionality of its measures and in view of that attitude I should like to know if the minister does not think it might be wise to consider testing the validity of one, two or three of these acts before entering upon their administration on too vast a scale?
Mr. Rhodes: There is nothing I can add to what the Prime Minister (Mr. Bennett) has said on one or two different occasions when similar questions were put to him by the right hon. leader of the opposition (Mr. Mackenzie King). I shall direct the Prime Minister's attention to this question in the event of his desiring to enlarge upon what he has said previously.
Mr. Mackenzie King:	The trouble is that
in the early part of the session the Prime Minister did not seem to care much about the matter of constitutionality but during the latter part he has seemed to be greatly concerned. We should like to know just where the government stands now.
Mr. Rhodes:	If I possessed the necessary
legal background-
And curiously enough he was a lawyer.
-I might attempt to answer the question myself, hut not having that I prefer to leave it to the Prime Minister.
Look how meek they were all the time! No spirit of initiative; all under the whip.
Mr. Mackenzie King: I can quite appreciate the fact that no member of the government feels himself able to give an answer.
That was the experience of every Liberal member while the party was in opposition. A very efficient cabinet; everyone should have received an efficiency medal.
Mr. Pouliot:	This so-called social legislation was the main issue in the provincial campaign in New Brunswick which ended yesterday and I think the answer was loud enough.
For the benefit of the new members may I mention that once, when the minister of labour in the former government was introducing an amendment to one of his bills, and was asked what it was about, he could not tell. Though he was moving the amendment he did not know what it meant. Many old members can verify my statement. The dunderheadedness of these ministers was something out of the ordinary, yet these are
[Stage Direction]
Limitation oj Hours of Work Act
the people who afterwards went around telling labour that they were going to save them. How could they save them if they did not know what they were going to dto to save them? I should be scandalized, Mr. Speaker, to read any further.
On motion of Mr. Mackenzie King the debate was adjourned.

[Stage Direction]
Mr. JEAN-FRANCOIS POULIOT (Temis-couata) moved the second reading of Bill No. 33, to repeal the Limitation of Hours of Work Act.
He said: The incident that I have just referred to, the fact that the minister could not give any details about the amendment that he was moving, happened while we were discussing the bill that I desire should be repealed. This also is a fake and a humbug; it never came into effect. I cannot see why it should not be repealed at once.
Air. T. L. CHURCH (Broadview):: I rise to a point of order. I wish to direct the attention of the chair to the rules. The Prime Minister (Air. Mackenzie King) has prevented the opposition, members of a free parliament, from entering into discussion of the merits of three bills introduced to-night by moving the adjournment of the debate. If practices such as this are to be tolerated, hon. members might as well go home. We should know whether this is to be a free parliament or not. One of the first principles of liberalism is a free parliament and freedom of debate, yet members of the opposition have been prevented by two hon. members on the government side from debating these matters. I wish, as representing the constituency of Broadview, to protest against the action of the Prime Minister in rising in his seat and moving the adjournment, evidently after having consulted the hon. member who moved the bill-
Some hon. AIEAIBERS: Oh, oh.


Thomas Langton Church: And preventing His
Alajesty's loyal opposition from discussing this repeal legislation.


Jean-François Pouliot: Mr. Speaker, speaking to the point of order-


Ernest Lapointe: There is no point of order.


Mr. SPEAKER:: Any hon. member has the right to move that the debate on a bill be adjourned. The point of order raised by the hon. member is not well taken.


William Lyon Mackenzie King: May I say that it is the privilege of any hon. member in a free parliament to move the adjournment 
of a debate. If the hon. member who has just protested had been in his seat at the time that his leader, or rather the hon. member for St. Lawrence-St. George (Air. Cahan), who sits near by, was protesting against the taking up of this legislation, he might not have felt that there was any need to make the protest that he did. The legislation has been before the house previously and will be again; there will be an opportunity for the hon. member to discuss it later; but in the absence of the leader of the opposition (Mr. Bennett), and of the hon. member for St. Lawrence-St. George, each of whom is much interested in this particular legislation, I think I was acting very much on behalf of the opposition as well as of the government in moving the adjournment of the debate.
On motion of Mr. Mackenzie King the debate was adjourned.



NATURAL PRODUCTS MARKETING ACT

[Stage Direction]
Mr. JEAN FRANCOIS POULIOT (Temiscouata) moved the second reading of Bill No. 34, to repeal the Natural Products Marketing Act, 1934, and the Natural Products Marketing Act Amendment Act, 1935.
He said: I hope the hon. member for Northumberland, Ont., (Mr. Fraser) will not complain if I move the second reading of this bill to repeal the Natural Products Marketing Act and the Natural Products Marketing Act Amendment Act. That legislation was silly. Its purpose was to erect a kind of tariff wall between the provinces. The tariff wall around this country was not high enough, so there was to be a new Chinese wall between each province. It was a great invention. I wonder from what country the model of this stupid legislation came. Alay I draw to your attention, sir, the fact that our legislation is drafted in an abominable way. I have cited the instance' of a minister who could not give any explanation of one of his pet amendments and bills; he could not explain anything. How could a judge understand anything when the sponsor does not know anything himself? It is a most absurd situation. As a lawyer who has had much experience before the courts, you, sir, know very well that very often the judges are handicapped in giving their decisions by the obscurity of the law. We do not want legislation of that kind.
I take this opportunity to congratulate the Minister of Agriculture (Mr. Gardiner) on his very bright idea of advertising Canadian products. The farmers should do the same as any merchant or storekeeper, advertise their merchandise and then deliver the goods, sell

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Mr. Rogers
the very merchandise that they advertise. And any money which is spent for advertising Canadian products will serve a very useful purpose. But, sir, I could tell the house of many incidents which occurred during that discussion, some very picturesque, especially a discussion one night between the hon. member for Northumberland, Ont., and the present provincial leader of the Tory party in Ontario. It was most exciting But I shall not insist any more, sir, I hope every hon. member will accept the views already expressed, and by reading the judgment given by the privy council will be convinced that the only thing to do is to repeal this bad legislation.
William Lyon Mackenzie King: Unless the hon. member for Broadview (Mr. Church) wishes to speak, I shall move the adjournment of the debate. If he wishes to speak, I shall give him the chance.
Motion agreed to and debate adjourned.



DOMINION TRADE AND INDUSTRY COMMISSION ACT

[Stage Direction]
Mr. JEAN FRANCOIS POULIOT (Temis-couata) moved the second reading of Bill No. 35, to amend the Dominion Trade and Industry Commission Act, 1935.
He said: The other bills are for the repeal of the whole enactment in each case, but this one is to repeal the part of the act which has been declared ultra vires by the privy council. By declaring that section ultra vires the privy council gave a judgment of the utmost importance. It means that without the section which has been declared ultra vires this act is of no use at all. It is like a human being without a heart. That happens often, but a human body should have a heart in it to be normal.
This is going fine. Every bill has made a little progress to-night, and I hope that hon. members if there are any, who have not read the judgments of the privy council will take this last opportunity to do so, before the bill passes the committee stage and third reading and goes to the senate.
William Lyon Mackenzie King: Unless the hon. member for Broadview (Mr. Church) wishes to speak on the second reading of this bill, I move the adjournment of the debate.
Motion agreed to and debate adjourned.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Mr. Dunning that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment thereto of Mr. Bennett.
Mr. J. H. BLACKMORE (Lethbridge):: It was my intention, Mr. Speaker, to speak to the main motion. Accordingly if I may have the assurance of the Prime Minister (Mr. Mackenzie King) that my position will not be altered in respect to the main motion, and that my privilege of speaking to that motion will not be lost, I now ask you to allow me to withdraw from the debate on the amendment, with the stipulation that I speak first immediately after the vote on the amendment.


William Lyon Mackenzie King: Certainly; if my hon. friend does not wish to speak on the amendment but wishes to speak on the main motion, he will have a perfect right to speak on the main motion when the amendment is disposed of. It is quite agreeable to the government that he should.speak then.


Thomas Langton Church: This is all part of the Liberal platform of 1919.
Hon. NORMAN McL. ROGERS (Minister of Labour): I am speaking to the amendment moved by the leader of the opposition (Mr. Bennett) at the conclusion of his speech this afternoon. In doing so I propose to speak in more temperate language than was used by him, with a greater sense of responsibility than was evident in his concluding remarks, and with a more scrupulous regard for the realities of the situation which confronts our country.
Why was this amendment introduced in the form in which it has been presented to this house? Was it because the leader of the opposition was convinced in his own heart and mind that there has not been a marked improvement in the employment situation in this country during the past year? To that question me only answer can be an emphatic negative. The evidence of economic improvement in Canada does not need to be adduced in the form of elaborate statistics. That improvement is evidenced in practically every statement issued by the bureau of statistics within the past year, by the statements which have been issued and circulated throughout this country by bank presidents, by heads of mortgage corporations, and by those who by reason of their

The Budget-Mr. Rogers

interests and their particular knowledge of different phases of industrial life in this country are competent to speak with authority. There can be no question whatsoever that the employment situation in Canada at this time is substantially better than it was a year ago, and very much better indeed than it was at any time during the period when hon. gentlemen opposite were charged with the administration of this country.
Was this amendment introduced, sir, because the leader of the opposition had some constructive suggestion to offer after five years of extravagant futility, in attempting to deal with a problem which he said he would solve or perish in the attempt? I leave it to the judgment of the house whether in anything that was said by the right hon. gentleman this afternoon there was the slightest suggestion of any constructive effort which might assist in dealing with this grave national problem. The one compelling reason for the amendment, as given to this house in the concluding remarks of the leader of the opposition, was briefly this, that he had proposed this amendment because it was the same sort of amendment the Liberal opposition had proposed when his own administration was in power. In other words the leader of the opposition has decided first to misrepresent the unemployment situation in this country and then, to use it for the purpose of political reprisal.
I doubt if the records of this house will disclose a more inappropriate amendment to a budget speech or one based upon a more flagrant distortion or misunderstanding of the facts. The leader of the opposition based his amendment chiefly upon a recital of the appointments made to the staff of the National Employment Commission. I shall deal with that aspect of the matter in a few moments, but I have too keen an interest in the problem of unemployment and too high a regard for the appreciation of that problem by the members of this house to subordinate the larger considerations of unemployment policy to a discussion of an aspect of the matter which after all does not go to the root of the question. This administration has been in office since October, 1935. When the late administration came into office it did so on the basis of the most emphatic pledges given by the leader of the Conservative party that he would end unemployment; that he would provide work and not doles; that he would blast his way into the markets of the world. When he came into power on his own statement the number of unemployed in this country was
117.000.	When the present administration

assumed office and the right hon. gentleman left it, in October of 1935, according to the bureau of statistics the number of unemployed had risen to 435,000. In case there should be any misapprehension as to the improvement that has taken place during the past year at this point I should like to say-and I propose to deal with it more fully later-that the figures of the bureau of statistics for October, 1936, are not 435,000 but 393,000, which I submit is a very substantial reduction in that period of time.
What was the situation when this government came into power? What was the situation as between the dominion government and the provincial governments? Were those relations based upon harmony or were they not shot through with friction from one end of this dominion to the other? What was the attitude of the younger people? What was the attitude that was engendered in the relief camps which were established by the late administration, more or less, I suggest, as a counsel of despair, and which provided as it were a chain of hostels for the unemployed from Nova Scotia to British Columbia? I do not think I need remind hon. members that those relief camps, which at that time had been in existence for a number of years, harboured men of ages varying from eighteen to sixty; men who had not found the work that had been promised them by the leader of the opposition in 1930; men who found in ' those camps nothing more than a shelter against the storm. Those who entered the relief camps at that time assuredly carried nothing in with them, and with equal assurance it can be said that those who left the relief camps carried nothing out. The camps were organized on the basis of a payment of twenty cents a day to those in them. I suggest, Mr. Speaker, that the relief camps we found when we came into office were nothing more or less than a blind alley for the unemployed. For the government they were an extravagant luxury. In the final year of their operation the total cost was over $9,000,000. If in the succeeding year they had been continued on the existing basis the cost would have risen to $12,000,000; that is, on the basis of the increased wage allowance which was put into effect by this administration.
First of all I want to say, to make it clear beyond peradventure, that when this government came into office and I first went to the Department of Labour there was no problem that gave me keener concern than the plight of those single unemployed men in the relief camps of this country. I had a strong feeling.

The Budget-Mr. Rogers
based upon my knowledge of conditions in those relief camps and my knowledge of the sense of frustration and despair which was developed by them, that the best way to deal with the relief camps was to close them as quickly as possible. On the other hand, in this case not following the policy which on occasion, I suggest, was followed by the leader of the opposition, it seemed to me that we should not make our judgment blindly; that we should get some collective thought upon this problem and, through collective thought, find some definite objective, some determined road. So we appointed a committee to investigate relief camps in Canada, and that committee, I suggest, was composed of men who had not only a keen appreciation of all the problems involved in the administration of relief camps but who also had an equally keen appreciation of the human elements involved. On that commission we had the head of the employment service of Canada; we had Mr. Humphrey Mitchell, a former member of this house, and we had a man who had not been closely connected with government in other years but for whom I have a very high regard, Doctor Bradwin, president of the Frontier college. These men made their investigation and in due course presented their report. The report confirmed the view which I suggested a moment ago I had formed in my own mind as to the disposition that should be made of the camps. They proposed that these camps should be closed as soon as possible. They stated in the most emphatic terms that unless they were closed they would tend to become institutionalized, and that in their opinion the relief camps in their structure, and particularly in the attitude of mind which they developed in the youth of this country, were alien to the spirit of this young dominion.
So, upon the basis of that report, we determined to close the relief camps, and we set a date as an objective. Almost a year ago we declared that we believed it would be possible to close the relief camps by July 1 of last year. I do not hesitate to tell the house that there were those who said it could not be done, that it would lead to riots, to disturbances and to a serious dislocation of business. Despite those forebodings we felt that our objective was correct, and because we believed that we believed also that the way would be found to realize it. It was so arranged that through the provision of employment upon special maintenance work on the railways, about 10,000 of the men in the relief camps were given an opportunity for employment in the summer months at the prevailing rates of wages for the type of work it 31111-90i
was proposed they should do. Almost 1,000 others were absorbed into farm employment. Many others, through the assistance of the employment service, found employment in other directions. As I have said, the camps were closed, and about 10,000 of the men in them were transferred to remunerative employment. To this time the camps have not been reopened.
Naturally at t'he conclusion of the work upon the railways during the past summer the government was confronted with the issue of what next should be done to deal with the single unemployed. In our decision as to what should be done I should like to make it clear that the government had the advice and the very useful assistance of the National Employment Commission, which this afternoon was condemned by the leader of the opposition. We believed it would create a much more wholesome atmosphere for the single unemployed and transients in various parts of the country if we could direct them into employment connected with the great primary industries of the dominion. In conjunction with the provinces we worked out the details of the farm employment scheme. I should like to make it very clear that in the conception and execution of the farm employment plan the National Employment Commission was of the utmost assistance to the government.
I have before me figures covering farm placements in the last few months. Some 46.000 placements have been made under the farm employment plan in the various provinces where it is in use. I have it on good authority that in Saskatchewan there is not a single unemployed man now available for farm employment service. I also have-


Mr. STEWART:: Would the minister permit a question? When was this farm placement scheme begun, and how many were placed in each year since the beginning?


Norman McLeod Rogers: The estimates of the Department of Labour are not now before the house; when they are I shall be very glad indeed to give all that information, for the enlightenment of the hon. member. If I had it now, I would give it with equal readiness. I should say however that the present scheme is a development of a previous scheme, and in my own mind that is one of the merits of it. After all, we have sought to learn by experience in dealing with unemployment. Unfortunately there was not as much record of the experience of hon. members opposite as one could have wished, but so far as the
The Budget-Mr. Rogers

scheme was in operation and had proved to have merit, we built upon it. I think we can say we have improved upon some features of it.


Hugh Alexander Stewart: You have not changed very much, though.


Norman McLeod Rogers: As I have said, under the farm employment plan,-and the supplementary plans, under which some 5.000 additional men were employed, particularly in forestry work in British Columbia and Manitoba-during the last few months there have been placements of some 50,000 men. Previously there was an aimless, drifting group of single unemployed men in various parts of the country, and more particularly in the western provinces.
I am not speaking about something of which I am ignorant. Fortunately some months ago I had the opportunity of travelling through western Canada. I have seen the single unemployed at their work on the railways. I have talked with them; I have seen them gathered in queues at soup kitchens in Winnipeg and Edmonton. I know something of what years of insecurity and idleness have done to their morale, and I suggest the leader of the opposition would have been far more sensible of his responsibility at this time if, instead of holding up to this house the record of staff appointments to the National Employment Commission, thereby suggesting that the government had not dealt with the great national problem, he had at least touched upon some of the details, some of the broad principles lying at the base of the policies we have put into effect.
Another problem which confronted the government when it came into office was the relationship between the dominion and the provinces and municipalities, particularly with respect to the exact apportionment of costs of unemployment relief. I shall not go into the historical background of that aspect of the unemployment problem. However I do want to make it as clear as possible to the house that, by reason of the very structure of our government under the federal constitution, there is, as it were, inherent antagonism always capable of being brought to a head, oecause of the apportionment of financial responsibilities in relation not only to unemployment relief but to social services generally.
When we took office we found the provinces and municipalities believed they were facing a very serious crisis if the dominion

government at that time did not give them further assistance-and remember that at that time sentiment and economic conditions in Canada were quite different from what they are to-day-


Charles Avery Dunning: And only sixteen months ago.


Norman McLeod Rogers: Sometimes I wonder if we realize the extraordinary change that has taken place within the last few months, particularly in respect to the sentiment of the people. At that time many provinces and municipalities harboured the well-grounded fear that if they did not receive a greater degree of assistance from the dominion government in connection with unemployment relief they would be forced into bankruptcy. Again we did not make our judgment blindly; rather we called the provinces into conference and discussed the matter with them. Upon the basis of what they told us, and of what came to us from the mayors' conference which met in Montreal at about the same time, we decided it was in the interests of a proper administration of unemployment relief, and in the interests of maintaining a proper relationship between the dominion and the provinces, that at least during the critical period the dominion should assume a larger proportion of the costs for unemployment relief. We acted accordingly.
As a result of that action I believe pressure upon many municipalities was lifted. As a result of it the serious pressure on some of the western provinces, which had been felt through years of drought, was relieved. Through that action we established a basis for a much more satisfactory handling of some of the broader aspects of unemployment and relief. Subsequently when we believed the greatest pressure had been relieved we determined that there should be a downward adjustment of relief grants from the dominion to the provinces, and we have followed that policy carefully. In getting the problem into a clearer perspective we are at this time receiving the assistance of the National Employment Commission. It has been announced that by reason of the marked economic recovery in the past year the dominion government is now entitled to accept a lesser degree of financial responsibility for unemployment relief. Here again I would emphasize that we are proceeding along the lines of making these readjustments upon some rational basis and in such a way as to ensure for us the continued cooperation of the provinces and the municipalities.

The Budget-Mr. Rogers
I would not suggest for one moment to this house that the problem of unemployment and relief, either in its human or its financial aspect, can be liquidated1 within a few months. I know something, as I think all members of this house do, of what might be termed the residual problems of the economic shock through which this country has been passing since 1930. There are great and grave problems of readjustment. There is not merely the restoration of morale among the single unemployed-that in itself is a most serious and important matter-but there is also the providing of the means by which these young men who have perforce lived a life of idleness in recent years can gradually be brought back into the economic life of this country in a manner to enable them to recover their independence and their self-respect. That is our objective; that is our determined road.
When we came into office we found that the government of the day had made a practice of cooperating with the provinces in works programs designed as a measure of relief for unemployment. In making our arrangements with the provinces during the past year we inserted in the agreements for the first time a clause requiring that a specific proportion of the number employed upon these works should be taken from the relief rolls. We worked on the principle, which I believe is a sound one, that relief works should reduce relief rolls. If relief works do not reduce relief rolls, they are misnamed and I doubt the wisdom of continuing them.
I do not suggest that hon. gentlemen opposite were oblivious to this aspect of the question. I would not suggest for one moment that they were not equally anxious to deal with it. There is no such thing as a monopoly of human sympathy and compassion. We may differ in our policies, but I doubt whether any of us in this house differ greatly in our desire to deal in the most satisfactory way with this matter of unemployment and relief. At the same time, the previous agreements with the provinces did not stipulate that a fixed percentage of those employed on these works should be taken from relief rolls. We made that stipulation. Forty thousand men were employed upon these works during the past year and at least 20.000 were taken from the relief rolls, thus reducing the burden on municipalities from one end of the dominion to the other.
I come now to the issue, if we can call it such, raised by the leader of the opposition this afternoon. I wonder if the right hon. gentleman appreciated fully the example in dialectic he gave the younger members of this
house, myself included. The right hon. gentleman was introducing an amendment regretting that this government had failed to deal adequately with the unemployment problem, and three-quarters of his discussion of the unemployment problem was a recital of staff appointments to the National Employment Commission. I am going to deal with that question here and now, having first discussed the broad considerations of policy which to my mind should have been dealt with by the leader of the opposition.
The National Employment Commission was set up last year under legislation passed by this parliament. That legislation provided for a commission of seven members and for two advisory committees, one known as the youth employment committee and the other as the women's employment committee. I do not think anyone who has given any study to the problem of unemployment relief can fail to realize that these two committees were called upon to deal with what might very properly be termed special and all-important aspects of the question. Provision was made in the act for the payment of such fees and travelling expenses as might be decided upon by the governor in council. Two members of the employment commission have served without remuneration, and one of these was only reimbursed for his travelling expenses. Only three members of the commission may be said to have given nearly all of their time to the work of the commission in recent months. The youth employment committee has been making a study of its particular problem only in quite recent months, and the same may be said of the women's employment committee. This commission did not differ actually in structure from other commissions which frequently have been appointed in this country to deal with problems less grave.
I have here a complete statement of the total expenses of the National Employment Commission to date. I propose to place these before the house in order that there may be no misunderstanding as to what this commission has cost this country up to the present time. In doing this I should like again to object to the method employed by the leader of the opposition to create an impression contrary to the facts. I am not suggesting that he knew the information he gave was contrary to the facts, but there was no doubt as to the impression he sought to convey. He read lists of names which were repeated time and again.


Charles Avery Dunning: The same names.


Norman McLeod Rogers: The same men were
reemployed, because the;' were employed only temporarily. In some c 'es their employment
The Budget-Mr. Rogers


Mr. C. G. MacNEIL (Vancouver North):: Mr. Speaker, I am ill prepared at the moment to deal effectively with the important issue brought to the fore in this debate by the amendment and by the remarks of the Minister of Labour (Mr. Rogers). Nevertheless as I listened to the minister's remarks I felt that certain claims advanced by him should not pass unchallenged. I consider it my duty on this occasion at least to give the evidence that has come into my possession with regard to the circumstances of single unemployed men in this country, and particularly in British Columbia-evidence which has been gained through close and intimate
The Budget-Mr. MacNeil

contact with these men during the latter part of last summer and during the autumn of 1936. I consider it not only a privilege but a duty to advance a plea on behalf of these single homeless young men and women, and to direct the attention of the house to the fact that the statistics do not tell the whole story. It is most unfortunate that on this occasion the minister should have been compelled merely to defend the work of the employment commission on the basis of the statistics which have been secured. I propose to deal with this matter from the standpoint of human values rather than that of statistics.
I was present in the house when, last session, the minister dealt with the problem of the young men then in relief camps across the dominion. He announced that on July 1, 1936; it would be possible to close the relief camps, and that he had a solution in view. He proposed to solve the unemployment problem of . these young men with the plans he was then about to table; he said they were on the road to success, that he was going to place them on a work and wages basis during the summer months, and he tabled the agreements entered into with the Canadian Pacific Railway Company and the Canadian National Railway Company. I regard it as most unfortunate that during last session we had not sufficient time properly to analyze the terms of these agreements. Even the terminology employed was most unfortunate. It recites that His Majesty's government proposed then to "deliver" approximately ten thousand young men, able and willing to work, to the railway companies, these young men to be subject to dismissal for cause and required to accept the discipline imposed upon all the other extra gang labourers. The phrasing was most unfortunate, reminding one of the old indentures of bondage; and a form of bondage it proved to be, for these men were actually "delivered," ushered out of the relief camps and delivered to the railway companies, and when any of them attempted to escape the servitude imposed upon them by the terms of these agreements they were almost branded as criminals.
At the same time the minister gave solemn assurance that the railway companies would undertake extra maintenance of way and betterment work; that they would not attempt to replace the regular maintenance crews with the men from the relief camps. From personal observation I must say that this assurance was violated at many points by the railway companies. Men taken from the relief camps were placed on regular maintenance

work; they displaced the regular maintenance crews in many districts across this country, and were required to do heavy maintenance work for which they were poorly prepared.


Norman McLeod Rogers: If the hon. member will permit me, I do not feel that I should allow that statement to pass without some correction. We obtained definite assurances that the work done by the men who came from the relief camps was in excess of the normal maintenance work being undertaken by the railways during the past summer. Subsequently we received assurance that not only was that true, but that the additional maintenance program which was inaugurated with these men from the relief camps made possible the employment of about two thousand railway men who theretofore had been unemployed.


An hon. MEMBER:: That is correct.


Charles Grant MacNeil: I am well aware that the minister received that assurance from the railway companies. I am also aware that at the time those agreements were to be carried out, the minister, in the performance of his duties, was absent from the country. But I may tell hon. members that in visiting the small towns in the interior of British Columbia, and even on the prairies, many men told me that for the first time they were compelled to go on relief because they had been released from the regular maintenance work on the railways, work upon which they had depended season after season for their livelihood, to make way for the men from the relief camps. I submit that the evidence is that only too many men on regular maintenance crews were displaced by men from the relief camps. May I also point out that many of these men, when I questioned them, swore that they left the relief camps prior to the date of these agreements to which I have referred, hoping to secure employment on the regular maintenance crews; that they did secure such employment and while engaged in that work were discharged when the men from the relief camps appeared on the scene. They were unable subsequently to get employment with the extra gangs. The evidence through the prairie towns and the towns in the interior of British Columbia pointed conclusive]}' to the fact that the railway companies violated the terms of the agreement in that respect.
The minister stated at the time that the men would be placed upon a work and wages basis. Upon investigation it was found that work and wages meant working ten hours a day for twenty-five cents an hour, in spite of the terms of the agreement.

The Budget-Mr. MocNeil


Mr ROGERS:: I am sorry to interrupt, but if my hon. friend will permit me, I have here a report of the work, and I think this ought to be corrected, for it is important. Our information is that in addition to those actually employed on the maintenance of way work the total number of those employed under the terms of the agreement in supervision, operating steam shovels and work trains, and paid directly by the railways was, for the Canadian Pacific Railway, 1,132, and for the Canadian National Railways, 1,000, a total of 2.132.


Charles Grant MacNeil: I cannot see that those figures upset the argument I am advancing. I repeat that my information was gleaned from the men themselves who testified that they were actually doing regular maintenance work, from men who were actually released from employment on regular maintenance crews, and those who were in charge of relief and welfare activities in the various towns to which I have referred.
I stress the point of work and wages. The agreements were worded in such a way as to offer loopholes which under the conditions which prevailed were taken full advantage of by the railway companies. In only too many instances the men worked day after day for ten hours a day at the rate of twenty-five cents an hour, doing heavy arduous work for which they were poorly prepared, and in many gangs men were dropping right and left through exhaustion. Only too many men who were casualties were compelled to leave the gangs before the termination of the period of employment, and subsequently were discriminated against in the provinces in which they applied for relief. This work and wages basis of twenty-five cents an hour was in direct violation of the laws regulating working conditions and wages in some provinces.
Under the terms of the agreement the railway companies were to receive reimbursement for wages so paid up to a sum not exceeding $3,000,000. According to the statistics tabled by the minister this session, approximately $2,600,000 was paid under these conditions. In addition the railway companies were to receive a loan of approximately a million dollars to sweeten the bargain. I cannot refrain from bringing to the attention of the government and hon. members the effects of this agreement, chiefly because the minister at that time emphasized the importance of relying upon private enterprise for a solution of this problem. What happened as a result of this reliance on private enterprise? It certainly was a grand deal for someone, but not for the men. The railways got a straight gift of approximately $3,000,000 worth of
work performed; the men got increased hardships and faced destitution at the opening of last winter. In addition the railways received reimbursement for transportation in moving gangs back and forth. It was arranged that they should receive reimbursement for medical aid, and deductions were made from that pitiful pay of twenty-five cents an hour for board, lodging, blankets, and medical aid. The maximum term of employment was something like 1,248 hours, and I defy any hon. member, taking the maximum wages that might be received by any individual and deducting therefrom the amounts charged by the railways for board and lodging, blankets, medical aid, et cetera, to arrive at a sum that would keep body and soul together for the succeeding winter. In fact I found on personal investigation that many men left the gangs with sums not in excess of $30 or $40, and those who were able to work the full time left with very little in excess of $100. Out of this they were required to pay their own transportation back to the points from which they came. So that it was not in any sense a solution of the unemployment problem as affecting these young men.
Towards the end of the summer I happened to be in the interior of British Columbia, and everywhere I saw these young men on the freight trains passing through the divisional points with their meagre belongings in small packs on their backs, working their way along, endeavouring to secure employment in the harvest fields, or a little later in the apple orchards of the Okanagan, or the tomato fields, and then moving on towards the coast in the hope of securing employment in the woods of British Columbia. They were making an earnest endeavour to gain whatever benefits were possible from casual employment on the prairies and in the interior of British Columbia as opportunities arose, following this casual employment from district to district. Everywhere they were establishing little jungle camps as bases of operations, following, shall I say, the lure of propaganda appearing in the newspapers at that time to the effect that at many points in British Columbia unemployment no longer existed. They had every inducement to move in that direction because of the advertising carried in the daily press with regard to the prosperity of various sections of British Columbia.
Subsequently a large number of these young men gathered in Vancouver. They were unable to secure employment, unable to get relief, because in moving from relief camps to the work on extra gangs, and subsequently in search of casual employment, under the regulations they were deprived of all rights
The Budget-Mr. MacNeil

of domicile. It was estimated at one time that something like 3,000 young men were footloose in Vancouver. In an effort to present their claims to the authorities they organized. Being without work and unable to obtain relief they were facing destitution. It has been alleged that these activities were fostered by subversive organizations. My investigation of the matter led me to a different conclusion. I found these young men organizing in a very efficient and democratic way, meeting almost daily, electing their own leaders by the usual democratic procedure, and determining their own policy. From my knowledge of the calibre of these young men I say that they were not of the type that might easily be led by persons actuated by ulterior motives. Mainly they were recruited from the cities of eastern Canada, boys from seventeen to twenty-five years of age, who had not formed any very definite opinions with regard to political policies and were simply seeking some opportunity of solving their own acute problem. They organized and attempted to make representations to the authorities. The civic authorities were unable to accept any responsibility. For that I cannot blame them, because they were faced with a large number of men for whom they could not provide. The provincial government likewise denied any responsibility, and representations were made day after day to the federal government asking that some action be taken to deal effectively with this problem. No effective answer could be secured. The men were desperate. They attempted to organize an appeal to the public of Vancouver, and on one occasion they marched to Hamilton hall, where single men received their relief. There an unfortunate riot occurred. I cannot with propriety comment on the circumstances of that riot, which have been dealt with by the courts of the land, but of this I am convinced: in planning to present their claims in Hamilton hall the men originally did not intend to engage in or incite a riot. Unfortunately two young men were sentenced to spend two years in the penitentiary as a result of that disturbance.
The organized group proceeded to place their case before the public in Vancouver. They appeared on street corners soliciting alms, holding out tin cans with signs stating that they were homeless, without work and without relief. The public of Vancouver responded very generously, but for reasons best known to themselves the civic authorities decided that this was a breach of the law. and the men were arrested in large groups.

Day after day, thirty, forty or fifty men would be picked up, taken to the police station and charged in the Vancouver police court. They may have been guilty of a technical breach of the law; usually they were charged with vagrancy under section (d) of the vagrancy section of the criminal code, but actually their only crime was that they were without food and shelter and without opportunity for employment, and that they had the courage to state their needs in a public place. Up to that time no response had been received from the federal government; no escape from their predicament had been offered. They had no recourse, actually, but to take the course that was taken, to appeal publicly and in an organized way for funds. The funds so secured were handled in a businesslike and efficient way; they were distributed among the men in such a manner as to provide each man with two meals a day and a bed.
Subsequently I was invited by the men themselves to appear on their behalf in the Vancouver police court. In attempting to carry on this work I interrogated the men individually and gained a close knowledge of the circumstances and life history of each man. I have these records under my hand, the lists of the Vancouver police court and my notes taken in each individual case. I mention that to show that I have definite knowledge of their circumstances. Of the large number of young men I interviewed approximately seventy per cent were Canadians, from good Canadian homes, and the majority of these were from eastern Canada. A small percentage of the men had come from the United Kingdom, encouraged to do so under various immigration schemes. They were denied the right of domicile in British Columbia. An attempt was being made to compel them to accept transportation to other points in Canada, but at that time no assurance was given to any man that if he accepted that transportation he would fare any better at his destination. For the majority of them to accept such transportation would have been suicide. They had no clothes except those in which they stood, usually consisting merely of a pair of pants, a shirt and a sweater. It would have been suicidal for them to facp the severity of winter in eastern Canada in such garb.


Mr. FINN:: No boots or socks?


Charles Grant MacNeil: The hon. member for Halifax inquires as to their boots and socks. Very few of these men had socks, and after they had tramped through the Okanagan in search of work the condition of their boots beggared description.

The Budget-Mr. MacNeil
Approximately 140 men were sentenced in the Vancouver police court to varying terms of imprisonment ranging from two months to six months. That was before I appeared in court on their behalf. When I interviewed the police magistrate, the chief of police and others concerned, all of whom offered me their very courteous cooperation, they stated very clearly not once but several times, publicly from the bench, that this was not a crime problem. They did not desire to deal with it as a crime problem; it was a problem of unemployment which never should have been referred to the police authorities. They were looking anxiously for some solution, and at that time they stated that they were making the most emphatic representations to the federal government asking that definite action should be taken. Day after day the men were arrested and charged in police court. Through the cooperation of the social welfare agencies temporary maintenance was secured. When I could assure the police magistrate that temporary maintenance would be provided the men were released on their own recognizance pending action by the federal government. Those who had arrived in the city of Vancouver only a few weeks previously were sentenced; an additional sixty men were sent to Oakalla prison farm.
The ironical and tragic part of it was that when these men were questioned in court it was represented that they had the opportunity of taking advantage of the farm placement scheme. The magistrate would say, "Are you willing to accept work on a farm at $5 a month and your board? If you stay long enough you will probably get $750 and your board." At that time no provision had been made in the province of British Columbia for the employment under the farm placement scheme of men whose domicile in that province had not been established under the regulations, nor was any assurance given those men that if they accepted transportation to any point elsewhere in Canada they would be given employment under that scheme elsewhere. Furthermore, as subsequently disclosed, at that time no definite agreement had been arrived at with the province of British Columbia in respect to a farm placement scheme. As a matter of fact a survey of the farmers in that province had been made, and only approximately fifty-five farmers stated that they could possibly employ men under the terms indicated in the proposed agreement.
So, through the cooperation of the social welfare agencies in the city of Vancouver, and to some extent with the provincial government, temporary maintenance was provided. Several hundred men at that time were rescued from going to gaol. Later, when the minister returned from Europe and visited the city of Vancouver, I must say as very much to his credit that he received the men with courtesy and sympathy, and within twenty-four hours announced to them that he had entered into a special agreement with the provincial government relating to forestry projects. The men accepted the agreement. They were somewhat discouraged by its terms, but nevertheless they accepted it; they immediately registered, received temporary relief and thousands were placed in employment on the forestry projects. But something like 160 young men continued to serve their terms of imprisonment in Oakalla, The delay of the federal government resulted in that tragedy. They were compelled to associate and fraternize with hardened criminals from the underworld. Not once but several times I had definite evidence that young men from good Canadian homes in the east were approached by hardened criminals and asked to engage in the easier life of crime. I consider that a great tragedy.
I mention this to-night because in a way it dramatizes that which has been happening to the young men for whom the minister claims adequate provision has been made. They are now engaged in the forestry projects of British Columbia, and are not securing the advantages of training. I think it may reasonably be suggested that men engaged in forestry work should be given the advantage of technical training in the science of forestation. Adequate facilities exist for such training. Nevertheless they are engaged under distressing conditions merely in the arduous work of clearing trails, most of which lead to valuable mining properties and various timber limits now operated by large interests in British Columbia. The men are not yet on a work and wages basis. It is true that for each day they work they receive a larger wage than they formerly did in the relief camps under the Conservative administration, but when we consider the wages paid and the period for which these wages must provide we find that they are working for a sum actually no greater than the amount they would receive if, in the province of British Columbia, they were granted the relief to which a single man is entitled.
The relief camps are not closed; many of the camps in British Columbia have been reopened. In the constituency I represent the camps which were operating prior to
The Budget-Mr. MacNeil

July 1, 1936, are again operating under practically the same conditions, and the men are engaged in exactly the same work as before. Slightly different arrangements exist as to the payment of wages, but they still work at relief rates without any hope for the future and without any solution of their problems. My information is that those who have accepted placement under the farm placement scheme are in an equally hopeless position. Even as before, they are suffering frustration and hopelessness with regard to the future.
It would be grossly unfair if I did not mention the single homeless women. It has been forcibly brought to my attention that the plight of single homeless women is even more serious. Upon investigation I have found there had been a similar migration of young women to the coast, particularly from the burnt out areas in the prairie provinces. Upon application to the various social welfare agencies some secured meals and shelter for a couple of days, but after that time they were cast out. They were denied relief by the provincial authorities. Although so far as the men were concerned the minister accepted responsibility for waiving the regulations as regards domicile in British Columbia, enabling all those in the province prior to November 15, 1936, to receive the advantages of forestry work, no equivalent provision was made for the young women who took part in the same migration. Their plight was pitiful in the extreme. Incident after incident was brought to my attention of young women from good homes and of excellent character who had to spend night after night in railway depots, who had to wander here and there begging for employment and living under most tragic circumstances. No provision could be secured for them, because they could not establish domicile in any particular province. They fell between two stools because of the dispute as to responsibility which was carried on between federal and provincial authorities. They were left as outcasts.
While I would not suggest that the character of the majority of these young women could be questioned-in fact I have reason to believe the great majority were of excellent character -it is nevertheless true that failure to deal adequately with the problem has contributed seriously to other problems. My conclusions on that score are corroborated by people holding official positions. The problem of the unmarried mothers is becoming more acute; the problem of illicit alliances is more acute, as all social welfare workers know. Young girls compelled to leave their homes in eastern Canada and in the prairie provinces are panhandling, as we say, on the

skid-road for a meal, and the price of a bed. It is a most pitiful situation. Furthermore, the problem of venereal disease is becoming more acute, as many are unable to obtain treatment. No doubt this economic situation is a contributing factor to the serious aggravation of social problems. The fact that disturbs me is that young women on every hand are being exploited in the most vicious fashion by unscrupulous employers. It is well known that there is a chain of protected bawdy houses throughout the interior of British Columbia, and that the recruiting of inmates for these houses is being conducted in certain sections of Vancouver city from among this class of women.
I should be remiss in my duty if I did not make a most earnest appeal to the federal authorities to accept responsibility for the protection of young women who find themselves in these unfortunate circumstances. I have said that the relief camps are not closed, and that the plight of the young homeless men is as serious as it was on July 1 of last year. I believe the minister was not quite fair to himself or to the work in hand when he claimed so substantial a measure of improvement. When we delve beneath the surface, when we contact human beings in circumstances with which they must contend and when we actually interrogate men and women we realize their plight is as serious as it was before, and that never was it so imperative that definite action be taken.
In many sections of British Columbia the relief camps are operating on exactly the same basis as before. Young men are without hope. The work is not even as well organized as it was before. No assurance has been given that upon the conclusion of work on these projects they will be cared for. Worst of all, the measure of recovery which is claimed by the minister has not provided any large measure of additional employment opportunities for these young men. They are without training; they are eager; they are keen, and they are of a good type, generally speaking, but they have not had the advantage of equipping themselves mentally or physically for employment opportunities, if such opportunities should be offered by employers of labour. This is particularly true of the young women. Under the minister's present policy and the plans which have been sketched for the benefit of the house they are largely the victims of unscrupulous exploitation by employers of labour. They are being used, as cheap labour, to the disadvantage of other workers and, worst of all, they are being denied the opportunities they have a right to expect from this nation.

The Budget-Mr. Harris


Mr. J. H. HARRIS (Danforth):: pointed out a few of the danger signals which should be observed. I shall defer my remarks on this matter until the main motion is being discussed, but I should like to suggest that as these danger signals have something to do with unemployment they should receive consideration. They are all around us. They are present on the stock market. There is a fixed price for gold; the costs of production are rising day by day and there is bound to be a collapse in that direction if we are not careful. The production of armaments cannot go on indefinitely, and when it slows down, look out for trouble. Perhaps the minister was wise in reducing his works program, but he had better get ready for another works program. He had better continue the policy of taking relief workers off the relief roll. Of that I shall say something a little later.
I come now to the main subject. We were supposed to find something within the confines of this budget to help the unemployment situation. Not finding it in any degree, but rather finding something which retarded employment, we moved an amendment to the main motion. There are a number of reasons why I propose to vote for the amendment, some of which I shall try to enumerate.
The budget shows the sales tax to be the greatest revenue producer. It is estimated that it will produce $115,500,000, and that, plus stamp and manufacturers' taxes of $38,000,000, gives a total of $153,500,000 or 33-97 per cent. I ask the Minister of Labour in the absence of the finance minister: does the sales tax help the unemployment problem? When the sales tax and the manufacturers' tax in 1929 brought a revenue of $81,500,000, or only 18 per cent, just a little more than half of what it is bringing to-day, the present leader of this government, who I am sorry is not in his seat at the moment, rose in his place and said, as reported at page 2706 of Hansard of June 16, 1931, with respect to sales taxes-and I say. Mr. Speaker, that the sales tax does not help solve the unemployment problem:
What do they disclose? They disclose that the burden of taxation is being placed upon the backs of the people least able to bear additional taxation. . . . What there is in the way of loss of revenue from such exemption will have to be made up by taxes raised in another way. Where does my right hon. friend expect to get most of his taxation?
The present Prime Minister was addressing his remarks to the present leader of the opposition.
Where does my right hon. friend expect to get most of his taxation? He expects to get it out of the sales tax and from the excise tax of one per cent on everything that comes

into this country. What does that mean? The sales tax, as we all know, bears most heavily on the great mass of the people-
He repeated! that twice, yea like Peter he repeated it thrice; so if I do the same I shall be forgiven. He said:
The sales tax, as we all know, bears most heavily on the great mass of the people. . . . and that additional burden is placed on the great body of the people through the sales tax and the excise tax of one per cent on everything imported.
The sales tax in those days was 4 per cent, and it produced $85,000,000. To-day it is 8 per cent, and it produces $153,000,000. It is just double to-day what it was then. Therefore if these words of the present Prime Minister were true then, they are doubly true to-day. Further down on the same page he said:
Talk about the "death knell of protection"!
He was referring to 4 per cent sales tax
This is the death knell of everything in the shape of freedom of trade.
If that was true then, it is doubly so to-day. The point I want to make is that this tax does not help solve the unemployment problem.
In like manner, Mr. Speaker, there is another tax that does not help solve the unemployment problem, namely, the income tax, and on that I should like to say a few words. Demagogues like to speak of the income tax in derogatory terms. I have seen them standing on a chair on a street corner and heard them shout: "Soak the rich!-Make them pay!"


An hon. MEMBER:: Hear, hear.


Joseph Henry Harris: for these products have been 'Chicago and New York, which set the prices for this continent. Even while the government was negotiating its treaty with the United States the agricultural bloc at Washington were framing the Bailey amendment to the 1936 United States revenue bill, imposing a duty of 3 cents per pound against produce of Canada which had been going into that market for the last sixty years, and thereby cutting it off over-night. What can be done about it? Nothing? While that was going on in the United States our fellow citizens in the empire have been busily producing, in Nigeria, the Straits Settlements and Ceylon, millions and millions of pounds of vegetable oils and shipping them into this country free of any duty and any tax. In 1933 the amount was 119,000,000 pounds; by 1936 it had risen to 224,000,000 pounds. The United States has imposed taxation of five cents per pound on cocoanut oil, four cents per pound on palm kernel oil, and three cents per pound on palm oil. Their action, which was taken in June of last year, tended to back up into the world's markets a, billion pounds of vegetable oils. England is terribly worried about it. The Minister of Finance when he was in England was worried about it, and the world at large is concerned about it from this general angle, that the vegetable kingdom is fast replacing the animal kingdom. If the situation has caused anxiety in the world generally, we in Canada, which is an animal producing country dependent more on animal than on vegetable products, have cause to be doubly concerned and promptly to bestir ourselves. What is happening is that the product of these vegetable oils is replacing the production that these
46,000	boys and many more of whom the minister has spoken are trying to dispose of, and it is doing so by leaps and bounds. Today we have a record surplus of butter;
25,000,000 pounds of butter in Canada requires a market. I am pleased to see that the Prime Minister has come in, because I want him to get the full significance of this.


William Lyon Mackenzie King: I could hear
the hon. member when I was outside.


Joseph Henry Harris: The Prime Minister says he can hear me outside. Mr. Speaker, I wish you would open these windows so that the whole of Canada would hear. I was just saying that the Minister of Labour has placed 46.000 boys on the farms of Canada. At the same time, as I pointed out, we in this country have a surplus of butter of record proportions; and since the United States, applying their so-called reciprocal methods of conducting affairs with Canada,
[Mr. Harris.!
and exhibiting their usual generosity, have seen fit to place a duty of three cents per pound against our animal fats, and from 34 to five cents per pound against the vegetable products of all the British colonies-because Britain owns most of the countries producing vegetable oils-we in Canada are suffering greatly from the inroads of vegetable oils into our Canadian market. In the next two years our butter producers will find themselves in a very difficult position if the Minister of Finance does not carry out the suggestion which is indicated in his budget speech, where he says:
The tariff board will have ready in the near future reports on other matters referred to it, and it is expected that these will be received in time for consideration by the government while the house is still in committee of ways and means.
I hope that this committee sits long enough to receive the reports on these questions from the tariff board. The evidence runs to 500 pages; there are forty items. The dairy farmers in the house number over one hundred, and if you multiply one hundred by forty speeches by five hundred pages perhaps we shall miss the coronation ceremonies but we may be able to receive the report, in the terms suggested in the budget speech, and be able to give considration to it in the committee of ways and means.
Now, as to the merits of the case itself, a tank steamer from Nigeria called the Swartzemmer, landed at Sorel in September of last year with 7,800,000 pounds of vegetable oil. It was entered on the records as vegetable oil "not for food," in like manner as 195,000,000 pounds is entered on the records of the bureau of statistics as not for food. But immediately we find it made into food. That is something which ought to be checked up. Only 8,000,000 pounds entered for food, and last year we produced
103.000.	000 pounds of edible shortening, sold to the housewives and bakers of Canada. The
195.000.	000 pounds entered "not for food" was refined and sold, at least 70 per cent of it, for edible purposes.
Getting back to this tank steamer at Sorel,
7,800,000	pounds was discharged in a few hours through a large pipe line into a tank on the docks. What does that mean? My Saskatchewan friends, how much butter do you produce? Twenty-three million pounds a year. In the seven winter months you produce 34 per cent of 23,000,000 pounds, and 34 per cent of 23,000,000 pounds is 7,800,000 pounds. The same weight of fat was on that steamer at Sorel as the 40,000 dairy farmers in Saskatchewan produce in seven

The Budget-Mr. Harris
months. Do you get the significance of that? If you do not, let me give you the full measure of this traffic. Imagine thirty tank steamers. If you cannot imagine that, you know what a tank car looks like; imagine forty-five trains of fifty ears each of 100,000 pounds capacity entering Canada-each and every year-one hundred and three million pounds of that production replacing the natural wholesome industry of this country, the butter fat industry, which makes work for your 46,000 boys who were put out on the farm replacement scheme.
It was requested that consideration be given to some amendment. The hearing before the tariff board closed on December 11, so that there has been plenty of time for a report. It should have been within the competence of the board to bring that report down. This parliament should sit here long enough to get that report and take some action on it, not only because of the situation between ourselves and Nigeria and other countries, but more particularly on account of the action taken by our reciprocating friends of the United States in placing an excise duty of three cents per pound against our product going into that country. If I had another hour I could tell the house how in the Nigerian climate they only have to shake down palm nuts from a tree, throw them into a pit and let them rot, press out the oil and then carry the oil to a tank steamer on the border of Nigeria. The tree does not need feeding as your cow in Saskatchewan does. They do not have to house the palm tree in Nigeria as you house your cattle in Saskatchewan. The native climbing the tree does not tear his trousers getting down, whereas our farmer friends in Saskatchewan must be clothed in the winter time. I could enlarge on all these differences between their civilization and ours, but that would perhaps be wasting time. They are empire colleagues of ours and they take this trade and our empire friends take this trade. But let me finish that other story. When he gets these nuts down out of the tree the meat on the outside gives 60 pounds of fat and the inside kernel yields 40 per cent, while the poor man who strips the cow only gets 3i per cent of fat out of his milk. This is a matter that should be given consideration.
Some will say: That is all bound up in the empire trade agreement; why was not something done about it before? In 1933 the traffic was only 91,000,000 pounds, but in four short years it has grown to 224,000,000. The act of the United States in this regard has brought the matter forcibly to the attention of the National Dairy Council of Canada and 31111-91
they are greatly alarmed about it. The opportunity to do something about it should be seized. The Britishers who received these cargoes of nuts on the west coast of England to the amount last year of 1,762,000 long tons do not mind what tax or duty you put against that product as long as you give them the preference. A preference of ten per cent a few short years ago diverted all that trade of pressing to the United Kingdom. The presser there is content,-it is on the records somewhere-provided he gets his margin of preference.
It may be argued: But you will raise the cost of living, the cost of these shortening and other products by the amount of duty you put on. That condition does not obtain in the United States to-day. I have under my hand five copies of invoices of which I took photographs in New York two weeks ago, of the Ward Baking Company, sold to their bakers, and I found the price to be 11 i cents, whereas Proctor and Gamble of Hamilton sold it the same week in Kitchener at 13 cents. In Columbus, Ohio, another firm sold a half-carload at 12 cents a pound, while at the same time, to another firm in Canada, a similar product, 100 per cent vegetable, was sold at 11J cents a pound. It was sold in Chicago at 111 cents and in Hamilton at 13 cents. And mark this carefully; let our baker and consumer friends get this idea clearly in their minds. Right on the body of this invoice, which shows the price to be 11| cents per pound, is a clause which says:
If the Bailey amendment is found to be unconstitutional and if this processing tax or excise tax or duty is collected back from the government, then we will reduce the price of this invoice accordingly and return to you the collection we made from the government less the incidental cost of collection.
What does that mean? That means that the manufacturer there gets 7-} cents for his product that he sells to the Ward Baking Company in Chicago and in Columbus, Ohio, while our baker here is paying the full 111 cents or 13 cents as the case may be. So that argument falls to the ground. True, to an extent it would add a little to the cost. But there is another observation that I should like to make. The revenue resulting to this country if the government saw fit to do just seventy-five per cent of what the United States did on June 20 of last year-it became law on August 20, 1936-would amount to $9,449,000, according to the rebuttal evidence put in at the tariff board hearing a few weeks ago.
But it may be said, the material would not come in then. It would still come in, but not to so large an amount. I remember in

Questions

this house twelve or fourteen years ago hearing the representations made with regard to oleomargarine. In those days we were worrying about a production of 5,500,000 pounds. To-day we are faced with a production of
103.000.	000 pounds, which will increase to
120.000.	000 pounds this year. In those days we were not worried about a surplus of butter and finding a market for it. To-day we have a surplus of 25,000.000 pounds.


Ernest Lapointe: Time.


Joseph Henry Harris: The Minister of Justice (Mr. Lapointe) says " time.'' I will take my remaining five minutes to-morrow.



BUSINESS OF THE HOUSE


William Lyon Mackenzie King: Mr. Speaker, perhaps the house would allow me to put a motion that will ensure the debate continuing on Thursday and Friday if necessary. I move:
That standing order 28 respecting the committee of ways and means be suspended for the sittings of Thursday, 4th March, and Friday, 5th March, 1937.
If this motion were not adopted the Speaker would leave the chair on those days and the debate could not proceed.


[Stage Direction]
Motion agreed to.
On motion of Mr. Mackenzie King the house adjourned at 11.03 p.m.
Wednesday, March 3, 1937