AGRICULTURE AND COLONIZATION

[Stage Direction]
Second report of the select standing committee on agriculture and colonization.-Mr. Kay.


[Stage Direction]
Bill No. 139, to incorporate the Hamilton Life Insurance Company.-Mr. Bell (Hamilton).

[Stage Direction]
rORTAGE LA PRAIRIE MUTUAL INSURANCE COMPANY
Mr. E. A. McPHERSON (Portage la Prairie) moved:: '
That the petition of E. H. Muir and others, praying for an act of incorporation in the name of the Portage la Prairie Mutual Insurance Company, presented this day be referred to the select standing committee on standing orders for the purpose of considering the suspension of standing orders 92 and 95 in reference thereto.


[Stage Direction]
Motion agreed to.


Right Hon. W. L. MACKENZIE KINO (Prime Minister):: I beg to lay on the table copy in English and French of the international treaty for the limitation and reduction of Naval Armament, London, April 22, 1930, signed in respect of the Dominion of Canada by the plenipotentiary named therein.



CRIMINAL CODE AMENDMENT

[Stage Direction]
Hon. ERNEST LAPOINTE (Minister of Justice) moved for leave to introduce Bill No. 13S, to amend the criminal code.
Mr. RYCKMAN:: Explain.


Mr. LAPOINTE:: This bill proposes a certain number of amendments to the criminal code. I will merely indicate a few of them. First there are amendments suggested by the interprovincial conference that took place two or three months ago between the attorneys general of the various provinces in connection with stock market operations.
There is an amendment repealing certain sections of the criminal code concerning sedition. This is the same as that which has passed the [Mr. Hanson.)
house on various occasions but which did not get through the other chamber.
There are certain sections which embody a particular bill which has passed the Senate on two occasions in regard to the prevention of the importation and sale of certain weapons, firearms, for instance, except under special conditions. I think this bill which has passed the Senate on two occasions was considered and recommended by a special committee of the house, but the session ended before it could be submitted to the house.
There is a provision prohibiting certain advertisements or the giving of tips in regard to horse races and other games. That provision is similar to one that has been passed by this house on two or three occasions but has failed of being adopted in the other house.


Mr. McGIBBON:: Is the other house safe
now?


Ernest Lapointe: I do not know. There
are also certain amendments suggested by the attorneys general of Ontario and the other provinces concerning culpable negligence especially in connection with motor car accidents. Certain other sections have been urged by representatives of the Humane Society in various parts of the country concerning cruelty to animals. Finally, there are certain amendments in the matter of procedure which have been suggested and recommended by the attorneys general and other persons entrusted with the administration of criminal justice in the province.
Motion agreed to and bill read the first time.



QUESTIONS

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

Mr. BLACK (Yukon):: 1.	Was A. W. Greene, solicitor, Ottawa, employed in any work for the Department of Public Works during the years 1921 to 1930, inclusive?
2.	If so, what was the nature of the work performed by him?
3.	Was the said Greene employed by any other department during the period above mentioned?
4.	If so, what was the work performed by him?
5.	Was the firm of Greene, Johnson and Strike, solicitors, Ottawa, employed by any department during the period of i921 to 1930, inclusive?
6.	If so, what wTas the nature of the work so performed?
7.	What was the total sum paid: (a) to the said A. W. Greene; (b) to the firm Greene, Johnson and Strike, Ottawa, during the period of years 1921 to April 1930, inclusive?

Questions


Mr. RINFRET:: 1.	Yes.
2.	Legal services in connection with the acquisition of the following properties by the Department of Public Works: Cranston property, Sussex street; Gatineau Co., Ltd., property, Sussex street; Ottawa Electric Co., property, Sparks street; Irvine property, Sparks street.
3.	Yes.
4.	Services as representatives of the corporation of Ottawa on a board of conciliation and investigation appointed by the Minister of Labour under the Industrial Disputes Investigation Act, in the matter of differences between the corporation of Ottawa and certain of its employees, being firemen, members of the International Association of Fire Fighters.
5.	The firm of Greene and Johnson, barristers and solicitors, Ottawa, was employed in 1927, by National Revenue department. Mr. Glenn E. Strike was employed in 1926 and again in 1928. Subsequently he joined the firm of Greene and Johnson.
6.	Messrs. Greene and Johnson were employed in connection with the investigation made by the Royal Commission on Customs and Excise. Mr. Glen E. Strike was engaged in connection with the recovery of arrears of sales tax.
7.	(a) Public Works Department, 14,870.08; Labour department, $215.
(b) National Revenue department, Greene and Johnson, $200; Glenn E. Strike, $47.


IMMIGRATION REJECTIONS
Mr. RYERSON:: 1.	Have any prospective immigrants been refused admission to Canada during the fiscal years 1928 and 1929 on account of mental disorders?
2.	If so, how many in each of the said years?


Mr. STEWART (Edmonton):: 1.	Yes.
2.	In the fiscal year 1928-29, 772 persons who contemplated coming to Canada were certified in the British Isles and on the continent under section 3 ss. (a) of the Immigration Act; while 336 were certified in the British Isles and on the continent under section 3 ss. (k). In the fiscal year 1929-1930, 560 persons were certified by our oversea medical service under section 3 ss. (a) and 240 under section 3 ss. (k); making a total for the two years of 1,332 under section 3 (a) and 576 under section 3 (k).
In addition to the above certifications on the continent and in the British Isles, rejections
under section 3 ss. (a) numbered 17 at Canadian ocean ports during the fiscal year 19281929, and 26 during the fiscal year 1929-1930, or a total of 43 at the ocean ports for both years. There were also 63 rejections under section 3 ss. (a) at ports on the international boundary during 1928-1929, and 78 during 1929-1930, or a total of 141 on the Canadian border during the two years mentioned.
Section 3 (a) of the Immigration Act prohibits the entry to Canada of the following- idiots, imbeciles, feeble-minded persons, epileptics, insane persons, and persons who have been insane at any time previously; while section 3 (k) prohibits the entry of persons of constitutional psychopathic inferiority.


NAVAL SERVICE-REPAIRS
Mr. ROSS (Kingston):: What amount was spent on repairs to different units of the Canadian navy during the years 1926-1927-1928-1929?


Mr. RALSTON:: 1926- 27	$ 87,377 29
1927-	28..	
133,455	641928-	29	
55,316	121929-	30	
76,657	98Total	$ 352,807 03


RAW LEAF TOBACCO
Mr. GOTT:: 1.	How much raw leaf tobacco was imported from the United States during the year 1929?
2.	What is the present rate of duty per pound: (a) stemmed; (b) unstemmed?
3.	How much tobacco was exported from
Canada during the year 1929 to:	(a) Great
Britain; (b) other countries?
4.	What is the present rate of duty on tobacco, all grades, raw and manufactured, entering Canada?
5.	What grades of tobacco were imported during the past year?
6.	How many pounds of tobacco were produced in Canada during the years 1924, 1925, 1926, 1927, 1928, 1929?
7.	How many pounds were exported during the aforementioned years (by year)?
8.	How many pounds were imported during the aforementioned years (by year) ?


Mr. RINFRET:: 1.	Canada's imports of unmanufactured tobacco from the United States, calendar year 1929, were 16,408,039 pounds; value, $5,441,662.
2.	Tobacco, unmanufactured, for excise purposes under conditions of the Excise Act is
Questions

free of customs duty but subject to an excise 3. Canada's domestic exports of tobacco to duty of 60 cents per pound for stemmed and (a) United Kingdom, (b) Other countries, 40 cents per pound for unstemmed.	calendar year 1929, were:
(a) United Kingdom-
Unmanufactured tobacco..
Cigars	
Cigarettes	
Plug and twist tobacco.. . Tobacco stems and cuttings Other tobacco	
Pounds	$
5,809,207	1,635,949
180	245
60	69
2,900	87
255	342
Total
5,812,602	1,636,692
(b) Other countries-
Unmanufactured tobacco..
Cigars	
Cigarettes	
Plug and twist tobacco.. . Tobacco stems and cuttings Other tobacco	
Pounds	$
1,434,838	109,317
750	2,420
2,151	2,281
9,598	5,885
352,900	5,366
18,353	17,237
Total
1,818,590	142,506
4.	Tobacco, unmanufactured, for excise purposes under conditions of the Excise Act, free.
Cigars, the weight of the bands and ribbons to be included in the weight for duty, $3.90 per pound and 25 per cent.
Cigarrettes, the weight of the paper covering to be included in the weight for duty, $4.10 per pound and 25 per cent.
Cut tobacco, 95 cents per pound.
Manufactured tobacco, n.o.p. and snuff, 90 cents per pound.
5.	No information available as to grades. According to United States trade returns the following types of leaf tobacco were exported to Canada: bright flue-cured; Burley; dark-
Calendar
years
1924..
1925..
1926..
1927..
1928..
1929..
fired Kentucky and Tennessee; dark Virginian; Maryland and Ohio export; Green River; cigar leaf; and Perique.
6.	Canada's yield of tobacco during the years 1924 to 1929, inclusive, was:
Year	Pounds
1924		 18,711,000
1925		 29,266,000
1926		 28,824,000
1927		 43,917,000
1928		 41,976,000
1929		 29,886,000
7.	Canada's domestic exports of tobacco, in pounds, calendar years 1924 to 1929, inclusive, were:
aanufactured	1 Stems and	Manufacturedtobacco	cuttings	tobaccoPounds	Pounds	Pounds3,627,826	685,500	146,1041,974,765	541,600	121,1345,050,118	457,500	251,0935,867,479	430,700	257,1606,199,913	420,800	155,1757,244,045	355,800	31,347
[Mr. Rinfret.I

Questions
8. Canada's imports of tobacco, in pounds, calendar years 1924 to 1929, inclusive, were:
	Unmanufactured	Manufactured
Calendar	tobacco	tobaccoyears	Pounds	Pounds1924.. ..	18,034,551	481,2831925.. ..	14,847,553	472,5941926.. ..	16,100,333	485,9471927.. ..	18,678,745	482,3081928.. ..	17,943,070	476,7121929.. ..	17,717,610	472,328


BUTTER-PRODUCTION AND PRICES
Mr. TOBIN:: 1.	What is the tariff on butter entering: (a) the United Kingdom; (b) Canada; (c) the United States of America?
2.	How have prices for creamery butter at London, New York and Montreal compared during the current calendar year?
3.	How did production of creamery butter, by provinces, in Canada, during 1929, compare with production during 1928?


Mr. RINFRET:: 1.	(a) Duty free; (b) New Zealand butter imported direct from New Zealand to a sea or river port of Canada, 1 cent per pound.
Australian butter imported direct from Australia to a sea or river port of Canada, 1 cent per pound.
Item 18 of the budget resolution at present before parliament, effective on and since the 2nd May, 1930, reads as follows:
Item 18.-Butter-
British preferential tariff..	4 cents per lb.
Intermediate tariff	 6 cents per lb.
General tariff	 7 cents per lb.
Provided that, if any country imposes upon butter produced in, and imported from, Canada rates of duty higher than are enumerated in this item, equivalent rates of duty shall be imposed upon butter entering Canada from such country.
(c) At present 12 cents per pound.
2.	Average wholesale jobbing quotations for creamery butter at the close of each week:
<V >	Sh . o >	f-, CD >New York Creamery Extras 92 score	Montreal No. 1 Pasteurizec	London Australian Finest	Premium Montreal ( London	Premium Montreal c New York	Premium New York ( Montrealcents	cents	cents	cents	cents	centsDate-1930	per lb.	per lb.	per lb.	per lb.	per lb.	per lbJanuary 4	.. 37.25	38.87	33.41	5.46	1.62	January 11	.. 35.62	38.12	32.48	5.64	2.50	January 18	.. 37.00	37.75	32.55	5.20	.75	January 25	.. 38.00	36.75	33.09	3.66	1.25February 1	.. 36.50	36.25	32.76	3.49	.25February 8	.. '36.50	36.50	32.55	3.95	February 15	.. 37.00	36.62	31.90	4.72	.38February 22	.. 35.00	36.25	30.81	5.44	1.25	March 1	.. 34.00	35.62	30.49	5.13	1.62	March 8	.. 36.00	35.50	29.19	6.31	.50March 15	.. 38.25	35.12	29.51	5.61	3.13March 22	.. 38.37	35.00	28.64	6.63	3.37March 29	.. 39.75	34.25	27.22	7.03	5.50April 5	.. 39.00	33.12	26.90	6.22	5.88April 12	.. 3S.50	31.25	25.60	5.65	7.25
Questions

3, Preliminary report of production of creamery butter in Canada during 1929, as
compared with 1928, is shown hereunder: Province
Prince Edward Island	
Nova Scotia	
New Brunswick	
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia	
Total	
1929	1928	per cent	per cent
		Increase	Decrease
lbs.	lbs.		
1,929,987	2,036,838	5.24,254,379	4,479,276	5.01,850.768	2,091,723	11.557.569,163	52.526,248	0.9	57,000,000	63,733,187	10.515,472,109	13,782,167	12.2	14,780,000	11,310,496	30.6	16,025.000	14,375,636	11.4	3,700,000	3,691,468	0.2	172,581,406	168,027,039	2.7


TRENTON AIR PORT-FENCING
Mr. RENNIE:: 1.	Were tenders called for chain link fencing used in connection with government air port at Trenton, Ontario?
2.	If so, how many tenders were received, and from whom?
3.	AVas the lowest tender accepted, and what was the name of the person or firm submitting the said tender?
4.	What are the names and addresses of the directors and officers of the firm which secured the said contract?
5.	What firm supplied or will supply the material?
6.	AYhere is the said material manufactured, in Canada or the United States?
7.	If in United States, why was Canadian material not used?


Mr. RALSTON:: 1.	Yes.
2.	Six:	Frost Steel and Wire Co. Ltd.,
Hamilton, Ont.; Steel Co. of Canada, Ltd., Montreal, Que.; AValker Hardware Co. Ltd., Belleville, Ont.; S. Bilsky, Ottawa, Ont; representing the Dennisteel Limited, of London, Ont; Dominion Chain Co. Ltd., Niagara Falls, Ont.; Sarnia Fence Company, Ltd., Sarnia, Ont.
3.	Yes: Walker Hardware Company, Ltd., Belleville.
4.	No information.
5.	Canadian Steel Corporation, Ltd., Ojib-way, Ont.
6.	In Canada.
7.	Answered by 6.


GLACE BAT POST OFFICE
Mr. MacDONALD (Cape Breton South):: 1.	What is the present staff employed in the Glace Bay post office?
2.	How many letter carriers are employed in Glace Bay?


Mr. VENIOT:: 1 and 2. 1 Postmaster; 1 assistant postmaster; 1 postal clerk; 1 clerk, grade 2; 1 clerk, grade 1;	6 letter carriers; 1 postal
helper; 1 temporary postal helper; 2 temporary letter carriers.


MOUNTED POLICE-PAY AND ALLOWANCES
Mr. SPENCER:: 1.	What are the total monthly rates of pay and allowances to constables and N.C.O's in the Royal Canadian Mounted Police?
2.	Have these officers received any increase in pay within the last ten years other than the extra allowance for long service?
3.	Is it the intention of the government to bring the scale of pay more in accord with the present cost of living?


Ernest Lapointe: (1)	Straight pay
30 day per day month
Constables 1st year	$2	00	$60	00Constables 2nd year	
2	05	61	50Constables 3rd year	
2	10	63	00
Constables 4th and subsequent
year	
2	25	67	50Corporals	
2	50	75	00Sergeants	
3	00	90	00Staff Sergeants	
3	25	97	50Eight Staff Sergeants	
3	75	112	50
Extra Pay. Extra pay to a limited number of detectives, blacksmiths, other artisans and also for special work such as prisoners' escorts, clerical work, etc., ranging from 25 cents per diem in the case of prisoners' escort to $1 per diem in the case of an experienced non-commissioned officer detective.
Allowances. All N.C.O's and constables are supplied with free rations, lodging, clothing and kit and medical attention.

Civil Service-Minimum Salary
la eases where it is not convenient to supply rations in kind, a ration allowance of 60 cents per diem is granted.
Married N.C.O's and constables receive the same pay as those who are unmarried but a double ration is granted in the former case.
(2)	No.
(3)	The pay of non-commissioned officers and constables was increased in 1919, in accordance with the increased cost of living, and is now considered adequate and in proportion to the pay of other organizations.


UNOPPOSED MOTION FOR PAPERS
Mr. STEVENS:: For a copy of the report of the resident engineer and/or of the Deputy Minister of Marine in regard to the work being done under contract in the First Narrow's, Vancouver, British Columbia.


RUSSIAN ANTHRACITE COAL
[Stage Direction]
On the orders of the day:
Mr. E. J. GARLAND (Bow River):: I
wish to ask the government if they are yet in a position to make a report on the Russian anthracite importations.


Hon. CHARLES STEWART (Minister of the Interior):: No, Mr. Speaker. We are
still gathering information in connection with this question.


Edward Joseph Garland: May we
expect a report before the end of the session?


Charles A. Stewart: I shall do
my very best to expedite a report.


INQUIRY FOR RETURN
[Stage Direction]
On the orders of the day:
Mr. II. B. SHORT (Digby-Annapolis): An order of the house was issued on April 28th last for a return of correspondence in connection with steam trawlers and draggers. I would ask the Minister of Marine and Fisheries (Mr. Cardin) when I may expect the correspondence.
Hon. P. J. A. CARDIN (Minister of Marine and Fisheries):: I shall make inquiries and try to expedite the bringing down of the return


CIVIL SERVICE
[Stage Direction]
On the orders of the day:
Mr. JOHN EVANS (Rosetown):: I would
ask the Prime Minister (Mr. Mackenzie King) a question based on a telegram that I received 2419-1311
this morning from Regina, from the secretary of the amalgamated civil servants, whether it is the intention of the government to deal with their request for a minimum salary of $100 per month.


William Lyon Mackenzie King: I assume that the telegram which my hon. friend has received is similar to several dozens that I have received and all of which are worded in exactly the same way.
I had better read one of these telegrams to the house because it is desirable that hon. members should have the contents before them. This wire is one, as I have said, of very many that are similarly worded:
Dominion civil servants emphatically protest against any further delay in establishment of one hundred dollar minimum. After many years patient waiting can parliament assure us that legislation based on our request for adequate salaries will be introduced and passed before dissolution?
The house will observe that the request is of parliament to state what it is going to do in respect of a minimum salary for civil servants. Whoever was responsible for drafting and circulating that particular telegram has not to my mind been particularly helpful to the cause of the civil servants, because I do not believe that parliament as such could be expected to reply to a communication so worded.


Mr. BELL (Hamilton):: Not by five cents.


William Lyon Mackenzie King: So far as the
government is concerned, I may say that we are giving very careful attention to the whole question of what is to be done with regard to the salaries of members of the public service. A general election has been announced, and I assume that any pronouncement which the government may make with respect to salaries of the civil servants would be viewed by the country and possibly by members of the house as having been made in the light of that announcement. May I say that that is one aspect of the question to which the government at the moment is giving very careful consideration? There is a desire, I believe, on the part of members of the public service to have the position of those in the lower grades investigated in accordance with one of the recommendations of the Beatty report before action is taken on the Beatty report itself. It is just possible that the government may think it advisable to follow that course, but for the present I do not wish to make any announcement as to what will be done beyond saying that I do think, a general election having been announced, it is in the public interest that great caution should be taken by the adminis-
The Budget-Mr. Deslauriers

tration and by parliament as respects any rivalry between the different parties in this house as to who is to have the last word in the matter of either increases or decreases.
SOLDIER SETTLEMENT BOARD STAFF On the orders of the day:


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, may I ask the Prime Minister whether it is the intention of the government at this session to make provision for placing the staff of the Soldier Settlement Board on a permanent basis as a part of the civil service?


William Lyon Mackenzie King: I am sorry that I cannot answer my hon. friend at the moment.
TARIFF REDUCTIONS AND WHEAT On the orders of the day:


Hon. FERNAND RINFRET (Secretary of State):: Yesterday, Mr. Speaker, the hon.
member for East Simcoe (Mr. Thompson) inquired as to when he might expect further information than that contained in the return brought down on April 28, concerning certain tariff reductions. I should like to draw my hon. friend's attention to the fact that this supplementary return has been tabled this day.


THE BUDGET
[Stage Direction]
The house resumed from Tuesday, May 13, consideration of the motion of Hon. Charles A. Dunning that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, the amendment thereto to Mr. Bennett, and the amendment to the amendment thereto of Mr. Fansher (Last Mountain).
Mr. HERMAS DESLAURIERS (St. Mary) (Translation):: Mr. Speaker, the budget of the hon. Minister of Finance (Mr. Dunning) has heretofore afforded to our opponents the opportunity of making unwarranted criticisms which really have no weight whatsoever. In 1921, the people of Canada worried in many ways by the government of that day, desired ardently an era of peace. It was then that the present Prime Minister of Canada (Mr. Mackenzie King) put in his program as an outstanding feature, a promise of an era of peace, should the citizens of Canada entrust him with their confidence. No one, to-day, can state that the Prime

Minister failed to carry out his promise and that his efforts did not tend to ensure peace to this country. Because our neighbours, through their legislation, seem to express a desire of ceasing all trade with us, the Prime Minister, without any fuss directed the efforts of his government in negotiating with better disposed countries. On the other hand our opponents, if we are to believe them, would have preferred to see the government take part in a series of provocative tariff wrang-lings, forgetting that imported page of history, when England in 1775, on a simple tariff question, lost her wealthiest colony, the United States, and might also have lost Canada, had it not .been for the bullet of a valiant French-Canadian which laid low the brave General Montgomery, saved the situation and preserved the colony to the British Empire. These tariff changes may perhaps afford the opportunity to a few trade profiteers to squeeze for a time the people of this country, but their little sport will be of short duration since our relations with the West Indies and Bermuda, helped by our merchant marine equipped for the transport of fruits and vegetables will enable the government to improve conditions without much delay. The people must continue to trust the present government, if it wishes to enjoy peace in this country, and they can rest assured that if, one day, Canada is annexed to the United States the Liberal party's policy will not be to blame but the fault will be with the provoking methods of the Tory policy.
One question of which the present budget makes no mention, but which is very much alive, is that of the canalization of the St. Lawrence river. For some years it has been before the universities, the newspapers, the parliaments-as much American as Canadian -and in commercial circles under the title of "The Great Lakes Waterway," contemplating the canalization of the St. Lawrence to the head of the Great Lakes. In certain quarters this scheme is considered possible and practical. The Federation of Shippers, an association regarded as an authority in navigation, declares that the project is a serious error from the standpoint of navigation; the Chamber of Commerce of Montreal, a body composed of business men, opposes it from the economic viewpoint. But Ontario sees Toronto becoming an ocean port and Montreal a secondary harbour; the farmers of the west allow themselves to believe that the cost of shipping their grain will be made practically negligible; while others still more enthusiastic go to the length of hailing lake Superior as "the Mediterranean of the North!"

The Budget-Mr. Deslauriers
Numerous engineers come forward to present claims and opinions which are contradictory, and depend upon the party to which they belong.
However, from what we can deduce from official reports at our disposal, it seems to be agreed that the enterprise is practicable. I consider the question in the light of two factors, the time and the money. These reports and the supporters of the scheme tell us that navigation would be the principal objective and that the development of hydroelectric power would be secondary. However, setting to one side all these diverse opinions, interested or not, carefully studied, or not, I will consider this from the point of view of business and logic.
Starting from this point of view, I contend that the enterprise is not inspired by the actual needs of navigation, that the future holds out no promise of a time in which the project could be called necessary, and, moreover, that it cannot have navigation as its principal objective. Finally I say that the question of electrical power cannot be held a factor at present, since we have to deal with American financiers interested in the eastern part of the United States and who are at present engaged in figuring how they can lay a heavy hand upon our water-power resources for the benefit of their country.
Moreover, the completion of the project would not deal a death blow to the port of Montreal, nor abet the ambitions of Toronto, nor would it reduce in any degree the transportation costs of the western farmer. Thus, as it is a question involving an expenditure of probably a billion dollars, the greatest caution should be adopted before taking any decision, whether upon a joint enterprise or otherwise. It is the duty of the taxpayer, responsible already for two and one-half billion dollars of national debt, to study seriously what is proposed before committing himself.
Any person who knows anything, however little, of the history of his own country will admit that in the early days of colonization the St. Lawrence river was the only commercial artery, and that it rendered substantial service to the district through which it flowed. In later times it has continued to serve, but not alone, since it has shared the commerce with the railways. The progress, not alone of Canada, but of every country in the world, has imposed upon trade generally the necessity of rapid transportation, which has resulted in the development of the railways as carriers, a system of transportation more rapid, less
dear to insure, less exposed to weather hazards, going everywhere and at all times, so that transportation by water, especially in the canals, is very slow and does not possess any of the advantages of which the railways boast.
From these considerations we see, not only in Canada, but also in all other countries, a shrinkage in the volume of goods shipped by canal, while we see, on the other hand, the shipments by rail increase substantially, except in a few exceptional cases.
To emphasize this point-knowing that our canal systems are actually utilized only to 66 per cent of their capacity, considering that Fort Churchill in the future will divert a considerable volume of the grain of the West from the St. .Lawrence, that the development and steadily increasing accommodation of the harbours of Vancouver and Victoria will absorb more and more, notwithstanding the methodical reorganization of agriculture in Russia, the serious competition of Tcheco-slovakia, the southern republics and the Scandinavian countries-all these things are surely sufficient to Show that the existing canals are more than adequate. They force us to admit that we may look for a gradual diminution in the annual tonnage passing through our canals, since we know that half of cur western grain production goes through the United States by rail via Buffalo, even New York, at a greater cost of transportation, and that this condition will continue into the future. It surely is not possible for us, therefore, to give the need for wider transportation facilities on the St. Lawrence as the premier object of this enterpise, neither for the present nor for the future.
The need for water power cannot be urged on behalf of the project since Quebec and Ontario are exporting electrical energy by the hundreds of thousands of horse power to the United States, under yearly contracts which are susceptible of 'being cancelled from year to year if the provinces so desire.
Such is not the case with the Eastern states, the real ones behind the scheme and the only ones to derive any benefit from it, more particularly if they could get this power at half price after having inveigled us into paying half the cost of the undertaking.
The taxpayers always foot the bill and they should, in their own interests, learn and retain just what it costs to build these so-called seaway shipping canals; the methods and the results of these undertakings are, to my mind, always the same in all countries.
When the Panama Canal was first broached it was understood that the cost would be in

The Budget-Mr. Deslauriers
the neighbourhood of $100,000,000; but when the work was done people realized that it had cost $430,000,000. The Chicago canal, which according to the first estimates, could be completed for $16,000,000, cost all told $92,000,000. The Manchester canal cost 110 per cent more than the estimate, as did the Suez canal; the Welland canal, supposed to cost only $55,000,000, will have cost $115,000,000 or $120,000,000 before its completion.
This scheme, according to the engineers' first estimates, was to cost $252,000,000 (report of June 21, 1925). Later on this was revised to $6.50,000.000. Other engineers that I have consulted have told me that this undertaking might well cost one billion dollars or more. So we are perfectly justified in leaving a considerable margin in all these calculations, since these engineers' estimates have always been wide of the mark and the final cost has been two, three, even four times the original figure, despite the fact that the engineers responsible have been men with a well deserved reputation for science and workmanship.
Therefore the people of the country have fair warning that they are confronted with an undertaking of a kind that is always deceptive and decidedly expensive; that they should think well before going into an enterprise of that nature.
Let us say that our part of the cost will be $325,000,000 or one-half of $650,000,000; the yearly fixed charges will be a heavy burden for the public to bear. The annual interest at 4J per cent will be $14,625,000; maintenance and operation of a 25-foot canal will cost about $2,000,000 more; roughly a yearly total of $17,000,000 which in all likelihood will be near $20,000,000. While two economic factors which remain unchanged, time and transportation insurance, cause half of our Canadian wheat to be sent by rail through Buffalo via New York, it is nevertheless a fact that the quantity of wheat shipped to Montreal through our canals averages less than 100,000,000 bushels a year. But, speaking in a broad way, let us suppose that in 1935 we carry 400,000,000 bushels; it will require 4^ cents per bushel to meet the annual fixed charges of $17,000,000.
If, instead of building this canal for $650,000,000, with a yearly fixed charge of $17,000,000 for the transportation of 400,000,000 bushels of wheat, the government helped the farmers of the west with a bonus of two cents a bushel, at a total cost of S8,000,000, which implies that our present canal system would be utilized to only 50 per cent of its capacity, the one and only object of those who are behind this scheme, namely a reduction of two cents a bushel in the cost of our western wheat to

the seaboard would be attained and the government would save the balance of the $17,000,000 or $9,000,000. It' is quite evident that the government cannot accept this policy of a bonus which, would be class legislation of the worst kind; but the promoters have not yet succeeded in showing us that their scheme would bring about a reduction of two cents a bushel in the freight rates. On the contrary, it is more than likely that there will be no reduction whatever. That is what a business man, looking after his own interests, would do in like circumstances. Why should the public authorities not have recourse to the same solution, or else why should they have anything to do with such a scheme? We may readily conclude that the prime object of the enterprise is not navigation, which is more than amply provided for; we know that the proposed innovation would not result in lowering the freight rates; for corroboration we have only to look to the engineers' schedule of expenses where they allow 5-6 of the $650,000,000 for water-power development, which means 5-6 for the main object of the scheme power.
Of the total cost of $650,000,000 there is set aside the sum of $120,155,000 for digging a 25-foot canal. The Thousand Islands section is to cost $1,100,000; the international waterfalls $33,481,000; lake St. Francis, $980,000; Sou-langes $31,594,000, which represents the first group, Soulanges and Lachine forming the second.
Lachine would cost $53,000,000. According to the estimates the first group would yield 2,700,000 h.p., the second group 5 million h.p.
One could not choose a more inopportune time for such an undertaking; we have a population of barely nine millions, we are saddled with 22,000 miles of railway and our national debt is over two billions of dollars. At a time when our war taxes are still a heavy burden foreign speculators come here and try to talk us into accepting this w'hite elephant which will cost at the very least $500,000,000, while it is evident that our navigation system can well get along without it and that we have no need of additional water-powers. We are justified in making an appeal to common sense; for if we go into this thing without due reflection we are bound to pay the consequences.
We must necessarily take into account the opening a new seaport at Churchill with an objective exactly similar to that of the St. Lawrence which, at the start will be another burden on the Canadian taxpayer anl later will attract a considerable share of the St. Lawrence canal's business; also the C.N.R. and C.P.R. will lose a goodly part of their

The Budget-Mr. Deslauriers
profitable traffic between Georgian bay and Montreal; after all, our western grain can be shipped only once. The first part of the haul is by rail; and since the railroads will have had their receipts lessened for the benefit of the canal system they will eventually have to increase their freight rates on grain; so what the farmer gains on the one hand he sacrifices on the other, and in the end he'll be no better off.
Our canal system as it stands to-day, and it is used to only 50 per cent of its capacity, cost this country $250,000,000. When it was decided to build a canal 14 feet deep from Montreal to lake Superior those responsible foresaw a tremendous increase in traffic. Were their hopes justified? The reports of the Dominion Bureau of Statistics inform us that for a period of 19 years, from 1908-when we began to keep separate statistics for the traffic in American and in Canadian grain-up to 1926 inclusive, there has been a decrease in traffic. The reasons are not far to seek: they always are and always will 'be the same: quicker delivery and lower insurance rates. In other words the necessity of shipping the goods the quickest possible way and avoid high rates of insurance. Such is the business policy adopted throughout the entire world; and all the engineers' estimates will not change it one iota.
The federal statistics report shows clearly that during this period while water borne traffic decreased there was an increase in railway transport.
In 1913, 11,130,865 tons passed through our canals; in 1925, 9,750,311 tons; and in 1918, 3,369,474.
The difference in the volume of traffic is quite apparent. If we take an average for the five-year period from 1916 to 1921 it gives us 4,559,149 tons.
Let us divide that 19-year period into two parts, the first from 1908 to 1917 inclusively; the second from 1918 to 1926. We find that for the first part 78,197,080 tons passed through our canal, or an average of 7,819,708 tons per year.
During the second part, our canal traffic was 59,065,570 tons, an average of 6,451,752 tons, or a decrease of 4.7 per cent, as contrasted with the first part of the given period.
It cannot be claimed this was due to a general decrease in traffic because during the same period railway traffic increased tremendously. For the first 10 years from 1908 to 1917, our railroads carried 900,691,796 tons or an average per year of 90,069,179 tons for the latter part of this period that is, the nine years from 1917 to 1926, the total traffic
reached 1,037,903,947 tons, a yearly average of 114,211,550 tons. So while our canal system suffered a decrease in traffic of 4.7 per cent, our railroads were carrying 25 per cent more freight. This state of affairs was not characteristic of Canada but prevailed throughout the entire world with the one exception of the Panama Canal, which unites two oceans; this justified Prof. Milverton of Chicago in claiming that canals were a commercial error.
At any rate, this furnishes a powerful argument against those who would have us believe that the deepening of the St Lawrence to 25 feet is an urgent necessity. Following along the same line of reasoning we have the case of the Erie canal which serves quite aptly for purposes of comparison to the St. Lawrence project, as it runs through a highly industrialized region, and within the reach of the west, having a certain depth and capable of being further deepened. It would serve the same purpose that the promoters of the St. Lawrence canal have in mind, and perhaps with better chances of success. The aim which the New York state had in view was a canal of 25 feet in depth with prospects of controlling the output of the same territories included in the St. Lawrence scheme. The Senate and Congress unanimously voted $112,000,000 to put into execution this scheme; however, Symmons, an engineer of high repute, having the confidence of the authorities of his country refused to carry it out, qualifying it as a dream, he however deepened it by 5 to 12 feet and this cost double the amount voted. Events proved that he was right, be saved his country a considerable amount of money. Indeed, in the five or six years which followed the deepening of the canal to 12 feet, they did not transport one-fifth of the freight they carried when the canal was but 5 feet deep, and, in 1926, they were losing 80 per cent of the volume of freight, notwithstanding the improvement to the canal; this so astonished the Governor of New York, that he advised the closing of the canal or renting to private companies. This is an example to us showing that we should be careful, if the U.S. did not succeed, how can Canada do better.
The public must give their serious attention to our canal traffic. In 1926, 9,656,190 tons passed through our canal, of this total 3,340,000 tons were grain, 663,000 tons pulp, 351,000 tons sand, manufactured products 723,917 tons, and merchandise 251,066 tons. Machinery being considered as a negligible amount. It ia easily seen that the traffic was not very diversified and that the main portion waa grain.
The Budget-Mr. Deslauriers

be given our Canadian workmen since they know full well that a great part of this work
vill be done by machinery, that it will only last a limited time, and that once the thing is completed, since Canada has no need of it, and its advantages will accrue more to the U.S. than to Canada, that new industries will spring up on the other side of the border, and our working population will have less and less employment in Canada.
There is no need of counting on the increase in our population. The project is fallacious, on the face of it.
Competition on the grain markets cannot be adduced as an incentive to the realization of this canal project which will only increase our already-heavy annual burden of fixed charges as I have shown in the course of my remarks; it is an error to believe that an increase in the number of seaports necessarily indicates an increase in the volume of trade.
According to Mr. Thomas Robb, the deepening of the St. Lawrence would lower its level, consequently vessels would have to carry less grain; this is one side of the problem that the promoters have not touched.
At all events, if Canada had any capital to risk for the development of navigation, and of waterpowers, the opinion of Mr. Arthur Sur-veyer, hydrographic engineer, and the opinion of the Montreal Chamber of Commerce should prevail. Why should not this capital be applied to the development of the Georgian Bay scheme? I fail to see any reason.


Mr. SPEAKER:: The hon. gentleman has exhausted the time at his disposal.


Mr. G. R. GEARY (South Toronto):: Mr. Speaker, it was my unhappy lot to be unable to follow the remarks of the hon. gentleman (Mr. Deslauriers) who has just taken his seat. No doubt there was much in his speech to merit attention and I would have been glad to follow and to attempt to answer his arguments.
May I refer to some words of the Minister of Finance (Mr. Dunning) which he used during his presentation of the budget:
All governments make expenditures on capital account and frequently such undertakings are carried out by the use of borrowed capital. With that practice I find no fault, but may I emphasize the fact that in the past seven fiscal years it has been possible to carry out all capital expenditures of the Dominion without borrowing.
The statement of the minister is quite true, but it would have been fairer for the minister to have added that in the first year of this government's operations, eight years ago, it was obliged to borrow a very considerable

sum of money, and in so doing added to the funded debt of the country. I do not for one moment criticize the action of the government in that regard, since it was necessary to do so just as it was necessary for the preceding government to take a similar course on account of large expenditures caused by war and demobilization, and reorganization and consolidation of the Canadian National Railways. It is equally true that during the term of the preceding government, with the exception of the fiscal year 1920, in which ordinary capital expenditures were abnormal to the extent of $55,000,000 on account of extraordinary conditions caused through an unusual amount of money being required for the government railways and for government shipbuilding program, the same state of affairs obtained as that about which the finance minister now boasts. In those years the surpluses in consolidated fund compared more than favourably with those acquired by the government now in power. In each of the six years of the Union government the average surplus was $67,000,000 as compared with an average of $65,000,000 during the first six years in which this government has held office. It is true that surpluses of the last two years have changed the average somewhat in favour of the present government. An analysis however of surpluses during the whole eight years of their term will show that they averaged the amount of $67,000,000 annually, which is similar to the figure shown for the Union government. In addition we must remember that the present government has had a very substantial advantage because of the fact that special receipts to the amount of $45,436,000 have been placed in the treasury as compared with $2,224,800 during the term of the preceding government. The figure which obtained during the regime of the Union government was $2,224,800, while during the regime of the present government the special receipts have totalled $45,436,000.
Some credit has been taken by the government for the fact that $80,000,000 was retired last year; it was inferred by members opposite that that amount of money had been retired from the current surplus of the government. Of course that statement is not true. Part of it was retired from that source but the great bulk of it was retired from the money in the hands of the government at the commencement of this year. Members of the government, and particularly the Prime Minister, are fond of commenting on the great additions to the net debt incurred by the government which preceded the present one claiming that this

The Budget-Mr. Geary
was caused by the method of financing of that government. They make this claim in order to show that when they assumed office they were faced with financial difficulties. Such a statement has always appeared to me to be grossly unfair. Additions to the net debt during the six years of the preceding government were caused purely and simply by the necessity of providing money for purposes of war and demobilization and for the development of the national railways throughout the period of acquisition and consolidation. Under these headings the expenditures were:
Union	Present
government government War demobilization. $1,461,999,000 $ 7,711,000 Advances to railways	 209,672,000	131,509,000
In addition to that, in 1920 the preceding government took the bold step of including in the net debt of this country some $284,000,000 which was transferred to non-active assets and thereby increased the national debt. These non-active assets, previously being active assets, had formerly operated in the reduction of the net debt. Advances to government railways, of course, always had been earned as non-active assets. It will be seen, therefore, that the preceding government incurred capital expenditures which ordinarily might have been added to the debt of this country, to the following extent:
War demobilization	$1,461,999,804
Railways	 209,671,940
Advances to railways transferred to non-active assets.. 284,015,005

As against that vast amount of money, the net debt of the country increased by only $1,806,979,630. Thus there was a difference of $148,707,119 by which in effect the preceding government reduced out of current revenue the debt, which otherwise might have been added to the debt of the country.
In the present budget the Minister of Finance takes credit for the fact that this government has carried* through all capital expenditures and railway advances out of the ordinary revenue of the government. The fact upon which I want to lay emphasis-and it is a fact-is that this government in that regard has not done so well as the preceding Union government, despite all the disadvantages under which that government laboured. When we consider that in addition to ordinary revenue the present government has had the advantage of some $43,000,000 in special receipts more than the preceding government
had, it will be readily seen that the Union government was able to achieve more towards the reduction of the net debt of the country during its six years of office than the present government has been able to do in the eight years it has been in power.
The only refuge left to the Prime Minister in this matter is the statement that the railway expenditures of the preceding government should not be credited, and his reason for making this statement is that these were advances to a railway which was not a going concern and was not paying its way. His statement is that advances which have been made by this government have been advances to a going concern which is paying its way. This is not a fair answer, because it is well known that advances such as those made during the process of reorganization are strictly capital account. The position is somewhat analogous to that occupied by a firm constructing a building; interest on the moneys expended on construction properly take their place in capital account. Moreover, in spite of what the Prime Minister has said, the present government has followed exactly the same course, for in 1923 it charged $77,863,938.23 and in 1924 $23,710,616.70 as advances to the Canadian National Railways, which advances were not made to a railway which was a going concern and paying its way, because in those two years the Canadian National Railways were not doing anything of the kind. In addition, whatever may be the merits or demerits of the system of accounting in force in this country, this government has guaranteed the payment of vast sums which have been borrowed by the Canadian National Railways. These may not be a direct liability, but certainly they are a secondary liability, and these latter amounts must be considered as something of an addition to the debt of the country.
My object in putting these figures on Hansard, Mr. Speaker, is to show that the claims of the Prime Minister and the Minister of Finance are absolutely unfounded in this regard and that the financial record of this government not only is not better than the financial record of the government which preceded it, but is worse by many millions of dollars in the net result.
A surplus always has been a matter of importance to the present government; it has loomed large in its calculations and has been used invariably as an asset in its appeal to the country. For many years there has been a surplus, that is, an amount of money which is available for the reduction of the debt of the country. In connection with one article
The Budget-Mr. Geary

alone, tea, this government in the last five or six years has taken probably $15,000,000 in taxes directly from the pockets of people of all classes in this country.
That amount of money never has been required to form a surplus or to make ends meet. The tax was put on first as a war measure, not as a protective measure in any sense of the word, and it was only because of the desire of the government to show a handsome surplus at the end of its fiscal year that it did not long ago remove that tax. I say that during the past five years at least the government, with no justification whatever, has taken from the pockets of the people, through a tax perhaps more evenly distributed than any other, this large amount of money which it might very well have foresworn years ago. If anything were required to indicate that this budget is purely for election purposes it is the fact that on the eve of an election the government has seen fit at last to remedy that injustice and to remit to the people that tax which long ago they should have been forgiven.
Speaking generally of the budget, it is quite plain that it is not founded on conviction or principle, but that the basis of the whole concoction is simply this: "How can we so build up this budget as to attract votes in the impending election?" The presentation of the budget was deferred until much later in the session than usually is the case, and it did not take final form until an election had been decided upon. It is quite obvious, of course, that the government must have known that it is in growing disfavour with the people of this country, because of its futility and its indecision in tariff matters, and also because there has been spreading a very well defined feeling and conviction on the part of the people that the government has been far too sensitive to the moods and views of the people of the United States. On the whole, things were going very badly for the government, and it was decided to make of the budget if possible such a gesture as would disarm the criticism which had arisen in many quarters. Further delay undoubtedly was caused by the efforts which were necessary to overcome the reluctance of certain members of the government to stultify themselves and their followers as needs they must in supporting such a budget. However, he that will use all winds must shift his sail, and in the end the thing was accomplished.
Now I fear that , the government finds that it has been just a little too clever and has overreached itself, and that the people of this country, whom it hoped to hoodwink, continue to see. They have examined the 
budget; they have examined the proposals and the claims made in regard to them and they have become fully aware of the weaknesses of the structure. They recognize the inconsistency of those who propose these measures and, in the words of the amendment, have lost confidence in the government and recognize from its past course and its present action that it is not to be entrusted with the direction of the fiscal policy of this country. The people of Canada want straight dealings and definite policies; they do not approve of mere smartness and supposedly clever political manoeuvres in the conduct of their business. The very best day the government had in regard to this budget was the day it was printed in the newspapers. Since then, every day and in every way the budget has continued to lose favour with the people. For instance, it was thought by the framers of the budget that the headlines which would naturally follow the declaration that 270 items had been added to the free list under the British preference would be of some advantage in a campaign. On the day of publication it may have had some effect, but from day to day it lost its appeal. It could not stand the test of examination; for instance it was found that of those 270 items the majority affect commodities in which there either never has been any trade with England, and is not at present any trade, or in which no one expects that there will be any trade. The prospects of increased trade are so vague and flimsy that no one in his senses will expect any benefits to be derived therefrom. It may be considered quite proper to put in the British preference such articles as hay and natural gas, but it is idiotic of the government to think that the people of this country are so unintelligent as to be deceived by claptrap of that kind.
As was stated by the Minister of Finance, protection is being given to the iron and steel industry because it is necessary to maintain an efficient and self-contained iron and steel industry in the Dominion of Canada; in the view of the government that could be done only by the imposition of a protective tariff. I would ask members of the government to consider what they have said in days gone by, to consider how they controverted this idea from beginning to end, to remember how they derided it; attempted to tear it to tatters, made fun of it and abused it in every possible way. It is not so long since we heard the boast made by a member of the government that the Liberal budget was ringing out the death knell of protection. If I read this budget rightly, it would seem to be ringing out a peal of welcome. The government conversion

The Budget-Mr. Geary
has been thorough and sudden and compared to it I should say that the incident of Saul of Tarsus was of the slow motion variety. If there is a national necessity to maintain a self-contained and efficient iron and steel industry in this country, is there not equally a national necessity to maintain a proper, efficient and self-contained textile industry?


Mr. CHAPLIN:: And a furniture industry.


George Reginald Geary: Is there not a national necessity to maintain a self-contained copper industry, as well as to maintain many -other kinds of industry? . Does it not follow that in the view of the government the only way in which these industries can be maintained in an efficient and self-contained manner is by the application of the doctrine of protection? Why does not the government follow this new faith to the logical conclusion? We have heard the hon. member for South Waterloo (Mr. Edwards), give us a very able exposition of the state of the textile industry in this country showing the need for protection. We have heard the excellent speech delivered by the hon. member for Last Mountain (Mr. Fansher). With much of that speech I am unable to agree, but the hon. member gave many reasons for the support of the proposition that the government had in a backhanded way done that which it was afraid openly to do-increased the protection to the cotton industry. All this shows the inconsistency of the course of the government in dealing with matters of tariff.
When the question is asked: Why does not the government follow its new faith to the logical conclusion, there is only one answer, an obvious one: the government has no principle or conviction in the matter; its whole course is decided by the desire to obtain votes. The government asked itself the question: How can we frame a budget which will bring us votes?
It has been said both by one of the hon. members for Winnipeg and by the Minister of Justice (Mr. Lapointe), that this is a budget which will appeal to different sections of the country. I always understood that this administration was following the plan of saying something special and different in each part of the country, and an hon. member opposite is reported in Hansard' as saying that it has sought to inquire into the needs of the various sections of Canada and to meet those needs by the proper remedies. How on earth are we going to meet the needs of the western provinces by the application of duties which will affect an industry in Nova Scotia?	We are	all agreed that the
application of a tariff does not affect
only the industry which receives the benefit therefrom, but it affects everyone either directly or indirectly.
The government has heretofore fought the claims of the producers of fruit and vegetables. For some time it acceded to the demands made by my hon. friends opposite, who wanted every semblance of protection to be taken away from fruit and vegetables. At their behest the government abolished or cancelled the order in council which gave seasonal protection to the growers of fruits and vegetables. That was a glorious victory for my hon. friend whom I see smiling across the way. On that day the sun shone bright in Weyburn, soft, balmy airs caressed the fevered brow of the worthy representative of that district (Mr. Young). All was lovely. Then from the blue sky came the thunderbolt of duties, a tariff was iput on fruit and vegetables. Luck was not with my hon. friend that day.


James Dew Chaplin: They have four tariffs
now instead of three.


Mr. SPENCE:: He will swallow that.


George Reginald Geary: The hon. member found that not only had the government done a right about face on the proposition, but it had gone mad or crazy in its application. It had clamped on a duty which was unnecessary from the standpoint of the producer, and the prices of vegetables rose over night. The government did not restrict the entry of vegetables which might compete with the pro ducers of British Columbia or of other sections of the country, but it restricted the import of fresh fruits and vegetables during that portion of the year in which we do not produce.


Mr. SHORT:: Still the hon. member will
vote for the budget.


George Reginald Geary: I am not so sure about that. Listen to what the hon. member for Swift Current (Mr. Bothwell) said last year, as reported on page 943 of Hansard:
I submit it would be a crime to compel him -the farmer-to pay more than he now does for the fruit he wishes to purchase for the benefit of his family.
Hear the pearls of wisdom which fell from the lips of the hon. member for Weyburn (Mr. Young), as reported on page 1208 of Hansard of last year.
All this talk about the importation of fruit and vegetables breaking the home market and ruining our own producers is arrant nonsense.
He also declared in effect that it was infamous to put duties on these particular articles, and still he sits there smiling.
The Budget-Mr. Geary


Harry Bernard Short: And he is satisfied with this budget.


George Reginald Geary: Perhaps he is not so comfortable, because I do not think he has finally dissuaded himself from the course he followed. He is undecided if he will pursue the course which his conscience tells him to.


An hon. MEMBER:: Let his conscience be his guide.	.


Mr. YOUNG (Weyburn):: I do not intend to take any guidance from the other side of the house.


George Reginald Geary: Hear also what the hon.
member for West Elgin (Mr. Hepburn) said of a kindred matter:
-but if we place a tariff on this butter, one of two things will happen: we shall have to divert milk from those high priced markets to other sources or the people of Canada will have to go back to conditions which prevailed when our Conservative friends were in power, when they had to eat oleomargarine, a mixture of intestinal fats and southern oils imported largely from the United States.
And now my hon. friend will be forced to say that the blow came from his own friends. A duty is placed on New Zealand butter and properly too.
Taking the two groups alone: iron and steel, fruit and vegetables, I would ask: Does the action of the government commend itself to my friends from the prairie provinces? What think ye of it, ye men of the golden west? Have you any longer confidence in the professions, declarations or promises of a government which has shown itself so susceptible to the exigencies of political profit? If the hon. member for Lisgar (Mr. Brown) were in his seat, I would ask him: Has the great apostasy been accomplished and has he in turn become an apostle of the new faith? It will be interesting to watch these hon. gentlemen vote. I should like to know where are the Minister of Finance (Mr. Dunning), the Minister of Railways (Mr. Crerar), the Minister of Agriculture (Mr. Motherwell) and the Minister of the Interior (Mr. Stewart). These were the four horsemen of the free trade apocalypse. They were found in the van of the struggle and rallying to their flag were such men as the hon. member for Maple Creek (Mr. Bock). Where are they to-day? They have relegated themselves to that inconspicuous and ignoble position in the rear which is generally occupied by those known as camp followers.
With Liberalism betrayed, are the Liberals now to accept as the price of their adherence to the present government the hopes and ex-
LMr. Geary.l
pectations to be gathered from a wholly illusory increase in the British preference? Those proposals have, I think, been sufficiently analyzed and I do not know that I can take them up any further with advantage to the house. I did go through at some pains to myself, for I am not good at that sort of thing, the first two pages of the new tariff and in practically every case I found Great Britain was unable to compete to any extent with importations from other countries. Great Britain had, for instance, a 7t per cent differential on ploughs or drills, I do not remember which it was, and they could ship to Canada only $267 worth as opposed to $1,000,000 worth shipped to us by the United States. In another case, pumps, with a differential of 10 per cent they could not make any headway at all, obtaining trade to the extent of $247 out of a total of $1,783,497. That differential has been increased in some cases, but does anyone suppose, when with a 7i per cent or 10 per cent differential they could do no business, they could do any large trade with increases in the differential which are here proposed?
Let me refer to an article of table use like crockery and china. The object of the budget, as I understood the claims made, is to divert trade from what my friends across the floor insist upon calling the natural course of north and south, although I entirely disagree with them in that contention, and to make it flow east and west. The government found that the former avenue of trade was blocked by the actions of the United States and it decided to take certain trade away from the United States and give it to Great Britain. The only article in the lot where there seems to me to be any definite preponderance of trade with the mother country is that, of crockery and chinaware. We have no industiy worth speaking of, so I am informed, manufacturing these articles, and we export nothing. We import something like $2,500,000 worth from Great Britain; we import $91,000 worth from the United States and still, apparently, by this budget we are trying to take trade away from the United States and give it to Great Britain. If any trade is diverted, it will be from countries like Czechoslovakia and France with which we have by treaty solemnly agreed to trade.
It would not, as I say, be of any advantage to go again into a discussion of these items, but may I say just one other word following my examination of the first two or three pages, that the only article in which British preference countries have any trade at all-

The Budget-Mr. Kennedy
and it was a very considerable trade-is butter. On the first three pages that is the only article on which they have not increased the British preference to give Great Britain more trade, but they have raised the duty and lessened the preference in order to shut off the trade in this article from the British dominions. The policy of the government was supposed to be to encourage trade with the British dominions, but they certainly did not believe in increasing this particular duty the night before they presented this budget. These illusory hopes and expectations of increased British import trade are what the western provinces have been given for the betrayal of their interests and as the price of their adherence to the government. These hopes and expectations are "such stuff as dreams are made on," and I have not the slightest doubt they will come to nothing. To adopt in part the same quotation, these hopes, expectations and promises of a future benefit, like the baseless fabric of this vision, shall dissolve and leave not a rack behind.
The Minister of Finance himself thinks very little of the British preference. By very plain inference and implication he says so when he warns the British people in his budget speech, lest he be trapped later by the discovery of how little it means; that they cannot do any trade with us even under these increased preferences unless they revise their methods of marketing and selling. For a small amount of trade that is potential or even for the larger amount that these visionaries think will eventuate, the British merchant has to remodel his whole selling system; he has to make a long study covering a period of years of the markets of this country, revise his whole packaging, shipping and selling system and all for what nobody by the closest and most optimistic scrutiny of the budget can declare in dollars to be of any substantial advantage.
It is not so long ago since we heard hon. members opposite talking of what a heinous offence it would be for this country to retaliate against the United States. I suppose a rose by any other name will smell as sweet, and perhaps retaliation will, when you call it countervailing, Countervailing is nothing but setting up against, and if setting up against is not retaliation, I do not know what retaliation is. Very properly, from their point of view, hon. members opposite inveighed against this principle during last session and this sesion. We have heard the Minister of Justice (Mr. Lapointe) refer to it. As reported on page 1338 of Hansard, 1929, he said:
Talk of red blood! Is it a manifestation of red blood to shape our tariff policies on the policies of foreign countries by imitation or in any other manner?
Yet the Minister of Justice sat in conclave with the other members of the government when they foreswore their convictions and principles in this regard and made up a vote-catching budget that reflected nothing whatever of sincerity in its makeup. The question is: Have we or have we not confidence in the methods and practice of policy of the government? Unhesitatingly I say the answer of the country to that will be: No, we have not confidence. How can the house, how can the country, profess confidence in a government whose whole history has been a denial of consistency, whose course in fiscal policy has been one of devious ways, whose lack of conviction and of principle is painfully apparent, who stand ready at all times to sink their faith, if any they have, in the sea of expediency.


Mr. D. M. KENNEDY (Peace River):: Mr. Speaker, I rise on this occasion with some hesitation to speak on the budget and the two amendments that are before the house. It would be quite impossible for me, in view of what has happened during the past ten days, to say that I have any very definite opinion upon the details of the budget. I must confess some admiration for those people throughout the length and breadth of Canada and some in the old land who were able to tell us within twenty-four hours of the presentation of the budget just what it meant. However, I have come to some conclusions with regard to the budget, and these I shall present to the house in the time at my disposal.
Before proceeding to comment on the budget itself, I wish to make a few comments on another question which is really of greater importance than the budget itself, judging by the effect which it has had on the house, and that is as to the conditions under which the government asks us to pass judgment on the budget and the rest of the business that we have to do this session. I refer, of course, to the announcement of the Prime Minister (Mr. Mackenzie King) that there is to be an election, and his invitation to the leader of the opposition (Mr. Bennett) and the hon. member for Acadia (Mr. Gardiner) to meet him to ascertain if it would not be possible to speed up and hastily get rid of the rest of the business that is before the house. The date of the Imperial economic conference was set some time last autumn, according to the speech from the throne, from which I quote:
In the summer of last year, an invitation was extended by His Majesty's government in Canada to all His Majesty's other governments to participate in an imperial economic conference in Canada at the earliest possible date. It was found that the convenience of the
The Budget-Mr. Kennedy

majority of the governments could best be met by an arrangement to hold the Imperial economic conference along with the Imperial conference in London in the early autumn of the present year. This has accordingly been arranged.
I maintain that in view of the fact that it was known last autumn that the Imperial economic conference was to be held this autumn it was utterly ridiculous to delay calling this house to meet until the 20th of February, to sit until the 11th of April and then adjourn until the 28th of April, present the budget, a very contentious budget, of course, containing a number of changes, meaningful or meaningless, on the 1st of May, and then to say six days after:	It is time to
have an election, and we had better arrange to get through the business of the session in an orderly, but in any case a hasty, manner. I do not know what the other members of this house think, but I am just giving it as my opinion that no member has any right to accept his $4,000 indemnity if he agrees to the suggestion as it was made by the Prime Minister, as I understand it. It seems to me that ordinary commonsense would have dictated to the Prime Minister, if there was even a suspicion in his mind that it was necessary to go to the country this year, that the opening of the session should not have been delayed beyond the first or second week in January at the latest. If a farmer anywhere in Canada conducted his business with as Ittle regard for times, events and seasons he would be in the sheriff's hands inside of twelve months. The management or mismanagement of this matter must rest with the Prime Minister, and to me it looks at present like a very bad case of mismanagement. In Hansard of May 6, 1930, the Prime Minister is reported as follows at page. 1835:
Under the circumstances, I would suggest to my hon. friend the leader of the opposition that he and I meet together as soon as may be convenient to him to see if we cannot come to some agreement whereby the business of this present session can be brought to an orderly and speedy conclusion. It would be my wish to meet as well with my friend the hon. member for Acadia (Mr. Gardiner) and discuss with him the matters which he -would wish to have considered for the group which he leads and for those who sit about him.
Then he goes on to tell of the business of parliament. What is the situation? I do not think that we have voted one-third or even one-quarter of the estimates. I think we have gone into only two departments, and I do not believe the estimates of one department have been entirely voted yet. Then we have the budget before us. According to the Minister of Finance (Mr. Dunning), it makes very extensive changes which surely merit [Mr. Kennedy.}
careful analysis. Here we have the statement of the finance minister regarding the iron and steel schedules:
The iron and steel schedule is now an entity, compact and orderly, consisting of a single group of three hundred and twenty-five items. I have not attempted to refer in detail to all individual commodities affected, but only those of greatest interest. Details of each item will, of course, be dealt with in committee of ways and means.
Summarizing numerically I may say that under the iron and steel schedule general tariff rates have been reduced on sixty-six items and increased on forty.
Under the intermediate tariff, the reductions number eighty-six, and the increases twenty-four.
Under the British preferential tariff, the rates have been increased in eight cases and reduced, or made free, in one hundred and fifty-two.
They number something like 350 changes. In the budget of 1928, about 124 tariff items were struck out and 170 inserted; 4 new drawback items were added. In the budget of 1929, 17 items were struck out, 33 new items inserted, 12 drawback items struck out and 2 new ones inserted, and the sessions of 1928 and 1929 ran from four to five months. Here is a contentious budget, much more contentious I think than the budgets of 1928 or 1929, and after sitting less than three months we are asked apparently to get through with the whole thing in a hurry in order that we may have an election. Whether or not there should be an election this year is a matter that the government has decided, but I submit that in view of the fact that the session of 1929 closed some time in June, and the government having a mandate until November, 1931, it was an absolutely ridiculous proposition for the Prime Minister, after letting six weeks of the new year go by without calling the house after agreeing to two weeks' adjournment at Easter, after we had been sitting for less than three months to come to the house and say:	Let us get
through with this budget and the rest of the legislation before parliament, including the large volume of estimates that have not yet been touched, in as short a time as possible so that we can go to the country and hold an election before the economic conference. That is, having regard to the time the last session ended, and having proper regard to the work of the Imperial economic conference, here is seven months' business that we have utterly failed properly to arrange time for. The Prime Minister calls for orderly consideration of the business before us after making an announcement that is just about as conducive to orderly conduct of the business of the house as a nest of hornets would be to a man driving a string of mules.


Edmond Baird Ryckman: That is what he is
driving.
M^r. KENNEDY: I did not mean it in that
way'.


James Dew Chaplin: It is very appropriate
anyway.


Donald MacBeth Kennedy: Then, of course, we have the question of the staff of the House of Com-irions. A large number of the staff engaged around the House of Commons are paid by the day, and it is utterly unfair to them to close the session so abruptly. IVe have heard a *great deal about the government being a fnodel employer of labour. I do not think there is anything to indicate that the salaries of the temporary staff around the House of Commons are at all out of line with what they might be earning if they were engaged the year round. Here is another case where the announcement of the Prime Minister apparently has overlooked their interests and considered the one thing only, political expediency. During the last two or three years we have heard a good deal about an increase in the sessional indemnity; it has been discussed quietly around the house and in the country. I believe if the farmer members of the house could get home every year for seeding-and it would not be an impossibility- they would be better off with a decreased indemnity than with the present indemnity and sessions ending in June. But this year, if we have an indecisive election on top of this Lurried session, it will be necessary to hold a session between the election and the Imperial conference, and so far as the western farmer members are concerned, regardless of what group they belong to, they will be subject to the very great inconvenience of coming to Ottawa during the harvest season; and certainly, if you take a farmer member away from his farm in seed time and harvest, his sessional indemnity is far from being adequate. But the whole trouble is due to the utter mismanagement by the Prime Minister and the government with regard to the date of calling parliament together and the introduction of the budget so late in the session. This system under which one man at the head of a party can spring an election on the country at any time it suits him is altogether wrong and out of date.
Another matter I wish to comment on, Mr. Speaker, is the practice of going to the country every four years. The statute provides that there must be an election every five years. But that statutory provision is of absolutely no value, either to parliament or to the government, so far as I can see; it only provides
14, 1930 2081
The Budget-Mr. Kennedy
opportunity for the sort of juggling that we have had during the past few months. If the practice of going to the country every four years is continued, why not so provide in the statute? If the present practice is not to be continued, why not observe the statutory provision and go to the country every five years? At least once we had the matter on a definite basis the government would not be able to excuse themselves for such a mess as we are in at the present time with regard to the business of the session. I was very glad to hear the leader of the opposition although he appealed on two occasions for an election, state on the floor of this house that so far as the budget was concerned he would not agree to passing it without making a careful scrutiny and without being supplied with full information in regard to all the items. As members of parliament I do not think we have any right to hurry through the business of the country on account of the pending Imperial conference or any other matter. In this regard I think we might say that things should be done decently and in order, especially when there was ample opportunity to make proper arrangements ahead of time. It seems to me that the Prime Minister with his various veiled announcements regarding the possibility of an election is mainly responsible for the feeling of uncertainty respecting an election which, last week, he said existed throughout the country. In the course of the debate on the address in reply to the speech from the throne we had his announcement that there might be an election. Then of course everybody began to speculate. But even at that time if the government had had a definite policy regarding an appeal to the country, and had stated their intention, I think no one would have complained much against them in taking that position, and I think they would have been justified in doing so. But it seems to me that party exigency has been the ruling motive, and that the welfare of the country has been sacrificed for the sake of the Liberal party. I do not know whether this course of action is going to do the party any good; I think it will be the reverse.
Now, coming directly to the budget itself, I suppose it is correct to say that it is a protectionist budget. I think anyone who has followed the discussions before the tariff board must come to the conclusion that the steel interests appealed to the board for such a tariff as would effectively protect them from United States competition. In the course of his budget speech, at page 1625 of Hansard, the minister said:


Mr. C. H. CAHAN (St. Lawrence-St. George):: Mr. Speaker, I wish to devote my
attention more particularly to the subamendment now before the house. I agree with that part of the subamendment moved by the hon. member for Last Mountain (Mr. Fan-sher) which states that it is to be regretted that more effective consideration has not been given to the position of agriculture and labour, but I cannot agree with the latter part of the subamendment which states that the best interests of Canada would be served by a substantial increase in the British preference, particularly with reference to textiles.
You may examine these tariff proposals with a microscope, but I suggest that it will be impossible to find therein any provision whatever which will give one day's additional employment to any workman in the province

The Budget-Mr. Cohan
of Quebec or which will promote the prosperity of that province to the extent of a single dollar, if you will except the provision with respect to the repeal in October next of the order in council giving free entry to New Zealand butter, which step has been so long demanded by the Conservative party.
I will show later, if I have time, that the proposed countervailing duties against vegetables and fruits from the United States should have been a seasonal tariff. Under this new tariff the difficulties which have been faced for years by the thousands of market gardeners on the island of Montreal through competition with the United States will be increased a hundredfold by the free admission of fruits and vegetables from the West Indies. There fruits and vegetables are produced by native labourers who live in houses which require no coal for their heating; whose clothing consists of leather or canvas sandals and cotton garments which cost no more than ordinary overalls, and who live largely on the native products of the country. These native labourers receive about one-fourth the wage of the ordinary agricultural labourer on the island of Montreal, and the products of that labour, which will be admitted free in quantities of hundreds of tons as soon as they discover that this market is free to them for the future, can be laid down in the city of Montreal at prices with which the Canadian producer cannot possibly compete. They have the cheapest freight rates on the Atlantic from those islands, and the ships which will carry their products will be subsidized to the extent of 81,750,000 from the treasury of Canada for the purpose of giving them access to an open market in this country in competition with our own growers of vegetables and fruits.
I should like to deal at greater length with this question if I had time, but I wish to discuss particularly the suggestion that the best interests of Canada would be served by a substantial increase in the British preference, particularly with regard to textiles. To-day the textile industry is a large factor in providing employment in the cities of Montreal, Verdun, Sherbrooke, Drummondville, Three Rivers and Shawinigan Falls, and is the chief source of employment in Valleyfield, Magog and Montmorency, all in the province of Quebec. The hon. member for York-Sun-bury (Mr. Hanson) last evening referred to similar factories in the province of New Brunswick at St. John, Marysville and Milltown. There are also similar factories at Cornwall, Ontario, and elsewhere, but I am now particularly concerned with the province of Quebec, one of whose constituencies I represent in this house.
The manufacture of cotton is essentially a Quebec industry. The latest report of the Dominion Bureau of Statistics shows that in the calendar year 1927, out of 39 establishments engaged in cotton cloth and yarn manufacturing in Canada, 17 were located in Quebec. Those factories employed 14,221 workers out of a total of 21,383 employed in the industry generally. They paid 811,197,832 in salaries and wages out of a total of 817,146,927 paid by the cotton cloth and yarn mills of Canada during that year.
In the revision of the Canadian cotton tariff schedule in 1928, the duty on imports of print cottons from the United States was reduced 5 per cent. The duty was left 2^ per cent lower than the duty on coloured cotton, although the manufacturing expense in printing cotton is considerably higher than in ordinary dyeing. This constitutes one of the most unreasonable tariff revisions ever attempted in the tariff history of this country. The tariff board took no evidence in support of this revision, and the reduction was not justified. It has reduced employment in the mills of the province of Quebec and has brought great loss and impending disaster to the cotton and woollen mills of Canada. Canadian cotton mills which are now operating at less than 60 per cent of their capacity, as well as on a non-profit basis, could easily and profitably maintain the present basis of prices for cotton goods to the Canadian consumer if the imports were restricted and their operations and employment were permitted to be carried on at or nearly at a capacity basis. Such a policy would immediately add several thousands to the list of those employed in Canada and would correspondingly increase the weekly payroll and thus materially assist in improving the current business situation throughout Canada.
Cotton mills in the province of Quebec are operating with reduced staffs for only three or four days a week, while some 1,500 or more cotton mill workers are at present unemployed. Sales volumes are down considerably and a great deal of the business at present taken by the mills to maintain even limited operations is being taken at a loss. The cotton industry is now operating at the lowest ebb of production and profits that has obtained for many years.
I wish the hon. member for Southeast Grey (Miss Macphail) was in her seat, because I think the following facts should receive her consideration. The provincial laws r'f Quebec
20S6
The Budget-Mr. Cahan

very properly prescribe certain hours of labour; they preclude the employment of children and limit employment of women at night to two nights per week until nine o'clock, the aggregate not to exceed thirty nights in the whole year. Some of the Texas mills, whose products compete in the Canadian market with the Quebec mills, operate both night and day shifts of 55 hours each per week, as compared with a maximum of 50 hours per week in the Canadian mills. The night shift in a Texas mill generally consists of at least 75 per cent of female workers, and in many of the mills in the southern states children are employed for long hours. The minimum wage paid in the southern mills is about two-thirds of the minimum wage paid in Canada.
There is a still more striking contrast between the wages paid in Lancashire, England, and those paid in the cotton mills of the province of Quebec. This comparison shows the wages received for similar work performed on similar machinery in the same working hours:
	Lancashire	Canada
Slubber tender.. .	. . $9 44	$21 00
Intermediate tender.. 9 24		20 00
Roving tender.. .	. 8 32	18 00Ring spinner.. ..	. 9 19	15 50Apprentices.. ..	. . 4 50	9 00The prices given	for Canadian	labour are
those paid in the factories in the province of Quebec. It is in favour of such cheap labour that we give the Lancashire mills a preference in the Canadian market.
It is estimated by reliable authorities that importations account for over 40 per cent of the cotton manufactures and over 70 per cent of the woollen cloth manufactures consumed in Canada annually. During the past ten years, when these industries have been passing through a process of drastic competition and readjustment, not only have the Canadian mills been forced to meet the competition of excess stocks of British and foreign mills which were thrown on to the export markets at non-profit prices, but successive downward revisions of the British preferential, special treaty rates, the intermediate and general tariff rates in 1922, 1923 and 1928, have intensified, increased and widened this competition until the Canadian mills are now on the verge of disaster. The past year was one of the most competitive in the history of these industries, and the result has been that Canadian mills have operated at less than two-thirds of capacity, while the woollen cloth mills have fared even worse in the very limited market at their disposal, operating only three and four days a week and with reduced staffs. The worsted cloth weaving industry, which was presumed to have benefited by reason of the

duty-free yarns revision of the tariff in 1928, has reached the stage of over-productive capacity and non-profit margins. The cotton industry of the United Kingdom, which is developed to the basis of one spindle to each one of the population, and organized to export 85 per cent of its production, has lost 50 per cent of its export business due to the expansion and development of the cotton industry in India, China, Japan and other countries which were formerly large importers of cotton goods. The production of 20,000,000 spindles in the United Kingdom has thereby been thrown on the world markets. Reorganization is proceeding. The greatest combination of cotton mills in history, the Lancashire Cotton Corporation, is in process of formation. Bankrupt mills are being purchased at slaughter values. Hundreds of cotton mills in Lancashire have been closed. And now the Lancashire cotton industry, on the basis of reduced wages, reduced capital expends and non-profit margins, is striving to gain command of the Canadian market.
Here in Canada, the cotton industry is developed on the basis of one spindle to every eight of population. While in Canada, the British preferential rate on grey cottons is 12J per cent and on white cottons 15 per cent, in India, once Lancashire's greatest export market, the tariff on imports of cottons from the United Kingdom is 15 per cent and this in spite of the fact that wages in Canada are double those paid in Lancashire mills, whereas wages in the Indian mills are only about one-third those paid in Lancashire. Some 80 per cent of the Indian mills are said to be owned or controlled by English capital; yet there is no agitation throughout India in favour of creating a customs preference in favour of British cotton products.
In the United States the cotton manufacturing industry has an over-productive capacity and is seeking a slaughter market in Canada. There the industry is developed on the basis of one spindle to every two and a half of population, without facilities for increasing its export trade except on a slaughter basis.
The development of cotton manufacturing in the southern states, where labour laws permit night operations and the employment of women and children in night work, where wages are very considerably below the wages paid in New England and far below those paid in the Quebec cotton mills, and where mills are operating on mass production on standardized lines, the record of the past few years, and particularly at the present time, is one of non-margin profits. Cotton goods for export are sacrificed and sold to Canadian importers below the cost of production in

The Budget-Mr. Cahan
order to relieve the domestic markets in the United States. Much of this $17,000,000 worth of cotton goods which were imported into Canada from the United States last year came from southern mills and were manufactured and sold under the conditions which I have stated and which would not be tolerated in the province of Quebec or in any other province.


Mr. LAPIERRE:: May I ask a question?


Charles Hazlitt Cahan: I will talk to the hon.
gentleman when we come to discuss these items in committee, but as I have only a few minutes at my disposal I should like to proceed without answering questions.
In fact, the competition of imports into Canada of cotton manufactures from the United States is even more of a menace to the cotton industry of this country, and of the province of Quebec in particular, than the competition from Lancashire. Whereas the Canadian tariff rates which are now in force on imports of cotton goods from the United States are only 22^ per cent on grey goods, 25 per cent on white goods, 27 per cent on prints and 30 per cent on coloured goods, the new United States tariff on imports of cotton goods, with a duty of seven cents per pound on raw cotton, will be as follows:
Grey goods: not exceeding No. 90's in quality, 10 per cent ad valorem, and, in addition thereto, for each number, 2%ooths of one per cent ad valorem; exceeding No. 90, 41^ per cent ad valorem. That is, the duty on 20's quality cloth will be 17 per cent and on 40's quality, 24 per cent ad valorem.
White goods: 13 per cent and 3%ooths up to 90's, and exceeding 90's, 44^ per cent ad valorem. That is, the duty on 20's will be 20 per cent and on 40's quality, 27 per cent.
Print and coloured goods: 16 per cent and 3%ooths up to 90's, and exceeding 90's, 47-| per cent ad valorem. That is, the duty on 30's will be 26i per cent, on 40's, 30 per cent, and on 60's, 37 per cent. These are the United States duties which are about to be imposed by their new tariff schedule.
Here is an oportunity staring the Minister of Finance in the face for the imposition of countervailing duties on products on which there are really substantial importations from the United States and which are proving a serious menace to Canadian production and to the employment of Canadian labour. If the government approves the policy of enacting countervailing duties in Canada against increases in the customs duties of the United States, what reasonable grounds can be advanced for their complete failure to protect Canadian cotton mills and their employees against the disastrous competition of the mills
of the southern states? Why should a long established Canadian industry such as the textile industry be sacrificed, throwing thousands of Canadians out of employment and destroying millions of invested capital as they are being destroyed throughout Canada?
The Minister of Finance has turned a blind eye and a deaf ear towards all imports from the United States where countervailing Canadian duties would largely increase remunerative employment in Canada and conserve Canadian capital. Moreover, the drawback provisions of the existing cotton schedules in Canada reduce the real protection of the Canadian cotton mills to a mere shadow of what it purports to be. While the United States converter must place his order for a minimum of 7,500 yards of any particular pattern and pay for the expensive copper rolls, a Canadian converter can place his order with the same United States print works for as little as 2,500 yards of a pattern and, as the copper rolls have already been paid for, this cost is deleted from the price for export to Canada, so that the goods are actually sold in Canada at a less price than that at which they can be purchased by converters in the United States. Canadian mills owing to our situation have to demand a minimum yardage of 3,600 yards and absorb therein the cost of the rolls, although the number of patterns necessarily required to be made by the Canadian print works is very much larger than is made by the average print works in the United States. Obviously the competition of United States prints in this market has become excessively keen and of the most menacing and destructive character.
For export to Canada the American manufacturer makes especially low prices for special lots. He sacrifices in the Canadian market his surplus stocks and substandards of seconds. These goods are offered for export to large Canadian buyers at ridiculously low prices, often below the current American prices of the cotton yarns from which the goods are made, without adding the cost of manufacture and profit. There might be some economic advantage, it will be said, in the importation from the United States of these goods at low prices if the savings thus made were passed on to the Canadian consumer. But such is never the case. The goods are purchased by jobbers in Canada and sold through them to the consumers in this country on the basis of the competitive values of Canadian-made goods, and the actual consumer reaps no advantage whatsoever, while Canadian employees are put out of their employment.
No Canadian industry has recorded a more convincing case for upward tariff revision than
20SS
The Budget-Mr. Cahan

the woollen and worsted cloth manufacturers have done in their several hearings before the tariff board. This was virtually admitted by the government in 1928 when the tariff on imports of wool yarns for weaving purposes from the United Kingdom was removed. The duty of 12^ per cent on wool yarns was removed, and this permitted worsted cloth manufacturers to buy their yarns in England on the same basis as English manufacturers, and at the same time the duty of 24J per cent on imports of cloth was retained, and thus indirectly their net protection was increased. But this was done at the expense of the worsted yarn spinners in this country. Old established and completely equipped mills with wool preparing, carding, combing, drawing and spinning equipment were sacrificed ruthlessly. The wool growing industry in Canada received a set-back, and this government's new tariff policy in 1928 permitted the importation of wool and worsted yarns duty free to displace Canadian-grown wools in the manufacture of cloth from such yarns.
The woollen cloth industry has not benefited because of the technical difficulties connected with the importation of woollen yarns, and because of the fact that all the Canadian woollen mills are completely equipped for the handling and manufacture of wool from the raw state to the finished product, as is the case the world over. Yet, the whole tendency of this government's policy is to lessen the domestic consumption of Canadian-grown wools and to discourage wool production in Canada, a branch of the farming industry for which all admit there are great possibilities in every province in the Dominion, and particularly in the provinces of Quebec and Alberta, where some of the finest clothing and worsted combing wools in the world are now being grown. Wool production on Quebec farms and wool manufacturing in the home and in the factory has been peculiarly a French Canadian industry, but where once there were many flourishing manufacturing plants in the province of Quebec, there are now only three or four cloth mills struggling for existence. The industry has been sacrificed by the existing British preference, and the province of Quebec has been one of the principal losers.
On the other hand, the Canadian market is now being flooded with the very cheapest and lowest quality of woollens that can be manufactured in English, Italian and Czechoslovakian mills. Much of this cloth is entirely unsuited for Canadian climatic conditions. It is made from old rags and muck gathered from the four corners of the globe, 
and its production was intended originally for the low-paid, pauperized populations of. Russia, middle Europe, and Asia. It is cheap,' mungo and shoddy material without'warmth-or wearing quality, but it is showy and it is1 foisted by the thousands of yards upon the' Canadian market to supply Canadian women1 and children and workingmen as a substitute' for the good-wearing, high quality woollens made in Canadian mills or formerly imported from England. Of course, some good high quality woollens are still imported from English and Scottish mills, But the large proportion of importations of woollen cloth intb' Canada at the present time is this low gride' shoddy material, worthless for wear under the' climatic conditions which prevail in this country.	' - '[DOT]
Special treaties with these European countries have been responsible in large measure' for the regrettable conditions in which our' mills is placed. To-day Canadian woollen cloth mills, the few that still remain, are operating only 3 to 4 days a week,' with greatly reduced staffs.
Although wages in English mills are less than 60 per cent of the wages paid in Cana- ' dian woollen mills in the province of Quebec, wages in France, Italy and other European countries are 25 to 50 per cent lower than in Lancashire, England. English woollen and worsted manufacturers have made repeated requests to the British board of trade for a tariff of 33i per cent on imports of wool fabrics into the United Kingdom. This increase was reported upon favourably by the board of trade committee, but it has not yet been acted upon, owing to the change in the British government shortly after the report was brought down. Yet Canada gives to these shoddy products preferential treatment in our own market over the Canadian' product under special treaties which we have negotiated with such countries as France,' Italy and Czechoslovakia.
The destruction of the woollen manufacturing industry in Canada has been a blot on the political administration of this country. To-day, the industry is operating far below the economic minimum. If it is wiped out entirely, or indeed if immediate tariff action is not taken to resuscitate it, British and foreign mills will shortly control this market for woollen goods absolutely. To-day the cost of production in Canada is the price basis, but once "ptoduotion in Canada is removed, this market will be at the mercy of foreign manufacturers, a situation that is, or should be, inconceivable in a country such as Canada, where wool clothing is such an ab-

The Budget-Mr. Cahan
solute necessity and the development of manufacturing industry an economic necessity.	.	.
Development of the silk manufacturing industry in Canada has also been a feature of our industrial expansion during the past few years. The relatively high value of the raw material and the increase in popular demand for silk have been responsible. The high value yields a relatively higher tariff protection on labour cost than is the case with cotton or wool. Moreover, goods containing silk are something of a luxury or are in the luxury class. Development of the silk industry in the province of Quebec has been an outstanding feature of industrial expansion in that province during the past few years.
Now, the government has taken a slap at the silk industry by excluding the excise tax in force in Japan from being reckoned in the cost for duty purposes on silk goods imported into Canada from Japan. When a few years ago Japan imposed the excise tax of 10 per cent on silk manufactures, the Canadian dumping act was enforced and an additional duty of 10 peT cent has since been levied on imports of silk goods from Japan. But now this excise tax will be exempted for duty purposes on imports from Japan.
This exemption seriously affects the silk mills of this country. The development of the industry in Quebec has been due in no small measure to the decrease in Japanese competition induced by this additional 10 per cent duty. It has resulted in several million yards increase in Canadian production of silk fabrics. The exclusion of this excise tax from the cost on which the duty is .to be reckoned is now causing silk manufacturers considerable alarm.
The whole basis of consideration of the textile tariffs by the present government has been wrongly conceived. The incidence of the textile tariffs on the consumer's dollar has been misinterpreted and misunderstood. It is relatively insignificant. Only about 50 per cent of the domestic market for textile fabrics and materials is supplied by Canadian mills. Given a larger share of this market, under an adequate and scientific tariff adjustment, production costs in Canada can 'be decreased, thousands more of Canadian workers can be given employment, and millions of dollars more can be paid out annually in wages. The cost of production of textiles in Canada is the basis of prices for textiles in this market, so that an increased production will inevitably bring about a lowering of prices to the Canadian consumer.
I am not advocating-I have never advocated-that Canadian consumers should pay dividends upon watered stock. The capitalization of existing cotton and woollen mills is not in excess of the value of their assets. If there is such an excess, it can readily be ascertained by the government, who should apply the remedy. I am not advocating-I have never advocated-that customs duties should be invoked to sustain a business which is not thoroughly equipped and efficiently managed. The mills of Canada are well equipped and their management is as competent and as efficient as in the United States or in England. Nor should dividends be declared upon a capitalization which is excessive for the real requirement of the business. I am advocating an honest, efficient administration of the mills; but I am advocating also that the government and parliament of this country should protect our labourers against the cheap labour of Italy, Czechoslovakia, Belgium, and even France, not to speak of Lancashire and the southern states.
But we of the province of Quebec-I have not a dollar in this industry; I am speaking of public opinion-do resent pernicious propaganda, based on misinformation and misunderstanding, which has a tendency to destroy one of the great industries of the eastern provinces of Canada, an industry which we are as competent to administer and maintain as the cotton and woollen manufacturers of the United States or of Great Britain, of Belgium, Italy or Czechoslovakia.
Of course, there are highly specialized products-luxury products-of cotton, silk, and wool, for which there is not sufficient demand in Canada at present to justify the equipment of our mills for their manufacture. These we must continue to import from abroad, and in respect of this branch of the trade we would willingly give the United Kingdom a preference over the United States producers. But it is an economic crime to give to the producers of cottons and woollens in the United States, or even to the producers of Great Britain, a preference over our own workmen, in the markets of our own country.
Some of these industries are now being maintained on the verge of 'bankruptcy by reason of the preferences which prevail in Canada in favour of Great Britain, and also in favour of certain continental countries of Europe, which have hitherto been granted special privileges under existing trade treaties.
Complaint is made that we do not offer constructive policies. I should like to suggest that the duties prevailing on cotton goods
The Budget-Mr. McPhee

prior to February 1928, should be restored forthwith, and this, although it would increase the tariff protection by two and one half per cent, would give employment to several thousands of workmen throughout Canada, including some few thousand workmen and workwomen in the province of Quebec, and would stop the sacrifice and destruction of capital to the extent of a million dollars a year which is now taking place in the cotton and woollen mills of eastern Canada.
I see my time is up, Mr. Speaker. I shall have to take advantage of some other opportunity during this discussion to present a few more suggestions which I should like to make to the house and to the government.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. G. W. McPHEE (Yorkton):: Mr. Speaker, the amendment moved by the hon. leader of the opposition (Mr. Bennett) is unique in that it proposes no amendment to the budget, but states in effect that the present government has lost the confidence of the people of this country. I have followed very closely the addresses delivered by my hon. friends of the Conservative party and I have not discovered any case wherein they have proved that this government has lost the confidence of the people of Canada. On the contrary, hon. gentlemen opposite have resorted to wailing because they have not been able to obtain sufficient public confidence to place them in power.
If the issue is to be whether the government of Canada has lost the confidence of the people we will have to inquire wherein it has lost that confidence. Will the leader of the opposition say that the government of the day has lost the confidence of Canadians w'ith regard to the restoration of the Crowsnest pass rates on grain and flour in western Canada? Will the hon. gentleman say that the government of this country has lost the confidence of the Canadian people in regard to the reduction in the duty on agricultural implements? The electorate of Canada decided in 1926 that it had sufficient confidence in the Liberal party once more to entrust that party with the reins of power. In 1926 the Liberal party said that if it was returned to power it would pass legislation granting old age pensions in this country; that legislation has been put into effect. Will the leader of the opposition say that the present government has lost the confidence of the people of Canada in that respect?


Mr. BENNETT:: The Prime Minister has
said so.
Mr. VENIOT; No, he has not.


George Washington McPhee: The Liberal party said it
would put into effect the revaluation of soldiers' lands in this country; since the election of 1926 that legislation has been passed. Will my hon. friend say that in that respect the government of Canada has lost the confidence of Canadians? Will the hon. gentleman say that the present government has lost the confidence of the people in regard to its record of reduced taxation and reduction in the national debt?


An hon. MEMBER:: That is a joke.


George Washington McPhee: Every member of this
house will recall four years ago what was prophesied would happen to this country if the present government persisted in the reduction of duties on automobiles.
One other matter which was most vital to the people of western Canada was the pledge by the Liberal party to construct and complete the Hudson Bay railway. Will my hon. friend say that the completion of the Hudson Bay railway would place the present government in the position of not having the confidence of the people of Canada? Hon. members will recall the discussion which took place in this house in regard to the completion of that railway, and they will remember that the Conservative party was opposed to its completion.


Richard Bedford Bennett: Mr. Speaker, the statement of the hon. gentleman is not correct.


George Washington McPhee: I have in my hand Hansard of 1926.


Richard Bedford Bennett: Quite so.


George Washington McPhee: And in that volume I turn to a speech delivered by my hon. friend the leader of the opposition in the matter of a grant of $3,000,000 for the completion of the Hudson Bay railway. At page 4293 of Hansard, 1926, my hon. friend's words are reported as follows:
I do not regard the vote now before the house as in any sense committing me to the construction of a single foot of railway in addition to what has already been laid.
And further on he says:
I am not opposed to that being done, but lest it should be thought that by acceding to this grant I am agreeing in principle to the completion of the line to Hudson bay, I desire to make a few observations.

The Budget-Mr. McPhee
Later on in the same speech the hon. gentleman said:
Blit from the information I liave I could not under any circumstances vote to extend the railway a single foot beyond the present end of steel. I could not vote to send the railway to Nelson.
And further on in the same speech in connection with the same matter he said:
These points are apparent: first, that since the opening of the Panama canal and the movement of wheat from as far east as Maple Creek, and perhaps a little further, to the Pacific slope, there is no longer that urgent demand for the movement of grain west of that point to the Hudson bay or Fort^ William. Rather the desire is to move it to Vancouver. In the second place it must be remembered that the population of the country is not expanding as we should like, and that any movement that takes place of grain toward Hudson bay must necessarily involve a corresponding diminution in traffic on the two roads that now operate.


Richard Bedford Bennett: Will you read the context, please.


George Washington McPhee: I would ask the hon. gentleman to let me finish. Further on my hon. friend said:
I think the minister and the government would be well advised to afford us an opportunity to have firsthand information derived from competent sources as to the availability of this harbour and of this bay for navigation for the purposes we all have in mind, namely, to afford us the cheapest possible route for the transportation of the commodities of western Canada to the markets of the world. If I believed that were possible I would support the proposal regardless of governments	or
parties. Because I have no such evidence as I would require if I had to consider it as a judge in an impartial way, I believe the whole matter is impracticable.
That was the speech delivered by my hon. friend.


Richard Bedford Bennett: Quite so, and the Minister of Railways acted upon that advice and changed the location.


George Washington McPhee: To show my hon. friend that his own lieutenants agreed with my contention, I might read the speech delivered by Mr. Bury, the then member for East Edmonton, immediately following the speech	of
the leader of the opposition. He said:
I would not now have risen to speak but for the fact that the member for North Battleford (Mr. McIntosh)-with the best intentions in the world I have no doubt, and being himself assured of the truth of what he said-told the committee that the whole of the west was solidly behind this proposition, and he specifically mentioned the province of Alberta. Now, I cannot let that statement go unchallenged, because
there is at least one member-and indeed the house has heard another in the person of the member for West Calgary (Mr. Bennett) who does not believe in the project of the Hudson Bay route as a grain route.
Those are statements made by my hon. friend and one of his lieutenants in the house.


Richard Bedford Bennett: I would not say that was evidence against me any more than some of my hon. friend's opinions are evidence against him.


George Washington McPhee: My hon. friend was in his seat at the time and did not refute the statement.


Richard Bedford Bennett: What about the Minister of Railways? How did he vote the year before?


George Washington McPhee: Will my hon. friend now say that in the completion of the Hudson Bay railway, over the opposition of my hon. friends, the government of this country has lost the confidence of the people of Canada? Just in that connection it might be of interest to the house to read an interview with Mr. Clarence Graham, honorary president of the "On-to-the-Bay " Association, which appeared in the press just a few days ago. The interview is as follows:
Mr. Graham estimated that within ten years of the opening of the Hudson Bay route in 1931 there will be at least fifteen million people between the Great lakes and the Pacific ocean.
The British preference, put in a nutshell, simply meant favoured treatment for Britain. In the past there had been a great deal of talk of what had been called "the American penetration of Canada." British preference would be practically a subsidy on goods coming from Britain. Pointing to the advantage in distance of the new route, Mr. Graham stated that Churchill was slightly nearer to Liverpool than New York city, being 2,926 miles compared with slightly more than 3,000 to the latter place. He intimated that opening of the Hudson bay in conjunction with British preference would create such a condition of prosperity on the prairies as would excite a desire south of the border to participate on a par with those living this side of the line.
Is it, then, with regard to our increased trade that the government has lost the confidence of the people of this country? Consult the public statements of every provincial premier throughout Canada, of every bank president, of the presidents of large mercantile concerns. They all testify to the general prosperity of Canada. Just a few days ago I happened to pick up a blotter which has been broadcast throughout Canada by one of the large mercantile concerns of the west. On the back of the blotter appears some interesting data, as follows:
The Budget-Mr. McPhee

Canada's Great Export Growth
The story of Canada as a trading nation in the years since the war is an amazing record of achievement not yet fully recognized by Canadians themselves. Her external trade is now running over three billion dollars a year, compared with two billions only ten years ago.
Most amazing of all has been the growth and variety of Canadian exports. At the beginning of the century, the Dominion was a small country best known for its exports of good wheat. Industrially she was unimportant; a poor crop year made Canada sink into insignificance among the trading nations of the world. All that has been changed. On a per capita basis Canada now stands second among the exporting countries of the world. In 1913, she stood only seventh. But Canadian exports to-day are not all wheat, though wheat remains the backbone of her trading strength. In manufactures alone, Canada still stands second in the world on a per capita basis, exceeded only by Great Britain. Since 1922, Canada has increased its industrial production from $2,500,000,000 to $4,000,000,000. No country in the world has exceeded this rate of growth. . . The record is one which reflects the Dominion's prosperity, and Canadians have a right to feel proud of it.
Is it in the matter of the leadership of the Liberal party that my hon. friend the leader of the opposition says we have lost the confidence of the people of this country? I will let one of the principal Tory papers of Canada answer that question. The Winnipeg Tribune, in its issue of November 1 last, had this to say with reference to the leader of the present government:
Either by good fortune or good management -his opponents say one, his supporters the other-the country at present is both tranquil and prosperous. Really acute political issues are lacking, and such issues as do exist are discussed in calmness and moderation. This fact alone in no slight tribute to the qualities Mr. King brings to his task of leadership.
How, then, do our hon. friends opposite claim that this government has lost the confidence of the people? Some of them refer to the tariff; others say that the Liberal party has stolen the clothes of the Conservative party, and in that contention they are supported to a certain extent by their allies in the southeast corner. When did the British preference ever become a part of the Tory program, in this country? It was first inaugurated by Laurier and Fielding in 1897. If one wants to know the Tory reaction to the inauguration of the British preference in 1897 he only has to read in Hansard of that year the speeches delivered by the Conservative stalwarts of that time. It will be sufficient for me to quote the words of Sir Charles Tupper, who at that time was the leader of the Conservative party. Speaking in the house on April 26, 1897, with regard to the British preference inaugurated by the

Fielding tariff of that year, Sir Charles Tupper
said:
Now, what is the result? The result is that this tariff goes into operation, and the hon. gentleman knows that the industries of this country are already paralyzed in consequence. While hon. members gloat, vindictively gloat, over the destruction of Canadian industries, I was reading the wail, the sorrowful wail, of those industries in the Montreal Gazette, where one manufacturer after another declared that their industries were ruined, that their mills must close, and that they saw staring them in the face a return to the deplorable state of things that existed when the hon. gentleman who last addressed the house was in charge of the fiscal policy of this country. I say that a deeper wrong was never inflicted upon Canada.
Does that look as though the British preference was ever a part of the Tory program? Continuing, Sir Charles Tupper said:
I deplore from the bottom of my heart the ruin that is going to be inflicted upon the best interests of Canada, and upon its great industries. Still, I unhesitatingly say that from a party point of view the hon. gentlemen are doing our work; they are showing the people of this country that no reliance can be placed upon the most solemn declarations that they make, either in the house or out of it; they-are showing the people of this country that, having obtained power, which was ail they wished for, they are now prepared to abuse that power at the cost of the sacrifice of thq industries of Canada.
How similar that seems to be to the language used by the hon. gentlemen opposite.


Mr. SPOTTON:: Loud applause.


An hon. MEMBER:: Applesauce.


George Washington McPhee: If my hon. friend would wait a few minutes he might not be so vocal. Much has been said of the inconsistency of the Liberal tariff policy, but in many instances that is purely election talk. What is that policy? What was the policy enunciated by the revered leader of the Liberal party, the late Sir Wilfrid Laurier, in regard to this matter of tariff?


An hon. MEMBER:: He has been dead a, long time.


George Washington McPhee: There will be many hon, members opposite who will be dead politically within a few months.


An hon. MEMBER:: You will be deader.


George Washington McPhee: Speaking in the House of Commons on April 23, 1914, the late Sir Wilfrid Laurier enunciated what I believe is accepted by good Liberals as being the proper tariff policy to be followed by the Liberal party. He said:
We on this side of the house are not revolutionists; we are reformers; but we teff

The Budget-Mr. McPhee
bon. gentlemen opposite that the tariff exists for the people and not the people for the tariff. The tariff is not immutable like the laws of the Medes and Persians. The tariff has to be readjusted from time to time to bring it into harmony with changed conditions. It has to be readjusted periodically because after the lapse *of a certain period we know that changes in conditions have taken place, and the tariff has to be readjusted in order to correct errors and to remove evil where evil exists.
That is the policy of the Liberal party as enunciated by the late Sir Wilfrid Laurier and which has been repeated throughout Canada over and over again by Liberals of to-day. Yet our hon. friends opposite half-heartedly make the statement that in the present budget we have stolen their thunder. Ask any housewife in Canada to-day who is permitted to buy her tea at from 10 to 15 cents per pound cheaper than she had to pay before, if this budget is in any sense a Tory budget.


An hon. MEMBER:: That is Salada slops.


Rodolphe Lemieux: Order.
Mr. MePHEE: Ask any housewife who can purchase her tableware cheaper as a result of this budget; ask any consumer in Canada who is able to buy his goods at a reduced price as a*result of this budget, whether or not it is a Tory budget. Possibly my hon. friends would like to hear from one of their own newspapers.


Mr. YENIOT:: They could not stand it.
Mr. MePHEE: Perhaps they would like to hear what has been said in reference to the matter of British preference. The Toronto Saturday Night, which cannot be said to have been friendly hitherto to the Liberal party-


An hon. MEMBER:: Nor to the Tory party.
Mr. MePHEE: I am sorry the hon. leader of the opposition is not in his seat so that he could hear this. I read this in order partly to refute the statement made this afternoon by the hon. member for South Toronto (Mr. Geary), who stated that it was only for the first day after the delivery of the budget that the papers of Canada spoke highly of it, that as time went on they began to find flaws. The Toronto Saturday Night, in their issue of May 10, ten days after the budget was delivered, has this to say in reference to the British preference:
With regard to the extensions in the British preference which embrace enormous detail, there will be those, no doubt, who will complain that a bargain with the motherland should have preceded action.
That was the very statement made the other night by the hon. leader of the opposition, that we should have made a bargain with Great Britain. The article continues:
Such individuals are fortunately few; and the very sentiment created among Britishers by Canada's voluntary action will undoubtedly strengthen the hands of those abroad who wish to see trade prosperity in Great Britain restored through the only channel that seems to be open, increased empire trade based on mutual interest.
My hon. friends opposite, assisted by some of their allies to their left, have made the statement that there is very little difference between the Liberal and Conservative parties in regard to the matter of tariff. However, an editorial which appeared in the Manitoba Free Press only a few days ago clears the atmosphere and defines the issue as between the two parties. This editorial, which I think should be on record, reads as follows:
The Issue of the Tariff
Mr. Bennett's attack upon the Liberal tariff was in the true Conservative tradition. Since the Fielding tariff of 1897 Conservatives in attack have never allowed any undue regard for consistency to cramp their style. They have exercised the right to denounce Liberal-made tariffs as a hypocritical betrayal of the supporters of the Liberal government responsible because of the presence in it of provisions patently protectionist. They have also consistently and systematically attacked these tariffs on the ground that they do not supply "adequate protection." In parts of Canada where there is well-defined low-tariff sentiment they have said that there is no tariff issue because both parties are equally protectionist, with sometime the variation that the Conservatives are in reality the true low tariff party. This last line of argument is, however, usually left to confederates, who operate behind a screen-like Milton N. Campbell, the supposedly Progressive M.P. for Mackenzie, who has been busying himself lately in trying to make the people of Saskatchewan believe that their hope for tariff reduction lies in the return to power of Mr. Bennett.
The editorial continues:
But we do not think that now, or at any time in the last thirty years, it has been in the least difficult for an intelligent person to come to an informed opinion as to what the Liberal tariff policy is. It does not favour free trade; it is not primarily concerned with revenue; it does believe in permitting importations under competitive tariff conditions. We should say that it would be a fair definition to state that the Liberals support a competitive tariff policy, while the Conservatives favour a protective tariff looking towards prohibitive rates. The resultant Liberal tariff can only be regarded as low in comparison with protectionist tariffs: it is, in fact, pretty high. But it is now, and has been for 30 years, much lower than any possible alternative Conservative tariff; and there never was a time when the divergence in policy was more marked than it is right now.
The issue in the coming election is the tariff. The choice is between a moderate tariff which permits us to take pay for our exports in the
The Budget-Mr. McPhee

form of imports, and a high tariff intended to prohibit imports and hamper that foreign trade which is the very life-blood of western Canada. The electors of western Canada will have to line up on this issue, for or against a policy of tariff exclusion.


George Spotton: They will.


George Washington McPhee: Yes, they will.


An hon. MEMBER:: Perhaps.
Mr. MePHEE:	Our Tory friends are always very vocal on the eve of an election. Let us look back over the history of the Conservative party for the past thirty-eight years.


An hon. MEMBER:: Make it forty.
Mr. MePHEE:	No, make it thirty-eight.


George Spotton: Oh, get back farther.
Mr. MePHEE: Let us consider its history lor the past thirty-eight years, since the last election they won under the old national policy, and see what reason they have had for any exuberance of spirit prior to an election. In the past thirty-eight years the Tory party in Canada has had nine leaders. Since the last election they won under the national policy of 1892-


George Spotton: 1891.
Mr. MePHEE: Make it 1891. They have had Sir John Macdonald, Sir John Abbott, Sir John Thompson, Sir Mackenzie Bowell, Sir Charles Tupper, Sir Robert Borden, the Right Hon. Arthur Meighen, the hon. member for South Wellington (Mr. Guthrie), and now they have the present leader of the opposition.


Some hon. MEMBERS:: Hear, hear.
Mr. MePHEE:	In reply to the applause
from my hon. friends opposite I may remark that after the next election we shall be able to say of him as Mr. Fielding said of Sir Charles Tupper in 1897 when he compared Sir Charles Tupper with Moses and said that like Moses he had failed to lead his chosen few into the promised land, but had left that task to be performed by some Joshua still unknown and perhaps unborn. In those thirty-eight or thirty-nine years, with their nine leaders- and if we include the leader of the shadow government, that would make ten-they won one election, that of 1911.


Mr. QUINN:: How?
Mr. MePHEE:	Some other time I will
answer my hon. friend.


James Houston Spence: What about 1917?

Mr. MePHEE: My hon.. friend had better not mention 1917. In the same period of time the Liberal party had two leaders, our late revered leader, Sir Wilfrid Laurier, and the present Prime Minister (Mr. Mackenzie King).


An hon. MEMBER:: What about D. D.
McKenzie?
Mr. MePHEE:	In the same period of
time we won the elections of 1896, 1900, 1904, 1908, 1921, 1925,-


Some hon. MEMBERS:: Oh oh!
Mr. MePHEE: -1926, and I am satisfied that when the forthcoming appeal is made, whether it comes soon or late, the electors of Canada will assure to themselves another four years of reduced debt, reduced taxation, increased trade and general prosperity under a Liberal government.


Mr. J. F. WHITE (London):: Mr. Speaker, it has been customary for the present government during its regime which has existed almost continuously, from the beginning of 1922 to the present, to enlarge in the speech from the throne and also in the budget speech on the prosperity which Canada, it claims, is enjoying under its leadership. This year has been no exception to the rule. The government has both in the speech from the throne and in the budget speech claimed prosperity. I propose to consider some of these claims, not year by year, but rather in the light of experience of the years during which the governmefft has been in office.
Agriculture has always been regarded as one of the basic industries of the country. Early in the session several discussions took place on the various phases of agriculture and it was demonstrated in the debates that that basic industry was in a condition not at all in keeping with the claims made in the budget. Conclusive evidence of this is found in a circular letter sent out under the signature of the Deputy Minister of Agriculture. This letter, which is in part, as follows, refers to only a few branches of the agricultural industry:
You are, I understand, interested in live stock of some kind, and are therefore, I have no doubt, interested in Canada's holding her place, and even doing a little better than that on the world's markets for various live stock products. Now, as a matter of fact, Canada seems unfortunately to be losing ground in this connection. For instance, we no longer export any-eggs or butter; we send abroad very little dressed poultry or lamb; our exports of beef cattle are dwindling; our shipments of beef are decreasing; our shipments of bacon, which a few years ago ivere very large, have almost disappeared, and our shipments of cheese are

The Budget-Mr. White (London)
rapidly falling off	Such trade is essential
we believe if our farmers are to hope to do more than eke out a bare living on the land.
That is a most damaging confession, and now that the government have been eight years in office it would be interesting to have the replies that are sent to their query. We can, however, give the departmental officials credit for being alive to the danger and for trying to find a remedy.
In former days we -used to market a great deal of our farm produce in the United States. If we look back over the records of trade we shall find there have been some very serious changes and also the reasons for the drop in trade so far as that country is concerned. The Commercial Intelligence Journal periodically prints a record of the exports, from
Canada to the United States, of the principal commodities produced on Canadian farms or manufactured directly from such farm products. In the issue showing the report of the last six months ending March, 1930, we find a startling record as to the result of our business with our neighbours to the south, and also the reasons therefor. We find that in the six months ended March, 1921, we had supplied the United States market with farm product to the value of $130,517,000 and that during the six months ended March, 1930, our exports of farm products to the United States had dropped to $24,645,000. The reason for that is to be found in the records of the United States tariff rates. Their rates in 1921 and to-day are as follows:
Commodity
Cattle	
Sheep	
Oats	
Wheat	
Wheat flour	
Beef fresh, chilled or frozen..
Butter	
Potatoes	
Free
Free
Free
Free
Free
Free
2i cts. per pound Free
1| to 2 cts. per pound $2 per head 10 cts. per 100 pounds 42 cts. per bushel $1.04 per 100 pounds 3 cts. per pound 12 cts. per pound 50 cts. per 100 pounds
That is only a partial list, including some forty-odd items which bear the rates of duty which have been in force since 1922. It does not take into consideration any change in duties which are in contemplation by the United States government, and is, of course, onfy a record of the duties now in force. Those duties have had the result of causing a depreciation in our trade in the American market of eighty per cent.
What did this government do when the Fordnev-McCumber tariff of September, 1922, came into force? For one thing, they evolved 1he Petersen contract. For a second thing, they looked for wider markets. Third, they tried to reduce the cost of implements of production. Fourth, they lowered tariffs. Now, after eight years in office, when the government is faced with a further increase in American duties, it brings down countervailing duties. If countervailing duties is the right policy now, it was the right policy in 1922, when the Fordney-McCumber tariff became law. But in spite of the urging of the opposition, the government accepted the situation in 1922 without a protest, and the consequence is that our trade in the American market suffered a reduction of eighty per cent. Now, when the balance of our trade in that market is threatened, the government are moving to save the remaining twenty per cent by countervailing duties. The time to apply
remedial measures was when the greatest damage was being done in 1923.
We all know what happened to the Petersen contract, the government's first reply to the Fordney-McCumber tariff. It is not necessary to enlarge upon that, or upon the object of the Petersen contract or upon what happened to it when it was considered by a committee of this house.
The search for wider markets resulted in many treaties being made, one of which was the French treaty, the dire results of which have been explained to this house on more than one occasion. Then there was the trade agreement with New Zealand. This was under discussion in the house very recently, when the government defended the New Zealand trade agreement in spite of the large importations of New Zealand butter, mutton and other products that are coming into Canada from that country. In the month of March of this year the government defended it as being a splendid agreement, and then in the month of April they gave notice of its termination, driven to it, no doubt, by the activities of the Conservative opposition. In the meantime the government have been bombarded b3r requests and complaints from the fruit growers, the vegetable growers, the tobacco growers, the sheep raisers and the producers of dairjr products, and the results of the government's efforts on their behalf we find in the present budget.

The Budget-Mr. White (London)
As to cheaper implements of production, the budget of 1924 reduced the duties on agricultural implements and machinery. Many items were reduced, the reductions varying from five per cent up to twelve and one-half per cent. Members of the government have made great claims as to the reductions that have been made in the price to the consumer as a consequence of these reductions in the *duties on agricultural implements. I have watched the trend of prices, and on more than
6-ft. binder	
8-ft. binder, with bundle carrier and T. truck.
G-ft. mower	
Hay loader, with steel windrow and forecarriage
Field cultivators, 7J-ft., three-horse	
Single disc drills, eastern, 13-dise, 2-horse hitch. Single disc drills, western, 20-marker combination, 4-pulley hitch	
Disc harrow, in throw, 12-discs, 16-inch, 3-horse. Hay presses. 2-horse pull, toggle joint, 14 x 18. Ploughs, smaller size, about $2 cheaper in 1930. Ploughs, larger size, same price as in 1922.
Wagons, 3J skein, 2| x i tire	
Wagons, 31 skein, 3 x J tire	
Climax steel wheel farm truck, 3J skein, 4 x f
tire	
Sleighs, 2J steel shoes	
*Decrease.
one occasion I have referred in this house to the matter. The fact still remains that the price of implements to the consumer is higher * to-day than when the government assumed office in the early days of 1922. In proof of that I wish to cite prices that I have here, taken from the standard price lists of the
large implement makers. The prices I am
going to quote are October payment.	for quarter cash	and onePrice in 1922	Price in 1930	Increase$219 00	$225 50	$ 6 50251 00	263 50	12 5095 50	96 50	1 00112 00	122 00	10 0099 50	113 50	14 CO142 00	154 00	12 00206 00	232 00	26 0045 50	48 50	3 00407 00	440 00	33 00107 00	107 00	115 50	114 00	*1 5065 00	66 00	1 0056 00	59 00	3 00r b* 1 ' w, * p-	* n	
Thus it is that the government decreases the cost of the implements of production. As I said, the prices I have quoted were taken from the published price lists of the implement companies, and they prove conclusively that the consumer pays more for his implements to-day than he did when this government assumed office in 1922. In spite of that, the importations of agricultural implements have largely increased.
I wish to pass to a consideration of the effect of the volume of this manufacturing business so far as Canada is concerned. The Bureau of Statistics has issued a bulletin covering the agricultural implement industry in Canada in 1928, and it contains the statement that during 1928 more , money was spent in Canada on agricultural implements and machinery than in the preceding year. It goes on to state that this increase in demand for farm implements was largely supplied by imported goods, as lower levels of production were reported for Canadian-made products. Production values dropped in 1928, while imports advanced in the same year. According ;o the figures given in this bulletin, the apparent consumption of agricultural implements in Canada rose to $66,000,000 in 1928 as compared with $52,000,000 in 1927.
The percentage of Canadian-made implements bought by the Canadian consumer is of great interest. I find from the Bureau of

Statistics that in 1923, the year before the great reduction in the duties on agricultural implements, Canada produced 70 per cent of her requirements and purchased 30 per cent. These figures have been practically reversed. In 1925, one year after the reduction in duty, Canada produced 67 per cent and bought 33 per cent; in 1926 she produced 55 per cent and bought, largely from the United States, 45 per cent; in 1927 the figures stand 50-50; in 1928, the last year for which figures are complete, Canada produced only 40 per cent and purchased 60 per cent, almost entirely from the United States. This is a damaging statement so far as the agricultural implement industry of Canada is concerned.
A few days ago the Minister of Justice (Mr. Lapointe) delivered an address in Woodstock, and on the platform supporting him were the representatives of the federal ridings of North Oxford (Mr. Allan) and South Oxford (Mr. Cayley). They lauded the Minister of Finance and his budget. I wonder if the Minister of Justice knew that within shouting distance of the platform on which he was making his speech there existed a wagon factory which had been closed within the last three months? That factory did a good business for twenty-five years, it increased its operations, and it not only made farm wagons, but also freight wagons and sleighs and children's wagons. The firm ceased operations

The Budget-Mr. White (London)
three months ago and is now bankrupt. There is no doubt in my mind that the failure has been brought about by the reduction of the duties on agricultural implements made in 1924, because the duty on wagons at that time was reduced from seventeen and a half, general tariff, to ten per cent. What message of cheer did the Minister of Justice bring to the shareholders in that defunct institution? What message of encouragement did he bring to the workmen who had lost their jobs in that factory? He said, in effect, as he extolled the present government:	We know you are
out of a job, but farm wagons, on which the British preferential duty has been five per cent, we will admit free; freight wagons, on which the British preferential duty has been seventeen and a half per cent, we will also admit free; as to children's wagons, we will reduce the general rate from thirty-five to thirty per cent, the intermediate from thirty to twenty-five per cent, and we will make the British preference ten per cent instead of twenty-two and a half per cent. That, sir, is comparable in its heartlessness with the statement of the Prime Minister only a short time ago in which he dealt with the unemployment situation in the provinces under Conservative government. What recourse has the wagon company? None. All it can do is console itself with the ancient promise of the Prime Minister that " no legitimate company making a legitimate profit need fear any action on the part of the Liberal government." The futility of it all is that our manufacturing establishments are being put out of business and the price of wagons is no lower.
I am of the opinion, and this opinion is based on forty years' experience in manufacturing in the metal industry, that with the market we have in Canada assured to our manufacturers of implements by a reasonable tariff, they could on account of mass production make and sell implements at a much lower price than obtains to-day. It may be urged that prices will soar. They did not in 1922. Now we have a tariff board with a staff of men claimed to be experts. They have visited the plants where these implements are manufactured, and they should know the cost of production. If they do not, how can they arrive at the proper customs duty to apply to each of these items? If they know the cost of production they ought to know if prices are exorbitant, and if this is the case they should apply the remedy without any difficulty.
It has been said that since the duties on agricultural implements have been lowered more men are being employed in the industry than formerly. That statement may be true, 2419-133
but the percentage of implements made in Canada has fallen from seventy per cent in 1923 to forty per cent in 1928. If we had the seventy per cent production which we enjoyed in 1923, instead of having ten or eleven thousand men employed in the industry to-day we might be employing twenty thousand, and they would be getting steady work instead of looking for jobs.
When this so-called reduction in the cost of the implements of production was attempted by a reduction in the customs tariff it was accompanied by a reduction in duty on the raw materials which are used in the manufacture of these implements. Pig iron was placed on the free list, and in 1928 we imported 8.392 tons; castings were placed on the free list, and we imported in that year $345,000 worth; rolled iron and steel were also placed on the free list, and we imported in that year sixty-seven thousand tons; on another item under the heading of "other iron and steel products" which includes nuts, bolts, and other articles entering into the manufacture of these implements, the duty was reduced to six per cent, and in 1928 we imported these articles from the United States to the value of $4,321,000. The net result to the primary operations in iron and steel is that we have been producing less than we did in 1913, the year before the war.
I have under my hand Iron and Steel and Their Products in Canada in 1927, a publication issued under the authority of the hon. James Malcolm, Minister of Trade and Commerce. It deals with the production of pig iron, and on page 62 will be found a report of Canada's production in the years since 1913 up to the present time. In 1913 we produced over
1,000,000 tons of pig iron; from 1922 to 1927, the years when this government was in power, we produced an average of 649,000 tons annually, or only sixty-four per cent of what we produced in 1913. On page 63 the capacity of the blast furnaces in Canada is given. Their capacity is stated to be from 1,000,000 to 1,-
500,000	tons a year; in 1927 we produced only
649,000	tons. That will give the house some idea how these establishments are running on short time or are closed for a large portion of the year.
The manufacturers of iron and steel, of course, have been dissatisfied with this condition of affairs, and ever since 1926 the Minister of Finance has been importuned by many of them to reclassify the iron and steel schedules, and at last we have such a reclassification in this budget. Although the primary producers were sacrificed in 1924, six years later the Minister of Finance tells this house that

2098	COMMONS
The Budget-Mr. While (London)
the object of his budget is to help the primary producers of iron and steel. He is supported in that statement by the Minister of the Interior (Mr. Stewart), who spoke a few days ago along the same lines. In this budget there have been many changes in the duties, notably in the British preference, the object being "to trade with those who are willing to trade with us."
It is difficult to estimate the effects of the budget, but we do know that Canadian manufacturers are now being undersold in many lines by United States producers, and we do know that if Britain expands her trade she will have at least to equal, if not underbid the United States prices. It is a question whether equal prices will turn our trade to England, because geographical position has to be considered; there is the matter of the suitability of American goods as compared to English goods. Then there is the matter of the ease with which differences between buyer and seller can be adjusted. All these matters will militate against the importation of British goods, and if British goods do come in they will come in at the expense of Canadian labour. It must be remembered that every ton of goods imported, no matter where from, means that one ton less is made in Canadian factories by Canadian workmen. The government has had a change of heart in the matter of applying duties. It evidently now believes in the brick for brick policy which was condemned by them on almost every political platform in this country during the 1926 election campaign. They have, adopted that policy, if we may judge from the budget,and they now say it is a good policy for the grain growers; I wonder if the government believes that it is a good policy for the manufacturers. If so, they have not practised it.
There are some anomalies in the present iron and steel schedule. The first item in that schedule is the one regarding scrap iron and steel. Formerly those products carried a duty of 50 cents per ton, but now they are free. I wonder if the tariff board or the Minister of Finance have made any inquiry as to the position as far as scrap iron is concerned. If they had made an inquiry they would have found that the material mentioned in section (a) of item 373, which is wrought scrap and is now on the free list, was imported into Canada in the last five years to the extent of 40.000 tons; it was exported however to the extent of 378,000 tons. There is no record during the last five years in which the exports do not exceed the imports. Under those conditions the item of wrought scrap

iron on the free list will have very little effect. It is considered to be good practice in the operation of open hearth furnaces to use a considerable quantity of scrap; this use of wrought scrap does not interfere with the production of pig iron. The scrap is used in almost equal quantities with the pig iron in the interests of economy and good furnace performance.
The next item under the same heading is cast iron scrap. This is one type of scrap which interferes with the production of pig iron. The duty on pig iron is now $2.50 whereas cast iron scrap is free. The importation of this scrap cast iron means just so much less pig iron to be supplied from Canadian furnaces; the free entry will probably increase the importation of this particular item. In the year 1928 we imported 9,900 tons.
Another item in the scrap schedules is that of railway rails. The articles referred to are used rails brought into the country for rerolling and to be made into other forms of rolled bars, such as concrete reinforcement. The item of railway rails is one which comes into direct competition with the production of pig iron and the primary production of steel. In the last five years we have imported
366,000	tons. The government has raised the duty on billets by $2, and it encourages the importation of old rails to compete with the billets from which bars are made.
Take the items of blooms, cogged ingots, slabs and billets. In 1928 we imported 44,000 tons of this material. In the same year Canada produced 778,000 tons of billets, or 95 per cent of her total requirements. It will be apparent to hon. members that 44,000 tons represents only 5 per cent of our requirements. In the same year there were imported 127,600 tons of old rails to compete with Canadian billets, and these billets are used to make almost the same quality of bars as the old rails. It will be apparent to hon. members that the importation of old rails has a direct bearing on the reduction in the quantity of steel produced, although the government seem to be under the impression that the addition of $2 per ton on billets will make a difference.
Mr. 'CANTLEY:	It is replaced with material of a poorer quality.


John Franklin White: As the hon.
member for Pictou has said-and he has spent a lifetime in the business-it is replaced with material of a poorer quality. In connection with the hot rolled bars and rods there is a worse situation; the duty remains the same. In 1927 Canadian mills sold 190,000 tons of this particular material. In the same year we imported 118,000 tons; last year the

The Budget-Mr. Denis
amount was 173,000 tons. In other words, Canada imported 40 per cent of her consumption in rolled iron and steel while her rolling mill equipment has not been fully operative. To my mind such action is not aiding a primary industry. To raise the duty on ingots in order to protect 5 per cent of our requirements and to neglect the duty on bars when 40 per cent are being imported is not the way to help a primary industry.
I regret that I have not time to go into further detail in connection with the iron and steel schedule. All I can say is that there are some items which appear to encourage the manufacture of steel in Canada. The extra duty on alloy steels is one of them. The matter of heavy structural steel is dependent on an order in council, and it strikes me that any maunfacturing concern which will spend a million dollars or a million and a half for the construction of a heavy structural mill is taking great chances and is "putting its trust in princes" when it relies for its returns on an order in council which will impose a certain duty. On medium structural steel the duty has been doubled. The duty on plates has been increased, and this increase will probably result in further manufacturing in Canada. There will not be much change in regard to sheets. American producers do not seem to worry about the situation. The Canadian Steel Corporation, Limited, at Ojibway, has refused to be hurried as far as construction is concerned. While its plant has been under construction for several years there seems to be no probability of its entering the market immediately, so far as the production of primary steel is concerned.
Taking the whole- history of the government we find that there has been damage to agriculture. An attempt to reduce the cost of the implements of production has failed. There has been damage to the iron and steel and textile industries. Any prosperity which Canada enjoys in regard to industries is not by reason of any help which the government has given, but rather in spite of it. This proposed revision of the tariff is a mere patchwork; it puts up a little here and takes off a little there; it helps someone at this end of the country and hinders someone at the other end. To my mind what Canada needs is proper consideration of her primary industries and the adoption of tariff schedules which will foster the preliminary stages of our basic industries. After that is done consideration may be given to the secondary processes and so on until all industry has an equal opportunity to develop and to give employment to our people. The present budget does not measure up to that need, and I propose to vote against it.


Mr. ARTHUR DENIS (St. Denis) (Translation) :: Mr. Speaker, I must first offer my
congratulations to the right hon. Prime Minister (Mr. Mackenzie King) and the government for having chosen the Hon. Mr. Dunning as Minister of Finance. I do not think that a better choice could have been made.
A few days ago, the hon. Minister of Finance brought down in the house his first budget and submitted to us the financial, economic and trade situation of this country. Notwithstanding that the hon. minister did not comply with the definition of the dictionary, as he was reproached for, he nevertheless told us that our country, under the present administration, continued its ascending march towards progress and prosperity. Our national debt which, under the Conservative rule, increased by leaps and bounds, was reduced by $80,000,000 during this fiscal year, and by $257,800,000, within the last five years. Our trade with other countries was not as prosperous this year as during the preceding years; we registered an unfavourable balance of $103,000,000. This is due to the fact that the wheat pool in the west, either rightly or wrongly, refused to sell their wheat at the price fixed by the dealers in London. This slight disappointment can only be momentary. Already, since the opening of navigation we have noticed that our wheat shipments have been larger than at this period, last year. In regard to the fiscal year ending on March 31, 1930, the statement of the hon. Minister of Finance shows a surplus of more than $44,000,000, this has helped to reduce our national debt. The receipts amounted to $447,322,000, showing a slight reduction of $14,325,000 as compared with that of the preceding year. This decrease must not astonish us, considering the reductions in taxation effected last year, and which were estimated at more than $25,000,000. The same thing may happen this year owing to the decrease of the sales tax, from 2 to 1 per cent, which it is estimated will amount to $22,000,000. I do not think that there is any one in this house who will reproach this government for having reduced the sales tax, a reduction which was to the advantage of the most numerous and the least wealthy class, the consumers, the majority being workmen. If the manufacturers insist on not paying their employees wages proportionate to their profits and the protection they are given by this government, they will have to settle the matter with that same government. Do you wish another proof of the sympathy of the government towards the workmen? At this present session the hon. Minister of Labour (Mr. Heenan), got this house to adopt a measure obliging all contractors obtaining contracts
The Budget-Mr. Denis

from the government to observe the eight hour day and pay their employees fair and equitable wages. The government desired by this act that the workman, who is the most important factor in all industries, and without whom nothing could be done, should divide in a fair proportion the profits realized. The workman, like all other citizens, must live and it is but fair that the fruit of his wages should give him sufficient purchasing powers to buy what he needs for his existence and that of his family. Of what use would it be to the manufacturer to produce, if the workmen had not the necessary money to purchase his products? Inevitably these industries and their owners would face complete failure. The object which this present government has in mind through its tariff policy, is to grant to all and every one the protection to which he has a right without being detrimental to others. No one has a right to get rich at the expense of others. Before the law, we are all equal.
There is another diuty incumbent on the government of any country, which owing to its population, industrial and trade development cannot suffice to itself, if it is to keep up most friendly trade relations with other countries. That is why the government has made certain changes to its tariff schedule. It took no accounts of the theories of protectionist or free traders, 'but rather of the needs of the people and advantages that they might obtain from these tariff changes. Our farmers complained that there existed an unfair competition in butter by New Zealand; the Government asked the tariff commission to make an inquiry, and as a result the tariff was changed so as to do them Justice, by establishing a preferential tariff of * cents per pound. Our truck gardeners also complained of the competition carried on by the United States against their vegetables. Immediately an inquiry was started, and they are glad to hear to-day that the government by its budget has established a tariff which allows them to compete advantageously with the United States products. But we, city representatives, have no desire to see, by this tariff change, our workmen obliged to pay dearer for their commodities. This question was carefully considered by the government and the1 solution arrived at, I am convinced, will satisfy all concerned.
It is unfortunate, however, that Conservative importers, with the sole aim of deceiving public opinion, for election purposes, thought fit to raise the price of their goods, and this without any reason, making their clients believe that the tariff was the cause. It is some of the Tory party's propaganda and

falsehoods: the Canadian people are wise to their tricks and will not allow themselves to be deceived when the time comes to give their verdict, at the next general election. Before resuming my seat, allow me, sir, to draw the attention of the goverment to the request of the postal employees for an increase in salary. I think that this request should be given, further consideration. If it were thought proper to appoint a commission with reference to the increases to be granted to a certain class of employees, I think that the postal workers generally, also deserve that we take an interest in their lot and help them by complying with their request.
There is another question, sir, that I should like to submit to the government. There has been an attempt to introduce in this House a measure tending to make the Canadian people believe that a subsidy for the construction of a national highway would have greatly helped to relieve the unemployment that existed last winter. As representative of the province of Quebec, I have been and I am still apposed to a subsidy for the construction of a highway, so called national. The province of Quebec has always led in the movement to build up good roads. We did not depend on the Dominion government to construct these national highways and I think that the other provinces should have as much pride as the province of Quebec and build their highways without coming to Ottawa to seek the help of the Dominion government. If unemployment, sir, exists, it is not the Dominion government's fault. On the contrary, our government, through the Minister of Labour, did all it could to induce public companies and private firms which had work to be done, to begin as soon as possible, so as to employ those who were in need of work to provide for their families.
After these few comments, I am pleased to state in the house that, as representative of a Montreal riding, the St. Denis constituency, I am proud of the budget presented this year by the hon. Minister of Finance (Mr. Dunning) and I fed certain that it will 'be given at the next general election the entire approval of the Canadian people.


Mr. M. J. MALONEY (South Renfrew):: Mr. Speaker, I very greatly regret that my lack of knowledge of the beautiful language which has just flowed from the lips of my eloquent friend does not permit me to address the house in the same way. No doubt that is my loss; it is the loss of many people in this country, which some day we shall see remedied.

The Budget-Mr. Maloney
It has been my privilege on four or five occasions to say a word in connection with the budgets which have been delivered in this house and, Mr. Speaker, I recall with sorrow that the man whom I have been accustomed to hear deliver the budget speech during the last five years has passed away. The late Minister of Finance, even though we did not on all occasions agree with him politically, was a man whom we trusted absolutely, a man who I believe had the confidence of ninety per cent of our people. To me it is a matter of very great regret indeed that he has passed away and left us forever. His successor is an outstanding citizen who, we were glad to see, was sufficiently strong in health to deliver a budget of a character unusual in the history of our country.
Speaking as an individual member of the opposition, and for myself only, I should like to remind you, Mr. Speaker, that under the laws of this country there are several kinds of robbery. There is the ordinary, eveiy day robbery; there is highway robbery, and there is robbery with violence. When we come to consider this budget we find that all three kinds of robbery have been combined, and we can only say that the present Minister of Finance and those associated with him have committed at once all three varieties of this offence. As a matter of fact the only difference between certain hon. gentlemen in Canada and Jesse James is the fact that Jesse James had a horse. Surely when hon. gentlemen opposite endeavour to impress upon the country the attitude they are now taking, they cannot be serious. I will say this to the right hon. Prime Minister (Mr. Mackenzie King): If he can put this budget across, the day after the election he can start out and commit murder whenever he wishes, and he will be surely acquitted.
However, the people of Canada cannot be fooled all the time. Almost every item in the budget presented by the Minister of Finance is something for which we have been fighting for many years. It is a very fine tribute indeed to the great party on this side of the house. I think I am letting you in on no profound secret, Mr. Speaker, when 1 say that when the people of Canada have a chance to pronounce their views, which I hope will be within the next sixty or sixty-five days, they will give to the party which has been endeavouring to propound these policies the opportunity to put them into effect.
The budget will not be the only matter discussed before the people of this country during the next sixty or seventy days. We will discuss t'he record of this government for
the past nine years. Now, on their death bed, they are repenting and endeavouring to adopt the cures which we have been propounding for that length of time, but they will have to answer for their record during that period. To-day, when almost every industry in this country has been, practically ruined, with the farmers almost in penury, the government adopt the policies we have *been advocating for the past nine years.
We must also consider the record of this government in many matters in addition to the fiscal policy; we must consider matters of taxation and of expenditure. Here is a party which stood for low taxation and economy. What have they been practising in the last few years? Even to-day what is their platform on economy? They'are spending $22,000,000 more this year than was spent last year, and yet they say they are trying to save the money of the people of Canada. How are they spending that money? This is what the people will want to know. Are they spending it in the interests of the people of Canada as a whole? Let us consider for a few moments what is happening right here in the city of Ottawa. This is a matter which I have mentioned before and which will be mentioned again; it is of great importance to the whole Dominion of Canada. I refer to the amount of money which this government is prepared to spend in order to destroy perfectly good property in the city of Ottawa. Is that being done in the interests of the hard working farmer and the hard working labourer of this country? This government is prepared to do that, but how could that money have been spent? The proposal was made to the government that instead of destroying perfectly good property it should do something constructive; it should build a highway from the Atlantic to the Pacific. It should spend millions of dollars upon that work rather- than to tear down good property in this city. If that was done it would mean the employment of many thousands of men throughout Canada and would afford relief to a situation which is inimical to our welfare. This government has known of the unemployment in this country, but it has done absolutely nothing. An opportunity was presented to link the east with the west and at the same time give employment to thousands of our citizens. But the government has taken no action in this respect, and that is an issue which will come before the electors of Canada during the next two or three months.
In addition, there is the expenditure which is being made upon foreign legations. What are those legations doing for Canada? What
The Budget-Mr. Maloney

benefit have they been to the people as a whole? What has our friend Mr. Marler done in Tokyo for the benefit of Canada? How much has he cost the people of this country? What has our friend the Hon. Vincent Massey, in the meantime in Washington cost the people of this country, and of what benefit has he been to Canada? Our idea is to take the money being spent in Washington and Tokyo and spend it in aid of technical education. As you know, Mr. Speaker, our system of education is not one which brings the best out of a boy or a girl. From the time of entering until the time of leaving the common school, our system of education guides the scholar along one certain line, a line leading to the universities. AVe have not forgotten that ninety per cent of our boys and girls never reach the university? AArhen the young people leave the primary or secondary school, after matriculation, they have a knowledge of algebra, a knowledge of English, an imperfect knowledge of French and Latin, and a smattering of other subjects, but what position in life are they able to occupy? They cannot go into a store and keep a set of books; they cannot go on the farm and work the land- they are too highly educated for that. They cannot take up a trade because they have not received the necessary training. Technical education would mean that boys and girls at the tender age of twelve, fourteen or fifteen would have installed into their minds the idea of taking up some profession or calling worth while. But the government says: No, we would rather spend three million dollars on Messrs. Vincent Massey and Herbert Marler than spend one million dollars on the boys and girls of Canada. This is another matter which will come before the electors of Canada, in addition to the notorious highway robbery which I have already mentioned.
Has this government been a friend of the farmer? Consider the condition of agriculture to-day as compared with that of nine years ago. At that time the farmers of Canada were fairly prosperous; they were able to pay their debts and continue to carry on. From end to end of Canada to-day you will find in section after section, farm after farm abandoned. That applies even in the most highly developed portions of our agricultural districts. In the county of Oxford, which is perhaps the garden spot of Canada, there is to-day a smaller agricultural population than there was at the time of confederation. Why should that be? Simply because of the fact that this government during the last nine years has allowed every foreign competitor to dump his farm products into Canada in competition with our
[DOT]'Mr. Maloney.]
own farmers. In the county of Renfrew for the last eight or ten months we have been eating beef and mutton, produced where? Not in Renfrew county, not in Ontario, not in Canada, but in a country seven thousand miles away-that beef and mutton came all the way from New Zealand, and was dumped here in competition with Canadian farmers. How has this happened? This government passed an order in council without the consent of this parliament, without the consent of the people of Canada, which allows these products to enter Canada in unfair competition with our own products. Not only is beef and mutton allowed to enter under these conditions, but millions and millions of pounds of butter are being dumped here in competition with the products of our own farms. Then, the farmer having been ruined, and the dairying industry killed, in order to procure a few votes the government becomes penitent and says: AVe will adopt the policy which our opponents have been advocating.
However, there is one other product which has been forgotten-wool and wool products. Twenty years ago we had in the district from which I come ten or twelve woollen mills, all of which were running full blast day and night. What are the present conditions? Out of those ten or twelve mills, only two are left, and one is making a struggle for existence. The others are closed and locked up tight. AA7hy? Because this government has allowed woollen goods and certain grades of wool to enter free of duty, and we are unable to compete with the outside world. Possibly next year, if by any unfortunate chance the present government should be returned, after this industry is dead and gone it will accept the advice we have been trying to give it, and a tariff reform will be brought into force which will protect the woollen mills of Canada. However, that is carrying the question too far.
In conclusion, Mr. Speaker, let us look at these matters from the point of view of Canada's future. The policy of the party of which I have the honour to be a member is a policy for Canada first, last and always, a policy which means the manufacturing in this country of our own raw products, a policy which will preserve for the people of Canada our own markets against any other nation, no matter which it may be, because our first duty is to. our own people. AVhen the Canadian people within the next few weeks have a chance to pronounce upon this budget, I feel, as I think seventy-five per cent of the electors of this country feel that my honoured leader

The Budget-Mr. Rheaume
will have an opportunity to form a government, and then indeed Canada will enter an era of prosperity


Mr. THEODULE RHEAUME (Jacques Cartier) (Translation):: Mr. Speaker, I listened with interest to the speech of the hon. member for Renfrew South (Mr. Maloney). At the outset of his remarks, he charged the King government with three kinds of thievery as defined by the Criminal Code. Evidently the hon. member meant to say that the Dunning budget has completely unclothed our friends of the opposition and they feel somewhat in the awkward position that our ancestor Adam was, immediately after his fall. We are but human and charitable we would like to help them, however, it is impossible to offer them, in their distress, anything but our sympathy to cover their nudity
I first wish to congratulate the new Minister of Finance (Mr. Dunning), on his first political achievement which brings to the country smiling hopes and to the government itself a certainty of victory in the great conflict of to-morrow.
I shall now take up a few minutes of the last hours of the session to place before the house the question, ever so long discussed of a Dominion government grant to construct two tunnels under the Lachine canal, in Montreal, one at Wellington street, the other at Church street, Cote St. Paul. The necessity and urgency of these public improvements insisted on for over 20 years, cannot be gainsaid. On the south side of the Lachine canal, covering a distance of three miles, there is a progressive population which will soon attain the figure of 200,000.


Mr. DUSSAULT (Translation):: Are they
Liberals?


Joseph-Théodule Rhéaume: The Budget-Mr. Rheaume
congestion is intolerable in the morning and evening, when the workmen go and come from their work.
If we add to the ordinary traffic of a city which is growing every day as that of Montreal, the traffic of tourists who each year invade the metropolis of Canada, and two-thirds of whom pass over the Wellington bridge or that of Cote St. Paul, the house will have a fair idea of the necessity and urgency of the tunnels requested.
On what grounds would the Dominion government be called upon to contribute to the construction of these tunnels? First, the Dominion government is obliged to help traffic where its canals and railways are operating. When bridges become insufficient, it must provide other means to meet the needs of traffic. In the case under consideration it is proved that only tunnels could remedy the evil of which people complain.
Moreover, navigation will benefit greatly by the construction of those tunnels. Indeed, the vessels which carry our good will gain an appreciable time; the accidents which have occurred at the Lachine canal bridge and interfered with navigation for a few days, would then be a thing of the past.
With the competition that Canada meets over its wheat in the world markets, these advantages to navigation which I have just enumerated, will certainly be appreciated by the members of this house.
Now these improvements, like elections, require something more than prayers. What will be the cost of those tunnels? The engineers who have studied these two schemes have fixed the approximate cost of the tunnel at Wellington street, at $2,500,000, and that of Cote St. Paul, at $2,130,000. The cost seems high, but I shall show that the government will make a good bargain by contributing to them. The plans already prepared include the necessary space for two tramway tracks two vehicular roads, and a sidewalk six feet wide for pedestrians.
Now, sir, how will the cost of construction be distributed? Montreal, which will maintain on its own responsibility, and become the owners of, these tunnels will pay one-third of the work. The Montreal Tramway Company undertakes to pay another third There would only remain for the Dominion government to pay the balance, that is one-third of the cost.
I shall now show that this contribution of the Dominion government would be an advantageous one financially. It will cost the government very little to help in the construction of these tunnels; indeed, the Wellington street bridge was completed in 1898; it is

therefore 32 years old. Thirty-two years in power for a good government like the present one is not much, but for an iron bridge, it is practically the limit of its usefulness. The Cote St. Paul bridge is about as old, perhaps a few years less. It will be necessary to rebuild those two bridges in the near future. What will it cost the country? An amount not less than 8400,000 for each bridge. Add to the cost of construction, the operating and maintenance costs which amounts to about $20,000 per year for each bridge; now, the capitalized value of this yearly expenditure, $20,000 at 5 per cent, amounts to $400,000. The construction, therefore, of the government in the proportion of one-third would represent about the same amount which would be necessary to construct, operate and maintain the two new bridges.
I shall add nothing further, as the end of the session is near. I think, sir, that I have proved my case, as we say in court, and I feel confident that the supplementary estimates will help to solve a problem which interests greatly the city of Montreal and the whole country as well.


Mr. C. DUMAINE (Bagot) (Translation):: Mr. Speaker, a celebrated English parliamentarian stated that a new member should speak in the house only after having listened attentively during two sessions; that at the third session, he should speak but for ten minutes. I wish to conform, in a large measure to this advice, and I shall restrict myself as much as possible to the time limit indicated.
Before proceeding further, sir, allow me to recall to the hon. members the memory of the late Mr. G. D. Morin, my predecessor. Mr. Morin was highly thought of by his colleagues, friends and all his constituents. He was a hard worker and very devoted to his duties. The country lost a great man; his family, a good father and the county a distinguished member. Mr. Morin was the worthy successor of Mr. J. E. Edmond Marcile, who represented the county of Bagot during twenty-eight years, and his constituents reposed all their confidence in him up to the very last, since they elected him, in 1925, hardly a month before his death. I trust that the example of my predecessors may be a guide to me in my public life.
I took a great interest in the debates of the present session, and I studied as much as it was possible for me to do, the legislation enacted. Allow me, sir, to congratulate the right hon. Prime Minister of Canada (Mr. Mackenzie King) for the wise way in which

The Budget-Mr. Dumaine
he leads the Liberal party and directs the destinies of Canada. The right hon. Prime Minister is a great statesman, and has a wide-world reputation. All legislation which he has passed is sound, human and loj-al. I would not be doing my duty and would be unfair to our hon. ministers if I did not give them credit for the good and sound administration of their respective departments. And you, Mr. Speaker, you have my entire admiration and full confidence for the wise way with which you preside over proceedings of this house.
As I wish to be brief, allow me, sir, to say a few words on questions of a general interest to the country and of immediate need to my constituents.
On May 1, the hon, minister of Finance (Mr. Dunning) submitted to us the budget for the current year. The reduction of the national debt, as well as that on the income tax and sales tax were highb^ appreciated by all citizens of this country, Conservatives as well as Liberals, and this is vouched by all the newspapers which were published the day following this great event.
This year again, more than any other, the government seemed to take a greater interest in the farming class which I have the honour of representing in the house. The prohibition of United States farm products on our markets is a great help to Canadian fanners. The Americans used to dump the surplus of their products on our markets at ridiculous prices, and they prohibited our products on their own markets. I congratulate the government on the stand they have taken. One must not forget that the farmers belong to the class which is the least organized in this country, and we must protect them.
The farming industry differs from other industries; there are a number of factors which makes its management difficult. The crop is either good or bad, depending upon the weather, and even if the market is favourable, if a farmer has no crop he oanniot sell anything; and vice versa, should the crop be excellent and the market poor, the farmer is often obliged to sell at ridiculous prices even sometimes at 50 per cent of cost price. Yet the owner of a farm is always obliged to pay, each year, his taxes and meet various other payments, and, furthermore, interests at rates often too high.
One of our devoted colleagues, the hon. member for St. John Iberville (Mr. Benoit) introduced a resolution in this house to reduce the rate of interest on farm loans from 61 per cent to 5i per cent. All the members of Quebec and a great number of members from other provinces supported this resolution and signed a request asking the hon. Minister of Finance to reduce by one per cent the rate of interest at present in force.
I trust that the hon. Minister of Finance (Mr. Dunning) will grant our request, because I think it just and well founded. If we turn to the other countries which are favoured with a farm loans act, we find that the rate of interest is lower than the one at present in force in this country. I state again that this reduction is necessary and that we should be granted our request.
I should like to see this farm loans act administered by a federal commission, and paid from the -public treasury; that each province which benefits by it should look after the local administration, and that the borrower should -pay but the cost and fees of the examination of titles, acts and registration.
Another essential point to attain the real end for which the Canadian farm loans was established, is that the valuation of properties be made on the actual value of the properties and that the amount of the loan be not less than the f of the estimated value of the property. I am confident, sir, that if we thus assisted the farmers, without too m-uch cost to the country, the farming classes would feel happier and more prosperous.
As the hon. member for Jolette (Mr. Fer-land) stated in his last speech, -the Bankruptcy Act of 1919, caused considerable harm to farmers by allowing them to assign their property. This act, drawn up in terms sufficiently vague as to be interpreted in any way, -makes it possible for certain speculators to roam about the country-side and incite the farmers to assign their property. The latter lose their farms and remain with more debts than they had previously. Money lenders in good faith also lost -their loans owing to the fact of having made such advances during the three months preceding the bankruptcy. This act has been very harmful to the credit of fanners, and to-day, it is a problem for the owner of a farm valued at about $10,000 -to borrow $4,000 or $5,000. These are the reasons why I insist so much that the Canadian farm loans act should become a real help to the farming class.
I would further draw the attention of the government to the estimates for the Department of Agriculture. These estimates are not sufficiently large compared to others of less immediate importance, aviation for instance. Every year the Department is forced to ask for supplementary estimates, and while this is going on, our people are waiting for their money. Within the last few years, the government has wisely taken the initiative of reviving the dairy industry, and, with that
The Budget-Mr. Dumaine

object in view it has established restricted areas. I believe that this Act will be of great help to the farming class, providing that it is well administered. Inspection has already started in my county, and I think that it will be further continued in the autumn. I trust that the government will vote the necessary money to indemnify, as soon as possible, the farmers who may have sustained losses. By indemnifying them within 30 days, the loss sustained will be less felt, and the farmer will be able to renew his herd and get immediate results.
I am pleased-although I expected it-that the hon. Minister of Finance (Mr. Dunning) has levied a duty on butter coming from New Zealand. I hope that the farmers will benefit by it and that the consumer will not complain too much. Butter is, at present, too cheap; we have proof that for about one month past it has been selling below the cost price. The abrogation of the old treaty and the making of new trade arrangements with New Zealand will be highly appreciated by the citizens of this country. I congratulate the government on its attitude regarding this matter. This increase of duty on butter was based on the report submitted by the dairy industry of this country to the tariff commission, in January last. And if the present tariff is not high enough, my opinion is that it should be made higher. Butter is not a greater commodity to the consumer than other products and I know that the consumer will understand the requirements of the producer which are but just and well founded. I congratulate this government for its solicitude towards the farming class. The Liberal party has always been the champion of the farmer and workman; it has always made war on trusts which are a plague on the economic life of this, country.
The Conservative policy has always been fatal to the small capitalists; it only endorses the farmers cause during election time, and if we examine the past, we will see that the Conservatives have never done anything to protect those for whom they are claiming so much to-day. Their new attitude is but an election manoeuvre; and I hope the people of this country will understand it and that the Liberal party will be returned to power in the next parliament, with a greater majority than the one we have to-day.


Mr. A. E. BOURGEOIS (Kent, N.B.):: Mr. Speaker, I should be remiss in my duty to the constituency I have the honour to represent did I not commend the hon. Minister of Finance (Mr. ^Dunning) upon the splendid budget that he has presented to this house and I Mr. Dumaine.]
to the country. I do not recall a time when a budget has met with such widespread expressions of approval. It would be strange indeed were it otherwise; for in summing up its salient features one cannot but conclude that the many changes effected in the tariff schedules will be beneficial to all classes and sections of our country and tend to remove the many discrepancies in our tariff rates against the countries with which we deal.
From the viewpoint of the Canadian home, it must also be conceded by every unbiased citizen that in truth this is a real householder's budget. The budget is replete with happy surprises and anticipations. In view of the abolition last year of many of the so-called nuisance taxes, the reduction of the sales tax, the decrease in revenue from import customs duties, the sum total of which is in the vicinity of 828,435,000, the large increase of expenditures necessitated by the ever-increasing demands made upon the government year by year by the people of Canada through their representatives, the payment out of current revenue of maturing bonds to the extent of 880,000,000, one would not have expected that the Minister of Finance, notwithstanding those circumstances, -would be able to submit to parliament the large surplus of $44,500,000, which, coupled with the consecutive surpluses during the last five years, has brought about a total reduction in the national debt of S257.SOO.OOO.
This, Mr. Speaker, is very heartening to the people of Canada. It makes it abundantly clear and if the present government is retained in office for a reasonable period of years-and in view of the circumstances we have no reason to doubt that such will be the case-the national debt will in the natural course of events be to the people of Canada a matter of small concern. In view of these indisputable facts, it must be admitted that the results achieved coidd have been brought about only by a wise, economic and businesslike administration of the affairs of Canada such as has been accomplished by this government.
It is true, Mr. Speaker, that conditions during the last three months of the fiscal year have not been, particularly throughout western Canada, as satisfactory as could have been desired, but that was not due to any fault of the government, as some of our hon. friends opposite would have the people believe. It was due, as has already been stated in this house, to a combination of circumstances, the principal of which was the withholding of the export of wheat by that formidable western

The Budget-Mr. Bourgeois
organization known as the wheat pool. The pool was perfectly within its rights in acting as it did in an endeavour to realize a higher price for the farmers. Nevertheless this one factor alone undoubtedly reflected in large measure the depression that prevailed throughout the western provinces. It also very materially lessened the earnings of our two great railway systems. I am not condemning or condoning the wheat pool in this regard, but I must say that a corporation is indeed a formidable one that by its manipulations can affect to some extent at least, if not disorganize, the whole commercial fabric of a nation of ten million people.


Edward Joseph Garland: Is the hon. gentleman not aware that the wheat pool offered wheat for sale continuously throughout the year and did not deliberately withhold wheat from the market?


Alfred Edmond Bourgeois: My hon. friend is in a better position to speak as to that than I am.
With respect to the tariff changes made in this budget so far as the province of New Brunswick is concerned, I have no doubt that far-reaching beneficial results will follow. Living as we do beside a country of one hundred and twenty million people, with whom we have a large export trade in potatoes, lumber, pulpwood and fish, we desire the mutual good business relations between the two countries to continue. There is no sentiment throughout the maritime provinces, I can assure you, Mr. Speaker, in favour of a brick for brick tariff warfare. On the contrary, there is a sane common sense assumption that if the United States government has seen fit to adjust its tariff and make increases in its duties, it has been done in the spirit of serving the best interests of the people of that country, and therefore no one can find fault if we, actuated by the same motive of serving the best interests of our people, adopt a policy of countervailing duties, which means that countries that both buy from and sell to us have it in their power by reciprocal action on their part to enable us to reduce our duties.
The pulpwood industry in the province of New Brunswick has within recent years developed into one of great importance. We have at the present time two large pulp and paper mills, one situated at Bathurst, and another newsprint mill recently constructed in the town of Dalhousie, which is the largest of its kind in the maritime provinces, giving employment to a large number of men and affording a very substantial home market for
pulpwood. It would appear, however, and 1 am credibly informed, that there are a few large corporations throughout Canada that are desirous of having an embargo or export duty placed on pulpwood going to the United States. I want to say here and now, Mr, Speaker, that I am unalterably opposed to any movement in that direction. It would be most injurious to the farmers of New Brunswick and to others who have reserves of pulpwood. In other words, it would be placing a monopoly of purchase in the hands of a few large corporations to whom they would be obliged to sell. We desire that the farmers as well as all other exporters or dealers in pulpwood be given the opportunity of disposing of this forest product to whomsoever they desire and in the market where they can obtain the highest price.


Mr. ADSHEAD:: What is the difference
between having goods go out freely and having goods come in freely?


Alfred Edmond Bourgeois: That means free trade. Representing a constituency in which the basic industry is agriculture, I may say that the New Zealand trade agreement, up until the present time, has not been of much concern to the farmers and dairymen of New Brunswick, because of the fact that they have not as yet been able to meet home market requirements, but they will, I hope, in the course of a short time. However, there has recently arisen a growing sentiment in opposition to the New Zealand trade agreement in regard to butter. This opposition was expressed by resolutions passed at the annual meeting of the New Brunswick Farmers' and Dairymen's Association which met at Moncton in January last, requesting an increase of duty on butter coming from New Zealand. Nevertheless it is a fact that the New Zealand trade agreement has been of great benefit to the agricultural implement manufacturers and to the manufacturers of automobiles and other Canadian products, and also to our exporters of pulpwood. However, I am pleased that the government, in order to safeguard the best interests of the farmers, has advised the New Zealand government of its desire to terminate the agreement on the 12th of October, and that thereafter the duty on New Zealand butter entering Canada will be four cents a pound.
With respect to the increase in the British preference, no more opportune time could have been chosen in an endeavour to stimulate trade with the United Kingdom, which during the year has materially declined. Again, Mr. Speaker, has the Liberal party by action

The Budget-Mr. Bourgeois
given proof of its desire to encourage interempire trade. Not only is this desirable from the viewpoint of profit, but also as a matter of sentiment.
No better proof of the wisdom of the government in pursuance of a strong preferential trade policy could be given than is exemplified in the preferential trade agreement with the West Indies. In substantiation of this fact we have the statement of Dr. J. A. Ruddick, Dominion Dairy Commissioner, who, having returned a few days ago after a six months' visit to the West Indies, is reported in the Montreal Gazette as saying that Canadian trade is increasing tremendously, that we are now getting 90 per cent of the business in flour and more than 90 per cent of the business in dairy products, particularly cheese, butter and powdered milk, the latter trade having risen from 30 to 90 per cent within the last three years, due largely to the new preferential trade agreement between the two countries. We may now anticipate a still greater increase, particularly in fruit and vegetables, due to free entry under the preferential tariff as announced by the finance minister in his presentation of the budget. Therefore as a result the Canadian people may now exipect cheaper fruit and vegetables, particularly the people of the maritime provinces who are so geographically situated that they will benefit to a larger degree.
Coming now, Mr. Speaker, to the trend of events in the maritimes, I may say that optimism has been the keynote of expression during the last three years. It is not long since that our commercial prosperity was impeded by exorbitant freight rates and other economic burdens which confederation had imposed; but since the advent of the present government greater confidence in the future has been strikingly manifest. The claims of the maritime provinces were favourably considered by the government in the implementing of every recommendation contained in the Duncan report. The findings of the Duncan commission dealt effectively with the situation by placing the maritimes in their proper position of equality among the other provinces of the Dominion.
I desire to congratulate the government on the creation of a separate Department of Fisheries, the sole function of which will !be the advancement of the fishing industry in all its various branches. In view of this fact, I would suggest that the new Minister of Fisheries instruct his department to investigate conditions in the St. Louis river in Kent county, New Brunswick, with a view of bringing back to its former productivity its once famous oyster beds.

We are grateful for what the government has done for Kent county, particularly in the matter of public works. But there are still some much needed improvements, particularly the construction at as early a date as possible of breakwaters at Dixon's point and Moillet's gully, which are the two missing links necessary to the protection of the lives and property of our fishermen along the Northumberland strait coast of Kent county. There is also urgent need of dredging in the Buctouche and the Richibucto harbours in order to facilitate shipping. This work, I hope, will very soon 'be given favourable consideration by the present government, which we may expect will again be returned to office; for during the last nine years by its honest endeavours, it has succeeded in welding Canada into one happy, united and harmonious whole.


Mr. PAUL MERCIER (St. Henri) (Translation) :: Mr. Speaker, the people of Canada received with great satisfaction, the budget so ably prepared by the hon. Minister of Finance (Mr. Dunning). It answers to the needs of our country and includes all the fields of human activity. Not only does it proclaim that the financial situation of our country is in excellent shape, but its balance sheet shows a surplus of $44,507,000. The obligations contracted by the past administration, previous to December 6, 1921, have been met when they matured, without further borrowing by the King government and that, since it directs the affairs of this country, viz., close on ten years.
To fully appreciate the budget, we must consider the situation as it exists after the war, when all nations have, from the material standpoint, and more particularly from the economic standpoint, been reduced to a state of disorganization.
If we look and examine closely the present map of Europe, we note that it has almost been transformed. The various treaties while establishing peace have nevertheless created a diversity of trade interests, not only in Europe, but on the American continent. The European countries, enclosed in their new frontiers, endeavour to reestablish themselves on new trade bases. Each nation fights for its own interests, to sell its own products abroad, at the highest price obtainable, yet trying on the other hand to exclude other nations from exporting in its territory the products which might compete with its own.
Our neighbours, the United States, have sought for the last few years, to monopolize the world market and in return make the smallest trade concessions, not only to European

The Budget-Mr. Mercier (St. Henri)
countries, but to Canada, especially as regards farm products.
If in the budget, the government of this country has found it necessary to answer by countervailing rates the duties the United States put on our products, the people of the neighbouring republic cannot complain of our new tariff, because they drew it upon themselves by too much selfishness and trade exigencies on their part.
In support of this contention, not only as regards Canada but also France and certain other countries of Europe, it is only necessary to read this passage from a study on the subject, entitled: "The Tariff controversy with France" written by a distinguished economist, Mr. F. W. Taussig, in the Review of Foreign Affairs, edition of January 1928, from which I shall read the following extract:
What, then, will the United States finally do? The people of this country are recurrently called on to consider just how far they propose to carry their protectionist policy, and just how intolerant they propose to be in the way of keeping out every scrap of imported goods that might interfere with any clamorous domestic producer. Should we not consider these larger aspects of the tariff question in connection with the pending negotiations? We have proclaimed singlemindedness in tariff policy; and therein, as I have said, we are proceeding not unwisely. But does this necessarily mean complete disregard of other people? Even those who say most about holding aloof from European complications, say much also about the maintenance of friendly relations with all and the promotion of mutual good feeling. Now that we turn to a systematic policy of most-favoured-nation treatment, why not put into it some element of real favour and of genuine friendliness? It needs no acumen to discern that France does not stand alone in her feelings about our tariff rates. Other countries may make no moves such as she has made, but none the less they shrug their shoulders at the contrast between our courteous gestures and our stern realties. We are eager to export, and above all to export manufactured goods. Our Department of Commerce bends its energy to the utmost toward promoting their sales. But when others wish to send goods to us, we bend our energies to erecting barriers as high as we can devise. It *would be no bad outcome of the pending negotiations and debates if we were led to do something toward promoting beneficial trade and good relations not with France only, but with all the world?
We find in the concluding part of the speech of the Minister of Finance a true ideal of a tariff policy and trade relations of Canada with the countries of the world. From the budget there emanates a spirit of justice towards all classes of our country; it displays a spirit of fairness towards those who have invested with us considerable capital, from which the working classes may derive more benefit and better wages.
The farming classes must feel happy over the provisions of the budget, for they certainly
were taken care of; the Liberal party has always recognized that they should be protected, and at all times our policy has been: "for new and better markets."
Within the last few months, Conservative speakers have travelled across our province without success, criticizing our trade conventions with Australia and New Zealand. To please the farming class of this country, these conventions will end on October 12, 1930, when in due course, another convention will be negotiated between Canada and New Zealand. I trust that in this new treaty, provisions as advantageous as those of to-day will be included in so far as the automobiles, paper and puLpwood, are concerned.
We felt greatly satisfied, when, in the course of the present session, the various bills transferring to the Western provinces their natural resources, were adopted by the House. British Columbia also had its share in the transfer of lands, and the latter must now have more faith in the present administration of Canada which has been so generous towards it.
It was under the Government of Sir Wilfrid Laurier, then Prime Minister of Canada, that were created the western provinces, in 1905. This political Act, essentially liberal, gave them their autonomy, with the exception, however, of their lands and the administration of their natural resources.
In the year 1930, during the present session, the last of this 16th Parliament, we have witnessed with pleasure the transferring of these natural resources to the three western provinces with, besides, a readjustment of their indemnities. This generous act is to the credit of the present Prime Minister of Canada, the right hon. Mackenzie King, who has completed the work begun by Sir Wilfrid Laurier. Laurier created those provinces, King liberated them completely. Their status is, to-day, that of the Eastern provinces, and it seems to me that Confederation has grown and enjoys more glory since the enactment of the various measures returning to the Western provinces their natural resources.
To foresee, sir, the end of all the economic conflicts which may at certain moments cast shadows over our destinies, is an impossibility. Surely, in the course of one's life, we must shun pessimism as much as optimism; and it is thus that necessity always succeds in equalizing things. The world is revolving and will unceasingly revolve. The world carries on without troubling about, not even listening to our speeches and, little by little, we adapt ourselves to the whims and variations of our social and political surroundings. The difficulty, however, is to reach that stage without too many clashes, and especially, without giving way to the notions and visionary
2110	COMMONS
The Budget-Mr. Mercier (St. Henri)
schemes of idealists and dreamers. These people are always powerless in reorganizing our society and often have upset it on more than one occasion. Even practical measures are always harmful when, despising facts, their sponsors insist on foolishly changing the course of events. Nobody can experiment on society as on the material of a laboratory. History teaches us too well the confusion resulting from the social errors of certain European nations.
Canada is not given to new ideas and we are pleased to acknowledge that the Liberal party walks, to-day, in the footsteps of the sound traditions which it has always endorsed and which are a legacy of the political will of Sir Wilfrid Laurier. It is not always wise for a member to go back to the deluge when he rises in the house to deliver a speech, but it is sometimes necessary to examine the political past of a party as that of the Liberal party to inspire oneself by the deeds of that period which brought abundance to the country, and to note with pleasure that they are always the source of prosperity and a guide for the present time, even in 1930, by applying the same principles.
If we glance over the political history of our country, we find that at the general election of 1878, the Liberal government under Mackenzie was defeated, and, during eighteen years, the Liberal party, always courageous and chivalrous, followed the barren path of the loyal opposition of Her Majesty; but at sunrise one bright morning of June, 1896, Canada again welcomed the advent to power of the Liberal party, having as its leader Sir Wilfrid Laurier. On July 13, 1896, he was sworn in as Prime Minister and took charge, with his ministers, of the destinies of Canada.
The old members of this house no doubt recall the crisis Canada experienced in 1896. Unrest was general, industries were threatened, smoke-stacks appeared like giants but lifeless, agriculture without markets, prices varied like passing clouds, the financial situation uncertain, bankruptcies, sales by sheriff numerous; all citizens faced a gloomy future. It was urgent for the Laurier government to get down immediately to work so as to stimulate business, inspire confidence in all hearts and bring back a new era of prosperity. All had to be done over again, exactly as when the King government assumed power on December 6, 1921. Laurier realized then that the situation was a difficult one, but as he had secured the people's confidence through the program he had submitted to them, he endeavoured to carry it out, notably in the west, of which he knew the needs. The western provinces, known as the Prairies, have

become since a few years, a centre of attraction; a subject of talk both in the private and political life of this country.
The birth of the Progressive politcal party, in 1921, was a matter of discussion in Canada as well as abroad. This Progressive party, which time, that great reformer, has remodelled and drawn nearer to the Liberal party in most of its ideals, always remains opposed to the Conservative party's policy.
That part of Canada, therefore, interests at present all the citizens of the Dominion. In a word, to speak of the western provinces and their numerous problems, is, as we see it, to live in the present.
The vast territory that we generally designate as the Canadian west, extends from the province of Ontario to the Pacific ocean. Its total area covers 1,114,672 square miles. Its vastness is such that, even on the geographical map of the Dominion, one cannot truly realize its size and the numerous resources it contains.
We note with pleasure that the western provinces contribute as much as Quebec, Ontario and the Maritime provinces, to make of our Canada, a great and prosperous country, enjoying the most complete social harmony, drawing the admiration of the whole of Europe and being the pride of the British Empire. But, sir, you may say, the Canadian west had a beginning, it was not always what it is to-day: prosperous and forecasting a greater future. It must have grown through the impulse of a wise administration, that government no doubt gave it its start, favoured it by its measures and legislation, finally, became aware that the west would, one day, be the granary of the empire.
You are quite right, sir, the west was opened up to colonization, farming and industry, like all other regions. The great benefactor of the west, was Sir Wilfrid Laurier, the late leader, the soul still living of the Liberal party, whose legislative acts, prudence and sincerity are still the best guide of his worthy successor, the present Prime Minister, the Right Hon. William Lyon Mackenzie King, our leader.
The political administration of that great statesman, was the foundation stone of the development of the west. The first factor which brought progress to the west was the adoption of the preferential tariff between England and Canada, and the trip overseas of Sir Wilfrid Laurier. The latter spoke so admirably and with such frankness of his country, with such eloquence of all the advantages that it offered to the immigrants, the capitalist and manufacturer, that Canada

The Budget-Mr. Mercier (St. Henri)
appeared more beautiful to the eyes of nations and especially to the English people. A brilliant future awaited those who would come to settle on the western plains. Then followed a sound immigration policy.
During the fifteen years which followed 1896, nearly 10,000 miles of railway were constructed, that is an average of two miles per day. Two transcontinentals were built, numerous branch lines were added, terminal stations were built and other branch lines in connection with shipping. Following this expansion, our country grew, and took an important place in the world. That was the doings of the Liberal party and its policy and history now repeats itself, in 1930, after more than 8 years of wise administration by the King government.
We judge of the administrative success of a country by the same standard as that of a business firm, its balance-sheet and its surplus. After two years of sound administration our government entered into a new period of surpluses. Let us quote a few figures.
For the fiscal year 1924-25, a surplus of $300,000.
For the fiscal year 1925-26, a surplus of
28,000,000.
For the fiscal year 1926-27, a surplus of $42,000,000.
For the fiscal year 1927-28, a surplus of $54,000,000.
But from this total $16,000,000 must be deducted for soldiers' lands and seeds, leaving a surplus of $38,000,000.
For the fiscal year 1928-29, a surplus of $69,782,000.
For the present fiscal year of 1929-30, a surplus of $44,507,000.
We have also reduced taxes. First, in connection with the Income tax, an innovation of the Borden government.
In 1922.-Exemption for each child, from S200 to $300.
In 1924.-Additional exemption for each child, from $300 to $500;
In 1926.-Exemption limit of the Income tax, from $2,000 to $3,000 in the case of married persons or with dependents and from $1,000 to $1,500 in other cases; moreover the tax payers whose income is $5,000 or less have but 2 per cent instead of 4 per cent to pay on taxable incomes. The income tax of large companies is reduced from 10 per cent to 9 per cent;
In 1927.-The rates of the income tax of 1926 are reduced by 10 per cent;
In 1928.-Another reduction of 10 per cent;
In 1929.-A new reduction on income tax in favour of certain companies and exemption
to the amount of $500 for those who have families to support.
The customs tariff has been changed as follows, and allow me, Sir, to quote but the most important changes:
In 1922.-Decrease of duties on sugar, farming implements, cloth, boots and shoes and certain other articles;
In 1923.-The duties on imported goods under the British preferential tariff schedule are reduced by 10 per cent each time that the regular rates of duty exceed 15 per cent and that the goods are imported directly to a Canadian port.
Decrease of duties on sugar;
In 1924.-Decrease of duties on instruments of production utilized in farming, mining, forest and fish industries;
In 1925.-Decrease of duties on well boring machinery and on motors for fishing vessels;
In 1926.-Decrease of duties on sugar, automobiles, tin, etc.
In 1928.-Numerous tariff changes inscribed at ch. 17 of the 1928 statutes;
In 1929.-Abrogation of the regulation which taxed cablegrams and other telegraph messages.
Abrogations also of the regulation which taxed railway tickets and other tickets of the same nature.
As to postage rates, the Liberals reestablished the postal rate of 2 cents, from July 1, 1926; in 1929, the same rate was established for all parts of the British Empire.
Stamp tax on cheques.
In 1922.-Tax of 2 cents levied on all cheques to the amount of $50 and a maximum tax of $2 on cheques of $5000 or over.
In 1923.-Reduction of this tax to $1.
In 1925.-Suppression of the tax on cheques to an amount not exceeding $5.
In 1927.-Decrease of the tax to a uniform rate of 2 cents on cheques over $10.
Tax on receipts.
In 1926.-Established in 1922, abolished in 1926.
It is therefore well proven that the King government never ceased from year to year to decrease the taxes. This did not hinder it from lowering considerably the national debt, as shown in the budget of the hon. Minister of Finance (Mr. Dunning).
Canada has made great strides, under the administration as regards to diplomatic relations with Europe and our neighbour the U. S. The High Commissioner at London and our legations at Paris, Washington and in Japan are the watchful sentries of Canadian interests and a formal act of good will towards the European countries and the neighbouring republic.
2112	COMMONS
The Budget-Mr. Mercier (St. Henri)
Our government developed the Canadian ports and has carried on extensive works to meet the needs of the country and to facilitate shipping from foreign countries which export goods to us.
The ports of Montreal, Quebec, Chicoutimi, Sorel, Halifax, St. John (N.B.), and Vancouver are proofs of the money expended by the government of the Right Hon. Mackenzie King, in the greatest interest of Canada.
We equally note with pleasure that by the act 19-20 George V Ch. 12, sanctioned June 14, 1929, a sum of $51,409,000 was voted to the Canadian National Railways of Canada, for certain terminal stations with grade seperation at crossings and other works in the city of Montreal and its surroundings.
In the schedule of this act at paragraphs (d) and (e) it is sought and desired that grade separation by means of elevated or depressed or under ground tracks, or streets, as may be determined on the existing railway between Bonaventure and Turcot and connection to the viaduct referred to in paragraph (b); and grade separation by means of elevated or depressed or under ground tracks, or streets as may be determined between St. Henri and Point St. Charles.
We hope that if it is possible to do away with these level crossings, by means of underground passages, the government will notify accordingly the National Railway Company, moreover, if the executive council of the city of Montreal make reasonable and just suggestions to alter these plans, they should be given the highest consideration and be accepted in the interest of the city of Montreal, and especially the muncipal wards of St. Henri, Sainte-Cunegonde, St. Joseph, St. Gabriel and Ste. Anne.
I feel confident, as representative of the riding of St. Henri, that no pains will be spared to carry out the work at this terminal station, so as to satisfy the just claims of the metropolis of Canada.
In closing my remarks, sir, allow me to note with pleasure, that during the war, that is from 1914 to 1918, and since, Canadian paper money was not redeemable in gold; but since July 1, 1926, it has become so, and that is the strongest proof of Canada's excellent standing in the eyes of its citizens and of the whole world.
On motion of Mr. Ryckman the debate was adjourned.


PENSIONS AND SOLDIERS' PROBLEMS
[Stage Direction]
Mr. C. G. POWER (Quebec South) presented the fifth and sixth reports of the special committee on pensions and returned soldiers' problems.
On motion of Mr. Lapointe the house adjourned at 10.55 p.m.
Thursday, May 15, 1930.