1937-02-25

[Stage Direction]
Bill No. 36, for the relief of Charles Marsh Doxsey.

Mr. Walsh.
Bill No. 37, for tihe relief of Phyllis Sfcanners Kitchin, otherwise known as Judith Stanners Kitchin.-Mr. Walsh.
Bill No. 38, for the relief of Ivy Jackson Beaulne.-Mr. Jacobs.
Bill No. 39, for the relief of Charlotte Opal Moore Norton.-Mr. Jacobs.
Bill No. 40, for the relief of Mildred Tan-nenbaum Sufrin.-Mr. Jacobs.

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

Mr. McGREGOR:: 1.	Is Clive B. Davidson presently engaged as secretary of the Canadian Wheat Board?
2.	If so, at what salary?


Mr. ROGERS:: 1.	Yes.
2.	$6,800 per annum.


BINDER TWINE EXPORTS TO RUSSIA
Mr. WARD:: 1.	Did the Canadian manufacturers, in the years 1927 or 1928, export binder twine to Russia ?
2.	If so, what quantity was so exported?
3.	Was the price per pound charged the Russian government more or less than the prevailing wholesale price in Canada at that time?
4.	If so, what was such difference?


Mr. ROGERS:: 1.	Yes.
2.	1927, 114,934 cwt.; 1928, 57,637 cwt.
3	and 4. No information.


NATIONAL PARKS WORKERS-SALARY DEDUCTION
Mr. BLACKMORE:: 1.	Was the hourly rate of pay to workers in national parks reduced on April 1, 1932?
2.	If so, who reduced it?
3.	What department or agency in Canada possesses the power and authority to set this wage rate?

The Budget-Mr. Dunning


Mr. CRERAR:: 1.	Yes.
2.	Pursuant to Salary Deduction Act.
3.	The governor general in council-the rates are based on the wage scale prevailing in the *district.


MARKET GARDENING PRODUCTS
Mr. LACOMBE:: 1.	What was the approximate value of the market gardening products of Canada in 1935; also in 1936?
2.	What was the value of the market gardening products of the province of Quebec in 1935; also in 1936 ?
Mr. ROGERS; Approximate value of market garden vegetable crops in Canada: 1935, no information; 1936, $20,000,000.
Value of market garden vegetable crops in Quebec: 1935, $5,442,000; 1936, $6221,000.


LA SALLE-250TH ANNIVERSARY
Mr. MALLETTE:: 1.	Will the 250th anniversary of the death of Rene Robert Cavelier de la Salle be officially recognized on March 19 next?
2.	Is the government aware that the state of Louisiana is making preparations to celebrate this anniversary?


Mr. CRERAR:: 1.	It is the intention of the government to recognize the 250th anniversary of his death by providing for the erection, this year, of a memorial to La Salle.
2.	Yes.


QUESTION PASSED AS ORDER FOR RETURN
Mr. POULIOT:: 1.	What was the total expenditure for the National Research Council since June, 1935?
2.	Did that council make any scientific discovery during that period?
3.	If so, what member or employee of that council made it, what was it, and when was it made?


Mr. ROGERS:: Return tabled herewith.


THE BUDGET
[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved:
That Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
He said:	Mr. Speaker, among my New
Year's resolutions was a secret undertaking that my budget speech this year should be brief. I must confess, however, that this resolution has suffered the fate of many of its companions. In preparing a budget, a bewildering array of complex questions demand attention, if one is to give a reasonably complete and accurate statement of the economic and financial position of Canada in these difficult years. To abbreviate further the statement which I now offer would mean presenting to this house something less than is expected in an annual review of this kind. But, Mr. Speaker, if I cannot bring you greater brevity than last year, perhaps I can bring you greater cheer.
A year ago I was able to show that the state of business and trade was generally encouraging and suggested that we might reasonably expect throughout the year a strengthening and broadening out of the forces of recovery then clearly in evidence. My expectations of a year ago have been amply realized. The last twelve months have witnessed a continued and increasing vigour in the recovery movement, and the gratifying evidence of expanding business activity and more widely distributed economic betterment stands clearly recorded. In many directions the gains have exceeded expectations. The strength of Canada's recuperative power, the success of our constructive efforts, both as individuals and as governments, and the improvement in world economic conditions generally are seen in the growing volume of newly created wealth finding broader domestic and foreign markets and in the renewed spirit of confidence and enterprise on the part of our people.
I shall have occasion later to refer to the less satisfactory aspects of current developments and to certain signals which may point to danger ahead. Viewing the situation broadly, however, in the light of the progress of the past year and the major underlying forces at work, I believe I can fairly say that since 1929 no New Year has dawned with brighter promise for Canada. I shall be greatly disappointed if, by this time next year, Canada has not moved substantially further along the road of economic recovery.
I shall now present, with as little resort to statistics as possible, a few of the more significant evidences of our economic progress during the past year. Consider, first, our most comprehensive measure of economic activity in Canada, the index of the physical volume of business. This index is made up from forty-five important factors, and measures the physical volume of output in nearly all our leading industries as well as freight traffic on our railways, construction activity, and domestic trade. At the low point of the depression in February, 1933, this index had
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[Stage Direction]
fallen to 67 as compared with 100 in 1926. The average level of this same index for the final quarter of 1936 was 119-3, an improvement of over 78 per cent from the low point and of .more than 10 per cent as compared with the last quarter of 1935. The preliminary index for January, 1937, the latest month for which the figure is available, stood at 117-3 as compared with 106-2 in January, 1936.
This substantial improvement in business as a whole is confirmed by other broad indicators of general economic activity such as electric power production and carloadings. During 1936, the output of electric power established a new record, the total being 8-9 per cent higher than that for 1935, which was the previous record year. During 1936 also the railways carried more freight, total car-loadings increasing by 54 per cent. The improvement in carloadings has been greatly accelerated since the beginning of the year. Total cars loaded in January, 1937, exceeded the figure for January, 1936, by about 20 per cent, and were greater than in any previous January since 1931. Railway freight traffic is still substantially below the volume of the years 1926-20, but the return of normal grain crops in the west and restoration of construction activity with normal building material shipments would eliminate much of this differential and produce a radical change in the earning position of the two railway systems.
Manufacturing of all kinds showed a generally well-sustained growth during the past year. The gain over the preceding year was 10 per cent, and the output was greater than for any previous year since 1929. Output of automobiles was somewhat lower in 1936 than in 1935, but this was due to the production of some of the new 1936 models in the fall of 1935. In the case of pig iron and steel production, one of our major capital goods industries, the upward trend is now clearly defined, steel output rising by IS per cent in 1936 to the highest point since 1929. In general, the capital goods industries which normally suffer so severely in depressions and thus contribute so greatly to the spread of unemployment, have in the past year shown a marked increase in activity, recording gains in output of over 8 per cent. This improvement, which may be regarded: as one of the most significant features of the recovery in 1936, may reasonably be expected to be accelerated during the present year, as the latent demands arising from equipment replacements and plant extensions exert further impetus.
Activity in the forest products industries throughout 1936 showed truly remarkable gains over 1935, the general index for this

group having moved up more than 25 per cent from December, 1935, to December, 1936. In British Columbia the lumber cut increased by about 15 per cent. Exports of planks and boards to the United States, increased by more than 55 per cent as compared with 1935, while sales to the United Kingdom were almost 40 per cent higher. Expanding output has brought a most heartening increase of employment in logging. The seasonally adjusted index for the final quarter of 1936 recorded an average improvement of more than 28 per cent over the same period in 1935. Since the turn of the year, unfortunately, activity in the industry has been retarded because of weather conditions- too much snow in some sections, too little in others.
The production of newsprint in Canada soared to a new high point in 1936 with an output of more than 3,200.000 tons. This represents a gain of 16 per cent over 1935, and of 66 per cent over 1932, the low year of the depression in this industry. This output means that Canadian mills operated at an average of over 82 per cent of rated effective capacity for the year as a whole, and at 91 per cent of rated effective capacity in the last quarter. The increase in demand for Canadian newsprint, chiefly in the United States but also to an increasing extent in other world markets, and the probability of a moderate rise in prices augur well for the immediate future of this important industry which for so long has suffered from actual or threatened bankruptcy.
An ever-mounting total of wealth continues to flow from our mines. In 1936 the value of our output reached the imposing total of over $360,000,000, an increase of more than 15 per cent over that for 1935, the previous peak year for mineral output in Canada. At current production levels our mines are turning out wealth at the rate of a million dollars a day. While gold continues to hold the spotlight with an output of $130,000,000 in 1936, or double that of ten years ago, and with many new mines still coming into production, yet the other metals, such as nickel, copper, lead and zinc, are finding an increasingly important place in the growing volume of our mineral exports. Canada's base metal industry has undergone remarkable changes in the last ten years as the result of an expenditure of almost $100,000,000 in plant extension and equipment and the coordination of mining, smelting, refining, fabricating and marketing facilities. In the production of nickel, lead, zinc, the platinum metals, asbestos and salt, new all-time records were established in 1936 and the output of

The Budget

Mr. Dunning
coal was greater than in an}' previous year since 1929. As in the case of the lumber industry, the mining industry in its expansion is showing a steadily mounting pay-roll. The seasonally adjusted index of employment in mining was over 12 per cent higher in December, 1936, than in December, 1935, while the index of employment in metal ores moved up about 20 per cent during the past year. It is extremely gratifying to note this movement of our people into primary industries, where they find profitable occupation in the output of natural products with which Canada is so bountifully supplied.
Agricultural production suffered in 1936 through unfavourable weather during the growing season. Improved prices, however, resulted in a money return for field crops greater than in any year since 1930, amounting to approximately §600,000,000, an increase of about 17 per cent over 1935.
With regard to wheat, the 1936 yield was about 52-7 million bushels below that of 1935, and was the smallest crop since 1919. Drought conditions again played havoc in certain areas, destroying crops completely in some districts and reducing to meagre levels the yield in others. In spite of the smaller 1936 yield, however, the value of this crop was substantially above the value of the 1935 crop due to greatly enhanced prices, which are again reaching levels which promise more profitable and stable conditions for the western farmer.
During 1936 an increasing volume of live stock was marketed, but with prices slightly less favourable than those prevailing in the previous year. The bureau of statistics' index of live stock sales rose over 12 per cent above the previous year's average. For the dairy industry generally, prices were moderately higher during the past year. There was a striking increase in cheese exports, and the volume moving abroad in 1936 was more than double the amount exported in 1935 with prices higher than at any time since 1930.
Recent price movements have operated distinctly in the direction of reducing the farmer's handicap. As the house well knows, the farmer was particularly hard hit in the collapse of prices following 1929, and we find that by 1932 the average level of prices for farm products was down to 48-4 per cent of the average level in 1926. Since that time, however, prices have greatly improved, particularly in the past year, and by the end of 1936 this index had moved up to 82-4. While prices of things which the farmer sells have been moving upward, there has been relatively little change in the prices
of things which he buys. In fact, taking 1926 prices as equal to 100, we find the retail price index in December, 1936, standing at 81-8, while, as noted above, prices of agricultural products had reached the 82-4 level, after a rapid rise in the last few months of the year. At the end of 1936, therefore, the farmer's relative position, as far as prices were concerned, was slightly better than in 1926. Wide disparity between prices of primary and finished products is perhaps the most significant feature of what we call a depression, and it is greatly to be hoped that this approximate parity between agricultural and other prices can be maintained.
The general level of wholesale prices which had been remarkably stable in Canada since 1933 has finally begun to move sharply upwards. During 1934, 1935, and the first half of 1936. the bureau's index fluctuated narrowly around 72 per cent of the 1926 level. In the last half of 1936, however, the wholesale price index rose by over 10 per cent to 79-7 at the close of the year, an upturn that has restored wholesale prices to the level prevailing at the end of 1930. This rise in prices is a world-wide condition and the forces which have brought it about continue to be effective. One may express the hope that such forces may not be allowed to get out of hand. While they may correct the economic disparities from which we have recently suffered, and while they may give every evidence of abounding prosperity for a time, they are likely, if the pace is too rapid, to create new disparities and plunge us once more into the throes of depression.
An obvious indicator of the general state of our economic health is the volume of dividend distributions by corporations. It is gratifying to report, therefore, that reliable estimates of profits for the past year were the highest since 1930, and reveal an increase of more than 13 per cent over the 1935 total. An unofficial index of dividends distributed stood at 117 for December, 1936, against 100-1 for December, 1935, and 62-5 at the low point in August, 1933. Profits are the mainspring of economic activity in the system under which we operate. Increasing profits are therefore the best augury for increasing employment, the best indication of the approach of the day when private industry will be able to release governmental bodies from the enormous burden which they have had to bear in recent years.
In the financial field, conditions have remained generally favourable. The year 1936 witnessed a striking increase in the volume of capital issues publicly floated. Bond issues
The Budget-Mr. Dunning
[Stage Direction]
publicly offered in Canada for new capital and for refunding purposes, excluding treasury bill issues, are estimated to have reached a total of $715,000,000 as compared with $541,000,000 for the previous year, an increase of over 32 per cent. Of this 1936 total, $242,000,000 was for new capital and $473,000,000 for refunding purposes. Financing for private corporations accounted for $232,000,000 of the total in 1936, or more than five times the total of such financing during 1935. The increasing volume of such private corporate issues and the increasing proportion of such issues offered for new capital purposes are healthy signs.
This heavy volump of bond flotations is in part a reflection of prevailing low interest rates. The wages of money, as measured by the yield on high grade bonds, averaged lower in 1936 than at any time since before the war. These low rates have made it possible for the dominion government and for the eastern provinces to refund outstanding obligations and to raise new funds at record low cost. For short term money the dominion is paying on a yield basis of approximately three-quarters of 1 per cent per annum, while on long term issues the rate has been only slightly over 3 per cent. Except for an interruption in September and October, the trend of high grade bond prices was steadily upward during 1936. An unusual number of actual or pending flotations and fears engendered by the weak financial position of certain western provinces, coupled with unfavourable developments in foreign markets, have caused some hardening of the rates during the past month. The somewhat lower levels of bond prices resulting have attracted renewed investment buying and yields on high grade securities for the most part are still slightly above the levels prevailing a year ago. The continuance of interest rates on substantially the present basis will foster economic recovery by encouraging private enterprise to expand existing equipment and undertake new projects on a low capital cost basis.
It is unfortunately true, however, that ;he financial position of several of our provincial governments is such that they are unable to take advantage of prevailing low interest rates in order either to reduce their fixed charges by refunding outstanding debt or to obtain new funds for relief and other expenditures. Despite drastic efforts to reduce expenditures and increase taxes, and despite a long record of honourable dealing with their creditors, they have been unable either to balance their budgets or to have recourse to the investment market for the funds necessary to meet their commitments.

This is a problem to which the government has given the most serious and unremitting attention since the day it assumed office. I need not recount the efforts which were made last year to find a solution. The plan then evolved which would have made low rates available to the provinces as a result of dominion assistance under appropriate safeguards, proved unacceptable in several quarters. The acute stage which the problem has reached in Manitoba and Saskatchewan during the recent past led the government to make the decision which was announced by the right hon. the Prime Minister (Mr. Mackenzie King) to the house last week. That decision followed investigations which demonstrated what had long been recognized as a fundamental weakness in the allocation of financial powers and responsibilities to the provincial governments by the fathers of confederation seventy years ago. The revenue-raising powers assigned to the provinces do not appear to be commensurate with the responsibilities which they were given or which they have assumed in an age of increasing provision for governmental social services. It is a basic principle that a government should be able to stand financially upon its own feet-that it should itself be responsible for raising the revenue necessary to meet its own needs. I look therefore with great confidence to the results of the investigation into this whole problem to be made by the royal commission which is to be appointed. If this investigation and report are as competent, as impartial and as constructive as the occasion demands, they may well serve to point the way to such action as to make the year 1937 as significant in Canadian history as the year 1867.
In this connection may I pay tribute to the assistance given by the Bank of Canada in conducting the preliminary investigation of the financial position of these two provinces at the request of their governments *and of this government. The province of Alberta has now requested a similar investigation. As the house knows, the bank has power to act, upon request, as the fiscal agent and the adviser of any provincial government. We now have an illustration of the important contribution which the bank may make to the financial welfare of the dominion merely by providing a source of competent and disinterested advice to our major governments.
Our banking system currently finds itself with ample reserves for the accommodation of commercial borrowers. While the volume of commercial loans is abnormally low, there have recently been indications of growth, and a moderate increase is expected during the present year. Contrary to the prevailing

The Budget-Mr. Dunning
belief in some quarters, the banks will heartily welcome the opportunity thus provided to invest their funds at somewhat higher rates than have recently been available on gilt-edge securities. It is also encouraging to note in recent banking statistics that debits to individual bank accounts in the clearing house centres of Canada-in other words, the cheques drawn by the public on their bank accounts- showed an increase in December, 1936, of 16 per cent over December, 1935. We have to go back to 1930 to find an annual volume of debits exceeding the level reached last year. This indicates, Mr. Speaker, that the velocity of circulation of cheque-book money is speeding up with the rising tempo of business activity and the increase in public confidence.
This is the factor so frequently forgotten by advocates of monetary panaceas. The volume of money-work done is the product of the amount of money multiplied by its velocity of circulation. An arbitrary increase in the amount of money by the fiat of a government is likely to defeat its object by a proportionate or more than proportionate decrease in the velocity factor. If the increase in the volume of money continues beyond a certain but unpredictable point, public confidence is lost altogether and a flight from money occurs. In the early stages of a severe and prolonged depression credit expansion may be an essential weapon to combat the deflationary forces at work. It must, however, be recognized as a very dangerous weapon requiring the use of expert technique as well as great wisdom and caution. The control of the volume of money and credit with a view to mitigating the extremes of booms and depressions is one of the primary functions of a central bank. The easy money policy which has been followed in the recent past is, in my opinion, an illustration of appropriate action in a time of depression. There will come a time, however, and it may come more quickly than many of us expect, when precisely the opposite policy will have to be followed, if the best interests of the country are to be served.
Monetary policy has a role to play during depressions. That role is an important one; although I am bound to say that as a medicine for depressions monetary techniques are far more effective when applied before rather than after the event. During the present depression, more deliberate use has been made of monetary devices and remedies than in any previous depression. This is largely to be explained by the great advances made in monetary theory and central banking practice during the postwar years and, in so far as Canada is concerned, by the fact that we have only recently been building up the necessary mechanisms for control. But monetary policy should not be 31111-77
regarded as a panacea. It can, at best, only create conditions favourable to sound development. In a constructive program it should merely take its place as part of a much larger whole. Fundamentally our need is an increase in our aggregate national income-an increase in material wealth, not a different yardstick by which to measure it. Real purchasing power consists in goods and services produced, not in the number of monetary tickets which are used to facilitate the exchange of these goods and services.
An increase in our national wealth and income can best be secured by facilitating the production of the many things which Canada is best fitted to produce; and by exchanging these products on as large a scale as possible for products which Canada cannot advantageously produce. To these objectives the government has been energetically devoting itself by opening up and expanding foreign markets for our basic products, by stimulating employment in productive lines, and by endeavouring to eliminate uncertainty and fear which paralyze initiative and retard industrial enterprise. The success of these efforts is indicated in part at least-for I do not wish to claim for the government all the credit for the recovery which we have enjoyed- in the statistics which I have already given, indicating encouraging expansion in nearly all lines of productive activity. These statistics are confirmed by preliminary estimates of the national income for 1936. By national income I mean the income of all the people of Canada-I am not using it in the sense of governmental income. These estimates indicate a total of 84,520,000,000 as compared with $4,-
094,000,000 in 1935. This is an increase of over 10 per cent in the national income, that is, the aggregate of the individual incomes of all the people. It is an increase in real purchasing power, created not merely by writing up a credit to ourselves in our national bank account but by providing profitable opportunities for the production of goods and services. While there is still a substantial distance to go, this advance, like the others which I have recorded, is impressive and gratifying
In surveying the general outlook, however, we must not close our eyes to the fact that business cycles in their course from depression to full recovery never completely conform to an established pattern. We cannot deduce from past experience that the upward movement must inevitably continue or that it will proceed evenly and satisfactorily in all directions. The point I am making is this, that while the general movement is at present strongly upward, yet we must not lightly assume that we have solved our problems, or
[Stage Direction]
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[Stage Direction]
that we have by any means reached the stage where we can relax our vigilance or our economies. We must not lose sight of the fact that, in certain fields, improvement has lagged, and that to a large number of our people the recovery of business has not yet brought the expected relief. In other directions there is more than a suggestion of a mentality that led to the deplorable excesses in the late twenties. Greed and unreasonableness in industrial relations are dangers that can paralyze our best efforts. There are forces unleashed in the recovery period that must be grappled with no less vigorously than those facing us in times of depression. These realities must not be neglected. Furthermore, disturbing factors in international relations still perpetuate much uncertainty in the world outlook. To these less favourable factors I wish to devote a few moments.
Apart from those sections of our agricultural industry which have suffered from the ravages of drought, the most conspicuous laggard among our major industries has been private construction. While there was a very slight improvement in total private building, and a moderate increase in residential and industrial building, the bureau's index for construction activity averaged slightly lower in 1936 than in 1935, and stood at the deplorably low level of 49-8. The value of contracts awarded amounted to only 8162,000,000 as compared with an average of 8428,000,000 in the prosperous years from 1925 to 1929. This is especially unfortunate in view of the fact that so large a proportion of our unemloyment is to be found in the construction trades and the industries dependent upon them. It was for this reason that the home improvement plan has been devised and it is confidently hoped that during the next twelve months it will lead to a substantial volume of repair and modernization work which will transfer skilled craftsmen from relief rolls to pay-rolls, and at the same time serve to protect and increase the value of an important capital asset, the homes of our people.
As already indicated, the betterment and extension of industrial plant and equipment should also make a larger contribution to employment and business activity during the present year. Improvement should also occur in the field of housing construction, long retarded by uncertainty as to continuance of employment and particularly by high real estate taxation. It is obvious, however, that these difficulties are in part at least the result of a vicious circle. Real estate taxes are high, for instance, because relief costs are high; relief costs are high because unemployment is heavy; and unemployment is heavy, to an
[Mr. Dunning.)
important extent, because the building industry is inactive. Conversely, the building industry is inactive because all these other things are true. We are now reaching the stage in the recovery movement when this vicious circle must be broken. In my opinion, therefore, it behooves every branch of the construction industry, including the lending institutions which finance the repair and erection of houses, to study the facilities now available through the government's housing programs and to use the utmost ingenuity in providing a sound product at a reasonable price and in selling that product to the ultimate consumer. Public works construction cannot be continued indefinitely on the scale of recent years without building up an intolerable burden for the future. If it must be kept up in the late stages of a recovery movement, what hope can there be that governments will be in a position to use public works requirements as a reserve against future depression?
If the construction industry makes the effort which I have indicated, and if it receives, as it should, the hearty cooperation of the general public, the results will go far to solve the next problem with which I wish to deal, that of unemployment and relief. The bureau of statistics publishes monthly an index of employment which is reasonably representative of all industries. It is based on returns submitted by about 10,000 firms employing approximately 1,000,000 persons. After adjustment for seasonal variations, this index stood at 111 -1 for January of this year. Compared with January, 1935, this represented an improvement of about 5 per cent. In the field of manufacturing, employment moved up 6 per cent. In lumbering and mining, as mentioned previously, it showed substantial gains, while wholesale and retail trade employment in December was at the highest December figure on record. In the construction and maintenance industries, however, the index showed an actual decrease of employment which brought down the general average.
The disheartening aspect of these figures, however, is the obvious failure of employment to keep pace with the striking gains in business activity previously reported. Partial explanation of this is to be found in the substitution of full-time for part-time work and in the taking up of the "slack" which previously existed as a result of redundant staffs maintained by many employers who were reluctant to dismiss employees not really needed. For the rest, the explanation rests upon the progress of invention and the improvement in technical and managerial processes. To this extent it is a phenomenon

The Budget-Mr. Dunning
which is usually met with in the early stages of recovery from depression. As it indicates an increased efficiency in the productive mechanism, its results are not to be deplored. Its ill effects are temporary; in the long run it increases employment by cheapening production and expanding consumer purchasing power. As recovery gathers momentum, increases in employment will tend to conform more closely to expansion in business activity.
Still more disheartening to most observers is the failure of the numbers on relief to decline proportionately with the revival of business. The registration of relief recipients maintained by the national employment commission, the results of which are now available on a preliminary basis for last month, indicates that as compared with January, 1936, heads of families on relief rolls in January, 1937, had decreased by 8 per cent and the total number of individuals on relief by 5 per cent. Excluding those on relief in the drought area, the respective declines were 11 per cent and 7J per cent. These decreases are of sufficient importance to confirm our belief that with expanding activity, industry will be able to re-absorb at least that portion of our relief recipients who are employable. However, to those observers who look for an early end to the relief problem the decline during the past year will appear discouragingly small. In addition to the factors mentioned above, the explanation for the slow rate of reabsorption is to be found in the fact that the new jobs opening up are being taken in large part by persons who were unemployed but not on relief, and by the new recruits who annually leave our schools and colleges to join the ranks of industrial workers.
It is probably true, Mr. Speaker, that a hard core of unemployment and relief will always remain. Doubtless there will be a number of those in the higher age brackets, who have been on relief for several years, who may be permanently ^"unemployable." Even in the best of times, we have always had unemployment, but the unemployed have not been "in the statistics" nor a charge upon public funds to the same extent as to-day. The depression will leave us with a new problem which will demand new methods of treatment from the appropriate authorities.
I am convinced, however, that in the policies now being followed and in the economic forces now working with increasing momentum, the present and major problem will rapidly be reduced to manageable proportions. The real solution must come, and is coming, through the expansion of private enterprise, based on conditions favourable to the more
31111-77}
extensive development of our primary and other industries. The fostering of private construction along sound lines, as already indicated, will also make an important contribution. As real purchasing power thus created becomes more broadly diffused throughout our economy, we will find the problem of relief dwindling in its proportions. In the meanwhile, the situation also demands important supplementary activities such, for instance, as the national employment commission is sponsoring as part of its contribution to the solution of this national problem. I refer particularly to the farm placement scheme, the home improvement plan, the coordination of the efforts of various governmental bodies and private organizations with regard to youth, the organization of community cooperation, and measures designed to bring about a more efficient and economical administration of direct relief.
It may seem ironical for me to sound a warning about a problem of prosperity whilst we are still harassed by the problems of depression. Evidence is accumulating, however, of the prevalence of a state of mind which justifies a warning signal. If we may judge by the activity in brokerage offices, the rapid rise in stock market prices, and the ratio of stock prices, particularly in some sections of the market, to nearby earnings and dividend prospects, we are forced to recognize a revival of that get-rich-quick spirit which proved so disastrous in the pre-depression years. As business activity increases and especially if the commodity price level shows a rapid rise, this speculative fever is likely to become more widespread and more hectic, creating false standards of value and an unbalanced development with their inevitable aftermath. It is not too early, therefore, to call attention to these potential dangers and to express the hope that adequate measures may be taken with sufficient promptness to keep unsound developments in check. The Bank of Canada has the power to control the total volume of credit in circulation, but if the amount of credit flowing into the special channel of speculation is to be regulated there will be needed the effective cooperation of the stock exchanges and the banking institutions which will be called upon increasingly to finance speculative activity. We are, I hope, too close to 1929 to forget the necessity of ordered progress and well-balanced development.
Finally, a word as to the international situation. On the financial and economic side, the year has brought much of encouragement. Perhaps the most significant development in
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this connection was the devaluation, of the gold currencies of continental Europe. After years of resistance, during which continuing deflation in an important area constituted an important barrier to world recovery, most of these "gold bloc" countries finally took the inevitable step and adjusted their monetary units in order to correct the overvaluation of their exchanges. In this operation they were assisted by an international understanding that the United States, Great Britain and France would use all available means for keeping their currencies approximately stable in terms of each other. This cooperative agreement, which Holland and Switzerland have since joined, marks a notable advance in international collaboration in the field of monetary management. Not only has the devaluation thus effected with international support resulted in a greater degree of stability and certainty in exchange rates but it has placed the economic structure of the gold bloc countries in a position of better equilibrium with other countries, an essential condition for sound world recovery. It has also removed one of the major reasons for the exchange controls, quota arrangements and other restrictions which have been strangling international trade. Already some tentative steps have been taken in certain European countries to relax tariff barriers and trade restrictions. International trade has felt some impetus from this stimulus as well as from the greater stability in exchange markets and particularly from the rise in world prices for primary commodities.
World trade as a whole, however, has not made the progress which one might have hoped for, and in some areas there are still evidences of financial or economic strain. Nevertheless, in most countries, as in Canada, the signs point to continued progress if only peace can be preserved and political friction reduced. Looking back on 1936, however, one cannot pretend that political progress has kept pace with economic improvement. War and the fear of war appear to
loom larger in men's eyes than at any time in recent years. Rival ideologies clash in the press and the chancellories of Europe; doubt appears to have been cast for the moment at least upon the value of cooperative undertakings and the sanctity of international commitments; and an increasing proportion of national income goes into expenditure for armaments. Regret it as we must, realism compels us to face the facts squarely and take these potential dangers into our reckoning when we look to the future. Perhaps the best hope for peace lies in the fact that the dangers are so clearly realized. Where all can see the danger it may not be too much to hope that sufficient wisdom will be found among the nations to avert catastrophe.
I propose on this occasion to defer the review of the growth in our foreign trade and also of our treaty negotiations with other countries until I have discussed the public accounts for the year.

[Stage Direction]
With reference to the government accounts, may I first point out that, because of the early date at which the budget is being brought down, the figures which I shall present for the current fiscal year ending March 31 next are estimates only. I trust that our estimates of revenue and expenditure will be very close to the actual results disclosed when the books for the year are closed, but it will be recognized that they are approximations only and, also, that it is especially difficult at this- time to present our annual balance sheet.
Following the procedure of last year, I shall first, with the permission of the house, place on Hansard a number of tables giving a complete summary of revenues and expenditures under the various categories and of the total deficit or increase of net debt for the current year, together with comparative figures for the four prededing fiscal years. The tables follow:
[Stage Direction]
The Budget-Mr. Dunning

[Stage Direction]
(000 omitted)
-	1932-33	1933-34	1934-35	1935-36	Estimated 1936-37Tax Revenues-	%	$	$	%	sCustoms import duties	70,073	66,305	76,562	74,004	81,500Excise duties	37,834	35,494	43,190	44,410	45,500War tax revenues-	Banks	1,328	1,336	1,369	1,281	1,255Insurance companies	826	742	750	761	'763Income tax	62,067	61,399	66,808	82,710	102,000Sales tax	56,814	61,392	72,447	77,552	115,500Manufacturers', importations, stamps,	transportation taxes, etc	25,377	45,184	39,745	35,181	38,100Tax on gold	-	-	3,573	1,413	
JTotal revenue from taxes	254,319	271,852	304,444	317,312	384,618Non-Tax Revenues-	Canada Grain Act	1,445	1,236	1,205	1,213	1,402Canada Gazette	74	56	47	49	49Canals	831	878	838	890	1,782Casual	3,205	3,622	4,337	4,636	5,432Chinese revenue	9	6	6	6	6Dominion lands	459	419	516	458	475Electricity	298	440	485	542	615Fines and forfeitures	212	178	90	295	392Fisheries	5	39	43	42	54Gas inspection	84	76	96	91	90Insurance inspection	160	149	139	147	152Interest on investments	11,221	11,148	10,963	10,614	11,218Marine	178	208	218	222	223Mariners' fund	180	188	181	187	204Military college	20	20	20	20	20Militia pensions revenue	166	165	174	178	183Ordnance lands	17	18	16	16	17Patent and copyright fees	539	429	426	455	455Penitentiaries	121	98	74	68	50Post Office	30,928	30,893	31,248	32,508	34,310Premium, discount and exchange	146	752	36	Public Works	213	250	254	251	221Radio licenses	1,404	1,291	1,487	1,574	1,000R.C.M.P. officers' pensions	12	12	9	11	14Weights and measures	394	400	407	401	40652,321	52,219	54,031	54,910	58,770Total ordinary revenues	306,640	324,071	358,475	372,222	443,388Special Receipts-	Sundry receipts	4,490	409	3,397	320	8,125*Other Credits-	Refunds on capital account	500	90	80	27	565Credits to non-active accounts	105	91	21	27	45Total Receipts and Credits	311,735	324,661	361,973	372,596	452,123
* Includes $8,000,000 from Canadian Wheat Board to be taken into the accounts as an offset, in part, to the disbursements in 1935-36 re losses on 1930 wheat pool and stabilization operations.
The Budget-Mr. Dunning

[Stage Direction]
(000 omitted)
Ordinary expenditures	1932-33	1933-34	1934-35	1935-36	Estimated 1936-37$	$	$	$	$Agriculture	8,066	6,996	7,107	9,399	8,929Auditor General's Office	380	376	377	429	423Civil Service Commission	244	221	221	259	308Externa] Affairs, including Office of Prime	Minister	863	974	1,427	1,290	1,381Finance-	Interest on Public Debt	134,999	139,725	138,533	134,549	137,405Cost of Loan Flotations	1,639	2,550	2,890	3,577	3,900Premium, Discount and Exchange (net)..	-	167	-	-	300Subsidies to I'rovinces	13,677	13,728	13,769	13,769	13,769Special Grants to Provinces	1,600	1,600	1,600	3,975	3,225Other Grants and Contributions	499	396	467	736	643Civil pensions and superannuation	1,098	1,032	943	854	797Government contribution to Superannua-	tion Fund	2,270	1,986	1,948	1,875	2,025Old Age Pensions	11,513	12,314	14,942	16,764	22,500General Expenditure	2,050	3,152	3,939	3,735	3,667Fisheries	1,787	1,596	1,641	1,710	1,750Governor General's Secretary's Office	136	136	133	138	144Immigration and Colonization	1,689	1,374	1,269	1,322	1,333Indian Affairs	4,499	4,380	4,362	4,869	4,921Insurance	161	152	156	103	175Interior	3,503	2,857	2,750	2,939	2,963Justice	2,691	2,711	2,718	2,748	2,780Penitentiaries	2,870	2,677	2,667	2,377	2,449Labour	605	561	581	660	725Technical Education	202	129	91	99	100Government Annuities-Payments to	272	maintain reserve	289	184	146	541Legislation-	1,796	1,486	1,749House of Commons	2,210	986	Library of Parliament	05	69	71	76	77Senate	747	286	491	491	599General	81	62	95	55	75Dominion Franchise Office	-	-	1,545	498	46Chief Electoral Officer, including elections	56	32	146	1,089	80Marine	5,802	5,439	5,742	5,857	5,723Canadian Radio Broadcasting Commission	149	1,025	1,249	1,500	878Mines and Geological Survey	1,049	909	965	1,040	1,180Movement of Coal and Domestic Fuel Act..	1,220	2,772	2,124	2,103	2,304National Defence-	Militia Service	8,719	8,773	8,853	10,141	11,416Naval Service	2,167	2,171	2,222	2,380	4,851Air Service	1,731	1,685	2,2.58	3,777	6,229Sundry Services	1,133	847	847	879	1,001National Revenue (including Income Tax)..	10,846	10,360	10,166	10,963	11,272Pensions and National Health- Treatment and after-care of returned	soldiers	10,511	9,571	10,127	11,060	12,041Pensions, War and Military	44,183	42,923	43,232	42,790	43,092Health Division	924	802	809	993	880Post Office	31,607	30,554	30,252	31,438	32,417Privy Council	47	49	40	46	46Public Archives	174	157	209	165	167Public Printing and Stationery	231	172	368	169	175Public Works	13,108	10,827	9,905	12,945	14,643Railways and Canals	3,684	3,315	4,581	4,250	4,204Maritime Freight Rates Act	1,922	1,989	2,529	2,348	2,420Railway Grade Crossing Fund	318	310	275	128	104Royal Canadian Mounted Police	5,820	5,528	5,970	6,165	5,910Secretary of State	606	387	395	705	649Soldier Settlement	819	810	746	762	858Trade and Commerce	3,276	3,007	3,057	3,458	5,717Canada Grain Act	2,026	1,759	1,679	1,848	1,827Mail Subsidies and steamship subventions	2,082	2,221	2,274	2,426	2,077Total ordinary expenditure	354,643	351,771	359,701	372,539	391,860
IMr. Dunning.]

The Budget-Mr. Dunning

[Stage Direction]
FISCAL YEARS-Continued
(000 omitted)
-	1932-33	1933-34	1934-35	1935-36	Estimated 1936-37Capital Expenditure	$	$	$	$	3Canals	3,156	1,986	338	458	52Railways	1,659	754	526	287	217JPublic Works	4,234	3,840	6,243	5,799	3,178Total capital expenditures	9,049	6,580	7,107	6,544	3,447Special Expenditures	Unemployment Relief Act, 1930	548	4	2	26	Unemployment Relief Act, 1931	17,048	564	52	26	Unemployment Relief Act, 1932	19,125	6,948	399	111	Unemployment Relief Act, 1933	-	28,382	2,420	494	Unemployment Relief Act, 1934	-	-	49,114	1,152	Unemployment Relief Act, 1935	-	-	48,027	Unemployment Relief and Assistance Act, 1936-	Administration	225Grants-in-aid to Provinces	28,930^Dominion share of joint Dominion-Pro-	vincial projects- Projects undertaken prior to March	31, 1936	-	-	3,700New Projects	-	-	9,117Transportation facilities into mining	areas	-	-	1,342Railway maintenance	-	-	-	2,75036,721	35,898	51,987	49,836	46,064.Special Drought Area Relief-	Direct Relief	-	-	5,490Feed and fodder and freight thereon	-	_	4^160Freight charges on movement of cattle...	-	-	-	919,741Dominion Projects (Special supplementary estimates)-	Projects undertaken prior to March 31,1936	-	-	17,360New projects	-	-	-	7,014Miscellaneous	-	250Public Works Construction Acts	8,673	29,581	Wheat Bonus	1,811	1930 Wheat Crop Equalization Payments	Act	-	-	-	6,600	Loss on 1930 Wheat Pool and stabilization operations- Payment to Canadian Wheat Board of	net liability assumed as at Dec. 2. 1935.	-	-	15,856	Loss on 1930 oats pool under guarantee of bank advances to Canadian Co-opera-	tive Wheat Producers Limited	-	-	-	174	-Total special expenditures	38,532	35,898	60,660	102,047	80,429
The Budget-Mr. Dunning

[Stage Direction]
FISCAL YEARS-Concluded
(000 omitted)
-	1932-33	1933-34	1934-35	1935-36	Estimated 1936-37$	$	$	$	$Government Owned Enterprises-Coiic. Losses charged to Consolidated Fund- Canadian National Railway System, ex-	53,423	52,264	42,590	41,796	37,449Eastern lines	8,717	6,692	5,818	5,625	5,854Canadian National Steamships	-	-	-	270	-National Harbours Board	-	-	-	1,126	25CTotal charged to consolidated	48,817	43,553fund	62,140	58,956	48,408	Loans and advances non-active-	487	*333	*1,500Canadian National Steamships	1,382	14	Harbour Commissions	4,897	2,110	1,242	2,456	2,419Accounts carried as active assets transferred to non-active assets	*62,938	-	-	-	-Total non-active advances	66,453	2,096	1,729	2,123	919Total government owned enter-	44,472prises	128,593	61,052	50,137	50,940	Other Charges Write-down of assets chargeable to Consolidated Fund- Reduction in soldier and general land settlement loans	1,766	469	488	500Yearly established losses in seed grain and relief accounts-Department of Interior	106	91	21	27	45Non-Active Accounts- Canadian Pacific Railway advances (Relief Acts)	1,447	1,000	Active assets transferred to non-active...	-	-	11	-	fl8,765Total other charges	1,553	2,857	501	515	19,310Grand total expenditures	532,370	458,158	478,106	532,585	539,518
* Credit.
** Canadian National Railways-Loans for 1931-32 $41,121,000; Sundry harbour commissions-Advances prior to 1932-33 $21,817,000.
f Dominion contribution to Debt Adjustment Program being effected in Provinces of Manitoba and Saskatchewan respecting Drought Area Relief that was financed by the Dominion to Jan. 1,1935-Manitoba $805,000, Saskatchewan $17,960,000.
[Stage Direction]
The Budget-Mr. Dunning
SUMMARY OF REVENUES AND EXPENDITURES (000 omitted)
-	1932-33	1933-34	1934-35	1935-36	Estimated 1936-37$ 354,643 306,640	$ 351,771 324,071	$ 359,701 358,475	S 372,539 372,222	$ 391,860 443,388
Deficit (-) or surplus (+) on ordinary					
	-48,003	- 27,700	- 1,226	- 317	+ 51,528
					
	38,532 4,490	35,898 409	60,660 3,397	102,047 320	80,429 8,125
					
					
	34,042 9,049 128,593 1,553	35,489 6,580 61,052 2,857	57,263 7,107 50,137 501	101,727 6,544 50,940 515	72,304 3,447 44,472 19,310
					
" Government Owned Enterprises						
					
	173,237 60S	105,978 181	115,008 101	159,726 54	139,533 610
Add deficit or deduct surplus as above	 Total deficit or increase of direct net debt					
172,632 48,003	105.797 27,700	114,907 1,226	159,672 317	138,923 51,528220,635	133,497	116,133	159,989	87,395
revenues 1936-37
For the year as a whole, we estimate that total revenue from taxation and all other sources will aggregate $452,123,000. This total is almost $80,000,000 in excess of that for the preceding fiscal year and is exceeded by the revenues of only one other year in the history of the dominion, the fiscal year ended March 31, 1929, when total collections slightly exceeded $460,000,000. Looking at it from another point of view, it represents an increase of 45 per cent as compared with 1932-33, the low year of the depression. While taxpayers may greet this news with mixed feelings, I think it will be generally accepted as a striking tribute to the recuperative powers of the Canadian economy and a convincing confirmation of the reality of the economic recovery which I have outlined in the earlier part of this address. This increase of course is due to the increased taxes imposed last year, but essentially, expanding government revenues reflect and confirm the increase in national income.
The revenue from all tax sources will amount to $384,618,000, an increase of $67,306,000 over last year. To this increase, all our major forms of taxation contributed.
The sales tax is now the largest single source of government revenues. For the year we estimate a total yield from this tax of $115,-
500,000	an increase of $37,948,000 over the
preceding year. As the rate of this tax was raised last year from 6 to 8 per cent, it may be estimated, assuming no retarding effect on business from the higher rate, that $28,875,000 of the increase was due to the increase in rate and the remainder to the improvement in business activity and to higher price levels.
The second largest producer of revenue was the income tax, which we estimate will yield during the current year $102,000,000. This is also a gratifying increase over the previous year-$19,290,000-and is attributable largely to the improvement in corporate and individual incomes, although the increase of li per cent in the corporate income tax rate is estimated to be responsible for approximately $5,840,000 of the increase. Of the total receipts, $58,400,000 will come from corporations, $8,700,000 from the five per cent tax on interest and dividends, and $34,900,000 from the tax on individual incomes.
Excise duties, imposed chiefly on liquors and tobacco, are expected to yield $45,500,000, an increase of slightly over $1,000,000 as compared with last year.
Receipts from customs duties show an increase of almost $7,500,000. Last year you will recall that $74,004,000 was derived from this source as compared with $76,562,000 during the preceding year. We estimate a total yield this year of $81,500,000. While this is still less than half the customs revenue received during 1929 or even 1920, the increase
The Budget-Mr. Dunning
[Stage Direction]
this year amounted to 10 per cent, and there is evidence of an increasing rate of gain during recent months.
Special excise taxes will show an increase from 835,181,000 to $38,100,000. This increase is accounted for chiefly by increased receipts from the 3 per cent special excise tax on importations and the tax on transfer of securities. There was a slight decrease in receipts from the tax on bank notes due to the statutory decrease in chartered bank note circulation.
Non-tax revenues, that is, the revenues derived from investments and various departmental services, are expected to aggregate $58,770,000, an increase of $3,860,000 over the previous year. The largest increase in this group will be attributable to post office revenues which are estimated at $34,310,000 as compared with $32,508,000 for the year 1935-*36. The nominal surplus on post office operations is estimated at $1,893,000. In calculating this surplus we have included in expenditures of the department the cost of civil government. It has frequently been pointed .out, however, that the post office accounts do not provide, on the expenditure side, for the rental value and other costs of premises occupied and equipment used, nor on the revenue side do they include any credit to the post office for services rendered to other departments through the free use of the mails.
During the current fiscal year, we estimate that special receipts and other credits will total $8,735,000, as compared with $374,000 the previous year. This is mainly accounted for by the fact that we expect to take into our revenues $8,000,000 received from the Canadian Wheat Board which will represent an offset in part to the disbursement of $15,856,000 which we provided for last year to recoup the Board for the net liability assumed when it acquired the wheat and wheat contracts held by Canadian Cooperative Wheat Producers Limited in connection with the 1930 wheat pool and stabilization account. It is a matter of congratulation that a liability to our national finances of menacing proportions has been removed. At the close of the last fiscal year the position was such that the government felt it essential not only to pay to the board the $15,856,000 referred to above, but the further substantial liability shown on the board's books on the basis of closing market prices on March 31, 1936, made it appear almost inevitable that an additional heavy loss would have to be provided for again this year. We were criticized for the provision then made. We were told that we should await the complete disposal of the board's holdings before providing for any losses. It seemed to me, then, and it seems to me now, that it was only the part of ordinary business 
prudence to make at least a partial provision for what appeared likely to be a heavy loss. No one is happier than I am to-day to be able to welcome back to the treasury, as a result of good luck and sound policy, a portion of the funds then disbursed.

[Stage Direction]
In dealing with expenditures, I wish to emphasize again the importance of concentrating on the aggregate of our expenditures of all kinds and on our over-all deficit rather than on ordinary expenditures and the surplus or deficit on ordinary account. However, for the purpose of analyzing details and making comparisons with previous years, I shall first present the expenditures under the five main categories in which they are now classified in the public accounts.

[Stage Direction]
The ordinary expenditures for the year are estimated at a total of $391,860,000. This is $19,321,000 in excess of the expenditures for 1935-36. As ordinary revenues are estimated at $443,388,000, the so-called surplus on ordinary account would be $51,528,000, as compared with a deficit on ordinary account last year of $317,000. As I have indicated, however, this surplus on ordinary account has only slight significance under present conditions.
The largest increase in ordinary expenditures is in the cost of old age pensions, which are estimated for the current fiscal year at $22,500,000, as compared with $16,764,000 last year. Most of this increase of $5,736,000 is explained by the participation this year for the first time of the provinces of Quebec and New Brunswick in the old age pensions arrangement. Other important increases were $6,320,000 in the cost of national defence (including civil aviation); $2,856,000 in interest on the public debt; $1,698,000 in ordinary expenditures on public works; $1,889,000 in the expenditures of the Department of Trade and Commerce; and finally, an increase of $979,000 in the ordinary costs of post office operations.

[Stage Direction]
Total expenditures charged to capital account will amount to only $3,447,000, a decrease of $3,097,000 as compared with the year 1935-36. The chief item is $3,178,000 for public works construction.

[Stage Direction]
We come now to that important group of items which are classified as special expenditures, and which this year relate solely to disbursements made for unemployment relief purposes. During the year 1936-37 special

The Budget-Mr. Dunning
expenditures are expected to aggregate $80,429,000. The decrease of $21,618,000 as compared with the total for 1935-36 is wholly explained by the absence this year of any disbursements for grain marketing losses. Under the Unemployment Relief and Assistance Act, 1936, total expenditures are expected to reach $46,064,000. Of this total $28,930,000 will be accounted for by grants-in-aid to the provinces for direct relief; $14,159,000 by the dominion's share of joint dominion-provincial projects; and $2,750,000 by the cost of the special railway maintenance program which it will be recalled was designed to provide work for single homeless unemployed men formerly taken care of by the relief camps.
The serious drought which developed in the three Prairie provinces last summer necessitated relief on so extensive a scale that the government felt obligated to regard the condition as a national emergency and as one therefore which called for special dominion assistance. To meet this unforeseen and emergent problem, funds were appropriated by governor general's warrants to a total amount of $12,240,000 in order chiefly to pay for the cost involved in purchasing and distributing feed and fodder for live stock in the drought-stricken area and the cost of providing direct relief to families living in the area. Agreements were entered into with the three provinces under which the dominion
agreed to bear 100 per cent of the cost of direct relief in the drought area as defined, 100 per cent of the cost of feed and fodder for live stock, and 50 per cent of the cost of moving live stock into other feeding areas and of the losses involved in shipping low grade cattle out of the drought area to packing companies for conversion into tankage and boneless beef. These agreements contained special provisions for the protection of the government through the assistance of representatives of the comptroller of the treasury's office located in the three provinces. It is now estimated that the expenditures under this program will not exceed $9,741,000 by the close of this fiscal year. Of this amount $5,490,000 will represent the cost of direct relief and $4,251,000 the dominion's share of the cost of feed, fodder and freight charges.
The cost of dominion projects carried on under authority of the special supplementary estimates for 1936-37 aggregated $24,624,000. Of this total $17,360,000 represented the cost of projects undertaken prior to March 31, 1936, and $7,264,000 the cost of new projects.
The following table, which I will place on Hansard, compares the expenditures made or to be made for direct relief and various unemployment relief projects during the present fiscal year, with similar expenditures incurred in the preceding fiscal year.
Unemployment Relief Expenditure
Grants-in-aid to provinces	 $26,274,875
Dominion's share of joint dominion-provincial projects	 lo'79o'526
Railway maintenance works	 '	....
Dominion projects:
Department of	Public Works	
17,895,218Department of	National Defence	
10,201,468National Harbours Board and Department of Marine.. ..	5,437.008Department of	Interior	
2,294,291Department of	Agriculture	
238,500Department of	Railways and Canals	
942,689Miscellaneous and sundry departments	
1,431,681Special drought area relief	
4,000,000
Estimated
[Stage Direction]
$79,410,256	$80,429,000

[Stage Direction]
The next main category of expenditures is that of government owned enterprises in which is grouped the losses of and non-active advances to government owned enterprises which are operated as separate corporations.
Canadian National Railway Company
Operating revenues of the Canadian National Railway Company increased about $13,400,000 in the calendar year 1936 over the corresponding figure for 1935, or 7-7 per cent.
However, operating expenses increased by the same ratio and the net revenue after taxes, rentals, etc., available for interest on debt was $6,600,000 as against $6,800,000 in the previous year. The increased operating expenses were due in part to the costs absorbed by the Canadian National Railway Company under the various government unemployment relief programs and increased wage rates.
After applying the $6,600,000 available from earnings to interest charges of $49,900,000, there resulted a net income cash deficit of $43,300,000,
The Budget-Mr. Dunning
[Stage Direction]
which amount has to be paid by the dominion and charged to dominion expenditure in the current fiscal year. This cash deficit compares with $47,400,000 for 1935, the improvement being entirely due to reduction in interest charges resulting from refunding of securities at lower rates of interest.
It should be borne in mind that there are certain non-cash charges in the railway accounts which should be taken into account in reconciling the above-mentioned figure of cash deficit with the net loss for the year as shown by the annual report of the railway company.
In addition to payment of the railway's deficit, the government will advance $9,916,000 by way of loan to the Canadian National Railways during the present fiscal year. This will be made up as follows: $7,053,000 on account of miscellaneous debt retirements under the 1936 budget, and $2,863,000 representing cost of equipment purchased under the special supplementary estimates. Repayment of $395,000 was received on account of loans made in the fiscal year 1936 for repairs to equipment under the Supplementary Public Works Construction Act.
During the fiscal year, the government made temporary loans aggregating $33,032,970 to the company to meet called or matured debt, the major item of which was $24,220,000 Grand Trunk 6 per cent dominion guaranteed bonds, which were redeemed on September 1, 1936. These temporary loans together with loans aggregating $2,043,725 carried over from last fiscal year, were repaid from a public issue of dominion guaranteed bonds dated February 1, 1937, in the amount of $35,500,000. This issue was sold in two maturities: $15,500,000 2i per cent seven-year bonds yielding 2-39 per cent and $20,000,000 3 per cent fifteen-year bonds yielding 3'04 per cent.
Canadian National Steamships
During the fiscal year, the Canadian National Steamships returned $1,500,000 to the government. This was due mainly to the winding-up of the Canadian Government Merchant Marine. The amount of working capital and insurance fund that had been advanced as a non-active loan in previous years has been returned, in addition to the surplus of $343,000 accruing from operations during 1936 prior to the sale of the fleet. The operations of the West Indies service in the calendar year 1936 showed an operating surplus, after payment of interest to the public, of $70,000. This is the firet surplus recorded since the inauguration of the service and compares with a deficit of $270,000 in 1935.

Harbour Commissions
Assistance to harbour commissions appearing as expenditure in our accounts will total $2,669,000. This amount is composed of $250,000, representing the operating deficits of the harbour commissions at Halifax, Saint John, Quebec and Chicoutimi. The balance represents non-active advances of $443,000 for deficit on the Jacques Cartier Bridge, Montreal, and $1,996,000 for refunding of obligations of the harbour commissions at Three Rivers, Chicoutimi and Saint John, less refunds of $20,000 representing advances in previous years for capital expenditures at Halifax and Saint John.
The operations of the harbours are conducted on a calendar year basis and 1936 represents the first full year under which the management of the various ports previously administered by harbour commissions was centralized. While the National Harbours Board was not appointed until October last, centralized control has been effective since November, 1935. Net operating income of these harbours before interest on investment and depreciation showed an improvement in the calendar year 1936 of $1,128,000 over the corresponding figures for 1935.
To sum up, the total amount treated as expenditures in our accounts in connection with the operations of the railways and other government owned enterprises operated as separate corporations was $44,472,000 as compared with $50,940,000 for the previous year. This is exclusive of such amounts as are carried in our accounts as active assets, to which reference will be made later.

[Stage Direction]
During the fiscal year it is estimated that assets will be written down in the amount of $19,310,000. Apart from the normal writeoffs in connection with soldier and general land settlement loans and seed grain and relief accounts, which altogether total $545,000, this write-off item of $19,310,000 is explained by the contribution which we propose to recommend to parliament should be made by the dominion in connection with a cooperative program for the adjustment of indebtedness of farmers in the drought areas of Saskatchewan and Manitoba.
The proposal involves the writing off of provincial treasury bills held by the dominion as security for repayment of loans made to these two provinces to enable them to finance relief and seed grain expenditures in the drought areas during the period from May 1, 1931, to January 1, 1935, plus such accrued interest thereon as has been capitalized. The

The Budget-Mr. Dunning
amount involved will not exceed $805,000 in the case of Manitoba, and $17,960,000 in the case of Saskatchewan.
In the supplementary estimates for the current year authority will be sought to transfer these treasury bills in the government's books from "active assets" to "non-active assets" as at March 31, 1937. Final write-off and cancellation by the dominion government will be made on receipt of proof that the two provincial governments, the municipalities concerned and the mortgage lending institutions which have made loans to farmers in the drought areas have also made the required adjustments in debt or tax claims, as the case may be, in order to provide relief for farmers who have suffered from prolonged drought conditions.

[Stage Direction]
If we add together the capital and special expenditures, as well as losses of and nonactive advances to government-owned enterprises, and the other charges representing write down of assets to which I have just referred, we find that the grand total of expenditures for which the government is responsible during the current fiscal year will aggregate $539,518,000. This is an increase of $6,933,000 over the grand total of expenditures for the fiscal year 1935-36. It should be remembered, however, that the total for 1936-37 includes the abnormal item of $18,-
765,000	representing the write down of loans made to Manitoba and Saskatchewan during
the years 1930 to 1935. Had this item which relates to transactions of previous years not been included, our total expenditures for the current year would be Sll,832,000 less than those for last year.

[Stage Direction]
In the following table an attempt is made to show the percentage distribution of revenues and expenditures for the current year. Receipts from various taxes and other sources of revenue are shown as percentages both of total revenues and of total expenditures. Similarly several of the main items of expenditure and groups of such items are shown as percentages both of total expenditures and of total revenues. The form of our estimates and appropriations, and the method of classifying accounts make it impossible to achieve precise accuracy in such calculations as those I am now placing on Hansard, and I hope that by another year we may be able to introduce such changes in our procedure regarding estimates and accounts as will make it possible to determine more accurately the real costs of the various important services of government. I think members of the house have long recognized the need for the change I suggest. However, the results shown in the table are sufficiently accurate to enable broad conclusions to be drawn as to the relative burdens imposed on the public treasury by several important services or obligations. I now place the table upon Hansard without further comment:

[Stage Direction]
(000 omitted)
Revenues	Amount (estimated)	Percentage of total Revenues	Percentage to total ExpendituresOrdinary Revenue- Income Tax	$102,000	22-56	18-91Customs Duties	81,500	18-03	15-11Excise Duties	45,500	10-06	8-43Sales Tax	115,500	25-55	21-41Manufacturers', importation, stamp taxes, etc	38,100	8-42	7-06Other tax revenues	2,018	*45	[DOT]37Total Revenue from taxes	$384,618	85-07	71 29Non-tax Revenues	58,770	13-00	10-89Total Ordinary Revenues	$443,38S	98-07	82-18Special Receipts and Credits	8,125	1-80	1 50Other Receipts and Credits- Refunds of capital expenditures and receipts on nonactive accounts	610	[DOT]13	[DOT]12Grand Total Revenues	$452,123	100-00	83-80
The Budget-Mr. Dunning
[Stage Direction]
PERCENTAGE DISTRIBUTION OF REVENUES AND EXPENDITURES, 1936-37-Concluded
(000 omitted)
Expenditures	Amount (estimated)	Percentage of total Expenditures	Percentage to total Revenues
Ordinary Expenditures-			
Interest on public debt		$137,405	25-47	30-39
Cost of loan flotations-			
Amortization of bond discount, etc	3,900	[DOT]72	[DOT]S6Charges of management	197	[DOT]04	[DOT]05Total public debt charges	$141,502	26-23	31-30Subsidies and special grants to Provinces	$ 16,994	315	3-76Old Age Pensions	22,500	4-17	4-98Civil Servants' Pensions and Superannuation charges..	2,822	[DOT]52	[DOT]62Pensions and after-care of soldiers-	Pensions, War and military	$ 43,092	7-99	9-53Treatment, and after-care of returned soldiers....	12,041	2-23	2-66Total	$ 55,133	10-22	1219Agriculture	$ 8,929	1-66	1-97Fisheries	1,750	*32	[DOT]39Legislation	2,626	[DOT]49	[DOT]58Mines and Resources	12,701	2-35	2-81National Defence (including Civil Aviation)	23,497	4-36	5-20Post Office	32,417	600	7-17Public Works	14.643	2-71	3-24Transport	13,329	2-47	2-95All other	43,017	7-98	9-51Total Ordinary Expenditures	S391,860	72-63	86-67Capital Expenditures-	Canals	$ 52	[DOT]01	[DOT]01Railways	217	*04	[DOT] 05Public Works	3,178	[DOT]59	[DOT]70Total Capital Expenditures	$ 3,447	[DOT]64	[DOT]76Special Expenditures- Unemployment Relief and Assistance Act, 1936- Grants-in-Aid to Provinces	$28,930	5-36	6-40All other assistance	17,134	3-18	3-79Total	$46,0G4	8-54	10-19Drought area relief	$ 9,741	1-81	215Dominion projects (special supplementary estimates) 	24,624	4-56	5-45Total Special Expenditures	$80,429	14-91	17-79Government Owned Enterprises- Losses charged to Consolidated Fund- Canadian National Railways	*.	$43,303	802	9-58National Harbours Board	250	*05	[DOT]06Loans and Advances Non-active- National Harbours Board and Canadian National Steamships	919	[DOT]17	[DOT]20Total Government Owned Enterprises	$44,472	8-24	9-84Other Charges-	Write-down of assets to Consolidated Fund	$ 545	*10	*12Write-down of Active assets to non-active assets	18,765	3 48	415Total Other Charges	$ 19,310	3-58	4-27Grand Total Expenditures	$539,518	100-00	119-33
(Mr. Dunning.]

The Budget-Mr. Dunning

[Stage Direction]
Taking the total revenues for the year at $452,123,000 and the total expenditures at $539,518,000, it is apparent that there will be an over-all deficit for the fiscal year of

[Stage Direction]
This, of course, takes into account the railway deficit as well as other expenditures for which the government is responsible. It compares with a total deficit last year of $159,989,000. It is better than the figure of 100 millions deficit which I set as our goal in the budget last year. If we make allowance for the abnormal write-off of $18,765,000 which relates to the activities of previous years and also for the special receipt of $8,000,000 from the wheat board, it is indeed a very much better showing than we estimated a year ago.
But while we have succeeded in cutting last year's deficit nearly in half, and while we are able to show a substantially smaller deficit than in any year since 1930-31 when the deficit was approximately the same as for this year, I think it will be realized by all members of the house that the gap between our total income and our total outgo is still very broad and that it must be bridged at the earliest possible date.

[Stage Direction]
In addition to provision for the expenditures of the year as outlined, account should also be taken of loans and investments made which we regard as active assets in the public accounts. For the year such loans and investments are estimated at $36,785,000, excluding loans that may be made to provinces between February 15, 1937, and the close of the fiscal year on March 31.
Loans to Provinces
Loans made to the four western provinces which are the most important item in this category have shown a marked decrease during the present year. The Unemployment Relief and Assistance Act of 1936 restricted such assistance to a maximum amount measured by the provincial share of the cost of unemployment relief and undertakings during February and March, 1936, and under any agreements entered into pursuant to the act. Moreover, the act contemplated that any province desiring such assistance should establish the necessity therefor, and in practice we have required the submission of detailed statements of the financial position of the province.
Up to February 15, 1937, the net loans made under this authority have amounted to $10,892,235 as compared with $42,304,150 made during the preceding fiscal year. As of this date, loans made to the four western provinces under authority of the various relief acts were outstanding in the dominion's books to an aggregate amount of $127,419,400. The totals for the various provinces were as follows: Manitoba, $19,415,855'; Saskatchewan, $51,898,717; Alberta, $25,759,748; and British Columbia, $30,345,080. It will be understood these figures relate to totals outstanding prior to the write-off referred to previously.
I desire to place on Hansard tables showing the net loans made to each province during each of the last six fiscal years, and a classification of such loans on the basis of the general purpose for which the loans were obtained.

[Stage Direction]
-	Manitoba	Saskat- chewan	Alberta	British Columbia	Total$	$	s	$	$1931-32	2,788,812	10,934,341	4,097,740	4,813,124	22,634,0171932-33	5,171,904	7,578,556	1,902,041	912,636	15,565,1371933-34	2,273,283	5,469,240	4,050,743	1,321,761	13,115,0271934-35	2,874,631	10,141,014	1,926,476	7,966,714	22,908.8351935-36	2,396,226	14,245,478	13,104,000	12,5.58,445	42,304,1491936-37 (to Feb. 15, 1937)	3,911,000	3,530,088	678,748	2,772.399	10,892,235Net Loans Outstanding	19,415,856	51,898,717	25,759.748	30,345.079	127,419,400
The Budget-Mr. Dunning

[Stage Direction]
-	Loans specifically to meet maturing obligations and interest	Loans specifically for agricultural relief including purchase of seed grain	Loans for Provincial purposes generally including public works and direct relief	Total$	$	$	s1,139,455 3,934,341 8,577,000 11,190,509	243,400 13,892,633 3,152,748	18.033.000 34,071,743 14.030.000 19,154,571	19,415,855 51,898,717 25,759,748 30,345,080
24,841,305	17,288,7S1	85,289,314	127,419,400

[Stage Direction]
Loans to Canadian National Railways for miscellaneous debt retirements, less repayments, already referred to, amounted to $4,614,000.	Purchase of railway equipment
for the Canadian National Railway amounted to $2,863,000 and for the Canadian Pacific Railway Company to $2,303,000. In addition, $555,000 was loaned to the latter company for railway betterment expenditures in connection with the government's unemployment relief program.
During the fiscal year the government's purchases of Canadian Farm Loan Board 3J per cent bonds will amount to $11,100,000, and of the board's capital stock to $794,000. The total investment by the government of Canada in the farm loan board will reach approximately $28,684,000 at the close of the present fiscal year.
The amount paid out by the government on loans approved under the terms of the Dominion Housing Act is expected to total $1,218,000 during the current fiscal year. The
dominion's share of such loans represents 20 per cent of the lending value of each property financed under the act, and is paid out from time to time as required after loans are approved.
During the year, $323,000 was advanced to the harbour commissions at Montreal and Vancouver. These loans are considered as active assets, as both commissions have paid a substantial part of the interest accrued on their obligations held by the government.
Under authority of the Bank of Canada Act Amendment Act, the government purchased
102,000	shares of class B stock of the Bank of Canada, representing an investment of $5,100,000.
Repayments of $2,977,000 were received during the year in reduction of soldier loans and loans to provinces for housing purposes.
The following is a statement of the amount of loans and investments made during the last fiscal year, which are regarded as active assets, and the comparable figures for the four preceding years:
[Stage Direction]
The Budget-Mr. Dunning

[Stage Direction]
(000 omitted)
-	1932-33	1933-34	1934-35	1935-36	(Estimated 1936-37)Canadian National Railways .. Canadian Pacific Railway	
Canadian Farm Loan Board	
Dominion Housing Act, Loans disbursed... Harbour Commissioners... Provinces-under relief legislation	
Provinces-housing	
Railway equipment purchased	
Soldier and general land settlement	
Bank of Canada-Purchase of class "B" shares	
Other	$ 14,677 871 650 15,565 Cr. 139 Cr. 92 469	$ 2,628 416 1,677 13,115 Cr. 213 Cr. 2,492	$ 16,579 353 393 22,909 Cr. 397 Cr. 571	$ 3,689 1,270 7,933 82 1,438 42,304 Cr. 3,003 7,244 Cr. 1,054	$ 4,614 555 11,894 1,218 323 10,892 Cr. 2,038 5,166 Cr. 939 5,100
32,001	15,131	39,266	59,903	36,785

[Stage Direction]
During the fiscal year under review dominion obligations were issued to the amount of $3S2,996,000. In the case of treasury bills which have a three months' maturity and are refunded as they mature each fortnight, only the increase in the total outstanding during the year is included in the above figure. These issues, to the extent of $311,000,000 were for the purpose of meeting maturities and the remainder was for the deficit and other current purposes.
This financing was done at a very satisfactory cost to the government. The rates of interest on new issues were lower than those pre-valing on maturing issues, resulting in a considerable saving to the treasury in annual interest charges. At the close of the fiscal year, the average rate of interest on the fundel debt and treasury bills outstanding was 3-75 per cent as compared with 3-9 per cent a year ago.
Mr. BENNETT:: Have you the figure without the treasury bills ?


Mr. DUNNING:: That includes the treasury bills.


Richard Bedford Bennett: Have you the figure without the treasury bills?


Charles Avery Dunning: I have not that figure in this statement, but I will get it.
Loans were floated in both the domestic market and in the United States. The issues in Canada, exclusive of treasury bills, amounted to $267,996,000. The first issue was made in June, 1936, to an amount of $134,703,000. This issue was essentially a conversion loan, only $20,000,000 being issued for cash, the balance being made up of conversions of 1J per cent bonds due September 15, 1936, 2 per
cent bonds due October 15, 1936, and 5 per cent bonds due November 15, 1936. The new issue was comprised of two maturities, 1J per cent four year bonds yielding 1-63 per cent and 3| per cent thirty year bonds yielding 3-30 per cent. Cash subscriptions were accepted only in respect to the latter maturity.
The other major operation in the Canadian market was undertaken in September when a $100,000,000 issue was offered. This loan was also in two maturities; $45,000,000 1 per cent four and one-half year notes sold to yield 1-40 per cent and $55,000,000 3 per cent bonds (callable in thirty years) sold to yield 3'll per cent. The issue of perpetual bonds in the Canadian market represented a new departure in dominion financing. It was intended as the initial step in a program which is designed to provide for the consolidation and simplification of our public debt structure. Another purpose which we had in mind was to facilitate the setting up, as soon as the condition of our national finances make it practicable, of a general sinking fund to provide for the gradual amortization of our long term debt on scientific lines. The response of the investing public to this experimental issue indicated that perpetual obligations might prove as popular in Canada as they have long been in the United Kingdom. In this connection, I believe that the house will approve the policy which we have been following of taking advantage of the present period of low interest rates to get as large a proportion of our debt as possible into the form of long term obligations.
The $33,293,000 5 per cent school lands debentures due July 1, 1936, and held by the provinces of Manitoba, Saskatchewan and Alberta were renewed for a further period of one year at an interest rate of 4 per cent.


LOAN FLOTATIONS 1936-37
[Stage Direction]
Price		Yield			
Maturity Date	Where Payable	Amount IssuedIssue Date	Rate	To Public	To Govern- ment*	At Public Price	At Price to Government	1936	%	%	%	June 1	June 1, 1940	u	Canada	99.50	99.25	1-63	1-70	$	''0,000,000June 1	June 1, 1966	31	Canada	99.00	98.25	3-30	3-34	54,703,000July 1.... Sept. 15	July 1, 1937 Mar. 15, 1941	Canada (School Lands) Canada	100.00	4-00	33,293.4711	98.25	98.00	1-40	1-46	45.000,000Sept. 15-	Perpetual	3	Canada	96.50	95.75	3-11	3-13	55,000,0001937	Jan. 15	Jan. 15, 1944	21	New York	99.50	98.25	2-33	2-52	30,000,000Jan. 15	Jan. 15, 1967	3	New York	98.00	96.00	3-10	3-21	55,000,000$	352,996,471Increase in short term treasury bills outstanding March 31, 1937 over March 31, 1936	30,000,000
$	382,996,471
Price to public, lees commission to underwriters or dealers.
[Mr. Dunning.)

The Budget-Mr. Dunning

[Stage Direction]
As at March 31, 1937, the outstanding unmatured funded debt and treasury bills of the dominion, less sinking funds, will amount to $3,275,574,000. Adding to this amount $255,-
419,000	of other liabilities, consisting chiefly of annuity, insurance and superannuation funds, post office savings deposits and certain trust and contingent accounts, we arrive at gross liabilities of $3,530,993,00. Active assets, including cash on hand and investments,
amounted to $437,498,000. After deducting the latter figure from the gross liabilities, we reach an estimated net debt of $3,093,-
495,000	as at the close of the fiscal year. The increase over last year of $87,395,000 represents, of course, the amount of the over-all deficit to which I have previously made reference.
I now place on Hansard a statement showing the assets and liabilities of the dominion as estimated as at March 31, 1937.

[Stage Direction]
(estimated)		
Bank Circulation Redemption Fund		S.	$ 7,020,000
Insurance and superannuation funds- Government annuities		87.092.000 10.800.000 15.770.000 8,782,000 53.651.000	
Insurance fund, civil service			
Insurance fund, returned soldiers			
Retirement fund			
Superannuation funds			
		176,095,000
Trust funds- Indian funds		13,890,000 2.676.000 1.250.000 5.595.000	
Common school funds			
Contractors' securities deposits			
Other trust funds			
		23.411.000 6.340.000 2.814.000 9.624.000 21.800.000
Contingent and special funds			
Post Office money orders, postal notes, etc., outstanding			
Province accounts			
Post Office savings bank deposits			
Funded debt- Unmatured less sinking funds		3,275,574,000 6.565,000	
Matured but not presented for payment			
		3,282,139,000 1,750,000
Interest coupons matured but not presented for payment			
		
		$ 3,530,993,000
ASSETS MARCH 31. 1937		
(estimated)		
Active assets- Cash, working capital advances and other current assets			S 16,018,000 5.100.000 2.200.000
Bank of Canada, class "B" shares			
Gold Bullion account			
Loans to Provinces-	$ 4,730,000 108,654,000	
		113,384,000
		
Loans to foreign governments-	6,525,000 23,969,000	
Roumania			
		30,494,000
Loans to National Harbours Board-	59.446.000 23.755.000	
		
		83,201,000 275,000 1,300,000 12,000
New Westminster Harbour Commissioners			
Loans under Dominion Housing Act			
Bond holding account			
		
The Budget-Mr. Dunning
[Stage Direction]
ASSETS MARCH 31, mi-Concluded (estimated)
Railway accounts- . , . . Advances under financing acts, Canadian National Railways		41,399,000 555.000 789.000 1.270.000 6.748.000 5.662.000	56.423.000 28.684.000 42.656.000 2,370,000 15.749.000 39.632.000
Loans for betterment or repair of railway equipment-		
		
Purchase of equipment leased to-		
		
		
		
		
		
		
Deferred debits-		
		
		$ 437.49S,000
		$ 3,093,495,000
Net Debt represented by- A. Expenditure and non-active assets, March 31,1937 (estimated). Capital expenditures- Public Works-	242.727.000 443.124.000 267.963.000 12,035,000 9,896,000	
		$ 975,74.5,000 655,527,000 88.399.000 14.008.000 18.765.000 61.453.000 491,000 16.514.000 3,536,000 1,259,057,000
		
		
		
		
Loans non-active-		
		
		
		
		
National Harbours Board-	26.293.000 3.796.000 9.503.000 15.467.000 3.447.000 2.947.000	
		
		
		
		
Montreal (Jacques Cartier Bridge)			
		
		
		
B. Consolidated fund- Balance, consolidated fund, brought forward from March 31,1936.. Excess of expenditure over revenue, fiscal year ended March 31,	1,194,183,000 64,874,000	
		
		
		$ 3,093,495,000
		
Note.-The above Balance Sheet does not take into account any loans that may be made to provinces between February 15, 1937, and the close of the fiscal year. It does, however, take into account the proposed write-off of certain Treasury Bills of the provinces of Manitoba and Saskatchewan.
[Mr. Dunning.t

The Budget-Mr. Dunning
The following table which I also wish to place on Hansard gives a statement of the unmatured funded debt and treasury bills of the Dominion outstanding as at March 31, 1937, and the interest charges thereon:

[Stage Direction]
Date of Maturity	Rate Per Cent	Where Payable	Amount of Loan	Annual Interest Charges
			$ cts.	$ cts.
1937, July 1	4	Canada	33,293,470 85	1,331,738 83Dec. 1	(a) 5$	Canada	236,299,800 00	12,996,489 001938, July 1	3	London	8,071,230 16	242,136 90July 1	3	London	18,250,000 00	547,500 00July 1	3	London	10,950,000 00	328,500 00July 1	3*	London	15,056,006 66	526,960 23Oct. 15	2	Canada	90,000,000 00	1,800,000 001939, Jan. 1	2	New York	40,000,000 00	800,000 00Oct. 15	4	Canada	47,269,500 00	1,890,780 00Oct. 15	21	Canada	7,933,000 00	198,325 00Nov. 15	2	Canada	20,000,000 00	400,000 001940, Mar. 1	3	Canada	115,013,636 82	3,450,409 10June 1	Canada	80,000,000 00	1,200,000 00Sept. 1	41	Canada	75,000,000 00	3,375,000 001941, Mar. 15	1	Canada	45,000,000 00	450,000 00Nov. 15	5	Canada	141,663,000 00	7,083,150 001942, Oct. 15	3	Canada	40,409,000 00	1,212,270 001943, June 1	21	Canada	20,000,000 00	500,000 00Oct. 15	5	Canada	147,000,100 00	7,350,005 001944, Jan. 15	21	New York	30,000,000 00	675,000 00Oct. 15	41	Canada	50,000,000 00	2,250,000 001945, Aug. 15	21	New York	76,000,000 00	1,900,000 00Oct. 15	4	Canada	88,337,500 00	3,533,500 001946, Feb. 1	41	Canada	45,000,000 00	2,025,000 001947, Oct. 1	21	London	4,888,185 64	122,204 641949, Oct. 15	31	Canada	138,322,000 00	4,841,270 001950, July 1	31	London	137,058,841 00	4,797,059 431952, May 1	5	New Yrork	100,000,000 00	5,000,000 00Oct. 15	4	Canada	56,191,000 00	2,247,640 001955 May 1	31	London	48,666,666 67	1,581,666 67June 1	3	Canada	40,000,000 00	1,200,000 00June 1	3	Canada	55,000,000 00	1,650,000 001956, Nov. 1	41	Canada	43,125,700 00	1,940,656 501957, Nov. 1	41	Canada	37,523,200 00	1,688,544 001958, Sept. 1	4	London	73,000,000 00	2,920,000 00Nov. 1	41	Canada	276,687,600 00	12,450,942 001959, Nov. 1	41	Canada	289,693,300 00	13,036,198 50I960, Oct. 1	4	London	93,926,666 66	3,757,066 67Oct. 1	4	New York	100,000,000 00	4,000,000 001961, Jan. 15	31	New York	48,000,000 00	1,560,000 001966, June 1	31	Canada	54,703,000 00	1,777,847 50Perp.Sept. 15	3	Canada	55,000,000 00	1,650,000 001967, Jan. 15	3	New York	55,000,000 00	1,650,000 00Treasury Bills due April 1, 1937...	[DOT]745	Canada	25,000,000 00	186,250 00Treasury Bills due April 15, 1937..	[DOT]747	Canada	25,000,000 00	186,750 00Treasury Bills due May 1, 1937	[DOT]758	Canada	30,000,000 00	227,400 00Treasury Bills due May 15, 1937...	[DOT]776	Canada	25,000,000 00	194,000 00Treasury Bills due June 1, 1937	[DOT]776 (est.)	Canada	20,000,000 00	155,200 00Treasury Bills due June 15, 1937...	[DOT]776 (est.)	Canada	25,000,000 00	194.000 003,337,332,404 46	125,081,459 97Payable in Canada...	2,478,464,807 67	74-27%Payable in New York	449,000,000 00	13-45%Payable in London	409,867,596 79	12-28%3,337,332,404 46	100 %Less bonds and stocks of the above loans held as sinking funds	(estimated)	61,758,481 68	3,275,573,922 78	
(a! Tax free in Canada
The Budget-Mr. Dunning

[Stage Direction]
Bonds and debenture stocks bearing the guarantee of the dominion outstanding in the hands of the public at the close of the fiscal year will amount to SI,003,000.000, an increase of $9,000,000 over the same date a year ago. This increase is due mainly to the issue of dominion guaranteed securities to refund matured or called debt of the Canadian National Railways which had not been guaranteed.
In addition, there are other contingent liabilities arising out of guarantees given under relief and other acts. During the year the only new guarantee was that in connection with the home improvement plan under which the government guarantees approved lending institutions against loss up to 15 per cent of the aggregate amount of loans made by each tending institution. The limit of the aggregate loans to be made under this plan will be $50,000,000 and therefore the maximum contingent liability of the government will be $7,500,000. As at January 31, 1937, the amount of such loans subject to guarantee was $1,501,000. It is difficult to estimate what the total will be on March 31, 1937, as an acceleration of lending activity is expected with the approach of the spring building season.
I am glad to be able to report that as a result of the policy of orderly marketing and the rise in wheat prices to which I have already referred, bank loans which were made to the Canadian wheat board under our guarantee have been completely paid off, as well as the loans made from time to time directly to the board by the government. In a report made public on January 4, 1937, the Wheat Board stated that the total wheat and wheat contracts which had been taken over from Canadian Cooperative Wheat Producers Limited as
of December 2, 1935, amounted to 205,186,980 bushels. As of that date the board also held 90,186,986 bushels of 1935 crop wheat making a total holding as of that date of 295,373,966 bushels. The wheat and contracts taken over from Canadian Cooperative Wheat Producers Limited plus the total receipts by the board of 1935 crop wheat to the end of the crop year on July 31,	1936, aggregated 355,927,206
bushels. By July 31, 1936, the board's total holdings of wheat and wheat contracts had been reduced by sales to 86,729,413 bushels. Even after giving effect, as of March 31 last, to the payment of $15,856,000 which we made to the board, the liability of the board on that date for guaranteed bank advances was still substantial. To-day the board has outstanding no loans from the chartered banks or the dominion government or from any other source.
There is still outstanding the dominion's guarantee to the Winnipeg Grain and Produce Clearing Association Limited given to assure the due payment of day to day margin moneys which may be payable by the wheat board to the association arising out of transactions and trades in grain made by the board as a member of the association. These margin deposits are made daily and no liability accrues from day to day. The government's guarantee of bank advances for the purchase of oats by Canadian Cooperative Wheat Producers Limited for account of the province of Saskatchewan is also still outstanding. As at February 1, 1937, the amount of bank loans outstanding subject to this guarantee was $384,760.
I now place on Hansard a table giving the principal amount of the bonds and debenture stocks and other indebtedness guaranteed by the dominion which it is estimated will be outstanding as at March 31, 1937:

[Stage Direction]
Date of Maturity	Issue	Interest Rate	Amount Outstanding
		%	S cts.
May 1, 1938	2	13,400,000 00Feb 15, 1943	2	55,000,000 00Feb 1, 1944	21	15,500,000 00May 1, 1944..	3	35,000,000 00July 1 1946..	64	24,238,000 00April 1, 1948	New Westminster Harbour Commissioners	4j	700,000 003	20,500,000 00Sept 1, 1951	4J	50,000,000 00Feb 1, 1952	3	20,000,000 00Aug 1, 1952..	5	667,953 04Feb 15, 1953..	3	25,000,000 00July 10, 1953..	3	9,359,996 72Feb. 1, 1954	Canadian National	5	50,000,000 00
﻿1237

The Budget-Mr. Dunning

[Stage Direction]
AS AT MARCH 31, 1937-Concluded
Date of Maturity	Issue	Interest Rate	Amount Outstanding
		%	«
Mar. 1, 1955		Canadian National (West Indies) Steamships		
Limited	5	9,400,000 00,Til tip 15 1955	4|	50,000.000 00FpH 1' 195fi	n	70,000,000 00n	65,000,000 003?	7,896,546 2131	3,149,998 66Mnv 1Q* 1Qfi1	31	34,229,996 87Tnn 1	3	34,992,000 00Ton 1 ' 1 Qfi9.	4	8,440,848 005	60,000,000 00Oof 1 1QfiQ	5	60,000,000 00*NTrty 1 ' 1 QfiQ	5	19,000,000 001 ' 1Q70	5	18,000,000 002	24,205,685 53Various dates, 1937-54...	City of Saint John Debentures assumed by Saint	John Harbour Commission	Various	1,197,641 72Serial Feb. 1 and Aug. 1,	1937-38	5	2,250,000 004	60,833,333 335	20,782,491 67«	5	13,252,322 67u	4	119,839,014 33" 	Northern Railway of Canada Debenture Stock.	4	1,499,979 671,003,335,808 42
Other Indebtedness Guaranteed
Bank advances, re province of Manitoba Savings Office	
Bank advances, re government of Newfoundland	
Bank advances, re Dominion Steel and Coal Corporation (order
for rails)	
Province of British Columbia treasury bill	
Province of Manitoba treasury bill.. .		
Bank advances, re Canadian Cooperative Wheat Producers
Limited (Saskatchewan oats account)	
Reserve of chartered banks on deposit in Bank of Canada.. .. Guarantee of home improvement loans (15 per cent of aggregate loans made)	
Estimated principal amount outstanding March 31, 1937
[Stage Direction]
144,282 (Feb. 20, 1937, 626.534 5,894,127
386,988 (Feb. 13, 1937) 192,946,716 (Feb. 17, 1937)
225,150 (Jan. 31, 1937)
I now come to the budget forecast for 1937-38:

[Stage Direction]
I have already stated that the over-all deficit for the current fiscal year is estimated at $87,395,000. While it is the smallest deficit since 1930-31, nevertheless its magnitude is such as to indicate the necessity of unceasing effort to restore a balance between total income and total outgo at the earliest possible moment. In the budget of last year I discussed in some detail the dangers involved in the continuing series of large annual deficits and defined the government's policy as one which sought " an immediate, appreciable approach to a balanced budget as the first step in a definite, positive program which will assure the attaining of our final objective
within a limited period." I then indicated the measures by which it was proposed to reduce the previous year's deficit by approximately $60,000,000 to a figure not in excess of $100,000,000 for the current year. At that time, while I did not expressly state my expectations in view of prevailing uncertainties, I hoped that it would be possible to reduce the deficit to $50,000,000 for 1937-38 and to wipe it out altogether the following year. It now seems probable that this objective will be within our powers of accomplishment.
The house will recall that the main estimates, which are intended to provide for the ordinary operations of government, call for appropriations of $410,467,000, and I expect the various departments, under the
The Budget-Mr. Dunning
[Stage Direction]
consistent pressure which is being exerted to effect economies and hold down expenditures, to keep their actual expenditures below the aggregrate appropriations by as much as five to ten million dollars. The special supplementary estimates which will be tabled shortly and are intended to make provision for those special or emergency needs arising out of the abnormal conditions now prevailing, indicate a maximum total expenditure of about $96,000,000. Later, the usual provision will be necessary by way of ordinary supplementary estimates for a moderate amount of further expenditures. In this connection, I wish to announce that the government has decided to recommend to the house the restoration of the 5 per cent deduction from civil servants' salaries, effective from the beginning of the new fiscal year, and the necessary provision will have to be made in the supplementary estimates. Making allowances for these additional expenditures, we may estimate the total expenditure for 1937-38 at about $520,000,000.
The house will realize that at this early date it is very difficult to estimate the revenues for next year with the same assurance as in previous budgets. However, judging by the way revenues have been running during the last few months, and based on the outlook for the next twelve months, I estimate that for the fiscal year 1937-38 our present tax structure will produce an aggregate revenue of $485,000,000 derived from the usual sources as follows:-
Taxation Revenue-
Customs duties	$ 90,000,000
Excise duties	 47,500,000
Income tax	 113,000,000
Sales tax	 131,000,000
Manufacturers', stamps, importations and other	special	taxes.	42,000,000Banks and insurance	companies..	2,000,000Total taxation revenue	$425,500,000
Non-tax Revenue-
Post office receipts	 36,000,000
Interest on investments	 11,600,000
Other	 11,900,000
Total non-tax revenue	$ 59,500,000
Grand total revenue.. .. $485,000,000
This estimate takes no account of any special receipts and credits and represents a lower rate of increase than took place during the present year even after making allowance for that portion of this year's increase in receipts which was due to increased tax rates.
If this estimate of total revenue is realized and if aggregate expenditures are kept within the estimated figure of $520,000,000, the over-

all deficit for the coming year should not exceed $35,000,000. Stating my expectations in another way, I shall be greatly disappointed if we cannot keep our total deficit for 1937-38 within the limit represented by the net cash deficit of the Canadian National railway sj-stem. If we can attain this objective in 1937-38, I am confident that it should not be beyond our powers to wipe out the deficit altogether during the following year and begin the period when progress can be made in liquidating the accumulated deficits which have been funded during the depression. That is the goal which we must steadily keep in sight.
Last year the size of the gap between total income and total outgo made it essential to impose a substantial increase in taxation levies. The public accepted the imposition of these new burdens, not gladly it is true, but nevertheless with a sure sense that it was the right thing to do, that a serious problem existed and that it had to be faced squarely, though sacrifices might be involved. Fortunately the increase in the total income of the people has reduced the weight of the burden. In view of the progress that has already been made and the outlook for the immediate future, I am indeed happy to inform the house that it is not my intention to recommend any increases in taxation for the coming year.
Taxation Changes
The income tax will continue on the present basis. Furthermore, no alterations are to be made in rates of taxes either under the Special War Revenue Act or under the Excise Act. The only changes proposed are a few minor additions to the schedule of exemptions under the sales tax. Articles specially designed for use of the blind are to be given exemption. Art work and printing plates made therefrom for non-advertising purposes in periodical publications will also be exempted. Other items to be added to the list of exemptions are raw and salted hides, certain refractory materials, spinal braces and parts thereof, ingredients used in canning fish, and parts for grain and seed cleaning machines.

[Stage Direction]
I turn now, Mr. Speaker, to matters relating to trade and tariffs. The expansion of our foreign trade is undoubtedly the outstanding feature of the recovery movement in Canada during the past year. The acceleration of foreign demand for our products has probably been the most important single cause of the increase in our productive activity. It has provided expanding and profitable markets

The Budget-Mr. Dunning
for our great primary industries and as a result of this impulse new vigour has been infused into all our industries.
Foreign Trade
In the calendar year 1936 Canada's export trade passed the billion dollar mark, the higest level since 1929. Indeed, taking account of the lower level of prices, the physical volume of our exports was about equal to the 1929 level. The value of our exports, including commercial gold, reached a total of $1,027,-
901,000,	a gain of $189,559,000, or 23 per cent over 1935. This increase is all the more significant in view of the fact that agricultural and vegetable products which accounted for 47 per cent of our total exports in 1928 were only 34 per cent of the total in 1936. Imports for the year amounted to $635,191,000, which exceeded the 1935 total by $84,876,000, an increase of 15 per cent. Our total foreign merchandise trade for the year amounted to $1,663,093,000. This was an improvement of $274,435,000 over the previous year, or an increase of 20 per cent. The latest available figures for exports show a percentage increase for January of this year, even greater
than that for the whole year 1936. The increase in January, 1937, over January, 1936 was nearly 29 per cent. As a result of our gains in 1936 Canada has moved up from fifth to fourth place among the nations of the world in export trade, while retaining her position of fifth place in total trade.
This expansion of our foreign commerce of course reflects in part the improvement in world trade conditions, more stable currency relations in foreign exchange markets, and a general improvement in the demand for raw materials. But that is by no means the whole story. For while the total international trade of the world, as indicated by figures for 73 countries published by the League of Nations, is estimated to have improved by about 8 per cent in 1936, Canada's total trade showed an increase of 20 per cent. As our own trade gain is so much above the average of other countries I think it is not unreasonable to interpret this as clear evidence of the success of the government's trade policies.
A statement of total merchandise trade for the twelve months ended December 31, 1936, with comparative figures for 1935 follows:
Imports	
Exports:
Canadian produce Foreign produce..
Trade of Canada
(includes commercial gold but not monetary gold)
Calendar Year 1935	1936
	$ 550,314,551 $ 635,190,844
	 825,284,114	1,015,205,435
	 13,058,945	12,696,519
[Stage Direction]
Increase $	84,876,293
189,921,321
-362,426
[Stage Direction]
The figures just given show that Canada established on merchandise trade account a very substantial net credit balance. If to the export figures already given we add, as we should, the gold earmarked during the year and held by the Bank of Canada for clients abroad, that is, gold of our own production which would otherwise have gone abroad and is, in fact, owned abroad and paid for so far as we are concerned, then the excess of our exports over our imports would have amounted to the very impressive total of $452,000,000. The credit balance on commodity trade alone, excluding gold, was 326-9 million dollars, and was the largest recorded since 1925. Preliminary estimates of tourist trade show an increasing stream of visitors to our country, and an expenditure here last year of about $250,000,000, an increase of more than 24 per cent over 1935. After deducting estimated Canadian tourist expenditures abroad there still remains a net credit
balance on tourist account of $165,000,000. Adding this to our merchandise credit just referred to gives a total credit balance of no less than $617,000,000 on account of merchandise and tourist trade combined.
This credit balance, Mr. Speaker, gave Canada an ample supply of foreign exchange funds with which to meet interest and dividend payments to foreign creditors as well as other invisible debit items in our balance of payments, and at the same time enabled us to effect a very substantial reduction in our net capital indebtedness abroad.
In examining the distribution of our trade among countries during the past year we find that the United Kingdom purchased from us just over $400,000,000 worth of goods, which was about 39 per cent of our total exports, a percentage slightly above that of the previous year. The British Empire, as a whole, took about $486,000,000 of our total sales abroad as compared with $382,000,000 in the previous year. While the greater part of this additional
The Budget-Mr. Dunning
[Stage Direction]
volume sold within, the empire went to the United Kingdom, nevertheless South Africa, Australia and New Zealand also purchased substantially more from us than in 1935.
Imports from the United Kingdom were slightly higher in volume, reaching a total of $123,000,000 as compared with $117,000,000
for the previous year. From the empire as a whole our purchases were up over $15,000,000 in 1936 as compared with 1935.
I desire now to place on Hansard figures showing trade with the United Kingdom and with the empire as a whole, for the calendar year 1936, with comparative figures for 1935:
Trade of Canada with Empire Countries (includes commercial gold but not monetary gold)
Imports from the United Kingdom Exports to the United Kingdom.. Imports from the British Empire. Exports to the British Empire.. .
Calendar Year
[Stage Direction]
I am sure it will be a matter of special interest to the house to observe the growth in our trade with the United States, as we now have a full year's experience under the operation of the agreement which established new schedules of rates on January 1, 1936. During the year our total trade with the United States, including commercial gold, amounted to $787,000,000 as compared with $683,000,000 for 1935, an increase of $104,000,000, or 15 per cent. If we exclude commercial gold entirely from the figures for the two years under comparison we find that the trade increase in 1936 was just over 22 per cent. Calculated on this same basis, exports to the United States were greater by 28 per cent, while imports from the United States were higher by 18 per cent. It will be noted that these percentage increases are appreciably above the corresponding increases in our trade with all countries. The increase in trade with our nearest neighbour is ample evidence of the benefits which follow a policy of seeking wider markets through trade agreements.	I shall now review, in summary
fashion, the steps which have been taken by the government in this direction during the past year.

[Stage Direction]
As a result of negotiations, Russia rescinded an order of April 20, 1931, which had prohibited all importing organizations and trade representatives of the Soviet Union from purchasing any goods of Canadian origin, as well as from chartering Canadian vessels. Canada, on her part, rescinded the Order-in-Council of February 27, 1931, prohibiting the importation from the Soviet Union of coal, wood-pulp, pulpwood, lumber, asbestos and dressed furs.
A provisional trade agreement was concluded with Germany on October 22, 1936, whereby each country conceded to the other
a guarantee of most-favoured-nation treatment

in tariff matters. Associated with this was a "payments agreement," which provides that exchange accruing from German exports to Canada shall be made available for the purchase of Canadian goods. Definite percentages of this exchange are allotted for the purchase of commodities of such interest to Canada as wheat, apples, cheese, honey, fish, fox skins, asbestos and lumber.
The Canadian-Polish convention of commerce was brought into operation, providing for exchange of most favoured nation treatment between Canada and Poland, and for special concessions on both sides with respect to a limited list of articles.
A former arrangement with Brazil, whereby Canada conceded her intermediate tariff to Brazil in return for most favoured nation treatment, was terminated by Brazil on July 30, 1936, in pursuance of her policy of cancelling all old trade agreements. Following negotiations, Canada retained the benefit of the Brazilian minimum tariff (which is about one-quarter less than the maximum) on all goods, in return for granting to Brazil the Canadian intermediate tariff.
With another South American country, Uruguay, Canada signed an agreement on August 12, 1936, which provides for exchange of most-favoured-nation treatment as regards customs duties and related questions, including quotas and allocation of exchange for commercial transactions. Uruguay is to accord Canada her normal tariff, thus ensuring Canadian goods against a tariff one-half higher, which, under Uruguayan tariff regulations, may be applied to countries not offering reciprocity.
The trade agreement of 1932 between Canada and New Zealand, which was drawn for only one year, has been kept in operation by several renewals; on July 22, 1936, the agreement was extended until September 30, 1937, without further amendment.

The Budget-Mr. Dunning
Canada-United Kingdom Trade Agreement
These general observations regarding the expansion of our import and export trade constitute a fitting introduction to the presentation to parliament of the new trade agreement which has just been concluded with the United Kingdom. The speech from the throne intimated that agreement in principle had been reached between the two governments. As you now know, sir, the new trade agreement was signed on Tuesday of this week, and at the conclusion of these remarks I shall lay it upon the table of the house.	At this point I should state that
by arrangement with the government of the United Kingdom, which is as anxious as we are to put the tariff changes arising from the agreement into force at the earliest possible moment, it has been agreed that the provisions of article 9 and schedule "E" of the 1932 agreement shall cease to have effect from 12 o'clock to-night, when the provisions of articles 6, 7, and 8 and schedules IV and V of the new agreement will be in effect.
The extent and importance of Canada's trade with the United Kingdom would enable me to give a much more imposing statistical presentation than I used earlier in these remarks. But in this matter widely known and well understood facts make mere figures seem superfluous. We all realize that Canada's most prized market has been and continues to be the United Kingdom. Every Canadian minister of finance, in almost every budget speech, has had occasion to refer to that fact. In going last summer to London to initiate the negotiations which have resulted in the agreement to be tabled this afternoon, Canadian ministers realized that they were setting out upon a mission the objective of which was not to capture but to hold the most valuable market this dominion has ever known. As to how or when or by whom that great market was gained for Canada is not a matter about which we need dispute. Former Liberal administrations were pioneers in seeking it out and securing it, for they first conceived and put into operation the principle of giving to British goods a preferred position in our economy. But the good work initiated in 1897 has been carried on by all succeeding governments in Canada, however greatly the views of the major parties might differ as to the best means of attaining the objective. While those of us who sit now to your right, Mr. Speaker, may not adopt the same methods as our predecessors, believing our own to be better, we readily admit that they and we have been and are actuated by a keen desire for the best good
of our country. Our objective, may I lepeat, at London last summer was to retain for Canada a magnificent market; and I am certain that the opinion of this house and the country will be that the ground which has been won over many years has been held and consolidated at a minimum of cost.
Time will permit me to review only briefly the general principles underlying the agreement and to summarize its main provisions. Needless to say, all the articles in the agreement as well as the items comprising the schedules thereto, will be open to the fullest discussion when the House is in committee.
Careful examination of the provisions of the new agreement, which can only be made in committee, will I think, convince the house that a successful effort has been made to bring the policy of British preference, which successive Canadian governments have maintained for forty years, into closer alignment with the trade policy to which this government stands committed. The present agreement is in no sense a simple renewal of the trade agreement between Canada and the United Kingdom signed at Ottawa in 1932. The detailed differences between it and the one which it will supersede will be developed in committee. From the beginning, however, it should be clearly understood that throughout the negotiations which resulted in the present agreement, the Canadian government has insisted on broadening the opportunities of international trade, without impairing the practical effectiveness of the British preferential system, and has endeavoured to apply within that system the principles of commercial policy which it hopes to see realized in the economic relations of Canada with the rest of the world. The measure in which these objectives, which were in large part shared by the government of the United Kingdom, have been attained, can only be appreciated by a close examination of the text of the new agreement and its comparison with the corresponding provisions of the Ottawa agreement of 1932.
The goal of both the United Kingdom and the Canadian government in intra-imperial, as in international trade, is the lowering of tariff barriers and the freeing of trade from fettering restrictions; and the preamble to the agreement is evidence of a new emphasis on the importance of increasing the volume of international and intra-imperial trade, and a departure from some of the earlier forms of preferential policy, which were too much concerned with diverting a diminishing volume of trade into unfamiliar and uneconomic channels.
The Budget-Mr. Dunning
[Stage Direction]
An examination of the changes in the structure of the Canadian tariff resulting from the application of the provisions of the new agreement will show that the emphasis on trade expansion in its preamble is not misplaced. Although actual margins of preference on 179 items enumerated in schedule IV will be increased, in each case this increase is a consequence of a reduction in the duty against the United Kingdom. No preferences have been enlarged or created by increasing rates of duty against third countries, and the concessions made to the United Kingdom have been by way of lowered duties. It should not be necessary to stress the fundamental difference between this approach to the problem of preferential treatment and that which resulted in the 1932 agreement, in which a large proportion of the preferences guaranteed to the United Kingdom were created by raising the intermediate and general tariffs, and coupled, in a number of cases, with higher duties against the United Kingdom itself than had formerly been in force.
It will be found, in comparing the tariff items in schedule IV on which the preferential rate is reduced, with those in schedule I of the Canada-United States trade agreement, in which special reductions below the intermediate tariff were accorded the United States, that there are very few items which occur in both schedules. The explanation of the fact that enumerated tariff concessions to the United Kingdom and to the United States are largely made on different commodities lies in the complementary rather than competitive character of the bulk of Canadian imports from our two chief customers and sources of supply.
The reduction in the number of tariff items on which margins of preference are bound against decrease, from 215 in the 1932 agreement to 91 in schedule V of the present agreement, is further evidence of the effort that has been made to reconcile the principle of preferences with the necessity of removing barriers that stood in the way of international trade. The new agreement achieves a radical and far-reaching revision of the restrictions which its predecessor put upon the freedom of Canada to negotiate for the reciprocal reduction of tariff rates with third countries. Many items on which the differential margin between the British preferential and intermediate tariffs had operated either to limit Canadian trade treaty negotiations with foreign countries, to maintain prices of imported or domestic goods at unduly high levels, or in which five years' experience had shown that United Kingdom industries had not made, or were not likely to make, full use of the preferences

afforded them, have been dropped from the schedule, and, in twenty-one cases, the margins of preference on items remaining have been reduced.
In addition to the limited number of fixed margins of preference provided for in schedule V of article 8, there is provision in article 7 for a sliding margin of preference on United Kingdom goods, which are enumerated in schedule IV, dutiable under that schedule and " not of a class or kind made in Canada." I might point out that the obligation to maintain preferential margins on goods in this special category is terminable at any time by the reduction of the British preferential rate to free entry.
Further, either government is free at any time to modify or suspend any of the margins of preference set out in schedules III or V, if it is satisfied that a combine or monopoly of exporters is exploiting its domestic consumers by virtue of the preferential margins there provided for.
The gradual change and diversification of trade between Canada and the United Kingdom has given a very real point to the grievance frequently voiced by British industrialists who have been heard to complain that while competitive Canadian goods could enter the British market free of ordinary duty and free of dumping duty, and in some cases be sold there at prices below the fair market value for home consumption of the same goods in Canada, if the British manufacturer tried to meet dumping by dumping, his efforts were effectively blocked by ordinary duty plus special duty, which kept the Canadian market a closed and profitable preserve for our protected manufacturers. Such situations I know were not very frequent, but that they could occur is sufficient justification for the inclusion in the agreement of a special provision- article 12-under which the Canadian government agree that, in circumstances such as I have described, they will exempt particular classes of United Kingdom goods from dumping duty. This article is self-explanatory; it will, I think, be recognized as neither more nor less than an assurance of fair play both for the British manufacturer and the Canadian consumer. I hope that this evidence- afforded by the presence of this article in the agreement-of the government's determination to give no shelter or protection to unfair practice in export or internal trade, will in itself lead offenders to abandon the practice complained of, and make it unnecessary to apply the procedure provided in the agreement.
From this review of the aspects of the new agreement affecting the fn-;ff treatment of British goods imported into Canada, it will,

The Budget-Mr. Dunning
I think, be recognized that the Canadian government has succeeded in translating into policy those principles by which, in opposition, its leaders measured and criticized the C'awa agreement, of 1932. It will be remembered that the principal counts on which that agreement was then judged and found wanting were, first, that preference had been increased by raising rates against third countries instead of lowering them in favour of Britain; second, that an inordinate number of tariff rates were bound against decreases; and, third, that the term of the agreement-it was fixed for five years as against three for the new agreement-was unduly long and restricted the independence of action of succeeding parliaments and governments. Under each of these heads, the new agreement meets the conditions which the present Prime Minister laid down when leader of the opposition, and, taken as a whole, I think it can be regarded as the complement within the commonwealth to the United States trade agreement in the international field.
Turning now to those provisions of the new agreement bearing on the tariff treatment of Canadian goods imported into the United Kingdom, I need not emphasize the vital importance to Canada of confirming, for a further period of years, the assurance of unrestricted free entry into the United Kingdom market, which perhaps more than any other single factor has assisted Canadian economic recovery. In these years of constricted international trade, when high tariffs, exchange regulations and quantitative restrictions of every type have limited Canadian export opportunities, free entry into the United Kingdom market has saved the Canadian economy from strains that it probably could not have withstood. The importance of external markets to a country geared into a world economy needs no expounding- and of external markets no other has continued all through Canadian history to offer to the Canadian lumberman, farmer and fisherman the freedom of access which he enjoys in the United Kingdom.
The assurance in article I of the new agreement of the continuance of free entry for Canadian products is undoubtedly the great advantage which we receive from it. In maintaining free entry into the United Kingdom for Canadian goods, including manufactured products, we have kept open for a further term of years a door that once seemed to be rapidly closing. It is a matter of common knowledge that British industrial interests, with appetites edged by their recent taste of tariffs, are anxious to round out their present protective system by the imposition of duties on manufactured goods imported from Canada-nor
are British agriculturists by any means reconciled to the continuance of free entry for empire produce. The fact that, in spite of the influence of these powerful economic groups, the government of the United Kingdom were prepared to renew the assurance of free entry for Canadian produce is evidence of their appreciation of the magnitude and value of the reductions in duty on United Kingdom goods contained in schedule IV to the new agreement.
The trade figures that I am tabling in a separate document indicate much more clearly and vividly than any summary I could compress into this speech, the range of Canadian commodities, produce of factory, fisheries, forest, farms and mines, that are now being exported to the United Kingdom. It is this vast physical movement of goods that is in the last analysis the test of the value to Canada of the free entry into and preferential treatment in the world's greatest import market which the terms of this agreement assure us. We are all aware of the importance of the British market for lumber and salmon and apples and wheat-we are less likely to realize that it is also a market for iron and steel products-for motor cars and machinery, manufactured goods of many kinds. The exchange of goods between Canada and the United Kingdom is no longer merely an exchange of raw materials for finished goods.
I do not propose to enlarge on the items on which the United Kingdom has agreed to reduce or stabilize its tariffs. The reduction of duty and consequent increased margin of preference on natural silk stockings will be of value to an export industry that has, in recent years, been supplying an increasing share of the United Kingdom's import requirements, while the assurance that neither the duty on motor cars and their parts, nor their content qualification for preferential treatment, will be increased without the consent of the government of Canada will remove two sources of uncertainty which have caused a major export industry a great deal of anxiety. In passing, it might be noted that schedule II contains the first reduction of rates by the United Kingdom in a trade agreement with a commonwealth country; in most of the trade agreements concluded by the United Kingdom in recent years that country has refused to make any reductions in tariff, and confined its concessions to undertakings not to increase existing rates of duty.
As regards those commodities on which Canada is guaranteed the benefits of definite margins of preference, I might point out that there are no articles in schedule III on which
The Budget-Mr. Dunning
[Stage Direction]
margins of preference were not bound in one or other of the agreements concluded by the United Kingdom with the dominions in 1932. There were a number of commodities on which the same margins were guaranteed to two or more dominions, and there were other commodities on which a margin was guaranteed to one dominion but of which some other dominion was actually the United Kingdom's largest supplier; for instance, the margin on honey was bound in the New Zealand agreement but Canada sent more honey to the United Kingdom than did New Zealand, while the margin on chilled and frozen salmon was bound in the Newfoundland agreement, although Canada was as large an exporter of this product as Newfoundland. In negotiating the present agreement, we not only consolidated the preferences shown in schedules B and C of the Canada-United Kingdom agreement, but added a number of preferences, which the United Kingdom was already bound to maintain and which are important to Canada.
Not only are no new commodities bound, but in no case have existing margins of preference been increased. It is as true to say for the United Kingdom as for Canada that no concessions incorporated in the new agreement have impaired the tariff treatment of third countries. In this connection, a point that is often overlooked by critics of the system of preferences might be emphasized. The preferences enjoyed by Canada in the United Kingdom market are really extremely moderate and are much lower in most cases than the measure of domestic protection enjoyed in home markets of foreign countries by competing producers of those commodities. The ad valorem preferences are as a rule ten per cent, and in no case exceed fifteen per cent; the preferences expressed as specific duties on foreign goods are approximately equivalent, at present prices, to this 'ange of ad valorem rates.
Article 5 falls into two parts-the first part, relating to bacon and hams, corresponds to article IV of the 1932 agreement, which assured free entry of bacon and ham up to a maximum of 2,500,000 hundredweight or 280,-
000.000 pounds per annum. The new agreement continues the assurance of free entry and confirms the maximum of two and a half million hundredweight (almost double the largest actual shipments made by Canada in any year to date). It assures Canadian farmers an uninterrupted opportunity of expanding their export trade toward that maximum and precludes the United Kingdom from

bringing imports from Canada within its general system of supply regulation, unless their rate of expansion becomes "abnormal and such as to endanger the effective working of the system of supply regulation"-and then only after consultation with the Canadian government, which, for its part, agrees to continue to furnish as close estimates as possible of the forward movements of bacon and bam to the United Kingdom market. The importance of the assurance of favourable entry into the profitable and protected British market for bacon-which is, incidentally, the only import market for bacon of any consequence in the world to-day-is clearly shown in the supplementary statistical material which I propose to have printed for the convenience of members of the house. At this time it is enough to say that in the last calendar year, out of total exports-that is Canadian exports-of bacon and ham of 158 million pounds, 98 per cent of the total, or more than 154 million pounds, valued in excess of $25,000,000, were shipped to the United Kingdom. The safeguarding of this market, and the maintenance of our opportunity to expand our sales in it, are in themselves major advantages of the new agreement.
The special provisions of the agreement relating to bacon and cattle represent an adjustment of differing types of economic organization. The general assurance of exemption from import duty had to be reinforced-for these commodities-by guarantees that the system of supply regulation which the government of the United Kingdom has adopted for the protection of its domestic agriculture would not frustrate the purpose of the preference which they were ready to accord to Canadian produce. It was, therefore, necessary in each case to work out in collaboration with the United Kingdom a method of securing for Canadian farmers the opportunity to develop their exports to the United Kingdom, without attempting to dictate to the United Kingdom government the form that its domestic policy should take. This method we think we have finally found in article 5 of the new agreement, which safeguards Canadian interests and at the same time enables the United Kingdom to proceed with a policy of marketing organization which they hope will result in stable and remunerative prices for bacon and beef, from which of course every Canadian producer of hogs and cattle will benefit.
The detailed arrangements affecting cattle and beef are complicated and I shall reserve their fuller discussion for committee. At this stage I shall only point out that our producers

The Budget-Mr. Dunning
are guaranteed absolute freedom from import duty, the value of which is enhanced by the preferential margin created by the imposition as from December 1, 1936, of a duty of a cent and a half a pound on foreign chilled beef, and a proportionate duty on foreign frozen beef. Within the framework of the general scheme for regulating the import of cattle and beef into the United Kingdom, Canadian exports of fat cattle and beef would be free from all quantitative control so long as the annual quantities shipped do not exceed what the agreement describes as "recent levels," that is, 1933 and 1934, when the number of fat cattle exported to the United Kingdom averaged 50,000 head as against 6,000 odd in 1935 and 33,000 in 1936. In passing I might point out that the irregular volume in which Canadian cattle move to the United Kingdom market, which in 1934 took 85 per cent of our exports as against only 7 per cent in the next year, illustrates the basic difficulty of adjusting our interest in reserving the right of access to what is now a secondary market for our cattlemen, with the United Kingdom's not unnatural interest in securing a stable and uninterrupted supply of meat from countries whose interest it would be to cooperate in its endeavours to stabilize supplies and prices at a remunerative level. In the light of this situation it should, I think, be agreed that the United Kingdom has gone a long way to recognize the special character of the Canadian cattle export trade and to make special allowances for its maintenance under the international meat scheme which it proposes to set up.
The fact that there is no counterpart in the present agreement to articles 5 and 18 of the 1932 agreement does not mean that the United Kingdom proposes to revert to the conditions which governed the importation of live cattle from Canada prior to 1932, or that Canada has any intention whatever of altering, to the disadvantage of the United Kingdom, the regulations for the importation of pedigreed stock from that country.
General considerations of the same order account for the disappearance of articles 10 to 17. Surely this country has sufficient interest in maintaining an efficient and law-abiding customs administration to make one-sided provisions, such as article 16 of the old agreement, entirely unnecessary. Questions of departmental procedure and organization, which are properly each country's domestic responsibility, have been returned to its jurisdiction. Formal changes of this character are of course subordinate to the main purposes of the agreement and will not involve any interruption of arrangements that have been working to the general satisfaction of both countries.
Concessions in the tariff treatment of United Kingdom goods which are to be made by Canada are chiefly those embodied in schedules IV and V to the agreement. Schedule IV enumerates the proposed reductions in duties, while schedule V sets forth such fixed margins of preference as the Canadian government undertakes to maintain in favour of certain specified commodities originating in the United Kingdom. For purposes of brevity and clarity, it is advisable to refer separately to these two schedules.
Schedule IV enumerates 425 tariff classifications of goods on which this country gives an undertaking not to increase duties of customs against Great Britain in excess of those therein set forth. Of the 425 items, 246 appear for the purpose of binding as a maximum the duty at present effective, and 179 for the purpose of reducing the existing rate on United Kingdom products. As an indication of the scope of the reductions in duty, it may be stated that, in the fiscal year ended March 31, 1936, imports from the United Kingdom of the goods covered by the group of 179 items which are to be reduced were valued at between 27 and 28 million dollars.
Richard Bedford Bennett: Are the 179 items to be bound at the reduced rate?


Charles Avery Dunning: Yes, bound against increase.
Obviously, time at my disposal will not permit detailed reference to the great number of commodities affected by the reductions in rate under schedule IV. Beyond any doubt, however, these represent the most extensive downward revision of duties on United Kingdom products made at any one time since the inception of the British preference. These reductions cover an extremely wide range of semi-processed and fully manufactured goods of the kind which enter into the daily living of our people:-
In foodstuffs and other edible commodities, reduced rates will apply on meat extracts, chocolate and cocoa preparations, unsweetened biscuits, pickled and preserved vegetables, marmalades and preserves, canned herring, and confectionery of all kinds. Reductions are proposed also on cigarettes, as well as on ale and beer.
A wide field of paper products is affected, including greeting cards, camera films, electrical insulating board, wall-papers, wrapping paper of all kinds, and "all manufactures of paper n.o.p.," including envelopes and stationery.
The Budget-Mr. Dunning

Paints, varnishes and lacquers, as well as white lead, oxides and fillers, will bear lower imposts on importation from the United Kingdom, as will also certain clay products, notably firebrick, earthenware churns and crocks, tiles and blocks for flooring, sanitary earthenware of all kinds, and various types of English-made stoneware and earthenware.
The duties on glass tableware, cut glassware, and certain sizes and weights of plate glass are lowered, and rates on all unenumerated manufactured articles of glass are also reduced.
Reductions will apply on numerous primary and secondary products of iron and steel, including hot- or cold-worked bars and rods; rounds and squares of defined sizes; hot-rolled strip and hoop steel; poundage and other alloy steels in flat \orm; corrugated metal sheets and enamelled iheets; saw steel, tempered; fully finished structural steel; forgings of iron or steel; railway axles; cast iron and cast steel pipe; wire cloth and netting, including netting for fox-fencing; coal-cleaning machinery; ore and rock crushers, grinding mills, coal cutters and rotary coal drills; blowers and rotary kilns for metallurgical purposes; office machinery of all kinds; vacuum cleaners and sewing machines; lawn mowers ind ball and roller bearings; nuts, bolts, butts ind hinges; vitreous enamelled ware and other kitchen and dairy hollow-ware; sanitary ware of iron or steel, coated or not; steel wheels for railway rolling stock; trackless trolley buses; aircraft engines; dynamos, transformers, generators and electric motors; electrical precision instruments of various kinds; files and rasps; buckles, clasps, fasteners, needles and pins; and furniture of wood or metal.
In cotton goods, the reductions will affect printed, dyed or coloured fabrics; shadow-cloth, gabardines and certain cut-pile fabrics; cotton handkerchiefs; book-binders' cloth, and certain fine cotton fabrics.
Practically all the major items in the wool schedule figure in the list of proposed reductions. The following wool products are among those which will enter from the United Kingdom at lower duties than heretofore; woollen and worsted yams, whether for manufacturing purposes or for counter-sale; pressed felt and wool filter cloth; blankets of all kinds; woollen and worsted fabrics "in the grey," imported for finishing in Canada; practically all lines and weights of woollen and worsted cloths, including suitings and overcoatings; woollen clothing of all kinds, and many unenumerated articles manufactured from or containing wool.
In silk and artificial silk goods there are many important reductions, including those

on woven fabrics of all kinds, embroideries, laces, braids and cords; and clothing and wearing apparel wholly or in part of artificial silk.
The duties are reduced on knitted garments, knitted underwear and knitted goods of all kinds; as well as on hosiery, gloves and mitts, rugs and carpets, and linoleum.
Leather and leather products show reductions on belting; on gloves and clothing leather; and on all leather further finished than tanned, n.o.p. Similarly, duties are reduced on boots and shoes; on trunks, bags and valises; on fancy cases and boxes, and on clothing made from India rubber or from water-proofed cotton fabrics.
Miscellaneous articles upon which reduced rates are proposed includes braces, jewellery, brushes of all kinds, pens and pencils, tobacco pipes and all smokers' accessories, photographic dry plates, abrasives, medicinal and pharmaceutical preparations, toilet soaps, mucilage and adhesive pastes, surgical dressings and bandages, manufactured goods of celluloid, halibut liver oil, blackings and dressings for leather or metal, articles of sterling or other silverware, clock movements and parts thereof, children's carriages and sleds, picture and photograph frames, and woven dress linens.
An interesting feature is the provision for the free entry, from the United Kingdom, of goods, other than spirits or wines, more than 100 years old.
The undertaking to maintain certain fixed margins of preference applies only to the items enumerated in schedule V, which sets forth in each instance the measure or amount of the margin. This schedule contains 91 items as against 215 in schedule E of the agreement of 1932; moreover, in 21 of the 91 items comprising the schedule the amount of the margin to be maintained is materially lessened. Among the 125 items upon which Canada is no longer (as compared with 1932) bound to maintain fixed margins of preference, are many which will be of great value in trade negotiations likely to be entered into with other countries. There is this further important difference between Canada's commitments as to fixed margins in 1932 and the commitments being entered into to-day: that, except as regards certain primary iron and steel commodities, by far the greater part of the scheduled items enumerate commodities not produced or manufactured commercially at all in Canada, and, hence, entail no element of protection for domestic interests. The value of imports from the United Kingdom,

The Budget-Mr. Dunning
in the fiscal year 1936, under the 91 items on which fixed margins have been granted, was approximately 37 million dollars.
In the tariff resolutions which I shall table on concluding, it is provided that the various rates set upon United Kingdom products, under this agreement, shall become British preferential rates in the customs tariff. This is in accordance with the practice followed for many years by Canada of generalizing within the empire to the greatest possible extent concessions in tariff treatment granted to any one empire country. This principle is so desirable that, in this instance, the government is disposed to apply it without exception, in spite of the fact that there are involved one or two items in respect of which the chief beneficiary may be an empire country which affords no preference to Canada; in such instances, it lies within the power of the governor-general in council to withdraw from any such non-reciprocating empire country the preferential treatment now voluntarily extended to it.
We regard the agreement as a friendly arrangement for closer economic cooperation, from which both countries will benefit and by which no other country will suffer. A liberal and moderate preferential policy such as this agreement embodies will supplement and strengthen the growing movement for freer trade within the world as a whole.
Other tariff proposals, not directly associated with the United Kingdom agreement, while not great in number, are of importance to Canadian producing and consuming interests, and of considerable significance to countries whose trade with Canada has been a factor in the recovery to which I have previously referred. Revisions m duties which extend to intermediate tariff countries include reductions in the rates on cotton clothing of all kinds, as well as on a wide range of articles manufactured from cotton; on various gums and resins used in industrial processes; on well-casing of steel for oil and gas wells; on printing plates and paper used in the production of periodicals; on parts for aircraft engines; on a wide range of plastics and plastic materials; on plate glass, decorative marble, slipper cloth, parts of surgical instruments, and certain copper alloys. Provision is made for the entry free of duties from all countries of small "personal gifts," as well as for the free entry of stringed musical instruments certified to be more than 100 years old. Various liquorice fibres and products will enter at lower rates than heretofore, as will various fumigants and disinfectants, egg-cleaning machines, electric razors, forged steel rolls,
silk yarns covered with metallic strip, certain motion-picture equipment, corset rivets, and cotton laces used in the garment industry.


TARIFF BOARD REPORTS
[Stage Direction]
Reports which have been received from the tariff board and which find reflection in the tariff resolutions moved to-day include those on cherries in solution, motion-picture equipment, steel wool, hard rubber in sheets, and plastics, the last named providing for a completely new schedule to cover these products, now so widely used in industry. The board has reported also as regards chiffons and silica sand; and all reports received I shall table this day. The 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.
Conclusion	.
May I conclude, Mr. Speaker, on a note of cheer and of challenge: cheer, because the immediate outlook points to a continuation of the encouraging trends in economic activity which I have already reported; challenge, because the problems of depression we have still to solve and the new problems which will emerge with buoyant prosperity demand the best that we are capable of in wisdom, in forethought and in cooperative endeavour. We may rejoice that we have been among the leaders in the degree of our recovery from the depths of depression. But we have special problems inherited from the war or arising out of our economic and political structure with which we as a people and as a parliament will be confronted for some time to come. These problems are by no means insuperable; they merely forbid complacency, sectional dissension or relaxation of effort.
They can and will be solved as prosperity incresses, if only we take care to see that such prosperity is soundly based and evenly distributed, and if we all put our shoulders to the wheel in a common national effort. I mention them here not to diminish the joy which we naturally feel in the record of expanding trade, increasing business activity, rising payrolls and improving revenues which I have been able to report, but rather as a challenge to continued endeavour, to individual, corporate and national integrity, to a keener sense of trusteeship in carrying out our everyday business and civic responsibilities. If this challenge be accepted by the Canadian people, I am confident, sir, that better days lie ahead-better indeed than we have yet known.
[Stage Direction]
The Budget-Mr. Dunning

[Stage Direction]
Mr. Speaker, I beg to give notice that when we are in committee of ways and means I shall move the following resolutions:-
SPECIAL WAR REVENUE ACT Resolved, That it is expedient to introduce a measure to amend the Special War Revenue Act, chapter one hundred and seventy-nine of the revised statutes of Canada 1927, and amendments thereto and to provide-
1.	That schedule III to the said act, being the list of articles exempted from the consumption or sales tax be amended as follows:
(a)	by striking out the paragraph reading
as follows:	.
"Fire brick, containing not less than ninety per cent of silica; magnesite fire brick or chrome fire brick; other fire brick when for use exclusively in the construction or repair of a furnace, kiln or other equipment of a manufacturing establishment, and articles and materials to be used exclusively in the manufacture of such fire brick; materials, not to include plant equipment, consumed in the manufacture or production, and which enter directly into the cost of the manufacture of such fire brick;"
and substituting therefor the following:
"Fire brick, plastic refractories, high temperature cement, fire clay and other refractory materials for use exclusively in the construction or repair of a furnace, kiln or other equipment of a manufacturing establishment, and materials to be used or consumed exclusively in the manufacture or production of such fire brick or refractory materials."
(b)	by striking out the item reading as follows:
"grain or seed cleaning machines;" and substituting therefor the following:
"grain or seed cleaning machines and complete parts therefor;"
(c)	by adding to the said schedule the following:
"Raw and salted hides;
Photographs, paintings, pastels, drawings and other art work and illustrations of all kinds, whether originals, copies or proofs, and printing plates made to reproduce the same for use exclusively as non-advertising news pictures or for illustrating non-advertising articles or stories in periodical publications enjoying second-class mailing privileges, the pages of which are regularly bound, wire stitched or otherwise fastened together;
Materials used as ingredients in canned fish:
Goods enumerated in customs tariff items 236B and 698."
2.	That any enactment founded on paragraph one of this resolution shall be deemed to have come into force on the twenty-sixth day of February, one thousand nine hundred and thirty-seven, and to have applied to all goods imported or taken out of warehouse for consumption on and after that day and to have applied to goods previously imported for which no entry for consumption was made before that date.
3.	That subsection four of section eightynsix of the said act be amended by deleting the word "six" and substituting therefor the word " eight."
4.	That any enactment founded on paragraph three of this resolution shall be deemed to have come into force on the second day of May, one thousand nine hundred and thirty-six.

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Act 1934 to give statutory authority to the validation fee of twenty cents per proof gallon upon spirits exported, which was imposed by regulation approved by order in council dated the second day of December, 1933; and that any enactment founded on this resolution shall be deemed to have come into force on the second day of December, one thousand nine hundred and thirty-three.

[Stage Direction]
1.	Resolved, That the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended by chapter thirty-nine of the acts of 1929, chapter thirteen of the acts of 1930 (first session), chapter three of the acts of 1930 (second session), chapter thirty of the acts of 1931, chapters six and thirty-seven of the acts of 1932-33, chapters thirty-two and forty-nine of the acts of 1934. chapter twenty-eight of the acts of 1935, and chapter thirty-one of the acts of 1936, be further amended by striking thereout subsection 2A of section 6 thereof and substituting therefor the following:
(2A) The governor in council, whenever it is deemed expedient to do so, may order that import, excise or other duties and taxes, in whole or in part, shall be disregarded in estimating the market value for the purpose of special duty of goods of any kind imported into Canada from any specified country.
2.	Resolved, That schedule A to the Customs Tariff, being chapter forty-four of the Revised Statutes of Canada, 1927, as amended by chapter seventeen of the acts of 1928, chapter thirty-nine of the acts of 1929, chapter thirteen of the acts of 1930 (first session), chapter three of the acts of 1930 (second session), chapter thirty of the acts of 1931, chapter forty-one of the acts of 1932, chapters six and thirty-seven of the acts of 1932-33, chapters thirty-two and forty-nine of the acts of 1934, chapter twenty-eight of the acts of 1935, and chapter thirty-one of the acts of 1936, be further amended by striking thereout tariff items 8, 105a, 105b, 120, 160(a), 190, 191, 200a, 219a, 219c, 219e, 232d, 235, 235a, 237, 238, 241, 242, 246b, 254, 287, 320, 321, 328a, 348a, 409e(ii), 410d, 431b, 445j, 446d, 447b. 449, 451d, 473a, 476, 511, 529a, 530, 532, 534, 556b, 577, 588a, 604, 007a, 612, 616, 618a, 624, 690a, 693, 709, 742, 754, 755, 806, the several enumerations of goods respectively and the several rates of duties of customs, if any, set opposite each of the said items, and by inserting the following items, enumerations and rates of duty m said schedule A:

31111-79£
Tarif Item	British Preferential Tariff	Inter- mediate Tariff8	Canned meats, poultry or game	15 p.c.	105a	Lemon, orange, grapefruit and citron rinds, sulphured or in brine	Free	Free105b	Olives and cherries, sulphured or in brine, not bottled	10 p.c.	17$ p.c.120	Anchovies, sardines, sprats or pilchards, packed in oil or otherwise, in sealed tin containers, the weight of the tin container to be included in the weight for duty:- (a) When weighing over twenty ounces and not over thirty-six ounces each	per box	3$ cts.	5 cts.(b) When weighing over twelve ounces and not over twenty ounces each	per box	2$ cts.	(c) When weighing over eight ounces and not over twelve ounces each	per box	2 cts.	157c	(d) When weighing eight ounces each or less	per box	1J cts.	Isopropyl alcohol	per gallon	Free	50 cts.160	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 p.c.	90 p.c.187b	Sensitized negative film, one and one-eighth inches in width or over, for exposure in motion picture cameras	Free	219a	Non-alcoholic preparations or chemicals, such as are used for disinfecting, dipping, spraying or fumigating, n.o.p.:- (i) When in packages not exceeding three pounds each, gross weight	5 p.c.	25 p.c.(ii) Otherwise	Free	219e	Chloropicrin, ethylene oxide, methyl bromide, methyl formate, or cyanides, mixtures containing any of these, for use in combating destructive insects and pests	Free	232d	Jasein	25 p.c. cts.and, per pound	2 cts.	235	Liquorice fibres, whether or not dried, cleaned, cut to size, ground or sifted	Free	10 p.c.General Tariff	Present Rates	B.P. Tariff	Intermediate Tariff	General Tariff35 p.c.	15 p.c.	30 p.c.	35 p.c.Free	/Free	Free	Free\15 p.c.	25 p.c.	25 p.c.30 p.c.	10 p.c.	171 P-c.	30 p.c.6 eta.	31 cts.	5 cts.	6 cts.4$ cts.	2$ cts.	4 cts.	4$ cts.3$ cts.	2 cts.	3 cts.	3$ cts.21 eta.	1} cts.	2 cts.	$1.00	Free	25 p.c.	25 p.c.90 p.c.	60 p.c.	90 p.c.	90 p c.15 p.c.	15 p.c.	25 p.c.	30 p.c.25 p.c.	5 p.c.	25 p.c.	15 p.c.	Free	15 p.c.	15 p.c.Free	/Free	Free	27$ p.c.	\Free	15 p.c.	3 cts.	17$ p.c.	25 p.c.	271p.c.2 cts.	21 cts.	3 cts.15 p.c. I	Free	171 P-c.	171 P-c.
The Budget-Mr. Dunning
Tariff
Item
235a
235b
230b
238b
238c
238d
238e
Liquorice paste, not sweetened	
Liquorice in rolls or sticks, not sweetened	
Spinal braces and parts thereof	
(a)	Synthetic resin moulaing compositions containing synthetic resin derived from phenol and formaldehyde or their homologues or mixtures thereof, in powder or granular form	
(b)	Synthetic resin moulding compositions, n.o.p.,
in powder or granular form	
(c)	Synthetic resins, n.o.p., in liquid, powder,
granular, or lump form; or in tubes, cylinders, strips, sheets, plates, blocks, bars, rods, angles, channels, tees or other shapes or sections, when for use in Canadian manufactures	
(d)	Laminated products of which any^ synthetic resin or resin-like substance is the chief binding agent, in tubes, cylinders, strips, sheets, plates, blocks, bars, rods, angles, channels, tees or other shapes or sections, n.o.p.:-
(i)	with a base of paper or of fibreboard...
(ii)	with a base of cotton fabric or other woven
fabric	
Cellulose nitrate or pyroxylin plastics, in tubes, cylinders, balls, strips, sheets, plates, blocks, bars, rods, angles, channels, tees or other shapes or sections, not further manufactured than moulded or pressed, when for use in Canadian manufactures.
Moulding compositions of cellulose acetate or other derivatives of cellulose, in powder or granular form.
Cellulose acetate in sheets not less than five one-thousandths of an inch in thickness, and in rods, bars, tubes and other shapes or sections, not further manufactured than moulded or pressed, when for use in Canadian manufactures	
Regenerated cellulose, and cellulose acetate, transparent, in sheets, not printed, and manufactures of regenerated cellulose or of cellulose acetate, n.o.p...
Rritisl t Preferent Tariff
Free
Free
Free
10 p.c. Free
Free
15 p.c. 20 p.c.
Free
Free
Free 20 p.c.
'al
ur.:->.
Inter- mediate Tariff	General Tariff	Present Rates	B. P. Tariff	Intermediate Tariff	General Tariff12} p.c.	17^ p.c.	Free	15 p.c.	17} p.c.15 p.c.	22} p.c.	Free	20 p.c.	21\ p.c.Free	Free	12} p.c.	25 p.c.	35 p.c.20 p.c.	20 p.c.	15 p.c.	25 p.c.	25 p.c.Free	Free	15 p.c.	25 p.c.	25 p.c.Free	Free	fl5 p.c.	25 p.c.	25 p.c.[Free	Free	Free20 p.c.	25 p.c.	17} p.c.	22} p.c.	25 p.c.25 p.c.	30 p.c.	25 p.c.	30 p.c.	35 p.c.and, per pound	1} cts.	4 cts.Free	5 p.c.	5 p.c.Free	Free	Free	7} p.c.	10 p.c.Free	Free	FreeFree	Free	15 p.c.	25 p.c.	25 p.c.Free	Free	Free	Free	Free30 p.c.	35 p.c.	1 20 p.c.	30 p c.	35 p.c.
o
o
g
g
o
%
[Stage Direction]
The Budget-Mr. Dunning
23Sf	Interlined sheet stock, composed of sheets of cellulose		
	plastics cemented to cotton fabric		10 p.c.	15 p.c.
238g	Synthetic plastic materials with a basis of casein		
	soybean, gelatine or starch, in tubes, cylinders strips, sheets, plates, blocks, bars, rods, angles channels, tees or other shapes or sections, when for use in Canadian manufactures		Free	Free
241	Litharge, which may contain up to two per cent of		
	carbonaceous matter, and mixtures or combinations of such litharge with lead or other products of		
	lead, litharge being the chief constituent by weight, when imported by manufacturers of electric storage batteries, for use exclusively in the manufacture of storage battery plates, in their own		
	factories		Free	Free
242	Dry red lead; orange mineral; antimony oxide,		
	titanium oxide, and zinc oxide such as zinc white and lithopone; white pigments containing not less than 14 per cent by weight of titanium dioxide		Free	15 p.c.
246b	Stains and oxides, valued at not less than 20 cents		
	per pound, for use exclusively as colouring constituents in the manufacture of vitreous enamels and pottery glazes; finely divided metals or compounds of metals, whether dry, or suspended or dissolved in a liquid, for use exclusively in the manufacture of tableware of china, porcelain or		
	semi-porcelain		Free	20 p.c.
254	Gums, viz:-Australian, copal, damar, elemi, kaurie,		
	mastic, sandarac, Senegal, tragacanth, gedda, and barberry; lac, crude, seed, button, stick and shell:		
	ambergris; Pontianac; gums and blends of gums, n.o.p		Free	10 p.c.
282b	Saggars, w'hen for use in the manufacture of ceramic		
	products		Free	Free
287	All tableware of china, porcelain, semi-porcelain, or		
	white granite, but not to include tea-pots, jugs and similar articles of the type commonly known as		
		Free	35 p.c.
306d	Ornamental or decorative marble (not including chips), unicolour or variegated, of colours and/or texture not produced in Canada, rough, hammered, sawn, sand rubbed, chiselled or polished, with or without design thereon, xvhen specially imported		
			
			
	and used for interior work in churches and public buildings, not to include buildings operated for		
	commercial purposes or for private gain or profit..	Free	Free
320	Plate glass, not bevelled, in sheets or panes not		
exceeding seven square feet each, n.o.p	Free	20 p.c./10 p.c.	12} p.c.	15 p.c.\12i p.c.	17} p.c.	20 p.c./15 p.c.	25 p.c.	25 p.c.(Free	Free	Free/ Free	Free	Freet.15 p.c.	25 p.c.	25 p.c.Free	15 p.c.	15 p.c./ Free	20 p.c.	22} p.c.\20 p.c.	27} p.c.	30 p.c./Free	15 p.c.	15 p.c.\l5 p.c.	25 p.c.	25 p.c.12} p.c.	20 p.c.	22} p.c.Free	35 p.c.	35 p.c./Free	20 p.c.	35 p.c.\30 p.c.	35 p.c.	40 p.c.Free	25 p.c.	25 p.c.
The Budget-Mr. Dunning
Dunning.]
Tariff Item	-	British Preferential Tariff	Inter- mediate Tariff321	Plate glass, not bevelled, in sheets or panes, exceeding seven square feet each, and not exceeding twenty-five square feet each, n.o.p	Free	20 p.c.328a	Parts, unfinished, for the manufacture of spectacle and eyeglass frames	Free	5 p.c.342a	Copper alloys containing boron, for use exclusively as a flux or a deoxidizer in melting non-ferrous metals	Free	Free348a	Sculptures in any material, in round or in relief, cast or cut from models prepared in Canada and designed by sculptors domiciled therein, not to include more than two replicas or reproductions of the original model, under such regulations as the Minister may prescribe	Free	Free398b	Tubing of iron or steel, not joined, not more than inch in diameter, with one end swaged, or swaged, split and spread, but not further manufactured, when imported for use in the manufacture of fishing	Free	p.c.409e	(ii) Fruit and vegetable grading, washing and wiping machines and combination bagging and weighing machines, and complete parts thereof; machines for topping vegetables, and machines for bunching and/or tying cut flowers, vegetables and nursery stock, and complete parts thereof; egg-graders and egg-cleaners, and complete parts thereof, not including aluminum parts	Free	5 p.c.410d	Well-drilling machinery and apparatus, and complete parts thereof, for use exclusively in drilling for water, natural gas or oil, or in prospecting for minerals, not to include motive power; well-packers and complete parts thereof, for oil or gas wells; seamless iron or steel tubing of a class or kind not made in Canada, for use in casing water, natural gas or oil wells	Free	Free431b	Adzes, anvils, vises, cleavers, hatchets, saws, augers, bits, drills, screw-drivers, planes, spokeshaves, chisels, mallets, metal wedges, wrenches, sledges, hammers, crowbars, cantdogs, and track tools, picks, mattocks, and eyes or polls for the same....	10 p.c.	35 p.c.
Present Rates
General
Tariff
25 p.c.
5 p.c.
Free Free 15 p.c.
10 p.c. Free

Free
B. P. Tariff
Intermediate
Tariff
General
Tariff
25 p.c.
25 p.c.
/Free
\15p.c.
5 p.c. 32J p.c.
5 p.c. 40 p.c.
15 p.c.
25 p.c.
25 p.c.
/ Free \20 p.c.
15 p.c.
Free 271 P.c.
271 P.c.
Free 30 p.c.
30 p.c.
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\Free
5 p.c. 271 P.c.
10 p.c. 35 p.c.
/Free \15 p.c.
Free	Free
271 P-c.	30 p.c.
35 p.c.
10 p.c.
35 p.c.
35 p.c.
The Budget-Mr. Dunning
445j	Electric dry shaving machines for use in removing human hair, and complete parts thereof	Free	Free446d	Bottles or cylinders of steel for use as high-pressure containers for gas	Free	20 p.c.447b	Forged steel rolls, hardened and ground, for use exclusively in rolling ferrous or non-ferrous metals..	Free	Free449	Steel wool, including steel wool impregnated with soap or in retail packages containing a cake of soap.	Free	15 p.c.451d	Papier m&ch6 shoe buttons, shoe eyelets, corset eyelets and corset rivets, shoe eyelet hooks, shoe lace wire fasteners	Free	Free462b	Cinematograph and motion picture cameras, 35 mm., for use by professional motion picture producers having studios in Canada equipped for motion picture production	Free	10 p.c.473a	Printing plates of all kinds for periodical publications enjoying second-class mailing privileges, the pages of which are regularly bound, wire-stitched or otherwise fastened together, and matrices, metal bases and copper shells therefor, but not to include printing plates and other articles covered by tariff item 475	Free	Free476	(i) Surgical instruments of any material and complete parts thereof	Free	Free(ii) Dental instruments of any material; surgical needles; X-ray apparatus; microscopes valued at not less than 50 dollars each, retail; complete parts of all the foregoing	Free	10 p.c.511	Walking sticks and walking canes, of all kinds; golf clubs and finished parts thereof; skis; racquets and racquet frames and baseball bats; balls of all kinds for use in sports, games or athletics, n.o.p	20 p.c.	30 p.c.529a	Lace and embroideries, wholly of cotton, not coloured, when imported for use exclusively by manufacturers in the manufacture of clothing, in their own factories	7} p.c.	12} p.c.530	Lace and embroideries, wholly of cotton, coloured, when imported for use exclusively by manufacturers in the manufacture of clothing, in their own factories	7i p.c.	17} p.c.and, per pound	10 p.c.	Free	10 p.c.	10 p.c.25 p.c.	/Free \15 p.c.	25 p.c. 20 p.c.	25 p.c. 20 p.c.Free	/Free \10 p.c.	Free 27J p.c.	Free 35 p.c.20 p.c.	/Free (.15 p.c.	7} p.c. 25 p.c.	10 p.c. 27} p.c.Free	/Free \20 p.c.	Free 27} p.c.	Free 30 p.c.15 p.c.	15 p.c.	25 p.c.	30 p.c.25 p.c.	Free	7} p.c.	25 p.c.Free	Free	10 p.c.	10 p.c.10 p.c.	Free	10 p.c.	10 p.c.35 p.c.	20 p.c.	30 p.c.	35 p.c.20 p.c.	7} p.c.	12} p.c.	20 p.c.30 p.c. 4 cts.	7} P-c.	17} p.c.	30 p.c. 4 cts.
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The Budget-Mr. Dunning

Tariff Item	British^ Preferential Tariff	Inter- mediate Tariff	General Tariff	Present Rates	B. P.	Intermediate	GeneralTariff	Tariff	Tariff532	Clothing, wearing apparel and articles made from	woven fabrics, and ail textile manufactures, wholly or partially manufactured, composed wholly of cotton, n.o.p.; fabrics wholly of cotton, coated or impregnated, n.o.p	25 p.c.	30 p.c.	35 p.c.	25 p.c.	30 p.c. 1$ cts.	35 p.c. 4 cts.and, per pound Braided wick for candles or tapers, with or without	4 cts.	534	core, processed or not:- (a) Imported by manufacturers of wax candles or	tapers for use in their own factories in the manufacture of wax candles or tapers	Free	Free	Free	fFree	Free	Free(b) Imported, under such regulations as the minis-	i15 p.c.	22* p.c.	25 p.c.ter may prescribe, for use exclusively in oil-burn-	Free	Free	Free	1.25 p.c.	32* p.c.	35 p.c.556b	Slipper cloth, woven, napped on one or both sides, wholly or in part of wool, not to contain silk or	
artificial silk, weighing not less than 22 ounces per						
	square yard, when imported by manufacturers of indoor footwear, to be used exclusively in the manu-	Free	35 p.c.	40 p.c. 35 cts.	Free	35 p.c. 30 cts.	40 p.c. 35 cts.
	and, per pound (ii) Silk yarns wholly or partially covered with						
558c							
	metallic strip, one pound of which shall contain	12* p.c.	22J p.c.	25 p.c.	25 p.c.	32* p.c.	35 p.c.
577	Collars and cuffs manufactured from cellulose plastics						
		Free	20 p.c.	25 p.c.	Free	20 p.c.	25 p.c.
588a	Gas for heating, cooking or illuminating, imported by						
							
604b		12J p.c.	27* p.c.	27* p.c.	12* p.c.	27* p.c.	27* p.c.
607a	Leather, not further finished than tanned, in whole						
hides, in grains, or splits, when imported by manufacturers of upholstering leathers, for use exclusively in the manufacture of upholstering leathers, in their	15 p.c. 27* p.c.	15 p.c. 30 p.c.	15 p.c. 27* p.c.	15 p.c. 30 p.c.612	Harness and saddlery, including horse boots, n.o.p.,.	m p.c.	17* p.c.	616	Rubber, crude, caoutchouc or India-rubber, unmanu-	factured; powdered rubber and rubber or gutta percha waste or junk; and recovered rubber and	Free	Free	Free	Free	Free	Free616d	Hard rubber, in strips or sheets, not less than one-	sixteenth of an inch in thickness, or in rods or tubes.	Free	15 p.c.	20 p.c.	i /Free	\5 p.c.	7* p.c.	10 p.c.
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The Budget-Mr. Dunning
616e
618a
652
690a
709
Hard rubber, in strips or sheets less than one-sixteenth of an inch in thickness, but not further manufactured Comb blanks of hard rubber, not further manufactured than pressed and vulcanized, when imported by manufacturers of hard rubber combs, for use exclusively in the manufacture of hard rubber combs, in their own factories	 Bead ornaments, and ornaments of alabaster, spar, amber, terra cotta or composition; fans of all kinds; statues and statuettes of any material, n.o.p	 Toilet or dressing combs, n.o.p.; fancy combs, not	Free Free 20 p.c. 10 p.c.
Casual donations sent by persons abroad to friends in Canada, or brought into Canada personally by non-residents as gifts to friends, and not being advertising matter, tobacco or alcoholic beverages, when the value thereof does not exceed five dollars in any one case, under such regulations as may be prescribed by the minister		Free
(i) Articles imported by or for public museums, public libraries, universities, colleges or schools, and which are to be placed in such institutions as exhibits, under regulations prescribed by the	Free
(ii) Violins, violas and violoncellos, manufactured more than 100 years prior to date of importation, under such regulations, including proof of antiquity, as may be prescribed by the minister	Free
(iii) Antiquities (other than spirits or wines) produced more than 100 years prior to date of importation, under such regulations, including proof of antiquity, as may be prescribed by the	Free
Provided that, notwithstanding anything to the contrary in this Act or in any other law or regulation relating to Customs, antiquities as described in part (iii) of this item shall, for entry thereunder, be relieved from the requirement as to origin or British Empire content. (a) Goods, including containers or coverings as specified in part (b) of this item, the growth, produce or manufacture of Canada, after having been exported therefrom		Free
Free
Free
27J p.c. 25 p.c.
Free
Free
Free
Free
Free
Free
30 p.c. 271 p.c.
Free
Free
Free
Free
Free	Free	FreeFree	71 p.c.	10 p.e.20 p.c.	271 pc..	30 p.c.fl5 p.e. [DOT] 15 p.c. 1.15 p.c.	32J p.c. 25 p.c. 25 p.c.	40 p.c. 271 P-c. 25 p.c.Fre^	Free	FreeFree	Free	Free20 p.c.	271 P-c.	30 p.c.Dutiable under va form, use, etc.	rious Items, accor	ding to material,1 Free	Free	Free
The Budget-Mr. Dunning

Tariff
Item
British
Preferential
Tariff
Intermediate
Tariff
Present Rates
General
Tariff
B. P.	Intermediate
Tariff	Tariff
General
Tariff
(b) Bags, barrels, bottles, boxes, carboys, cartons, casks, crates, cylinders, drums, tarpaulins and other usual containers or coverings, n.o.p., filled or empty, and impact registers or recorders for use in railway cars, upon which duty has once been Paid	 Free
All the foregoing under such regulations as the Minister may prescribe;
Provided that the goods are returned to the exporter thereof within five years from the time of exportation, without having been advanced in value or improved in condition by any process of manufacture or other means, or combined with any other article abroad;
Provided also that any goods described in this item, upon w'hich an allowance of drawback has been made, shall not be admitted to entry thereunder except upon payment of duties equal to the drawback allowed;
Provided further that any of such goods manufactured in bond or under Excise regulations in Canada and exported shall not be admitted to entry except upon payment of the Customs or Excise duties to which they would have been liable had they not been exported from Canada.
Cocoa residues, containing not more than five per cent by weight of fat, when imported by manufacturers of chemicals for use in the manufacture of theobromine and caffeine, in their own factories.... Free
Free
Free
Free
/Free	Free
\Or dutiable at var ious rates.
Free
Free
15 p.c.
25 p.c.
25 p.c.
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3. Resolved, That schedule A to the Customs Tariff be further amended and (b), 178, 178c, 180, 181a, 187. 192b, 193, 194, 195, 197b, 198, 199. 248, 249, 250, 252, 284, 285, 286, 288, 289, 316a, 322, 323, 326, 326a, 357. (e), (£), and (g), 385, 386(h), 388d, 392, 392a, 394(a), 396, 396a, 397(d), 430, 430a, 432, 432a, 432b, 432d, 433, 434a, 434b, 438a, 439f, 440m, 445f, 537e, 539, 542a, 542b, 548, 549c, 551, 551a, 552, 553, 554, 554b, 555, 557b 610a, 611a, 619a, 622, 623, 624a(i), 628, 647, 653, 655, 655a, 656, 659, and the several rates of duties of customs, if any, set opposite each of rates of duty in said schedule A:
by striking thereout tariff items 23, 65. 90(b), 105d, 105e, 141, 143a 147 fa) 219(i), 220(a) and (b), 228, 234, 236, 238a, 243, 244, 246, 247 247a 362, 368, 369, 378(b) and (c), 380(c), 382(a), (b) and (d), 383(d)! 398a, 402a, 402b, 407a, 410b, 4101, 410u, 410z, 414c, 415, 415d, 422, 425 427b 445g, 451, 451a(i) and (ii), 451b, 462, 465, 469, 512, 518, 519, 523b,' 537a! 558c, 560a, 561, 565, 568, 568a, 568b, 572, 573, 578, 597a, 607, 608, 610, 670, 710(b) and (bb), the several enumerations of goods respectively the said items, and by inserting the following items, enumerations and
The Budget-Mr. Dunning
Tariff Item	-	British Preferential Tariff8a	Extracts of meat and fluid beef, not medicated	10 p.C.23	Preparations of cocoa or chocolate, n.o.p., and confectionery, coated with or containing chocolate, the weight of the wrappings and cartons to be included	12| p.c.in the weight for duty	and, per pound	2| cts.65	Biscuits, not sweetened	125 p.c.90	Vegetables, prepared or preserved:- (b) Pickled or preserved in salt, brine, oil or in any	15 p.c.other manner, n.o.p	105d	Jellies, jams, marmalades, preserves, fruit butters	2 cts.and condensed mince meats	per pound	105e	Fruits and peels, crystallized, glac6, candied or drained; cherries and other fruits of cr£me de	20 p.c.menthe, maraschino or other flavour	122	Herring (not including kippered herring in sealed containers) packed in oil or otherwise, in sealed con-	20 p.c.
141	Sugar candy and confectionery, n.o.p., including sweetened gums, candied pop-corn, candied nuts, flavouring powders, custard powders, jelly powders, sweet-meats, sweetened breads, cakes, pies, puddings and all other confections containing sugar, the weight of the wrappings and cartons to be	^ ct.
	included in the weight for duty	per pound	
	and	15 p.c.
143a	Cigarettes, the weight of the paper covering to be	$3.50
	included in the weight for duty	per pound	
147	Ale, beer, porter and stout, when imported in	15 cts.
	bottles	per gallon Provided, that six quart bottles or twelve pint bottles shall be held to contain one gallon.	
Inter- mediate Tariff		Present Rates		
Tariff	B.P. Tariff	Intermediate Tariff	General Tariff30 p.c.	35 p.c.	15 p.c.	30 p.c.	35 p.c.27$ p.c. 2$ cts.	35 p.c. 2$ cts.	20 p.c. 2$ cts.	27$ p.c. 2$ cts.	35 p.c. 2\ cts.22$ p.c.	25 p.c.	15 p.c.	22$ p.c.	25 p.c.32$ p.c.	35 p.c.	20 p.c.	32$ p.c.	35 p.c.31 cts.	5 cts.	21 cts.	31 cts.	5 cts.35 p.c.	35 p.c.	22$ p.c.	35 p.c.	35 p.c.30 p.c.	35 p.c.	li cts. (per box)	2 cts.	2\ cts.$ ct. 35 p.c.	$ ct. 35 p.c.	$ ct. 22$ p.c.	5 ct. 35 p.c.	\ ct. 35 p.c.$4.10 25 p.c.	$4.10 25 p.c.	$3.50 25 p.c.	*4.10 25 p.c.	*4.10 25 p.c.50 cts.	50 cts.	30 cts. (ale and beer)	50 cts.	50 cts.
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T/ie Budget-Mr. Dunning
*. Dunning.]
Tariff
Item
180
181a
192b
192d
British
Preferential
Tariff
Advertising and printed matter, viz:-Advertising pamphlets, advertising show cards, illustrated advertising periodicals; price books, catalogues and price lists; _ advertising almanacs and calendars; patent medicine or other advertising circulars, fly sheets or pamphlets; advertising chromos, chromotypes, oleographs or like work produced by any process other than hand painting or drawing, and having any advertisement or advertising matter printed, lithographed or stamped thereon, or attached thereto, including advertising bills, folders and posters, or other similar artistic work] lithographed, printed or stamped on paper or card board for business or advertisement purposes n.o.p.:-
(i) when produced in countries entitled to the British preferential tariff and relating exclusively to products of such British countries, but not relating to Canadian products	
Free
Intermediate
Tariff
(ii) n.o.p. [DOT] [DOT] ...:	per pound 5 cts.
Provided, that on importations under the intermediate or the general tariff, the rate of duty shall be not less than	
Photographs, chromos. chromotypes, artotypes, oleographs, paintings, drawings, pictures, decalcomania transfers of all kinds, n.o.p., engravings or prints or proofs therefrom, and similar works of art, n.o.p.; blue prints, building plans, maps, and charts, n.o.p] 12§ p.c.
12} cts.
27i p.c.
22\ p.c.
Pictorial post-cards, greeting cards and similar artistic cards or folders	
...	.	,	,	,	and, per pound
Albumemzed and other papers and films chemically prepared for photographers' use, n.o.p	
20 p.c.
32? p.c.
Free
25 p.c.
Sandpaper, glass or Hint paper, and emery paper or emery cloth	
121 p.c.
22\ p.c.
Electrical insulating pressboard, not less than -040
inch in thickness	
Paper sacks or bags of all kinds, printed or not....I
Free 15 p.c.
25 p.c. 30 p.c.
General
Tariff
15 cts. 35 p.e.
22* p.c.
35 p.c.
5 cts.
30 p.c.
25 p.c.
35 p.c. 35 p.c.
B. P. Tariff
Present Rates
Intermediate	General
Tariff	Tariff
Free	
(or 5 cts.)	
5 cts.	12* cts.
	27* p.c.
1 15 p.c.	22* p.c.
22* p.c.	32* p.c.
I 15 p.c.	25 p.c.
15 p.c.	22* p.c.
15 p.c.	25 p.c.
* 20 p.c.	30 p.c.
15 cts. 35 p.c.
22| p.c.
35 p.c.
5 cts.
30 p.c. 25 p.c.
tsO
£
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2
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35 p.c. 35 p.c.
The Budget-Mr. Dunning
195
197b
199 199f
220
2321
23G
238a
Playing cards, in packs or in sheet form, n.o.p.; cards and sheets partly lithographed or printed, for use in
the manufacture of such playing cards	
<	per pack or equivalent
Provided, that in no case shall the duty under the
British preferential tariff be in excess of..
Paper hanging or wall papers, including borders or
bordering	
and, per pound
Wrapping paper of all kinds, not pasted, coated or embossed	
Ruled and border and coated papers, boxed papers, pads not printed, papier-mache ware, n.o.p....
Papeteries, envelopes, and all manufactures of paper,
Hand made papers, not to include mould-made deckle-edge papers, valued at not less than 40 cents per pound wholesale	
(i) Solutions of peroxides of hydrogen, n.o.p.
All medicinal, chemical and pharmaceutical preparations, compounded of more than one substance, including patent and proprietary preparations, tinctures, pills, powders, troches, lozenges, syrups, cordials, bitters, anodynes, tonics, plasters, liniments, salves, ointments, pastes, drops, waters essences and oils, n.o.p.:-
(a)	When dry	
(b)	Liquid, when containing not more than two
and one-half per centum of proof spirit....
Soap powders, powdered soap, mineral soap, and soap, n.o.p	
Mucilage and adhesive paste	
and, per pound
Perfumery, including toilet preparations, nonalcoholic, viz., hair oils, tooth and other powders and washes, pomatums, pastes and all other perfumed preparations, n.o.p., used for the hair, mouth or skin	
Surgical dressings, antiseptic or aseptic, including absorbent cotton, lint, lamb's wool, tow, jute, oakum, woven fabric of cotton weighing not more than seven and one-half pounds per one hundred square yards, whether imported singly or in combination one with another, but not stitched or otherwise manufactured; surgical trusses and suspensory bandages of all kinds; sanitary napkins, and abdominal supports	; [DOT] * [DOT]
danutactures ol pyroxylin piasncs, or oi which pyiv xylin plastic is the component of chief value, n.o.p.
5 cts. 15 p.C. 17| p.c.	7 cts.
	32! p.c.
17! p.c.	30 p.c.
20 p.c.	32£ p.c.
20 p.c.	32! p.c.
10 p.c.	22! P-c.
12! P.c.	22! P-c.
17! P-C.	25 p.c.
20 p.c.	40 p.c.
20 p.c.	32! p.c.
15 p.c.	25 p.c.
1! cts.	2! cts.
15 p.c.	40 p.c.
10 p.c.	25 p.c.
10 p.c.	32§ p.c.
8 cts.	5 cts	7 cts.	8 cts.35 p.o. 2 cts. 35 p.c.	22\ p.c.	32J P-C.	35 p.c. 2 cts.20 p.c.	30 p.c.	35 p.c.35 p.c.	221 p.c.	321 P-c-	35 p.c.35 p.c.	221 p.c.	321 P-c-	35 p.c.35 p.c.	r15 p.c.	221 P-o.	25 p.c.\22i p.c.	321 P-o-	35 p.c.25 p.c.	15 p.c.	221 P-O-	25 p.c.25 p.c.	20 p.c.	25 p.c.	25 p.c.40 p.c.	25 p.c.	40 p.c.	40 p.c.321 p.c.	221 p.c.	321 P-c.	321 P-c.271 p.c.	171 p.c.	25 p.c.	271 p.c.3 cts.	2 cts.	2j cts.	3 cts.40 p.c	20 p.c.	40 p.c	40 p.c.35 p.c	121 p.c.	25 p.c.	35 p.c.40 P.C :	15 p.c.	321 p.c.	40 p.c.
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The Budget-Mr. Dunning

Tariff
Item
244
247 247a
249
252
265c
281b
285
286 288 289
318a
Dry white lead	
White lead ground in oil	
Oxides, fireproofs, rough stuff, fillers, laundry blueing, and colours, dry, n.o.p	
Liquid fillers, anti-corrosive and anti-fouling paints,
and ground and liquid paints, n.o.p	
Artists' and school children's colours; fitted boxes containing the same; artists' brushes; pastels, of a value of one cent per stick, or over; artists' canvas, coated and prepared for oil painting	
Paints and colours, ground in spirits, and all spirit
varnishes and lacquers	per gallon
Varnishes, lacquers, japans, japan driers, liquid driers, and oil finish, n.o.p	per gallon
Paris green, dry	
Shoe blacking; shoemakers' ink; shoe, harness and leather dressing, and knife or other polish or composition, n.o.p	
Halibut liver oil, crude or refined	
Firebrick, n.o.p	
Drain pipes, sewer pipes and earthenware fittings therefor, chimney linings or vents, chimney tops and inverted blocks, glazed or unglazed, n.o.p.;
earthenware tiles, n.o.p	'
Tiles or blocks of earthenware or of stone prepared
for mosaic flooring	
Earthenware and stoneware, viz:-demijohns,
churns or crocks, n.o.p	
Stoneware and Rockingham ware and earthenware,
n.o.p	
Baths, bathtubs, basins, closets, lavatories, urinals, sinks and laundry tubs of earthenware, stone,
cement, clay or other material, n.o.p	
Incandescent lamp bulbs and glass tubing for use in the manufacture of incandescent lamps, and mantle
stocking for gas light	
Plate glass, n.o.p	
Silvered glass, bevelled or not and framed or not, n.o.p	
British Preferential Tariff	Inter- mediate Tariff	General Tariff	Present Rates	B. P. Tariff	Intermediate Tariff	General Tariff15 p.c.	27# p.c.	30 p.c.	20 p.c.	27! p.c.	20 p.c.	35 p.c.	37! p.c.	30 p.c.	35 p.c.	37| P-c.12# p.c.	20 p.c.	22# p.c.	15 p.c.	20 p.c.	22# p.c.171 p.c.	27! p.c.	30 p.c.	20 p.c.	27# p.c.	30 p.c.Free	27# p.c.	30 p.c.	f20 p.c.	27# p.c.	30 p.c.ree	27# p.c.	30 p.c.75 cents	$1.25	$1.25	$1.25	$1.25	$1.2515 cts.	20 cts.	20 cts.	20 cts.	20 cts.	10 p.c.	25 p.c.	30 p.c.	15 p.c.	25 p.c.	Free	7# p.c.	10 p.c.	5 p.c.	7# p.c.	10 p.c.12# p.c.	25 p.c.	27# p.c.	15 p.c.	25 p.c.	27# p.c.Free	20 p.c.	22# p.c.	12# p.c.	20 p.c.	22# p.c.71 p.c.	20 p.c.	22# p.c.	12# p.c.	20 p.c.	22# p.c.20 p.c.	32# p.c.	35 p.c.	25 p.c.	32# p.c.	35 p.c.15 p.c.	27# p.c.	30 p.c.	20 p.c.	27# p.c.	30 p.c.20 p.c.	30 p.c.	35 p.c.	25 p.c.	30 p.c.	35 p.c.20 p.c.	35 p.c.	35 p.c.	25 p.c.	35 p.c.	35 p.c.15 p.c.	35 p.c.	35 p.c.	20 p.c.	35 p.c.	35 p.c.Free	7# p.c.	10 p.c.	5 p.c.	7# p.c.	17# p.c.	30 p.c.	35 p.c.	20 p.c.	30 p.c.	35 p.c.20 p.c.	30 p.c.	35 p.c.	22# p.c.	30 p.c.	35 p.c.
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[Stage Direction]


The Budget-Mr. Dunning
326a
339b
362
369
377e
377f
380
3S3
(i)	Demijohns or carboys, bottles, flasks, phials, jars and balls, of glass, not cut, n.o.p.; lamp chimneys of glass, n.o.p.; decanters and machine-made tumblers of glass, not cut nor decorated, n.o.p	
(ii)	Opal glassware, glass tableware, cut glassware and illuminating glassware, n.o.p	
Manufactures of glass, n.o.p	
Collapsible tubes of lead or tin or lead coated with	15 p.c. 10 p.c. 10 p.c. 10 p.c.	30 p.c. 30 p.c. 20 p.c. 27i p.c.Britannia metal, nickel silver, Nevada and German silver, manufactures of, not plated, n.o.p	15 p.c.	35 p.c.Articles consisting wholly or in part of sterling or other silverware, n.o.p.; manufactures of gold or silver,	20 p.c.	37j p.c.Clocks, time recorders, clock movements, clockwork mechanisms, and clock cases	15 p.c.	30 p.c.Provided, that when imported under the intermediate or the general tariff, the duty shall not	Parts of clock movements or of clockwork mechanisms, finished or unfinished, not including plates. .	10 p.c.	25 p.c.Wrought iron in the form of billets, bars, rods, sheets, strips, plates or skelp	Free	20 p.c.Bars or rods, of iron or steel, hot rolled, viz:-Rounds over 4| inches in diameter and squares over 4 inches	per ton	Free	$7.00Bars and rods, of iron or steel; billets, of iron or steel, weighing less than 60 pounds per lineal yard:- (b) Not further processed than hammered or pressed, n.o.p	10 p.c.	25 p.c.(c) Cold rolled, drawn, reeled, turned or ground,	10 p.c.	25 p.c.Plates of iron or steel, hot or cold rolled:- (c) Flanged, dished or curved, n.o.p	5 p.c.	25 p.c.Hoop, band or strip, of iron or steel:- (a) Hot rolled -080 inch or less in thickness, n.o.p.	5 p.c.	15 p.c.(b) Hot rolled, more than *080 inch in thickness, n.o.p... 	per ton	$3.00	$8.00(d) Cold rolled or cold drawn, more than -080 inch in thickness, n.o.p	12^ p.c.	271 p.c.Sheets, plates, hoop, band or strip, of iron or steel:- (d)	Coated with metal or metals, n.o.p	
(e)	Coated with paint, tar, asphaltum or otherwise coated, n.o.p	5 p.c.	121 p.c.5 p.c.	121 P.c.(f) Coated with vitreous enamel, n.o.p	10 p.c.	20 p.c.(g) Corrugated, coated or not	10 p.c.	20 p.c.Sheets, plates, hoop, band or strip, of iron or steel, hot rolled, valued at not less than five cents pet pound, n.o.p	Free	121 p.c.32} p.c.	15 p.c.	30 p.c.	32} p.c.32} p.c.	15 p.c.	30 p.c.	32} p.c.22} p.c.	15 p.c.	20 p.c.	22} p.c.30 p.c.	20 p.c.	27} p.c.	30 p.c.40 p.c.	25 p.c.	35 p.c.	40 p.c.45 p.c.	30 p.c.	37} p.c.	45 p.c.35 p.c.	20 p.c.	30 p.c.	35 p.c.50 cts.	50 cts.	50 cts.25 p.c.	15 p.c.	25 p.c.	25 p.c.30 p.c.	/*2.50	*4.50	*4.50\15 p.c.	25 p.c.	30 p.c.$7.00	*4.25	*7.00	*7.0030 p.c.	15 p.c.	25 p.c.	30 p.c.30 p.c.	15 p.c.	25 p.c.	30 p.c.30 p.c.	10 p.c.	25 p.c.	30 p.c.15 p.c.	7} p.c.	15 p.c.	15 p.c.*8.00	*4.00	*8.00	*8.0030 p.c.	15 p.c.	27} p.c.	30 p.c.15 p.c.	7} p.c.	12} p.c.	15 p.c.15 p.c.	7} p.c.	12} p.c.	15 p.c.25 p.c.	15 p.c.	20 p.c.	25 p.c.25 p.c.	15 p.c.	20 p.c.	25 p.c.15 p.c.	5 p.c.	\2\ p.c.	15 p.c.
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The Budget-Mr. Dunning

Tariff	British Preferential Tariff	Inter- mediate Tariff	General Tariff	Present Rates	Item	B. P.	Intermediate	GeneralTariff	Tariff	Tariff386	Sheets, plates, hoop, band or strip, of iron or steel, as	hereunder defined, under regulations prescribed by Minister:-	(h) Sheets, plates, hoop, band or strip, hardened.	tempered or ground, not further manufactured	than cut to shape, without indented edges, when imported by manufacturers of saws for use ex-	clusively in the manufacture of saws, in their own	Free	10 p.c.	121 P-c.	0 p.c.	10 p.c.	121 P-c.388d	Iron or steel angles, beams, channels, columns, girders, joists, piling, tees, zees and other shapes or sections, punched, drilled or further manufactured	
than hot rolled or cast, n.o.p		20 p.c.	35 p.c.	40 p.c.	25 p.c.	35 p.c.	40 p.c.
392	Forgings, of iron or steel, in any degree of manufac-						
		17J P-c.	271 P-c.	30 p.c.	20 p.c.	271 P-c.	30 p.c.
392.1	Forgings of iron or steel, in anv degree of manufacture,						
	hollow, machined or not, not less than 12 inches in internal diameter; and all other forgings, solid or otherwise, in any degree of manufacture, of a	Free	27J p.c.	30 p.c.	/20 p.c. \Free	27j P-c. 30 p.c.	30 p.c. 30 p.c.
	Axles and axle bars, n.o.p., and axle blanks, and parts						
394							
	thereof, of iron or steel:-						
	(a) For railway vehicles, including locomotives						
		71 p.c.	271 P-c.	30 p.c.	10 p.c.	271 P-c.	30 p.c.
396	Pipe, cast, of iron or steel, valued at not more than						
five cents per pound	per ton.	$5.00	$12.00	$14.00	$7.00	$12.00	$14.00396a	Free	71 p.c.	10 p.c.	5 p.c.	71 p.c.	10 p.c.397	Pipes and tubes, of wrought iron or steel, plain or	coated:-	121 P.c.	p.c.	30 p.c.	15 p.c.	27^ p.c.	30 p.c.398a	Pipes and tubes of iron or steel, seamless, cold drawn,	plain ends, polished, valued at not less than five cents per pound; steel tubes, welded or seamless, more than 10| inches in diameter, with plain ends, when imported for use exclusively in the manufacture or repair of rolls for paper-making machinery..	Free	20 p.c.	30 p.c.	flO p.c. [Free	15 p.c. 20 p.c.	20 p.c. 30 p.c.402a	Woven or welded wire fencing, of iron or steel, coated or not, n.o.p.; wire cloth or wire netting, of iron or steel, coated or not	20 p.c.	35 p.c.	35 p.c.	25 p.c.	
35 p.c.	35 p.c.
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402b
407a
410b
410u
410z
414c
415d
Woven netting, of iron or steel, coated, made from wire of 17 gauge or heavier, with meshes not smaller than one inch and not larger than two inches, with specially strengthened joints, when for use exclusively on fur farms, under regulations prescribed by
the minister	
Chains, of iron or steel, n.o.p., and complete parts
thereof	
Machinery and'apparatus for use exclusively in washing or dry-cleaning coal at coal mines or coke plants; machinery and apparatus for use exclusively in producing coke and gas; machinery and apparatus for use exclusively in the distillation or recovery of products from coal tar or gas; and complete parts of all the foregoing, not to include motive power, tanks for gas, nor pipes and valves lOj inches or less in
diameter	
Ore crusher, rock crushers, stamp mills, grinding mills, rock drills, percussion coal cutters, coal augers, rotary coal drills, n.o.p., and complete parts of all the foregoing, for use exclusively in
mining, metallurgical or quarrying operations..
Blowers, of iron or steel, n.o.p., for use in the smelting of ores, or in reduction, separation or refining of metals, ores or minerals; rotary kilns, revolving roasters and furnaces of metal, n.o.p., for use in the roasting of ore, mineral, rock or clay; furnace slag trucks and slag pots, n.o.p.; and integral parts of all the foregoing	
Machinery and apparatus, n.o.p., and complete parts thereof, for the recovery of solid or liquid particles from flue or other waste gases at metallurgical or industrial plants, not to include motive power, tanks for gas, nor pipes and valves 10i inches or less in
diameter	
Adding, bookkeeping, calculating and invoicing
machines and complete parts thereof, n.o.p	
Electric vacuum cleaners and attachments therefor; hand vacuum cleaners; and complete parts of all the foregoing, including suction hose, n.o.p	
Sewing machines, with or without motive power incorporated therein; complete parts of sewing machines	
425
427b
Street or road rollers and complete parts thereof....
Lawn mowers	
Ball and roller bearings	
13i p.c. 15 p.c.
Free 5 p.c.
12i p.c.
5 p.c. Free
5 p.c.
5 p.c. Free 10 p.c. Free
274 P-c. 30 p.c.
10 p.c. 20 p.c.
17* p.c.
10 p.c. 20 p.c.
20 p.c.
15 p.c. 30 p.c. 30 p.c. 274 p.c.
30 p.c. 35 p.c.
12* p.c. 25 p.c.
20 p.c.
124 P-c-25 p.c.
25 p.c.
25 p.c. 30 p.c. 324 P.c. 35 p.c.
15 p.c. 20 p.c.
n p.c. 7* p.c.
15 p.c.
7} p.c. 15 p.c.
124 P-c-
10 p.c. 10 p.c. 20 p.c.
5 p.c.
27* p.c. 30 p.c.
10 p.c. 20 p.c.
17* p.c.
10 p.c. 20 p.c.
20 p.c.
15 p.c. 30 p.c. 30 p.c. 27* p.c.
30 p.c. 35 p.c.
12* p.c. 25 p.c.
20 p.c.
12* p.c. 25 p.c.
25 p.c.
25 p.c. 30 p.c. 32* p.c. 35 p.c.
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[Stage Direction]
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The Budget-Mr. Dunning

Tariff Item	-	British Preferential Tariff	Inter- mediate Tariff427h	Motion picture projectors, arc lamps for motion picture work, motion picture or theatrical spot lights, light effect machines, motion picture screens, portable motion picture projectors complete with sound equipment; complete parts of all the foregoing, not to include electric light bulbs, tubes, or exciter lamps	Free	15 p.c.430	Nuts and bolts with or without threads, washers, rivets, of iron or steel, coated or not, n.o.p.; nut and bolt blanks, of iron or steel per one hundred pounds	25 cts.	50 cts.anti	7* p.c.	20 p.c.430a	Hinges and butts, of iron or steel, coated or not, n.o.p.; hinge and butt blanks, of iron or steel	
per one hundred pounds	75 cts.	75 cts.and	5 p.c.	27j p.c.431f	Files and rasps	Free	35 p.c.431g	Fixed or stationary meters, of a size or capacity not made in Canada, for hydraulic engineering; gauges, indicators and recorders for water or other liquid levels, volume or flow, of a class or kind not made in Canada	Free	20 p.c.432	Hollow'-ware, of iron or steel, coated or not, n.o.p...	10 p.c.	27* p.c.432a	Kitchen and dairy hollow-ware of iron or steel, coated with tin, including cans for shipping milk or cream, not painted, japanned or decorated	15 p.c.	27* p.c.432b	Hollow-wrare, of iron or steel, coated with vitreous	17* p.c.	32* p.c.432d	Manufactures of tinplate, painted, japanned, decorated or not, and manufactures of tin, n.o.p	15 p.c.	27* p.c.433	Baths, bathtubs, basins, closets, lavatories, urinals, sinks, and laundry tubs of iron or steel, coated or	5 p.c.	25 p.c.434a	Motor rail cars or units for use on railways, and chassis for same; complete parts of the foregoing	Free	30 p.c.434b	Steel wheels for use on railway rolling stock	7* p.c.	30 p.c.General Tariff	Present Kates	B. P. Tariff	Intermediate Tariff	General Tariff35 p.c.	10 p.c.	27$ p.c.	35 p.c.75 cts.	50 cts.	50 cts.	75 cts.25 p.c.	10 p.c.	20 p.c.	25 p.c.75 cts.	75 cts.	75 cts.	75 cts.30 p.c.	10 p.c.	27$ p.c.	30 p.c.35 p.c.	10 p.c.	35 p.c.	35 p.c.35 p.c.	(20 p.c.	27* p.c.	30 p.c.J10 p.c.	27* p.c.	35 p.c.) Free	27* p.c.	35 p.c.(l5 p.c.	25 p.c.	30 p.c.30 p c.	20 p.c.	27* p.c.	30 p.c.30 p.c.	20 p.c.	27* p.c.	30 p.c.35 p.c.	22$ p.c.	32* p.c.	35 p.c.30 p.c.	20 p.c.	27* p.c.	30 p.c.35 p.c.	10 p.c.	25 p.c.	35 p.c.35 p.c	/15 p.c.	30 p.c.	35 p.c.\Free	30 p.c.	35 p.c.35 p.c	m p.c.	30 p.c.	35 p.c.\15 p.c.	27* p.c.	30 p.c.
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The Budget-Mr. Dunning
31111-80 J
438a to	Automobiles and motor vehicles of all kinds, n.o.p. electric trackless trolley buses; chassis for all the foregoing		
T oo o 4391	Provided, that machines or other articles mounted on the foregoing or attached thereto for purposes other than loading or unloading the vehicle shall be valued separately and duty assessed under the tariff items regularly applicable thereto. Children's carriages, sleds and other vehicles; complete parts of all the foregoing		15 p.c.
440m	Engines and complete parts thereof, when imported for use only in I he equipment of aircraft		
445f	Electric dynamos or generators and transformers, and complete parts thereof, n.o.p		15 p.c. 15 p.c.
445g 445n	Electric motors, and complete parts thereof, n.o.p... Electrical instruments and apparatus of precision of a class or kind not made in Canada, viz:- meters or gauges for indicating and/or recording altitude, amperes, comparisons, capacity, density, depth, distanc , electrolysis, flux, force, frequency, humidity, inductance, liquid levels, ohms, operation, power factor, pressure, space, speed, stress, synchronism, temperature, time, volts, volume, watts; complete parts thereof		
446f 446g	Cellulose acetate film reinforced with wire mesh	
Electric welding apparatus not including motors	Free 10 p.c.451	Buckles, clasps, eyelets, hooks and eyes, dome, snap or other fasteners of iron, steel, brass or other metal, coated or not, n.o.p. (not being jewellery)	15 p.c. 10 p.c.451a	(i) Spring-beard needles and latch needles.'.	
10 p.c. 17$ p.c.
451b	Pins manufactured from wire of any metal, n.o.p	
and, per pound	462	Philosophical, photographic, mathematical and optical instruments, n.o.p.; speedometers, cyclometers and pedometers, n.o.p.; complete parts of	7$ p.c. 10 p.c. 10 p.c.465	Signs of any material other than paper, framed or not; letters and numerals of any material other than	469	511b	512	Picture frames and photograph frames, of any	17$ p.c. 17$ p.c.518	Billiard tables, with or without pockets, and bagatelle and other game tables or boards, cues, balls, cue-racks and cue-tips	
17$ p.c.
30 p.c.
25 p.c.
33$ p.c. 33$ p.c.
25 p.c. 25 p.c. 25 p.c.
27$ p.c. 30 p.c. $1.50 30 p.c. 27$ p.c. 10 cts.
25 p.c.
25 p.c. 20 p.c. 30 p.c.
27$ p.Q.
30 p.c..
Free	17} p.c.	2'} p.c.27} p.e.	15 p.c.	27} p.c.	30 p.c15 p.c.	25 p.c.	25 p.c.35 p.c	22} p.c.	30 p.c.	35 p.c.27} p.c.	10 p.c.	25 p.c	27} p.c.37} p.c.	25 p.c.	33} p.c.	37§ p.c.37} p.c.	25 p.c.	33jf p.c	37} p.c.30 p.c.	15 p.c.	25 p.c.	30 p.c.35 p.c.	10 p.c.	27} p.c.	35 p.c.30 p.c.	j	15 p.c.	25 p.c.	30 p.c.i	10 p.c.	27} p.c	35 p.c.30 p.c.	20 p.c.	27} p.c.	30 p.c.35 p.c.	15 p.c.	30 p.c.	35 p.c.SI .50	$1.50	$1.5035 p.c.	15 p.c.	30 p.c.	35 p.c.30 p.c.	20 p.c.	27} p.c.	30 p.c.10 eta.	10 cts.	10 cts.30 p.c.	15 p.c.	25 p.c.	30 p.c.30 p.c.	15 p.c.	25 p.c.	30 p.c.25 p.c.	15 p.c.	20 p.c.	25 p.c.35 p.c.	20 p.c.	30 p.c	35 p.c.30 p.c.	20 p.c.	27} p.c.	30 p.c.35 p.c.	22} p.c.	30 p.c.	35 p.c.
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[Stage Direction]


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The Budget-Mr. Dunning

Tariff Item	-	British Preferential Tariff519	House, office, cabinet or store furniture of wood, iron	15 p.c.or other material, in parts or finished	523b	Woven fabrics, wholly of cotton, printed, dyed or	20 p.C.
and, per pound	
23j	Shadow cretonnes, wholly of cotton, with printed	12! p.c.
	warp and plain weft			
	and, per pound	
523k	Gabardines, wholly of cotton, with not less than 280	12| P*c.
	ends and picks of ply yarn per square inch		
	and, per pound	
5231	Woven fabrics, wholly of cotton, composed of yarns of counts of not less than 80 and not more than 99, including all such fabrics in which the average count of the warp and weft yarns is not less than 80 and	12! p.c.
	not more than 99		
	and, per pound	
524a	Fabrics with cut weft pile, wholly of cotton or of cotton	5 p.c.
	and artificial silk		
532a	Handkerchiefs, wholly of cotton		15 p.c.
	and, per pound	15 p.c.
532b	Woven fabric, wholly of cotton, for covering books...	
	and, per pound	
537a	Rovings, yarns and warps wholly or in part of vegetable fibres, including yarn twist, cords and twines generally used for packaging and other purposes,	17! P-c.
	n.o.p., not to contain silk, artificial silk nor wool...	
537e	Rovings, yarns and warps wholly of jute, including yarn twist, cords and twines generally used for	25 p.c.
	packaging and other purposes, n.o.p		
539	CoTdage, exceeding one inch in circumference, wholly	17! P-c.
	of vegetable fibres, n.o.p		
542a	Woven or braided fabrics not exceeding twelve inches in width, wholly or in part of vegetable fibres	22! p.c.
	n.o.p., not to contain silk, artificial silk nor wool..	
542b	Linen fire-hose, lined or unlined		15 p.c.
548	Clothing, wearing apparel and articles, made from woven fabrics, and all textile manufactures, wholly	
	or partially manufactured, composed wholly or in	
Inter- mediate Tariff				Present Rates	
Tariff	R. P. Tariff	Intermediate Tariff	General Tariff30 p.c.	45 p.c.	20 p.c.	30 p.c.	45 p.c.27| p.c.	32| P-C.	22| p.c.	27$ p.c.	32| P-c.3£ cts.	4 cts.	3\ cts.	4 cts.27! p.c.	32$ p.c.	22$ p.c.	27| p-c.	32! p.c.3§ cts.	4 cts.	3| cts.	4 cts.27$ p.c.	32! P-c.	22$ p.c.	27$ p.c.	32$ p.c.3£ cts.	4 cts.	3$ cts.	4 cts.27! p.c.	32! p c.	15 p.c.	20 p.c.	25 p.c.3! cts.	4 cts.	20 p.c.	22' p.c.	27! P-c-22! p.c.	27! P-c-	32! p.c.and, in each inst	ance,3| cts.	4 cts.
30 p.c.		
30 p.c.	35 p.c.	25 p.c.	30 p.c.	35 p.c.1! cts.	4 cts.	1! cts.	4 cts.30 p.c.	35 p.c.	25 p.c.	30 p.c.	35 p.c.1! cts.	4 cts.	1! cts.	4 cts.22! p.c.	25 p.c.	20 p.c.	22! P-c.	25 p.c.30 p.c.	32! P-c.	27! P-c.	30 p.c.	32| p.c.22! p.c.	25 p.c.	20 p.c.	22! p.c.	25 p.c.27! p.c.	35 p.c.	25 p.c.	27! P-c.	35 p.c.32! p.c.	35 p.c.	25 p.c.	32! p.c.	35 p.c.
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The Budget-Mr. Dunning
	part of vegetable fibres but not containing wool n.o.p.; fabrics, coated or impregnated, composer wholly or in part of vegetable fibres but not containing silk, artificial silk nor wool, n.o.p		25 p.e.	30 p.e.
	and. per pound		15 ets.
548a	Woven dress linens containing not more than 15 p.e. by weight of cotton yarns for decorative effect		Free	30 p.e.
	and, per pound		35 ets.
549c	Haircloth, composed of horse hair in combination with any vegetable fibre	175 p.e.	275 p.e.551	Yarns, composed wholly or in part of wool or hair but not containing silk or artificial silk, n.o.p	15 p.e.	20 p.e.an* I, per pound	6 ets.	20 ets.551a	Yarns and warps composed wholly of wool or in part of wool or hair, imported by manufacturers for use exclusively in their own factories, n.o.p	10 p.e.	17| P C.and, per pound	5 ets.	15 ets.552	Felt, pressed, of all kinds, in the web, not consisting of or in combination with any wo\en, knitted oi other fabric or material	15 p.e.	225 P-e.and, per pound	5 ets.	175 ets.553	Blankets of any material, not to include automobile rugs, steamer rugs, or similar articles	20 p.e.	30 p.e.and, per pound	5 ets.	25 ets.554	Woven fabrics, composed wholly or in chief part by weight of yarns of wool or hair, not exceeding in weight six ounces to the square yard, n.o.p., when imported in the gray or unfinished condition, for the purpose of being dyed or finished in Canada....	175 p.e.	25 p.e.and, per pound	7J ets.	175 ets.554b	Woven fabrics, composed wholly or in part of yarns of wool or hair, n.o.p	225 p.e.	35 p.e.and. per pound	12 ets.	30 ets.554e	Provided, however, that the sum of the specific and ad valorem duties imposed by this item on imports under the British preferential tariff shall not be in excess of 50 cents per pound. Filter press cloth of wool	20 p.e.	35 p.e.and, per pound	30 ets.555	Clothing, wearing apparel and articles made from woven fabrics, and all textile manufactures, wholly or partially manufactured, composed wholly or in part of wool or similar animal fibres, but of which the component of chief value is not silk nor artificial silk, n.o.p.; fabrics, coated or impregnated, composed wholly or in part of yarns of wool or hair, but not containing silk nor artificial silk, n.o.p	30 p.e.	40 p.e.and, per pound	32$ ets.
35 p.c. 4 cts.
35 p.c.
4 cts.
30 p.c.
22$ p.c. 22$ cts.
20 p.c
17$ cts.
25 p.c. 20 cts.
35 p.c. 30 cts.
30 p.c. 20 cts.
40 p.c. 35 cts.
40 p.c. 35 cts.
40 p.c. 35 cts.
25 p.c. 3 cts.
25 p.c. 3 cts.
20 p.c.
15 p c. Hi cts.
10 p.c. 7$ cts.
15 p.c. 7$ cts.
22$ p.c. 10 cts.
20 p.c. 9$ cts.
27$ p.c. 17 cts.
27$ p.c. 17 cts.
30 p.c. 18f cts.
30 p.c. 3$ cts.
30 p.c. 3$ cts.
27$ p.c.
20 p.c. 20 cts.
17$ p.c. 15 cts.
22$ p.c 17$ cts.
30 p.c. 25 cts.
25 p.c. 17$ cts.
35 p.c. 30 cts.
35 p.c. 30 cts.
40 p.c. 32$ cts.
35 p.c. 4 cts.
35 p.c. 4 cts.
30 p.c.
22$ p.c. 22$ cts.
20 p.c. 17$ cts.
25 p.c.
20 cts.
35 p.c. 30 cts.
30 p.c. 20 cts.
40 p.c. 35 cts.
40 p.c. 35 cts.
40 p.c. 35 cts.

The Budget*-Mr. Dunning

Tariff
Item
557b
558c
560a
565
568
568a
568b
573
Garnetted material wholly of silk, artificial silk or similar synthetic fibres, produced by chemical processes, obtained by disintegrating cocoons, yarns or fabrics, prepared for use; filaments or loose fibres wholly of silk, artificial silk or similar synthetic fibres produced by chemical processes, not more advanced than in the form of sliver; waste portions of unused fabrics, wholly of silk, artificial silk or similar synthetic fibres, n.o.p., not to include
remnants nor mill ends	
(i)Rovings, yarns and warps, wholly or in part of silk, n.o.p., including threads, cords or twist for sewing,
embroidering or other purposes	
Woven fabrics wholly or in part of silk, not to contain wool, not including fabrics in chief part by weight
of artificial silk, n.o.p	
and, per lineal yard Woven fabrics wholly or in part of artificial silk or similar synthetic fibres, produced by chemical processes, not to contain wool, not including fabrics
in chief part by weight of silk, n.o.p	
and, per pound
Embroideries, lace, braids, cords, chenille, gimp fringes and tassels, whether containing tinsel or
not, nets, nettings and bobinet, n.o.p	
Plaited or braided lines and cords, non-elastic, whether of tubular or of solid construction, not exceeding one inch in circumference, wholly or in
chief part by weight of vegetable fibres	
Knitted garments, knitted underwear and knitted
goods, n.o.p	
and, per pound
Socks and stockings;-
(i) of wool	
and, per dozen pairs
(ill n.o.p	
and, per dozen pairs
Gloves and mitts of all kinds, n.o.p	
Oriental and imitation oriental rugs or carpets and
carpeting, carpets and rugs, n.o.p	
and, per square foot Enamelled carriage, floor, shelf and table oilcloth
linoleum, and cork matting or carpets	
and, per pound
British
Preferential
Tariff
Free 15 p.c. 22| P.c-
27! P-c.
22| P-c.
17! P-c-20 p.c.
20 p.c. 30 els. 20 p.c.
20 p.c. 30 p.c.
15 p.c.
	Present Rates		
Tariff	B. P. Tariff	Intermediate Tariff	General Tariff10 p.c.	5 p.c.	71 p.c.	10 p.c.25 p.c.	17! p.c.	22| p.c.	25 p.c.45 p.c. 10 cts. 45 p.c. 40 cts. 35 p.c.	27| p.c.	40 p.c. 10 cts.	45 p.c. 10 cts.30 p.c.	40 p.c. 40 cts.	45 p.c. 40 cts.25 p.c.	32J P.c.	35 p.c.35 p.c.	25 p.c.	32! p.c.	35 p.c.45 p.c. 30 cts. 35 p.c. *1.50 35 p.c. $1.50 45 p.c.	25 p.c.	35 p.c. 25 cts.	45 p.c. 30 cts.30 p.c. 75 cts. 30 p.c. 75 cts. 25 p.c.	32! P C. $1.35 32! p c. $1.35 25 p.c.	35 p.c. SI. 50 35 p.c. $1.50 45 p.c.40 p.c. 20 cts.	30 p.c. plus either 3 cts. or 5 cts.	35 p.c. 15 cts.	40 p.c. 20 cts.35 p.c 4 cts.	25 p.c.	32! P C.	35 p.c. 4 cts.
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T/ie Budget-Mr. Dunning
597a
604a
608
610a
611a
612a
619a
623
624a
624b
647
655 655a
658
6631
Regalia, badges and belts of all kinds, n.o.p	
Musical instruments of all kinds, n.o.p.; phonographs, graphophones, gramophones and finished parts thereof, including cylinders and records therefor;
and mechanical piano and organ players	
Belting leather in butts or bends; and all leather
further finished than tanned, n.o.p	
Crust oil leather, for use in manufacturing chamois
leather	
Leather, when imported by manufacturers of gloves or leather clothing, for use exclusively in manufacturing gloves or leather clothing, in their own
factories	
Leather, not further finished than tanned, and skins,
n.o.p	
Belting, n.o.p	
Belting of camel's hair, for machinery	
Boots, shoes, slippers and insoles of any material,
n.o.p	
English type saddles	
India-rubber clothing and clothing made from waterproofed cotton fabrics	
And, in addition, on raincoats	each
Trunks, valises, hat boxes, carpet bags, tool bags,
and baskets of all kinds, n.o.p	
Musical instrument cases and fancy cases or boxes of all kinds, portfolios and fancy writing desks, satchels, reticules, card cases, purses, pocket-books,
fly books and parts thereof	
(i) Dolls; toys of all kinds, n.o.p	
Statues and statuettes of porcelain or earthenware...
Braces or suspenders, and finished parts thereof....
Jewellery of any material, for the adornment of the
person, n.o.p	
Brushes of all kinds	
Pens, penholders and rulers, of all kinds	
Lead pencils and crayons	
Tobacco pipes of all kinds, pipe mounts, cigar and cigarette cases, cigar and cigarette holders, and cases for the same, smokers' sets and cases therefor, and tobacco pouches	
Film of standard width (one and one-eighth of an inch and over) when imported for the sole purpose of having 16 millimetre reproductions made therefrom and provided that the original is re-exported within
three months from date of importation	
	per linear foot
Photographic dry plates	
Iodised mineral salts, for use exclusively in the feeding of animals	
22) p.c.	30 p.c.
15 p.c.	27) p.c
7) p.c.	27) p.c
Free	27) p.c
Free	7) p c.
5 p.c. 15 p.c. 7} p.c.	17) p.c 25 p.c. 27) p.c
22) p.c. 10 p.c.	35 p.c. 27) p.c
25 p.c.	30 p.c.
15 p.c.	40 p.c.
15 p.c. 10 p.c. Free 15 p.c.	40 p.c. 30 p.c. 27) p.c 30 p.c.
25 p.c. 15 p.c. 12) p.c. 10 p.c.	37| p.c 30 p.c. 25 p.c. 35 p.c.
17) p.c.	32) p.c
Free 15 p.c.	3 cts. 27) p.c
Free	25 p.c.
45 p.c.
30 p.c. 27* p.c. 27* p.c.
10 p.c.
20 p.c. 27* p.c. 27* p.c.
40 p.c. 30 p.c.
35 p.c. 50 cts.
40 p.c.
40 p.c. 40 p.c. 30 p.c. 35 p.c.
45 p.c. 40 p.c. 27* p.c. 35 p.c.
35 p.c.
3 cts. 30 p.c.
25 p.c.
27^ p.c.	30 p.c.	45 p.c.20 p.c.	27* p.c.	30 p.c.12* p.c.	27* p.c.	27J p.c.12* p.c.	27* p.c.	27| p.c.5 p.c.	7* p.c.	10 p.c.10 p.c.	17* p.c.	20 p.c.20 p.c.	25 p.c.	27| p.c.15 p.c.	27* p.c.	27* p.c.25 p.c.	35 p.c.	40 p.c.17* p.c.	27* p.c.	30 p.c.25 p.c.	30 p.c.	35 p.c.50 cts.	50 cts.	50 cts.20 p.c.	40 p.c.	40 p.c.20 p.c.	40 p.c.	40 p.c.20 p.c.	30 p.c.	40 p.c.20 p.c.	27* p.c.	30 p.c.22* p.c.	30 p.c.	35 p.c.30 p.c.	37* p.c.	45 p.c.17* p.c.	30 p.c.	40 p.c.15 p.c.	25 p.c.	27J p.c.15 p.c.	35 p.c.	35 p.c.22* p.c.	32* p.c.	35 p.c.1* cts.	3 cts.	3 cts.20 p.c.	27* p.c.	30 p.c.15 p.c.	25 p.c.	25 p.c.
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The Budget-Mr. Dunning

Tariff Item						Present Rates	
Bi lLiali Preferential Tariff	mediate Tariff	Tariff	B. P. Tariff	Intermediate Tariff	General Tariff670	Grinding wheels, stones or blocks, manufactured by the bonding together of either natural or articial abrasives; manufactures of emery or of artificial abrasives, n.o.p	10 p.c.	25 p.c.	30 p.c.	15 p.c.	25 p.c.	30 p.c.710	Coverings, inside and outside, used in covering or holding goods imported therewith, shall be subject to the following provisions, viz:- (b) Usual coverings containing goods, not machinery, subject to any ad valorem duty, when not included in the invoice value of the goods they contain	It p.c.	20 p.c.	20 p.c.	15 p.c.	20 p.c.	20 p.c.(bb) Usual coverings containing machinery subject to any ad valorem duty, when not included in the invoice value of the goods they contain..	S p.c.	15 p.c.	20 p.c.	H p.c.	15 p.c.	20 p.c.
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The Budget-Mr. Dunning

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4. Resolved, That Schedule B to the Customs	set opposite to each of the said items, and by
Tariff be amended by striking thereout tariff	inserting the following items, enumerations and
items 1060 and 1063, the enumerations of goods rates of drawback of customs duties in said and the rates of drawback of customs duties schedule B:-
Item No.	Goods	When Subject to Drawback	Portion of Duty (not including Special Duty or Dumping Duty) Payable as Drawback1060	Paper of all kinds	When used by the publisher or printer in Canada in the production of periodical publications enjoying second-class mailing privileges, the pages of which are regularly bound, wire-stitched or otherwise fastened together	75 p.c.1063	Materials, including all parts.. .	When used in the production of engines for use exclusively in the equipment of aircraft	60 p.c.
5. Resolved, That any enactment founded upon the foregoing resolutions to amend the Customs Tariff or schedules thereto shall be deemed to have come into force on the twenty-sixth day of February, one thousand nine hundred and thirty-seven, and to have applied to all goods mentioned in the foregoing resolutions imported or taken out of warehouse for consumption on and after that date, and to have applied to goods previously imported for which no entry for consumption was made before that date.
Richard Bedford Bennett: Mr. Speaker, we have not
seen copies of these agreements until to-day, and as they are somewhat complex I think it undesirable to endeavour to proceed with them at once. I would therefore move the adjournment of the debate until Tuesday next, following the practice set up by Colonel Ralston. An opportunity will thus be given to apprehend these agreements. Although copies have not yet been distributed, I assume they will be.
Motion agreed to and debate adjourned. BUSINESS OF THE HOUSE



CANADA-UNITED KINGDOM TRADE AGREEMENT- INSTRUCTION TO COMMITTEE OP WAYS AND MEANS TO CONSIDER AND REPORT

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That it be an instruction to the committee of ways and means that they have power to consider the terms of the trade agreement entered into on the 23rd day of February, 1937, between the government of Canada and the government of the United Kingdom together with the modifications in the customs tariff therein mentioned and to report to this house on the whole agreement prior to the introduction of a bill respecting the said agreement.


[Stage Direction]
Motion agreed to.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. SUPPLY
The house in committee of supply, Mr. Sanderson in the chair.
POST OFFICE DEPARTMENT Post Office-Outside Service
Salaries and allowances, $16,713,338.50.
Mail services, including mail services by air, $14,520,000.
Miscellaneous, including $5,000 to provide for payment of compassionate allowances to employees injured while in the performance of their duties or to other persons injured while performing duties in any way connected with the postal service or in protecting His Majesty's mails, or to the dependents of such employees or other persons who may be killed while so engaged, payments to be made only on the specific authority of the governor in council, $1,004,600.
Mr. BROOKS:: On Friday, February 12.
when this item was being considered, I asked the Postmaster General (Mr. Elliott) a question concerning the attitude of the department in connection with the dismissal of certain returned men and also the non-appointment of returned men to vacancies that had occurred, and I called particular attention to the case of the dismissal of the postmaster at Canterbury Station, New Brunswick. I pointed out to the minister at that time that a request had been made by the hon. member for York-Sunbury (Mr. Clark) for the dismissal of the postmaster on the ground that he had been engaged in partisan work during the previous election. I also pointed out that an affidavit had been sent to the department but that evidently it was not considered sufficient. The department had its inspector go to Canterbury Station from the
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city of Saint John; an investigation was held, not of the charge of partisanship but in regard to the site of the post office, and the postmaster was dismissed on the ground that the site was not as good as another which was proposed. In this connection I wish to quote from certain letters that passed between officials of the Canadian Legion, British Empire Service League, and others, and the department. In reply to a letter from the hon. member for York-Sunbury complaining about partisanship, the Postmaster General, on April 1, 1936, wrote:
Dear Mr. Clark:
With reference to your communication of the 27th March in regard to the position of postmaster at Canterbury Station, N.B., I may say there is no vacancy in the postmastership at that point at the present time and no serious complaints have been received about the manner in which the post office is being conducted by the present incumbent. Thomas J. McMullin, who was appointed on the 12th January, 1931.
1 note your remarks to the effect that charges of political partisanship can easily be sustained against the present postmaster.
Charges of partisanship were not investigated, but the postmaster was dismissed, as I have said, on the ground that the site was not satisfactory. I would point out to the Postmaster General that in the correspondence set out in sessional paper 118, it appears that as far as the site was concerned there is very little difference between the previous site and the proposed site, the latter being about one hundred yards farther away from the centre of the village. The village is a very small one, and the previous site is nearer the school. As we all know, in these small villages and country districts children go to the post offices and get most of the mail.
Communications were received by the department from returned soldiers' organizations. On page 13 of this sessional paper is a copy of a telegram sent to the Postmaster General from the Federicton branch of the Canadian Legion. The telegram reads:
Hon. J. C. Elliott,
Postmaster General,
Ottawa, Out.
Strongly protest removal of Thomas McMullin ex-service man from postmastership Canterbury.
W. A. Gibson,
President, Canterbury branch.
In the sessional paper is included another telegram from the Woodstock branch of the Canadian Legion, as follows:
Woodstock, N.B.. June 9.
Hon. J. C. Elliott,
Postmaster General,.
Ottawa, Ont.
Thomas J. McMullin postmaster Canterbury York county, N.B. to-day received notice of dismissal no reason given from post office inspector St. John said dismissal to take

effect twelfth instant. This man is returned soldier receives small pension and is member this branch. Special meeting executive called this evening strongly protest this dismissal and ask new appointment held up pending investigation.
On June 12 the appointment was made. On page 9 of the sessional paper is a letter from J. C. G. Herwig, of the service bureau of the Canadian Legion at Ottawa, reading as follows:
The Hon. J. C. Elliott, K.C., M.P.,
Postmaster General,
Ottawa. Ontario.
Dear Mr. Elliott:
An urgent request has been received from our Woodstock (N.B.), branch to make representations to you with reference to the release of Thomas J. McMullin of Canterbury. I quote hereunder from their message.
The message is the same as the telegram I have just read.
This notice -was given without much warning and no reason was given for the dismissal which is to take effect from the 12th instant.
It is pointed out that Mr. McMullin is a returned soldier receiving a small pension and the postmastership, therefore, is his livelihood because pension is insufficient for maintenance. I understand from officers of your department that the reason for this dismissal is that the present location of the office is unsatisfactory. If this is the case, then we feel that McMullin should be given an opportunity to change to a more suitable location before his dismissal is carried out.
When discussing the release of returned soldiers with you, you gave us assurance that they would not be removed from positions of this kind except for cause. In this case we are assured that the objection could be readily met by Mr. McMullin if he were given an opportunity to do so.


Hon. J. C. ELLIOTT (Postmaster General):: Would my hon. friend give me the date of that letter?


Alfred Johnson Brooks: The letter was written on June 10. It continues:
We think, therefore, that we are not unreasonable in asking that you delay drastic action in this case until Mr. McMullin has an opportunity of providing more suitable quarters.
This was not done. McMullin was dismissed on June 12.
I want to bring to the minister's attention another matter that has to do with the actions of certain commissions appointed to investigate partisanship in New Brunswick. The one case I refer to particularly is the dismissal of a postmaster at Mill Cove, New Brunswick, which is in my own constituency. This case is entirely different from the other. As I pointed out, in the first case the postmaster was accused of partisanship. He was dismissed on the ground that the site was not considered satisfactory. That was the excuse given. In the second case the ground on

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which the complainant asked for the postmaster's dismissal was that the site was not satisfactory, but it was so obvious that the site proposed was unsatisfactory-not as satisfactory as the former site-that a charge of partisanship was brought against him and an investigation was held. The complaint was made by the defeated candidate in the constituency of Royal. He wrote to the department, who advised him how the investigation was to be carried out. Affidavits were made and a commissioner was appointed to hold the investigation. The commissioner was the law partner of the man who made the complaint, Mr. White, the defeated candidate in Royal. In order that the minister may understand this matter, I shall quote from some of the correspondence.
On June 3, a letter was written to the Postmaster General as follows:
June 3, 1936.
Hon. J. C. Elliott,
Postmaster General,
Ottawa, Ontario.
Re: Mill Cove Post Office Dear Mr. Elliott:
I would request the removal of the above post office from C. W. Orchard's to James McLaughlin's, as location of the office on McLaughlin's premises would be a more practical site to enable it to better serve its patrons. The present site is not, I understand, as satisfactory as if the office were located on Mr McLaughlin's premises.
Yours very truly,
Donald V. White.
As a matter of fact the proposed location at Mr. McLa'ughlin's would require the patrons of that post office to walk about an extra mile for their mail, and when the matter was looked into it was found that the complaint that the site was unsatisfactory would not hold water; so then it was decided to bring a charge of partisanship against the holder of the office. An affidavit was procured from a gentleman named Robert M. Mott. I shall not read the whole of it, but his chief charge was:
In the last dominion election I saw the said C. W. Orchard drive up in his car with a Conservative voter to one of the polling booths in the said parish of Cambridge and in the afternoon I saw his wife drive to the polls with two Conservative women in her car.
The department wrote to Mr. Orchard asking him what he had to say about the charge, and he replied:
June 30, 1936.
Postmaster General,
Ottawa,
Canada.
Dear Sir:
In reply to your letter of the 22nd I will say as to my taking an active part in politics it is a complete falsehood. I did not canvass nor was I canvassed. True I took my wife's
uncle along with me to the polling booth he came and asked my wife if he could get a chance with me-he has been a life long Liberal-he says I don't say how I'm going to vote, she said that is your own affair there is room if you want to go. On my way back my wife's cousin asked me if she and my wife's niece could go along with my wife, her cousin has always been Liberal don't know about her niece what she is. We did not ask any of them to go with either of us, they came back with other parties. On her way my wife took a man in whom afterward we heard refused to go in the Conservative cars. She asked him if he would have a drive he accepted. With the exception of asking this man to have a drive we can both swear that we only took these people because we were asked-and did no canvassing whatever. I want the name of the persons who sent in the sworn statement-how could anyone take an oath that these people were either Liberal or Conservative.
There have been a number of falsehoods about our office which we have proved out to the department and it is getting irksome. I hope I shall always keep broadminded enough that I can give a person a lift regardless of their politics in which I take no active part.
Please write me the name of the person who sent the statement.
Yours truly,
Charles W. Orchard.
A commission was appointed and an investigation held. I shall read the report. The investigation was held at Cambridge, New Brunswick, on September 24, 1936, and the evidence as reported reads:
The witnesses for the informant testified that during the provincial and dominion election campaigns of 1935 Charles W. Orchard, postmaster at Mill Cove, attended the conventions of one of the political parties, that during the federal campaign Mr. Orchard attended a political meeting of the same party on the evening when two of the parties held meetings in the district, and that during his term of office Mr. Orchard had attended other political conventions of the same party. They also testified that on dominion election day, October 14. 1935, Mr. Orchard had driven one votei to the polls at Cambridge, and that his wife had driven two women voters to the same poll.
The postmaster gave evidence on his own behalf, stating that he had not attended political conventions as a delegate, that voters driven to the polls were driven at their own request, and were taken by his wife and himself when they themselves went to vote. He admitted that he had never attended conventions of other than the one party, but stated that he had attended joint nomination some years ago and that during the 1935 dominion election campaign he had attended a political meeting of another party.
The evidence was to the effect that it was a Liberal meeting.
His wife, deputy postmistress, testified similarly regarding the voters driven to the polls, as well as voters themselves, two of whom claimed to belong to party other than the one the postmaster was believed to support. All the voters transported were relatives of Mrs. Orchard. The honorary chairman of the Conservative party for the district testified that postmaster Orchard had never attended committee meetings of that party.
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The finding of the commission was:
In view of the evidence submitted, I feel that sufficient proof has been offered to find postmaster Orchard guilty of acts of political partisanship.
The convention which he was accused of attending was an open-air convention held on the shores of Grand lake in the county of Queens, New Brunswick. Hundreds of people were there and I saw among them the chairman of the Liberal party in the county of Queens, and dozens of other Liberals. Mr. Orchard lives only a few miles from this place, and practically everyone in the neighbourhood, no matter what might be his party affiliations, attended this convention. It was like a picnic, but only those wfio were delegates could vote. Mr. Orchard was dismissed on this very flimsy evidence which was brought before this commission. The facts proved were that he conveyed three voters to the polls; two of these voters were Liberals and they do not know how the third voted. I should like to read to the committee one or two letters indicating the attitude of the public. This may seem trivial to some, but it is important to the people who live in this district, and that is why I am bringing it to the attention of the Postmaster General. I am not going to worry the committee in regard to these commissions which have been investigating not only this case but others, but I know of other dismissals in my own constituency just as unfair and unreasonable as this one. I hope in future these matters will be more carefully considered by the authorities. I have in my hand many letters but I shall read just a few. This one is dated September 27, 1936:
Bear Sir:
As I am a resident of Mill Cove I am writing to you in regard to the post office. There are five families living here and the post office is one and a half miles away. I think it is far enough to have to walk after the mail without haring to walk any further. If they shift the post office we will have to walk for our mail two miles and a half. So I don't know what we will do. Please let me know what is to be done.
Another letter, dated September 24. reads:
Just a few lines in regard to the office at Charlie Orchards. As I think it would be an unfair thing to move the post office any further than where it is for we have about one mile now and what will it be for us if you moved it any further so hope you will please decide to leave it at Charlie Orchard for the people in the settlement, and obliging.
Mrs. Clifford Thompson.
The point is that practically all the people who get their mail at this post office were

compelled to walk a mile further for their mail just to satisfy a supporter of the party in power. I may also point out that the post office of which Mr. Orchard was postmaster was beside the school at Mill Cove and the children who come from the back districts would get their mail and take it home after school. After the post office was moved, they had to go half a mile up the road to McLaughlin's, get their mail, go back half a mile and then return home. Anyone who knows country districts in the winter will know that is a real hardship. I hope that in the matter of appointing commissions to investigate complaints of this kind there will be more careful investigation, and that the rights of the people will be the first consideration. It does not make so much difference that Orchard was dismissed, but the fact that dozens of people have to walk daily another mile through all kinds of weather to get their mail seems very unfair.
I should like to correct a statement I made the other day with reference to the postmastership in the town of Woodstock. I stated that a returned man had not been appointed to that vacancy. That is correct, but I have learned that the present incumbent is appointed only in a temporary capacity. But I object to that. Looking over some records not long ago, I noted that most of these temporary appointments are given to some party heeler, and then perhaps later a returned man is appointed. Why cannot the returned man be appointed as temporary postmaster in the first instance? It is sometimes months before the regular appointment is made. I ask the Postmaster General if it is the intention of his department to appoint a returned man to the Woodstock post office. If so. how soon will that appointment be made? It has been pending now for a considerable length of time and it seems to me the appointment should be made without further delay.
I also asked the Postmaster General last year with reference to the post office at Florenceville, New Brunswick. A widow was dismissed from that post office without very much reason, as is the case in a good many instances in my province. At that time I asked the Postmaster General: "If a change is contemplated, will an investigation be made before any such change takes place?" The Postmaster General answered:	"Yes,
an investigation will be made." But I am informed that no investigation was made, that the postmistress was dismissed without any investigation. The Postmaster General gave me his word that an investigation would be held, but there was no investigation.

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John Campbell Elliott: Dealing first with the Canterbury office, since the hon. member started speaking I have been able to obtain the report upon which this change was made. This office is in the electoral district of York-Sunbury. The revenue was SI,834. A report was asked from the district director, and I have a copy of it in my hand. It is dated April 27, 1936, and reads:
A number of the patrons of the office were interviewed, and it would appear that public opinion was favourable to the proposed location. The proposed site is 180 yards west of the present location and is more central as shown by the sketch herewith enclosed, which also shows the location of tile patrons.
I should be glad to elaborate on that if my hon. friend wishes me to do so.


Alfred Johnson Brooks: I should like to ask a question. In the letter written by the Postmaster General to Mr. Herwig on June 10, a statement was made to the effect that a returned soldier in a position of this kind would not be dismissed without cause. I also understand that Mr. McMullin was not given an opportunity to change the site of his post office, so in my opinion the reason given was only an excuse. Be that as it may, however, I should like to ask the minister if Mr. McMullin was given an opportunity to change the site of the post office, if it was not satisfactory.


John Campbell Elliott: I can go only by the records I have before me. First, I might say a word with regard to the question of changing the site of a post office in charge of a returned soldier. If a change of site is considered desirable, the practice has been, quite consistently for a number of years, to have an examination made by the district director. If this report shows conclusively that some other site is much more desired by the people who are to be served, which site according to the map is much more central- and it was so in this instance-the change is made. It has not been the practice to consider the returned soldier as being dismissed if his site is not as suitable as the other one suggested. That is not in the nature of a dismissal for cause.


Alfred Johnson Brooks: I should like to ask another question. Did the Postmaster General receive any complaints with regard to this site prior to the letter which was written by the hon. member for York-Sunbury? I have the correspondence under my hand, and it does not indicate any such complaint.


John Campbell Elliott: I am not aware of any such complaint, but this change was made at the request of the patrons who
were being served, and with a view to securing a better site.
Now I might say a word with regard to the second matter to which my hon. friend referred, the post office at Mill Cove. I have before me the finding of the investigator, and I would say to my hon. friend that I think quite as much care has been taken in these cases as has been customary in regard to matters of this kind. A commissioner was appointed; he made a report, and the report indicates that the postmaster at that point has been guilty of political partisanship. I should like to refer my hon. friend to what is frequently the most important evidence one gets. It is the evidence of the postmaster himself as to whether or not he was guilty of political partisanship. This is what he says:
The postmaster gave evidence on his own behalf, stating that he had not attended political conventions as a delegate, that voters driven to the polls were driven at their own request, and were taken by his wife and himself when they themselves went to vote.
In all fairness I would suggest to my hon. friend that most people are taken to the polls by their friends when their friends go to vote.
He admitted that he had never attended conventions of other than the one party, but stated that he had attended joint nomination some years ago and that during the 1935 dominion election campaign he had attended a political meeting of another party. His wife, deputy postmistress, testified similarly regarding the voters driven to the polls, as well as voters themselves, two of whom claimed to belong to party other than the one the postmaster was believed to support.
I want to say to my hon. friend that, apart altogether from the evidence given by the postmaster, the finding of the commissioner is that on the whole evidence given before him the postmaster was guilty of political partisanship. I do not know how we can retry the finding of any commissioner as long as the record appears to show that there was evidence which, if believed by him, would support the charge. I am not going to argue the matter, but that has been the practice, and that is the course which was followed in this case.
Now I should like to say a word with regard to Woodstock, about which my hon. friend asked. The revenue of that post office is over 819,000. When the appointment is made it will undoubtedly have to be made by the civil service commission, and the returned soldier preference will apply. I am afraid I cannot say much more than my hon. friend can say with regard to what the civil service commission will do. I think that covers the three cases to which my hon. friend referred.
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Mr. CHURCH:: This is a public utility, Mr. Chairman, and in my opinion it should be operated in a different way. I do not intend to say very much about this firing business. I remember when the present Postmaster General (Mr. Elliott) was on my football team; I believe this is a little contrary to his own way of doing business, so I do not believe he has very much to do with it, though there were postmasters fired in the Niagara peninsula.
This utility is maintained by the public and should be conducted on a commercial basis if we are to have any efficiency. Years ago Sir William Mulock got efficiency and many reforms were introduced into the department in order to make it more businesslike. I must say, however, that this business of firing aged employees who are in the evening of life, without making any provision for them, is not creditable to the post office or any other public utility.
I come from a city which contributes some $7,000,000 yearly to the postal revenues of this country, and in my opinion Toronto is getting very poor service for the amount of money expended. In the residential districts the service is not what it should be. In addition to that, I believe Toronto, which contributes about $90,000,000 annually to the revenues of this country, should have some better post office terminal system. In that city we have no post office with the exception of the old building which was constructed shortly after confederation, at the head of Toronto street. It is true that we have the terminal in the union station, but I maintain that the Post Office Department < f Canada is away behind the times. We are sending ministers over to England on almost every boat nowadays. The Minister of Agriculture (Mr. Gardiner) was in the house for only three months before he took a Cook's tour around Europe. If they would open their eyes and see what the British post office is doing in the way of efficiency, they would be doing something for the people of this country.
As a postal item is under discussion, I should like to know what the department is going to do about the postal service in my constituency, that of Broadview, which comprises a large district over the Don, and in which is one of the largest business retail streets in Canada, namely, Danforth. In that section of Toronto there is no adequate post office. Post office business is conducted in an old leased building. Other places, from which the department derives very little revenue, can have buildings valued at $100,000 erected. Only the other day we heard about one at

Fort Erie, in the Niagara district, where the revenue is not nearly as large as it would be in Toronto. I do not object to Fort Erie getting something, but the commencement of that federal building with the laying of the corner stone was nothing but a Liberal rally in the district. With a golden trowel the member laid the corner stone, and there were the usual ceremonies. The revenues from that district are set out in the returns received by the Postmaster General.
In my opinion the Post Office Department should be operated from the commercial aspect, and the commercial aspect only. There should be some efficiency in the department. Toronto contributes $7,000,000 to the revenue. In that city we are entitled to one cent drop letters. The revenue from Toronto should not be used, to the detriment of increased service for Toronto at less cost, to bolster up post offices in other places throughout Canada, in the manner indicated.
All along the line the provinces of Quebec and Ontario, which contribute eighty per cent of the cash taxation to the federal treasury, have been discriminated against. The day is coming when the businessmen will insist upon business administration in the Post Office Department. We should have additional facilities in Toronto for handling the mail. Regarding the delivery of letters in the residential districts of Toronto may I refer to an editorial appearing in the North Toronto Herald, published in the constituency of the hon. member for Eglinton (Mr. Baker). I happen to live in that district. In the newspaper editorial there is a complaint about several postmen having been bitten by dogs when they go to deliver the mail. That should not be so. The minister ought to notify people that if they want to have mad dogs, and that kind of thing, about the property, they had better get their mail at the post office.
This is not the only public utility in Toronto which is suffering thus from vicious dogs attacking inspectors. The minister is not much of a dog fancier-at least he was not when I used to know him so well. May I repeat that other public utilities in Toronto are suffering in the same way from people who keep these mad or semi-mad dogs. When postmen come to deliver letters they are bitten, and they have no remedy for damages.
In addition to that, the time is not far distant when more humane methods should be used for the good of the rank and file of the men who do the work in the Post Office Department,-not for the brass hats to whom the hon. member for Temiscouata referred.

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The rank and file of postmen are not receiving the consideration they should. Should one of these poor chaps steal a dollar or a dollar and a half out of the mail, he may be sent to prison for three years. I know of no other public utility which uses its employees in that way; when such utilities have revenues, they pay their employees proper living wages and rates. In my view the law concerning the three year sentence in connection with postal employees should be changed.
Some of these postmen are returned men. One of them may steal a dollar or two out of a letter, especially if his family is not receiving proper maintenance. With the increased revenues in the Post Office Department I say that law should be changed. It was introduced before confederation, and there should be some amendment of it, and the men affected given parole or some other consideration.
There is another point concerning the revenue of the department about which I should like to speak. The newspapers of Canada are receiving a cash subsidy of $8,000,000 from parliament. Why do they receive that? They get it through the carrying of second class mail at less than cost. The special freight rate they enjoy is greatly to their benefit, and it costs the department a loss of over $8,000,000 to carry the newspapers through the mail. The hon. member for Parkdale (Mr. Spence) is one who knows a great deal about the Post Office Department, and only a few days ago he referred to this matter. If these newspapers can afford to have a couple of pages of turf news, they can afford to pay a proper rate for the delivery of their newspapers, and to do it without cash subsidies from parliament. In my view the law in that regard should be changed.
The Postmaster General should take up the bill I introduced some years ago concerning the identity of the newspaper as to ownership. We should follow the law of Great Britain and that of the United States, whereby newspapers must disclose their identity as to ownership, stockholders, mortgagees, mergers and matters of that kind or be refused the right of the mails. The fourth estate is not what it used to be as a defender of public rights or of the liberty of the subject; this seems to be past and gone, forever. I say that the Postmaster General should consider this matter and bring in an amendment to the Post Office Act, whether hon. gentlemen in another chamber like it or not. There should be proper disclosures as to ownership of newspapers receiving these subsidies; otherwise they should be denied the right to use the mail, as is done in Washington, under the laws of the United States.
I believe the department should add new features. I hope the Postmaster General will go to England for the coronation ceremonies, because if he goes over there and keeps his eyes open-and he has pretty good eyes when he wants to see-he will notice the improvements they have in England. The minister sometimes did not see the referee and got ruled off when on my team, but he is very observant. I believe he should go to England and see what the Post Office Department over there is doing to add to the usefulness of the post office.
The Post Office Department has not in Toronto the modern facilities to do business. It is not equipped as are other public utilities, such as the Bell Telephone Company, the Consumers' Gas Company or the Hydro Electric. It has not the modern type of building, modern facilities or modern methods. The Post Office Department is a public utility, and as such it is away behind the times. We could learn a lot by going to Washington and finding out what they are doing in the larger cities of the United States.
I agree with the hon. member for Parkdale in connection with his observations about the Christmas mail. When hon. members on this side were in office they played the game. I never succeeded in placing a man in the Post Office Department at Christmas time. I never asked to, because I knew it would not be done. Last Christmas the returned soldiers got a raw deal from the Post Office Department. They were asked to file their applications, go down to Adelaide street and register. They spent hours and hours of time trying to get the work, but they were refused. Other men from all over Ontario were taken on. I do not blame the present Postmaster General or the Toronto postmaster, but I believe there should be in Toronto a system similar to that found in the municipalities. Municipalities try to run their business from a commercial standpoint, and not as Liberals or Conservatives. If the federal authorities did as the municipalities do, they would get greater efficiency in the Post Office Department, and would receive a fair day's work for a fair day's pay from the rank and file of the men who, dear knows, could stand a little increase in their pay. We should have more humane treatment of the men. Some day the people who pay for the Post Office Department will rise up and have something to say about the way in which it has been operated.
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John Campbell Elliott: In answer to the hon. member may I say that no one appreciates more than I do the contribution made by the city of Toronto to post office revenue. The hon. member is correct in stating that we receive about $7,000,000. When he complains about the building accommodation in Toronto, I notice he looks at his friends on his side of the house. He will be one of the first to remember that the fine building they have there near the station for sorting purposes was erected as a result of estimates passed when I had the privilege of being Minister of Public Works. I think my hon. friend will admit that the service in Toronto has been improved as far as possible since the present administration has been in power. I agree with him that perhaps there was a good deal of room for improvement. As far as the dogs to which he has referred are concerned, he is a good lawyer and he knows that the control of dogs is a matter entirely within provincial jurisdiction. That is something over which the federal parliament has no control. I am bound to say that we have had no complaints from the couriers. I want to be fair to the people of Toronto and to the character of the canines in that city by saying that no complaints have been received. In view of what my hon. friend has said, perhaps representations should be made to his friends at Queen's park.


Mr. MacNICOL:: Not his friends.


John Campbell Elliott: Then perhaps the hon. member for Davenport (Mr. MacNicol) will make the representations.


John Ritchie MacNicol: They are not my friends
either.


John Campbell Elliott: I have no
doubt it will be given consideration.
I just wanted to return some of the compliments which the hon. member paid to me by saying that if the team which he captained a short time ago was the wonderful success it was, this was due to the management of my hon. friend.
With regard to the deficit which my hon. friend stated was due to the handling of a certain class of mail, I must say that the figure he gave is too high. There is no doubt there is a deficit, but the amount is much smaller than that mentioned by my hon. friend.
I find I neglected to answer one of the questions raised by the hon. member for Royal (Mr. Brooks) with regard to the Flor-enceville post office. The information which I have from other sources is that there was

an inspection made of this post office. A shortage was discovered ana as this was the second offence of that kind, the inspector asked for the resignation of the postmaster which was accepted.


Mr. SPENCE:: Mr. Chairman, there is no one who can make excuses better than the Postmaster General. He is certainly clever and accomplished at that. I do not think anyone regrets more than he does the fact that he has to defend his department in connection with such matters as were referred to by the hon. member for Royal (Mr. Brooks). He knows that these charges were made by a certain individual and that these postmasters were going to be fired regardless of whether or not an investigation was held. I am sorry to say that the spoils system is carried on in the maritimes. After every election the same thing happens, and I do not want to go back too far. I regret that sometimes the Conservatives have done this, but they have not been as bad as the Liberals. The minister will not be able to blame the hon. member for Royal if he asks that these postmasters be changed should this government be defeated in the next election. Such practices should be stopped and men who are doing their duty should be protected.
In Ontario the spoils system has never been developed to this extent. When we came into power in 1930 there was not a man in the customs house, the public works department or the post office in Toronto who was fired. I am glad to say that that is still the fact, with the possible exception of the extra men taken on at Christmas. We could not get a look in at all. The hon. member for York North (Mr. Mulock) and the hon. member for Spadina (Mr. Factor) ran away with all the jobs and we got nothing. However, we shall get back at them, that is if we live long enough. I have always had great regard for the Postmaster General, but I do not think he is sincere when he defends the action of his department in laying off the two postmasters referred to by the hon. member for Royal.


Mrs. BLACK:: Mr. Chairman, quite unlike the previous speakers, I have practically no complaint to make in connection with the carriage of mails in the Yukon territory. Times have changed since those early days when we had to pay a dollar to get a letter sent as far as Skagway. Times have changed since our mails were carried by dog team and when men had to stand in line and pay a dollar to get inside a post office. A good

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looking woman could get in for nothing, but I always had to pay.


Mr. LAWSON:: You were the first in.


Donald Elmer Black: When new contracts are being made, I should like the Postmaster General to consider the service between Dawson and Granville. Granville post office is being conducted by a man who is very much interested in that part of the country. He works for the people and with the people. Because of the increase in the use of labour by the Yukon Consolidated Gold Company in the summer months, there are between three and four hundred men located within three-quarters of a mile of this post office. The post office itself is about half the size of the Clerk's table, there being hardly enough room for two people to get in at the same time. There are no facilities for issuing money orders at this post office and a number of requests have been made that these facilities should be provided. Last summer when I was at Granville I was given about $700 loosely tied up in a bundle with which to purchase money orders in the town of Dawson. Money is tied up just with some paper and a piece of string and given to anyone going to Dawson to purchase money orders to be sent from there. This is most inconvenient and I think there should be facilities provided, at least in the summer time.
The peopie in this locality are anxious to have a biweekly mail service during the summer months. The roads are good and the mail comes in in large quantities. There is considerable parcel mail during the summer and it would be a great convenience to these people to have this biweekly service. I am sure everyone in the locality would appreciate it if the Postmaster General would consider this request.


John Campbell Elliott: I would say that any request made by the hon. member who has just spoken will receive every consideration. She has already spoken to me with regard to the service between Dawson and Granville and also with regard to the desire to have money order facilities at Granville. While the revenue is not very large, the post office receipts being only $194, I realize that a great service would be given. Since the hon. member formerly spoke to me about it I have discussed it, and while it is as well not to make any promises before something is actually done, her request will receive the most sympathetic consideration.	.


Mr. MALLETTE:: Before I ask the minister the question I wish to put to him, may I draw 31111-81
to tlie attention of the committee the very fine French accent which has been acquired by the hon. member for Broadview (Mr. Church) ? If there is one word well known politically in the federal division of Quebec, it is the word Temis-couata. The hon. member for Broadview referred to it a moment ago and called it "Temiseooter." I do not know whether he is seeking to reform our pronunciation or is trying to give a hint to the hon. member for Temiscouata to join the boy scouts. Probably the hon. member for Broadview can explain it.
I was not in this chamber the other day when this vote was first introduced, and I should like to know from the minister whether any decision has been arrived at with regard to the representations made by the postal employees about two weeks ago respecting Christmas and New Year deliveries. I know we are a long way from next Christmas or New Year, but I do not see why the service should be given on these two days. The rest of us sit at home and enjoy ourselves, and I think these humble employees of the Post Office Department should have the same privilege as their fellow citizens.


John Campbell Elliott: As far as these services are concerned, I cannot add anything to what I said when the matter was under discussion for a considerable length of time the other evening. The result of the present arrangement has been exceedingly favourable, particularly in the large cities. Communications we have received from various sources indicate how much the people in those places appreciate getting their Christmas mail either on Christmas day or within a day or two of Christmas. I repeat what I said the other evening that with regard to Christmas it is utterly impossible, particularly in the large cities, to keep anywhere in sight of the work if we allow the complete Christmas holiday to pass without the mail being sorted or any mail being served; it could not be finished at the end of the week. That has been the experience in the past. We in the department are most anxious to give the public the best possible service consistent with reasonable expenditure. Nobody desires less than I do to pay out money to give people service they do not want, but at the same time we owe something not only to the people to whom the letters are delivered but to those who have sent those letters; they are entitled to have them delivered within a reasonable length of time. With regard to smaller places it is much easier to make some arrangements which may not be so ex-

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pensive but will give a reasonable service. We are surveying the whole situation, but I should not be fair to my hon. friend if I led him to believe I thought that, with a volume of mail such as we had this last year, it would be humanly possible, if we were to dispense with the Christmas mail delivery, to get the Christmas mail disposed of within the succeeding three or four days.


Joseph Léon Vital Mallette: As reference has been made to large cities, may I point out that I understand that in the city of Quebec, which is quite a large place, the people are opposed to these deliveries. As regards accumulation of mail for delivery on Christmas day, a little missionary work could be done by means of advertising so that people would be induced to mail their communications earlier. The department very thoughtfully sent us circulars early in December telling us that, if we wanted to have our mail delivered to the United Kingdom or elsewhere abroad, it should be posted by a certain date. The same procedure might be applied to deliveries within Canada. What I had in mind was the interests of the postmen. As I have said, all of us enjoy Christmas and New Year's day, and I believe these employees should be with their families on those occasions. Of course I bow to the inevitable; although I sit on this side I am not a member of the opposition.


Mr. LOCKHART:: May I inquire if representations have been made through the postal services, particularly in cities of 25.000 to 40,000 population, asking that Saturday afternoons be allowed to the employees who work in those cities? Very many of these men are interested in sports. It seems to me that while the argument advanced by the Postmaster General (Mr. Elliott) may be quite in keeping with the situation as far as Christmas mail is concerned, it is difficult to appreciate the necessity of having mail delivered on Saturday afternoons in these smaller places, where half the places of business are closed. I understand that strong representations in this connection are being made.


John Campbell Elliott: Prior to the recent inauguration of service on Saturday afternoons, no mails which were received in a city like Montreal after about nine o'clock in the morning were delivered that day, and numerous complaints, verbal and written, were received. Those complaints were investigated very carefully, and I will say very frankly that I think I can convince the hon. member that, of all days except possibly Christmas and New Year, when the volume of mail is

much heavier than it is at any other time of the year, the delivery which cannot be dispensed with is the one on Saturday afternoon. Perhaps I might give the result of an investigation that was made by an inspector sent down to Montreal, following complaints which were received. I recall particularly the case of one letter which was posted in Winnipeg by air mail on the 12th-


Norman James Macdonald Lockhart: Will the minister permit a question just at that point? Have investigations or inquiries been made in centres such as those to which I have referred? I am speaking not of Montreal and Toronto, but of cities with populations ranging from 25,000 up to 50,000. Has the matter been gone into thoroughly in connection with cities of that size? I was thinking particularly of St. Catharines. Was an investigation held there?


John Campbell Elliott: If my hon. friend had just borne with me a moment I do not think it would have been necessary for him to ask the last question, because what applies to the city of Montreal as regards mail that is sent part of the way by air applies also to these smaller cities. If this mail comes in on a Saturday morning after sortations are made for the mail carriers to get out on their rounds, it lies in the post office until the following Monday morning. The delaying of one letter of that kind will do more injury to the Post Office Department than can be cured by a lot of expenditure and much diligence. That is our trouble. Unless there is a sortation, a staff kept for sortation purposes on Saturday morning, and the mail that comes in on Saturday morning is sorted so as to get out on Saturday afternoon, all that mail remains over until the following Monday, and the result in some cases, particularly where important business messages are involved, is very serious. People do not send letters by air mail unless they are important. They pay a higher rate and we think they are entitled to the best possible service that can be given within a reasonable price.


Norman James Macdonald Lockhart: I quite appreciate all that the minister has said with regard to Montreal. Very little air mail ever reaches such an urban centre as that of which I have spoken. They do have a sorting staff in the morning and two deliveries in the uptown business section, and I cannot see the application of the minister's argument in cases such as I have mentioned. I insist that the minister cannot have made a thorough inquiry into conditions in places of that size when

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he compares them with cities like Montreal where a large amount of air mail comes in. I would ask him again whether the matter was gone into carefully in connection with urban centres of the size I have referred to- not whether the air mail question was taken into consideration, but whether the matter was reviewed from the standpoint of having the mail all cleared out by Saturday noon and not on Saturday at nine o'clock.


John Campbell Elliott: In the first place it must be apparent to my hon. friend that it is impossible for him or anybody else to say that no air mail will come into St. Catharines or any other place. That depends upon whether the man at the other end sends his letter by air mail or not. That is the answer to the first part of his question. With regard to the question whether or not investigations have been made there, I will say frankly that there has not been the same degree of investigation in connection with places of that size that there has been with regard to cities like Montreal and Toronto and the larger centres from which the majority of the complaints came. The inspector was regarded as one of the most capable men in the service in this respect, and he reported that the great majority of the complaints were made in consequence of there not being a Saturday afternoon delivery.


Norman James Macdonald Lockhart: I wish to bring another matter to the minister's attention. The evidence submitted at the inquiry in connection with the post office at St. Ann's, Ontario, was given to the house, and I want to make a few observations in that connection. There were about 105 pages of evidence and correspondence. I notice in the evidence that the building which was abandoned was in much better condition than the one to which they went. The new premises were not as clean, nor was the accommodation in a general way as good. Moreover, something must be said about the calibre of the four or five witnesses who tried to substantiate the charge against the previous postmaster. I know a considerable number of the citizens including nine or ten of the most responsible men in that community who testified on behalf of the previous postmaster. Petitions were circulated to which nearly eighty-five per cent of the community subscribed one hundred per cent in favour of the former postmaster. I have read all this evidence carefully, and I wonder whether the Postmaster General has gone thoroughly into this case. Before I get through I am going to bring to his attention something which should convince him of the absolute injustice of the action that was taken 31111-814
in this particular case. I refer particularly to the calibre of the men who testified against the former postmaster. I wonder whether the minister carefully reviewed all the evidence that was brought down in the return asked for and whether, having reviewed it, he is of opinion that any charge had been made out against the man who previously held the office. Does he not think it was absolutely a case of discrimination?


John Campbell Elliott: As soon as my hon. friend mentioned this case I sent for the file. It has only just come in and I have not had an opportunity of looking it over, but I think I know the evidence probably as well as he does. I read it all and considered it carefully, and I did so because a special request was made to me by the postmaster's counsel, an eminent lawyer from Toronto. I went over the evidence with him and these are the circumstances as I recall them. In August, 1935, the man who had been postmaster there for a number of years-a gentleman named Snyder, who bore an excellent reputation in the community but wrho was certainly not as popular with the Liberal party as with the Conservatives, for he was a strong Conservative-became assistant postmaster, the post office being given to his son shortly before the election. For the father's actions in the post office, the son, who was the postmaster, was responsible. The investigation was held by a competent young man whom the hon. member for the riding will know-a Mr. Bench-and the evidence disclosed that a number of persons had stated that he had repeatedly spoken very strongly in favour of his particular political party, and that he did so in the store in which the post office was held, and in the presence of the son, who was the postmaster. The finding was that he was guilty of political partisanship. There was no question about it. My hon. friend after reading the evidence must admit that there was evidence of partisanship on which the commissioner who heard the witnesses could quite properly find that the man had been guilty of partisanship. That was the finding. I was asked to consider it very carefully; I went over all the evidence with counsel for the postmaster, and I would say to my hon. friend that after reading the evidence there was no course left for me but to accept the finding of the commissioner.


Norman James Macdonald Lockhart: Did the minister consider the calibre of the witnesses, several of them of foreign extraction who gave evidence against the previous postmaster, and does he not think that the men who gave evidence
12S2
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in favour of the previous postmaster are of a different calibre and type altogether from those who gave evidence in favour of the new man ?	.


John Campbell Elliott: I wonder
whether my hon. friend thinks that I interviewed the people who gave evidence, or had an opportunity of judging them as the commissioner who heard the evidence had. The commissioner, a gentleman of repute, a barrister of high standing at the Ontario bar, heard these witnesses; he came to his own conclusion, and I am satisfied that the correct thing to do in view of his finding was what the department did. It is not a pleasant thing to dismiss a man who is getting up in years and who has served the office well in the past, with the exception that he was a bit partisan at election times. But when a change is made just prior to the election, the office handed from the father to the son, and the son is the postmaster and the father the assistant, then I do not think my hon. friend will claim that, when a complaint is made and the man who hears the evidence finds that the father was guilty of political partisanship in the office and to the knowledge of the son, and that under the law he should be dismissed, it would be fair that that postmaster should be retained. After all, this is a business. You cannot have the postmaster irritating and annoying people who are compelled to come into the store where the post office is situated to do business when an election is pending. There are, of course, certain ridings in which political feeling runs higher than in others-I am not saying my hon. friend's riding is one of those, but his party has been very fortunate in that riding for a long time. I think he is not being quite fair to the people who gave evidence there to t'he effect that almost every time they went into the store this assistant postmaster said something to them about the demerits of the Liberal party and the merits of the Conservative party, to contend that they should have to put up with that. In the past the practice has been to accept the finding of the commissioner, and I venture to say that in no case has more care been given to making sure that that finding was right than in this case.


Norman James Macdonald Lockhart: I know the commissioner very well and I know his calibre. I :read his findings carefully, and I say that they do not bear out all that the minister has said. When you have a petition circulated in a community of several hundred constituents who are served by a post office of that
[Mr. Lockhart.)
kind and find eighty-five per cent of all the residents in that community, irrespective of party, signing the petition in the interests of a man who has served them for thirty-two years and who has a family, and then you have a commissioner finding a small measure of partisanship on the part of the assistant postmaster, the father, and on that the postmaster is dismissed, I can hardly see how discrimination could be more apparent.


John Campbell Elliott: Regarding the petition, my experience leads me to believe that a man who has served the people as mail courier or postmaster or in almost any capacity can get nearly everyone in the community to sign a petition. The law does not make any provision for the consideration of petitions in matters of this kind. It is true, as my hon. friend says, that there was a large petition, but I have before me a large number of letters from people who signed the petition, to the following effect:
Please cancel our names to Snyder petition for post office at St. Ann's as I was wrongly informed.
Another:
I shall be glad if you will remove my name from the petition sent you, as I signed it under a misapprehension.
Another:
I shall be glad if you will remove my name from the petition and also my wife's, as wo signed it under a misapprehension.


Norman James Macdonald Lockhart: May I ask the names of those who wrote these letters.


John Campbell Elliott: They are all in the return; if my hon. friend has read the return he will have seen them.


Norman James Macdonald Lockhart: Well the name is very important; I know the standing in the community of the men who signed some of these letters.


Mr. FINN:: I have not any desire to enter into the merits or demerits of this case, but in fairness to the Postmaster General and the officers and the commissioner I would point out one thing. A commissioner is sworn; evidence is given on both sides, and given under oath. My hon. friend the member for Lincoln (Mr. Lockhart) takes the view that perhaps some of the witnesses were not of the same calibre as the people who gave evidence the other way. If that was so, I would point out that counsel who acted for this gentleman was at fault, on the basis as laid down by my hon. friend, in not proving or giving evidence of bad character. That not having been done, the com-

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missioner was bound by the evidence, and no matter how many petitions came in they did not come before him, they were not signed under oath. If such factors as this should enter into an inquiry, why should they not apply to proceedings in the magistrates' courts, in the county courts, in the supreme court? You can get lots of people to sign petitions against people being hanged, but that does not prove that they were not guilty. If citizens of my hon. friend's riding knew that people of "questionable" character gave evidence, they should have given evidence of that "questionable" character, so that the commissioner, the Postmaster General and his officials could have taken that into consideration. But there is nothing of that sort on the record; therefore my hon. friend, in the parlance of the legal profession, is out of court.


Mr. TOLMIE:: Had the Postmaster General requests from the west to make these changes concerning letter carriers? Were there complaints and requests from western postal officials?


John Campbell Elliott: I think when the matter was under consideration the other evening, I said that I could not speak so positively with regard to Victoria, but I know there were protests from Vancouver.


Simon Fraser Tolmie: Asking for the change?


John Campbell Elliott: Oh, no, protests after the change was made.


Simon Fraser Tolmie: What I wanted to know was whether there were any requests for the change from merchants or others interested at any of these western points.


John Campbell Elliott: I do not recall any from that section of the country.


Simon Fraser Tolmie: Has the proposal of the federated association for a five day week been considered by the department and, if so, what decision has been reached?


John Campbell Elliott: No decision has been reached. The deputation representing the amalgamated' civil servants spent the forenoon with me the other day discussing the matter. They placed before me the proposition, which is not new by any means, of an eight hour day and a five day week. I heard everything they had to offer by way of argument, and no decision has been reached.


Simon Fraser Tolmie: Has this new plan been in operation sufficiently long for the minister to form an opinion as to its success?


John Campbell Elliott: That is the delivery on holidays and Saturday afternoons?


Simon Fraser Tolmie: Yes.


John Campbell Elliott: Well, I am absolutely satisfied that for the Christmas and New Year period and for Saturday afternoons it would be impossible to revert to the old system and give the public a reasonable service.


Mr. WOODSWORTH:: In spite of what the minister has said I should like to protest against the change that was made last Christmas season. A few moments ago the minister suggested that the demand came from the larger centres, and he tells us now that it would be quite impossible to give the service if we reverted to the old arrangement. As a matter of fact, we had the old arrangement for a great many years. The postal employees in my city objected very decidedly to the change, in the first place because of the arbitrary way in which the announcement was made. They had no previous indication, I understand, that this change was being made. At times this department has considered the advisability of setting up some sort of joint, councils. It seems to me that whether or not we have such councils, the least that might be done, where a large group of faithful employees such as the postmen are concerned, would be to give due notice of the intention of the department; in fact I think they might have been taken into consultation.
With regard to the deliveries at Christmas, in our childhood we had an old saying, " Christmas comes but once a year." I think everyone feels that the postmen, who>
are serving us very, very faithfully, ought to be allowed to have Christmas day off. Some of them regard Christmas as having a very distinct religious significance. The great majority of them look upon it as a home day, and I do not think, merely because they are government employees, the postmen ought to be deprived of enjoying that one day in the year. A great many of them have very heavy work prior to Christmas; many men have heavy work during Christmas week. I do not object so much to the delivery on New Year's day, which has neither the same religious significance nor the same home traditions and which, outside of perhaps the Scotch community-
Mr. MaeNICOL: I am glad the hon. member made that exception.


James Shaver Woodsworth: -has nothing like the same significance as Christmas day. I would plead that the men be given Christ-
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mas day. I know that the interests of the general public must be considered. I think I touch a fair cross-section of the community, and among my own friends in various circles I found a good deal of regret expressed because of the action taken by the department. Business men do not want their mail delivered on Christmas day, except under very exceptional circumstances. The people who most enjoy Chirstmas day want other people also to have an opportunity to enjoy themselves. For many years past it has been the practice of the department, and a very good practice too, to send out a warning to the public to post their Christmas mail early. They have fair warning, and if they delay in getting out their Christmas mail I see no reason why the postmen should be penalized. If necessary, an extra force should be put on. I know extra men are put on, but, if necessary, that force could be doubled, in order, that as much mail	as is required	may	be delivered by the day before Christmas.I should also like to say a word with regard to Saturday afternoon. Last	year	I protested in this house against the practice that had grown up	of	frequently having	no delivery for two	or	three days.	Often	a holiday falls on a Monday, which would mean that there would be no delivery from Saturday morning until Tuesday. I think we made a mistake in allowing that practice to develop, because I knew of certain business men who had important mail delayed for two or three days. I suggested that some change should be made in order to remedy that state of affairs. Now the minister has gone altogether too far. He now wants to take away the Saturday half holiday in any case. It would seem to me reasonable that there might be a delivery in certain restricted business districts on Saturday afternoon. I recognize that important mail may have to be delivered at that time, but as far as the general public are concerned, many people now take Saturday afternoon off, and I do not see why the postmen, with the exception of those necessary for the delivery of mail in such restricted areas, should not have their Saturday afternoons free as well. I brought up this matter last year and pleaded that a change should be made so that we would not run through from Saturday until Tuesday without a mail delivery, and because of that fact I now ask the minister not to go quite as far as he has gone and, if possible, to give the great majority of the men their Saturday afternoons off.


John Campbell Elliott: I just want to say a word to my hon. friend, first with

regard to his suggestion that these regulations were put into effect without notice having been given. My hon. friend is in error there, quite unintentionally I am sure, because I do not think he was here the other evening when this matter was discussed.


James Shaver Woodsworth: No, but I know the postmen say they did not get very much notice.


John Campbell Elliott: All their representatives had notice of the matter and dis-cused it with me on. I think, the 27th of November. We intended to put it into effect the following Saturday, -but at their request we allowed it to stand over for a week longer in order that they might be able to communicate with the people whom they represented. I am very greatly surprised to find my hon. friend taking the position he now takes, because I always thought he was a very easy man to satisfy. When- these estimates were under consideration last year, I find that on April 24 my hon. friend made this statement:
There are two criticisms of the service which have been given me by certain business people. One is in regard to delay in delivering letters owing to holidays. In many places now Saturday is a half holiday; there is no delivery on Sunday, of course, and it is becoming the practice on a number of occasions to give a holiday on Monday, which means that the mail is not delivered for two and a half and sometimes three days. In the case of urgent business or sickness or anything of that kind that is a very long delay. Personally _ I do not want to see the men deprived of their holidays, but I think it might be possible by a slight increase of staff to arrange that there would not be that long delay.


James Shaver Woodsworth: Quite so; I referred to that to-night.


John Campbell Elliott: I take it now that the hon. member is entirely in accord with Saturday afternoon deliveries.


James Shaver Woodsworth: No; I have always said, if I may say-


Mr. GRAY:: Just like the defence estimates.


James Shaver Woodsworth: I do not know why we have to have interruptions of this kind that are absolutely irrelevant even if they come from the chief whip.


Mr. LAPOINTE (Quebec East):: An angry man.


James Shaver Woodsworth: If you are going to permit, the defence debate to be continued to-night, I am quite willing we should go into it.


Mr. JACOBS:: No, no.


James Shaver Woodsworth: We were told the other day we were wasting time when we

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were considering an expenditure of $35,000,000, one which might involve this country in war-


Some hon. MEMBERS:: Order.


James Shaver Woodsworth: We were told we were wasting time.


Ernest Lapointe: Keep smiling.


The CHAIRMAN:: The hon. member for Winnipeg North Centre is out of order in referring to a past debate.


James Shaver Woodsworth: Quite so.


Ernest Lapointe: Keep smiling.


James Shaver Woodsworth: But the chief whip of the Liberal party referred to a past debate before I did.


Mr. MACKENZIE (Vancouver):: He was out of order too.


Frederick George Sanderson: Any hon. member of the committee who in this discussion refers to a past debate is out of order.


James Shaver Woodsworth: Quite so; the chairman did not call him to order but he did call me to order.


Frederick George Sanderson: I did not hear him.


James Shaver Woodsworth: The chairman never hears, when it is on the Liberal side.


Frederick George Sanderson: That is a reflection on the chair, and I want it withdrawn.


James Shaver Woodsworth: I will recall it, Mr. Chairman.


Frederick George Sanderson: Does the hon. member withdraw?


James Shaver Woodsworth: I withdraw it. If you will permit me, Mr. Chairman, to come back to the question we are discussing-[DOT]


Some hon. MEMBERS:: Hear, hear.


James Shaver Woodsworth: -and protect me from interruption, and reference to other debates, I would like to say with regard to this matter that the Postmaster General was quite right when he read from the remark I made last year in the house. I said I had had complaints from certain business people to the effect that it was too long a time from a delivery on Saturday morning until Tuesday morning, and I thought arrangements could be made, when two holidays occurred in that way, whereby, through putting on extra men, there would not be that long delay. But I said it seemed to me to be going altogether too far to proceed to cut out the Saturday holiday for all the men. That had not been
in my mind at all a year ago. I said I thought that in the swing back from what seemed to be a certain easy-going arrangement the Postmaster General had gone too far.
I do think that it might be possible for the majority of the men to be given a half holiday on Saturday, but that in certain restricted business districts a Saturday afternoon service might be given by putting on more men. That is all I said, I wish especially that the Postmaster General would reconsider the Christmas arrangements, so that the postmen would have their Christmas day.


John Campbell Elliott: I know how interested the hon. member is on behalf of the people who are engaged in this and other kinds of labour. I hope I am not entirely unsympathetic to those men. We are paying a very substantial sum for the Saturday afternoon service and it is treated as overtime. Formerly, when the Saturday afternoons were taken off, when Christmas was taken off and when New Year's day was taken off, there was no reduction in the pay of the men. When we give the extra service we give overtime to the men who serve. I do not see how there could be any possible objection, and I know that was the view of the people who represented them on the discussions. Of course it is only fair to say that they preferred to get the overtime pay, that they did not want to have the time worked off by somebody other than themselves. However, this time is being worked off, and we are paying a substantial amount for it. We thought we had given fair treatment to the people engaged in the service.


Mr. MUTCH:: I should like to learn from the Postmaster General if he has had a number of protests from business people in Winnipeg with respect to deliveries on Saturday afternoon. That city is perhaps distinguished by the fact that the vast majority of business offices are closed that afternoon. I have had a great many communications from people in the postal service and even more from people in business offices protesting against having their mail fired through a slot in the door only to lie there from Saturday noon until Monday morning.
I was interested, too, in the fact that the minister based his decision in this matter upon investigations conducted in Montreal. It is not very often an hon. member rises to boast of the smaller size of his native city, but, after all, certain conditions which obtain in large centres are not found in the smaller ones, and the absence of those conditions accounts for many of us choosing to live in a smaller city where we believe
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working conditions are more favourable and where we may live the type of life we desire.
Throughout my constituency I have not heard any approval of the Saturday afternoon delivery. If there are some in the constituency who like it, at least they have not been vocal. If the minister has heard from them, I should like to know about it. With respect to Christmas delivery may I say that I have lived in Winnipeg for a number of years, during which we did not have Christmas delivery. In Winnipeg I believe we have not experienced any grievous disrupting of the mail service on that account. Very few business offices do any serious business in the few days before Christmas-I have had enough experience to know that; no doubt much of the post office Christmas business is in Christmas cards.


Mr. HANSELL:: Mr. Chairman, my question may sound peculiar, but I do not find any item, other than this one, under which it could be asked. Are there any rules and regulations governing the sending of anonymous literature through the mail? I refer particularly to literature which may be described as propaganda. I believe there are parcels of literature going through the mail which are really a menace to peace, order and good government. During an election campaign literature must have printed upon it the name of the printer and the name of the party under whose authority the literature is printed. But between elections the mails are used for purposes of propaganda, and on many occasions carry anonymous letters.


John Campbell Elliott: There is a section in the act forbidding the sending of any obscene, immoral or scurrilous communications. The difficulty in connection with anonymous matter is to find out who is sending it in order that he may be brought within the provisions of this section. In the great majority of cases it is practically impossible to find out who is sending this type of mail. The sender usually typewrites his letter; he uses a different type of envelope and paper from that which he is in the habit of using and he mails the letter at a different post office. If his letters reach the point of being scurrilous or obscene or immoral, then the act would apply, but there is no section referring to anonymous matter.


Ernest George Hansell: I recognize the difficulty in tracing the sending of such a letter, but oftentimes packages of literature come through the mail. However, the answer given will

have to suffice. To what section of the act was the minister referring?


John Campbell Elliott: Section 7.
We have had a case come up which is exactly in point. We find that occasionally this anonymous mail is posted by some official in the department. We are to-day recommending the dismissal of an official in the department for putting anonymous matter into circulation.


Mr. WEIR:: I should like to say a word
or two with reference to the delivery of mail by rural mail carriers. I am surprised to hear certain hon. members complaining about getting too much mail service. When a holiday comes on a Monday, as happens in many instances, mail on the rural routes is delivered on the previous Friday and then there is no more delivery until the following Wednesday. This is what happens in many of the rural parts of Manitoba due to train services and other conditions. Such a service is certainly not good, and if this holiday service is going to. be considered a general policy, I think some consideration should be given to the people residing in the rural districts. Where the rural mail carrier is permitted to consider Saturday as a holiday, there is no delivery of mail between Friday afternoon and Wednesday when a holiday falls on Monday.


John Ritchie MacNicol: Mr. Chairman, I do not
want to go quite as far as some hon. members have gone in criticizing the minister, particularly certain hon. members on his own side of the house. I think the remarks of the hon. member for Winnipeg South Centre (Mr. Maybank) express the sentiments of most hon. members with relation to postal employees working on Saturday afternoons and on Christmas day. Why does the minister permit a different condition to exist in one province from that existing in other provinces? The Postmaster General admitted to the hon. member for Winnipeg South Centre that the postmen in the city of Quebec did not have to work on Christmas day. I should think that if the Postmaster General issued a regulation as to the working hours of posties, that regulation should be uniform in all the cities of Canada. The posties of one city should not be privileged over the posties in other cities.
When these estimates were last before the committee, the Postmaster General admitted that a number of young men had been brought in from Newmarket, Aurora and other points within twenty-five miles of Toronto to work as extra postal employees during the rush period. I notice the hon. member for York North (Mr. Mulock) is present, but I

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am sorry the hon. member for York West (Mr. Streight) is not. They should be proud of having been able to get positions for so many men in Toronto to the exclusion of unemployed young men in that city. They certainly lowered my prestige. When I was home last Saturday a number of people told me that I did not seem to have any more influence. They had read the Postmaster General's remark and they realized why the young men in my riding were not able to get on at Christmas as extra postal employees. As a matter of fact, I did not try to get any on, but that is actually what happened.
. When I was home, I met a postie who was dressed in a brown uniform. I asked him why he was not dressed like the other posties and he told me he was just on temporarily. I asked him if he had tried his examinations under the civil service, and he told me quite frankly that he had not, that he had come in from North York to go to work. I extend my congratulations to the hon. member for that district on the large number of young men he has been able to place in the city of Toronto. Shortly afterwards I met two other young men who had tried the postal examinations advertised for November 21. I ask the minister if this is the proper way to run a department? The newspapers carriedi a great story about the several hundred additional employees who were to be taken on in the postal service, and examinations were advertised for November 21. These young men went down and tried the examinations, but here we are well into the new year and those who passed are not yet in the service. When the estimates were last before the committee, the minister told us that the said extra employees would be on until perhaps March 1.
In conclusion, I want to say that I endorse every word of objection that has been said with reference to working on Saturday afternoons. This is a new thing as far as Toronto is concerned. I also endorse all the objections made to posties working on Christmas day. I hope the minister will turn over a new leaf. His estimates have been under a good deal of fire, more from his own side of the chamber than from this, and he should consider taking patronage out of his department and turning the appointments back to the civil service commission.


John Campbell Elliott: I was not going to interrupt the hon. member for Davenport if he was saying "carried," but as it was something else he had in mind I wish briefly to reply. We consulted the civil service commission as to what should be done in the way of temporary help to work out overtime. We were advised that they could
not have examinations completed early enough for this period of Christmas help and temporary help for working off overtime. I have a letter from the chairman of the commission in which he made suggestions that he thought would meet satisfactorily this question of overtime, and we are following them to the letter.


Mr. MacINNIS:: In reply to some remarks made a few moments ago by the hon. member for Winnipeg North Centre (Mr. Woods-worth), the Postmaster General (Mr. Elliott) replied that these new conditions were not put into effect without consultation with representatives of the organizations or assosiations of which the post office employees are members. I have before me a letter dated1 February 16 from the secretary of one of these bodies, and I find in the Very first paragraph this sentence:
We would like to point out that no employee organization was consulted prior to the government bringing the new policy into effect.
I do not think the Postmaster General
is paying any attention. I wonder whether we can have his attention.


John Campbell Elliott: I beg pardon.


Angus MacInnis: He is holding up the estimates. I thank him. I was pointing out to the committee that the Postmaster General, in reply to the hon. member for Winnipeg North Centre, made the statement that before effect was given to this policy the employees' organizations had been consulted. I also pointed out that the correspondence I have had with the secretary of one of the organizations indicates definitely that they were not consulted prior to the new policy being put into effect.


John Campbell Elliott: Let me inform the hon. member that I have a list of the delegates. It includes Mr. Duncan, secretary of the Canadian postal employees; Mr. Moran, of the same organization, and a number of other gentlemen, including Mr. Draper, Mr. Reaves, and Mr. Fitchett, who consulted me on the 24th of November. At that time we intended to put the change into effect the following Saturday afternoon, November 28, but at their request, after consultation first of all as to whether they should be paid or somebody, at least, should be paid for the extra time, and they had worked out with Mr. Underwood the method in which that overtime should be worked off, it was arranged that the change would not be put into effect until Saturday, December 5, in order that they might have an opportunity of communicating with the people they represented. That is all I can say.

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Mr. MaoINNIS: The announcement of the new policy was made, was it not, on November 17?


John Campbell Elliott: I think so.


Angus MacInnis: Prior to that date had there been any consultation with the associations?


John Campbell Elliott: No.


Mr MacINNIS:: Then the ordinary course was not followed, that is the usual procedure between an employer of labour and an accredited association of employees, of taking them into consultation before adopting a new policy in regard to the particular work. It is correct to say that that policy was adopted without consultation with the employees. However, I do not have to labour that point because, from the information I have, the employees' associations are not objecting to continuous service; if there is a difference of opinion it is as to which method should be adopted, a five-day week, or a six-day week with a lay-off for a certain time. In that regard has any definite policy yet been adopted?


John Campbell Elliott: No. The five-day week is another proposition, and I should prefer that my hon. friend would not mix the two matters, because they are not related. The position is this. I think there would be unanimity among all the employees if they, the present employees, got overtime in cash instead of somebody else being taken on to work out the overtime. That, I think, is about the main question between them. But I explained to them that this is being given to people who do not have jobs, and it was thought it was fairer to give this bit of work to someone who was not employed rather than to somebody who already had a job. The employee gets, as my hon. friend understands, a week off for every eleven afternoons that he puts in.


Mr. PELLETIER:: Some time ago I read about a new and improved service between Edmonton and Athabaska. Would the minister explain what that new service is?


John Campbell Elliott: I think the hon. member is referring to the service between Edmonton and Lloydminster. We have recently changed from baggage car service to a railway post office between Edmonton and Lloydminster by way of Willingdon.


René-Antoine Pelletier: That is not what I was referring to. I recently read an announcement in the Edmonton press that consideration had been given to a request or that

a request had been made to increase the service between Edmonton and Athabaska. Is there anything in that?


John Campbell Elliott: No. That matter is under consideration, but no decision has been reached.


René-Antoine Pelletier: Before the minister comes to any decision, I should like to tell him about the service that the Peace River country is now receiving. It is not my intention to make a speech this evening about the merits of the Peace River country-I shall do that later on-but I should like to point out that the present population is somewhere around 70,000 and that the only service we get there is two trains a week; that is, we get mail on Tuesdays and Fridays and the rest of the time we have to go without it. I understand that the United Air Transport planes operating out of Edmonton are carrying on a daily service between Edmonton and the town of Grande Prairie, and the department could very well utilize that line to give a more frequent mail service to the residents of the north country. Nowhere else in Canada, no matter how distant it is, are 70,000 people receiving so little attention as we in the Peace River country. This may be due, of course, to the poor efforts of the member for the constituency, but I shall try to remedy that in the near future. I should like the minister to consider seriously what I am saying, because I believe these people are entitled to better mail service than they are receiving. Two years ago the Lesser Slave lake rose to such a degree that at various points it washed out the railroad. There was a time when no mail was delivered for a period of seven or eight days, and even at that, motor boats had to be used to bridge the gaps over various portions of the railway which had been washed out. The service at that time was most unsatisfactory. I am sure the minister, knowing the beautiful climate of that part of the country, is aware that it would be possible to use aeroplanes to a greater extent than at the present time, especially in view of the fact that there is now an established passenger service between Edmonton and Grande Prairie. The people of that country would be grateful to him if he could find it in his heart to help them and to give them the consideration which is due them.


John Campbell Elliott: I can assure my hon. friend that that matter, and a great many other requests from people who think they are in almost as bad a position as that in which the people of the Peace River dis-

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trict consider themselves to be, are receiving the best attention we can give them.


Mr. RICKARD:: If the hon. member for York North (Mr. Mulock) has been successful through the medium of the civil service commission, he is to be complimented. I have been interested in this discussion on dismissals and I can tell the hon. member for Lincoln (Mr. Lockhart) that, as far as I know, the dismissals have not been one-sided, because I know there are cases in my constituency where dismissals have been made without any commission being appointed. It would be interesting to the hon. member for Lincoln and other hon. members to look up the records for the constituency I represent and see how dismissals have been made there. In one instance a man was dismissed merely on the word of a certain gentleman, notwithstanding that the reports all showed that everything had been O.K. throughout. There were no reports that were not perfectly in order; yet this man was dismissed without cause and the secretary of the Conservative association, a man who had held that position for some years, was appointed postmaster. The old postmaster had two girls working for him, one a Liberal and the other a Conservative. When the new postmaster was appointed he dismissed the Liberal girl and kept the Conservative. These dismissals are not by any means all one-sided, and, as I say, the hon. member for Lincoln would find it interesting to look up the record.


James Houston Spence: You have asked us to be fair to you, Mr. Chairman, and I suggest that you should be fair to the committee. You saw me on my feet half a dozen times and yet you allowed five other hon. gentlemen to speak. It is hardly fair of you when you expect civility not to show us some in return.


Frederick George Sanderson: Order.


James Houston Spence: That is all I am going to say; I am not criticizing you too severely, but I do not want to be jumping up and down like a jack-in-the-box. The hon. member for Davenport (Mr. MacNicol) made some remarks with regard to the eligible list of persons to be appointed as letter carriers and postmen in Toronto. I believe that some two hundred are wanted. The minister says that he has a letter from the civil service commission to the effect that the examination papers have not yet been all read. I have been making inquiries and have been told that the examiners of the civil service commission are really breaking down in health, they are working so hard. Whoever heard of
such a thing around here? Just imagine a man writing an examination last November and the papers not being checked up yet by the great staff they have in the Hunter building! It seems to me their system should be changed or they should be eliminated entirely if they cannot do better.
Speaking of Saturday afternoon deliveries and the delivery on Christmas day and New Year, I am not going to criticize them at all because every city has its own difficulties. In Toronto, if we did not get a Saturday afternoon delivery the service would be poor indeed, and until the Post Office Department decides to give us an up to date service and have the mail that goes out on the train from Montreal or Ottawa as well as the mail coming from the west, sorted and delivered to people resident two or three miles distant from the post office, it is no service at all. If I wrote a letter to my home on Friday and that letter arrived in Toronto at 7.50 Saturday morning, it would not be delivered at my house until Monday morning. We are entitled to better service.
I am not asking men to work on Saturday afternoon, but I submit that there should be some system whereby the morning mail would be sorted and got out before noon. Around King street, Colborne street and Church street there are three or four deliveries before twelve o'clock, though, as some hon. members have said, most of the places there are closed in the afternoon and people do not want deliveries there at that time of day. On the other hand, the outlying districts will get no service at all if they do not get an afternoon delivery on Saturday.
As regards delivery on Christmas day, I have spoken to only two or three of the postmen and they all tell me that they were delighted to deliver mail on Christmas day because the presents came in fast and they went home happy, whereas if they did not deliver mail on Christmas day they would not get as much out of the job. On New Year's day there is not the same demand for service, though the Scotchman from Davenport thinks it is as important. I have to differ with some of my best friends and with the Postmaster General himself at times.
At any rate, the laughing stock of the whole matter is the suggestion that the civil service commission have not been able to examine three or four hundred papers written early in November. It is now the twenty-fourth of February and the papers have not yet all been examined. I am told by the department that the health of the civil service commission examiners is breaking down because they are
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working night and day. If you make any complaint to that department you get a long letter from the secretary, Mr. Foran, a letter of three or four pages cleverly written. I have been in this house since 1921 and I have never yet known a friend of mine who wrote an examination, whether he got 96, 98 or 100 per cent to get a job from the civil service commission. Is there not something wrong? I will go so far as to say that half of the jobs advertised are filled before the advertisement reaches us, and it is only a waste of paper because we simply throw these advertisements into the wastepaper basket.
The civil service has become a matter of personal patronage; it is not political patronage, though it might as well be political. I have never seen a service so badly looked after in my life. It is really a scandal, the way in which it is handled. We have many good friends there and we look sometimes for fair treatment, but it seems to me that no matter who it is you get the same treatment, because they say, " Oh, we are all sworn to do so and so." They are sworn to look after themselves and their own friends.


Mr. FAIR:: I have been attempting for about an hour to get a word in and now that everyone else has spoken, perhaps I can ask one or two questions. I was wondering, in those cases where a commission is necessary, what procedure is followed in order to have a commissioner appointed.


John Campbell Elliott: The commissioner is appointed on recommendation of the Minister of Justice to council.


James Houston Spence: Does the civil service commission make a recommendation to the Minister of Justice?


Robert Fair: Is the commissioner sometimes a partisan or is he always independent? An hon. member here said that a partner of the party who laid the complaint was appointed as commissioner. That does not look good to me. I was wondering whether these commissioners are partisan or whether they are independent.


John Campbell Elliott: The department recommends obtaining the best man possible, to make the investigation, and I have great faith in the Minister of Justice appointing nobody who is not thought to be competent for that office. Then, of course, the commissioner who is appointed under the Inquiries Act is sworn to do his duty without fear, favour or affection.


Robert Fair: Do these commissioners get any remuneration in the way of travelling or living expenses or per diem allowance?
[Mr. Spence.J


John Campbell Elliott: They do; they get travelling expenses and send in a bill for their time, and that is taxed by the justice department also.


Robert Fair: I should like to know whether any new post offices were established during 1936, and if so, how many in each province.


John Campbell Elliott: Does my hon. friend refer to the calendar year?


Robert Fair: Calendar year or fiscal year.


John Campbell Elliott: My hon. friend will find in the Postmaster General's report for the year ended March 31, 1936, the new post offices established in that year. The report for this year of course is not yet made. But if he will look at page 6 of the report for 1935-36, he will see the total number of offices established from April 1, 1935, to March 31, 1936, was 148. The number closed in the same period was sixty-one. The number opened during the period November 1, 1935, to December 31, 1936, by provinces is as follows:
Nova Scotia	 6
Prince Edward Island	 0
New Brunswick	 14
Quebec	 79
Ontario	 53
Manitoba	 9
Saskatchewan	 30
Alberta	 17
British Columbia	 16


Robert Fair: Were any rural mail routes established in the same period?


John Campbell Elliott: I cannot at the moment give with the same definiteness the number of mail routes. There were some new routes established, some improvements to the services, that is in the frequency of mails in a number of post offices. I could not give that up to date, but I could get it for my hon. friend if he wishes.


Mr. GREEN:: May I make a suggestion with regard to the extra help that will be required in the larger cities at the coming Christmas? Last year we provided for a veterans' assistance commission, whose duty was to help solve the problem of unemployed veterans in Canada. I believe that there are 33,000 unemployed veterans who have answered the questionnaire sent out by that commission, and over half of that number are employable. In addition to the commission, there are strong honorary local committees, in ten cities at least, perhaps more by this time. These men are doing their best to get work for these unemployed veterans, and my suggestion to the minister is that he adopt a

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policy of giving this veterans' assistance commission and also these honorary local committees the first choice in the placing of men required for extra post office work at Christmas time. If he will do that, and particularly if he will announce such a policy shortly, it will give great encouragement to these local committees and also to>
the unemployed veterans, and might go a long way towards making the veterans' assistance commission a success.


John Campbell Elliott: There were 817 returned soldiers engaged for this work for the last Christmas rush in Toronto alone. That is 204 more than were engaged the year before. Every returned soldier who was on the eligible list and was available and suitable for the employment was taken. I might give a statement of how these employees are selected. Returned soldiers with dependents get the preference; next, civilians with dependents; next, returned soldiers without dependents, and, last, civilians without dependents.


Howard Charles Green: I realize that that has been the rule, and I am not complaining particularly about what happened last Christmas, because I do not know. But now this veterans' assistance commission has been set up. and they are dealing with the problem of the unemployed returned men-I emphasize the word "unemployed"-it would help a great deal if the department would make a new rule in regard to veterans, and would go first to the veterans' assistance commission, and to the honorary local committees which are serving under that commission, for a list of returned men who are to get the preference.


John Campbell Elliott: I think the veterans' organization is nearly always consulted by the postmaster in any district where there is any large number of soldiers being taken on. But I shall make further inquiries and give the matter my best consideration.


Howard Charles Green: The veterans' assistance commission has been appointed recently. It was not in a position to furnish names last Christmas, but I believe it will be this coming Christmas. I am sure the Minister of Pensions will endorse my suggestion.


Mr. POWER:: I am wondering why my hon. friend is in such a hurry to get their reports, when he says they have only started to work. Not long ago he kept me here three hours to get an interim report.


Howard Charles Green: Well, they seem to be
working very slowly; I am trying to help
the minister out. I think he should be more grateful.


Mr CLARKE (RosedaLe):: May I ask the Postmaster General if he could give the total number of employees in the Toronto district, both returned men and general, during the Christmas rush? Also is it possible to get the names and addresses of these temporary employees to see whether they reside in Toronto? There seems to be a kind of inference that a considerable number came from outside Toronto, and if we could get the addresses that matter might be cleaned up


John Campbell Elliott: I do not think there will be any difficulty in getting the names at any rate.


Mr. CLARKE (Rosedale):: And addresses; the addresses are very important.


John Campbell Elliott: If the postmaster has kept the addresses, I shall be glad to have them furnished to my hon. friend.


Mr. MARSHALL:: I do not wish to hold up the vote unnecessarily, but I should like to come back to the very important matter of the balance sheet. On a previous occasion the minister said the surplus would be a littile more than $3 000,000. In the course of his remarks on that occasion he stated that this year the cost of the franking privilege would amount to $1,001,000. I should like to know why the cost of the franking privilege during the first year in office of the Liberal party should increase from $750,000 to $1,001,000, or by approximately fifty per cent.


John Campbell Elliott: That is for both incoming and outgoing mail. Of course there has been a general increase in the business of the departments of the government, and I can only say that the members, who are largely responsible for the use of the franking privilege, decide how much mail they shall send. Of course there are also certain departmental documents that are sent out, and I suppose the departments decide that. I could get my hon. friend the particulars.


James Alexander Marshall: Am I correct in assuming that $1,001,000 is the correct figure, while the amount of $750,000 stated in the annual report is an approximate figure?


John Campbell Elliott: The $750,000 is an accurate estimate made, as I understand it, by actual measurement of the mail going out from here. The $1,001,000 includes the mail coming in.


James Alexander Marshall: My next question deals with the matter of the expense in connec-
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tion with the savings bank branch of the post office. The amount stated in the return is $60,000, while the amount mentioned by the minister is $80,000, an increase of $20,000.


John Campbell Elliott: I am told that this increase is attributable to an increase in the number of accounts and the general overhead expenses.


James Alexander Marshall: Can the minister inform the committee as to the amount of money that was actually paid to the postmasters in connection with their work in the savings bank branch?


John Campbell Elliott: I do not have it just at hand but I shall have it in a moment.


James Alexander Marshall: I have another question. Is the amount charged for heating assumed by the Post Office Department or by some other department? What I should like to get is a correct balance sheet for the Post Office Department.


John Campbell Elliott: The estimate given was prepared, I understand with a great deal of labour and care, by the Public Works department.


James Alexander Marshall: Is that expenditure
assumed by the Public Works department?


John Campbell Elliott: Yes.


James Alexander Marshall: I have just two more short questions, and then I am through. What rate of interest is allowed on deposits in the post office savings bank?


John Campbell Elliott: I understand it is two per cent.


James Alexander Marshall: Could the minister give me the net profit derived from the operations of the post office savings bank last year?


John Campbell Elliott: 
James Alexander Marshall: The point I am trying to make is that if the post office savings bank costs the government $80,000 and the profits are less than $80,000, I cannot understand why the government should maintain that branch. Why not leave the business to the chartered banks? I should like to get the information if it is available.


John Campbell Elliott: I think I can explain to my hon. friend just how this works out. This money is paid into the consolidated revenue fund. The finance depart-
[Mr. Marshall.J
ment has the use of the money. Certain fees are paid to the postmasters for services rendered in taking in the deposits, but the Post Office Department receives no pay as a department. This policy was originated with a view to encouraging thrift by inducing people to deposit savings in this bank, which has the security of the dominion at its back. The offices are there; we have the facilities with which to give the service, and I say very frankly that I think the public should avail themselves of that privilege to a much greater extent than has been the case up to the present. A good rate has always been paid on deposits, and the dominion has had the use of the money at that rate.


James Alexander Marshall: How many branches are there in the dominion?


John Campbell Elliott: If my hon.
friend will look at page 11 of the last report, that is. the report for the year ended March 31, 1936, he will see all the details as the situation existed at that time. There have been some changes since then. At that time the number of post offices transacting business had increased from 1.272 to 1,282 and the amount on deposit was a little over $22,000,000. The number of depositors is given, together with the number of new accounts issued.


Mr. GRAYDON:: Mr. Chairman-


Mr. LENNARD:: Mr. Chairman-


Frederick George Sanderson: The hon. member for Peel has the floor.


Frank Exton Lennard: On a point of order, Mr. Chairman, the hon. member who was given the floor is not speaking from his proper seat in this house.


Frederick George Sanderson: The point of order is not well taken in committee.


Gordon Graydon: Mr. Chairman. I came down to this seat from the back benches with the idea of finding out whether there was anything in the suggestion made by the hon. member for Parkdale (Mr. Spence) with respect to being noticed by the chair when one desires to ask a question. After sitting here a moment or so I have a suggestion to make. I believe money would be well spent to provide rear-vision mirrors for hon. members sitting in the front seats, so that they will have an opportunity of seeing those on the rear benches who have stood up and wish to speak. Seriously, I should like to learn from the minister whether or not the advertising done by the Post Office Depart-

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ment to avoid a Christmas rush of mail has had the effect of equalizing the traffic. If not, at what time during the Christmas season does the peak load come?


John Campbell Elliott: My advice is that for years advertising has been carried on urging all persons sending extra mail to mail it as early as possible. Apparently in Canada we have not yet formed the habit of mailing early, as it is done in the old country. I am told the campaign over there has succeeded much better than has the one in Canada. I believe, however, that, in view of the large amount of mail handled, the advertising did some good last Christmas. I cannot express too strongly the wisdom of mailing as early as possible.


Frank Exton Lennard: How many temporary employees were taken on in Hamilton during the Christmas and New Year rush?


John Campbell Elliott: I cannot
answer directly, but I could get the information from the postmaster at Hamilton. Probably there will be returns in the office here in Ottawa.


Frank Exton Lennard: And the number of returned men?


John Campbell Elliott: Yes; I should be glad to get the information and send it to the hon. member.


Frank Exton Lennard: Would the minister tell me the number of postal notes or post office orders issued on Christmas day in Hamilton? I can furnish the information, if he does not have it.


John Campbell Elliott: Then I wonder why the hon. member asks me.


Frank Exton Lennard: I was wondering whether the minister knew.


John Campbell Elliott: No.


Frank Exton Lennard: As we are aware, Hamilton post office was open Christmas day. I would suppose the wicket at which the postal notes would be handed out would be attended by possibly two employees. The fact is that only one postal note was issued, and that about five o'clock on Christmas afternoon.


Norman James Macdonald Lockhart: I wish to correct a reference made by the hon. member for Halifax (Mr. Finn) in a discussion which took place earlier in the evening. It was a question as to general standing in the community; I do not wish the inference to go out that it was a question of character.
May I say to the minister that I appreciate the explanation he gave in connection with
the evidence. Now that the dismissal has been made, from the explanation given by the minister I conclude that it was made because of the indiscretion of the father who was seventy-two years of age, and that there is nothing against the present holder of the post office. That was the impression I got. The indiscretion of the father, as I understand it, seemed to be the important point. Am I correct ?


John Campbell Elliott: I would say that the postmaster is liable for the indiscretion of his assistant in a case like this.


James Earl Lawson: That is a terrible principle.


John Campbell Elliott: The evidence went to show that these discussions took place on several occasions in the presence of the postmaster, in the post office or the store of which the post office formed a part, and without any objection from the postmaster.


Norman James Macdonald Lockhart: But the point I am raising is this: The charge of indiscretion was brought against the assistant postmaster. No charge of any kind whatever was brought against the postmaster himself.


John Campbell Elliott: Does the hon. member think it was very discreet for the postmaster to stand by and allow his father, who is his assistant, to talk politics to the people coming into the office? If that is being discreet, then he was guilty of no indiscretion.


Norman James Macdonald Lockhart: But the new postmaster appointed was not involved in any way, was he, with the exception of the indiscretion of allowing his father, a man of seventy-two years, to discuss matters?


John Campbell Elliott: I have the return before me; I do not recall anything else, other than attending meetings.


Mr. BARBER:: I should like to inquire about the trans-Canada mail, from the east to Vancouver. Are the contracts held by both railways or by one of them? For instance, are the mails to Vancouver connecting with the boat service handled by both railways? I know the Canadian National Railways, which pass through a large section of my constituency, carry no mails. The result is that the mail goes to Vancouver and then back up through some other service, perhaps by way of an electric railway or some other means. If the contracts are held by one road, for how many years has that been the condition?
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John Campbell Elliott: The rates
are set by order in council. There is no definite term in the contract.


Harry James Barber: No term in the contract?


John Campbell Elliott: No; each railway is utilized to the extent the department thinks it can best be utilized to the advantage of the service.


Harry James Barber: I understand that for a
number of years the mails have been carried over one road.


John Campbell Elliott: In some cases that is true.


Harry James Barber: The other road, the junior one, has not had the opportunity to carry them.


John Campbell Elliott: That is true in regard to some of the services.


Harry James Barber: And that will be continued, I suppose?


John Campbell Elliott: Well, it is
hard to say what may happen.


Mr. WALSH:: I do not wish unnecessarily to delay the passage of the item. I believe the district of Montreal has been fairly well treated by the Post Office Department. Outside the occasional instance of a dog biting a postman, and some other minor incidents, we have fairly good service. However, there is one point I should like to bring to the attention of the minister. I have before me a file almost a quarter of an inch thick detailing my effort to secure a post office box on the corner of Grey and Western avenues in Notre Dame de Grace in the district of Mount Royal. I believe delay is being caused through the inaction of the postal authorities in Montreal. I bring the matter to the attention of the Postmaster General so that he may stir them up to a little quicker action, and have the box placed in the location I have indicated for the convenience of the public living in the immediate vicinity. I hope the minister will give the matter some consideration, and ascertain where the delay has been occasioned. If instructions have been given for the placing of the box, so much the better.


John Campbell Elliott: I shall have the matter looked into. I cannot say I have given personal attention to it, but I am strongly of the impression that possibly something can be done.


Mr. RYAN:: Is the department contemplating air mail service between Saint John and

Halifax? I ask this because the present train service is inadequate and an opportunity is being offered to establish a service by air.


John Campbell Elliott: This matter would be considered in connection with the genera] air mail service, but no decision has been arrived at.


William Michael Ryan: I would like the Postmaster Genera] to consider this matter apart from the general scheme as this is something which is very urgent. It is possible to have such a service established at no great cost and I would appreciate if the minister would give this matter special consideration. The ordinary service has been cut down and the merchants are suffering great hardships. I know the board of trade and other organizations have been pressing this matter, and I ask the minister to give it special consideration.


John Campbell Elliott: It has been discussed by the gentleman who is in charge' of the air service down there and is receiving consideration.


Mr. SINCLAIR:: Is it the intention to establish an air mail service between Charlottetown and points in New Brunswick?


John Campbell Elliott: I understand there is a service between Moncton and Charlottetown.


John Ewen Sinclair: Will that be continued?


John Campbell Elliott: I hope so.


Frank Exton Lennard: What number of postmasters in Canada receive less than $20 per month as commission on stamps?


John Campbell Elliott: I have not that information before me, but I can obtain it.


Frank Exton Lennard: Is there any regulation covering the remuneration of sub-post offices in cities?


John Campbell Elliott: It runs to a maximum of $600 plus certain commissions according to the amount of business done.


Frank Exton Lennard: Are there any sub-post offices on the outskirts of cities where the only remuneration received is the commission on stamps and postal orders?


John Campbell Elliott: The commission depends upon the amount of business done.


Frank Exton Lennard: Is the rate of commission set by the department in Ottawa or by the postmaster of the city in which the sub-post office is located?

Farm Rehabilitation-Mr. Bennett


John Campbell Elliott: The rate is set by the department.


Frank Exton Lennard: What would the rate of commission be for a sub-post office located on the outskirts of Hamilton?


John Campbell Elliott: If my hon. friend will look at page 21 of the last report of the Postmaster General, he will find the total revenue for Hamilton and the revenue of the various sub-post offices.


Frank Exton Lennard: That does not quite answer my question. I want to know the usual rate of commission.


John Campbell Elliott: That is not shown here, but we can obtain it for my hon. friend.


Frank Exton Lennard: Could the minister give the rate of commission on stamps paid to village post offices?


John Campbell Elliott: The minimum is $100. Then there is a commission of 70 per cent on the first $1,000. There is 50 per cent on that part of the money order commission collected from the public and included in the revenue from $1,000 to $10,000; there is 30 per cent on the postage stamp revenue from $1,000 to $10,000, and 20 per cent on anything over $10,000.


Frank Exton Lennard: Would the commission for a post office on the outskirts of a city be as low as two per cent?


John Campbell Elliott: Is my hon. friend talking about stamp vendors or subpostmasters?


Frank Exton Lennard: A sub-post office.


John Campbell Elliott: I would not think it would be.


Frank Exton Lennard: I do not want the minister to think I am trying to hold up his estimates. I shall be glad to take this matter up with him later on.


[Stage Direction]
Item agreed to.
Progress reported.
On motion of Mr. Lapointe (Quebec East) the house adjourned at 10.58 p.m.
Friday, February 26, 1937