[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Railways and Canals): I desire to table a return moved by the hon. member for Peace River (Mr. Kennedy), for all correspondence with reference to the survey which will be undertaken jointly by the Canadian National Railways, the Canadian Pacific Railway and the British Columbia government into the resources of that country. I desire also to table a further reference moved by the hon. member for Peace River, for all correspondence between the Department of Railways and Canals and the Alberta government in reference to the joint purchase of the Edmonton, Dunvegan and British Columbia railway.
In connection with both these returns I should say that delay was occasioned by reason of the need of securing the permission of the .presidents of the Canadian Pacific Railway and the Canadian National Railways for the inclusion of certain personal correspondence. That permission has been granted, but I desire to say that this does not constitute in any way an acknowledgment of the principle that personal correspondence of that character can be brought down as a matter of right. In this case, however, both presidents were willing to have that correspondence included because of the nature of the correspondence and the information it conveys.
Private Bills


[Stage Direction]
Bill No. 214, for the relief of Eva Alexandra Grayson Smith-Mr. McPhee.
Bill No. 215, for the relief of Ernest Gillespie Simpson.-Mr. Clark.
Bill No. 217, for the relief of Gertrude Helena Martin.-Mr. Clark.
Bill No. 218, for the relief of Laura Warren. -Mr. Speakman.
Bill No. 219, for the relief of Ethel Elizabeth Kelley.

Mr. Edwards (Waterloo).
Bill No. 222, for the relief of Mildred Muriel Lange.-Mr. McPhee.
Bill No. 223, for the relief of Linda Lydia Snowdown Pascoe.

Mr. Sanderson.
Bill No. 228, for the relief of William Tres-love.

Mr. Thorson.
Bill No. 229, for the relief of Annie Letticia Smith.-Mr. Clark.
Bill No. 231, for the relief of Jennie- White. -Mr. Taylor.
Bill No. 233, for the relief of Gladys Evelyn Lawrence.-Mr. Taylor.
Bill No. 234, for the relief of Daniel Ray Bouvier.-Mr. Clark.
Bill No. 237, for the relief of George Nelson Brown.-Mr. McPhee.
Bill No. 239, for the relief of James Duncan Gerard.-Mr. Sanderson.
Bill No. 241, for the relief of Violet Haney. -Mr. Sanderson.
Bill No. 242, for the relief of James Thompson Clark.-Mr. Sanderson.
Bill No. 245, for t-he relief of Alexander James Purse.-Mr. Clark.
Bill No. 246, for the relief of Wilfred Keith Black.-Mr. Clark.
Bill No. 247, for the relief of Henry Feldman.-Mr. Jacobs.
On division.

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

Mr. BELL (St. Antoine):: 1.	At what price were the Canadian Gunner, Canadian Harvester, and Canadian Settler sold, in 1926?
2.	To whom were they sold, and have they
been paid for in full?	.
3.	At what price were each of the seven steamers, Canadian Aviator, Canadian Gunner, Canadian Harvester, Canadian Otter, Canadian Runner, and Canadian Sapper transferred from the merchant marine fleet to the Canadian National steamships?


Mr. DUNNING:: 
PENSIONS AND NATIONAL HEALTH-SOLDIERS'-ADVISERS
Mr. ESLING:: 1.	What are the names of the soldiers' advisers under the Department of Pensions and National Health?
2.	What is the salary of each adviser?
3.	What advisers are on full time and part time respectively, and what was the profession or vocation of each adviser before his appointment?
4.	What travelling expenses were allowed each adviser for the past fiscal year, and what office expenses were allowed each adviser for the same period ?


Mr. KING (Kojotenay):: 
REFUNDS TO COAL IMPORTERS
Mr. CANTLEY:: 1.	Of the total amount of $1,060,090.16 reported on page 2121 of Hansard of April 29, as refunded to importers of coal during the year 1928, what was the amount refunded on coal used in the production or manufacture of iron and/or steel in each of the several provinces of Canada ?
2.	What was the amount so refunded on account of coal imported and used in connection with metallurgical processes other _ than the production of iron or steel in each of the provinces of Canada?
3.	What was the amount so refunded on account of coal imported and used in connect'on with the production or refining of salt in each of the several provinces of Canada?


Mr. EULER:: 1.	$662,986.28.
2.	For metallurgical processes other than iron or steel, nil; for production of coke, $383,072.96.
3.	$14,036.92.
Note:	To give fuller details would disclose the business of individual concerns which is contrary to the practice of the Department of National Revenue.


UNOPPOSED MOTIONS FOR PAPERS
Mr. MANION:: For a copy of all correspondence and other documents relating to the present postmaster at Dauphin, Manitoba, Mr. A. E. Iredale.


PICTOU COUNTY PUBLIC WORKS
Mr. CANTLEY:: For a copy of all correspondence, reports and recommendations received at the office of the district engineer of the Department of Public Works. Halifax, relating to, or in any way connected with any work done in the county of Pictou by the Department of Public Works.
2. A return showing all appointments and/or dismissals made by or under authority of the said district engineer, with the causes assigned therefor, if any.
He said:	This motion is incomplete; it
should designate the years 1927, 1928 and 1929.
Motion stands.


PRIVATE BILLS
[Stage Direction]
The house in committee on Bill No. 22, to incorporate Niagara Falls Memorial Bridge Company-Mr. Pettit-Mr. Johnston in the chair.
On section 6-Directors.
Mr. CLARK:: Mr. Chairman, the hon.
member for Lincoln (Mr. Chaplin) is very much interested in this bill. He is away at present but I know he will return in ample time to enable this bill to be dealt with, and I suggest, in fairness to him, that some of these clauses be allowed to stand so that he may be enabled to express his views.


The CHAIRMAN:: That is for the committee to decide.


Mr. PETTIT:: I think I have acted perfectly fairly in this matter; this bill has been before the house and has been adjourned six times.


Mr. BENNETT:: I received a telegram in
connection with this matter from the Premier of Ontario, and I understand that a similar telegram was sent to the Prime Minister by the Premier of Ontario. As I understand the matter, the state of New York is opposed to this bridge, and the province of Ontario

Niagara Falls Memorial Bridge
through its parks commission, is applying for the incorporation of a company of its own to deal with a bridge in that locality. This bill gives incorporation to the company and parliament has to deal with it because it happen? to be an international waterway which is to be crossed. I understood that the hon. member for Lincoln, who is on the parks board, has certain observations to make to this house with respect to this bill, but due to a bereavement in his family he is absent at a time when he expected to be here. I have not discussed this matter with the hon. member for Welland (Mr. Pettit) and I have had no communication with the hon. member for Lincoln, but in view of the fact that the state of New York and the province of Ontario, the two communities affected, are both opposed to this legislation, it would seem to me that an opportunity should be afforded to the representative who happens to be on the parks board, and who is looked to to present their views to this house, to put his case before the committee. It will be a matter of more than passing curiosity why this parliament gives incorporation to a company which is not desired by either the state of New York or the province of Ontario.


Mr. YOUNG (Saskatoon):: As the hon.
leader of the opposition (Mr. Bennett) has said, a telegram was sent to the Prime Minister of Canada by the Premier of Ontario. This telegram was placed in the hands of the chairman of the railway committee, and he handed it to me, as I was then acting as chairman. The telegram was read before the committee when the hon. member for Lincoln was present, and it was fully discussed. Several amendments were introduced which I understood very largely met the objections raised by the hon. member.


Richard Bedford Bennett: Am I right in believing
that an advertisement is pending for a bill on behalf of the parks commission itself to construct a bridge across this waterway?
I think hon. gentlemen will find that such is the case; that the province of Ontario is now advertising in the Gazette and in the newspapers asking for a bill such as this. I am only giving my recollection of what was said by one of the gentlemen from that department.


Mr. SPENCER:: I have seen the advertisements.


Mr. LAPOINTE:: It is rather late for a
private bill.


Richard Bedford Bennett: They were trying to get it through this session.


John Frederick Johnston: It is for the committee to decide whether or not we shall proceed with the bill. We are now on section 6. Shall section 6 carry?


[Stage Direction]
Section agreed to.
Sections 7, 8 and 9 agreed to.
On section 10-Tolls.
Mr. DUNNING:: Was this section
amended in committee?


John Frederick Johnston: Yes, in line 17 the words " governor in council " have been struck out and the words "Board oif Railway Commissioners for Canada " have been substituted therefor.
Section as amended agreed to.
Section 11 agreed to.


John Frederick Johnston: Sections 12 and 13 have been stricken out.
Sections 14 to 20 inclusive agreed to.
Bill reported on division.


FLORENCE MAT FORBES
[Stage Direction]
The house in committee on Bill No. 122 for the relief of Florence May Forbes.-Mr. Bell (Hamilton)-Mr. Johnston in the chair.
On section 1-Marriage dissolved.
Henry Elvins Spencer: Would the sponsor of the bill inform the committee whether there are any children in this case?


Mr. BELL (Hamilton):: If my hon. friend will refer to the former proceedings, he will see that it was explained that the respondent had become a fugitive from justice two or three years before this unfortunate woman petitioned; that one of the children remained with her, and that two others were being cared for by relatives in England.


Mr. BOURASSA:: It has been frequently said that parliament does not encourage divorce by collusion. This is supposed to be the rule. In the senate committee there is put to every petitioner for divorce a formal, what I might call a stereotyped, question to which the invariable answer " no " is given. Of course, if one reads the evidence in most of the bills, it is quite apparent that although there is not actual and absolute collusion, the party against whom the divorce is asked has generally placed himself or herself in such a position that the evidence will enable the committee of the senate to declare that adultery has been proven. That is quite clear from the evidence in most of the bills, but

Procedure Respecting Divorce
in this ease there is worse in the evidence itself. At page 10 of the minutes of evidence I find that this question was put to the petitioner regarding a conversation she had with her husband some time previously:
Q. Did he tell you anything else?
A. Yes, he said that I was far too good for him and I had better go home and take the children home to my mother. He said that he had done everything that he should not have done and he said there was no way out of it but for me to divorce him. But I could not, because I did not have the money, and our third baby was about to be born.
Here, therefore, we have clear evidence that prior to these divorce proceedings there was a meeting between the husband and the wife, that the husband advised the wife to ask for a divorce, making her a confession of the facts upon which the petition is brought to parliament. Then the wife adds that she did not take immediate proceedings because she did not have enough money.
The procedure adopted in this case is nothing out of the ordinary. Since we have been told that if these divorce bills pass it is because we, as members of parliament, neglect the duty of looking into them, I have made up my mind to look into some of them, so far as I can do so without disregarding my other duties as a member of this house, and conquering as best I can my instinctive feeling of revulsion and disgust at reading the evidence. Whstt is testified to, quite honestly I believe, by the petitioner in this case takes place in many other cases that come before the senate committee. That is quite dear from the evidence itself. I think it is no exaggeration to say that nearly all these divorce cases are decided ex parte by the senate committee upon the evidence of the petitioner, whether husband or wife, and upon the evidence given by a police agent who is hired by the petitioner to make the case, such agent testifying to facts which are not corroborated by any other witness. It is also quite clear in many cases that the party against whom the petition is filed anid against whom a divorce is pronounced, has lent himself or herself, whether husband or wife, quite openly to the research made by the police agent. I claim that this is divorce by collusion. Collusion may be proved at times, but not often, and that is true not only of divorce but of all other cases. It is very seldom that people who enter into collusion to evade a law will do it in such a manner that the evidence of collusion is easy to establish before a court of law. Collusion is generally the result of some action or inaction on the part of the individuals who enter into it.
This case I take as an example because it differs from many other cases in this, that the petitioner gives very candid and apparently honest testimony as to collusion. Evidently she had not been warned by her legal adviser that she ought not to bring before the senate committee any fact that would tend to prove collusion, which is so clearly shown in many other divorce cases. In this case you have the .petitioner, under oath, and appearing on her own behalf, giving evidence of collusion before the senate committee. She swears that she was advised by her hudband to ask for a divorce, and that her husband confessed to her the facts which enabled her to establish the grounds for divorce. I ask any fair-minded man if that is not prima facie evidence of collusion? I leave it to the house to decide whether or not we are justified in ratifying this decision of the senate committee after a fact like this is madte clear in the evidence itself. This is not a case of presumption; it is not a ease of the obiter dictum of anybody; it is not a construction being put on circumstantial evidence by anybody here or elsewhere; it is the very testimony of the petitioner herself, giving evidence under oath. I leave it to the house to decide whether or not this parliament, being the highest court of the land, as we are told time and again, should do what no other court and no other judge with a sense of judicial responsibility would do.


Leslie Gordon Bell: Mr. Chairman, I
do not know how the hon. member for La-belle or any other member could have succeeded so admirably in proving to this house that I and other hon. members have been right in advocating repeatedly that there ought to be a divorce court to deal with the question of divorce in this country, because we know perfectly well that it is not competent to members of parliament as a whole, and certainly of all members it is not competent to my hon. friend from Labelle, to say what amounts in law to collusion. If there ever was necessity for a demonstration of that, the hon. member has just given it. Here we have the case of a woman who is ruthlessly deserted by a man. who has become a defaulter and has left her flat to carry on with her three little children. That man without any suggestion or assistance from her writes to her and rather brutally says, "I have broken my marriage vows. I have left you flat. You can go out and get a divorce if you feel like it," and my hon. friend from Labelle says that that amounts to collusion.



Procedure Respecting Divorce


Joseph Henri Napoléon Bourassa: It was not a letter; it
was a conversation which took place between the two parties, and which is related by the wife.


Leslie Gordon Bell: Then so much the worse.


Joseph Henri Napoléon Bourassa: Quite so.


Leslie Gordon Bell: So much the worse for the man. If my hon. friend had chosen to read but o<ne detached portion of the evidence he would have seen how on page 11 this woman pledges herself to the fact that there was no collusion between her and her husband to make this application for divorce. She takes that oath after all the circumstances were laid before the divorce committee, and after the divorce committee had been apprised of the fact that without any suggestion from her this man had walked out and left her flat to care for herself and her three little children. I would be very glad, if it were possible to do so, to leave this case to the judgment of my hon. friend from Lisgar, -who checks up on these applications, or to my hon. friend from Winnipeg North Centre, who has interested himself in many of these applications, to say whether this chamber should not unhesitatingly endorse this application, because I am sure that of all the applications that have come before the house this session there is none more meritorious than this.


[Stage Direction]
Section agreed to, on division.
Section 2 agreed to, on division.
Bill reported on division.

[Stage Direction]
The house in committee on Bill No. 95, for the relief of Mary Melvina Guerin-Mr. Young (Toronto Northeast)-Mr. Johnston in the chair.
On section 1-Marriage dissolved.
Joseph Henri Napoléon Bourassa: Mr. Chairman, on this bill I wish to direct the attention of the committee to tiwo facts. First, the parties are Roman Catholics. They were married according to the rites of the church and to the laws of the country before a Roman Catholic priest. Some years ago a similar case came before the house. Thereupon most of the representatives from the province of Quebec pointed out that such a marriage could not be dissolved under the laws of their church and of their province. They opposed that bill both on moral grounds and on legal grounds. The same arguments that were then advanced by several members, including, I (Mr. C. W. Bell.]
believe, the present Speaker of the house-I am not sure as to that-apply in this case. There are four children born of this marriage. Those children are Roman Catholics. If we grant this divorce we place those children with regard to their church, their social ties, and so forth, in the most awkward and obnoxious position. We do them an injury of which they cannot at present-they are all under age-measure the consequences.


Mr. WOODSWORTH:: Would the hon.
member pardon my interjecting? In the case of annulment, as granted occasionally in the province of Quebec, are not the children placed in a very awkward position, because they are then rendered illegitimate?


Joseph Henri Napoléon Bourassa: I am glad my hon. friend has brought up the point, because it is one of the errors most generally propounded over the country. It has been repeated time and again in many, many newspaper articles and in speeches inside and outside this house. Both under the age-old law of the Roman Catholic church and under the written law of the province of Quebec, articles 163 and 164 of the civil code, every time a marriage is declared to be null-the Minister of Justice will correct me if I am 'wrong-if the so-called marriage was entered into in good faith by the two parties, even if one only was in good faith, the children are held to be legitimate. I am sure this will be confirmed by my hon. friend from Cartier (Mr. Jacobs), who is neither Catholic nor Protestant, but who knows the law.


Mr. JACOBS:: I agree with the hon. gentleman, and as he notes, I can properly act as arbitrator for both denominations.


Joseph Henri Napoléon Bourassa: They are held to be legitimate, not only morally and socially, but legally as well. In other words, although the marriage is annulled, or rather-because in these matters one has to be precise-although the marriage is declared to be non-existent, the children are held, for all intents and purposes whatsoever, to be legitimate. They inherit from their father or their mother just as legitimate children do. I know of no single instance in Lower Canada previous to confederation or in the province of Quebec since confederation where the slightest stigma has ever been attached to children born of such marriages, or rather of suoh unions declared by the tribunals or the church to be non-existent. I hope that will satisfy my hon. friend from Winnipeg North Centre so far as the state of la<w, and the state of mind also, in the province of Quebec are concerned.

Procedure Respecting Divorce
But on all those matters I must repeat and go on repeating what I have said on previous occasions-it is a difference of education, it is a difference of temperament, if you like. In those matters we Catholics look primarily to the social aspect. I am not saying that we are right or wrong. I am stating a fact. We look primarily to the social aspect. We claim, as they did, not only in old France, but in England as well, up to the middle of the last century, that matrimonial laws are primarily enacted for the sake of society, and that such individual cases, sad as they may be, which may come in conflict with the general law, should not predominate in the minds of the legislature or of the tribunals over the social principle.
Now, if you take that state of mind, if you take that principle of legislation into consideration, you will readily understand how on the one hand we endeavour to maintain the laws of matrimony intact from the social point of view, while at the same time we endeavour to make it as clear as we can in law, m practice, in effect, that no stigma, no degradation should attach to those individuals who happen to have broken the laws and therefore have put themselves into a position resulting in the situation which my friend has described, when in good faith they thought they had complied with the law.
So I repeat, without attempting to bring any religious issue into the debates of this house, that we should hesitate before we pass any legislation, private or public, which will put the subjects of such legislation in a position entirely antagonistic to the social surroundings and to the social laws under which they had been bom and brought up. Of course, I realize that this parliament cannot legislate from the point of view of any individual church in this country. My friend from Cartier may regret that we have not Jewish legislation here. My friends of the Anglican church may feel similarly. I may feel the same as a Catholic. But we have to take the conditions in the country as we find them. As far back as 1851 it was declared in the legislature of United Canada, I will not say with unanimity, but under the influence of a French majority, that the conditions of Canada being as they are, all religions, all churches and creeds must stand on a footing of equality before the law. That may be objectionable from a purely philosophical or religious point of view, but it is true and unavoidable from the point of view of fact. But while I take it as an admitted principle of our polity that no legislation should be passed under the dictation of any 78594-1531
church, as detrimental to any other church,
I claim that we should avoid, either in private or in public legislation, hurting the feelings or impairing the social position of any church in this country, when the decision we make affects only the members of that church. That is a principle which was recognized by parliament in the past.


James Shaver Woodsworth: In this particular case one of the parties comes seeking a divorce. That action, I presume, would not be countenanced by the church.


Joseph Henri Napoléon Bourassa: Of course not.


James Shaver Woodsworth: But can we refuse to receive this petition even though the person seeking the divorce may be a member of the Roman Catholic church?


Joseph Henri Napoléon Bourassa: Here again my hon.
friend will realize the difficulty-but it is a difficulty which we must face-the difficulty of 'harmonizing the individualistic point of view, which I respect, of those people born and brought up in what I might call the tendencies of Protestantism, with the point of view of those born and brought up in the faith of Roman Catholicism. My hon. friend is impressed-and I appreciate his point of view-with the individual position of the woman asking for this bill. I have endeavoured however to direct the attention of the house to the social aspect of the case as it relates to the position of the four children concerned in this legislation, who have no word to say in law or otherwise, nor anyone to represent to this house what their situation will be after the marriage is dissolved. In the assumption that these four children will remain members of the Roman Catholic church when they come of age and when they enter into social1 relations with people of their creed, I submit that they will be placed in a most awkward position. Moreover, if either the woman or the man, heretofore the wife or the husband, should choose to marry again, against the rules of their church, taking advantage of this piece of legislation, once more you will place this Catholic family in a most awkward position. And you do it, I repeat, when there is no one entitled, legally or morally, to state the views of the four children. I have said on a previous occasion, and I repeat it now, that all through this broad question of marriage and divorce, I am more concerned with the fate of the children than with the fate of either the man or the woman. They are supposed to know what they have done and what they are doing; they are supposed to stand the consequences of their action. This

Procedure Respecting Divorce
woman is supposed to have known what she was doing when she asked for the divorce, and the husband is supposed to have known all the circumstances; he was free to come before parliament and oppose the petition of his wife. I am not in this instance discussing the principle of divorce itself; I am bringing forward once more the rights of the children. In this as in all other cases of this nature, who are the protectors of the children? By what right can this parliament or any body of men or any tribunal declare that four children, incapable of expressing their will, incapable of acting legally, shall be put in a position which will hamper them in the future if they desire to go on living socially with people of their creed1? I am prepared to take the same position with regard to divorces granted to people of the Anglican faith, though of course I admit it may be perhaps a little indiscreet on my part to stand up in support of the position taken by the bishops of that church, when no representative of that church in this house does so. One does not like to be over zealous. But I am simply stating this fact to show that I am not taking this position merely from the Roman Catholic point of view; I am arguing from this standpoint:	that when we deal with people belonging to one single individual church we have no right to pass legislation repugnant to the principles of that church. I take that stand, just as I would take the position that if any member of a particular church asked us to pass legislation or to refuse legislation in keeping with the principles of that church, but in a matter touching which the adherents of another faith were concerned, I should say that, given the principles and the practice of polity which must prevail in a mixed country like ours, we cannot afford either to grant or to refuse legislation from the sole point of view of one church when individuals belonging to another church are affected.


James Shaver Woodsworth: A question was put to me only a few days ago by a correspondent in Montreal, a woman who thinks that she ought to obtain a divorce. She thinks the circumstances are such that were she a Roman Catholic living in the province of Quebec she could have her marriage declared null and void, but being a Protestant it is impossible for her to obtain relief along that line. Yet, living in Quebec, she finds it very, very difficult to obtain a divorce. Now, I put that problem to my hon. friend. Is there not a real difficulty for Protestant minorities living in Quebec?


Joseph Henri Napoléon Bourassa: I cannot discuss the case because one would have to know the cireum-
stances. The situation in the province of Quebec is this. Both under civil law-what it is good for at present, I do not know, nor does anyone know-both under civil law and under the canonical law of the Roman Catholic church, divorce is not admissible What is possible is a declaration of nullity, if according to the evidence, it is found that at the time of the marriage there was some impediment fatal in law, canonical or civil- because, I repeat, there is a discrepancy between the two-in that case the marriage is declared to be null. The marriage must have been celebrated by what is now called a substantial form of marriage, which is the law in every country with slight differences. It is the law of every province in Canada, of the United States, of every country, that there must be some essential form, rudimentary if you like, in the solemnization of marriage, and there must have been a form of consummation. If these conditions do not exist, then a declaration of nullity will be granted by a court of law in the province of Quebec.
The other procedure is separation. Both under canonical and civil law separation, or what is called in English, divorce a mensa et thoro, can be granted by the court, which has jurisdiction to declare under what conditions as to property the two parties will separate, to which of the two parties the children shall be confided, and what will be paid by one of the parties to the other for the maintenance of the children. That is all I can say to my hon. friend now on that point.
In the case now before us I want first to place before hon. members of this house, and especially those from the province of Quebec, the position with regard to the principle of this legislation. They may do as they like in the matter, but I desire to place the principle before them and to refer them to the debates which took place in this house in connection with a previous divorce case. I do not like to mention names, but my friend the Minister of Justice will remember the case. Two parties in the province of Quebec applied for a divorce some time shortly after the war, I was not then in the house; I am told it was about 1919.
However, apart from the question of principle there is a question of fact in this case. The husband and wife separated long before action was taken, which happens in nearly all these cases; the children lived with the father for some time and then returned to live with the mother. This divorce was recommended by the judicial committee of the senate on the sole evidence of one of the children, a girl of fifteen years of age, who at the request

Procedure Respecting Divorce
of her mother testified as to the adultery of her father. That was the sole testimony in this case, and I would ask the legal members of this house if any court of law would render judgment, even in a trivial case, upon the testimony of a child fifteen years of age, as against one of the parents?


Mr. YOUNG (Toronto):: On a point of
order, Mr. Chairman; anyone looking at page 10 of the evidence will find that the statement just made by the hon. member is not quite correct. I refer to the following:
By Hr. Kelley:
Q. What clid your husband tell you when you asked him about living with this woman?-A. He just told me that he was living with this woman for about two years.
There is not only the uncorroborated evidence of the child but also the admission of the husband.


Joseph Henri Napoléon Bourassa: I said previously that
the testimony of an interested party is not testimony at all, and I repeat that the only witness apart from the petitioner was the fifteen-year-old girl.


Mr. STINSON:: There is the man's own
admission.


Joseph Henri Napoléon Bourassa: Yes, but the man did not appear and the woman simply said her husband admitted doing a certain thing.


Thomas Hubert Stinson: She is a competent witness.


Joseph Henri Napoléon Bourassa: I am not discussing this matter from the legal point of view; I am now addressing myself to the people who are not desiccated by law and have preserved some sense of humanity. Here is a poor woman who finds herself in the position of asking for a divorce; she thinks she is entitled to a divorce. That is her business, with which I am not concerned. She testifies against her husband, who does not appear. They never appear in these cases, apparently; most of them only appear when the police agent is sent to catch them under the proper or improper conditions which are required to make a case.


Samuel William Jacobs: They also appear at the
second wedding.


Joseph Henri Napoléon Bourassa: Yes, both or either of
them. The other witness is the girl, who says that she lived for months with her father. I shall not enter into a discussion of the details of this case; they are sufficiently repugnant, but the girl admitted that as long as she lived with her father she never spoke about the matter because he had forbidden her to do so. Then she went to live with her mother, and when the mother asks for a
divorce the girl comes before the committee of the senate and gives her evidence. I remember having read in books of history that many times tribunals have refused to listen to such testimony; they have refused to put a child in the cruel position of having to testify against her father or her mother, but evidently this parliament is above such considerations. One of these days we may expect to have babies testify before the committee of the senate that they were born of adultery.
I am not a lawyer-like Sir Charles Tupper I was on the point of saying, "thank heaven!" -but I must say that the idea of deciding a case in law, whether civil or criminal, in such a manner revolts my feelings of humanity. Someone, I think, has interjected that this is a Roman way of thinking, but in my opinion it is a human way of thinking. Whether we are pagans or infidels or whether we belong to any sect imaginable, I cannot put it into my clumsy head to think that bringing a child born of , lawful or unlawful union, to decide on the fate of either its father or mother, is the right kind of justice. I cannot put it in my clumsy head to think that a so-called representative body of a so-called civilized country should pass that sort of legislation.
To complete my idea, in a sense I regret that these two circumstances should be connected in this case; I would far rather have seen them separated. There is the principle to which I directed the attention of the committee in the beginning, the moral inability of this parliament to pass legislation contrary to the basic law of any religious community so long as only members of that community are concerned; secondly, the point of fact which I have just made. By mere accident they are connected together in this case and, therefore, I thought I would bring them to the attention of the committee. As regards the previous cases, and the cases which will follow, I leave it as it is for the time being. But on this bill, I hope we will get some pronouncement on the part of the representatives from the province of Quebec, because their silent attitude would stand in such contrast to the attitude taken upon the occasion to which I have referred, that it would give the people cause to doubt what has become of the sense of social duty of some of our representatives.


Mr. MARCIL:: Mr. Chairman, I wish to repeat what I have already said. The people of Ontario and the people of Quebec have never accepted divorce. The question of divorce has never been submitted to the people, and I know if the province of Quebec were asked to express their view on any proposal accepting the principle of divorce it

Procedure Respecting Divorce
would be turned down by an overwhelming majority. And I know that in Ontario there is a very strong public opinion against divorce, which is evidenced, as mentioned by the hon. member for Labelle, by the pronouncement made by tShe Bishop of Ottawa and the Bishop of Kootenay at a meeting of the synod of the Anglioan church of Canada. Divorce has been recognized as a misfortune; it has become a peril and a menace to our social existence. We must not follow in the footsteps of the United States where last year there was one divorce for every four marriages, or in the footsteps of the state of Nevada, where there there were two divorces for every marriage.
At the time of confederation divorce courts were in existence in Nova Scotia and New Brunswick, and had the fathers of confederation meant to impose divorce upon Quebec and Ontario they would have included a clause to that effect in the British North America Act; but that was not done. I have before me a volume which deals very suc-cintly with the constitutional aspect of divorce. It is entitled, Parliamentary Divorce Practice in Canada, and the author is Frederick D. Hogg, of the Ottawa bar. I Should like to read an extract or two from this volume, as follows:
Under the constitution of the Dominion of Canada the subject of divorce comes within the powers with respect to legislation, conceded to the parliament of Canada.
Section 91 of the British North America Act declares, that the exclusive legislative authority of the parliament of Canada extends to all matters coming within the classes of subjects enumerated in this section and included among these specifically mentioned subjects is that of divorce.
This power to deal with divorce conferred upon the Dominion parliament by the constitution, is not exercised to its fullest extent and the Dominion has not enacted legislation with reference to divorce, applicable to Canada as a whole.
By section 129, of the B.N.A. Act,
"All laws in force in Canada, Nova Scotia or New Brunswick at the union shall continue in Ontario, Quebec, Nova Scotia, and New Brunswick respectively as if the union had not been made, subject nevertheless (except with respect to such as are enacted by or existing under the Act of Parliament of Great Britain and Ireland) to be repealed, abolished or altered by the parliament of Canada or by the legislature of the respective provinces according to the authority of parliament or of that legislature under this act."
Then the author continues with his comments:
Under this section the whole body of laws in force at confederation in the uniting provinces is continued, subject to the legislative authority granted by the act, to the Dominion and the provinces respectively. Any alteration
[Mr. Marcil.l
therefore of the existing laws regarding divorce can be made only by the Dominion parliament.
Parliament has not yet repealed, abolished or altered the statutes in force in the several provinces at the time of their entry into confederation so far as any law in existence on the subject of divorce is concerned and does not exercise its right to exclusive authority over divorce.
The courts of the provinces of Nova Scotia and New Brunswick in which there was legislation with respect to divorce at the time of confederation, have always entertained applications for divorce.
At the time the province of Prince Edward Island entered into the Dominion there was power in that province itself, to deal with the questions of marriage and divorce, this power having been given to the province by 5 William IV, Chapter 10, which conferred the right upon the governor and the executive council to grant divorce.
This jurisdiction was extended to the western provinces under the provisions of the Divorce and Matrimonial Causes Act.
Divorce has never been accepted by the people of Quebec or by the people of Ontario, and in granting these bills of divorce we are making an exception for the relief of certain parties. To people who believe in divorce this is naturally very acceptable in some cases, but where people do not believe in divorce a very extraordinary position is created, as has been pointed out very eloquently by the hon. member for Labelle. If a man or a woman is a Roman Catholic and wishes to remain in the Roman Catholic church, he or she is debarred from divorce, and a divorced person cannot be remarried within the pale of -the Catholic church. That is the law of the church, not only in this country but throughout the world, and it has been the law for centuries. It is true that a marriage may be declared null in the province of Quebec, but that is brought about by means of an ecclesiastical tribunal, such as existed in England for many centuries and such as exists at the present time in Rome and other parts of the world. This ecclesiastical tribunal hears evidence ab initio, as the expression is, to discover whether -there was any impediment to the marriage either by reason of kindred or because of other obstacles which should be surmounted before a marriage could be performed. This religious tribunal presents a finding which is subject to appeal to another religious tribunal within the Dominion of Canada. If that is not satisfactory there is another appeal to the Rota at Rome, which is the outstanding tribunal of the Roman Catholic Church. These decisions do not declare in favour of divorce, but declare whether or not the marriage ever existed. In the province of Quebec legal and civil effect is given to the findings of the ecclesiastical

Procedure Respecting Divorce
court, and that is the end of the matter as far as Roman Catholics are concerned. The course generally followed in Quebec, and I presume in many other countries-it was followed in England for generations-was that parties who did not agree between themselves would apply to the court for separation as to bed and board. A finding is always made for alimony to the wife and for the maintenance and care of the children. Nothing of that kind is done by the federal parliament, and that is our strongest objection against divorce. It is unnatural and immoral and, with no disrespect to the opinions of those who believe otherwise, it is contrary to what I would cal] the well being of the state, because it saps the very foundation of home life. With that going on, what will become of the state in a very short time? The other day I cited some figures showing that in the United States in a period of fifty years prior to 1925 , 6,500,000 people, including the children, had been affected by divorce. If we continue this state of affairs, where shall we find ourselves later on?
I shall not deal particularly with the case under discussion, but the hon. member for Labelle has disclosed a most extraordinary condition of affairs. He has pointed out that evidence was adduced by a minor, a young girl of fifteen years of age, who was the chief witness in the case and who was called upon to testify against her father. If that is the procedure which the people of this country wish to uphold in the parliament of Canada, I have never seen anything like it, although I have sat in this house for thirty-two sessions. Such a procedure is contrary to public polity and to the interest of the state.
As I said a moment ago, we do not want and we have never asked for divorce in Quebec. It is imposed upon us, and the unfortunate people in the present case, if they secure their divorce and wish to remarry, must, leave the Catholic church; they cannot remain within its fold because they will be debarred from remarriage. For all these reasons I am glad that the opportunity has been offered me once more to direct the serious attention of the members of parliament to the remedy which must be applied to put an end to the most extraordinary state of affairs that exists at present with regard to divorce, and I hope the legal minds of the house will find a solution when next session comes round.


Mr. EVANS:: Certain views which have
been expressed this afternoon regarding the case before us make one wonder what a federation, or a confederation, as we call it, consists of; and a feature of the inconsistency
of our position as a parliament has been well brought out by the hon. member for Labelle. We have before us a case of a woman belonging to the Catholic church and yet no Roman Catholic in the house will sponsor the bill. The inconsistency lies in this parliament insisting on granting divorces for certain provinces while some provinces deny the right of parliament to grant divorces to those who belong to particular churches, to interfere, as I believe the hon. member said, with the civil and religious rights and social status, chiefly of the children. It was not made very clear by the hon. member whether he intended that those civil and religious rights of Quebec should extend to the other provinces of Canada.


Joseph Henri Napoléon Bourassa: No.


John Evans: His actions are not consistent with his words, then, because not long ago I remember quite well his declaring in the house in an impassioned speech that the western provinces had no right to their own natural resources without the rights of the minorities in those provinces being safeguarded in connection with the separate schools. I am wondering how, under such circumstances, parliament can be a parliament for the whole of Canada. There does not seem to be any consistency in such a situation. But it all amounts to this: Is it not time now for parliament to enact a law that will give the right to Ontario to deal with its divorce cases? As the hon. member for Winnipeg North Centre pointed out the other day, it is quite within the competence of the government at this session of parliament to introduce a bill to provide for that. Why not do so here and now before parliament prorogues and end all this inconsistency and confusion?


Joseph Henri Napoléon Bourassa: I am sure my hon.
friend from Rosetown does not want to be unfair, and I want to be absolutely fair to him. May I say this just as a matter of personal explanation, although I think it is quite out of order. I never suggested in any way, shape or form that any piece of legislation should be enacted by parliament on any question whatever-I am generalizing it -because of the rights of certain minorities. What I have stated and what I repeat is that parliament, having pledged itself in writing and in law to certain things, cannot undo those things without redeeming its pledges to whatever parties are concerned, whether they are majorities or minorities. That is all there is to the question of the return of the natural resources.

Procedure Respecting Divorce


John Evans: I wish to say in answer to
that, that in 1926 when the agreement between Alberta and the Dominion government had been entered into and approved by both parties, it was a speech by my hon. friend on the floor of the house that prevented its being carried out.


Ernest Lapointe: Let us discuss divorce.


John Frederick Johnston: Shall the seetion carry?


Joseph Henri Napoléon Bourassa: Is it in order for an
hon. member to take his seat and vote after the question has been put?


John Frederick Johnston: Yes, in committee.
' Section agreed to: yeas, 43; nays, 14.
Section 2 agreed to on division.
Bill reported on division.


MARION RUTH LAIDMAN
[Stage Direction]
The house in committee on Bill No. 98, for the relief of Marion Ruth Laidman.-Mr. Young (Toronto Northeast)-Mr. Johnston in the chair.
Section 1 agreed to, on division.
On section 2-Right t-o marry again.
James Shaver Woodsworth: Are there any
children in this case?


Edward James Young: No.


[Stage Direction]
Section agreed to, on division.
Bill reported, on division.

[Stage Direction]
The house in committee on Bill No. 88, for the relief of Minerva Elliott.-Mr. Young (Toronto Northeast)-Mr. Johnston in the chair.
On section 1-Marriage dissolved.
Joseph Henri Napoléon Bourassa: Just to illustrate the
system, let me say that there is not one single word of proof in this case. I have looked at the evidence, and it is all based on presumption. The woman lives in Toronto, she does not give evidence herself of the actual adultery of her husband. She speaks of a previous case where the woman had committed suicide, and then the parties adjusted their differences, and afterwards separated again. She was asked why she had not got a divorce before. She said she had no money; but for this case she had the money or somebody else found the money for her, and she hired three detectives in Montreal to make out the case. They shadowed the man from place to place, and to give those who are 
familiar with the city of Montreal an idea of the accuracy of their testimony I would point out that one of the detectives says in his evidence that he had followed at night a man who was supposed to be the husband, in the company of a woman. On page 11 of the evidence the detective says:
He had parked his ear on Bleury street where the Viger station is.
Now I ask anybody who is familiar with the city of Montreal what geographical connection there may be between Bleury street and the Viger station. That station is distant from Bleury street about the distance of the Central station at Ottawa from, let us say, the end of Rideau street near the bridge; so that this man, followed by this detective, one of the witnesses in this case, upon whose testimony that high judicial body of the senate has pronounced judgment, parked his car in front of a hotel on a street half a mile distant from that hotel. Three detectives were employed in the case; one of the other two admits that he did not see anything, and the other one followed the man and the woman to a certain door, but actually there is not one single witness of the act supposed to have *been committed.


An hon. MEMBER:: The statutory ground.


Joseph Henri Napoléon Bourassa: What is'called the statutory ground, but of course, there is no ground and there is no statute. It simply forms part of the vocabulary of hypocrisy which has become established in order to explain to the good people of this country why we are acting as a tribunal on divorce, although there is no law to guide us, and although we break every law, natural or otherwise, in connection with the taking of evidence as it should be taken by any tribunal with a fair standing. Again, I leave this case to the committee I suppose the bill will pass, as usual, It is the business of this representative body, ivhich so often has denounced the abuses of the senate-it is the business of 245 elected members of this house to vote blindly for a decision taken by five judges-that was the number sitting in the senate divorce committee on this case-of the highest court, of the land. I do not suppose any of them knew the city of Montreal. If we acted as decently as they do in the United States, in that low degraded country, even at Reno, if there was anybody acting in the public interest in these cases like the king's proctor acts in England, he would at least see that the law of evidence was respected and would follow the evidence in order to find out if the witnesses were sufficiently informed and were of sufficient good faith to be believed.

Procedure Respecting Divorce
I know of a case wh ere one of 'the witnesses who had come to testify against a woman- this was a case of the husband accusing the wife of adultery-met a member of this house after the session and told him, " Of course, all that was fabricated. If you give me so much I am prepared to go next year and testify the other way." That bill did not carry because of the political crisis of 1926, and it did not come up the year following because that member of the house, having received that information by the merest chance, went and informed the committee. The hired perjurer was afraid to come, but the year previous a decision was rendered by that high court of justice, the senate committee, upon the perjured testimony of that man who was paid to defame that woman. If that is justice, if that is accomplishing our duty by the people who come to this parliament seeking relief, very well; but every . time I discover a case like that I will put it before the house, and when the house prorogues I intend to put it before the country. It is about time that we should realize at least what we are doing. I do not want to be too hard. I admit that most of us have done it without realizing what we were doing. I myself-I have confessed it before-for many years allowed divorce bills to go through without having the slightest idea of the circumstances involved. But now I have begun to scrutinize these bills a little more closely, though not half as much as I would if I could, and I am beginning to realize the absolute and unexaggerated truth of what I said the other day. I do not know of any so-called civilized country in which divorces are granted by courts under any law-lax as the American laws are with regard to the grounds for divorce-where at least some degree of concern is not given to the evidence and where somebody is not supposed to take up the case from the other point of view.


Mr. CAMPBELL:: Might I ask if all this
is not evidence in favour of the desirability of having these cases dealt with by the courts?


Joseph Henri Napoléon Bourassa: Of course; but I go
further. I think it is altogether in favour of the contention that this parliament should not deal with divorce, because in order to deal with every one of these cases with some kind of decency, with some kind of respect for the elementary principles of justice, equity and evidence, not one single item of public business could be attended to throughout the course of a six months' session; it would take the whole of our time to scrutinize these so-called private bills. Take the evidence involved
in this bill. Three detectives were employed to gather evidence. I happen to know Montreal, and on the face of the evidence one of those witnesses either never was in Montreal or does not know anything about the city or thought he could impose anything on the committee. The idea of declaring he followed the husband and a woman to the point where they parked their car before a certain hotel on a street which is half a mile distant from that hotel! I do not believe one of those three detectives really followed the party. They saw what they thought was the man concerned in the case entering a certain room in the Place Yiger hotel. That is all they saw. Is any man convicted before a court of justice because he has been seen entering a certain place and because he is suspected to have committed a crime with the person accompanying him? I put it to any lawyer in this chamber, would any tribunal pronounce judgment upon that kind of circumstantial evidence? In the previous case there was, for what it is worth, a declaration by the wife saying that her husband had admitted to her that he had misconducted himself; but in this case there is no such admission. What is declared to be an admission relates to acts committed long before and on which the decision is not pronounced. The acts upon which this decision is supposed to be pronounced are unknown to the petitioner, they are unknown to the three witnesses. The three paid agents of a detective agency simply testified that they followed up this man from place to place, and I have mentioned the discrepancy in the testimony of one of the detectives. Now, are you going to pronounce a divorce and, break the family tie upon such evidence?


Edward James Young: If the hon. member is going to review the evidence he must review it in full, and not take that part which suits his case. He neglected to inform the house that the man and the woman who was not his wife registered at the hotel as husband and wife.


Joseph Henri Napoléon Bourassa: Is that a ground for divorce?


Mr. STEVENS:: It is evidence.


Joseph Henri Napoléon Bourassa: Is it evidence that something wrong has been committed?


Edward James Young: It is evidence of wrong intent.


Henry Herbert Stevens: Would you not think that is evidence?


Joseph Henri Napoléon Bourassa: That is merely what we call in French "presumption of guilt."

Procedure Respecting Divorce


Edward James Young: They stayed there the night.


Joseph Henri Napoléon Bourassa: The clerk said they
registered. One of tihe detectives said he went up to the door of the room. That is all. I do not say nothing was wrong. I simply ask: would a court of law base its judgment upon such evidence? But my further point is this, that we go on voting these bills without knowing what there is in the evidence upon which they are founded. If we as a jury take the trouble of looking into each bill what is the result?


An hon. MEMBER:: Carried.


Joseph Henri Napoléon Bourassa: An hon. gentleman says "carried." I heard the interruption, but I do not know where it came from. Suppose you pleaded a case before a jury and one of the jurors said "verdict," what would be the attitude of the judge towards that juror? I admit that this, which is supposed to be the most important social tie in this country, has become a-n object of laughter. Then for heaven's sake let us cease talking about civilization, let us cease talking about the superiority of our morality as against that of the United States or Mexico or any other country, because upon this issue, which everywhere is considered as a basic principle of society, the principle upon which rests the family, whether the people in those countries are for divorce or against it, they treat it with some degree at least of apparent seriousness; but in this house it is treated with levity. I know the subject is playing upon the nerves of some hon. members. I regret it. I do not like to be disagreeable to anybody, but I think that some of us who have reflected a little on this question and have talked it over with thoughtful people outside this house cannot treat the subject lightly. We must not imagine that all the wisdom of this country is contained within the four walls of this Chamber or of the chamber on the other side. There are a few thoughtful people outside parliament; in fact I think there are a good many, because perhaps they are less busy than we are and have a little more opportunity for reflection.


An hon. MEMBER:: Let us hope so.


Joseph Henri Napoléon Bourassa: Yes, let us hope so. Those people are simply beginning to take notice of this question; but we shall soon lose the respect and confidence of the thoughtful people of this country unless we at least scrutinize some of these bills, and show, by referring them back to the committee that is supposed to deal with them, that we are really con-

cerned in this matter. Here is a case, I repeat, where there is no evidence, from the little I know of law, that would be accepted by judges as sufficient to justify judgment. It might justify suspicion; it might justify an assumption. But I have always understood that, under the British law, it is not possible to condemn a man or a woman upon a mere assumption of facts; there must be real evidence or such circumstantial evidence as to carry conviction to the minds of judge and jury. It is clear in this case that there is no such evidence; more than that, there is proof that at least one of the witnesses did not know anything about the city in which he was supposed to carry on his trade-that he was simply fabricating testimony to give to the senate committee.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
John Frederick Johnston: Shall I report the bill?


Some hon. MEMBERS:: Carried.
Bill reported on division.


FREDERICK RUTHERFOORD ZOPPI
[Stage Direction]
The house in committee on Bill No. 86, for the relief of Frederick Rutherfoord Zoppi- Mr. Kay-Mr. Johnston in the chair.
On section 1-Marriage dissolved.
Henry Elvins Spencer: Are there any children
in this case?


Mr. KAY:: No.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported on division.

[Stage Direction]
The house in committee on Bill No. 154, for the relief of Agnes Victoria Leader-Mr. Edwards (Waterloo)-Mr. Johnston in the chair.
On section 1-Marriage dissolved.
James Shaver Woodsworth: This bill we had
before us the other day, and it is rather different from most of the others. We have heard it stated again and again in this house that infidelity or adultery was the only ground on which divorce was granted by this parliament. In this case, as I understood from the sponsor the other day, the ground is non*-eonsumma-tion. I want to point out clearly to this house and to the country that there are no statutory grounds. I heard a member of the

Procedure Respecting Divorce
legal profession say the other day that a certain ground was statutory, but I think I am correct when I say that there are no statutory grounds; we are simply proceeding upon precedent. It is sometimes said that if we send these divorces to a court we shall be widening the grounds of divorce, but I suggest that the grounds are to-day as wide as they can be. We can grant divorce in this house on any ground whatever, and you cannot have it any wider than that. It is quite true that in practice the grounds have been limited to two, but that is only a matter of precedent. Even if we did transfer these cases to some other court that need not mean the widening of the grounds, but rather a delimitation of them, with this further advantage, that a court would be a great deal more careful with respect to the evidence-as my hon. friend from Labelle (Mr. Bourassa) has pointed out -than is the case in the senate. This is an important matter and we should have from the sponsor of the bill some intimation as to whether or not there have been precedents in regard to the particular ground on which this divorce is sought. I should like also to hear from the Minister of Justice. I asked him the other day whether he thought that in a matter of this kind this parliament was competent to deal with the facts.


Mr. EDWARDS (Waterloo):: I have secured a partial list of the annulments granted by this parliament in former years. May I cite a few of the cases. In 1916, under chapter SI, an act was granted for the relief of Mabel Mills, on the same ground; in 1919, chapter 147, an act was granted for the relief of Claudius Henry Sherk; in 1919, chapter 136, Rose Kent Miller; in 1922. chapter 89, Nellie Berry; 1928, chapter 240, Elsie Irene O'Meara -all on the same ground. This is only a partial list of the annulments granted by the senate committee. I do not know much more about the case than the fact that these people came here in good faith and on the strength of these precedents; and their evidence was heard by the committee and annulment granted on the ground stated. The woman in this case works as a weaver in a knitting mill and she had to wait several . years before she could obtain money to present her case. It would be a real hardship if the committee refused to pass the bill.


Ernest Lapointe: As a matter of fact this
ground has been accepted by the senate in previous instances. I have here Gemmill on Divorce, and discussing the White case, 1888, the ground being the same, he says:
In this case the application was dismissed, the evidence being insufficient to support the
preamble of the bill, but it stands as an example of the principle put forward by the author that parliament is disposed to grant relief upon grounds which were recognized in the former ecclesiastical courts of England as sufficient to declare a marriage null and void.
Following this precedent, parliament, I know, has in many instances granted divorce on this ground.


Alexander McKay Edwards: I have a
partial list of the annulments that have been granted but this list could be greatly extended.


Joseph Henri Napoléon Bourassa: This case involves an
important point of law; it is not a question of evidence. It has been said time and again in Quebec by people who would like on the one hand to reconcile themselves to the laxity with which parliament grants divorces and at the same time to make the Roman Catholic clergy in that province believe that they are opposed to divorce, that parliament grants divorces because Protestants want them and because under the laws of Quebec divorce is not obtainable. That has been a ground of defence; without going into the matter at length -one might put it that way. But here is a case which comes within the purview of the principles suggested by the hon. member for Winnipeg North Centre (Mr. Woods-worth) in a previous case, when he asked me in what position people would find themselves in Quebec with respect to divorce or separation. If the evidence in this case is correct, if the ground on which the divorce is being sought is true, then we are passing a bill of divorce in spite of the fact that either in Quebec or in Ontario, or for that matter in any other country, it is possible to ask for a declaration of nullity on the part of a regular court. Here is the very declaration in the bill.


Mr. MacDONALD (Cape Breton):: Was
there not a case identical to this last year, in which two Catholics in Quebec were granted a divorce?


Joseph Henri Napoléon Bourassa: My hon. friend is making the same mistake. There never has been and cannot be a pronouncement of divorce in Quebec, either under civil or canonical law; but in a case like this if the evidence which was presented before the senate had been presented before the proper tribunal in Quebec, and I think I am right in saying in Ontario and all the other provinces as well, showing that the marriage had not been consummated because of impotency, the tribunal would declare the marriage null. There is, however, this difference between canonical and civil law: the canon law is at once broader, and I think more sensible than the civil law, which

Procedure Respecting Divorce
says that the impediment of impotency cannot be pleaded after three years of married life, while the canonical law, which was the old French civil law and which I believe to be the English law, provides that if the impotency is radical and organic and if it existed previous to the marriage, then there never has been a marriage and that impotency can be pleaded at any time as a ground for nullifying the marriage.
Those are the only cases so far as this impediment is concerned in which not a divorce but a judgment in nullity may be rendered by the civil courts of Quebec, and I am sure similar judgments have been rendered in Ontario and in every other country. So, in a case of this kind, there was no necessity whatever for the parties to come before parliament; they cannot claim what has been claimed by the upholders of divorce in this house, that they have no other remedy but to come before parliament asking for a divorce. They have their remedy before the courts of the province. The evidence proves that this case is one which should be adjudicated upon by the provincial courts, and the declaration of the senate itself, in the preamble of the bill-


Alexander McKay Edwards: If my hon.
friend will refer to page 5 of the bill it will be seen that these parties were married in September of 1918 and that they separated in February of 1922, so they could not come before the civil courts.


Joseph Henri Napoléon Bourassa: Of course I do not know the Ontario law, and there may be a limitation, but the preamble to this bill states:
...and whereas by her petition she has prayed that, because of his physical incompetence to consummate the said marriage, their marriage be annulled . . .
My hon. friend says he does not know, and I do not know, the law of Ontario in this regard, but I do know that the ground upon which this divorce is recommended is one acknowledged under every civil law of which I have knowledge as being a ground for nullifying marriage. In other words, this is not a case for divorce but a case for a declaration by the courts, and if the laws of Ontario or Quebec are not broad enough to meet a case of that kind why should not the laws be amended in the proper way? Why should we, by private legislation, infringe upon a power which was supposed at the time of confederation to be vested in the provinces? That would raise a very interesting issue which I am sure will have to be taken up before

long, as to whether or not this parliament or the provincial legislatures are competent to legislate on such questions as this. If we pass over this matter, let us see in the future that parliament grants divorces only on one ground, which has been stated time and again during the various sittings devoted to these bills. Here is a case where it is not even intimated that the so-called statutory ground, which never has been defined by statute and which is not even mentioned in the criminal code of Canada, exists; according to the evidence and according to the preamble of the bill itself this so-called statutory ground is not present in this case.


Richard Bedford Bennett: That is the British
statute of 1857.


Joseph Henri Napoléon Bourassa: But that British statute is not in force here. If we want to put it in force let us say so; that would be far better and far less hypocritical than to go on granting divorces from year to year with no law to guide us as to the grounds for divorce or with regard to the taking of evidence. Then we have the organic impotency of this parliament to deal with the civil effects resulting from its decisions in these cases. Here we have a case where divorce is asked on a ground which is supposed to be covered by provincial laws, and we are unable to implement our decision, as is the case in respect to all these bills, looking to the effects which will result.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported on division.

[Stage Direction]
The house in committee on Bill No. 186, for the relief of Isabel Honor Gilderoy-Mr. Garland (Carleton)-Mr. Johnston in the chair.
On section 1-Marriage dissolved.
Henry Elvins Spencer: Are there any children in this case?


Mr. GARLAND (Carleton):: One female
child, in charge of the petitioner.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported on division.

New Westminster Penitentiary

[Stage Direction]
The house in committee on Bill No. 194, for the relief of Harvey Baden Powell Haney -Mr. Garland (Carleton)-Mr. Johnston in the chair.
On section 1-Marriage dissolved.
Henry Elvins Spencer: Could we have some information regarding the children?


William Foster Garland: There is one child, at present in charge of the petitioner, the father.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
Bill reported on division.

[Stage Direction]
The house in committee on Bill No. 197, for the relief of Helen Steele-Mr. Jelliff- Mr. Johnston in the chair.
Section 1 agreed to.
On section 2-Right to marry again.
Henry Elvins Spencer: Could we have some information regarding this bill?


Mr. JELLIFF:: My recollection from reading the evidence is that there are three children concerned; one is a married daughter with whom the petitioner is living at the present time and the other two are sons of the ages of twenty and twenty-two respectively, living with the father. I do not imagine that the question of parental care is a very vital one in this instance.


[Stage Direction]
Section agreed to.
Bill reported on division.

[Stage Direction]
Bill No. 94, for the relief of Edyth May Shields.-Mr. Young (Toronto Northeast).
Bill No. 127, for the relief of Sophia Love.- Mr. Young (Toronto Northeast).
Bill No. 138, for the relief of Harry Freeman Switzer.-Mr. Young (Toronto Northeast).
Bill No. 178, for the relief of Adele Cawthra Regers.-Mr. Matthews.
Bill No. 179, for the raJief of Madelaine Virginia Lumsden.-Mr. Bothwell.
Bill No. 180, for the relief of Edgar Charles Buchanan.-Mr. Stewart (Leeds).
Bill No. 196, for the relief of Ivy Georgina Lloyd.-Mr. Jelliff.
Bill No. 19S, for the relief of John Campbell.-Mr. Garland (Carleton).
Bill No. 200, for the relief of Annie Forbes Sangister.-Mr. JeffiS.
Bill No. 202, for the relief of Joseph Niksboll. -Mr. Garland (Carleton).
Bill No. 203, for the relief of Charles Stanley Cuneo.-Mir. Jelliff.
Bill No. 294, for the relief of William Allan Griffith.-M.r. Jelliff.
Bill No. 205, for the relief of Sydney Bishop. -Mr. Jelliff.
Bill No. 208, for the relief of Marjory Laviniia Bradford.-Mr. Anderson. (Toronto-High Park).
Bill No. 209, for the relief of Patrizio Nardini.-Mr. Garland (Carleton).
Mr. SPEAKER:: Mr. Johnston from committee of the whole reports that the committee have considered certain bills. When shall the report be received? Now.


Joseph Henri Napoléon Bourassa: I intend to give notice of amendments on the third readings of a couple of these bills.


Hewitt Bostock: When shall the bills be read a third time?


Henry Herbert Stevens: Next sitting of the house.


Hewitt Bostock: Next sitting of the house.


SECOND READINGS
[Stage Direction]
Bill No. 201 for the relief of Ethel Evelyn Farrow.-Mr. Lennox.
Bill No. 210 for the relief of John Alfred Neary.-Mr. Lennox.
Bill No. 211 for the relief of Charles Storey. -Mr. Lennox.

[Stage Direction]
On the orders of the day:
Mr. W. G. McQUARRIE (New Westminster) :: On May 14, 1928, an order was passed for the return of certain papers in connection with the New Westminster penitentiary, but that return has not yet been brought down. I should like to ask the Minister of Justice whether he does not think it is about time we were getting that return.


Ernest Lapointe: I will look into the matter, and if the return is ready, I shall be pleased to lay it on the table. But may I call the hon. member's attention to the fact that I do not think he h:as the right to criticize me, because, under the rules, a motion for a return drops after the session is over. If the motion has not been renewed this session, my hon. friend cannot get the papers as of right, although I will give them to him.

Regulation of Liquor Traffic
Mr. MoQUARRIE: That is very kind, but I believe the minister is not quite correct in his statement of the rule.


Ernest Lapointe: Yes, I am correct. I will show my bon. friend Bourinot, Beauchesne and all the other authorities. I was reading them yesterday.


William Garland McQuarrie: The minister is good-natured to-day. In view of the delay there has been, will he bring the file up to date?


Ernest Lapointe: What is it about?


William Garland McQuarrie: It is in connection with an investigation which was held some time ago by Inspector Jackson into the affairs of the New Westminster penitentiary. There was a transcript of the evidence. I might read the order:
Order of the house for a copy of the transcript of evidence taken by Inspector Jackson on his recent investigation of certain charges against Lieutenant-Colonel H. W. Cooper, late warden of the _ British Columbia penitentiary at New Westminster, and into the administration of the said penitentiary; also a copy of all letters reports, or other documents or memoranda leading up to the said investigation, or during the course thereof; and also a copy of all letters, reports, documents or memoranda subsequent to the said investigation, including all correspondence passing between the Minister of Justice and the said Cooper.
Will the Minister of Justice be good enough to bring the report up to date?


Ernest Lapointe: I was under the impression that those papers had been brought down. Perhaps it was in the senate.


William Garland McQuarrie: They were not brought down in the house.


Ernest Lapointe: No, but I think they
were in the senate.


William Garland McQuarrie: I should be glad if he would bring them up to date, and in addition to that I should like to get, if possible the file of the Civil Service Commission-


Ernest Lapointe: Ah, that is different.
Mr. MoQUARRIE: Similar files have been brought down several times during the source of the debate on the Post Office estimates.


Ernest Lapointe: I have no power over
the Civil Service Commission. I shall be glad to transmit the wish of my hon. friend.


William Garland McQuarrie: I think the Secretary
of State is the proper officer, if he will bring down the file in reference to the appointment of Inspector Jackson and all matters in connection with the same case.


Ernest Lapointe: I can speak only for
myself.


Richard Bedford Bennett: I think the Minister of Justice is
in error in saying that papers called for by an order of the house should not be brought down if parliament prorogues before they are tabled. I quite agree with him that if the motion has not been converted into an order before parliament prorogues, the motion lapses. But when an order of the house has been passed, the question is then only one of the officers of the department preparing the documents. Frequently we have had evidence of these having been brought down during the recess and the papers lodged in the proper place. An order of the house does not lapse merely because parliament prorogues. I think the hon. member is confusing for the moment the order with the notice which is placed upon the order paper and which is not converted into an older.


Ernest Lapointe: No, I am not confusing them. They are very wide apart.


Richard Bedford Bennett: I know we have acted
upon the opposite principle.


REGULATION OF LIQUOR TRAFFIC
[Stage Direction]
On the orders of the 'day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: On the 23rd of April the
hon. member for St. Lawrence-St. George (Mr. Oahan) asked for some correspondence between His Majesty's government in Great Britain and His Majesty's government in Canada and also between His Majesty's government in Great Britain and the government of the United States respecting a convention signed in January, 1924, in relation to the liquor traffic. His Majesty's government in Great Britain has no objection to the tabling of the correspondence between the governments of Canada and Great Britain; but as regards the correspondence between the governments of Great Britain and the United States, the British [DOT]government is of the view that much of it is highly confidential and should not be tabled. I am, therefore, not at present in a position to table the correspondence between Great Britain and the United States, but I am now tabling the correspondence between Great Britain and Canada in reference to the convention.

Canada's Gold Reserve


CANADA'S GOLD RESERVE
[Stage Direction]
On the orders of the day:
Hon. J. A. ROBB (Minister of Finance):: A few days ago the hon. member for Winnipeg North Centre (Mr. Woodsworth) inquired as to the exchange rates. In order that there may be no misunderstanding as to any authoritive powers vested in the Dominion government to ameliorate exchange rates by the exportation of gold, I desire to make our position clear:
First:	Exchange rates are determined by
commercial business, and so forth, transacted between countries.
Second: Banks are the media for conducting external as well as internal financial business, and not the government.
Third: The gold reserves held in our vaults belong to and are held for account of the several banks to the extent of the amount of available Dominion notes which they primarily obtained from the treasury on deposit of gold with the treasury.
Fourth:	The banks are required by the
Bank Act always to keep on hand 40 per cent of their cash reserves in Dominion notes, thus eliminating to that extent the amount of Dominion notes in their possession to call for gold from the treasury.
Fifth:	The banks have gold supplies in
their own vaults not under control of the treasury, except such gold as they may from time to time deposit in the central gold reserves towards protecting any surplus issue of their own bank notes over and above the amount allowed them under the provisions of the Bank Act.
Sixth:	The banks are free to export their
gold holdings without reference to the Dominion treasury, together with as much gold held in trust for them by the treasury as they are able to obtain by taking out of circulation and handing back to the treasury Dominion notes previously obtained by them on deposit of gold with the treasury.
Seventh:	The Dominion has not parliamentary authority to deal in the buying and selling of gold for commercial purposes. If commercial business transacted by the people through the banks requires the shipment of gold, it becomes the duty of the banks to export or import gold to meet such requirements as their business transactions with the public demand.
Eighth: The Dominion treasury is obligated by the act governing government savings
banks deposits to keep on hand gold to the extent of 10 per cent of such deposits made with the government. Such gold forms no part of the reserve held by the treasury in trust for the banks.
Ninth:	The treasury has from time to
time bought from Canadian mines gold consigned to the Royal Mint for refining purposes. All such gold has been paid for out of current revenues received from taxation and other government services. Such gold is held by the treasury in place and instead of the cash to our credit which was taken from our cash deposits with the various banks, and the gold so held is available for use on government business only and is utilized when required for such purposes. For example, such gold may be at any time deposited with the banks in Canada for the credit of the Receiver General, or may be shipped to our financial agents in any country, but only for the purpose of meeting government obligations. We have large commitments from time to time in New York and London, England. When exchange is against Canada to an extent over and above the cost of shipping gold, if our supply of this free gold permits, shipment will take place, but such shipments, being for government account in New York and not for sale in New York of Canadian funds, would have no effect on exchange rates other than perhaps what might be designated as a slight sentimental effect.
The above sets out the position of the federal treasury and the obligations of the banks in regard to exchange transactions. If the federal treasury needs funds at any time for government obligations in New York we are obliged to buy exchange through the banks precisely in the same way as is done in ordinary business practice, unless we can advantageously make use of any holdings we may have of free gold which has been bought from the mines, and so forth, with cash taken from our revenue accounts.


Richard Bedford Bennett: I do not think that that statement answers the question that was asked. Was not the question as to the extent to which gold is held against Dominion notes issued by the country?


James Shaver Woodsworth: No, although that other question is involved. Just the same, I do not think the minister's statement is an answer to the question I asked the other day.
2430	COMMONS
British Preference-Mr. Campbell



WAYS AND MEANS


[Stage Direction]
Hon. J. A. ROBB (Minister of Finance) moved that the house go into committee of ways and means.
Milton Neil Campbell: Mr. Speaker, I desire to bring to the attention of the house some matters arising out of a discussion between the Minister of Finance (Mr. Robb) and myself on Tuesday last, a discussion which centered around the regulation that was imposed in connection with the British preference on the 1st of February last. Before dealing directly with the question at issue, I desire to summarize the events leading up to it.
The Minister of Finance in his budget speech in 1928 announced that this regulation was being put into effect, and he stated that it was brought in with the object of fostering imperial trade. It was pointed out at that time that the regulation would have precisely the opposite effect, that instead of fostering inter-imperial trade it would be an impediment to that trade. The Minister of Finance did not take any serious objection to that. On February 29, 1928, some statements were made in the house by the Minister of Railways and Canals (Mr. Dunning) on the authority of the Minister of Finance. The Minister of Railways and Canals on that occasion said:
As to the criticism which has been uttered with respect to the intimation by the Minister of Finance that in future it was proposed to ask that ail goods coming in, taking advantage of the British preference, should have a 50 per cent British or empire content, I desire to say just this: the Minister of Finance gave that intimation in no sense intending thereby to limit the British preference in the slightest degree.
Further on he said:
Some hon. gentleman in the far corner-1 forget who it was-instanced the possibility that the raising of the limit to 50 per cent might have the effect of debarring British goods. 1 can assure my hon. friend on the authority of the Minister of Finance that there is no intention to permit it to be used for any such purpose, and if as a result of experience it is found necessary to provide a different percentage of content for different classes of goods, as other British dominions have done, it is quite within the competency of the government to work out the solution along those lines.
Later, on March 13, 1928, the Prime Minister in the same budget debate, referring to the regulation in question, said:
May I say to this house; if we discover, in connection with the enforcement of a regulation of that kind, that the consumers of this
[Mr. Woodsworth.l
country are in any particular losing the benefits which the British preference was intended to give, we shall not hesitate speedily to make such changes as the circumstances may demand.
Further on, the Prime Minister said:
I wish to say that if that situation arises it is not the intention of the government to make the existing 25 per cent British content one per cent higher than it is at the present time.
The agitation from this corner of the house I believed had some effect; at any rate, the regulation was not put into effect at that time. Indeed, after the statements made by these ministers some of us were rather surprised that the regulation ever went into effect. However, it was made effective on the 1st of February last.
May I say that it appears that this regulation was actually asked for by the textile manufacturers? That would seem to prove to me, at any rate, that these gentlemen knew that it was in their own interests. I am not objecting to that, of course, but it would rather indicate that that regulation was never intended to foster inter-imperial trade. The Canadian Textile Journal in an editorial on November 29 last stated:
Manufacturers and producers will welcome the 'announcement from Ottawa that after February 1 goods to enjoy the British preference entering Canada will be required to be 50 per cent of empire material and labour, instead of 25 per cent as at present.
Quoting further from the same editorial:
This increase in empire content was foreshadowed by Hon. James A. Robb in his last budget and is due to the repeated demand of Canadian producers.
My complaint in this regard is that it never was intended to foster inter-imperial trade. That is my impression, at any rate, and certainly a wrong impression was created in this house and in the country, I believe, by the words of the Minister of Finance when he introduced his budget.
May I itemize some of the commodities that are affected by this regulation? First, fur. The raw fur used by British manufacturers comes largely from Russia, and as in nearly all cases this raw fur is more than 50 per cent of the value of the finished article, naturally these goods would be debarred from the benefit of the British preference. Then there is copper. I admit that the minister has perhaps more ground for the regulation in connection with copper than in connection with any of the other commodities. Copper is produced in Canada, in Australia and in other parts of the British Empire. But at t'he present time the Canadian copper producers have no worry with regard to marketing their product; as I understand it, they are

British Preference-Mr. Campbell
much behind their orders. So even in respect to copper this regulation might well be delayed. The British manufacturers contend that while they do use Canadian copper, they find it almost impossible t-o make an affidavit as to the exact content in any particular line of copper goods. That is, to comply with the regulations they have to make an affidavit that, all the copper in a particular manufactured article is empire copper. It is very difficult to segregate the lots of coppeT that come from different parts of the world. Then take velvet. Raw velvet, I understand, comes from Japan, and again as in most of the manufactured goods, the value of the raw material is more than 50 per cent of the value of the finished article. Of course, when that is so, the manufactured goods are debarred from the advantages of the British preference.
Then there is the question of mercury. Last Tuesday I read a letter from the British federation of industries which showed the effect that this regulation would have on mercury and its compounds. The letter pointed out that not only is mercury in its original form not commercially procurable in the British Empire, and therefore would be debarred under this regulation, but that there are many compounds of mercury. Mercury enters into many drug compounds, and these would all be affected to a very large extent. But the most important commodity, and the one that will be affected most seriously by this regulation, is cotton. As 'hon. members know, almost all of the cotton used in the British mills comes from the United States, and naturally, all other things being equal, it would be easier for the Americans to manufacture their cotton and ship it in here than it would be for the British manufacturers. The only thing that helps the British manufacturers to compete here is the British preference. If they are denied that advantage, it seems to me, while it might help our textile manufacturers to a limited degree, it would divert a good deal of the trade to the United States. I will deal with that later on.
On Tuesday I read considerable correspondence that has passed between the British High Commissioner and the Department of National Revenue, and also between the British federation of industries and the same department. The Minister of Finance, in answer to a question of mine to be found in Hansard on page 2314 said1:
Mr. Robb: It is the 50 per cent clause the hon. member is referring to?
Mr. Campbell: Yes.
"Mr. Robb: The 50 per cent requirement of British labour and material. We have discussed this matter with the British board of trade and I think they are quite satisfied with 78594-154
the arrangement. There is a member of the Canadian customs staff in England at the present time and if they desire to have this 50 per cent clause checked up he is available to do that work and we would consider the matter on his report. So far nothing has been brought before us to indicate that any companies are having trouble coming within this regulation. The broad general statement has been made that some of them could not come under it, but as yet there has been nothing submitted to us.
Further on I made this statement:
Mr. Campbell: If I understood the minister correctly he said that the British authorities were satisfied with the 50 per cent regulation?
To which the minister replied:
Mr. Robb: We have heard no complaints. Then on page 2316 the minister in answer to a statement of mine, said:
Mr. Robb: What justification has my hon. friend for saying that the minister has not dealt with the complaints?
Further on he said:
I understand that the officer is now on the way home. I imagine when he returns, we shall have the report, but I repeat that while my hon. friend has read from a long list of statements which have come from overseas, he has not made out any case that British importations have been stopped.
And again he said:
There may be cases where it is not obtainable, but these cases will be adjusted when the report of the officials of the department investigating the matter comes before us. That report has not yet been presented.
On the following morning, May 8, I noticed an article in the Citizen which I will read for the information of the house:
Considerable concern has been aroused in the office of Sir William H. Clark, British High Commissioner, by comments, made by Hon. J. A. Robb, Minister of Finance, on the new 50 per cent empire labour and material preferential regulations in the House of Commons budget debate last night.
Questioned on the minister's statements, R. H. Hadow, first secretary in charge in the absence of Sir William on his western Canada trip, said this morning that he found it difficult to reconcile Mr. Robb's statement that the report of the Canadian government investigator in England had not yet been received with the official information given the high commissioner's office that the report was made on April 26 to the minister of national revenue.
Mr. Robb's statement that no further complaints had been received since the Canadian government investigator began his investigation among British manufacturers early last March is explained by the high commissioner's office in that all complaints were made direct to Major L. A. Wilmot, Canadian customs service agent in London, England, who made the investigation.

2438	COMMONS
British Preference-Mr. Campbell
"When is Major Wilmot expected to make his report to the government?" Mr. Hadow was asked.
"Our information," the first secretary replied, "is that Major Wilmot was in Ottawa on April 26 and made his report then to the Minister of National Revenue."
"What about the minister's statement that no complaints have been received from British manufacturers for some months past?"
Withold Direct Complaints "That is easily explained," Mr. Hadow rejoined promptly. "The British manufacturers were told by this office that the question was being investigated by an agent of the Canadian government and were directed to make all their representations to him. Thereafter, in order not to prejudice the situation nor to embarrass the Canadian government, all direct complaints to the Canadian government were withheld until Major Wilmot completed his enquiry. But, while no complaints may have reached the Canadian government during this period, as Mr. Robb informed the house, at the same time a continuous stream of complaints was reaching the government's investigator in the old land. Not until May 2, after this office was informed Major Wilmot's report had been made to the government, was any further complaint addressed direct to the Canadian government. On that date, however, this office, in a communication to the government, reaffirmed its previous objections to the new regulations and stated that .already British export trade was suffering severely frorn the impossibility of complying with the regulations which were put into effect on February 1 last.
In view of this statement, I think it was a little unfair for the minister to speak as he did on May 7, unless this had not come to his notice. The article proceeds:
"Major Wilmot, in making his investigation, visited Manchester and other British industrial cities; he interviewed many manufacturers, and met many representatives of the British federation of industries; he was afforded every opportunity of visiting British factories to see for himself the difficulties under which the manufacturers are operating in attempting to comply with the new regulations."
"What about Mr. Robb's observation that Sir Williatn Clark had to frankly confess that Great Britain does not comprise all of the British Empire?"
Sort of Suggestion
"That seems to be a suggestion that British manufacturers could use more Empire materials if they wished," Mr. Hadow concluded. "After careful investigation, British authorities were persuaded that certain types of short staple cotton used for certain manufacturers at present exported to Canada were not obtainable in commercial quantities in the British Empire, and that the new regulations, despite the utmost readiness of the British manufacturers to comply as far as possible in the interests of interimperial trade, will result in the exclusion of a large quantity of British goods from Canada."
May I read two letters I have received since the date of this debate? These letters are from representatives of British firms in Canada, one being from Messrs. Sproul, Smith &

Co., manufacturers' agents, 33 Melinda street, Toronto, Canada, dated Thursday, May 9, 1929;
Milton N. Campbell, Esq.,
Member of Parliament,
House of Commons,
Ottawa.
Sir: I beg to refer to the statement attributed to Hon. Jas. A. Robb, Minister of Finance, in the_ House of Commons on the 7th instant regarding the 50 per cent British labour and/ or material requirements for United Kingdom goods entering the Dominion.
If he has been correctly reported I understood him to have stated as follows:
"Not long ago an official of the Department of National Revenue was sent to England to investigate complaints by British manufacturers that the new regulation would work a hardship upon them. Since he left we have heard no more complaints, .and we have had no evidence that the British manufacturers cannot comply with the 50 per cent requirement."
"I will repeat that an official of the Department of National Revenue went to England to investigate and that he is now on his way home. Sir William Clark told us that some raw materials were not obtainable in Britain, but had to confess frankly that Great Britain did not comprise all of the British Empire. Australia imposes a requirement of 75 per cent, New Zealand 50 per cent, and even Great Britain imposes a requirement of 75 per cent on certain goods. We do not think it unreasonable to ask that British-manufactured goods seeking the preference from Canada should have 50 per cent of British labour and material."
Permit me as the Canadian representative of one of the largest Lancashire manufacturers of grey cotton goods to profoundly disagree with the above. The assertion that since a representative of the Department of National Revenue was sent to England no complaints by British manufacturers that the new regulation would work a hardship upon them have been received is, in a sense, true, but to my knowledge many complaints have been made to the government by the Canadian representatives of British manufacturers and probably also by some of the British manufacturers themselves, but as these complaints are at present being investigated by the Customs department, it is possible that they were not within Mr. Robb's notice at the time his statement was made.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Milton Neil Campbell: When the house rose
at six o'clock, Mr. Speaker, I was reading a letter which I had received from Messrs. Sproul, Smith & Company, manufacturers' agents, Toronto, and I will start in again at the point where I left off when you interrupted me at six o'clock.
The fact that Australia imposes a requirement of 75 per cent, New Zealand 50 per cent, and Great Britain 75 per cent, is beside the point as all of these countries have lists of

British Preference-Mr. Campbell
exempted goods and all that is being asked for now is that exemption lists should also be provided for in the case of British goods entering the Dominion. It is a well-known fact that there are certain raw materials which are not obtainable within the empire: for example, the cotton used in the manufacture of greys is only grown tin the United States of America, the cotton grown in the empire only being suitable for fine qualities of cotton cloths.
Grey cottons are an essential requirement to all classes of the community and they must be obtained somewhere. Hitherto supplies have come mainly from the United Kingdom but if the 50 per cent requirement as regards this class of goods is insisted upon it means that in future requirements will be met from United States sources, or to put it more plainly, the government will simply be taking a certain volume of trade from the United Kingdom and handing it over to the United States of America. This, bearing in mind the present attitude of the United States government to Canadian products as expressed in their present tariff proposals, is unthinkable, and I earnestly hope, not only from a personal but also from an imperial standpoint, that it will be found possible to provide for an exemption list.
Then again I have a letter from the Toronto office of Messrs. Wm. Anderson & Company Limited, under date of May 9, as follows:
Milton jST. Campbell, Esq., M.P.,
Ottawa.
Dear Sir,-I have noted, with interest, the statement made in the House of Commons on May 7th, 1929, by the Honourable J. A. Robb, in which he said: "That since the official of the Department of National Revenue was sent to England, no more complaints have been heard regarding the proposed new reguation and that no evidence has been forthcoming that British manufacturers cannot comply with the fifty per cent requirement." In the same newspaper I note, with satisfaction, that you challenged the minister regarding this statement and I am enclosing a copy of a letter addressed to the minister regarding this matter.
There is not the least doubt but that if the new regulations are applied without regard to exceptional cases such as the fabrics we have mentioned in our letter to the minister that they will affect very adversely the importations of these classes of British textiles to Canada and will greatly facilitate the importation of goods of similar construction from the American mills.
Attached is a copy of a letter which this firm sent to the Minister of Finance on May 9, as follows:
Hon. J. A. Robb, M.P.,
Ottawa.
Dear Sir,-In the Toronto Globe of May 8th, 1929, you are reported as having made the following statement: "Not long ago an official of the Department of National Revenue was sent to England to inspect complaints by British manufacturers that the new regulations would work a hardship upon them. Since he left we have heard no more complaints and we have had no evidence that the British manufacturers cannot comply with the fifty per cent requirement." Your statement, if correctly reported, 78594-1544
is surprising,; in view of the fact that so far as I know nothing has as yet been done to meet the position which arises in the case of certain goods in which my firm is interested, along with many other British manufacturers, and regarding which they made representation some time ago to the Department of Overseas Trade, London.	[DOT]
I refer to goods similar in construction to the sample attached hereto.
I may say that attached to the letter is a sample of this grey cotton, what the housewife would call unbleached cotton.
This material is entirely British made of American cotton. The yarns are spun and the goods are woven in England; the raw material only is not of empire origin and is not available within the empire. The fair market value of such a cloth, as attached, is approximately four hundred and seventy-five pence for one hundred yards and the valufe of the cotton used in this cloth approximates two hundred and sixty-two pence, and it will, therefore, be seen that although the entire process of manufacture is British we cannot certify that the goods have fifty per cent British labour and material. This oloth is typical of a considerable number of fabrics manufactured in quantity in Great Britain, which under the new regulation would apparently not enjoy the advantages of the British preference, thereby facilitating the importation of such fabrics from the mills of the United States.
It is respectfully suggested that such articles as this are worthy of special consideration and I find it difficult to believe that it is the intention of the new regulation to deny the British preference to goods in which the whole process of manufacture is British and the raw materials for which are not available within the empire.
I would point out that the various firms who have registered complaints with the minister and the British High Commissioner's office are not objecting to the regulation as such, but are asking that exemptions be allowed for certain classes of goods not commercially procurable in the empire, as has been allowed by New Zealand, Australia and also by Great Britain herself.
I direct the attention of the house to the probable effect this 50 per cent requirement will have on Canada's trade. I find that for the year ended December 31, 1928, we had what is commonly called an unfavourable trade balance with the United States of $333,000,000; that is, we bought from the United States of America goods to the value of $333,000,000 more than we sold to them. I find that for the same period we had what is commonly called a favourable trade balance with (great Britain of $257,000,000; that is, Great Britain bought from us goods to the value of $257,000,000 more than we bought from her. The question of the drop in the value of the Canadian dollar in New York has been raised recently in the house, and the minister read a statement this afternoon
2440	COMMONS
British Preference-Mr. Campbell
dealing with that question. I think it was the hon. member for Winnipeg North Centre (Mr. Woodsworth) who pointed to the fact that the Canadian dollar was below par in New York and that considerable shipments of gold had been made, apparently to balance the exchange. I do not think the assertion will be questioned that the drop in the value of the Canadian dollar is caused in this case by the unfavourable balance of trade. The present tariff bill before the House of Representatives at Washington will make it increasingly difficult to market our farm products in the United States and will increase and intensify that condition, and if nothing is done to correct it there is very little doubt that it will end by our selling less to the United States while the probable effect of this regulation will be that we will buy more from that country. Under those circumstances, we might look for a further drop in the value of the Canadian dollar, necessitating the shipment of further amounts of gold to the United States.
Some days ago I quoted from a speech delivered by Sir Herbert Holt to the shareholders of the Royal Bank. I do not think anyone will accuse Sir Herbert Holt of being a free trader or of being even a low tariff man. In pointing out the trend of events in the United States and the danger of a market being refused to our Canadian farmers, he mentioned that it might be necessary for Canada to increase the British preference and to make better treaties with the more favoured nation countries in order to market our farm products which he, at that time, anticipated the United States would refuse to accept. I have in my hand a Canadian Press despatch from Toronto, dated May 8. This is a press interview with the Hon. J. S. Martin, Minister of Agriculture of Ontario, *and it says in part:
The only recourse of the Ontario dairymen, Mr. Martin said, will be to make cheese and butter of the cream which is now being exported to the United States. It will be necessary, he continued, for them to concentrate on the British market with cheese and butter. The British market would be the only one open to them, he said.
I have another Canadian Press despatch from Montreal, dated May 8. This is an interview with the Hon. J. Edouard Oaron, former Minister of Agriculture for the province of Quebec, and it states in part:
He urged an increase in Canada's production the better to meet domestic needs and urged a trend toward developing the British market should any export trade be sought.
It seems to me that it is a most dangerous thing for the Canadian government to do

anything at the present time which might prejudice or jeopardize that very important trade with the mother country which has proven so profitable to us. My complaint is based on two grounds: First, that the effect of this regulation will be to put additional impediments in the way of British trade- trade which we should encourage and foster in every way possible at the present time in view of the tariff attitude of the United States. My second objection is on a moral ground. I do not want to accuse the minister of deceiving the house, but I think he has either deceived the house or he has been deceived himself in introducing a regulation like this. I prefer to think that the minister did not understand it. In view o>f Ms statement, given through the Minister of Railways (Mr. Dunning) and the statement of the Prime Minister (Mr. Mackenzie King) which I read this afternoon, I am inclined to think that the minister had not given very close study to this matter but had simply accepted the recommendations of the textile industry and had brought forward this proposal without considering its actual effect. My submission is that the effect of this regulation will be to raise the tariff on certain British goods. It is not being raised in the straightforward, honest, old fashioned way by means of a revision of the schedules upward, but it is being raised by indirect means and the effort has been made to create the impression in the house and throughout the country that the tariff on British goods is being lowered and that the government is doing something to foster and develop interimperial trade.


Hon. W. D. EULER:: (Minister of National Revenue): Mr. Speaker, as the subject under discussion affects the Department of National Revenue, I would like to make a very brief review of the situation as it stands to-day. I take it that the hon. member for Mackenzie (Mr. Campbell) criticizes not only the principle of the 50 per cent requirement of British content in order to obtain British preference, but also the manner in which it is working out. If he is criticizing the principle, I think he is just about one year too late as the matter was introduced during the last session of this house.


Milton Neil Campbell: I criticized if much more forcibly during the debate on 'last year's budget.


William Daum Euler: If he is criticizing at this time its working out he is premature, because very little has been done eo far with regard to the matter.

British Prejerence-Mr. Euler
The theory of the 50 pea- cent requirement of British content, as announced by the Minister of Finance last session, is to help empire trade. This is questioned by the hon. member for Mackenzie, but if a further application of this 50 per cent requirement also helps Canada and Canadian production, because Canada is part of the empire, then, for myself, I would say that it should give no cause for regret. I take it that the British preference is intended for British goods, and I would make this statement: Goods are not British if they are not of British origin or British workmanship to a very substantial percentage. I do not think 50 per cent is at all too high a requirement, and if goods imported from Great Britain are not at least 50 per cent of British material or British workmanship then, I would say that they are not British and are not entitled to the British preference. I believe there are many instances where goods, largely manufactured in continental countries, have been imported into Great Britain and, after some further processing have been exported as British goods and have received the British preference, when as a matter of fact that preference went largely to manufacturers in other countries.
I think the hon. member gave a very unfortunate example when he mentioned the matter of furs. He thought it a matter of regret that the manufacturers of furs in Great Britain could no longer go to Russia to buy their furs. When Russian furs are brought to Great Britain and manufactured there they do not contain 50 per cent British content and, therefore, could not take advantage of the British preference. Surely we are not required to go so far as to pay a bonus to the producer of furs in Russia in order to compete against Canadian furs. If the British manufacturer of furs wants to export them to Canada, surely as a part of the empire, we are entitled to some consideration as a fur producer, and he might very well buy his furs in that portion of the empire which produces them.
The hon. member also mentioned mercury. That criticism is entirely pointless, because mercury is actually on the free list and cannot be affected at all by this requirement. He claims that the proper working out of the application of this requirement would help United States industry. I do not know, but I might just as well assume that it might help Canadian industry and this is desirable. I believe this 50 per cent requirement will encourage empire trade. We have not completed our investigations and it is for that
reason I say that the criticisms of the hon. member are premature. Our investigations have only just begun, but investigations so far show that the British manufacturer-and I do not blame him for this-is now purchasing in foreign countries a good many of his raw materials which he certainly can purchase in the British Empire because the 50 per cent British content applies to the whole British Empire. Surely it is not unfair, if he is to get a preference as a British manufacturer, that the thing should be reciprocal, and that the British manufacturer should purchase as much as possible from other parts of the empire. If we are going to continue as we have been doing and he is permitted to purchase where he pleases in foreign countries -and of course this is his privilege-then nothing is changed and we have the old condition that goods come in here as of British manufacture, get the British preference, and yet have perhaps not more than 25 or 30 per cent of actual British content.
When we put the requirement into force a few months ago, the Minister of Finance and I were interviewed with regard to the matter by the British High Commissioner, Sir William Clark. At first his protest was in the direction of a complaint that the application was a little too rapid and that more time should be given. We made some concessions in that regard. Later on a complaint-was made regarding certain outstanding commodities which would be very seriously prejudiced in connection with their sale to Canada if we applied the 50 per cent provision. Those three commodities were cotton, copper and chemicals. It was stated that with regard to cotton, certain raw materials must of necessity be purchased from the United States; that the kind of cotton necessary for the particular commodities which they exported to Canada could in many instances be procured only in the United States, and that the cost of the raw material, the cotton, was in itself frequently greater than 50 per cent, so that it would not be possible to have in the finished article a 50 per cent British content by way of labour or raw material. It was suggested, as my hon. friend said, that an exempted list should be formed which should not come under the 50 per cent regulation. As regards cotton, our investigations have not been completed, but we have ascertained some facts. The cost of cotton, as everyone knows, fluctuates. If it is 10J pence per pound, then the manufactured goods will be able, I think td come under the 50 per cent British content.

British Preference-Mr. Euler


Mr. KENNEDY:: W'hy was the investigation not made before the change was made in the preference?


William Daum Euler: I will come to that.


Donald MacBeth Kennedy: That is the point.


William Daum Euler: I will try to present it to my hon. friend in a moment. As I was saying, if the price of raw cotton is lOJ pence per pound, all dried and finished piece goods can qualify. I think the price is lower than that at present. Grey cottons come very close to the 50 per cent requirement, and many already qualify. Cotton yams, coarse, may not qualify, but we have not yet sufficient information -to reach any decision.
With regard to copper, our investigation has not yet been completed, 'but in the course of a year or so the British manufacturer should make no complaint if he does not get the benefit of the British preference by reason of the fact that he does not 'buy his refined copper in the British Empire, because within a year or not more than two years there will be refined in Canada all the copper that will be necessary for manufacture in Great Britain.
With regard to chemicals the criticism does not seem to be very important for the reason that many chemicals are already on the free list and cannot be affected by the 50 per cent requirement, and in the case of commodities affected, the difference is very small, almost negligible. The difference between the British preference of 16 per cent and the general tariff of 17-i per cent is only 24 per cent. Linseed oil is mentioned in the list about which some complaint has been made. It is quite possible to buy linseed or flaxseed in the Dominion of Canada. I want to point out that the whole arrangement ought to be reciprocal and I think it ought to appeal to the good sense of the house, that if this provision is intended for the benefit of the empire, Canadat itself, 'being a part of the empire, certainly ought to expect to derive some benefit from it as regards purchases of raw materials from this country. Let me give some of the reports received from certain cities and districts. Belfast states that linen goods will not be affected. Dewsbury, in which many textiles are manufactured, states that they are not affected. The south of Scotland states 'that their products would not be affected even if the percentage were to be raised considerably. Leeds states that there are no instances in which local industries will be hampered.
When we have placed the legislation on the statute books and have applied the regula-IMr. Euler.]
tion, surely we are not going to call it a dead letter from the outset just because we have a few complaints from some interested parties. I am finding no fault with those business men in Great Britain who feel that they may not be quite free to purchase their raw materials outside the limits of the empire. When Sir William Clark made his representations, we said that we had an open mind on the question whether it was desirable in the interest of the Canadian consumer or in the national interest that we should make an exception with regard to, let us say, cotton, copper or any other material, but we were not ready at the very outset, before giving the new regulation a trial, practically to wipe it out. We said1: We want to give it a trial and make investigations before we make any changes. As a result of that, the representative of the Department of National Revenue in Great Britain, Major Wihnot, was instructed to make investigations whenever a complaint was lodged. Unfortunately, Major Wilmot, very shortly after the instructions were issued to him, resigned his position and returned to Canada, but he had some opportunity to make investigations and he presented what we must term an interim report, which is certainly not complete.


Mr. CAHAN:: In the investigation made, did the department ascertain what percentage of empire cotton is available for British manufacture as compared with the whole which, I understand, largely comes from the United States?


William Daum Euler: I am afraid I cannot give the hon. gentleman definite information with regard to that, but the British representative was very clear on the point that, as regards many cotton manufactures, they must purchase the kind necessary from the United States. Just what percentage of t'heir total output that would comprise, I am not in a position to say. We are, however, now sending another man and perhaps two men to England to make investigations as they are required. I might also say that the representative we had there, Major Wilmot, had considerable difficulty in making those investigations. For example, I understand he asked certain manufacturers who were complaining, to come to a gathering, to bring with them their costs, and I think in only one instance did the manufacturers do so. Surely it is not unfair for us to expect them to show what their costs are if they expect consideration of their claim with regard to the British preference.
With regard to the criticism made of the Minister of Finance (Mr. Robb) in connec-

British Preference-Mr. Kennedy
tion with the report that was sent in on the 26th of last month by the representative of the Department of National Revenue, there can really be no criticism of the Minister of Finance in that regard. That report, quite naturally, was sent by an officer of the Department of National Revenue to the Department of National Revenue itself. It required considerable examination, and when the Minister of Finance made that statement he had not seen that report.


Mr. ADSHEAD:: In connection with the
cotton industry, will not the regulation with reference to the British preference have this effect. If a low class of cotton does not come up to the 50 per cent requirement, will not the effect be to increase the importations into this country of a higher class of cotton on which a great deal more labour has been done? In other words, instead of getting a low class cotton, shall we not get a higher class on which more labour has been expended ?


William Daum Euler: I cannot say definitely how
it will work out, but I think in Canada we use high class goods in any event.


Mr.   CAJELAN@: Can we make cottons in Canada as cheaply as they sell in Great Britain?	.


William Daum Euler: I would be very glad indeed if all these goods were made in this country. The point I want to make is this: There can be no real cooperation such as ought to exist between the various parts of the empire unless all parts of the empire cooperate. For my part I should think that wherever it is possible for the British manufacturer to buy his raw materials in Canada- we are interested in Canada primarily-we should see to it that he does so, or at least that he buys them in some portion of the empire before he can take advantage of the preference. But if he prefers to buy hia goods in the way of raw materials in some other country, that does not prevent him exporting his goods to Canada, only he will be under the handicap of having to pass a little higher customs barrier. For my part- I am perhaps speaking only for myself-I would say that if a manufacturer in Great Britain, with whom we want to do as much business as possible, buys his goods in a foreign country when he could have purchased them in some part of the British Empire, he has no complaint whatever if he does not get the benefit of the British preference if his goods do not come up to the requirement of at least 50 per cent Canadian content. We should expect to get some business from those from whom we buy.
Finally I would say that the question is not settled. We are just beginning; we are making our investigations. We appreciate the desire of the British manufacturer to have just as soon as possible some sort of certainty with regard to the whole matter. There has been some delay, and I have given the reason for it, the fact that our officer on the other side has resigned. That will be corrected just as soon as possible, and in the meantime I think I am right when I say that the protests and complaints which have been made have been made only pending investigation. The matter is still open, and if we find upon investigation that adjustments should be made, they will be taken into consideration.


Milton Neil Campbell: I would ask the minister if Major Wilmot's report will be made available to the members?


William Daum Euler: Reports of that nature are
confidential.


Donald MacBeth Kennedy: A short time ago we had a budget debate, and I am not going to refer to it beyond making that statement.
In all matters respecting changes in the tariff, whether in connection, with the British preference, the general tariff or the intermediate tariff, I have been under the impression that it was understood that the matter would first be investigated by the tariff board, and that then the government would act. That procedure 'has not been followed in this case. The Minister of National Revenue tonight says: We are going to investigate, and it is unreasonable for members sitting in that comer of the house to ask the government to move in changing the present position of the British preference until the government has investigated the matter. So the position of the government really is this: We will not reduce the British preference without an investigation but we will increase it without an investigation. Now if it is necessary to investigate in one case, it ought to be necessary in the other. This is a case where the government has definitely moved in the opposite direction from its pledges to the country, without investigation, and it is rather striking that the minister who gets up to explain the position of the government tonight is the minister that did not make any statement at all about the matter last year when the government was appealing for support and particularly appealing to the house to vote against the amendment moved in this corner of the house in connection with the British preference. The Minister of National Revenue (Mr. Euler) is a well-

British Preference-Mr. Cahan
known protectionist. I am not blaming Mm for that, but what I do protest against is the government promising one thing and then acting in a contrary manner in the house.


Charles Hazlitt Cahan: Before the Minister of
National Revenue (Mr. Euler) sat down I was going to ask him a question. He spoke of the lack of certainty now in the minds of the British manufacturers. There is no uncertainty now as to the British manufacturer's position. He knows his own costs of material and of manufacture.


William Daum Euler: He has no uncertainty as to where he stands. He knows he must come up to the 50 per cent British content, but he does not definitely know whether we will make any exemptions or not.


Charles Hazlitt Cahan: That is, he does not know whether the minister and the government will change their minds in the near future. I intended to follow that up with another question. The minister referred to possible changes. Would the minister state what are the general principles upon which future possible changes will be based? What are the principles which guide the government in making changes of the character under consideration?


William Daum Euler: In general terms I might
say anything that we consider to be in the general public interest.


Charles Hazlitt Cahan: Of the empire or of Canada?


William Daum Euler: For my part, I would consider Canada first.


James Alexander Robb: May I just say a word regarding this apparently semi-controversial question of the British preference?
The idea of increasing the requirements as to labour and content is not a new one in British countries nor in the countries with which we have trade agreements. The mother country introduced that idea not so very dong ago after they introduced their Safeguarding of Industries Act, and with that I shall deal in a moment. Australia, New Zealand and some of the other self-governing dominions also increased their requirements as to British labour and content. Some of the countries with which we have treaty agreements also increased their requirements, but I have yet to learn, indeed, I would be very sorry to learn, that any junior in any of the departments of Canada in any country of the world should attempt through the press or parliament to attack the policy of the gov-

ernment to which he was accredited. I think we shall get along better and further by reasonable co-operation and going carefully into the merits of each case as represented to us through the proper diplomatic channels. We have succeeded to some extent in improving the Canadian position through that method. I have nothing to add to-night to what was said when the budget was brought down and when we were in committee last session-to what was said by the Prime Minister, by the Minister of Railways and Canals and by the Minister of National Revenue. We recognize that there are some items that may require to be revised, but I admit to this house and to the country that surely it is reasonable that those who are enjoying the British preference should submit evidence that they are entitled to a revision of the 50 per cent requirement.	.


Milton Neil Campbell: Might I ask the minister if Australia, Great Britain herself and New Zealand do not publish a list of exemptions?


James Alexander Robb: I am very glad my hon. friend has brought up that question. He has referred to furs and apparently it is a question of Russia against Canada. My colleague, the
Minister of National Revenue, has dealt with that.


Milton Neil Campbell: It is not a question of-


Hewitt Bostock: Order.


James Alexander Robb: I did not interrupt my hon.
friend. He has referred to copper. Now, the difference in our method as compared with that of some other countries is that we widen out the preference to the whole British Empire. We say that these products may come from any part of 'the empire. Surely my friend will not deny that copper is produced, and will be produced .in increasing quantities, in Canada, not only in British Columbia, Manitoba and Ontario, but also in the province of Saskatchewan whence my hon. friend comes. In that province there are very good prospects of copper development. Copper is produced in large quantities in Rhodesia.
Now, my friend has referred to drugs. That question has been dealt with by the Minister of National Revenue, who has shown that the particular drug which my hon. friend referred to is on the free list anyway and could not be affected by this requirement. Indeed if my hon. friend looks at the tariff he will discover that in regard to drugs not on the free list there is very little difference in the

British Prejerence-Mr. Robb
rating as between the British preference, the intermediate and the general tariff schedules because of the alcoholic content.
With respect to cotton, I say very frankly to the house that there are some classes of cotton goods in regard to which when the price of raw cotton is high the Lancashire workers might not be able to qualify; but as my :hon. friend from East Calgary (Mr. Adshead) very well pointed out-and I know from his accent that he understands the cotton business-they will qualify in their better goods. I submit that this is in the interests of the people of Canada.


Charles Hazlitt Cahan: Will the minister allow a
question? Is he not making his policy in regard to cotton depend upon the price of cotton in the United States and the fluctuating market there?


James Alexander Robb: 
Charles Hazlitt Cahan: Did they make that change?


James Alexander Robb: Yes. The report proceeds:
We have carefully considered the question of the sufficiency of the present rate of duty, and having regard to the inadequate protection given by the present rate of duty in respect of many of the articles in question, we are of the opinion that there is much to be said for an increase from 33$ per cent to 50 per cent.
The recommendation that the duty should be increased from 33$ per cent to 50 per cent was embodied in the United Kingdom budget of 1926-27 and was effective from May 1, 1926.
The recommendation that the proportion of the value of goods of empire origin be raised from 25 per cent to 75 per cent was made effective on March 1, 1927, and notice to that effect was given by the Board of Trade on February 1, 1927. Britain gave only one month's notice. I am not finding any fault with Great Britain, they were looking after their trade, but hon. gentlemen will observe that in this case Canada was specially singled out because Canadian trade was coming in under those conditions.
My hon. friend has referred to Australia. In the first place let me observe that the Australian tariff is a very much higher tariff than the Canadian. I am not advocating adoption of the Australian tariff. I think the Canadian tariff is very much more suitable for this country than the Australian. The Australian tariff is very much higher than the Canadian. My hon. friend has said that Australia gives a list of exemptions. That is true. But the Australian requirement is 75 per cent. Let me quote to the house from an official document of the Commonwealth of Australia dated at Canberra, December 8, 1927:
The minister shall determine what are to be regarded as raw materials and in such determination may include partially manufactured Australian materials.
(b)	To goods, not wholly produced or wholly manufactured in the United Kingdom in the terms of paragraph (a), provided they contain at least 75 per cent of United Kingdom labour and/or material in the factory or works cost.
(c)	Notwithstanding anything contained in the preceding paragraphs, to goods of a class or kind not commercially manufactured in Australia provided they contain at least 25 per cent of United Kingdom labour and/or material in their factory or works cost.
The limitations are there; there are exemptions but they must prove that these goods are not manufactured in Australia. My information is that ithe exporters are very much handicapped in that when the goods arrive there, there may be an industry employing say four or five men and the customs authorities say, " These goods are of a kind manufactured in Australia and therefore the higher duty must be paid." I submit to my hon. friends that the Canadian tariff is very
British Preference-Mr. Robb

much more favourable to the British Empire, as well as to to Canada herself, than the tariffs of some of these other countries which have been cited.
I was greatly interested in the argument of my hon. friend for Mackenzie (Mr. Campbell) as I listened to his discussion of cotton. The hon. member argued that the Lancashire mill was unable to obtain cotton of a suitable kind within the British Empire. I will admit that perhaps there is not sufficient cotton available in the Soudan and other British countries-and they produce cotton in Australia. But I could not understand his reasoning when he argued against the United States doing business direct with Canada. His whole argument was that our cotton should be shipped from the United States to England, there manufactured, and brought back to Canada. If I am doing him an injustice in thus interpreting his argument I shall have to apologize.


Milton Neil Campbell: The minister is hardly putting it in a fair light. I said that the ultimate effect might be

I did not say it would be, but that it might be-to divert trade with Great Britain to the United States and thus increase the adverse balance against this country.
Mr, ROBB:	But my hon. friend forgets
that the Canadian mills bring in raw cotton for manufacture in Canada, and there are thousands of good Canadian citizens employed in manufacturing cotton. If my hon. friend were to argue that the Canadian was paying too high a duty on United States cotton yardage then I could understand how he might appeal to the people in his part of the country. But he forgets that the Canadian mills buy their raw cotton from exactly the same source as do the mills in the United Kingdom, and here in Canada it is entirely Canadian labour.


Charles Hazlitt Cahan: And the minister wishes to give it a chance to compete.


James Alexander Robb: Well, we have been giving
it a chance; but we have been enlarging the British preference. Let me say this in conclusion. If it can be shown that in any case British industry cannot qualify properly, in respect to goods obtainable within the British Empire, we are prepared to consider the question; but we submit that it is fair to the Canadian people that evidence be adduced to our officials that they cannot qualify under the 50 per cent requirement.
Motion agreed to and the house went into committee, Mr. Johnston in the chair.


SPECIAL WAR REVENUE ACT AMENDMENT
John Frederick Johnston: When the committee
rose, an amendment was under consideration.


Robert James Manion: When the committee rose at six o'clock the other evening I was discussing a certain matter which I shall now conclude in a few minutes. I was pointing out on that occasion that there was a somewhat inequitable tax on some of the shares in different classes of stocks, not only mining but industrial stocks as well, and I submitted the point for the consideration of the Minister of Finance. I pointed out, for example, that under the new method 1,000 shares of Noranda at $54 would be $54,000, upon which the tax would be $30, whereas 1,000 shares of Kirkland Lake-at $1.02 would represent $1,020, on which the tax would be $10. I have said that the tax is inequitable. Take the case of Kirkland Lake. The tax on the sale of the same number of shares, according to these values, is eighteen times the tax on the Noranda deal. Take another, and you will find a still greater inequality. I have given as an example 1,000 shares of Noranda at $54, amounting to 854,000, with a tax of $30; on 1,000 shares of Columbus Kirkland at H cents -this is one of the smaller penny stocks- we have $15 with a tax of $1. A tax of $1 on $15 applied to the valuation of Noranda would increase the tax on Noranda over one hundred times. Obviously, therefore, the whole tax is inequitable. The small man or small purchaser-the minister objects to my using the words "small dealer," although he is a dealer inasmuch as he is dealing in stocks; for I was not speaking of the broker but of the man who bought and sold the stock-is overtaxed, and that is where the minister is wrong; it is here that he should reconsider the matter. This is not a reduction but an increase, the minister having made a change after bringing in the original budget; and in practically every change in taxation the small man seems to suffer. In my opinion there should be worked out a tax proportionate to value, a tax which would be fair to all dealers, and which would be imposed1 upon people according to their ability to pay. I do not consider this a tax of that kind. The minister took something off the tax on mining machinery, but he puts it back on mining stocks; in other words, he removes with one hand the burden on mining machinery and with the other puts a heavier tax on the stocks. I think the facts I have submitted to the minister are correct, and they show that the tax is inequitable; the minister is taxing the smaller man more heavily, the

Special War Revenue Act
man who purchases the cheaper stock. I submit that the whole scheme should be rearranged without injustice generally and making it more equitable to all classes.
That is the sum and substance of what I wish to say, and I shall not take up any more time at present. However, I think the minister should give this matter further consideration and bring in an amendment, if not to the present budget certainly to the budget next year.


Mr. LANG:: Mr. Chairman, I wish to join
with the hon. member for West York, the hon. member for Vaneouver-Burrard and the hon. member for Fort William in protesting against the proposed tax on the sale and transfer of Shares, which is now before the committee. I do so because I have looked into this proposal to quite an extent since it was brought down on March 1, and I find that the more it is looked into the worse it gets. Certainly it is not a fair or just tax; it works inequalities however you look at it; it places the burden upon the small investor and takes it off the large investor. Recently, in considering this question, it struck me that if the Minister of Finance believes the proposed tax to be an improvement over the tax which has been in effect for some years past surely the present tax would be worth looking into also, because if the present tax is worse than
this proposal it certainly must be terrible. I wish to discuss this question first from the standpoint of the tax at present in effect in order to find out why the minister wants a change and, if a change is necessary, to see if we cannot find a more equitable tax than that proposed at present.
In order to appreciate the effect of this tax it will be necessary to consider the present structure of the companies listing shares on the stock exchanges throughout the country. In that connection I happened to notice an article on the mining page of the Toronto Star of last Friday, which gives the structure of 117 of the companies whose shares are most dealt in through the stock exchanges of Toronto. The article begins as follows:
Following is a compilation of the market value as of May 4 of the outstanding share capital of the most active mining securities listed on the Standard stock and mning exchange of Toronto:
Then follows this statement showing the capitalization, the present sale value, the par value and so on of the shares of these 117 companies. With the consent of the committee I would like to place this list on Hansard without going through it, and then I desire to deal with some of the companies in order to show how the present tax works out:
Company
Abana	
Aconda	
Amity	_	
Amulet Gold Mines	
Ankerite	
Area Mines	
Arno	
Algonquin	
Apex	
Argonaut	
Atlas	
Baldwin	
Base Metals	
Barry Hollinger	
Bathurst Mines	
Bedford Mines	
Bidgood Con	
Big Missouri	
Buckingham	
Bunker Hill Exten	
Cambro Kirkland	
Capital Rouyn	
Castle Trethewey	
Central Manitoba	
Chaput-Hughes	
Clericy Cons	
Coast Copper	
Coniages	
Coniaurum	
Consolidated Smelters.. ..
Crown Reserve	
Can. Lorraine	
Capitol	
Shares	Par	Price	ValueCapital	issued	value	May 4	May 4, .. 3,000,000	2,675,775	1.00	2.10	5,619,127.. 3,000,000	2,400,000	1.00	.10	240,000.. 2,000,000	350,000	1.00	.34	129.000. .. 3,000,000	2,500,000 N.P.V.	1.73	4,325,000, .. 2,000,000	1,519,506	1.00	.18	273,511. .. 2,000,000	2,000,000	1.00	.15	300,000, .. 3,000,000	1,985,000	1.00	.31	615,350. .. 2,000,000	1,000,000	1.00	.01	10,000. .. 2,500,000	2,500,000	1.00	.03	75,000. .. 5,000,000	4,666,667	1.00	.02	83,333. .. 5,000,000	5,000,000	1.00	.01	50,000. .. 5.000,000	2,654,996	1.00	.06	159,299. .. 3,000,000	2,000,000	N.P.V.	3.60	7,200,000. .. 3,000,000	3,000,000	1.00	.31	930.000. .. 4,000,000	1,000,000 N.P.V.	.19	190,000. .. 2,000,000	1,604,985	1.00	.56	898.790. .. 3,000.000	2,200,000	1.00	.31	620,000. .. 5,000,000	2,700,000	1.00	1.55	4,185,000. .. 4.000,000	2,304,672	1.00	.05	115,233. .. 5,000,000	3,500,000	N.P.V.	.11	385,000. .. 3.000,000	2.000,000	1.00	.15	300,000. .. 4,000,000	4,000,000	1.00	.04	160,000. .. 2,000,000	2,000,000	1.00	.35	700,000. .. 4,500.000	4,405,467	1.00	.50	2,202,733. .. 5,000.000	3,027,490	1.00	.08	242,199. .. 4,000,000	2,027,140	N.P.V.	.15	304,071. .. 1,000,000	200,000	5.00	.54	10,800.000. .. 4,000,000	800,000	5.00	1.60	1,280,000. .. 6,000,000	1,080.000	5.00	.30	324,000. .. 12,736,575	509,463	25.00 430.00	219,069,090. .. 3,000,000	2,336,277	1.00	.03	70,088. .. 3.000,000	2,700.000	1.00	.02	54,0003,525,000	1.00	.06	211,500
Special War Revenue Act

Company
Col. Kirkland	
Corona	
Dom. Kirkland	
Dupprat	
Dome Mines	
Dunkin Mines	
Faleonbridge Nickel	
Federal Kirkland	
Goldhill Mines	
Goodftsh	
Goldale Mines	
Graham-Bousquet	
Granada Rouyn	
Grover-Daly	
Golconda	
Grandview	
Harker	
Hilltop	
Hollinger Cons	
Howay Gold	
Hudson Bay M. and S	
International Nickel	
.Jackson Manion	
Keeley	
Kirkland Hunton	
Kootenay Florence	
Kirkland Lake	
Lake Shore Mines	
Laval Quebec	
Lebel Oro	
Macassa	
Malartic Gold Mines	
Mandy Mines	
Manitoba Basin	
McDougall	
McIntyre	
McKinley Darragh	
Mining Coup	
Mint-Ore	
Moffatt Hall	
Moss Mines	
Murphy Mines	
Millcrest	
Newbec	
Night Hawk	
Nipissing	
Noranda	
Northern Canada	
Osisko	
Old Colony	
Pawnee Kirkland	
Pend Oreille	
Peterson Cobalt	
Pioneer Mines Corp	
Premier Gold Mines	
Ribago Copper Corp	
Por. Crown	
Potterdoal	
Preston	
Robb-Montbray	
Sudbury Mines	
San Antonio	
Sherritt-Gordon	
Siscoe	
Stadaeona	
St. Anthony G. M	
Sudbury Basin	
Sudbury Contact	
Sunlock	
Sylvanite	
Teshota	
T eck-Hughes	
Thompson-Cadillac	
Towagamac	
Treadwell Yukon	
Tough-Ooakes	

Shares	Par	Price	ValueCapital	*issued	value	May 4	May 4. 5,000,000	5,000,000	1.00	.01	50,0002,600,000	1.00	.02	60,000.. 2,000,000	2,000,000	1.00	.01	20,0003,180.000	N.P.V.	.04	127,200.. 1.000,000	953,334	N.P.V.	10.15	9,676,340.. 4,000,000	1,500,000	1.00	.07	105,000.. 5,000,000	2,750,000	N.P.V.	12.00	33,000,000.. 4,000,000	2,800,000	1.00	.04	112,0002,840,311	1.00	.05	142,0153,000,000	1.00	.04	120,0002,874,257	1.00	.11	316,1672,550,000	1.00	.14	357,0002,550,000	N.P.V.	.18	778,6133,000,000	1.00	.03	90.0001,500,000	1.00	1.70	2,550,0002,749,000	.50	.50	1,374,5004,000,000	1.00	.15	600,0003,941.905	1.00	.03	118,2574,920,000	5.00	7.30	35,916,0004,730,000	1.00	1.28	6,054,400.. 2,500,000	2,500.000	N.P.Y.	18.60	46,500,00013.758.208	N.P.V.	54.00	742,943.2322,000,000	1.00	.16	320.0002,000,000	1.00	.56	1,120,0003,000,000	1.00	.02	60,0005,330,000	.20	.15	799,5005,000,000	1.00	1.03	5,150,000. - 2,000,000	2,000,000	1.00	26.80	53,600,000.. 5,000,000	3,960,000	1.00	.05	198,000.. 1,500,000	1,350,000	1.00	.04	54,000.. 5,000.000	3,175,000	1.00	.20	635,000- 3,000,000	2,800,000	1.00	.48	1,344,000. 3,000,000	2,500,000	N.P.V.	1.28	3,200,000* 5,000,000	3,000.000	N.P.V.	.45	1,350,000- 2,000,000	1,770,000	1.00	.50	885,000. 4,000,000	798,000	5.00	18.50	14,763,000[DOT] 2,500,000	2,247,692	1.00	.20	439,538[DOT] 8,300,250	1.660,050	5.00	4.25	7,055,212[DOT] 3,500,000	2,255,000	1.00	.10	225,000[DOT] 5,000,000	3,488,141	1.00	.12	418,576. 4,000,000	2,678,293	1.00	.60	1,606,975. 3,000,000	2,200,000	1.00	.23	506.000. 3,000,000	2,439,500	1.00	.02	48,790. 5,000,000	3,904,707	N.P.V.	.42	1,639,976. 5,000,000	4,500,000	1.00	.08	360,000. 6,000,000	1,200,000	5.00	3.25	3,900.000. 2,250,000	2.168,566	N.P.V.,	54.50	128,186,847. 5,000,000	2,500,000	N.P.V.	.65	1,625,000. 2,000,000	1,572,156	1.00	.66	1,037,622[DOT] 6,000,000	4,000,000	N.P.V.	.35	1,400,000. 3,000.000	2,999.000	1.00	.05	149,950. 1,000,000	1,000,000	1.00	6.10	6.100,000. 2,900,000	1,689,947	1.00	.12	202,793. 5,000,000	2.523,129	1.00	.45	1.135,408. 5,000,000	5.000,000	1.00	1.80	9,000,000. 4,000,000	2.022,006	1.00	.03	60,660. 4,000.000	2,813,055	1.00	.02	56,260. 5,000,000	3,977,456	NJP.V.	.02	97,549. 3.000,000	2,500,000	1.00	.02	50,000. 6.000,000	4,700,000	1.00	.04	188,000. 3.000,000	1,600,000	1.00	.04	24,000. 4,000,000	2,200,000	N.P.V.	.12	264,000. 6.000,000	4,881,794	1.00	8.40	41.007,069. 4,000,000	3,780.000	1.00	.78	2,948.400. 5.000,000	3,950.000	N.P.V.	.10	395,000. 3,000,000	1.000,000	1.00	.29	290,000. 2,000,000	1.665.505	N.P.V.	.55	14,240,067. 2.000.000	1,300.000	1.00	.06	76,000. 1.000,000	1,000.000	1.00	2.75	2,750,000. 3.300,000	3,299,500	1.00	1.60	5,279,200. 3,000,000	1.500.000	1.00	.24	360,000. 5.000,000	4,767.144	1.00	9.35	44,572,796. 2,000,000	1,895.334	1.00	.18	341,160. 1,000,000	1.000,000	1.00	2.10	2,100.000. 1,500,000	1,500,000	1.00 13.00	19,500,000. 3,000,000	600,000	5.00	.04	24,000
Special War Revenue Act
Company	Capital 	
10,000,000	Shares Par issued value 6,346,705 N.P.Y.	Price May 4 9.50	Value May 4 60,293,697
1,500,000	1,000,000 1.00	.75	750,000
2,500.000	2,000,000 1.00	1.07	2,140,000
7,000,000	4,870,905 N.P.V.	.04	194,836
5,500,000	5,500,000 N.P.V.	1.80	9,900,000W aite-Ackerman	
2,000,000 	
3.000.000	2,000,000 N.PV. 1,561,400 1.00	3.85 .22	7,700,000 343,508Windfall Rouyn	-	2,220,500 1.00	.06	133,230Total	
$1,607,709,667
Let us take Abana, the first stock on the list. The shares of Abana, a mining company in northern Quebec which has become well known during the last year or so, have a par value of $1. On May 4 the selling price per share was $2.10. Under the present system a tax of three cents is collected on shares to the par value of $100, so that on the sale of 100 shares of Abana the tax of three cents would be collected, although the actual selling price would be $210. I use this illustration in order to point out that the present tax is not an ad valorem tax- according to value; it is a tax on the par value of shares. At present Abana is selling for more than twice the par value, and the $1.10 additional is not taxed at all.
Then let us take Aconda, another mining company in northern Quebec. This is a cheap stock which has been on the market for some time. It has a par value, or a fictitious value, of $1 per share and on May 4 the selling price was 10 cents per share. On the sale of 100 shares of that stock the tax of three cents would be collected, yet the selling price of 100 shares would be only $10. My whole point is that the tax in force now is most unfair because it is not a tax according to value. That is the only fair way of imposing a tax of this kind, but this tax is imposed on a fictitious value placed upon the shares when these companies are formed. Under these conditions it is no wonder that we are trying to get something more equitable, and probably the Minister of Finance is trying to find some method which will bring in more revenue.
Now we will consider Argonaut, another cheap stock. This is a mining company in northern Ontario whose shares have been dealt in for a number of years, although it shows very little activity at present. The shares have a par value of $1, but on May 4 the selling price was only two cents per share. On 100 shares of Argonaut the tax of three cents would be collected, but the actual selling price of the 100 shares would be only $2. In other words, when you deal in Argonaut at 2 cents per share, on 100 shares you pay a tax on $98 which does not exist at all.
This illustrates very clearly the inequality of the tax.
Now let us take some of the higher priced shares and see how this tax works out. Consolidated Smelters is one of the good, safe, big mining stocks of which every person knows. These shares have a par value of $25, 'but on May 4 last they were selling for $430. In order to collect a tax of three cents the sale of four shares of this stock would be necessary, making a total par value of $100, but the actual selling price of four shares on May 4 would be $1,720, so $1,620 would not be taxed at all. That shows the inequality of this tax in another way.
Falconlbridge Nickel, another of the good mining stocks in Ontario, affords a further illustration of how the present tax works out. When this tax was framed seven years ago, in 1922, I suppose the government thought they were imposing a tax on value; they imposed a tax of 3 cents on every $100 of par value of shares of stock sold or transferred. Apparently some time after that the Department of National Revenue realized that there were some shares which had no par value and I have been told that for some time they did not know what to do because the act did not cover that class of share. I have no doubt that for a number of years no tax was collected on stocks of no par value, which is of considerable importance when we realize that out of a list of 117 companies the stocks of which are being traded in at present there are quite a number of stocks of no par value.
In going down this list the first stock of no par value that I come to is Falconbridige Nickel. On May 4 the selling price of that stock was $12 per share. No matter how many of these no par value shares were traded in, they were taxed on their selling value, a 3 cent tax on every $100 worth. I cannot understand why the government do not realize, when they present a proposal to change the method of taxation, that an ad valorem tax would be the absolutely fair way of taxing these shares. It is hardly fair to such stocks as Falconbridige Nickel when it is considered that there are other 'high priced
Special War Revenue Act

stocks which are paying taxes on a certain par value when they are selling as high as twenty-five times the amount of their par value.
The next stock I should like to mention is Lake Shore. The Lake Shore mine is in northern Ontario, up in the Kirkland lake district, in the riding which I have the honour to represent. This stock has a par value of $1 per share. That means that when there is a transfer of 100 shares of Lake Shore stock the government receives a 3 cent tax. On May 4 that stock was selling at $27 per share, just twenty-seven times its par value. On a sale of one share at $27, $26 of that amount would be exempt from taxation. I know these Lake Shore people quite well and I am sure that they do not desire the government or anyone else to discriminate in their favour, as is the case with the present tax and as will, in another way, be the case with the proposed tax.
Another of our gold stocks which is selling above par is Teck-Hughes. This stock also has a par value of $1 per share and it is selling around $9 per share, nine times its par value. Under the present tax, on every sale there would be $8 per share which would not be taxed. It is no wonder that the Minister of Finance was not receiving the income he thought he would from this 3 cent tax. Had it been m!ade an ad valorem tax and not a hotch-potch, graduated sort of thing such as he is proposing, it would work out quite fairly. Let the tax be a 3 cent tax on $100 of value, as it has been since 1922, but on the value of the shares soldi. If that were done every person would be satisfied and happy because no one would be discriminated against and the government would be receiving a revenue at least four times as great as it is under the present tax; and the tax would remain at the same rate.
The next stock I should like to mention is that of Sherritt-Gordon, a recent development in northern Manitoba. I had given very little attention to this matter previously but when I picked up the Toronto Star on my way home on Saturday and read this article it started me thinking. This Sherritt-Gordon mine is not producing as yet, but it is expected that it will be within a year or two. The stock has a par value of $1 and is selling to-day at about nine times that value. On every share of Sherritt-Gordon stock which is traded in on the market about $8 is exempt from taxation. The Minister of Finance is losing for the people of Canada the tax which he would be receiving on that extra $8, il it were an ad valorem tax.

Another stock is the Sudbury Contact. This is one of the new companies, formed within the last year or two in the Sudbury district near some of the big producers. It has not been successful so far; the initial money for development purposes has, I suppose, been pretty well spent and I understand it has not yet found any quantity of ore. Sudbury Contact has a par value of $1 a share, but on May 4 it was selling at 6 cents a share. Let the committee think how that affects the little fellow who is having a hard time to finance and get along. A sale of 100 shares of Sudbury Contact, which has a par value of $1 a Share, pays a tax of 3 cents to the government, just the same as the high	priced share that is selling	at $27.	Onthis	stock,	selling at 6 cents a share,	thetax,	which	is 3/100 of one per	cent of	thepar	value,	amounts to one-half	of one	per
cent of the actual value. Wherever you have a low priced share selling under par, at half par, quarter par or 10 per cent of par, then it has to pay a tax which should never be imposed upon it. It is absolutely unfair and unjust and it places the burden on the one who finds it hardest to pay. On the other hand, as regards every share of stock that is selling at over par, where the mine is getting into good shape and producing and where the public wants the stock because it has merit, under the present tax the government does not receive any revenue at all on every dollar that the stock sells over its par value.
Another stock is the Treadwell Yukon, one of the great mines of Canada. It has a par value of $1, but it is selling on the market now at $13 a share. On every Share of that stock that is traded in at $13 a Share, $12 escapes taxation. Surely if the committee will just think seriously for a moment about the sort of taxation that we have had on the sale of shares of stock, and the sort of taxation that is proposed, it will realize that the one is just as crazy, foolish and unfair as the other. It is the simplest thing in the world to remedy this situation; it is staring us right in the face in the present tax that we have. All that is necessary is, instead of cutting out clause 58 as is proposed, simply to delete the word par . It says that a tax of 3 cents is to be imposed on every $100 of par value. Just leave that word "par" out, and Jet it read that there is a 3 cent tax for every $100 of value of shares traded in. In that way we shall have a fair and equitable tax, a tax that will bring in, as I say, at least four times as much revenue to the public treasury as the tax in its present form will do.

Special MTar Revenue Act
I do not know that I should take up anymore of the time of the committee. Surely it must be evident to any person who wants to give thought to the matter, that there is a fair and equitable way to raise revenue on a tax of this kind and that it cam be done without the imposition of am onerous tax or one that will bear heavily on anyone. I am not a bit afraid that the Minister of Finance or the government will make it too heavy a tax as long as it is left where it bears equally upon ail the people concerned. If it should ever happen that as great a percentage of taxation should be proposed' on the higher priced as on the low priced shares, I know enough pressure would be brought to -bear upon the Minister of Finance and the government from quarters that have had nothing to say about this tax, to ensure that such a step would not be taken. So far as I am concerned, the government can go just as far as they like in regard to this tax so long as they make it equitable, fair and just, bearing equally upon all; and that cam be done only by its being made an ad valorem tax as I suggest, simply by deleting the word "par" from clause 58. Who in the world ever thought of imposing a tax on par value when the prices of the hhares do not represent par value? Par value is simply a unit of division of the number of shares stipulated in the formation of a company. Naturally the big fellows do not worry about this tax; the little fellows apparently have not many people to look after their interests and they cannot raise much of a protest. But surely when the matter is brought so plainly to the attention of the committee, little more need be said.
I have under my hand a table something along the lines of those given by the hon. member for West York and the hon. member for Vancouver-Burrard with regard to the proposed tax. I do not know that it is necessary to give the figures, because I cannot conceive of any sane people going ahead with a tax such as is proposed when it is so evident that a fair, reasonable, just and equitable tax can be imposed and a greater revenue obtained for the people of Canada. I will, however, give a few of the figures, because I have spent a little time in working out the table. Suppose a mining company wishes to raise 850,000, which is the amount very often raised for the initial development stages; in order to do that, if the shares sell at 5 cents each, one million shares must be sold. In very many cases 5 cents is the initial price of the shares. Under the new proposal-which never will go
into effect, but if it did-the tax on that $50,000 would be $1,000. Suppose that $50,000 is raised by the sale of 500,000 shares at 10 cents a share. The government would then receive in taxation $500. The government takes a tax of $1,000 when $50,000 is raised by selling a million shares at 5 cents a share, but only $500 when $50,000 is raised by selling 500,000 shares at 10 cents a share. Suppose the $50,000 is raised by the sale of 100,000 shares at 50 cents a share; the government tax would then be only $100. So that on $50,000 raised by selling stock at 5 cents a share the tax is $1,000; at 10 cents a share, it is $500; at 50 cents a share, it is $100. The government are taking less in taxation all the time, although the same amount, $50,000 is raised in all three cases.
Suppose 50,000 shares are sold at $1 a share. The government would then take $125. That seems wrong; there is another jump in the tax, which further demonstrates its lack of equity and fairness. Suppose 50,000 shares are sold at $1.10 a share. The amount raised would be $55,000, and the government tax amounts to $500. Truly a wonderful system, if it ever went into effect!
Suppose $50,000 is raised by the sale of 25,000 shares at $2 a share. The government tax on that would be $250. Not so bad, but still not so good; there are others better than that. Suppose $50,000 is raised by the sale of 12,500 shares at $4 a share. The government tax on that would be $250. Or take the sale of 5,000 shares at $10 a share. The government tax on that would be $100. That is pretty fair. At $20 a share, selling 2,500 shares, the tax would be just $50, although it is a $50,000 deal just the same. The government would take $50 on that $50,000 deal and $1,000 on a $50,000 deal when the shares sell at 5 cents a share. At $125 a share, selling 400 shares and raising $50,000, lo and behold! the government tax now is only $16, although it is a $50,000 transaction just the same as in the first case, where the government got a tax of $1,000 when the shares were selling at 5 cents each.
That is how it work out, Mr. Chairman. Surely this committee is never going to allow a tax of that kind to be placed upon the people of this country. If there were no other form of taxation that would be fair, equitable and just, one might say that we could not get away from this tax, that we have to raise the revenue; but when the tax can be imposed in such a way as to bring in a much greater revenue, a tax that will be fair to all, and that will not increase the burden on the buyer of the smallest shares.
Special War Revenue Act

a tax that will take the burden off the little fellow and place a fair share of it upon those who are buying the higher valued shares, we should adopt that method. It is so simple that you would think anyone could see it. Simply place an ad valorem tax on the transfer of shares. Why in the world don't we do it that way? I feel sure that if the Minister of Finance considers this matter a little further, he will withdraw the proposal now before the committee; that he will impose an ad valorem tax, a tax that is fair to everybody, a tax on values, an equitable tax according to the size of the transaction. Let that be done, and I care not whether the minister raises the tax higher than 3 cents on every $100 of value in the transaction. I am satisfied that if he will leave the tax at 3 cents on every $100 of value in the transaction-not on the par value, because that would be foolish-it would work out well if the method I suggest were adopted. The only shares that have been paying an ad valorem tax have been the shares of no par value stocks, and the Department of National Revenue, in administering the tax on the no par value stock based it on the value of the transaction, as should be done in every case. As the act stood it provided simply for a tax on shares according to their par value, and there must have been some scratching of heads in the National Revenue department when they were figuring out how to tax shares of no par value, because there is nothing in the act to give them any authority to do so, so far as I can see. The act simply says, "three cents on every hundred dollars of the par value of the stock sold." This works out unfairly. It can be made fair, and I feel sure it will be.
I have a large amount of other material here which I would have gone into had I thought it necessery. I feel confident that there will be a great sigh of relief not only in stock brokers' offices but among all classes of Canadians if this particular tax is levied in a way fair and equitable to those concerned, and it seems to me that my suggestion is the only way in which it can be done. It is not simply few places that are interested in this tax; it is not merely our mining constituencies that are affected, but the people throughout the length and breadth of the Dominion realize what an important factor in our national life is the wonderful development that is now taking place in our mining and oil industries. Therefore we should not fool around any longer with a hotch-potch, graduted, unfair sort of tax such as that now under consideration. If the Minister of

Finance is afraid there would not be a sufficient revenue from the tax I have suggested, let him instruct his accountants to figure out the returns from such a tax, and I venture to say he will find that, a three cent tax on every hundred dollar value of all share transactions will bring him a revenue four times as great as the revenue derived under the tax at present in effect or to be derived from his present proposal. This proposed tax would be obnoxious to the people and it would be unfair. I am sure the only reason that we have not realized the unfairness of the tax at present in effect, is that none of us were thinking about it or talking about it. As a matter of fact I never thought of looking into it until I read an article in the Star on my way home last Saturday. I was under the impression that the present tax was an ad valorem tax such as I have suggested. The only part of the tax on an ad valorem basis is the tax imposed on no par value stock, simply because there was no other way of taxing such stock.


Mr. ESLING:: It is good to hear a voice
from the other side of the house, Mr. Chairman, in agreement with us. The minister and practically every other member on the government side has received protests against this proposed resolution, from almost every part of the Dominion. The main argument against is its lack of balance and absolute disparity in application. It is unreasonable and inconsistent. While the people generally have accorded a generous acknowledgment of the Finance minister's goodl judgment and intention, in this case they are very much dissatisfied, and I suspect that he himself is not very enthusiastic about this resolution, nor can any of those associated with him be keen for its adoption.
To be as brief as possible I shall present my argument by way of illustration. I will take the difference in fax paid by an ordinary investor as compared with a trust company. We will take a trust company, for instance, which invests the sum of $250,000 in 500 shares o'f the value of $500 each. The tax is merely $20 at 4 cents per share under the new rate. Or that trust company may invest the same sum of money-and I think this is a point that should be considered-it may be the same sum of money, but if it is used to purchase a different kind of shares, it becomes subject to a different rate of tax. If that same trust company invested its $250,000 in 1,000 shares at $250 each, instead of paying $20 tax they will pay $40. Now we will take a man who has $1,000 to invest. I am sure this will appeal to the general public, and I imagine

Special War Revenue Act
it must appeal to the Minister of Finance as unjust. This man buys two shares of Smelters, we will say, at $500 .per share; his tax is 8 cents. If he buys 4 shares, we will say, of Canadian Pacific Railway stock at $250 a share, his tax is 16 cents. But this man may say, "I think I will not buy those high-priced shares, I will get some of the low-priced Shares." So he invests $1,000 in 10 cent shares, and his tax will be ten dollars. If he puts his $1,000 into 8 cents shares, his tax will be $12.50. If he invests in 4 cent shares his tax will be $25. If he uses his $1,000 to buy 2 cent shares, his tax will be $50. It is inconceivable that such an unreasonable tax should be proposed, and I am confident that it would be difficult for any member on the other side of the house to justify to his constituents a vote in favour of this resolution. I am sure that most of the ministers have received protests against this tax. It is to be hoped that for the welfare of the mining industry the hon. Minister of Finance will withdraw this proposal and bring in something of a more reasonable nature.


Herbert Bealey Adshead: Will the hon. member
permit a question? I am not so conversant with mining stocks as he is, apparently. Under this arrangement is it not a double tax, a tax on the par value and on the actual a-mount involved in the transaction?


William Kemble Esling: Not under the new resolution.


Mr. ARTHURS:: The minister would be
well advised if, in accordance with the argument put forward by my hon. friend (Mr. Lang), he placed the tax on the actual selling value of the stocks to be taxed. The minister has gone on the supposition that this is a tax against the stockbrokers; as a matter of fact it is not a tax against the stockbrokers or the Toronto stock exchange or any other such institution. This is a tax against the actual mining operations in the country. If, as pointed out by several members to-night, a company decides to put stock on the market at $1 a share at par, it has a great deal less to pay than the company which decides to put on the market stock valued at $1 per share which it sells at 5 or 10 cents. Every dollar collected by this government in the first instance is collected from the actual assets or receipts of the company itself. Ordinarily speaking, a company starting in business requires a capital of from $50,000 to $100,000, and in order to raise that money it must sell stock on terms that are agreeable to the brokers and to the public. Usually these 78594-155
stocks are sold at a very small figure per share-10 cents or less. In that case, according to the original tax proposed by the minister, one-tenth of all the funds goes to the treasury of the Dominion-one-tenth of all the funds secured; and probably one-fifth more goes to the broker. The result is that the money actually secured for the development of the mine is small indeed. The minister would be well advised to withdraw the item and in the meantime to reconsider the matter, which is of vital importance to the development of new mines not only in Ontario but in practically the entire Dominion. Could he not try to secure some equitable means of levying the tax on the market value of the stock at it is sold?


James Alexander Robb: The tax as originally introduced was complained of, particularly by the mining brokers. There was very little complaint except as regards those stocks included in paragraph (e):
One cent for every share of stock sold or transferred at a price of three dollars or less per share.
Now there is before the committee an amendment which it occurs to me, after listening to the arguments of some hon. gentlemen, has probably been overlooked. That amendment now provides:
(e)	one cent for every share of stock sold or transferred at a price over one dollar per share, but not more than three dollars per share;
(f)	one-fourth of one cent for every share of stock sold or transferred at a price over fifty cents per share, but not more than one dollar per share;
(g)	one-tenth of one cent for every share of stock sold or transferred at a price of fifty cents or less per share.


James Arthurs: According to the amended schedule the tax on stocks selling at 10 cents would be $1 per $100.


James Alexander Robb: There are three parties to
this legislation before the committee. There is the prospector, there is the investing public and there are those concerned with revenues of the country, and I submit that the readjustment as presented is not unfair to the development of mines,' while it is fair to the public and to the government revenues. Hon. gentlemen must observe that when stock is first allotted there is no tax whatever on the original transfer; it is only when they begin trading and selling the stocks to the public that the tax is imposed.


James Arthurs: Not according to the original act.

Special War Revenue Act


James Alexander Robb: Well, I will quote it to my hon. friend if he has any doubt in the matter. Section 61 of the Special War Revenue Act reads:
The first delivery by a corporation or company of such shares, or debenture stock, in order to effect an issue, or the first issue of a bond, or a sale or transfer of any bond between any recognized dealers or brokers shall not be subject to the tax imposed by this part.
That is to say, the first delivery is exempt.


James Arthurs: That is the delivery to the brokers.


James Alexander Robb: The same thing applies to
stock.


James Arthurs: Not according to the
act.


Charles Avery Dunning: It applies to stock as
well.


Mr. FRASER:: Does it apply to common stock?


Charles Avery Dunning: Yes.


Robert James Manion: What the minister has quoted does not change our argument. We were not arguing-at least some of us were not-on that point but in regard to the sale of stocks on the market.


James Alexander Robb: I repeat, there is no tax on the first transfer, and I submit that this tax is a reasonable one. '


James Arthurs: I have not before me
the act to which the minister has referred nor have I the details of the proposed Change. But my impression is that while the original transfer from the company to the brokers is not taxable, the transfer to the public is; and it must then be an additional charge to the company so far as the stock is concerned.


James Alexander Robb: As soon as they begin speculating then certainly the nation has a right to take some share of the profits. If I were representing a mining section of the country I might take a onesided view of the matter. But this is in the interests of .the mining industry, and in support of that statement I shall quote the opinion of the Northern Miner.


Richard Bedford Bennett: That is the editor's
opinion.


James Alexander Robb: Well, he Should know what
the opinion is in that part of the country. And as a matter of fact any opinion expressed in an editorial column is largely the editor's opinion. I quote:

While the business of company promotion by brokers has lagged lately, reducing the prospector's claim market, fortunately he has never been in such good position to sell first-class discoveries. Dozens of big mining organizations will listen eagerly to his story if he has a good one to tell, and will send engineers hopping by plane to examine. If his show stands up money is waiting, on the nail. Easy going, long distance deals are completely out of fashion. The prospector can get quick action if he is willing to deal with the big companies. Competition for good ground is so keen that he is sure of good terms. . . On the whole, it has probably been a good thing for everybody that the promotional game has been slack. Buyers have bad a chance to catch their breath and promoters a chance to realize and act upon the new conditions. The public was overloaded with half-baked propositions. . .
The Monetary Times of January 11 quotes Mr. Norman Urquhart, president of the Standard Stock and Mining Exchange of Toronto, as follows:
Another development which deserves mention and which has come with the increasing confidence in the mining industry is the improved cash position of new companies making application for stock listing privileges, compared with less than two years ago. To-day 60 per cent of the companies making an application have from $100,000 to $200,000. This ensures fewer mining failures than formerly because of lack of capital to carry on and indicates how much easier it is to raise money for preliminary development.
Then I have here another statement made by one of the most prominent bankers in the city of Toronto, where I suppose more mining shares are sold than in any other city of Canada. This statement was made by Mr. Bogart, general manager of the Dominion Bank, in his annual report:
With respect to mining, entirely too many stock issues are made at a premature stage of development-some with no claim to recognition whatever are traded in daily-and it is a great pity that the mining industry, which in proper hands is making fine headway, should have to suffer through unworthy exploitation, and it does Canada no good abroad. The On tario government and some sections of the press do what they can to protect the public, but there should be stricter regulation of the sale of stock and closer supervision of those who sell it.


John Anderson Fraser: What, was the date of that observation?


James Alexander Robb: It was made at the annual
meeting of the bank on December 31, 1928.


Robert James Manion: That was before the imposition of this tax.


James Alexander Robb: 
Mr. STIRLING:: Is that on the par value?


James Alexander Robb: That is per share.


John Anderson Fraser: How can you compare the
old country with Canada?


James Alexander Robb: I will be finished in a
moment, and then my hon. friend can talk until eleven o'clock if he wishes. I submit that this is not an unreasonable tax but that it is fair as compared with the sales tax the miner must pay on his clothing and equipment when he goes out to prospect for these mines. I have had some experience in municipal life as well as in this federal parliament, and I have never yet known a tax which everyone considered fair.


Mr. McRAE:: 
John Arthur Clark: My hon. friend referred to a purchase of shares, worth $500 each, to the amount of $500,000. The tax on such a transaction would be $40, whereas if shares worth $1.01 each were purchased to the amount of $500,000 the tax would be $5,000; in other words the tax on the lower priced share would be about 125 times greater than the tax on the higher priced share. That is not fair.
To a certain extent the minister has alleviated the situation; that we admit. As it stood previously it wras impossible, but I should like to point out that in addition to the inequality of the tax there is another serious feature. In British Columbia at least the mining development since the war has been due largely to what my hon. friend from North Vancouver described as the optimism of the public. There the 'people have gone into the underwriting of legitimate propositions put forward under the best mining engineers in the country and they have purchased shares in these companies. As the matter now stands, however, if they find that owing to the tax, the brokerage and so on they must get about $1.05 for a share for which they paid $1.01 in order to get their money back it will deter people from purchasing these shares, and unless the Shares are marketable people will not purchase them. If a man is considering going into a new proposition the first requisite is that the shares must be marketable, and I think these are the two main points we have in mind. First we believe that this tax does not work out equally- perhaps that is the most serious feature-and in the second place, these shares must be made marketable. If the tax is too high the shares will be marketable no longer, and if there is inequality in the tax people will hesitate before undertaking to purchase these stocks.


James Alexander Robb: According to a statement prepared by the department I find that in 192627 the Ontario government tax on shares amounted to $223,096.27. Quoting only the

Special War Revenue Act

Standard exchange, which I imagine does practically all this business in Toronto, in the same year the federal revenue was $47,393.01. In 1927-28 the Ontario tax was $399,116.98; while the federal mining tax was $121,114.70. I have a statement showing the number of shares of stock sold on the Standard mining exchange on March 15, 1929, and the tax which would be applicable under the schedule which we are now divided on. There were 324,900 shares at 50 cents or less, which gives a revenue of $324.90. There were 186,500 shares over 50 cents but not over $1, which, at a quarter of a cent per share, would give $466.25. There were 114,900 shares over $1 per share, but mot over $3, which, at one cent per share, would give a revenue of $1,149. There were 150,900 [DOT] shares valued at over $3 but not over $20, which, at 2 cents per share, would give $3,018. There were 29,300 shares valued at over $20 per share but not over $100, which, at 3 cents per share, would give a revenue of $879. It will be observed that there is a. turnover of 324,900 shares of what might be called speculative stocks. I submit to the house that this is a very fair tax and that it does not work out as the hon. member for Fort William has pointed out.


Alexander Duncan McRae: I am afraid I have not made my point clear. In these mines the venture, if we can call it such, is underwritten and the underwriters take a certain percentage of the shares. I should like to know whether the shares in the name of the underwriters will be considered as original shares and not taxed in the event of a transfer.


James Alexander Robb: I am not able to answer the hon. member because the Department of Finance does not administer this act.


James Arthurs: That is an essential point.


James Alexander Robb: When the act was framed it appears that the minister was given power to deal fairly with all cases. I have already quoted section 61 of the act, but I will quote it again. It is as follows:
The first delivery by a corporation or company of such shares, or debenture stock, in order to effect an issue, o-r the first issue of a bond, or a sale or transfer of any bond between any recognized dealers or brokers shall not be .subject to the tax imposed by this part.


James Arthurs: That is only dealers or
brokers; it does not cover the point raised.
Mr, ROBB: That is what they tell me in the department. Section 62 reads:
The governor in council may make regulations for the purpose of determining what constitutes .a sale or transfer under this part.
I am not just sure what the regulations are.
(Mr. Robb.]


Richard Bedford Bennett: I do not think this government should impose this tax. I do not think the federal government should impose any tax in connection with enterprises which are dependent entirely upon the provinces. The crown in the right of the Dominion does not own, nor has it any royalty in, the minerals in the provinces of British Columbia and Ontario, so why should we levy a tax of this kind? The provinces already tax these enterprises, and this means double taxation, which is wrong in principle. In my judgment the minister is making a great mistake in proposing to tax these mining ventures. Nearly all of them exist where the crown has no right to the mines or minerals. The federal government have no title and no royalty in Quebec, so why should they impose a tax? They have no title or royalty in Ontario, so why should they impose a tax? The same is true in New Brunswick, Nova Scotia and British Columbia, and within a few months will be equally true in Manitoba. Why should the Dominion impose taxation on the transfer of mining shares when the provinces are already being overtaxed to provide the cost of the very trails which lead up to the mines, the schools in which the children of the miners receive their education, the other facilities which have to be maintained for the life of the community itself? I submit that this is an unfair tax against ventures which are already taxed by the provinces. It simply means that taxation by the Dominion will be superimposed upon the existing taxation; it means taxation by a power which has neither title nor right to the products of the mines in any way, shape or form.
There is something more to be said about it. This tax works out in a most inequitable fashion. I shall not repeat the figures already given, but I should like to emphasize the point made by the hon. members for Parry Sound and North Vancouver. Under the statute as it now stands the first issue is free from taxation. That is the issue which divests the enterprise of its securities and places them in the hands of the underwriters, whether the underwriters be dealers and divide it up with others, or whether they maintain it for themselves. The purchasers who buy either from the underwriters or from one of the recognized dealers have to pay a tax, and the brokers provide for that tax when they sell to the public. That is the point which the hon. member for Parry Sound has been making. It is too late to suggest that this tax should not be imposed in view of the fact that this government has not given assistance to any industry with a view to aiding its

Special War Revenue Act
development. What has the government done to aid the pulp and paper industry, which belongs to the two provinces of Quebec and Ontario. Not a single thing which has contributed either to its success or to its failure.


Mr. POWER:: The provincial governments contributed largely to its failure. The industry would have been better off had they left it alone.


Richard Bedford Bennett: The hon. member for
Quebec South may be speaking with authority with respect to his province, but this is not a provincial legislature; it is the Dominion parliament. I do not propose to discuss whether they were right or wrong, but this government did not do anything to make the industry a success or a failure. They have not helped in the expansion of trade through the finding of markets-although the minister may say he did something in Australia and then by order in council shifted it on to New Zealand so that their butter could come here and kill our dairy industry. If he regards that as an achievement of which to be proud, he is entitled to the credit. Take our next largest industry, that of mining. Minerals to the value of 8275,000,000 were mined in this country last year, and the Minister of Finance cannot point to a single thing which justifies his imposing a tax on this transfer of mining shares. The royalties of these mines belong to the crown in the right of the provinces, and the whole obligation of maintaining the enterprises engaged in developing them rests upon the provincial authorities. An important principle is involved here. Because it is said there is large speculation in mining stocks the government proposes to tax the transfer of such stocks, although the provinces alone have to do with them and the burdens connected therewith are theirs, not ours. The Minister of Finance has pointed out that the revenue received by the Dominion from the transactions on the Standard exchange amounted to only $47,000 or $48,000 in round figures, while the province obtained some $200,000. Why should not the province receive that? What interest has the Dominion of Canada in the mines of Ontario, Quebec or British Columbia?
It is the old story of overlapping taxation which came before the interprovincial conference two years ago. These mining ventures may be highly successful for some people and equally unsuccessful for others, but in the meantime, because they offer a target at which the government can direct a taxing power- the provinces have nursed this industry along
until it has reached a point where it plays a very important part in the life of the country -they say: We are going to tax it. I do not think that is right.


Edward James Young: Would that be
any worse than imposing an export duty on their ores?


Richard Bedford Bennett: Who was talking about
an export duty on ores?


Edward James Young: My hon. friend's friends are talking about it.


Richard Bedford Bennett: What ores? Newfoundland?


Edward James Young: Yes.


Richard Bedford Bennett: The hon. member was
out of the room. I am glad to see that he has wakened up. He has wakened up at the wrong time, like Rip Van Winkle. We were not talking about export duties on ores.


Edward James Young: My hon. friend's friends have been talking about them for weeks.


Richard Bedford Bennett: Would my hon. friend
just state Who they were?


Edward James Young: The hon. gentleman (Mr. Stevens) who is sitting right beside my hon. friend now.


Richard Bedford Bennett: What did he say?


Edward James Young: He said that he would put a duty on the export of our minerals and would not let them ship them out of the country.


Richard Bedford Bennett: And1 what else? Let
my hon. friend give the rest of it.


Edward James Young: He would make them refine and manufacture them here.


Richard Bedford Bennett: Quite so. I think one
might almost say in the words of Shakespeare: "I thank thee Jew, for teaching me that word," beoause it makes it perfectly clear the hon. member for Vancouver Centre said what I would expect he would have said, namely, that he did not believe in Canadian mineral products being sent in the raw state to the United. States of America and then bought back by cur own people at one-quarter of a cent higher price than their competitors in the foreign country paid for .their own product.


Edward James Young: My hon. friend
said just now that we had nothing to do with that.
Special War Revenue Act


Richard Bedford Bennett: I said that that was not what we were discussing to-night; that we were discussing the question of taxation on the transfer of shares. We discussed the other matter some days ago. I suggest to the minister that he abandon this taxation in its entirety, having regard to his buoyant revenues, and after the speech to which we listened to-night from the hon. member for South Timiskaming, who has given a great deal of consideration to the matter and whose province is developing a mining industry without any assistance from this government. Of course the Minister of Finance will say: "Have we not put mining machinery on the free list?" Well, the mines would be developed whether he did that or not, whether he obtained or lost the revenue. What has the government done to develop the mining industry? The tax should be imposed by the province which has to bear the burden, not by the Dominion government, which picks out this industry as a target at which to aim taxation.


James Alexander Robb: My hon. friend the leader of
the opposition is arguing as if this were a new tax.


Richard Bedford Bennett: No.


James Alexander Robb: It is a revision of a tax already imposed.


Richard Bedford Bennett: The other was a mere
stamp tax.


James Alexander Robb: Well, this is a stamp tax.


Henry Herbert Stevens: No.


Richard Bedford Bennett: It would not be classified as such.


Robert James Manion: It is a revision upwards,
of oourse.


James Alexander Robb: I am in agreement with my
hon. friend as to the desirability of getting away as soon as possible from this double taxation, but he will not deny that the federal authorities have the right to impose taxation anywhere in Canada.


Richard Bedford Bennett: I do not for a moment
doubt that right.


James Alexander Robb: We require the revenue. We cannot build railways into the mining districts to take out the ore unless we get revenue somewhere.


Richard Bedford Bennett: But the freight rates
surely furnish that revenue. According to the Minister of Railways that is so; otherwise we would not be building railways.
'Mr. E. J. Young.]


James Alexander Robb: My hon. friend has admitted
that we have contributed towards helping the mines by reducing the duties on the implements of production required in the mines.


Richard Bedford Bennett: Implements of production not made in Canada.


James Alexander Robb: But apparently my hon. friend has forgetten that the government has built some railways into this section and proposes to build more. W7e must have revenue, and I submit that this is a fair tax. It is a revision of an old tax.


Robert James Manion: A revision upwards.


James Alexander Robb: If my hon. friend from Fort
William is right, another year is coming and the matter can be considered.


Robert James Manion: I do no't know why the
Minister of Finance Should link me up with that "another year". He has done that two or three times. I said that if he could not do it this year, he should do it next year. Let him put the responsibility on his own shoulders. He takes the attitude that this is a revision of the tax and he is a great boaster of revising taxes downwards. This is a revision upwards. As regards the Dominion government helping mining by building railways, the government that built railways to help mining was the Conservative government of Ontario. The Timiskaming and Northern Ontario was the railway that did a great deal towards the development of mining in this country.


Mr. MALCOLM:: Who started the Timiskaming and Northern Ontario?


Robert James Manion: I do not know, but I
know who completed it.


Some hon. MEMBERS:: Oh, oh!


Robert James Manion: My hon. friends may
laugh, but they do not know any more about who started it than I do.


An hon. MEMBER:: Yes, they do.


Robert James Manion: The Conservative government was the one that built it, and the Conservative government of Ontario has done more for mining in this country than any other government. I think the minister would be well advised to change the tax this year. I repeat that if he does not do it this year, he should do it next year.

Special War Revenue Act


Alexander Duncan McRae: I am rather astonished at
the Minister of Finance mixing up his department with the Department of Railways.
I think he might look after his own department and the Minister of Railways look after his.


Richard Bedford Bennett: The Minister of Finance to-night says that he is going to revise the tax upwards, and I suppose the people of Canada will have the pleasure of hearing him say next year: Yes, see bow I have reduced the taxes! It is the old way. How long does he think the people will be fodled by that sort of guff?


Some hon. MEMBERS:: Order.


Richard Bedford Bennett: That is the only word
that describes it, and for the last five years that is what has been going on in Canada. The Minister of Finance introduces legislation year after year raising taxes and then reducing them, and he says to the people: Look how I have revised the taxes and lessened the burden of taxation! To-night he is going to revise this tax upwards. He says:	Wait till next year. Next year he will
say:	Look what we did for the mining industry ! We have reduced the tax 25 per cent. How long does he expect the people of Canada to be fooled by that sort of thing?


James Alexander Robb: Then my hon. friendi will be
able to say: I told you so.


Richard Bedford Bennett: We are taking proper
steps this session to provide against a recurrence of such conditions. I suggest that the Minister of Finance explain to his colleague the Minister of Railways, who has been giving uis all this talk about the self-supporting capacity of the railways, how they are going to take care of themselves, and how he has devised during long and tiresome nights a method of extending the railway system without loss of revenue; bow he, the Minister of Finance, is helping to build railways with one-fenth of one per cent of a tax on mining stocks! That is the story my hon. friend is giving the country. The Dominion government got $47,000 out of this tax the year before last and the Minister of Railways is going to build a railway to Chibougamau. He was not able to pronounce the name the other night. That is good' for the Minister of Finance, but I think he should have a quiet little talk with the Minister of Railways, because I am satisfied he will have to impose a good many taxes of that kind before he will be able to build his terminals at Montreal or extend his Gaspe and Oriental to Turkestan, because that is where it is bound for on its oriental mission.


Malcolm Lang: Just another word. A number of hon. gentlemen have spoken since I first rose to discuss this question. The Minister of Finance has read some statements by bankers in Toronto, and something he saw in The Northern Miner. Those, speaking generally, were articles about mining and stock conditions in the country at the time they were written. None of them had any reference whatever to the present proposed mining tax They were written before the minister even thought about this tax, but even if they were written after the minister's proposal had been brought down^ they bad not in mind at all the mining tax that we have or any proposed tax; they had in mind only a condition that exists throughout Canada to-day.
The minister quoted some figures about the revenues of the provinces and of the Dominion under the present tax. I could not catch his figures, but I have some here that might interest the committee. Under the present tax which has been in effect since 1922, in 1927-28 the government collected on the transactions over the Toronto exchanges $615,000; in 1928-29, for the first nine months, the government collected $700,000, which amounts to approximately $950,000 for the year. The present tax, collected in the manner in which it must foe collected, relieves from taxation entirely every cent of value over the par value of a stock, and if you go down that list of shares printed in the article in the Toronto Star, showing the 117 issues that are mostly traded in at the present time, you will find that the great volume of business, so far as money value is concerned, is in stocks that are selling away above their par value. In other words, the government is getting only 3 cents on every $100 of par value of the trading that goes on, when the great bulk of the trading, not in the number of shares, but in the dollar volume of business, is in shares that are selling from two to twenty times their par value. That means, so far as I have been able to judge in the short time I have been able to study this matter, at least two-fifths of the value of the business done over the Toronto exchanges is not taxed at all because it is made up of transactions in stocks selling over par. I have not a doubt in the world that half of the $990,000 that the federal treasury will receive in 1928-29 from this tax applied to the transactions on the Toronto stock exchanges comes from the smaller valued stocks that are taxed, not 3 cents on $100 of value, but sometimes 2 per cent of their value, so that it is a most unfair tax. Surely at this stage of the game, when with a stroke of the pen
Special War Revenue Act

we can rectify this condition and get started off right, we are not in such a hurry to wind up the business of the session that just because this proposal has been put before us by the Finance minister and he says, "I am going to put it through whether it is a fair tax or not," we are not going to accept such an unfair proposal. There is not a member of this house who dare stand up before a body of men who know anything at all about political economy and say that this proposal could by any possibility be a fair tax. It is absolutely unfair, and it cannot be made anything else. On the other hand, an ad valorem tax would be absolutely fair, it could be easily imposed, and be much more easily collected. Any accountant who wants to figure it out will find that if that 3 cent tax was on every $100 of value, instead of on the par value, it would create a revenue four or five times as great as now when it is simply based on the par value.
Why should we hasten through the committee a proposal of this kind? I thoroughly understood from statements made to me by the Minister of Finance that the tax that is in effect now was an ad valorem tax, but when I looked into the matter for myself I found that it was not an ad valorem tax or anything that looked like an ad valorem tax. The only part of it that is an ad valorem tax is the tax on no par value shares, and those shares were not taxed at all, I believe, for a number of years because the department did not know how to tax them. The act did not provide for taxing no par value shares, and finally the shares were taxed' under the present Minister of National Revenue on the basis of value, and that is an ad valorem tax on shares of no par value. But on every other share of stock it has been an absolutely unfair tax, and it has placed an unjust burden on the small investor and on the smaller priced stocks which are used for raising money for the development of new industries, and particularly the mining industry. Surely this committee is composed of mem with business ability enough, with common sense enough- for that is all it needs-to see the unfairness of a tax of this kind. You do not need any business training to see the unfairness of the present tax; all you need is common sense. Any school boy or school girl in this country who knows* anything at all about taxation knows that a tax on value or an ad valorem tax is the one general way of imposing taxation that can be fairly distributed according to the ability of the taxpayer to pay.
I should like to hear from some lawyer as to the interpretation of section 58. I know

the section provides for a tax of 3 cents on every $100, not of value, but of par value, of shares of stock transferred or traded in. Surely any person can see how unfairly it has worked out. It has been absolutely unfair and oppressive upon those who should not be discriminated against. So much for the present tax in effect since 1922; and if this proposed tax is put info effect we shall have for another year a tax that is every whit as bad as the tax we have had since 1922, every bit as unfair, every bit as unjust, inequitable in every respect, and a tax that in my judgment, and I believe, in the judgment of any person who will give it careful study, will not bring in any more revenue to the treasury than the present tax does, because just as soon as such a tax is imposed' those affected are going to seek ways and means of evading it. That is what they did under the old tax to a certain extent. That probably was the reason why quite a number of companies were incorporated with no par value stock; the incorporators saw a possible chance of getting by without any taxation. I think the National Revenue department owe it to this house, when bringing down a change of this kind, to state how the old tax worked out, and when they discovered a way of imposing the tax upon corporations with shares of no par value. Of course, had such companies reorganized and converted their no par value stock into par value stock of $1, a company such as Noranda, whose shares are selling to-day at $54, would not be taxed on the extra $53 at all. A tax such as this is manifestly unfair, no person can make it appear anything else, and when it is so easy to impose a.n ad valorem tax I cannot understand why it is not done. An ad valorem tax of 3 cents on $100 would work out all right and would be fair to everyone. I do not intend to let this proposed tax go into effect so long as I can do anything to hinder it, because it will not be fair to the people of Canada, and therefore should not be imposed.


Mr. LAWSON:: I am indeed reluctant to
have anything further to say on this subject by reason of the length of time I devoted to it last week, but to-night the Minister of Finance has made two statements which I cannot allow to pass. One is obviously an error, the other is misleading. If I remember correctly, in the case cited by him to-night, he quoted figures to show that the province of Ontario had derived something like four or five times more revenue from the transfer of shares than the amount received by the Dominion treasury.


19C9
[Stage Direction]
Special War Revenue Act
James Alexander Robb: Perhaps my hon. friend would like the figures on record?


James Earl Lawson: $200,000 odd against $40,000. Is not that correct?


James Alexander Robb: Yes, in 1926.


James Earl Lawson: On referring to the Dominion statute in force prior to this proposal I find it reads as follows-I am going to omit words which are unnecessary for my purpose-
No person shall sell or transfer the stock or shares of any association. . . unless in respect of such sale or transfer there is affixed a stamp. . . of the value of 3 cents for every $100 or fraction thereof of the par value of the stocks or shares. . . sold or transferred.


An hon. MEMBER:: Bonds.


James Earl Lawson: I am not interested in
bonds for the time being. The bon. Minister of Finance has given the returns, I understand, from the Standard stock and mining exchange. Now take the Ontario statute-


James Alexander Robb: My hon. friend, if he is going to argue fairly, must continue and quote the exceptions provided in article 61.


James Earl Lawson: I am not quarrelling with
that. I am going to read the Ontario act to show that the statutory provision is exactly the same as in the Dominion statute.


Richard Bedford Bennett: The Dominion act is
copied from the Ontario statute.


James Earl Lawson: Under section 12 of the
Corporation Tax Act of the province of Ontario it is provided:
There shall be levied a tax of 3 cents, payable by the transferor, in money or stamps, for every $100 or fraction thereof of the par value upon every change of ownership consequent upon the sale, transfer. . .
Obviously if under the law of Ontario and the law of the Dominion the same amount of tax is imposed, then the Dominion treasury must have received the same amount of tax from that source as the provincial treasury, or else some department of the Dominion has been distinctly lax in its collection of revenue.
My other point is this. The hon. Minister of Finance stated that this was not the imposition of a new tax; it was a revision of the schedule. But may I point out to him that this introduces an entirely new principle in taxation, and I should like to hear some statement or argument from him justifying, not the quantum of taxation-that is the part to which all his statements have been directed -but the reason why a larger percentage of tax should be imposed upon the lower priced stocks than upon the higher. I should also
like to ask the minister if he has any precedent for the imposition of a stock transfer tax on an ascending ratio as the value of the stock descends. I have had occasion from time to time to examine the transfer tax laws of the provinces and indeed of some of the states, and if there is any precedent for a tax based upon an increasing ratio on the lower priced stock, I should be interested to know.


John Frederick Johnston: Shall the amendment
carry?


Some hon. MEMBERS:: No.


James Earl Lawson: Mr. Chairman, I should
very much like to know if the Minister of Finance will attempt to justify the imposition of a higher percentage of taxation on the sale price of the lower priced issues than upon the higher. Why is it not equitable in an ascending ratio, if anything, on the same basis as the income tax?


Mr. GARLAND (Bow River):: The point raised by my hon. friend appears to be one that is worthy of attention. I should like the minister to give us an explanation. If he cannot explain it let him say so frankly, but if he can why not let us have the explanation?


James Alexander Robb: Explain what?


Edward Joseph Garland: Give an
answer to the hon. member.


James Alexander Robb: We might argue all night. We have submitted the matter to examination and we think the tax is fair, considering the business that is done and the nature of that business. Hon. gentlemen talk about the tax on certain high priced stocks; they forget that we derive an additional revenue from such stocks in the way of income tax. I submit that this tax will meet with the approval of the country.


James Earl Lawson: Seventy-four per cent of
the mining stocks traded in in Ontario on the Standard stock and mining exchange are selling at under $3.


Samuel William Jacobs: Does that include wash sales too?


James Earl Lawson: So far as I know, and I
have some experience, they do not have wash sales in the province of Ontario. The statutes of the province of Quebec, in which my hon. and learned friend is interested, specifically provide that a tax shall be payable on wash sales. The Minister of Finance has pointed out that these higher priced issues bear a heavy tax inasmuch as they produce revenue from which the Dominion secures income tax. But as I pointed out the other night, 74 per
Special War Revenue Act

cent of all stocks traded in on the Standard stock and mining exchange were stocks selling under $3; yet the gold and silver mines alone in the province of Ontario last year paid in dividends some $12,000,000. Surely that money coming into the hands of investors is taxable for income tax purposes just as much as the higher priced issues.


John Frederick Johnston: Shall the amendment
carry?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: Lost.
Amendment agreed to on division: yeas, 52; nays, 44.


John Frederick Johnston: There is another amendment.
That the resolution amending the Special War Revenue Act be amended by striking out paragraph seven and substituting therefor the following:
7. That any enactment founded on paragraphs two and three of this resolution shall be deemed to have come into force on the first day of May, 1929, and that any enactment founded on paragraph four of this resolution shall come into force on the first day of July, 1929.
Shall the amendment carry?


Some hon. MEMBERS:: Carried.


[Stage Direction]
Amendment agreed to.
John Frederick Johnston: Shall the resolution as amended carry?


Some hon. MEMBERS:: Carried.


Some hon. MEMBERS:: Lost.
Resolution as amended agreed to on division: yeas, 47; nays, 40.
Resolution reported.
On the motion for first reading of the resolution :


Richard Bedford Bennett: I do not think a resolution can be read after eleven o'clock.
Mr, SPEAKER: I believe that is correct.


Mr. McGIBBON:: I would like to ask, as a matter of information, whether this last vote is legal, since it was started after eleven o'clock.


Hewitt Bostock: As a matter of fact it was started just at three minutes to eleven o'clock.


Peter McGibbon: I must take exception to that statement.


Hewitt Bostock: I was watching the time closely and when I resumed the chair the hour was striking.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.