[Stage Direction]
Second report of the special committee on the Civil Service Act-Mr. Bowman (for Mr. Lawson).

Mr. MICHAEL LUCHKOVICH (Vegre-ville):: Mr. Speaker, I should like to correct an erroneous report which appeared in the May 10 issue of the Ottawa Citizen. This is in connection with some remarks I made as to the stand of the Hon. J. E. Brownlee, premier of Alberta, in connection with the marketing bill now before the house. The Ottawa Citizen reports me as follows:
Six provinces have passed companion legislation, announced the agricultural minister, surmounting the constitutional problems arising out of divided authority over trade. Three provinces, Prince Edward Island, Nova Scotia and Alberta have not made known their positions. It was stated by Michael Luchkovich, United Farmer member for Vegreville, that at least one premier, J. E. Brownlee, of Alberta, was opposed to the bill.
This report is wrong in two instances. In the first place, the Minister of Agriculture did not include Alberta in the list of provinces that had not passed enabling legislation.
He is reported on page 2940 of Hansard of May 9 as follows:
We have not received copies of legislation passed, nor have we any definite information from Prince Edward Island, Nova Scotia and Manitoba.
In the second place, I never said that Mr. Brownlee was opposed to the bill. I am reported on page 2i940 of Hansard of May 9 as follows:
I understand that at least one premier has put himself on record as being in favour of the principle of the bill. I refer to Premier Brownlee of Alberta.
I based my remarks on an interview which Mr. Brownlee had had with the Toronto Farmers' Sun, wherein he is reported as having said:
The principles of the Weir bill are directly in line with the objectives of the U.F.A.; the measure has the full support of my government.


Mr. SPEAKER:: Order.

Provincial Financing in London


Michael Luchkovich: I should like to know how a newspaper which so often hits the nail on the head could have strayed so far away from the truth in this case.


Pierre Édouard Blondin: Order. What is the question the hon. member is purporting to raise?


Michael Luchkovich: This is an incorrect report in a newspaper.


Pierre Édouard Blondin: The matter is entirely out of order.


Mr. CASGRAIN:: Take it out of Hansard.


Mr. MACKENZIE (Vancouver):: Expunge.



MARKETING ACT

Hon. ROBERT WEIR (Minister of Agriculture) :: Mr. Speaker, I desire to lay on the table of the house copies of the proposed amendments to Bill No. 51, and also copies of provincial bills and acts passed in 1933 and 1934 relating to the marketing of natural products.



PROVINCIAL FINANCING IN LONDON

[Stage Direction]
On the orders of the day:
Hon. IAN MACKENZIE (Vancouver
Centre): Mr. Speaker, I should like to direct the attention of the Prime Minister (Mr. Bennett) to a question which I asked the other day of the Minister of Finance (Mr. Rhodes). This question which appears on page 2807 of Hansard is as follows:
I should like to ask the hon. Minister of Finance what is the policy in general of the federal government in regard to permitting any of the provincial governments to enter the British financial market for refunding purposes.
The reply of the Minister of Finance in part was as follows:
I shall be happy to direct the attention of my right hon. leader who is Minister of External Affairs to the question for any further answer which may be given on Monday.
I direct the attention of the Prime Minister to this matter.
Right Hon. R. B. BENNETT (Prime Minister) :: The question raised by the hon. gentleman is obviously one over which this government has no control. So far as I could ascertain at the time we made the last loan in London the tendency was not to permit provincial governments to make issues on the London market. The hon. gentleman knows quite well that that is not an open market and no issues can be made there unless the treasury has given its consent. The treasury at once accorded the Dominion of Canada

consent to make the loan of last fall. While I have no definite information, my conclusion, from what was said and has since been communicated to me by representatives of the provinces, is that it would be very difficult to secure consent for any provincial government to place a loan upon the British market. That is my information at the moment. The hon. gentleman understands, of course, that there is no finality about matters of this kind; they are subject to change, having regard to the conditions that exist at the time that application may be made. And of course-I want to make this perfectly clear-as my colleague suggests to me, the consent is not ours; it is the British Treasury's.


Ian Alistair Mackenzie: May I
ask the Prime Minister a supplementary question arising out of his reply? In the event of the British Treasury authorizing a provincial government to float a loan in England, is that government, in his opinion, required to obtain the permission of the federal government before approaching the British authorities?


Richard Bedford Bennett: So far as I recall, the
constitution of this country authorizes and permits the provinces to make loans anywhere they may desire, and on their own security. We have not endeavoured to exercise any authority over the provinces in connection with loans they may have made or may desire to make, but I think that what the hon. gentleman has in mind is that those who have money to lend have been very anxious that in some way, if money were lent to a province, they should tie the dominion up with it. Thus far they have not succeeded.


Hon. CHARLES STEWART (West Edmonton) :: My right hon. friend will remember that during the war period provincial governments could not negotiate loans except by consent of the federal government, and I am curious to know whether the same condition holds to-day with respect to the London market.


Richard Bedford Bennett: The hon. gentleman is
no doubt aware of the fact that the War Measures Act, passed by the parliament of Canada in the emergency of war, dispossessed the provinces of much of the jurisdiction which otherwise would have been solely theirs, and we have the authority of the highest court in the land that the dominion, because of the war emergency, had certain authorities which they no longer possess. This is an instance that very clearly illustrates the different conditions that prevail. The Defence of the Realm Act in England gave to the

The Budget

Mr. Bowman
executive powers to make laws with respect to almost any matter about which they felt they should make laws, and the War Measures Act in this country conferred upon this parliament, and this parliament in turn upon the executive, powers much larger than could possibly be possessed except in case of national emergency, as was pointed out in the Board of Commerce case, by Lord Haldane. I do not think there is the slightest likelihood-at least I hope there is no likelihood-of any such condition again prevailing. At the moment, with the repeal of the War Measures Act, that power disappears as far as the provinces are affected.



WHEAT AGREEMENT

[Stage Direction]
On the orders of the day:
Mr. S. W. JACOBS (Cartier):: The press for the past few days has been giving importance to news from England that the Argentine government has been making representations to the other wheat quota countries asking for a modification of the agreement, looking to an increase in their quota and naturally a decrease on the part of the other countries. Could the Prime Minister give us some official information on the question, and as to who is negotiating for the Canadian government.


Richard Bedford Bennett: At the conference that met at Rome a short time ago the Dominion oi Canada was represented by Colonel Vanier, secretary of the High Commissioner's office, from London, England, and Mr. McFarland of Canada. The meeting was adjourned to London, Mr. McFarland in the meantime returning to Canada. Discussions have continued between the various governments at London but no final conclusion has been arrived at. Any concessions that might be made to the Argentine by reason of the extraordinarily large crop they had would not involve Canada in the loss of any shipments that we might be able to make, for the quota we had for the year was a quota that was greater than we should be able to fill under existing probabilities. In any event it would be merely a loan of a part of our quota until next year, so that we would not lose anything if we made an adjustment with the Argentine. When the matter is concluded I shall be very glad to make a statement, but at the present moment the negotiations have not reached absolute finality.
74720-187J



THE BUDGET


[Stage Direction]
The house resumed from Monday, May 7, consideration of the motion of the Minister of Finance that Mr. Speaker do now leave the chair for the house to resolve itself again into committee of ways and means, and the amendment thereto of Mr. Ralston.
Mr. J. L. BOWMAN (Dauphin):: In the
few moments I have I purpose this afternoon discussing some problems which at the present time are uppermost in the minds of those whom I have the honour to represent in this house-debt, interest, credit, cost of farm implements and price spreads. In discussing the matter of debt I purpose dealing particularly with federal debt and individual debt, individual debt in so far as it affects the agriculturist.
It is with some diffidence that I enter upon the discussion of so important a question as federal debt. According to the budget speech of the Minister of Finance, our federal debt is represented by three items. First there is the direct debt, which amounts to $2,850,000,000; then there is our indirect debt, which is largely a railway debt, with some subsidies to harbour commissions, amounting to 8990,000,000 odd; and the further railway debt, not guaranteed, amounting to $290,000,000 or in all something over 84,130,000,000
First I desire to turn my attention to the indirect debt. In a recapitulation of the indirect debt, I find that this debt is payable, part of it in Canada, part in London, part in New York, part in Canada and London, Canada and New York, and a third part, about half of it, payable at the option of the holder in Canada, New York and London, The debt, one might say, is pretty well scattered all over the lot. I find, in examining that indirect debt, the interesting fact that at the present time about 33 per cent of it bears interest at 4 per cent and under and that, according to those in authority, only about 20 to 25 per cent is held in Canada, the rest being held mostly in England and in the United States. In looking at our direct debt I find that a little over 72 per cent is payable in Canada, a little more than three per cent in Canada and New York a little more than 10 per cent in New York and the balance of about 13J per cent in London. But what I find more interesting is that in so far as a calculation can be made about the same proportion of our direct debt as I have indicated is held in Canada, New York and London. About 70 to 75 per cent
The Budget-Mr. Bowman

of our direct debt is held in Canada, about 10 to 15 per cent in the United States and about 15 per cent in London. With respect to that portion of our direct debt that is payable in London an interesting fact is that all of it bears interest at rates of four per cent and under. For the time being my purpose is to direct the attention of the house only to a consideration of that portion of our direct debt which is held in Canada, bearing in mind as I have just stated that approximately three-quarters or 70-75 per cent is so held.
I also note this other interesting fact that within the next five months we have maturing of our direct and indirect debt no less than approximately $441,000,000. A large payment falls due on June 1 next and further payments up to November and in that period of five months, we have falling due the immense sum of $441,000,000 of which
8424,000,000 is direct debt. In view of the fact that these large sums of money must be refunded during the next five or six months and also that 70 to 75 per cent out of 85 to 90 per cent is held in Canada, we must put on a huge conversion loan during the summer. In stating that I am saying what seems to me to be quite obvious. When I suggest that this conversion loan will be a success I have in mind the fact that in 1931 when conditions were much worse than they are at present we asked for $250,000,000 and -we actually had converted something over ;$634,000,000, reducing interest charges at that lime from five and a half per cent to four and [DOT]one half per cent. The next loan we made result-ted in a further reduction of interest to four per cent and during last March we were successful in placing short-term loans at 2-41 and 2-71 per cent. This indicates that from 1931 to the present time moneys have actually been loaned to the government at much lower interest rates than prevailed some three or four years ago. The loan that was placed last October has been selling recently to net the lender 3-77 per cent.
I would also point to the fact, which I think is unquestioned, that in this country the sentiment is very strongly in favour of lower rates of interest and consequently of a conversion on as large a scale as possible. I believe holders of bonds bearing interest at five or five and a half per cent realize that the rate should be lowered during these times. It seems to me that during the perilous period through which we have passed those who have been receiving five and five and a half per cent should consider it a privilege to be able to serve Canada at this time by converting those loans into bonds that would

bear a much lower rate of interest, say three and a half to four per cent. I would say further that any loss that might be sustained by a conversion of this kind would be more than counterbalanced by the speeding up of business, by the creation of better feeling in Canada, and the economic life of the country would be given an impetus that would enable those who were fortunate enough to hold bonds at a higher rate to be compensated for any loss they might suffer by reason of converting them to a lower rate. I am not unmindful of the fact that many bonds that have been issued have bearer coupons attached and there is a possibility, if a huge conversion loan were put on, that some holders- and I believe they would constitute a very small percentage

might be so unpatriotic as to send those coupons abroad in order that they might be collected in New York or London at the higher rate of interest. I am also not unmindful of the fact that this government has issued certain tax-free bonds.


Richard Bedford Bennett: Not this governmentthis country.


James Langstaff Bowman: Quite so. A previous
government has issued tax-free bonds. In looking over the record I find one issue of about $89,000,000 at five per cent which falls due on March 1, 1937, a second issue of some $236,000,000 at five and a half per cent which falls due on December 1, 1937. May I call the attention of the house to the fact that as regards the five per cent bonds, on March 1 next eighteen out of twenty payments at five per cent will have been made, and if the holders of those bonds convert them to, say, three and a half per cent, and if we presume that they held the bonds from the start, they would have realized during the whole of the twenty years an average of 4-85 per cent, which after all, is not a bad rate of interest on government-guaranteed bonds.
May I also point out with respect to the five and a half per cent issue to which I have referred, amounting to some $236,000,000, that on December 1 next seventeen full payments of interest at five and a half per cent will have been made. If the holders of those bonds found that it was to their advantage and to the advantage of Canada that they be converted into bonds bearing interest at the rate of 3i per cent, and they were so converted, the average rate for the twenty years would be 5-20 per cent; not a bad rate of interest after all for federal bonds.
It had been suggested to me in discussing this matter that if we asked for only a con-

The Budget-Mr. Bowman
version of those bonds held by Canadians we would be showing some discrimination against our own people. Possibly so. But after all, who should come to the rescue of this country if not the Canadian himself? Moreover, might I point out that if by this conversion benefit results to Canada through the saving, through lower taxation, through speeding up the business life of the country, who would reap that benefit but the Canadian, who had converted? It is not necessary for me to point out what the benefit of successful refunding would be. We would have a saving of course, the amount of which would depend on the rate of interest at which the government of the day felt the conversion should be floated and the amount converted. If the conversion loan were successful, and I have already pointed out that in times much worse than the present we succeeded in the conversion of $634,000,000, if a conversion were made of even $1,000,000,000 or $1,500,000,000 of these bonds, the saving would be very substantial. It would result in a better feeling all round. It could not then be said that the producer, the wage earner and the business man alone had taken the loss, but it would then be made clear that the bondholders had been prepared to take their share. I am satisfied in my own mind, if I am any judge at all of the feeling of the people, that such a conversion loan could be made a remarkable success. The people are for it. We have at the present time as leader of the government in this country a man who has safely piloted the ship of state through the storm of the last four years. No man in our time is more familiar with financial transactions of the magnitude such as I am discussing. With his resourcefulness, his courage, his determination, the putting through of a huge patriotic conversion loan would be I am satisfied a tremendous success. '
I have not said anything about compulsion whatsoever. Let us attempt to put this across, and after we have done so, look at the resulting picture and see what then is necessary to be done. If compulsion is then necessary let us have it, although that would be the last thing I would advocate. But after all the welfare of the state comes before that of the individual.
I have said nothing with respect to those bonds which are held abroad. I would not advocate anything with respect to them. Our credit is high in New York and London; we should keep it so. Refunding from time to time will be necessary in order to take up our obligations there. Money will be needed in
Canada for development if we are to maintain the high standard of living to which we have been accustomed in the past. So I make no suggestion whatever as to the conversion of those bonds which are held abroad. It does seem to me that at the present time our credit as a nation stands very high both in the United States and London. I am reminded of the $73,000,000 loan which went across so successfully in London. I am reminded of the fact, to which I have already drawn the attention of the house, that not one dollar of the $384,000,000 which is payable in London bears interest at a rate higher than 4 per cent. Money is plentiful over there, the rate of exchange is favourable and sentiment is strong for Canada. The prestige of this government, largely because of the prestige of its leader is high, not only in London but throughout Europe. So it seems to me not unreasonable to suppose that in the very near future money from London should be made available to Canada for current requirements at an interest rate approximating 3i to 4 per cent.
I turn to say a passing word with respect to interest on bank deposits. I understand that it is the firm opinion of the government that interest on bank deposits should be further reduced from 2J to 2 per cent; but that some difficulty lies in the way because of the fact that trust companies, which accept deposits, are under provincial jurisdiction. It does seem to me that the provinces should be prepared to cooperate with the federal government in making a further reduction in interest charges. Everything possible should be done to get more money into circulation. I shall probably refer to that again in a moment in another connection.
Then may I say a passing word with respect to individual indebtedness. I refer particularly to the indebtedness of the agriculturist, as I represent a rural community. Speaking of debts and interest I am reminded of the presentation made by the Prime Minister at the imperial conference held in Ottawa in 1932. It might be well to bear in mind that at that time the Prime Minister of Canada stressed debts, interest, credit and prices. Speaking of interest he stated on that occasion:
Interest charges represent the most important of the fixed or semi-rigid elements in our cost structure. If prices remain on their present level, such charges will constitute an intolerable or almost intolerable burden in many cases. Even if it can be borne, the fortuitous gain to the creditor of 40 to 48 per cent in general purchasing power above what he contracted for appears to be a grave injustice.
The Budget-Mr. Bowman

That was in 1932. Those same conditions exist to a considerable extent to-day, although there has been an improvement in the prices of farm products. As most members representing rural constituencies are aware, at the time when high prices of grain were prevalent in 1920, 1921 and thereabouts, farmers became indebted for very large sums of money by purchasing lands at prices above their real value and by mortgaging on a basis for which there was really little excuse, except that we are all human and we were looking to the. future in the light of the prosperity then existing. Those mortgages and debts still exist in many quarters, except where readjustments have taken place or where there have been foreclosures by the mortgage companies. Some of these companies have been fair, but many have not; the latter have insisted on the strict performance of the contract and upon payment of principal and interest in full no matter how impossible of performance that might be. As a result we have had in many cases an impossible burden of debt and interest piled upon the backs of many of the farmers who borrowed money or purchased land during the period to which I have referred. The government have indicated that they propose to bring in a measure of relief. In view of what has been said in this regard it is not for me to suggest what should be done, but may I say that those who bear this burden should be given some opportunity to compromise with their creditors so that they may make a fresh start and continue to be useful citizens adding new wealth to the country.
Now I should like to refer for a moment to the matter of credit. I represent a constituency in which, fortunately, we have had very good crops; in fact there have been no crop failures during the last twenty or twenty-five years. Last year we had the best crop we have had since 1915, so in some quarters things are not so had as they are in other parts of the west. There is one matter, however, in connection with which I think the farmer has real cause for complaint; I refer to the fact that he has not been able to obtain money to finance his operations. The bankers have practically ceased to loan money to the farmers in Manitoba, and it has become absolutely impossible to secure money from private sources. Not many years ago most lawyers practising in the smaller country towns had a certain amount of private funds to loan, but that day has passed. The mortgage companies have ceased to operate; no money can be borrowed from them. The banks have absolutely refused in, I should say, seventy-five

to ninety per cent of the cases to loan money to farmers who really should get loans. I particularly drew the attention of one or two of the bankers who appeared before the banking and commerce committee to the fact that the banks would not make advances for the purchase of binder twine, without which it is impossible for the farmer to harvest his crop. We were told in that committee that if the farmer was one to whom credit should be extended he would get it, but I am sorry to say that this has not been my experience in the northern part of Manitoba. The farmer has not been able to get money for his binder twine; he has not been able to get money to buy seed or to purchase other things needed to carry him through the season until his crop is harvested,-and that condition exists to-day. Surely there should be some means at hand whereby the farmer-I do not mean the farmer who cannot pay his debts, because there are such-who is entitled to and deserves reasonable credit should be able to obtain that credit in order to carry on his season's operations. I am quite ready to admit that I would not be prepared to suggest that the government should start a banking institution; we have had rather a weird experience in Manitoba in regard to rural credit and farm loans, but pressure should be brought to bear upon the banks and they should be told plainly that in a district such as the one I represent, which of course I think is the best constituency in Canada-


Some hon. MEMBERS:: Order.


James Langstaff Bowman: There may be those who differ, but I believe the banks should be told that in a farming constituency of that kind they should loan the farmers a reasonable amount of money in order to meet their urgent needs and to enable them to carry on until their crops are harvested.
There is another matter of tremendous importance to the agriculturists of the west; that is the cost of farm implements and machinery. Almost every member representing a rural constituency in the west will agree, I am sure, that the old binders, plows, waggons, mowers, and so on are on their last legs, because money has not been available for the purchase of new machinery, and even if it has been available the prices have been so high that it has been practically impossible for the farmer to accumulate enough money to buy the machinery he needs. I can well remember following a binder in my youth-and I could follow one then-when that machine sold for about S125. Then the price went up

The Budget-Mr. Bowman
to S135, and I remember that when it reached $150 to $175 the farmers thought they were paying a terrible price,-to-day, they pay about $275.


Some hon. MEMBERS:: That is the tariff.


James Langstaff Bowman: The tariff has absolutely nothing to do with it. In the United States you will find that farm implements and machinery are at practically the same level, and I would remind those who just interrupted that under the previous administration the prices of farm implements and machinery were from fifteen to twenty per cent higher than they are at the present time. I submit that the manufacturer of farm implements and machinery in this country should be told that if he cannot sell machinery at lower prices we will have another price spreads inquiry and find out why he cannot do so.


Ian Alistair Mackenzie: Come
over here.


James Langstaff Bowman: There is no need to go over there; I have noticed that all the inquiries that have been held have been started by this government.
The next question which I should like to discuss for a moment is the question of prices. In practically every rural community there is the idea that the prices the agriculturist has to pay are out of all reason when compared with the prices which he receives for his products, and when we consider what has taken place in the Stevens committee in the last few days it would seem that the primary producer is pretty well justified for some of the views he has held. May I once more refer to the presentation, bearing on the question of prices, made by the Prime Minister of Canada at the Ottawa conference of 1932:
Prices of raw materials here as elsewhere, have fallen much more rapidly than wholesale prices generally. Thus, prices of raw and partly manufactured materials have fallen 47-3 per cent since August 1929, whereas prices of fully and chiefly manufactured articles have declined only 26'0 per cent. Farm products have been particularly hard hit, the decline averaging 56-4 per cent. Wheat, the staple of the western farmer, has fallen from an average price of $1.50 per bushel in 1926 to 55 cents in June, 1932, a drop of 63-3 per cent, giving an index of 36-7 as compared with one of 70 for manufactured goods at wholesale.
Then, farther on the Prime Minister said:
I have said enough to indicate the importance which Canada is bound to place upon the solution of the problems of price instability and of unstable exchanges. In particular we believe that it is imperatively necessary to put a stop to the persistent decline in commodity prices which is paralyzing private enterprise, choking off international trade,
multiplying unemployment and social distress, and menacing the stability of our present social and economic order. We also believe it urgently desirable to encourage in every way that can be accepted as sound and practicable, a rise in prices to a height more in keeping with the fixed or highly rigid cost elements in the existing economic structures of most countries.
I say that this government has done something in the matter of price spreads and the increase of prices of primary products. Of course, the basis for the increase during the past two years in the prices of many raw products in Canada is the Ottawa agreements. I sometimes wonder where Canada would be to-day if the Ottawa agreements had not been entered into.
Perhaps it might not be amiss if we were to review one or two of the provisions in these agreements relating to hogs, cattle, lumber, copper and so on. In preparing these remarks I was interested in some statements made by the leader of the opposition (Mr. Mackenzie King) at the time the agreements were under discussion, and to compare what he then stated with what has since happened. First of all I should like to refer to hogs and hog products. At page 276 of Hansard for the year 1932-33 the leader of the opposition is reported as follows:
I come now to article 6, and I ask hon. members to see what they can make out of it in the way of definiteness. One of the faults of this whole agreement is the obscurity of the language in which it is couched, the uncertainty as to the meaning of the words and as to what their interpretation and application will be.
We find the words "obscurity" "uncertainty" and "application." Well, there is certainly no uncertainty about the agreements now. We know what the application has since been. We were told about that in the Stevens committee. Mr. McLean of the Canada Packers Limited, giving evidence before that committee stated that the increase in the price of hogs, which he attributed wholly to the Ottawa agreements, meant during the past year an additional $361)00,000 in the pockets of the farmers of Canada. Is there any obscurity or uncertainty about that? While we in Canada were receiving in the neighbourhood of eight, nine or ten cents for our hogs they were selling on the Chicago market, the place where we used to sell before the right hon. gentleman opposite was in power, for from four cents to four and a half cents per pound.


Mr. VALLANCE:: What did they sell at last December?
The Budget-Mr. Raymond


James Langstaff Bowman: Yes, what was the price last December?-but the situation has improved substantially since then, and so long as the agreements remain in force it will continue to improve. If these agreements are cancelled, as the right hon. leader of the opposition has promised should he attain office, we will see what will happen. I venture to say that the leader of the opposition will not go to the west and state that if he and his party are returned to power they will cancel the agreements made in 1932. I challenge him or any western member to do so.


John Vallance: Bring on the election.


James Langstaff Bowman: The election may come on plenty soon enough for the hon. member who has just spoken. I notice that the hon. member for Vancouver Centre (Mr. Mackenzie) has been laughing at my remarks about the agreements. Does he remember how hon. members from British Columbia stood in this house and said that the ten per cent preference on lumber would not help the lumber men of that province? Will they go back to their constituencies to-morrow and make the same statement? I challenge them to do so.


Mr. MAXIME RAYMOND (Beauharnois) (Translation):: Mr. Speaker, I cannot find
a more appropriate expression to describe the four last years of this government's administration than that used by the hon. Minister of Finance (Mr. Rhodes), in the course of his budget statement. After a review of the present situation, and seeking encouragement in statistics-which a great British statesman, Disraeli, looked upon as one of the three gradations of lying-the minister praised the fortitude which the Canadian people had displayed "throughout their vicissitudes and sacrifices of these last years."
Years of sacrifices! Is truly what describes our existence under the present regime. Yet, the right hon. Prime Minister (Mr. Bennett) had promised happiness to all, in 1930.
If we had only to deal with these inconsiderate pledges, but, since then, how many optimistic statements have been made in parliament and elsewhere? Each year the speech from the throne informed us that business was improving and prosperity was around the corner and, each year, the budget statement revealed a fearful increase in our national debt, a deficit which has become chronic in our current transactions, new liabilities incurred and additional charges; in brief, a bankrupt balance sheet.
At a period, sir, when the people have more need to repose confidence in their ad-

ministrators, they require more than broken promises or words of hope without any foundation. They require acts to restore public confidence and safety, and this government has proved incapable of accomplishing them.
The hon. member for Shelburne-Yarmouth (Mr. Ralston) and others who followed him in this debate, have made an analysis and detailed criticism of the budget. I simply wish to make a few observations and point out to the house the danger and disastrous results of the policy inaugurated and followed for the last four years, which consists in spending, and pledging Canada's credit, disproportionately to her means, without first obtaining the sanction of parliament, but simply through orders in council and, at times, under the sole signature of the Prime Minister; moreover, the danger and the consequences of a policy which favours large financial interests both local and foreign, neglects or refuses to protect the working class against every kind of exploitation, or to help the farmers and which, after, unjustly throws the burden of taxes of a ruinous administration on those who are least capable of supporting them. I intend to submit a few facts and draw from them certain conclusions which I deem of general interest.
From the very outset of his administration, the Prime Minister showed special solicitude for an old friend of his, the Canadian Pacific Railway, a solicitude which manifested itself in gifts, loans without interest and finally a guarantee on a $60.000,000 loan.
In October, 1930, shortly after the election -it was perhaps the right time to show gratitude-the government, on the authority of the Relief Act, made a present to the Canadian Pacific Railway of $863,550 and, the following year, of an additional sum of $209,196, making a total of $1,072,746, as recorded in the statement furnished by the hon. Minister of Labour, dated March 22, 1934. Yet this company was neither in difficulties or hard pressed, since in 1930, according to its balance sheet, it realized, all current and fixed charges paid, a net profit of $38,381,000, and distributed among its stockholders dividends amounting to about $38,000,000, of which $32,000,000 went to foreign holders, the preference stock being held in a proportion of about 86 per cent by foreigners.
We had no funds to carry out urgent public works, as for instance, repairs to wharves, or to continue the work begun on the Canadian National, in Montreal, which would have afforded jobs to thousands of workmen and

The Budget-Mr. Raymond
created a national wealth, but we had funds to make gifts to a friend, the Canadian Pacific Railway, and thus increase its wealth.
Yet the dividends distributed abroad by this company did not increase by one cent the purchasing power in Canada. So much for gifts.
Let us examine loans without interest. In 1932 and 1933, the government, always under the authority of the Relief Act, the blank cheque, and acting by simple order in council, loaned to the poor friend, the Canadian Pacific Railway-the distributor of magnificent dividends to foreign holders-a total amount of S2,447,222, without interest, and for an almost indefinite period. All this time, the poor Canadian Pacific Railway was accumulating, as an investment, shares of the Consolidated Mining and Smelting Company, an enterprise foreign to all public services.
How many industries, more humble it is true, which had never paid out large dividends, but which contributed to the livelihood of the entire population of a district where their factories were located, had to close their doors, at that time, with the results which are known. A small loan without interest, reimbursable almost at will, would have steadied and permitted them to carry on their beneficial work. How many farmers would have been saved from ruin with a similar loan. These small industries, these farmers set again on their legs would have proved a purchasing power, kept up our commerce and maintained the operations of our railways, without any other assistance. Why have railways and subsidize them if we have no freight to carry?
Let us now examine the magnificent gift of $60,000,000 made, in 1933, to this same friend, the Canadian Pacific Railway under the form of a guarantee. The Canadian Pacific Railway had borrowed $20,000,000 from the Bank of Montreal, in 1931, and $10,000,000 from the Chase National Bank Loan, in 1932, making a total of $30,000,000, maturing in 1933. Moreover, the company had notes falling due in April, May, June and November, 1934, for a total amount of $17,519,000. It was to reimburse, among others, these amounts that the government guaranteed a loan of $60,000,000 made by the banks to the Canadian Pacific Railway.
Let us investigate to what purpose served these loans, since the Prime Minister thought it too delicate a matter to inquire.
In 1931, the company borrowed $20,000,000 from the Bank of Montreal. According to its financial statement for the same year, this
company paid in dividends, on both preferred and common stocks, held, in a ratio of 85.64 per cent by foreigners, $26,190,030, while its net available returns for dividends were but $13,834,471; namely: the company was short about $13,000,000 to cover the dividend paid. Moreover, it acquired 15,858 new shares of the Consolidated Mining and Smelting Company. Note to what purpose had served the $20,000,000 borrowed in 1931 and reimbursed to the Bank of Montreal in 1933, thanks to the government guarantee.
The loan of $10,000,000 from the Chase National Bank Loan, in 1932, served the same purpose. During 1932, although its net returns applicable to dividends amounted to only $257,880, the company paid on its stock held by foreigners in a ratio of about 86 per cent, dividends amounting to $9,677,776, and it again acquired 14,553 new shares of Consolidated Mining and Smelting Company of a market value of about $1,500,000. Thus the $10,000,000 borrowed in 1932 and reimbursed in 1933 to the Chase National Bank Loan, thanks to the government's guarantee, had again served the same purpose, namely: to pay dividends to foreigners and facilitate the acquiring of stock in the Consolidated Mining and Smelting Company.
We now come to May 30, 1933, three days after the prorogation of parliament, when following a short interview between Mr. Beatty, Sir Charles Gordon and the Prime Minister, the latter, a few hours later, under his sole signature, pledged the country's credit to the extent of $60,000,000, so as to reimburse these two loans amounting to $30,000,000, of which the bank was not then requesting payment- note well-as well as another amount of $17,519,000 maturing only in one year-again note-and this, under the plea of urgency and by virtue of "the Peace, Order and Good Government Act."


Some hon. MEMBERS:: Hear, hear I
An hon. MEMBER (Translation): Shame 1


Mr. RAYMOND (Translation):: Note that during all that time the company was accumulating stock of the Consolidated Mining and Smelting Company-30,913 shares, in 1933 -bringing its investment from 305,587 to 336,500 shares representing at the market price, in May, 1933, an amount of about $40,000,000.
To summarize, the loan of $60,000,000 to the Canadian Pacific Railway, of which the guarantee by the government was neither urgent nor necessary, has served to reimburse a total amount of $30,000,000 which had been

The Budget-Mr. Raymond
used to pay dividends to foreign shareholders and speculate with the stock of the Consolidated Mining and Smelting Company.
These favours to a private company constitutes one of the most shocking abuses of the arbitrary and discretionary power which the government had parliament grant to it. This is the kind of abuse of power which tends to rouse the people who toil and patiently bear up with the sacrifices imposed on them for the last four years, and which have the effect of discouraging and engendering distrust.
Think of the farmer's plight who, during that time, not being able to meet his liabilities, was forced to abandon his land, which he had always farmed and which afforded a livelihood to his family. There are thousands of such persons who might have been rescued from ruin, if the government had simply pledged the credit of Canada for an even less amount than $60,000,000.
An hon. MEMBER (Translation): Hear, hear!


Donat Raymond: The government boasts of borrowing at a reduced rate of interest. Why does it not reduce the rate of interest and improve the conditions of loans to farmers by virtue of the Canadian Earm Loan Act? Millions of dollars are expended to provide for those who have deserted the land, thus increasing the number of unemployed in large cities and becoming a heavy drag on the financial resources of municipalities, dominion and provincial governments. It is high time to think of applying some funds to retain on the farms those who are still there, and who instead of being a passive asset would continue to be an active one for the state. Agriculture supplies 75 per cent of our requirements. The countryside supplies water free, a home, wood as a fuel, food and even some of the clothes which are derived from the transformed agricultural products. Those are the main necessaries in life. It also contributes to increase the purchasing power and helps all the branches of economic activities which owe to agriculture the reason itself of their existence.
All agree that what is lacking to activate business is the purchasing power and that it must first come from the farming class. The farmer creates the demand. The farmer does not depend on the merchant for a livelihood but it is the latter who depends on the farmer. Cultivate the soil and factories will open their doors, workmen will find work and railways will be kept busy. Even if railways build new lines or ears, they will serve no purpose,

as long as traffic is lacking. Although agriculture should receive our first consideration, it is the most neglected of occupations.
Money or credit seems scarce to help our own people, but the government finds some for foreign shareholders of the Canadian Pacific railway or for the government of Newfoundland.
Again this guarantee of $625,000 in favour of a foreign government is an abuse of power. We thus decrease, for the benefit of others, our boiTowing power which is not unlimited, and the day will come when our borrowing power will become restricted and less advantageous.
I wish to point out another example of abuse of power which will react considerably on the farming class. It is the tax exemption enjoyed by the Beauharnois Light, Heat and Power, ever since it has been under the control of the Montreal Light, Heat and Power. The Beauharnois canal was, up to September 1932, the property of the company which had built it, and it was utilized to develop electric power. The government, on the other hand, had the right to use it for navigation pur. poses. As proprietor, the Beauharnois Light, Heat and Power had to pay the various municipalities its quota of taxes, because of the lands -which it had purchased and other properties it owned. Since the control has passed into the hands of the Montreal Light, Heat and Power, the government has become very obliging. It had the property of the canal transferred to it gratuitously, including bridges and certain adjacent lands, the company having -the same rights to utilize them in the operation of its water power plant, exactly as before-that is all it requires. The difference, however, is that government properties being exempt of taxes by virtue of the Municipalities Act, the company, while having practically the same rights, is now dispensed from paying taxes to the various municipalities.
The bridges are valued at more than $5,000,000, and there are about 10,000 acres which have become exempt of taxes, and the local farmers will have to portion out among themselves the taxes which the company should have paid. In one parish alone, St. Cecile, taking into account the valuation of one bridge, the five-sixths of the municipality valuation is thus exempt of taxes, so that the burden of all charges and liabilities will fall o.a the other one-sixth. This is another instance of the solicitude of the government for the large corporations to the detriment of' the rural class.

The Budget-Mr. Raymond
Favoritism does not stop there but goes so far as to allow the workman to be fleeced. Is there a more odious exploitation that the one by which the worker becomes the victim of coal importers? The government has prohibited Russian coal imports and it levies a duty on American coal. Thanks to such measures, the importers of English coal have formed a monopoly which affords them the opportunity of selling this article of necessity at an excessive price and thus make exorbitant profits. It was admitted that the profits in one year were about $400.000! Think of the profits for 1934, owing to the excessive cold we experienced; there was 25 per cent more coal consumed and prices were raised in February and again a few days ago. If there is a dealer, sir, who, because of the nature of the product he sells, should be restricted to a minimum profit for the welfare of the majority, it is certainly the importer of coal, owing to our rigorous climate which makes it an article of prime necessity. A profit of $400,000 did not seem large enough to these importers, and prices were raised this year; there was one among them who had the impudence of posing as a philantropist! Since when does Mr. Webster sell his coal simply to keep his fellow-citizens warm and prevent them from freezing to death? When shall he cease to speculate on human misery? In January and February last, there were on an average 1.275,000 people receiving the dole, so as to keep them from starvation and freezing to death; what amount did the government contribute to purchase coal for these people and thus increase the profits of the importers? How long will the government tolerate such a flagrant abuse?
The hon. Minister of Labour (Mr. Gordon) ordered an investigation, by virtue of the Combines Act, which cost the country $40,451. It was held behind closed doors and the minister refused to divulge the contents of the report under the plea that it was detrimental to public interest. One helps a friend. Yet, another investigation was held in connection with the tobacco industry. The same plea was at first invoked. Finally, thanks to a by-election in South Oxford, the plea of public interest was discarded and the report was tabled in the house. However, in the case of coal, public interests seem to depend on Mr. Webster.
Surely it is not with expensive investigations, held behind closed doors, and a refusal to publish the findings, that the government will appease the public which knows that it is being fleeced. Efficient measures must be
taken. If the existing laws do not contain any appropriate remedy, let new ones be enacted. Our statutes embody very severe laws against slight offences. Thus, according to the excise act, a person found in possession of the least quantity of alcohol, on which an excise tax has not been paid-what a crime!- is guilty of an offence punishable by a fine and imprisonment, with or without hard labour for a period of one to twelve months and the government never fails to see that it is enforced. I once knew a good citizen who, during Yuletide, had purchased a quart of whisky, on which no duty had been paid. He was thrown in gaol; such cases were not left to the discretion of the magistrate.


Mr. LAFLECHE (Translation):: He is not the oqly one.


Donat Raymond: The government provides imprisonment so as to protect the treasury, but when it is a question of protecting human life-because one dies of cold-it becomes unconcerned, in spite of the most arbitrary and extraordinary powers it possesses.
Workers are no better protected against manufacturers who on the one hand take advantage of tariff increases, enacted by the government, to maintain high prices and thus permit large dividends to be paid, while on the other hand they take advantage of unemployment to further fleece the workers by not paying them sufficient wages to provide a livelihood.
I already have had occasion to point out specific facts to the house; I shall quote others in support of them. In Valleyfield, at the Montreal Cotton Mills, a company which still pays a 7 per cent dividend to its stockholders, there are heads of families who work from six o'clock in the evening to seven o'clock in the morning, at a rate of 9 cents per hour. Twelve hours of night work, to earn SI.08. Among them, I know of one who has no choice in the matter and must provide for his wife and four children on such wages.
The government is very willing to protect manufactured goods, but it refuses to protect labour. Why did it not stipulate, when providing for tariff increases on manufactured products, that manufacturers would have to pay rational wages to the workers? The latter are entitled to wages which will provide them with a livelihood and not let them starve. It is not with such petty wages that a man can feed and clothe his family and, when winter comes, pay to Mr. Webster's company, thanks to the government's protection, an excessive price for his coal.
The Bridget-Mr. Raymond

There is a provincial statute which fixes the minimum wages for women. What happens? The Montreal Cotton Co. obliges young girls to sign a petition addressed to the minimum salary commission requesting that the company be exempted from such provision of the act, and those who refuse to sign are dismissed.
The workman is no better dealt with in the distribution of taxes and his situation is becoming worse. Certainly, taxes are needed to fill the treasury, but the least burdensome way from an economic and social angle, must be sought, and they must serve a truly useful purpose. Whence comes the greatest revenue? A perusal of the returns from taxes shows that during the fiscal year 1933-34, all taxes amounted to $271,000,000. From this amount, $61,000,000 was levied on the income tax; the balance for the most part, came from customs duties, excise taxes and that on consumption-the latter alone amounts to
S63.000,000. Of all these imposts, the largest, the most burdensome and unjust is the tax on consumption because it reaches everybody equally, without taking into account one's capacity of paying and one's circumstance. One who is in utter want is placed on the same footing as the millionaire. One who is at the head of a large family is placed on the same footing as the bachelor. It is absolutely unjust! The most equitable taxation is the one which is portioned out according to the capacity of paying. However, the latter depends on the income of the one who pays and his circumstances. The head of a family, the only bread-winner, who must provide for the livelihood of his wife and four children and who is paid by the Montreal Cotton Mills wages at the rate of $1.08 for twelve hours' night work, has certainly not the means to pay a consumption tax on articles of prime necessity.


Joseph-François Laflèche: It is a provincial question.


Donat Raymond: It becomes an impost on distress. In some cases, such as sugar, there is even an additional charge, which brought in about 810,000,000 in less than a year, it was levied mostly on the poor people. Let the articles of luxury be taxed but not necessities of life.
And what purpose do these revenues levied partly on the distress of workers serve? One million dollars is expended on radio-that does not feed a person-it also serves to pay the travelling expenses of ministers who, meanwhile, neither pay the consumer's tax nor a tribute to Mr. Webster.
[Mr Raymond.]
Most of the taxes are at present, borne by the working classes and this is a flagrant injustice.


Joseph-François Laflèche: Did you make these remonstrances to the provincial government?


Donat Raymond: I regret that I cannot reply to your question as I have but forty minutes at my disposal.


Mr. GOBEIL (Translation):: Are wages
fixed by Quebec or Ottawa?


Mr. CARDIN (Translation) :: Ottawa fixes the tariff from which are derived the profits.


Donat Raymond: I shall have later on an opportunity of discussing this subject, if my hon. friend will permit me to continue.
I have set forth, sir, a few phases of the present administration's policy. Let us draw the conclusions. The people are tired-


Samuel Gobeil: They are
tired of Taschereau.


Donat Raymond: -of this dictatorship exercised with arrogance, favoritism, and in an abusive way for the benefit of large corporations; it can only give rise to a feeling of distrust among the working classes. Confidence is something which is not enforced on the public through decrees, it must be won by meritorious deeds.


Samuel Gobeil: That was evident in Montreal.


Mr. FAFARD (Translation) :: It is the university man who speaks!


Donat Raymond: Will the hon. member for Compton (Mr. Gobeil) allow me to follow up my arguments? I am not in the habit of interrupting him and I would ask him to do likewise.
When we examine what the government has done since 1930, we soon realize that no relief has been applied to the difficulties in which the country is struggling.
What have become of our resources-referred to by the Prime Minister-capable of creating work and prosperity for all? They have not melted away! Instead of work, he substituted official unemployment with all its consequences and excesses.
He spoke of the respect due to parliamentary rules, no one more than him despises them. In times of crisis, one must not close his eyes or stuff his ears, but it is befitting that measures taken or enacted be in accord with public feeling and the way to make sure of it, is to

The Budget-Mr. Maclnnis
keep in touch with it through the representatives of the people. Here, it is all jostling, one must vote on the run his measures which have hardly been introduced, otherwise it is looked upon as obstruction; parliament embarrasses him. Yet, the control exercised by parliament is the only guarantee against arbitrary rule.
There exists an atmosphere of unrest, discontent and anxiety which reaches all classes of society.
The anxiety of the farmer who depends largely on his land for livelihood since it produces most of the necessary food products, but who nevertheless feels himself crushed by various taxes, such as customs, excise, municipal imposts and other charges, rvhen it is not the expropriation through the sheriff's sale which awaits him.
Anxiety of the workman owing to the distress which prevails and awaits him if it has not already done so. Think of the unfortunate situation of the large number of people who would like to be producers, but who are condemned to involuntary or compulsory idleness, often victims of technical progress. Where production increases, more unemployment prevails. In the United States from 1919 to 1929, production increased 32 per cent while the number of workers decreased 13 per cent. At present, there are thousands who are utterly in want, with no prospect of finding work in the future; they pitifully wander through life depending entirely on public or private charity. For them, the foremost question is that of the right to work and live. Think of the situation of workmen whose only wealth are their hands and, who, victims of over ambitious manufacturers, receive insufficient or petty wages. Their home is the house of need. They are looked upon as part of a machine which serves to enrich the manufacturer.
Anxiety of the consumer with a salary hardly sufficient to live upon. Conditions of life were already hard, but they are made worse by taxing articles of prime necessity. The victims are the large families of workers who receive petty and insufficient wages. There is, at present, among the working classes, a serious unrest caused by unfair taxation. The anxiety increases at the approach of winter, when a tribute must be paid to the magnate of coal which our laws do not reach.
Among all the anxieties prevailing, there is one which should draw particularly our attention, it is the anxiety of youth, whose future, according to the expression used by His Eminence Cardinal Villeneuve, constitutes a
national problem. There are, at present, in Canada 942,000 young men between the ages of 15 and 24 in a ratio of 54 per cent in cities and 46 per cent in the countryside. What will become of them? Idleness can only have a bad effect on them. It is, however, the lot which has been assigned to most of them for the last four years. They have before their eyes thousands of unemployed and naturally wonder with uneasiness whether they will ever earn a livelihood. They need to be reassured. Does the government realize this fact? What paradox presents itself to their mind? Famine and distress side by side with abundance. If they go to the mills to obtain employment, they are told that there is no work, or that machines are doing the work, or that all places are filled. If they graduate from school, loaded with degrees and great knowledge on various subjects, whatever way they turn, the avenues are closed, all careers are filled. Yet, one must live. That is one of the sad aspects of the social problem of to-day; youth finds no employment.
Faced with all these anxieties, sir, I take the liberty to tell the government: Enough favours to friends, large corporations and foreigners; give some consideration to the farmer, worker, consumer and youth. It is not in the relief of unemployment or in the too burdensome imposts that are to be found the proper remedy to calm the anxiety of the various classes of society and inspire hope to our discouraged people.


Mr. ANGUS MacINNIS (Vancouver South):: I doubt whether there was ever a
time in Canada when Canadians took so much interest in economic and political problems as they do at the present time. Perhaps there has never been a time in the history of Canada when it was so necessary that they should do so. I know that in my own province, in every little community, in every city and town there are numbers of student economic classes held almost every day in the week.
It is my intention before I sit down to touch on what I believe to be the fundamental basis of a great part of our difficulties if not of all. However, before I come to that I wish to discuss a few other matters that are relevant to the budget.
There is nothing much in the budget this year which one need get excited about. There is nothing in it that one need strenuously oppose, and there is certainly nothing in it that can give the slightest hope to thousands of our people who have been living in misery during the last four or five years. It is a
The Budget-Mr. Maclnnis

budget which is intended to maintain the status quo. No attempt is made through it to equalize the distribution of the wealth of this country, although that is a step which in my opinion is most urgently needed at the moment.
Perhaps no other world statesman has been so much in the public eye during the last year as the President of the United States. Certainly no other government has been so energetic in its efforts to increase the purchasing power of the masses as has the government of the United States. I am not concerned now as to whether or not the steps they have taken will ultimately meet the desired end, but they surely indicate that President Roosevelt realizes the importance of a better distribution of wealth. Speaking on March 5, 1934, the first anniversary of his coming into office, he said:
Every examination I make and all the information I receive lead me to the inescapable conclusion that we must now consider immediate cooperation to secure increases of wages and shortening of hours.
That is a very different attitude from that taken by this government. No steps have been taken by this government towards that end, that is, towards the shortening of hours and the increasing of wages. It may be brought forward as an excuse that wages and hours of work come under the jurisdiction of the provincial governments, which is quite true. But it does not follow that there is nothing that this government could do'if it wished. But does it wish, or does it realize the importance of increasing purchasing power? It would seem to me it does not.
When the Prime Minister spoke at Montreal after his return from the world economic conference he said that it was not the intention of the government to follow the lead of the United States in shortening hours and increasing wages because Canada, an exporting country, could not afford to do so. I notice that just about that time the Minister of Trade and Commerce said that before President Roosevelt introduced the N.R.A. Canada had been doing the same thing for three years. I observe, however, that the minister a few days ago in Montreal made the statement that unless the manufacturers and owners of industry in this country took steps for a better distribution of wealth an N.R.A. would have to be put into effect in Canada.
In 1930 the Prime Minister was going to bring prosperity to this country by preserving the Canadian market for Canadian manufacturers. It now transpires, from the statement he made in Montreal, to which I have re-

ferred, that the Canadian manufacturer is not satisfied with the Canadian market. He must have a share in the foreign market as well and Canadian workers must toil and sweat in Canadian factories for long hours at miserable wages in order that he may get that share.
I have stated in the house on a number of occasions that the home market is not sufficient for the disposal of capitalistic production; that a foreign market is also necessary. The position which the Prime Minister now takes goes some distance toward proving my contention. I maintain that the government could use the taxing power which it has to equalize the distribution of wealth in this country; it has not made full use of its power to that end. Anyone who has followed the evidence adduced before the price spreads and mass buying committee during the last few days will realize that a few Canadians are receiving out of the wealth of the country a far greater share than that to wliich they are entitled, and that some means should be taken to ensure that that wealth is better distributed. The dominion government has the power through taxation to distribute that wealth but the government seems to be quite satisfied if it is able to meet the principal and interest on the financial obligations of the dominion. That is not wThat it was elected to do. The previous government was doing that well enough. The Prime Minister speaking for the Conservative party during the election campaign of 1930 made certain promises to the Canadian people. As those promises have been quoted in the house on numerous occasions I am not going to repeat them now but it must be kept before the people that those promises have not been fulfilled and we are not going to allow them to be forgotten by government speakers drawing attention to other things that have been done.
The Prime Minister, speaking in Ottawa as reported in the press of November 9, 1933, said:
It must be a source of great pride to every Canadian that this young country has met every obligation in the terms of the contract, at home and abroad.
During the last four years I have met a large number of Canadians and I cannot recall any whose chests swelled with pride because the government has met its financial obligations but I have met many who have bowed their heads in shame that the government has done nothing to ease the misery and want in a country so richly endowed with

The Budget-Mr. Maclnnis
the good things of life as is this one. I maintain further that the government did not meet every obligation in the terms of the contract. The contract made with the people of Canada by this government in 1930 was that it would put an end to unemployment. That contract has not been fulfilled. As I said before, the government was not elected to pay the interest on the national debt. The former Liberal government was doing that to the satisfaction of the creditors and also of the people of Canada, but it was not meeting the unemployment situation to the satisfaction of the Canadian people and that is why the present government is in office today. Before the election of 1930 and for a short time thereafter, the government had two remedies for dealing with the economic crisis facing the dominion, first, national expenditure on public works of various kinds in collaboration with the provinces and municipalities. This remedy of course was considered as being a palliative and it was soon discarded as it was found that like most palliative measures it did not palliate; that the improvement of the moment was followed by an unfavourable reaction. The real cure that the government had for the depression was increasing the tariff; tariff increases were the magic which was to drive out the demon of depression. It has always been a mystery to me why a person with the intelligence of the Prime Minister could not see the fallacy of the high tariff remedy. All that was necessary to do to realize its uselessness was to look to the great country to the south of us, a high tariff country, one with possibly the highest tariff of any in the world, where even in 1930 its relative unemployment problem was worse than ours in Canada. There were plenty of other examples besides that of the United States.
It is quite true that the United States prospered under a high tariff policy; she did up to a certain point. It is equally true that Great Britain prospered under a free trade policy, again up to a certain point. They prospered under policies which were diametrically opposed, because the conditions of the two countries were different. Great Britain prospered under free trade because she was the first in the field as a manufacturing country; she had the important essentials of a trading nation: a highly skilled working class, the most highly developed machinery of the time and plenty of coal for motive power and iron for steel and machinery. Last, but not least, as I said, before, she had an advantage over other countries by being the first in the field.
The United States prospered for very different reasons; she prospered under a high tariff because she had a large undeveloped territory, diversified natural resources and the development of the country absorbed all but a small fraction of her production until the end of the war when the country was not only developed but over-developed from a production point of view. But be it noted that neither free trade nor protection will bring back prosperity to either of those countries to-day.
In the budget there are indications, faint ones of course, that the government is losing faith in the tariff as a means of bringing back prosperity. No doubt we should be thankful for small mercies and should welcome the reductions in the tariff which are announced in the budget. The Canadian people will no doubt be grateful to the government for the reduction in the excise taxes on champagne and sparkling wines. The Minister of Finance did not tell the house whether champagne and sparkling wines would now be on the menu in the unemployment camps and included in the budgets of families on relief. Of course it may make their lot much easier to know that some people in Canada can afford to drink champagne and sparkling wines even if they themselves cannot. I noticed in speaking throughout the country that many people are worried as to who will drink the champagne and smoke the expensive cigars under socialism. I have never been able to tell them that, but I can tell them who are doing it now.
As usual in the minister's budget speeches, he ended on a hopeful note; in his position that is no doubt an appropriate thing to do, but as intelligent people we should demand some foundation for that hope. I would like to know from the minister or the government what is the cause of the depression. It is not enough to say that it is worldwide; we know that. We also know that what little improvement has taken place is also worldwide and consequently the government cannot take any credit for that. We would like to know what is responsible for the improvement, how long we may expect it to continue, what are the probabilities of the upturn in business being followed by another depression, and, more important than all, what steps the government is taking to prevent another economic collapse. Or does the government believe with the Prime Minister that we are in the grasp of a fate over which we have no control? The hope for better things is very good as far as it goes, but after all it is only a pious wish.
The Budget-Mr. Maclnnis

I maintain that before there is any permanent. improvement there must be some understanding of the factors which are essential to the functioning of the system under which we live. I maintain that we shall have to acquire an understanding of how and why our economic system functions or fails to function, and that we shall have to assume control over it; that we cannot, as we are doing to-day, leave the ordering of our economic and social life to the whims of individual interest, that if we do there will be ups and downs in our economic activities, with the consequent unnecessary suffering, as sure as day follows night.
Undoubtedly there is some reason for the slight improvement that has taken place in the economic life of the world during the last year. The present slight improvement in my opinion is due to three factors: (1) the increase in armaments and the universal preparation for war; (2) the depletion of supplies in hand of consumers' goods and the need for replacements in producers' goods, that is, new capital; and, (3) the policies of the Roosevelt administration in the United States. It will be remembered that when President Roosevelt came into office in March, 1933, the whole economic life of that country was almost paralyzed. By April there was a perceptible if small improvement, and that improvement has continued since but shows some indications now of slowing down. 'Certainly there is nothing fundamental on which we can base any measure of hope for permanent improvement. I think it has begun to be realized by many people to-day that there are certain flaws in the capitalist system itself, certain inherent faults which make it impossible of stabilization, that there are certain reasons why it must either expand or contract. In my opinion there are quite obvious reasons why the era of expansion is over and the era of contraction is now with us. Consequently there will be no permanent improvement under the present system. It is not a question of the capacity of government or even of the good intentions of government; the question is, Can the system function under the changed circumstances which now confront us?
In every organism -and machine there are vital parts or factors which are essential to the efficient functioning of that organism or machine. The same is true of a system of society. Our present system of society is breaking down because certain factors which were and are essential to its operation have become impaired. Now what are those factors? The first that I need mention is

the foreign market, that is foreign trade. The subject of foreign trade and our foreign trade policy has been mentioned in this house on a number of occasions during the last four years. In fact a certain section of the house believes that all our difficulties are due to wrong trade policies. I do not hold to that. I believe, as I said before, that in the capitalist system itself can be found the defects which -are responsible for the conditions which we find about us to-day.
I am going to try to explain this to the best of my ability from my point of view in the short time at my disposal. Capitalism is different from all other systems of production that we know anything about. It is concerned not with the production of use values but with the production of exchange values; in other words with producing goods to sell rather than to use. A country producing in this way must have a foreign market, because the producers of wealth never receive enough purchasing power in return for their labour to enable them to consume what they have produced. The owners of the means of production cannot consume the surplus because of its magnitude. It is therefore necessary in -order to dispose of this surplus to find a foreign market outside of the country of production. If that were the position only as far as Canada is concerned there would be possibly no great difficulty, but every other country in the world finds itself in the same difficult position. They also have surpluses which their own people cannot consume because they have not adequate means to buy. If they cannot buy the goods produced in their own country they certainly cannot buy what we have to sell. Here we find one of the curious contradictions of capitalism, it has many but perhaps this is the outstanding one; that is that a foreign market is absolutely essential to its existence, but it no sooner finds that market than it proceeds to destroy it.
To illustrate my point I will take two industries established in Great Britain at the beginning of the industrial revolution, cottonmanufacturing and engineering or machinemanufacturing. Great Britain was the first country to manufacture cotton with power driven machinery, and consequently the first to manufacture cotton manufacturing machinery, engines and spinning and weaving machines. Soon after Britain began to manufacture cotton with power driven machinery she had to find a market outside her borders for a considerable portion of it, not because British consumers had all the cotton they could use, because millions of the population of Great Britain to this day have never had

The Budget-Mr. Maclnnis
all the cotton cloth they have needed. But they had all the cotton goods which their wages could buy. However, the world was then the market for the products of Great Britain's cotton factories and for the labour of British workmen, because Great Britain was the only country in the world at that time engaged in machine production. But unfortunately for the British cotton manufacturer, and perhaps even more so for the British cotton operator, the British manufacturer of looms and engines also had to find an outside market for his surplus commodities, that is the looms and engines that could not be absorbed in the British market. So engines and looms were sold to other nations, who thus were not only enabled to manufacture cotton for their own needs but began to compete with Great Britain for the world market. Let me give an illustration which appeared in the press quite recently. It is headed:
British Brains and Machinery for Chinese Factories
It relates that:
Messrs. Platt Brothers, Oldham, had received large orders for textile machinery for cotton mills to be erected in South China, and a Midland firm has got the order for the electrical equipment. Mr. Harold Briggs of Oldham has been appointed' technical adviser by the Canton government, and sails for China this month. Mr. Briggs said the first mill was in course of erection and the machinery would be sent out early this year.
This export of cotton manufacturing machinery and of British capital for the development of the cotton industry in other countries has been going on for years. The result is that one-half or more of the cotton workers in Great Britain are and have been unemployed since 1920, and as far as their employment depends on the export of cotton goods they are doomed to unemployment for all time.
I was reading recently a book entitled Lancashire and the Far East. It is an history of the development of the cotton trade in India, China and Japan. It shows the effect of this development on the cotton market, over which Great Britain held a virtual monopoly for over one hundred years. I will give a few figures from this book, and I may say that all the statistics are verified as to their source. In 1913 the total export of cotton goods by Great Britain was
7.075,000,000 yards; in 1929, sixteen years later, this had shrunk to 3,765,000,000, a decrease of 47 per cent. Now let us see if we can find why this shrinkage came about. It is not necessary to tell this house that Japan is Britain's most dangerous competitor in cotton goods as well as in many other corn-74726-188
modities. In 1913, of the total exports of cotton goods to China, according to quantity, Great Britain supplied 68 per cent and Japan 23 per cent, the remainder being supplied largely by Russia and the United States. By 1925 the position was reversed, Great Britain supplying only 26 per cent and Japan 74 per cent, with Russia and the United States out of the market altogether.
I think that is sufficient to show how Great Britain, through the investment of capital in these countries, has helped to destroy the market which she needs so badly. From 1913 to 1929 Japan imported 2,000,000 yens worth of spinning and weaving machinery from England and Germany, principally spinning machinery. From 1923 on Japan did not import any weaving machinery, since she was able to supply her own requirements, and in the near future, if it is not the case already, she will be able to supply her own spinning machinery as well. Then not only will the cotton market be gone; the market for cotton manufacturing machinery will be gone as well.
Now let us come closer home. Canada is also an exporting country and is vitally interested in finding a market for wheat and other agricultural products. But Canada is interested as well in finding a market for agricultural machinery. It is held by many of our people that upon our ability to find a market for our agricultural products depends the prosperity of this country. Yet we supply the countries which we have considered as markets for our agricultural products with the machinery that will enable them to become self sufficient in regard to agriculture. Thus we destroy the markets we require so urgently. I should like to give a few figures as to our exports of agricultural machinery for 1930, which will illustrate the point I wish to make. These figures are from the Trade of Canada, 1933, issued by the Department of Trade and Commerce. During 1930 we sold harvesters or binders to thirty countries, some of whom, such as Russia, Argentine and Australia, were our competitors in the markets of the world. Others, such as France, Italy, Germany and the United Kingdom, constituted our markets for agricultural products. Here are the figures as to the sale of harvesters or binders in 1930:
France	 2,045
Germany	 2.535
Russia	 2,838
United Kingdom	 396
Italy	 349
Australia	 804
Argentine	 50
In the same year we sold ploughs and parts to sixty-two countries, to the value of

The Budget-Mr. Maclnnis

So,000,000. I think these figures are sufficient to show what is happening in every line of production. What has happened in regard to cotton has happened in regard to agriculture and almost every other industry. Is it any wonder that our exports of wheat and other agricultural products have declined? Our Liberal friends keep asserting that the only way to prosperity is through the resumption of world trade, and the other day I heard the Prime Minister make the same statement in the house. I wonder if they ever analyzed the circumstances necessary to trade or, what I would consider a better word, to exchange. The basic factor underlying exchange is the desire of one individual to get something he has not in exchange for something he has. We buy only those things we cannot produce for ourselves, or the machinery with which to produce such things. Let me illustrate this point by taking three individuals, one producing grain, the second producing fruit and the third producing dairy products. It is clear that each individual would be better off by exchanging some of the surplus of his product with each of the others for some of their surplus, but it must be obvious that if each individual, in addition to the commodity he produced at first, produced also the commodities which the others produce, there would be no incentive to and no possibility of exchange. Heretofore world trade has been largely the exchange of commodities such as I have indicated or the export and import of the machinery which would enable each country to produce a larger variety of commodities. What I have pointed out in regard to cotton and agricultural products has occurred in regard to a great many other commodities. The nations of the world are becoming more and more self-sustaining, because of the development of science and invention. In future trade will become more and more restricted to such commodities as, because of climatic conditions or the lack of natural resources, a country is unable to produce for itself.
I think the sooner we realize that fact the better it will be for us. We may rave as we please about economic nationalism, but it will not get us anywhere unless we try to understand the reasons underlying the condition we are pleased to call by that name. Capitalism expanded and became international in its outlook by reaching out and developing new countries and new areas. Now we have come to the point where there are no further new countries or new areas to be developed-or

possibly exploited would be a better word- and the capitalists of the world are forced, as a matter of self preservation, to try and secure to themselves the home market. Right Hon. Walter E. Elliot, British Minister of Agriculture, put the case very neatly in a speech he made some little time ago, in which he referred to the three stages in our development during the last one hundred and fifty years or so. He said:
But these factors, the power of science to make anything anywhere, the determination of men to try everything everywhere, and a growing doubt as to whether foreign loans in many parts of the world are not simply free gifts which we should do as well to keep for ourselves, have produced and are producing a change so fundamental in our outlook that it might almost be described as the third stage of the industrial revolution. The first stage was, so to speak, the drilling of a borehole and the tapping of a great subterranean source of power by the people who made this venture. The second, which we have just lived through, was the piping off of that power to undeveloped nations as capital development, financed by unrepaid loans.
That is, the sending of capital into new areas.
The third stage is the check and flood-back as the boreholes in other countries strike oil in their turn, and the pipes begin to fill tip from the far end also.
I think that is a very clear picture of what has happened in the world markets during the last few years. In my opinion there is no doubt that the foreign market is fast disappearing, never to return as we once knew it. As the British Minister of Agriculture points out, this is the inevitable effect of the development made possible by science and invention.
And that is not all. The capitalists, in their endeavour to hold the dwindling foreign market, are destroying the home market as well. This is being done by reducing wages, increasing the hours of work, increasing the intensity of labour, and by the greater use of labour-displacing machinery. They call it reducing the cost of production, and it is done to increase profits, of course. But it is also done in order to enable them to compete for a share in the fast dwindling world market. Let us see how it works. If the manufacturer of cotton goods reduces his production costs in the way I have mentioned he may be enabled better to meet competition in the world market, but it further reduces the home market because the employees affected have lost buying power and consequently are less able to buy the other goods such as food, furniture and clothing which are produced at home.

The Budget-Mr. Belec
It also reduces the world market, as Canada's home market is the foreign market, or at least part of the foreign market for all other countries. This is an inevitable and inescapable consequence of the system of production under which we operate.
The next factor necessary to the efficient working of a capitalistic system is the ever-extending field for development and the investment of new capital. I say "the ever extending field" because in the ordinary capitalistic state the capital investment increases yearly by the reinvestment of part of the profits of the preceding year. In fact, the purpose of capitalist production, as I have said before, is the production of new capital which is invested for the purpose of producing more capital values.
I have some figures before me taken from the Canada Year Book, concerning manufacturing in Canada, showing that invested capital increased from 178,000,000 in 1871 to $5,093,000,000 in 1929. If hon. members would compare the increase in wages with the increase in capital they would find that salaries and wages did not keep pace with capital invested. In the same period wages increased from $40,000,000 in 1871 to $813,000,000 in 1929. These figures are the total amounts paid in wages and salaries. Outside of the market for government bonds and debentures there is no great opening to-day for the investment of new capital. In 1930 corporation bonds to the value of $146,303,000 were sold in Canada.


Mr. DEPUTY SPEAKER:: The hon. member has spoken forty minutes.


Angus MacInnis: With your permission, Mr. Speaker, I shall finish with one other observation. In 1933 we find that these investments had shrunk to $4,200,000. I say that unless we consider this question from the standpoint of changed conditions and try to meet it by increasing the purchasing power of our people at home it is useless to talk about increasing the world market.


Mr CHARLES BELEC (Pontiac):: Mr. Speaker, it is with great pleasure that I extend my congratulations to the Minister of Finance for the exceedingly able manner in which he presented the budget to the house. It is a matter of great satisfaction to learn that in the twelve months period ending March 31 last, exports of Canadian produce increased by $105,500,000, or 22 per cent over the same period last year. Imports, advancing less 74726-188J
rapidly at first but showing greater gains in recent months, increased by $27,300,000 or 7 per cent. The improvement in the aggregate trade was $132,000,000 over the same period last year, or 15 per cent. The total trade exceeded one billion dollars.
The beneficial effects of the empire trade agreements are shown in the expansion of intra-empire trade. In the eleven months period ending February 28 of the present year exports from Canada to the United Kingdom, our largest market, increased by 20 per cent, accounting for more than half of the increase of sales abroad. Exports to Australia increased by 54 per cent, to British India by 45 per cent, to British South Africa by 72 per cent and to New Zealand by 6 per cent. Statistics of the United Kingdom show that whereas in 1931 imports from Canada represented 3'8 per cent of the total purchases from abroad, in 1933, Canadian products represented 6-9 per cent of the total. Prominent among the commodities showing increased exports to the United Kingdom were planks and boards, apples, meats, copper and other metals, and cattle.
It is a matter of pride to all Canadians to remember that Canada, with a population slightly over ten millions of people, is the fifth trading nation of the world. At this time, when world recovery is slow, our country has increased its exports and is slowly but surely emerging from depression to prosperity. I am sure that the next year will continue to show a marked improvement in conditions.
In the budget it will be noticed that the dominion treasury has stood the brunt of depressed conditions in all parts of the country, and especially in the western provinces. A total of $36,000,000 was expended in the last fiscal year for relief measures. The budget discloses that the expenditures made since 1930 by the dominion on unemployment relief have reached $115,500,000, to which may be added the cost of the wheat bonus in 1931, amounting to $12,700,000 and $2,400,000 advanced for employment in railway shops, a total of $136,600,000
It is these relief expenditures and public works expenditures that I want to discuss, especially in their relation to the county of Pontiac The Department of Labour has kindly sent me a statement showing dominion contributions to relief expenditures in Pontiac -in Temiskaming, Abitibi, and old Pontiac These were as follows:
The Budget-Mr. Belec

1930	act	
1931	act	
1932	act	
1933	act	
(Dominion commitments, $84,134.50).
Dominion payments Public works	Direct relief

Total dominion payments under all acts..

Thus it will be seen that since 1930 a total of $305,217.48 has been expended in Pontiac county for relief alone.
I regret, however, to point out that relief works expenditures were curtailed because I could not secure the cooperation of the Quebec government. Last year I advocated the construction of the Sheenboro highway and could have secured an appropriation from the dominion government, but the authorities at Quebec would not join with us in building the road which would be a new means of communication with the north country. Besides it would have provided much needed work. I should like to quote a statement made on March 22 by the Minister of Labour (Mr. Gordon) in reply to the hon. member for North Timiskaming (Mr. Bradette). This appears on page 1724 of Hansard and is as follows:
Might I interrupt a moment? As far as the trans-Canada highway is concerned I do not think the hon. member wants to be understood as saying that in his judgment the trans-Canada highway should go up to Senneterre and out to Manitoba in that direction. And I do not think he means that the road from Sheenboro to connect with Kipawa in Quebec is not being built because of any neglect on the part of the dominion government, because the fact is we have received no schedule and no request for any contribution to that road which would connect with the Ontario roads passing through Rouyn down to Ottawa and Montreal. The Sheenboro-ICipawa-Ville Marie road is the one break which has necessitated the people in the north end of Pontiac and the Rouyn mining country coming down to Montreal and Toronto by the Ferguson highway in Ontario. I do not think the hon. member wants to be understood as meaning that the province
of Quebec has given the lead to Ontario as far as opening up that part of northern Quebec is concerned, as compared with the efforts of the provincial government of Ontario in opening up roads in Ontario, which has been going on steadily and to an increasing extent each year. The Ferguson highway has been the outlet to the front, both Toronto and Montreal, for all of that north part of Pontiac to the present time, and still is as far as vehicular and motor traffic is concerned.
I want to give the house some idea of the amount of work done in the county of Pontiac by the Department of Public Works. I should like to set out these facts in detail in order that the people of Pontiac will know once and for all that the Bennett government has been more generous with them in four years than was the late administration in eight years. What are the facts? Under the late administration the Department of Public Works expended in Pontiac county from 1922 to 1930 a total of $534,090.51. The present government in a little more than three years has expended a total of $632,771.95. In addition, the contribution to relief works and the cost of direct relief in the county has amounted to $305,217.48. The total expenditures in Pontiac county by t'he Bennett government since it came into office in July, 1930, are $937,989.43, while the Liberal administration spent only $534,090.51 in eight years. In order that I may be frank and honest I should like to put the facts on the record. According to the official figures of the Department of Public Works, the following amounts have been expended in Pontiac county by that department from July 28, 1930, to date:
Place-
Amos	
Brown's island.. .. Bryson bridge.. ..
Chaboiley	
Chapeau bridge. . .
Des Joachim	
Desjardins	
Fort Coulonge.. .. Harricana river.. .
La Matte	
La Reine	
La Sarra	
Makamic	
North Timiskaming
Norway Bay	
Palmaroll	

Work-	Expenditure
Wharf	$	2,755 78Wharf	
132	50Bridge	
534	66Unemployment relief	
1,998	05Bridge	
920	88Bridge	
1.386	73Wharf	
44.496	12Wharf	
2,995	30Wharf and dredging	
60.241	85Wharf	
381	71Wharf	
201	40Wharf	
450	84Wharf	
1,528	18Wharf	
137	90Wharf	
4,281	74Wharf	
165	00
The Budget-Mr. Belec
Place-
Portage du Port. River Kinogeris. Senneterre. . . . Taschereau river
Kippewa	
Ville Marie.. .. Timiskaming. . . Ville Marie. . .. Shawville	
Work-	Expenditure
Bridges	
1,098	19Dredging	
295	00Wharf	
3,327	28Unemployment relief	
957	20Telegraph lines	
2,526	50Wharf	
3,817	07Dam	
465,000	00Public building	
32,680	19Public building	
461	88
Total

The details of the expenditures made under the late administration from 1922 to 1930 are as follows:
Place-
Amos	
Angliers	
Brown's island	
Bryson bridge	
Chapeau bridge	
Des Joachim	
Fabre	
Fort Coulonge	
Harricana river	
La Motte	
La Reine	
La Sarre	
Makamic	
North Timiskaming	
North Timiskaming	
Norway Bay	
Notre Dame des Quinze	
Pointe Piche	
Portage du Fort	
Portage du Fort and Bryson bridge.. ..
Quyon	
Riviere Courville	
River Kinogeris	
Senneterre	
Kippewa	
Ville Marie	
Shawville	
Work-
Wharf	
Wharf	
Wharf	
Bridge	
Bridge	
Bridge	
Wharf	
Wharf	
Wharf and dredging. . .
Wharf	
Wharf	
Wharf	
Wharf	
Wharf	
Bridge over Quinze river
Wharf	
Wharf	
Wharf	
Bridges	
Sand blasting	
Wharf	
Dredging	
Dredging	
Wharf	
Telegraph lines	
Wharf	
Public building	
Expenditure .$	6,204	48.	6,539	84.	3,297	04.	38,124	93.	1,519	40.	21,638	00.	19,375	91.	3,014	18.	142,806	40.	3,586	09.	3,856	32'.	2,296	29>.	4,001	13:.	21.192	35.	87,780	71.	35,444	77.	553	17.	48,426	51.	12,849	74.	5,078	84.	3,057	53.	500	00.	1,196	00.	2,797	10.	30,425	38.	24,683	97.	3.844	52
Total..
. . $ 534,090 51
I take this opportunity of congratulating the Minister of Finance upon cutting in half the tax on sugar. This tax, which was two cents per pound has been cut to one cent, and I hope the state of the treasury will permit the minister to abolish the tax next year. All taxes are unpopular, but this levy has aroused the ire of the housewife who uses a great deal of sugar at preserving time.
It gives me the greatest pleasure and satisfaction to declare that I am proud to support a government which has introduced such measures as the marketing bill, the Bank of Canada bill and the proposed works program. All of these things will prove to be advantageous to our country. The marketing bill will be of great advantage to agriculture because it is designed to increase the prices of farm products by facilitating the efficient and profitable marketing of live stock and all other produce of the farm.
I have not sufficient time, Mr. Speaker, to go into the back to the land movement thoroughly. I will say that I have visited every part of my riding every summer and particularly the back to the land settlements. There are 398 families who have gone back to the land in the Abitibi district and 351 families in the Timiskaming district. They are happy because they are industrious and hard-working. Both, I am glad to say, will be fine settlements. Those people have gone in with the determination to make good and what they have accomplished in such a short time would surprise you. Recently I visited the new settlement at Laferte and there I found that a fine sturdy lot of settlers had located and were busy finding new homes in Pontiac county. Of course, there are criticisms I could make as to the way in which the Quebec government has administered these settlements, but I hope that the authorities at Quebec will deal with these

The Budget-Mr. Belee
complaints as this is entirely a provincial matter, and out of my hands. I might say that too much money has been spent on transporting these new settlers, but as the administration of the settlements rests squarely upon the Quebec government I can do nothing but voice these complaints, hoping that the authorities at Quebec will step in and correct them.
I want also, Mr. Speaker, to congratulate the Minister of Finance on his words in the budget in which he indicates there is to be a lowering of interest rates. Interest rates have proven to be a heavy burden to the farmer. Now I am glad to say that the government proposes to bring down legislation designed to provide machinery whereby farmers who find themselves unable to pay the fixed charges on their outstanding debts will be able by an expeditious and inexpensive process to work out compromises with their creditors and to obtain new working capital. The guiding principle of this legislation will be to secure for the farmer a simplified debt structure reduced in size to a point where the carrying charges will be within the capacity of farm enterprise to pay. This will involve some concessions on the part of creditors, as outlined by the Minister of Finance, but these will be more than outweighed by the advantages which will follow as a result of retaining the farmer as a willing and effective producer. As the Minister of Finance points out, the release of economic energy so produced and the substitution of hope and goodwill for despondency and discontent which are now prevalent in certain parts of our country should result in a real gain to our whole domestic economy.
Now, Mr. Speaker, I want to tell something of the riches of the county which I have the honour to represent. Pontiac county is the largest gold-producing county in the province of Quebec. In 1924, 1925, and 1926 the molybdenite mines produced a total of $30,855.
The next year, 1927, the production increased to $40,000. Then in the northwest section of the county, Rouyn and other parts, there were great gold and copper discoveries. To illustrate the mineral riches of the county I will simply give the production figures:
1928		 $ 5,528,160
1929		 10,215,791
1930		 11,339,902
The reason 1930 has such a high figure is - the increased price of copper.
1931		 $9,388,200
1932		 9,509,199
1933		 9,646,281

Thus, Mr. Speaker, you will see that since 1924 Pontiac county produced $55,667,533 in new mineral wealth. Great mines like Nor-anda, Siscoe, Treadwell, Big Ben, Beattie, Cadillac, which I visited last summer, were working three shifts. Men were at work; men were happy. There was no depression in that area. Further, these mines were stabilizing conditions in the depression. They were stimulating other branches of industry by their purchases of materials and were a boon to the agriculturist. I am glad that the government has modified the tax on gold, and I am sure that the industry is appreciative of the fact.
On the whole I am proud to represent such a fine county as Pontiac with its great people and richly diversified resources. I have been in the House of Commons just over three years and believe that I have done my duty. I am proud to support such a strong leader as the Right Hon. R. B. Bennett whose policies saved Canada in the depression.


Mr. EUSEBE ROBERGE (Megantic) (Translation):: not meet their wishes, because they prefer taxing sugar and foodstuffs. They therefore place the burden of taxation on the working classes instead of on the wealthy class, which they protect.
To summarize, the government could levy $78,000,000 more on the income tax; $50,000,000 on gasoline; $15,000,000 on coal; $25,000,000 on stocks sold on the exchange, which would make a grand total of $168,000,000; while those who would pay that amount would in no way be the poorer, because they have the means to do so. This amount could have helped the government to suppress all the taxes levied on the farming and working classes, ever since they are in office.
There are many other trusts in this country from which the government could levy taxes in order to relieve the worker and farmer. All suggestions, sir, coming from the opposition which might improve our financial situation and relieve the people from overtaxation, does not meet the wishes of this government which has its own way of drawing the last penny of poor people and protecting a small group of millionaires who control the trusts on gasoline, coal, water powers and tobacco and many others, to the detriment of the people.
The Canadian people had a right to expect that the budget of 1934 would show some improvement, they had a right to expect that the prime minister would reduce taxation which so heavily burdens the poor, the workmen and farmers. The Prime Minister should have read what his predecessors have written or stated and the views of great financiers on high protection. The following are a few excerpts:
Toronto, January 24, 1933.
Sir Robert Borden, speaking in Toronto, last evening, insisted on the necessity of a greater freedom in trade relations throughout the world.
And to obtain a greater freedom in our trade relations, we must lower our tariff barriers.
Toronto, March 25, 1934.
The Hon. Mr. Meighen, former Prime Minister, speaking in Toronto:
The country's salvation demands a remedy for unemployment. People who set aside their savings in order to speculate should be made to bear the taxes.
This former prime minister would no doubt approve of the tax which I suggested. Those who speculate in stocks should be made to pay instead of the workman.
Saskatoon
Sir Henry Drayton, Chairman of the Financial Committee of the Board of Trade,

suggested in his speech to reduce expenditure and taxes so as to accelerate the movement of economic restoration.
April 11, 1934.
The following is what Mr. S. H. Logan, Director of the Canadian Bank of Commerce, stated:
The high tariffs of importing countries were responsible for the crisis in this country.
February 21, 1934.
Sir Arthur Balfour of Sheffield, London:
That protection barriers constitute a greater threat to the peace of the world than the building of war ships.
This should make the protectionists of this country pause.
As you may judge, sir, by all these statements, high protection is a thing of the past and the government must, to relieve the crisis, entirely change its policy.
What remedy does this year's budget propose so as to relieve unemployment and reduce the cost of living? The government reduced by one cent the tax on sugar and cigarette tubes, a tax which had been in force for one year only, and the most unjust one that ever was levied by a government. If the government -tax on sugar has been reduced it is not because its finances have improved-the national debt has increased by $135,000,000-but because of the protests of the Liberal party and the public.
Let us examine the tax on hops and beer. The government has made some changes in connection with the 3 cents tax on hops. After suppressing the 12i cents tax per gallon on beer, they increased the tax on hops to 7i cents. They contend that the returns will be as large while the work of officials of the department will be greatly lessened. I have been informed that the government intend to levy a further tax on the people by increasing the tax on hops. Most of our families that bake their own bread use hops and a number of our workmen and farmers who have not the means to purchase beer brewed by trusts, make their own beer and use hops. If the government expect to levy as large a revenue, by this new tax on hops they will be protecting the beer trust to the detriment of the working and farming classes.
Since this government has been in office, it has yearly increased the customs tariff. Our prime minister should realize that high protection has not been a success, because, since he is at the helm of affairs, the country's debt has increased over $500,000,000, namely, an increase of $2 per capita, yearly. Such is the result of the Bennett high protection.
The government could have ended the crisis by accepting the solution which my colleague,

Naturalization Act-Mr. Brown
the hon. member for Antigonish-Guysborough (Mr. Duff) suggested to the house in 1933 and in 1934.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill No. 59, for the relief of Archibald Bruce Elliott Smart-Mr. Bell (St. Antoine).
Bill No. 60, for the relief of Lilac Violet Grumbell Reid.-Mr. Casselman.
Bill No. 61, for the relief of Lily Archer Watson.-Mr. Bell (St. Antoine).
Bill No. 62, for the relief of Annie Isabel Tinning Meldrum.-Mr. Bell (St. Antoine).
Bill No. 63, for the relief of Lois Theresa Malcolm.-Mr. Bell (St. Antoine).
Bill No. 65, for the relief of Lucy Doris Cannon.-Mr. Pettit.
Bill No. 66, for the relief of Helen Isabelle Smith Maybee.-Mr. Bell (St. Antoine).
Bill No. 67, for the relief of Sybil Eileen Dyson Richardson.-Mr. Bell (St. Antoine).
Bill No. 68, for the relief of Bertha Alice Maude Maher Burke.-Mr. Heaps.
Bill No. 69, for the relief of William James Thistle.-Mr. Heaps.
On division.

[Stage Direction]
Bill No. 74, for the relief of Marjorie Seymour Hammond Zavitz.-Mr. Bell (St. Antoine).
Bill No. 75, for the relief of Lucille Margaret Turbin Kelly.-Mr. Vallance.
Bill No. 76, for the relief of Esther Liver-man Kazenel.-Mr. Lawson.
On division.


[Stage Direction]
Mr. M. J. MALONEY (South Renfrew) moved the second reading of and concurrence in amendments made by the Senate to bill No. 27, to incorporate the Thousand Islands Bridge Company.
Motion agreed to; amendments read the second time and concurred in.


[Stage Direction]
Mr. J. L. BROWN (Lisgar) moved the second reading of Bill No. 31, to amend the Naturalization Act.
He said: Mr. Speaker, the bill to which I am now asking that second reading be given has been on the order paper since early in the session, and I may say that it was brought forward at the request of some of the women's organizations in Canada. Since it appeared on the order paper I have received many communications from women in all parts of the dominion expressing their sympathy with the purpose of this amendment. In late years we have done a great deal towards giving women equality of status with men in almost all walks of life. They can sit in the House of Commons; it has been decided that under the law they are persons who can sit in the Senate, and in many other ways we have given them the privileges and rights that have been given the men. Many of the women still feel that in this matter of naturalization, however, they are not occupying the status they would like to occupy. It is true that much has been done, and many of the actions that have been taken have met with hearty approval. I might refer to the fact that in 1931 the Secretary of State (Mr. Cahan) brought in a bill, which passed this house, giving women the privilege of retaining their British nationality after marriage unless at that time they took the nationality of their husbands, and I should like to express on behalf of the women and the people of Canada generally an appreciation of the fact that the regulations concerning the naturalization of women have been somewhat modified, particularly in the matter of expense. At the same time, however, there is a feeling on the part of many that our laws have not gone as far as they might in recognizing the rights of women to naturalization in their own right.
It is not my intention to occupy a great deal of time in speaking on this bill to-night, since I know the mind of the minister and would like to give him full opportunity to express his attitude. I intend to make my remarks veiy brief, but I should like to bring to the notice of the house the fact that under existing laws cases still arise which entail a good deal of hardship and confusion. Just a few days ago I received a letter from a firm of solicitors in Toronto which I think I should read, without giving the names:
We note that you introduced Bill No. 31, an act to amend the Naturalization Act. upon March 12th. 1934. and have been awaiting news of the passage of this 'bill through parliament.
A young Dane applied through us for naturalization papers last October, subsequently married on December 16th last and expects to receive his certificate of naturalization within the next few weeks. Upon receiving his certificate he proposes to take his wife to Denmark for a short visit.
Should your bill be passed and become effective before the 16th of June, 1934, we feel
[Stage Direction]
Naturalization Act-Mr. Brown
that the young woman may safely consider herself to have retained her British nationality, despite her marriage to a man who was, at the time of such marriage, an alien. Otherwise, the determination as to her status of nationality involves several complicated problems in private international law.
Accordingly, we should be pleased if you could inform us whether your measure is likely to become effective by June 16th, as we must advise our client in what steps she will need to take to enable her to pass through Europe unhampered.
That is just one illustration, and I believe there are numerous cases in which a great deal of confusion and perhaps actual hardship is experienced because of the present law.
Another matter has been brought to my attention, and the papers in reference to it were just placed in my hands as this bill was called. I have not had an opportunity of reading them, but as I understand it this is the situation: If I am correctly informed our department has refused to grant naturalization certificates to people from Switzerland because the Swiss government is not willing to release them from their allegiance to their own country. Perhaps I am not stating the case correctly but, as I have said, these documents were placed in my hands just a few moments ago by the hon. member for Skeena (Mr. Hanson), who was talking with me some little time ago about the matter.
Mr. CAHAN:: We require the consent of the Swiss government, as we do in all cases where our naturalization certificates are not recognized.


Mr. BROWN:: The minister can make his statement during the course of his reply. It does seem only fair and reasonable, however, that we should grant naturalization to all applicants who conform to our laws, and it is open to question as to just how far we should allow our laws to be governed by the laws of other countries. It may be that in some cases it would mean dual nationality, which may be objectionable from some points of view, but at the same time I think this is a matter that should be considered.
I have here another extract which I should like to read to show that the women of the empire as well as those of Canada are taking a very active interest in this question and are asking that Canada give a lead to the empire in matters of this kind:
Dominion women who want Canada to take the initiative in legislation providing that a married woman should' have her own nationality and not be required to adopt the [Mr. Brown. 1
nationality of the man whose wife she has become, waited on the High Commissioner at Canada House the other day.
They urged that one of the dominions- Canada for preference-should take the first step towards producing agreement between all parts of the empire, since opposition to the reform seemed now to consist of stressing the difficulty of securing such unanimity.
British women, it was alleged, had lost the right to keep their own nationality after marriage by legislation in 1870. Before that date British women who married foreigners remained British.
As a result of recent legislation in Canada and the United Kingdom there was now no longer uniformity in the empire, a married woman in some cases being regarded as British in one place but not in another. The deputation also urged that the Hague Nationality Convention, which accepted the principle of the dependence of the nationality of the wife on that of the husband, should not be ratified.
Mr. G. Howard Ferguson thanked the deputation for putting their views before him and undertook to transmit them to Ottawa.
I am perfectly aware of many of the difficulties which may confront us before we could reach a final solution of this matter. Some progress has been made, but that it has not been made fast enough to satisfy the desires of our people is I believe hardly open to question. The women who asked me to bring this matter before the house were very insistent with regard to it, and I Should like to have the matter considered by the house.


Charles Hazlitt Cahan: Mr. Speaker, as the hon. member has observed, this matter is surrounded with many difficulties, one or two of which in his short statement he has emphasized. For more than a century in Canada we have from time to time had difficulties with regard to the naturalization of aliens in this country. Under the laws of Upper Canada, of Lower Canada, and again under the laws of United Canada after 1840 down to 1867, and again from 1867 to 1914, this matter from time to time has been under the consideration of successive legislatures. But until 1914 in none of the provinces of Canada, old or new, had the parliaments or legislatures the legislative authority to grant a certificate of naturalization to an alien which would be in force beyond the confines of Canada, whether the old provinces of Canada or the more recent Dominion of Canada as we have known it since 1867. To grant to an alien a certificate of naturalization that is not recognized by other British dominions or by the United Kingdom on one hand or by any foreign power on the other has served under the laws which have heretofore existed to place such naturalized Canadian under insurmountable difficulties the moment he passes

Naturalization Act-Mr. Cahan
the three mile limit of Canada. In fact the condition reached a crisis in Canada at about the time of the Franco-German war. Many aliens had received naturalization certificates in Canada making them British subjects in Canada, but the moment they passed outside Canadian borders they were not recognized as British subjects in any part of the British Empire or in any other part of the world. So that in 1873 the parliament of Canada, after reciting the grievances which resulted from other parts of the empire not recognizing certificates of naturalization made in any other part of the empire, and which resulted from foreign countries refusing to recognize those certificates of naturalization, passed a resolution. The text of the resolution was as follows:
Resolved that an humble address be presented to Her Majesty setting forth the aforesaid grievance and praying that Her Majesty will be graciously pleased to take such steps as may be necessary for the redress of the same, by the negotiation of naturalization treaties between Great Britain and the German and other foreign states, so that legally naturalized foreigners in Canada may not hereafter be subjected to the disabilities of a divided allegiance, but be entitled to all the rights, privileges and protection of British subjects in every part of the world, and in as full a measure as if they had been subjects of Great Britain by birth.
This address was engrossed and dispatched to Her Majesty. I have not the time to enter into the subsequent political discussion or the decisions of the British courts with respect to colonial naturalization. But it was clearly decided in the British courts time and again up to and including the time of the recent great war that no force or effect beyond the territorial limits of a dominion or of a colony or a possession of Great Britain could be given to its naturalization act, so long as section 16 of the imperial act of 1870 remained in force. And at the present time when those citizens or subjects of foreign states who, prior to 1915, received naturalization certificates in Canada pass beyond the confines of Canada and enter any other part of the British dominions, they are not regarded as British subjects. If they enter any European state, and particularly the state or states of which they were subjects or citizens prior to their naturalization here, their Canadian certificate of naturalization is not recognized, and from time to time we are met with cases of such citizens going abroad possessing the old form of certificate of naturalization, being arrested, compelled to do military duty and subject to pains and penalties because they have not returned to their native country to perform military services and other civic
duties. Under our law, however, there is a provision whereby they may obtain a new naturalization certificate from the Secretary of State of Canada giving them all the rights of British subjects in every part of the British dominions. But it is impossible- although I urge it from week to week and from year to year-to impress upon them the necessity of applying for such certificates, known as imperial certificates.
This matter of our naturalized citizens or subjects having no rights as British subjects beyond the confines of Canada was a subject very dear to the heart of the late Sir Wilfrid Laurier. The matter was discussed at the colonial conference of 1902, again at the imperial conference of 1907 and again at the imperial conference of 1911, at which the late Sir Wilfrid Laurier, the then Prime Minister, represented Canada. At the conference in 1911 Sir Wilfrid urged that an imperial act should be so framed and enacted so as to enable each self governing dominion to adopt it, and thus bring the naturalization laws of the United Kingdom and of the several dominions into complete conformity He insisted that imperial nationality should be world wide and uniform, each dominion being left free to grant local nationalities as heretofore on such terms as its legislature should think fit. It is unnecessary for me to enter into a full consideration of what took place at the conference of 1911, but the result was that in 1914 the parliament of the United Kingdom passed what is known as the Naturalization and Status of Aliens Act, and in the same year that act was adopted by the parliament of Canada. It has been adopted also by Australia, South Africa and New Zealand. So that so far as the empire is concerned, any British subject receiving a certificate of naturalization in Canada under that act is a British subject throughout the whole of the British Empire. Those who received certificates under the acts prior to 1914 were not British subjects once they had passed beyond the confines of the dominion in which they had received their certificate.
A number of cases arose during the late war which those lawyers who desire to study the question will find exceedingly interesting. One was the case of a German who went to Australia early in life and received a certificate of naturalization in that country prior to 1914. After the outbreak of the war he went to England and was arrested as a German subject who had not reported to the police under the laws then in force in the United Kingdom. The courts of England decided that having been naturalized under the old

Naturalization Act-Mr. Cahan
acts prior to 1914 he was not a British subject once he went beyond the confines of Australia. He was imprisoned and visited with severe penalties for not reporting. This case is reported in Regina vs. Francis, ex parte Mark-wald, 1918, 1 King's Bench, 617. It again came before the courts and is reported in Markwald vs. Attorney General, 1920, Court of Appeal, 1 Chancery, 349. Another case arose in British Honduras, to which a man, I think a German, had come with his father at an early age. His father became naturalized and he himself became a naturalized British subject. Later on he rose quite high in the legislative council of that colony and subsequently became acting governor. For some reason or other one of the central American states had some criticism to make of his official acts as governor and when he left the confines of the colony he was arrested. The British government refused to intervene on the ground that he was a British subject only when within the confines of that colony.
It has become very important in our efforts to solve these various difficulties that we should conform to the agreements made at the conference of 1911 and reaffirmed at every imperial conference since that date. It was then agreed that changes in naturalization laws should not be made by any dominion or by the parliament of the United Kingdom without the general consent of the other self governing dominions, so that a British subjest in one dominion might thereafter be a British subject in the other dominions. That convention has been carefully adhered to. The matter was brought up at subsequent imperial conferences and at the last imperial conference held in 1930 it was again affirmed. I quote from the report:
That, if any changes are desired in the existing requirements for the common status, provision should be made for the maintenance of the common status, and the changes should only be introduced (in accordance with present practice) after consultation and agreement among the several members of the commonwealth.
It was in accord with the agreement reached at that conference that I had the honour in 1931 of introducing an amendment to the Naturalization Act of Canada. This amendment conferred much larger privileges upon married women in Canada who had married foreigners, in certain cases, and to others who were aliens but who had married British subjects in Canada or who had been naturalized by certificates of naturalization issued in this country. That bill of 1931 subsequently became law and was adopted ver-

batim by the parliament of Great Britain at a recent session and is now the law of the United Kingdom as well. We have proceeded in conformity with that understanding because it appears to be useless and vain to maike an alien a British subject in Canada when he will not be recognized as a British subject in the other dominions.
There is another phase to the question. Under the act of 1914 we could grant certificates of naturalization to alien men or women, but such a certificate granted to a Swiss subject or a subject of Czechoslovakia or of nearly all the other European states without their consent is not of great value. Such a certificate may lead that naturalized British subject into great trouble if he proceeds beyond the confines of this country and visits the state of which he was a former citizen or subject. Therefore to this day when we grant certificates of naturalization to the citizens or subjects of certain states we ask those states to release the particular applicant from his allegiance to the state of which he was a former citizen or subject Otherwise, we have to bring to his notice and impress upon him that when he goes beyond the confines of this country his status as a British subject will not be recognized by the state of which he was a former citizen or subject and may not be recognized by many other European states.


Mr. NEILL:: Will the minister pardon me a moment? He says, " going beyond the confines of Canada;" does he not mean outside the confines of the British Empire?


Charles Hazlitt Cahan: I should have said, going
ouside the confines of Canada into a country other than a British country.
This matter has now again come up for careful consideration. We recognize that a statute passed by the parliament of Canada under which a citizen or subject of a foreign country becomes a British subject in Canada is really ineffective when it comes into opposition with the statutory law of Switzerland, of Czechoslovakia or of a number of other states which I could mention, which declare that unless released from his original nationality, the certificate of naturalization as a British subject will not be recognized in that country. An effort was made by the late administration to avoid the difficulties which arose out of this dual or divided allegiance, by seeking to secure the acquiescence or recognition by foreign states of the granting of certificates of naturalization as British subjects in any part of the British Empire.

Naturalization Act-Mr. Cahan
This question came before the imperial conference of 1926 and was then referred to an expert committee on interimperial relations. That committee met in October, 1929, and the Minister of Justice in the late administration, the hon. member for Quebec East (Mr. Lapointe) , represented Canada on the committee. That committee, after a thorough investigation of all the interrelations of this question, deferred definite action in view of the necessity of obtaining international cooperation and consent, and also in view of the fact that a conference had been called at the Hague for the codification of international law and the knowledge that this subject would then be considered by the representatives of all the nations at that conference at the Hague. That conference met in March and April, 1930, under the auspices of the League of Nations, and Canada, which was represented by a delegate appointed by the late government, became one of the signatories to that convention, which is known as the Hague Convention.
That convention was subject to ratification by the signatory states and it was provided that ratifications should be deposited with the secretariat of the League of Nations. With regard to the nationality of married women this Hague convention provided as follows:
Article 8
If the national law of the wife causes her to lose her nationality on marriage with a foreigner, this consequence shall be conditional on her acquiring the nationality of the husband.
Article 9
If the national law of the wife causes her to lose her nationality upon a change in the nationality of her husband occurring during marriage, this consequence shall be conditional on her acquiring her husband's new nationality.
Article 10
Naturalization of the husband during marriage shall not involve a change in the nationality of the wife except with her consent.
Article 11
The wife who, under the law of her country, lost her nationality on marriage shall not recover it after the dissolution of the marriage except on her own application and in accordance with the law of that country. If she does recover it, she shall lose the nationality which she acquired by reason of the marriage.
At that session at the Hague, during two long months, very definite differences of opinion were expressed by the representatives of the several nations. In fact, the conference was almost equally divided for and against permitting married women to acquire a separate and distinct nationality from the nationality of the husband, and the articles which I have read were tentatively adopted,
subject to ratification, as the largest measure of agreement that could be reached by the nations there represented. Although that convention was signed by a representative of the late government, events ensued in 1930 which prevented the government of the right hon. the leader of the opposition (Mr. Mackenzie King) from ratifying it. It was therefore brought again to the attention of the imperial conference of 1930, and by common consent of the British dominions there represented in that conference if was agreed that legislation should be introduced by the several dominions to carry that convention into effect. The bill of 1931 Which I had the honour of introducing has carried the Hague convention into effect to the full extent at which an agreement was reached at that convention, and Great Britain, as I have said, has enacted a similar measure, with the result that both Great Britain and Canada, together on the same day, have deposited ratifications of these several sections of the Hague convention which I have read.
Now that Hague convention is likely to sit again within a short time. There is provision whereby it may be convened again in January, 1936, as provided in article 27 of that convention, at the request of nine states, members of the League of Nations, who have ratified the convention; and it is certainly to be hoped that when that Hague convention resumes its session in 1936, if there are nine states who have ratified it, there will be further consideration of the entire subject. And in so far as the British dominions agree, and foreign states acquiesce, we shall feel that it is competent for us to extend the rights and privileges which are desired by many women throughout the country.
My hon. friend's bill has been drawn under one or two misapprehensions, because an unmarried woman has exactly the same right as a man, whether married or not, with respect to the obtaining of naturalization. But the government feel that in view of the attitude taken by their predecessors, in view of the long line of consistent policy which has developed during the last century, now, when for the first time we have reached agreement to a certain extent with the British dominions as to the rights and privileges of British subjects throughout the empire, now when we have reached with certain states in Europe a consensus of opinion with regard to the rights and privileges which should be granted by European states as well as our own to women, it is inadvisable for this parliament to disrupt that continuity of progress and policy and to revert again to the state of

Naturalization Act- Mr. Butcher
embarrassment and difficulty with which this country had been confronted for nearly a century.
There are very few states indeed which recognizes that a Canadian woman, a British subject, who marries an alien of a foreign state can retain her British nationality after such marriage, because by the law of most states she thereby becomes a citizen or subject of the foreign state-Czechoslovakian, the Swiss, and a number of others. And until we can reach an agreement whereby naturalization in this country is recognized by those foreign states, in the case of our naturalization of their citizens, we should, we think, proceed very warily and very cautiously. Therefore I feel that this government has consistently followed the policy laid down by its predecessors running back to the decision of Sir Wilfrid L aurier at the conference of 1911.
The subject is a very complicated and difficult one. Throughout the year several hundreds of letters a week reach my office dealing with the complicated conditions to which the hon. member who has moved the second reading of this bill has referred. We endeavour to solve those difficulties as best we can, but there is no solution which we can devise in respect of an alien who has become naturalized in this country going abroad unless he is recognized as a British subject by the state of which he was formerly a citizen. I think this matter will be settled perhaps within a few years; I hope it will be settled at the next assembly at the Hague. I did my best when the matter was brought up at the assembly of the League of Nations at which I had the honour of representing this country, but it was then impossible to obtain the consent of any large number of foreign states to our going further than we have gone in following out the decision of the imperial conference of 1930 and the Hague convention of the same year.
I trust the hon. gentleman, after he has elicited the views of the house, will feel disposed to withdraw the bill on its second reading and leave to this government or successive governments ample elbow room in working out these difficulties which are very grievous and embarrassing.


Mr. HARRY BUTCHER (Last Mountain) :: Mr. Speaker, in view of the observations of the Secretary of State (Mr. Cahan) I do not propose to say anything in support of the bill, but I want to take this opportunity of thanking him for the very favourable reception he gave to the representations made by myself and, I believe, by others with respect to the fee payable by the wife of a newly
[Mr. Cahan.1
naturalized alien on making a declaration of desire to obtain British citizenship. It will be within your memory, Mr. Speaker, that prior to August, 1931, the wife of a newly naturalized alien, merely by virtue of the naturalization of her husband, became also a British subject, but in August of that year the law was changed in that respect and it became necessary for the wife of a newly naturalized alien, who wished to acquire British nationality herself, to make a declaration to that effect. The fee on making such aplication was S5 and it was felt by many that such a fee was excessive. On behalf of many who are interested in the subject I and no doubt others made representations to the Secretary of State and he was kind enough to take the matter up with council with the result that the fee was reduced. I find that by order in council P.C. 646, dated March 29, 1934, the fee for filing a declaration of acquisition of British nationality was reduced to the sum of one dollar. On behalf of those who are interested in the matter I desire to thank the Secretary of State for his action.


Mr. J. A. BRADETTE (North Timiska-ming):: Mr. Speaker, I do not know if I am
in order, but the matter which I wish to bring to the attention of the Secretary of State (Mr. Cahan) is one which directly affects women of foreign nationality who make application for naturalization.


Armand Renaud La Vergne: Order. Unless the hon. member wishes to speak to this bill I do not think he would be in order in bringing up now the subject to which he refers. It should come before the orders of the day are called.


Charles Hazlitt Cahan: If the hon. member will
present the case in question to me by note or personally, I will see that he has a satisfactory answer if it is possible to give him one.


Joseph-Arthur Bradette: I thank the minister.


Alan Webster Neill: Mr. Speaker, I do not want to delay the matter past the hour. The hon. member for Lisgar (Mr. Brown) is to be congratulated, not perhaps on introducing this bill which may at this time be inopportune, but in eliciting from the Secretary of State (Mr. Cahan) such an excellent resume of the law governing naturalization. This is really valuable to keep for ready reference.
I want to see the record complete-and I should like the minister to correct me if I am wrong-on this one point: The British act which enacted British wide nationality requires the residence to be five years. Prior

The Budget-Mr. Roberge
29S5
to that the residence in Canada had to be only three years. This is the point I want to make clear. I believe in that act provision was made that if anyone living in Canada was naturalized under the three year provision he could by some simple process, provided he then fulfilled the five year residence, apply and come under the empirewide naturalization.


Charles Hazlitt Cahan: That is so.


Alan Webster Neill: The minister did not mention that, and if he does so, the record would be complete.


Charles Hazlitt Cahan: That is true. We are
anxious that those who received naturalization certificates under the old act should qualify under the act of 1914 and thus avoid all sorts of difficulties in going abroad.


James Langstaff Bowman: Is there any additional
fee?


Charles Hazlitt Cahan: I do not recall. If any, it
is very small.


Albert Joseph Brown: In view of the very full
statement made by the Secretary of State I have no desire to press this matter to a vote and with the consent of the house I shall withdraw the bill.
Bill withdrawn.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of the Minister of Finance that Mr. Speaker do now leave the chair for the house to resolve itself again into committee of ways and means, and the amendment thereto of Mr. Ralston.
Eusèbe Roberge: Mr. Speaker, when the house rose at 6 o'clock, I was discussing a resolution that my colleague and friend, the hon. member for Antigonish-Guysborough introduced in the house in 1933 and which, had it been adopted, would have greatly helped the farming class. This resolution was again introduced this year, and is as follows:
Trade With The United States
Proposed reciprocal arrangement for exchange of natural products.
That in the opinion of this house, it is expedient that the government of Canada reopen negotiations with the government of the United States of America with a view of bringing about a satisfactory reciprocal trade arrangement between Canada and the United States, whereby the natural products of Canada, that is the products of the sea, the
farm, the mines and the forests, and including fish, lumber, wheat, cattle, etc. should have free entry into the United States, in exchange for the admission of certain goods from the United States of America, which in the interests of both countries may be admitted into Canada, free from customs tariffs.
The following is the Prime Minister's reply to the resolution, on February 19, 1934.
Right Hon. Mr. Bennett: I move seconded by the Minister of Finance (Mr. Rhodes):
That all the words after the word "that" in the said' resolution be struck out and the following substituted therefor: -
"on the 1st day of May, 1933, the Prime Minister informed this house that the governments of Canada and the United States of America had agreed to begin a search for means to increase the exchange of commodities between the two countries and thereby promote not only economic betterment on the North American continent but also the general improvement of world conditions, and while no trade agreement between the two countries has yet been arrived at, this house approves of the government continuing their efforts to that end."
It would have been preferable for the Prime Minister to state immediately that he did not desire to sign any treaty with the United States and that he intended to allow our representative, at Washington to idle away his time. The latter costs the country nearly $100,000. Had he had any intention to sign a treaty with the United States, he certainly had time to do so since he opened negotiations with them. Our farmers would have benefited this year by such a trade agreement, especially as to maple sugar, which sold in Canada, in 1934, 6 cents per pound less than in the United States. In fact all farm products mentioned in the resolution of the hon. member for Antigonish-Guys-borough would have benefited.
However, it is contrary to the Prime Minister's policy to lower the tariff. All for Great Britain, whether it suits us or not makes very little difference to him. That is why I state that he is responsible for the communist ideas which have taken root in this country; he only protects the wealthy and the trusts to the detriment of the poor people. The country only awaits an opportunity to tell him what it thinks of his high protection and his policy which is contrary to the interests of the people. The last by-elections have proved it and the general election will but confirm my statement.
On April 26, 1934, we had the pleasure of listening to an eloquent speech by the hon. member for Dorchester (Mr. Gagnon) in support of bill No. 51, which was being discussed by the house. As representative of a
The Budget-Mr. Roberge

Quebec constituency, I was amazed at his attitude towards the hon. Prime Minister of Quebec in connection with a statement made by the latter and published by the newspapers, some time ago. The statement referred to bill No. 51, an act to improve the methods and practices of marketing of national products in Canada. I think that the hon. member for Dorchester should have rather approved the statement of Mr. Taschereau, because he has no right to ignore that the people of the province of Quebec are a minority in this Dominion and must take the necessary steps to see that our rights and privileges granted by the Fathers of Confederation are respected.
I further contend that it was the duty of the Quebec Premier to protest against this new measure which threatens the rights of provinces. The hon. member for Dorchester endeavoured to convince the house that Mr. Taschereau was inconsistent by making this statement, published by the press of the province, and in which he openly opposed this new measure. He had a bill enacted by the legislative assembly so as to permit his government to cooperate with the Dominion government so as to enforce the act, if thought beneficial. I think the hon. member for Dorchester, before criticizing Mr. Taschereau for being inconsistent, should have read the statement the Quebec Premier made when introducing bill No. 243, which permits the provincial government to cooperate with Ottawa, not only as regards Bill No. 51, but with any measure which might be enacted by this house at this session or by order in council, subject to being ratified by the Quebec legislature, at their next session. The hon. Mr. Taschereau stated on that occasion that bill No. 51 had just been introduced in the House of Commons, but that he was unable to say whether the bill would be adopted in its present form or amended so as to protect the rights of our province. The object which the Quebec government had in view when introducing bill No. 243, was simply to be in a position to take advantage of whatever might improve the situation in Quebec, and reject anything which might be detrimental to the interests, as a whole of the province, and it was his right and duty to take such steps.
To follow up what I stated in connection *with Bill No. 51, why did the government, if this bill favours so much the interests of the farmers, delay the measure so long, why did it wait until the eve of an election to introduce it? Had the government adopted
^Mr. Roberge.]
the following resolution moved by the right hon. leader of the opposition (Mr. Mackenzie King), on October 6, 1932, it might have helped the farming class.
Session 1932-1933, vol. II, page 1544.
Whereas parliament has been in session since October 6, of the present year and is shortly to adjourn until January 30, 1933;
And whereas, since parliament assembled the government has not made any statement of policy with respect to the relief of existing agricultural conditions;
And' whereas, the position of agriculture in Canada has become increasingly deplorable and, unless relieved, will bring about a condition of distress hitherto unparalleled.
This house is of opinion that the government should immediately announce what policy if any, it has with respect to the relief of agricultural distress, and permit full consideration of the same before parliament adjourns over the months of December and January.
By adopting this resolution of the leader of the opposition, the government would have assisted the farming class. It did not then appeal to them, but on the eve of an election they begin to take some interest in the farming class.
The following is the amendment moved by the right hon. leader of the opposition on April 19, 1934:
That all the words after the first word "that" be struck out and the following substituted therefor:
This house, while prepared to support legislation for assisting the orderly marketing of natural products, is unalterably opposed to the enactment of any compulsory measure which delegates to unnamed and undetermined individuals, groups or organizations, sweeping powers over the production and trade and commerce of the nation, and which confers upon a minister of the crown and upon the governor in council unprecedented authority and unusual powers to restrict production, and interprovincial, inter-imperial and foreign trade as regards both exports and imports, as well as other autocratic powers.
According to the official figures which I desire to place on Hansard, the public will have an opportunity of judging for themselves in what way the government takes an interest in the farming class which, in a crisis, should have been helped by >the government.
In the estimates which are voted, each year, on March 31, $7,247,500 were appropriated to agriculture in 1929; in 1930, $8,483,326; in 1931, $8,751,795.24; in 1932, $9,929,908.08; in 1933, $6,671,100; in 1934, $7,365,912; in 1935, $6,510,620. We note a steady decrease, sir, in the appropriations for agriculture, since 1932. Between 1932 and 1935 ,there has been a reduction of more than $3,000,000, while in the appropriations for the Royal Mounted Police-I do not know whether the govern-

The Budget-Mr. MacNicol
ment fears that the country may be kidnapped-there is a steady increase. In 1929, this service received $2,465,375.38; in 1930, $3,040,725.25; in 1931, $3,126,565; in 1932 $3,176,341.34; in 1933, $3,839,595.75; in 1934, $5,615,595.75; in 1935, $5,615,595.75. In looking over the official figures, sir, one may note the little interest which this government displays towards the farming class, since it increases the appropriations for the national defence and reduces those for agriculture, in a time of crisis.
May I, sir, place on Hansard a few of the promises which the right hon. Prime Minister made in 1930, so as to show his great sympathy for the farming class, in the course of the election campaign. How did he keep them?
The following is from the Calgary Herald on June 13, 1930:
We pledge ourselves to foster and develop agriculture and live stock and dairy industries now so sadly neglected.
The Morning Citizen of June 30, 1930, published a speech delivered at Ormstown by the present Prime Minister:
We of the Conservative party maintain that the dominion having control of all systems of taxation must assist agriculture, understand, by scientific study the problems under which we work and get the best returns. And we Conservatives are pledged to see that agriculture receives the same benefits as in the days gone by.
What resulted from these promises? We could quote many others, but these are sufficient to prove to the farming class in what way the right hon. Prime Minister intends to help them, namely, by reducing since 1932, the appropriations for agriculture by $3,419,288.08 and increasing those of the Royal Mounted Police by $2,439,254.41 for 1934-35.


Mr. J. R. MacNICOL (Toronto Northwest):: In every budget debate that I have listened to since I became a member of this house hon. gentlemen opposite have apparently enjoyed themselves from time to time in charging that the fiscal policy of the Conservative party is one of tariff barriers, restricted trade, trade obstruction, subserviency to big interests, robber tariffs, exploitation, and so forth. The hon. member for Shelbume-Yarmouth (Mr. Ralston) added one further expression when he stigmatized the fiscal policy of this government as one of tariff embargoes. At the same time he questioned the efficiency of tariff 74726-189
bargaining as a means to increase the trade of this or any other country. For my part I am in favour of adequate tariffs, and I oppose the stigmatizing of the fiscal policy of this government as a policy of barriers, restrictions, obstructions, embargoes and so forth.
The hon. member for Yorkton (Mr. Mc-Phee), when he spoke on the budget, asked: Where is the relief in connection with binder twine? I presume he must have had some thought that the question of binder twine had something to do with the budget now before the house. Ever since the government of the late Right Hon. Sir Wilfrid Laurier made binder twine free on January 1, 1898, binder twine has come into Canada free; this government has made no change in that regard, and as far as I know there is no intention whatever of changing the tariff as to binder twine. So why the question was asked I do not know. On the other hand I do know that on the thousand and one items imported into this country, all that are imported from outside the British empire pay an excise tax of three per cent, and those imported from within the British empire pay an excise tax of one and a half per cent. Knowing that the binder twine manufacturers of Canada pay a three per cent excise tax on all the fibre they import to manufacture into binder twine, and knowing that the British manufacturer, who is their second greatest competitor in that commodity, pays only one and a half per cent to ship his finished product into Canada, perhaps the hon. member for Yorkton thought that the Canadian manufacturer was not getting a square deal and had in his mind the idea of giving him some relief.
Since the question of binder twine has been mentioned, I recall having read that when the tariff was taken off binder twine on January 1, 1898, there were some twenty-five plants in Canada making binder twine. To-day there are three. At the time the tariff was taken off binder twine that article sold in Canada at six cents per pound. From the date of the removal of the tariff-I do not mean that free trade was the only cause that brought about this condition-the price of binder twine advanced until in 1918 it was thirty cents a pound. So I say free trade is not a cure-all so far as prices are concerned, but it certainly did put out of commission a goodly number of binder twine companies.
I have spent many years in industry and in association with employment. The principal reason that I am in the house to-day is in



The Budget-Mr. MacNicol
order to do what I can for both employment and industry, because I know they go hand in hand. I know that the tariff does provide jobs.


Some hon. MEMBERS:: Oh, oh.


John Ritchie MacNicol: The hon. member for West Lambton (Mr. Gray) may laugh at that, but he has a number of new industries in his own riding as a result of the tariff, and I do not believe the employees in those industries would care to hear him laugh about their employment. I say the tariff has produced and does produce jobs. I am quite well aware that there is exploitation-


Some hon. MEMBERS:: Hear, hear.


John Ritchie MacNicol: -but not necessarily as a result of the tariff. I will give a few instances of exploitation that had nothing whatever to do with any fiscal policy. I have on my desk before me a magazine that records a number of instances of exploitation. I am opposed to price exploitation; I will support any government measure that will prevent it and will see to the punishment of those proven to be exploiters and profiteers. This article, it would appear, refers to instances in the United States. I do not know whether we have had similar instances in Canada, though I do not believe so; I do not think Canadians would do that sort of thing, and I do not cast any reflections on our neighbours to the south. But when a company advertises that a container holds a quart when it really holds only a pint and a half, that is wrong; when containers which are said to contain a pound weigh only fifteen ounces, that is wrong. We all know of the case of the five dollar razor that was protected by patents. When the patents expired German razors were sold in the United States, duplicates of the five dollar razors, for twenty-five cents. Something may be wrong with the patent laws not only across the line but in Canada as well, if such conditions exist; but at any rate I call that exploitation. Then we have the case of a person going to buy an automobile. He is offered 1400 for his old car if he purchases one make of automobile or $800 if he wishes to purchase a higher priced car. I think something is wrong there, because the old car could not in these circumstances increase in value by $400. But the tariff has nothing to do with exploitation of that kind.


Some hon. MEMBERS:: Oh, oh.


John Ritchie MacNicol: If there is exploitation, however, the government can regulate it or
CMr. MacNicol.]
prevent it by passing laws, and such laws are not new. In the reign of Edward IH the great fishmongers of Billingsgate market threatened to exploit the small fishmongers, and the government of that day, some six hundred years ago, enacted legislation which prevented the great fishmongers from making more than one penny on a shilling's worth of fish. Again, in the reign of Queen Anne, similar laws were enacted to protect the consumers against exploitation. In 1930 the consumers' council bill was introduced in the British house, the fifth clause of which provided that where it was reported to the board of trade that an excessive price was being or was likely to be charged for any commodity, the board of trade might take action. Later that bill was incorporated in the British agriculture bill, and I believe some of the clauses of our marketing act are patterned after the clauses of the British agriculture bill.
The point I make, Mr. Speaker, is that exploitation can and should be prevented by law, but that the true principle of the tariff is not to blame for many cases of exploitation that have occurred. Every hon. member knows that to-day most every nation in the world, great or small, has a tariff. Even the dependencies of the nations have tariffs. Some of these tariffs may be higher and some may be lower than the Canadian tariff; it is not necessary to go into detail. In the face of that situation, however, what is Canada to do? Should she let down her tariff walls, as hon. gentlemen opposite did in 1922, 1923 and 1924? I was in business during those years and I remember the delegations from boards of trade, chambers of commerce and manufacturers from all over Canada that came to Ottawa to protest against the freer trade policy of the late government. I remember it was reported that forty-six per cent of the total capacity of the woollen mills of Canada closed their doors up to 1924, and I know that on September 4 of that year a great delegation attended what was then called an employment conference but what would be called to-day an unemployment conference, held in this city. Facts and figures were submitted to the conference, showing that 1,351 industries of one kind and another, large and small, had closed their doors as a result of the freer trade policy of the late government. Every hon. member knows that up to 1923 and 1924 approximately 350,000 Canadians were thrown out of work in Canada and compelled to migrate to the great republic to the south.

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Hon. members opposite also know very well that we could not maintain the Canadian standard of living against competition brought about by freer trade, that the standard of living in Canada would have to go down to the standard of living of lower wage countries. In this connection I should like to read from the speech made by the right hon. leader of the opposition (Mr. Mackenzie King) on April 29, 1931, as it appears on page 1115 of Hansard for that year. The right hon. gentleman was making an address in connection with unemployment insurance, and just here I may say that I am in favour of a system of contributory, compulsory unemployment insurance. I should like to read this statement, because it is a good exposition of the views held by the right hon. gentleman in that connection. He said:
But there is a law which applies in industrial relations as it does in other fields, whereby if competing standards differ, the lower standard in the course of time, tends to drive out the higher. That law was first enunciated by Gresham with respect to the precious metals.
Gresham pointed out that where two metals were in circulation, the one base and the other pure, the baser metal tended to drive the purer metal out of circulation. That same law, I believe, is applicable ,to competing standards in industry. Where you have high standards of industry in one province, with lower standards in another province, the lower standards, if permitted to compete with the higher standards, will drive the higher standard's out of existence and in time bring industrial standards to the level of the lower.
For that reason it becomes necessary in a country such as ours to devise some means whereby the standards of industry as between the different provinces may be brought to and kept at the same level. I doubt if that is possible in any other way than by some system of federal cooperation or control. But the problem is more far reaching than that. What I have said with regard to industries in the different provinces is equally true of industry as between different countries.
I ask hon. members opposite how they would maintain the standard of living in Canada against the standard of living of, we will say, Russia, Japan, or some other competing nation, other than by an adequate tariff policy. In my opinion there is no other way to do it than by the adoption of a tariff policy. This government has given Canada an adequate tariff policy. If hon. members think it worth while, I would ask them to compare the remarks I am making with the last sentence of the remarks of the right hon. leader of the opposition which I have just quoted. Then I would ask them to review the latest figures indicating the wages paid in some of the leading nations of the world. These figures, based on the eight hour 74726-189*
day and given in the equivalent of Canadian money, show that in Japan they are paying 76 cents per day; that in Italy they have reduced the wages only recently from 95 cents to 85J cents per day. In the Netherlands, where large quantities of binder twine are made and offered as the chief competition for our binder twine, they pay $1.18 a day. Last year the Netherlands sold to this country several hundred thousand dollars worth of binder twine. In France the rate is $136 per day; in Prussia or Germany $1.46; in England $2.28-all these against the average in Canada of $3.42. How can we compete? How can Canadian labour compete-and it is on behalf of Canadian labour that I raise my voice, and which I will defend on every opportunity which presents itself. How can the Canadian worker drawing wages averaging $3.42 compete with the twine worker in the Netherlands drawing $1.18? Apart altogether from binder twine, can the Canadian worker compete in any other way without protection-and I am not by any means in accord with placing a duty on binder twine. On the other hand I am in sympathy with giving the agriculturist every possible opportunity to produce his product at the cheapest possible price, and to sell it in the dearest market he can find. Statistics show that Russian wages to-day approximate 25 cents per day. The Canadian worker cannot compete against that kind of competition, and I know of no other means by which he may be allowed to operate unless through the use of tariffs.
As the time at my disposal is passing rapidly I shall not take time to submit datst and figures to show that business in Canada is getting better. That fact has been admitted from every corner of the house. During the recess I visited twenty-five or thirty towns and cities in Ontario, in addition to travelling extensively in the United States, looking into industrial and labour problems. I visited some sixty to seventy Canadian factories in Canada, talked to managers, foremen and workmen. I know from personal observation that business in Canada is improving. I was glad to find that out. I am pleased to know that every day more and more men are being employed in industry, and I only hope that the improvement continues.
Among other branches of industry I visited were those associated with construction. I must admit frankly that factories engaged in the manufacture of metals, glass, hardware and the allied lines of the construction industry have not improved as rapidly as have many other industries. But they are coming around, which means that construction in Canada is increasing. A person could have

The Budget-Mr. MacNicol
a fair understanding of the amount of construction going on in Canada in comparison with what is in progress in the great republic to the south if he were to visit Philadelphia, which has a population of about 3,000,000. If he were to visit the suburbs of that great city, as I have done, and look into the amount of building going on over there and then return to the great city, one riding of which I have the honour to represent, he would see, as I have seen, that in the suburbs of Toronto there is more construction going on than there appears to be in Philadelphia, a city five times as large. It would do anyone good to visit the northerly limits of the city of Toronto, where there is really a considerable amount of building in progress.
If the government are going to adopt a building program I would say that the sooner they commence the better. I certainly am not in accord with the erection of buildings having no commercial value and which do not effect a saving to the government. With this point in mind, during the recess I visited many Canadian towns and cities and made exhaustive inquiries into matters affecting building construction. For example may I instance the city of Hamilton? I say that Hamilton is entitled to a federal building because at the present time the government has to rent considerable space. In my view a federal building in Hamilton could be erected economically, because it would yield a return in rent saved. All hon. members who have visited Toronto know that on Front street a customs house has been built, but not completed. If the government were to finish the customs house in Toronto the rent saved would in time pay for the work. That kind of construction work is eminently sound, and I am in accord with it. So I would say to the government that at the earliest possible moment they should back up the efforts of the private constructors. So far as I can ascertain there is at the present time building contemplated to the value of $100,000,000. A building program to that extent would mean the employment of 125,000 men working in the quarries, the lumber woods, in the other primary industries connected with building, and would furnish work to the finishers, the artisans who are very anxious to have employment. I endorse heartily the proposal of the government to speed up construction of buildings and particularly those which in due time would pay for themselves.
As I said a moment ago I visited about sixty to seventy factories during the recess. I made a survey of the men engaged in those industries, men who in many instances were

turning out new materials which had never before been manufactured in Canada, materials demanded by Canadians. Capital was invested in those industries because the tariffs of Canada had kept competing materials out of the country. My compilation showed that 10,000 men and women workers are to-day engaged in making brand new material which has never before been manufactured in this country. These workers are in addition to the 400,000 or 500,000 men and women engaged either full or part time in Canadian factories. Some people will say that 10,000 workers do not indicate a great deal of industry, but if one takes the census returns of 1931 he will find that Brockville, Kingston, Belleville, Peterborough, Woodstock, Paris, St. Thomas and Owen Sound combined have only 10,000 industrial workers in their factories, and I will say that any community or province in Canada would be more than pleased to have in their midst a new city with 10,000 workers and with a purchasing power equivalent to that of all the industrial workers in the cities I have just mentioned. And that means more consumers for our agricultural producers in the province of Ontario.
Following the war most countries sought means whereby they could increase their industrial activities. Most of them followed-the plan adopted 'by Germany in 1881. At that time Germany established an industrial council and other European nations followed suit. To-day twenty-two nations have departments of industry, either separate or associated with other departments of government. I would have moved a motion recommending that this government consider the question of organizing a department of industry in this country but I was afraid that industry itself would think there might be government interference. Up to the present I have refrained from recommend|ing anything of that nature, but I am convinced that the time has come when the government could the greater assist the industry of this country without busybody interference. What were the objectives of the German industrial advisory board, the department of industry of France and the departments of industry of Norway, Belgium, Italy, Czechoslovakia, Ireland and China? First, they were organized to provide more jobs; second, to make all jobs more permanent; third, to provide a safer investment for capital; fourth, to provide minimum wage laws for those engaged in industry and compensatory measures where injuries occurred; fifth, to introduce compulsory and contributory unemployment insurance and, lastly, to create a national buying spirit.

The Budget-Mr. MacNicol
Last summer I made a tour of the mines in northern Ontario. I associated with the managers and foremen of mines. One of the things which struck me was the large number of steel drills piled up in the yards of various mines. Upon inquiry I ascertained that up to the advent of this government the mines of northern Ontario imported from New York state seventy-five carloads of steel drills per year. The manager of one of the large mines was impressed with the buy in Canada spirit-in my humble opinion it is patriotic to prefer goods made by Canadians-and he conceived the idea of holding a meeting of mine managers. It was ascertained that not only did the mines of northern Ontario use seventy-five carloads of steel drills but the rest of the mines in Canada used an additional seventy-five carloads, a total of one hundred and fifty carloads per year. I was told that representatives of the steel industry were invited to confer and the result was that to-day a steel plant in an Ontario city is shipping throughout Canada each year one hundred and fifty carloads of steel drills. This industry gives employment to 150 men. That is a real patriotic spirit. If architects, builders * and buyers throughout Canada were imbued with the patriotic spirit to buy Canada made goods, I am satisfied that within a reasonable number of years a quarter of a million more men would be placed at work in this country.
Prior to the imperial conference a deputation of British industrialists came to Canada to confer with Canadian manufacturers. They bargained on what could be manufactured economically in Canada and what British industry could ship to this country. They bargained together, which is not a new thing. Some time ago I read a speech of the Right Honourable Benjamin Disraeli quoted in the Edinburgh Blackwood's Magazine of 1868, at page 369. It appears that in 1844 and 1845 the then Tory Prime Minister of Great Britain was inaugurating a policy of free trade between Great Britain and other countries. His Tory followers were surprised and the common statement at that time was, whither will he lead us. Lord Beaconsfield, then Mr. Benjamin Disraeli, made a speech in which he said in effect:
Not that they were opposed to free trade, so long as it should rest upon sound principle. What they did object to was that, without any attempt to arrange with foreign countries a system of reciprocal intercourse, duties on imports and exports were lessened or repealed which had hitherto supplied the state with an adequate revenue, while at the same time they protected native industry. The party argued thus:	Make, by commercial treaties, any
arrangements which you consider to be advantageous to the common weal. We will
go with you in opening British ports to French silks and French wines, provided France will act in the same liberal spirit towards British cotton goods. We will admit into the home market, at reduced rates, the corn, hemp and tallow of the northern powers, provided they will reduce, in equal proportion, the duties which they now levy on our cutlery and hardware; but don't let us throw away what we possess without getting anything back in exchange, which we shall certainly do if we allow all the nations of the earth to glut our market with their products while they shut our products out of their market by taxing them heavily.
We had an experience similar to that in 1922 and 1923 under the administration of the late government. Our markets were opened to the manufacturers of the world, through low tariffs, while markets of the world were closed to ours. After twenty-five years spent in industry I am satisfied that the state of industry in Canada when the depression came upon us was due to our trade being depressed by the products of labour in foreign countries. The industry of Canada was unable to meet the depression as it otherwise would have done. This government has been eminently wise in taking the course it has in connection with its tariff policy and ensuring the buying by Canadians of goods manufactured in, Canada by Canadian workmen.
I should like to say a word about government costs, because the Minister of Finance pointed out that these costs were being cut down. In my humble opinion industry is afflicted to an abnormal extent with one kind of tax or another. This government has made a splendid start in cutting down the cost of government, but we can go much further when we consider that we have in this country nine legislatures, a legislative council, a House of Commons and a Senate ; approximately one thousand legislators and seventy-five ministers. There is no doubt that the people of Canada are overgoverned, and that the cost of government can be cut down. From 1904 to 1931 the costs of government in this country increased 666 per cent while the population increased only 78 per cent. I congratulate the government on what it has done, but I hope it will go further. Every hon. member has heard of the government costs of the state of South Dakota. In 1932 a new governor was elected and I have before me his inaugural address. I am happy to be able to say that he accomplished much of what he set out to do. He set out to wipe out state banking, state insurance, state bonding, the state railway commission, state operation of mines, state ownership of farms taken over on foreclosures, state duplication

The Budget-Mr. MacNicol
of municipal duties, state duplication of federal duties and state operation of cement and other plants. Governor Tom Berry deserves the support of his state for the attempt he has made to cut down government costs. As one who has been associated with industry for many years, I say emphatically that industry in Canada is crying aloud to this government and every government in the country to cut down the costs which to-day are being inflicted upon it, thus retarding employment to a certain extent. We can do something more along that line.
Many hon. members have no doubt read of the great metallurgical and chemical plant which the Russians are erecting at Magnetogorsk, on the Ural river, occupying about twenty square miles and with a capacity, when it is finally in operation, of four million tons of steel a year. Picture what will happen to the steel trade of the world when that plant goes into full operation. Why, in our palmiest days Canada imported only 150 thousand tons of steel a year. Canada as well as other countries must plan and make every effort to protect themselves against having their markets flooded by goods produced by cheaper labour in other countries. I have no criticism to offer with respect to the wages paid in Russia and the standard of living that prevails there. That is the business of the Russian people, and if they are satisfied with their conditions nothing that we could do, in any event, would alter that. And the same applies to Japan; I do not criticize what they do. Their standard of living and their wages suit them. But I do say that we can protect ourselves against the products of their factories, and we can do so in no way that I know of other than by an adequate tariff. We cannot afford to leave Canadian workmen and factories unprotected against the products of other countries where there is cheap labour. We must have an adequate tariff.
I made an extensive inquiry into labour conditions and industry in Europe and Great Britain, and while there I looked into plant areas and studied the question of plant concentration. I found great industrial areas in Sheffield and Birmingham, but the greatest industrial area in the world in my opinion is Trafford park in Manchester. I made an investigation of plant areas at Halifax, Saint John, Quebec City, Three Rivers and Montreal. All of them have magnificent areas; and along the St. Lawrence river, when the St. Lawrence waterway is completed, we shall have one of the greatest waterways in the world, developing illimitable power. There we shall have one hundred miles of plant sites equal to the

best plant areas anywhere. We have great areas at Vancouver. We have great areas at Winnipeg, at Port Arthur, at Fort William, at Windsor and along the Welland canal. I was happy to learn, while making an investigation of the steel industry in the United States last summer, after this house had risen, the opinion held by one important manufacturer there. He said to me, "Mr. MacNicol, had it not been for the depression this company might have erected along the Welland canal a great steel plant." We have also that magnificent plant area in Toronto which is being exceedingly well developed by the Toronto Industrial Commission. Even during these times of depression, since 1929, under the efficient management of Mr. Keenleyside the Toronto Industrial Commission has brought into that area 115 plants large and small, giving employment to 2,500 men, with an investment of $5,000,000, and occupying 1,250,000 feet of floor space.
I am convinced that if the governments of Canada, federal and provincial, having control over industrial expansion, could organize a department which would work as efficiently- and I see no reason why they should not- as the two great railway industrial departments and other industrial departments have, it would have a very beneficial effect on bringing industry to this country, and such new industry in Canada would provide a good deal of employment for Canadians.
I congratulate the government on what they have done, considering the world depression through which we have been passing, and I say this not only as a former industrialist but for labour as well; for I take second place to no man in this country in my feeling for labour. I say to the government: You have done wonderfully well and you deserve credit, for the employment which you have provided for Canadians, many thousands of men in various industries in this country, as a result of making it possible for much new manufacturing to take place in Canada. I say to them, "Keep on going straight down the road you have been travelling. Be not deterred from your objective, let the chips fall where they may, and in spite of any criticism that may be hurled at you either in this house or outside." I have not the slightest fear regarding the attitude of the people of Canada. They recognize in this government, in the leader and his cabinet, a group of earnest men who have done their best for this country in the severest depression that has ever been experienced not only in Canada but in the world. They have toiled for this country at

The Budget

Mr. MacLean
the sacrifice of their health and I am satisfied that when the bell rings for the general election the people of Canada will rise up and return the Prime Minister at the head of his government to continue as he has been doing.


Mr. A. E. MacLEAN (Prince):: We are always delighted to hear our good friend from Toronto (Mr. MacNicol) he is always interesting and lucid in his exposition of the tariff policy of this government. But tonight I must congratulate him on his great faith, a faith which is beyond my comprehension, when he suggests that the policy which this government has followed for the past four years will carry hon. gentlemen opposite into the treasury benches after the next election. Time will show how accurate my hon. friend is in that prophecy. I can well understand why he always makes such a plea for the manufacturer and the worker. He comes from an industrial city; his constituency is made up of industrial workers, and it is not to be wondered at that he does his best to put up a plea for them. I am sorry however that the hon. gentleman can see only one side of the question. We on this side of the house see the industrial side, but there is another great class in Canada who must receive some consideration, and that is the consumers and the public at large.
My hon. friend, when I came in, was telling this house that what Canada needed was an adequate tariff. It seems to me that what this government has given the country is a little more than an adequate tariff, for we have the highest tariff that we have ever had. He has also told us what the government has done for industry. Well, the best years that industry in Canada has ever experienced was during the regime of the last government, from 1921 to 1930, when the manufacturers sold more manufactured goods, when our export trade in manufactures was much larger, than at any time in the history of the dominion. And it was not a high tariff that did it but a moderate tariff which provided the country with a revenue so that we were able to pay our way and have a surplus on the right side of the ledger.
I regret the absence of the Minister of Finance (Mr. Rhodes) from the house tonight and also the very sad reason therefor. The annual budget is always looked forward to with a great deal of interest. It is supposed to give not only a review of the financial situation of the past year but a glimpse into the future, an outline of the policies which the government intends to
follow and also some lead as to our export and import trade. But in this budget speech and in the speeches of hon. members opposite who have spoken in large numbers we have heard nothing regarding our export trade and how they intend to extend it. In the budget there is not one word which suggests that any effort has been made in the past year to secure any new treaties with foreign countries or even to try to put through a reciprocal trade agreement with our friends to the south. Recently we saw that our United States friends were quite willing to introduce legislation looking toward reciprocal trade, and I believe the present is the most opportune time in the history of Canada to make a move in that direction.
We might look for a few moments at the records of the two governments. My hon. friend who has just sat down (Mr. MacNicol) has been a stout defender of his party, and I want to be just as stout a defender of the policies in which Liberal members on this side believe. All we have to do is to review the records of the two parties. No one will deny that under the King administration we had seven years of progress, splendid surpluses and increased trade, but under the regime of our hon. friends opposite, notwithstanding all their promises in 1930, we have had four years of almost famine. It has not yet reached the seven year period, but if our hon. friends remain in office I am afraid that it will run that long. Did the Conservative party give the former Liberal government any credit for the splendid showing they made during their term of office? Not on your life. I remember when sitting on the other side of the house hearing hon. members, then on this side, day in and day out, condemn the former government from every angle-we were spending too much money; we were not showing sufficient surpluses; we were not reducing the public debt fast enough; we were not reducing interest charges sufficiently. Talk about prejudicing the minds of the people! If any persons worked harder than did our hon. friends opposite to prejudice the minds of the people during the Liberal term of office, I would be glad to know it. The present Prime Minister (Mr. Bennett) used to tell the house how he would handle the finances of the country. He would provide a sinking fund that would eventually wipe out the national debt; he would reduce interest charges. The right hon. gentleman has had his opportunity; he was elected prime minister in 1930; he was not only prime minister but, for two years of that period, minister a*

The Budget-Mr. MacLean
finance, and he had every opportunity to put into operation the great ideas he had when he was on this side of the house.
But what do we find? The right hon. gentleman, far from moving along the lines he suggested in the house, has never made any effort at all to take care of the financial situation; no sinking fund has been established; deficits have been shown every year. Under the Liberal regime we had seven surpluses amounting in all to 8276,000,000, while our hon. friends opposite in four years have added to the funded public debt no less than
8594,000,000.
Someone may ask: What about the railway debt? Well, what about it? In the seven year period of the Liberal regime the national railways had a deficit of $93,000,000, and even if you take that from the $276,000,000, you have still $183,000,000 of a surplus to go towards reducing the public debt. But even if you disregard that altogether you will find that the public debt has been reduced by a much larger amount than that. When the hon. member for Shelburne-Yarmouth (Mr. Ralston) was speaking the other day he pointed out that during the Liberal regime current deficits on the national railways were paid out of current revenues and not charged to the public debt. Our hon. friends opposite should take note of this because it is a fact worthy of a great deal of consideration. Under the Conservative government from 1919 to 1921, the average deficit on the Canadian National was $22,000,000 per annum. From 1922 to 1930 the average surplus for interest payment due to the public was $24,000,000 per annum. The deficits began again when our hon. friends opposite came into power. As I pointed out, one has only to look at page 3 of the public accounts to find that the debt increase from 1930 to 1934 totalled, as I said before, $594,000,000, while increases in interest charges on the public debt, including this year's deficit, have reached $25,000,000. If you include the deficit this year of 8135,200,000. you find that the total interest charge we have to pay in this country is around $145,000,000. When one considers that in 1875 the total debt of the dominion was only $150,000,000, one can see in a minute whither we are drifting.
Coming to the question of interest charges we find that in 1930 the interest charge was around $121,000,000, but in 1933 it had increased to over $139,000,000, an increase of more than $18,000,000 in those three years, while under the Liberal regime interest charges were reduced $4,694,000. As I said before, if we include this year's deficit of $135,200,000 we have now an interest charge of around $145,000,000 per annum.
rMr. MacLean.]
I noticed that some newspapers commenting on the speech of the hon. member for Shelburne-Yarmouth stated that the average deficit of the Canadian National Railways for the last eleven years was $25,000,000. Why do they take the eleven year period? I think it is only fair for each government to stand on its own feet and each one to account for its own deficits or surpluses. If you take the eleven year period you will find from page 19 of the annual report of the Canadian National Railways that the average Canadian National deficit from 1923 to 1929, after deducting the one surplus, was $9,500,000 annually. But the average deficit for the past four years under this government was not $9,500,000 but $58,000,000 annually. That shows the difference in the management under the two parties. Our hon. friends opposite will say: "Oh, that was due to the depression." I think if we want to go into the matter we shall find that the great cause of the falling off of the earning powers of the Canadian National and the Canadian Pacific was the fact that this government put on a high tariff that stopped imports. The minute they stopped imports, the transportation systems had nothing to move, the result being that falling off continued right along the line and not only the transportation systems but everything else suffered in proportion.
The Minister of Finance in presenting the budget said that he would have a surplus next year of $8,000,000. I hardly think that is a fair statement to make to the house, because there are a great many things that have not been taken into account. We are told that a bill will be introduced this year providing for the spending of perhaps $50,000,000 on public works. Will these be chargeable to next year's account? If so, what becomes of the estimated surplus of $8,000,000? But it is not only that; there are a great many other items that have not been taken into account. The marketing bill that is now before the house is going to cost quite a few millions to operate if it is operated in the way our friends think it will be. Then there is the cost of restoring the civil service salaries- another large amount. I venture to say that when these items I have mentioned are taken into account instead of having a surplus of eight millions, the balance will be fifty to seventy-five millions on the other side of the ledger. So I say it is unfair to the public for the minister to say: "We are going to balance our budget and have $8,000,000 on the right side," when they knowingly leave out such large items.

The Budget-Mr. MacLean
The same thing happened when the estimates were brought down this year. Headlines appeared in the press all across the continent: "Seventeen millions saved in the estimates." I venture to say that before this house rises supplementary estimates will be brought down that will more than wipe out this seventeen millions. I say again that it is absolutely unfair to treat the public in this way. Our friends opposite should give them the real facts.
When hon. gentlemen opposite were on this side they were continuously telling the house and the public that we were spending too much, that the government was extravagant; that we were proceeding with extensive public works, building railways, erecting buildings, expanding in every way. I remember a small vote I wanted for my county, and the present Minister of Justice was good enough to move that the vote of $11,000 be reduced to SI. That was their idea of economy at that time-they were going to show us how to economize if they got on the treasury benches. Well, here are their expenditures since they have been in power. There was only one year in the ten that the Liberals were in power in which the expenditure exceeded $400,000,000. It ran along from $370,000,000, to $381,000,000,	$351,000,000,
$355,000,000, $358,000,000, $378,000,000, $388,000,000 and $398,000,000. But look at what happened after our friends got into power. In 1931, according to the budget speech delivered the other day, the expenditure was not $398,000,000 as under the Liberals, but $440,000,000 for the first year that hon. gentlemen opposite were in power. The next near, 1932, it was $448,000,000. In 1933 it was $531,000,000 and in 1934 $459,000,000. There is the difference in the expenditure under the two administrations. I do not know how it is in other parts of Canada, but I can say positively that there have been practically no new public works built in the maritime provinces since this government came into power; and the old works have not been maintained as they should be and some are falling into decay. Still our hon. friends have a record of spending from fifty to seventy-five millions yearly more than we spent, and they have nothing to show for it.


Mr. MANION:: What about the millions spent at Saint John, for example?


Alfred Edgar MacLean: Our friends talk about the tariff situation. Through the kindness of the Prime Minister we had the pleasure recently of hearing the Postmaster General of Australia speak in the restaurant. He said:
It is insensate nationalism, abnormally high tariffs and disorderly marketing methods which, more than anything else, are responsible for delay in the rehabilitation of all nations.
That is not merely the personal opinion of Hon. Mr. Parkhill. Take the reports of the bank presidents at the annual meetings of the banks, until a few years ago nearly every one of them was a high tariff man. I do not think that back in 1928 or 1929 you could find a bank president w'ho was not a high tariff man; at any rate there were very few of them. To-day you cannot find one who will say that an abnormally high tariff such as we have had under this administration has been beneficial to this country. Our total trade dropped from $2,393,000,000 in 1930 to $886,000,000, a decline of no less than $1,507,000,000 since this government came into power.
Then our friends were going to find us new markets, but they have not made much progress in that direction. We have a committee sitting in this house looking into this question from every angle but the right one. What Canada needs is world trade. As was shown by the hon. member for Yorkton (Mr. Me-Phee) a few days ago, no less than twenty-nine countries have put up their tariffs against Canada since this government came into power. Our hon. friends say, "Oh, the King government was in power for so many years and they did nothing to prevent other countries from raising their tariffs." I heard an hon. gentleman on the other side make that statement the other day. Well, I will tell you one thing the King government did not do; they did not make pilgrimages around the world endeavouring to get other countries to adopt a high tariff policy. We had free entry to Great Britain for our foodstuffs and for everything, from the beginning. My hon. friend who just spoke (Mr. MacNiool) told us about the industries of Manchester. England. What made Great Britain the greatest manufacturing country in the world? Was it her high tariff policy? Not on your life; it was the free trade policy which she followed. Her ships went out on the seven seas and brought in the raw material which was manufactured by her workmen, and she built up the greatest trade and became the greatest nation in the world through that policy. But the Prime Minister of this country made a pilgrimage to Great Britain and endeavoured to persuade that country to put up a tariff against the rest of the world in order that we might obtain a preference there. If the Prime Minister was the means of getting Great Britain to adopt that policy, did he do this country a service or a disservice? I claim

The Budget-Mr. MacLean
that if he was responsible for it he did this country a disservice, because we find that Great Britain has practically served notice on us now that some changes will be made in those preferences, even with the agreements we hear so much about from mu' friends opposite. We had splendid trade facilities with Great Britain, and I do not think there is any doubt that they would have been continued. We never had a written agreement with the mother country until this government -compelled Great Britain to put down in writing rvhat we could and what we could not ship there, and when those agreements run out I think Canada had better watch out or she will find herself shut out from the British market in respect of some of her products.
One of the measures on which hon. gentlemen opposite are staking their reputation is the marketing bill. I think the fact that to-day there were tabled no less than eighteen or twenty amendments to that bill proves that the opposition offered from this side of the house and throughout the country was well founded, because, as I said the other day, if we get a bill that is half workable it will be because the weaknesses of the present bill have been shown up. When you consider that there are only twenty-one clauses in the whole bill and that eighteen or nineteen of those clauses have to be amended I think you will realize in what shape that bill was when it was brought into the house.
Hon. gentlemen opposite have not much to say about the butter question, but I have a great deal of information here with regard to the leakage of butter brought into the maritime provinces. That butter is said to have been released and to have done a great deal of harm to the dairy industry in that part of the country. This is the last thing in the world you would expect under this government, because we all remember what they were going to do for the dairy farmers, how they were going to put them on easy street when they got into power, by shutting out New Zealand butter. Butter to-day is 19 cents. New Zealand butter has been coming in under this government; it is still coming in, and I am afraid that these complaints of leakages are only too well founded.
Hon. gentlemen opposite promised a great many things; very few of those promises have been fulfilled but they took many steps that were not promised at all. When we take the tariff increases into account we find that the government have brought about the largest tax increases that have been put on by any government. We had the sales tax increased

from one per cent to six per cent; the excise tax increased from one per cent to three per cent, and increases in the income tax, the corporation tax and so on, with new taxes imposed on telegrams, long distance calls, pullman car tickets and sugar, and the gold tax imposed just the other day. That does not take into account the tremendous tariff increases put into force by hon. gentlemen opposite, which I see they now admit constitute a direct tax. No, they did not promise these things, but they brought them about. I think if they had fulfilled some of the promises they made in 1930 and left undone some of the things they have done, this country would be in much better condition to-day. The situation is very well summed up in a small quotation from the New Era of Sydney, Australia, which sajrs;
When someone stops buying, someone stops selling. When someone stops selling, someone stops making. When some one stops making, someone stops working. When someone stops working, someone stops earning. When someone stops earning, someone stops buying.
That is just what this government have done. They -have stopped buying from abroad, and when they stopped that we stopped selling. When we stopped selling our factories stopped making, and when they stopped making their employees stopped earning. Then, when the employees stopped earning, everyone stopped buying. That is the situation in a nutshell, and that has been brought about by the policies of this government. I claim that the policy of protection has stagnated trade, crippled business, increased unemployment, ruined our transportation systems, handicapped agriculture, reduced our revenue and brought our country to the verge of bankruptcy. It has increased taxation to an extent hitherto unknown, and all this in the face of promises to reduce taxation, cure unemployment, build up agriculture, find markets, pay old age pensions one hundred per cent and reduce the national debt. Those are some of the promises made by hon. gentlemen opposite which they have not been able to carry out.
The budget speech would lead one to believe that many tariff reductions have been brought about, but I am sorry that these reductions are so few in number. I notice that there is a reduction in the tax on beer, wine and champagne. So far as our province is concerned that does not interest us, because ours is a prohibition province. We do not use liquor, and even if we did want to use it we would not have the money with which to buy it.

The Budget-Mr. MacLean
One matter to which I should like to refer is the tax on sugar. On February 13, 1934, there was a meeting of bakers and candy manufacturers in the city of Toronto, and some startling information was brought out at that meeting. I believe I should put this on record in order to show the increase in duty on this one commodity. These organizations whose names all appear in this statement, state that at the time the meeting was held they could buy one hundred pounds of refined sugar in Cuba for $1.50. The duty amounted to $1.89; the duty on the bag was 4 cents, and there was a dumping duty of 75 cents, bringing the total up to $4.18. Then there was a three per cent special excise tax, which amounted to twelve cents, and the tax of two cents per pound, which make a total of $6.30, including 30 cents freight. So we find that of the total of $6.30 paid for one hundred pounds of sugar, the government took $4.80 in taxes. I say, Mr. Speaker, that there is something seriously wrong with any system that allows any government, whether it be Conservative, Liberal or Progressive, to take $4.80 in taxes out of a total of $6.30, in connection with an article of food that is used every day by both rich and poor. I think that situation should be brought to the attention of the public. I am glad the government reduced the tax by one cent, but in the circumstances I think the tax should have been entirely wiped out. There are other ways of raising revenue without resorting to the taxation of articles of food which are necessities of life.	*
The other night the hon. member for Queens (Mr. Myers) whose pleasing countenance I see across the chamber, told us that the duty on fertilizer did not affect the farmers of this country, and that in fact no fertilizer was brought in on which a duty was paid. I took the trouble of obtaining from the bureau of statistics figures showing the importations of fertilizer, and I find that in the last three years over 16,000 hundredweight of fertilizer were imported. On that amount a duty of $65,880 was paid. That is a snug little sum. And I believe that is not all, because in a circular I have found that since that time a large amount of fertilizer which was not included in the statement I have mentioned, and on which a rate of ten per cent was paid, was brought in. So when hon. members opposite state that the duty does not increase the cost of the article to the consumer, despite the fact that $65,000 is paid in duty, I think we have good indication that duty is being paid and that thereby the cost of the article is increased.
I notice press dispatches indicate that a permanent highway is to be built through the province of Prince Edward Island. That is a very commendable project, and if the government gives assistance to Prince Edward Island we will welcome it. I understand that if the highway is built it will be built out of the unemployment grant, and undoubtedly (he province will have to pay its fifty per cent.
There is just one other point to which I should like to draw attention, and that is that in the past four years we in the province of Prince Edward Island have been left out of the picture. In Ontario no less than $25,000,000 have been expended on the trans-Canada highway, to say nothing of the expenditures in the other provinces. Large expenditures were made in the last two years in Nova Scotia, and it would seem that Prince Edward Island has been left out of consideration when the moneys were being handed around. Someone will say that it is because we had no unemployment down there. Well, Mr. Speaker, I wish to state that we did have considerable unemployment. There is this to be said about our people, however, that they will put up with a great deal, and that they are mostly able to get three meals a day in some kind of way. We did have unemployment, and could very well have used a considerable amount of the unemployment money in the building of a highway which by this time could have been completed. I believe the press behind the Prime Minister stated during the last election campaign- and I am glad to see him coming into the chamber, because he can correct me if I am wrong-that it was the policy of the Conservative party to establish a national highway system, which would mean that all the roads in Prince Edward Island would be taken over and maintained by the federal government, thereby reducing taxation in the province. Then, prior to the provincial election the late premier, Mr. Stewart, visited Ottawa and upon his return stated to the press that the Prime Minister of Canada would carry out his policy of federal assistance to the highways in Prince Edward Island. All I wish to say is that for the past three years no work has been started. As I have pointed out, the other provinces have benefited to a great extent in the expenditure of relief money, and I am pleased to know that a start is to be made in Prince Edward Island. I hope it will be a good start, and that a good road will be built.
Mr. Walter M. Stewart

In conclusion may I say that we have been asked to depend on the resourcefulness of our people, and have been told that if we do that, undoubtedly we will pull through the depression. Well, in 1930 hon. members opposite did not want even the resourcefulness of the people; they felt that they themselves were sufficient to put policies into effect which to a great extent would improve conditions. I regret that these improvements have not taken place, and that the reverse is true. I believe that the country is ready for a chance to vote, and the people are asking the government to give them that opportunity. When that time arrives I am convinced that the people will record their vote in favour of the party which during the last ten years they were in power gave to Canada an era of prosperity unequalled in its history.
On motion of Mr. Fraser (Cariboo) the debate was adjourned.
On motion of Mr. Bennett the house adjourned at 10.40 p.m.
Monday, May 14, 1934