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Las diagrammea suivants illuatrent la mAthoda. 1 2 3 1 2 3 4 5 6 L BUDGET SPEECH, Delitered in the House of Commons of Canada, on Tues- day, THE 1st Aprtl, 1873, BY THE HON. S. L. TILLEY, C. B., ii» MINISTER OF FINANCE. Hon. Mr. TILLEY said : Mr. Speaker.— The course that I propose to take is to make my statement while you, Sir, are in the chair, and I think that course was sugjyested and approved by leading members of the Opposition last year, when my pre- decessor made his last statement. Perhaps I shall be permitted in the first place, before enter- ing upon the statement which I am now about to submit, to offer a few personal remarks. I may say with truth that there is not an honorable member on the floor of the House, who regrets more sincerely than I do, that the statement which I am about to submit to you, is not to be submitted by the distinguished and venerable statesman who had that privilege for the last three years. The Leader of the Grovernment, my colleagues, and my predecessor himself, know right well that, when he intimated to the Government and to me his intention to retire from public life, everything that I could say, and every argument that I could present, to induce him to remain with us, was made use of. I did so for two reasons, first, because I felt that it was in the in- terest of the country that he should retain his position in the ad- ministration of its finances, as he had been most successful,securing the confidence of the people of the country, and of a large propor- tion of the members of this House. (Cheers.) Secondly, from a per- sonal and less pertinent reason. I felt that it was desirable that he should continue to occupy the position of Finance Minister because, if he retired from that position, the burden would fall '^^^ upon my shoulders, which I felt were li ss able to bear it, and I felt also that I could less ably advocate the views and opinions of the G-overnment in Parliament. I felt also that following so able a statesman, and at so short a notice, I was placed m a very unfavorable! position compared with that which I might have occupied under other circum- stances. For these reasons, therefore, I did all I possibly could to indu e him to remain, and it was only when 1 was told that he had been inlbrmed by his medical advisers that, unless he retired from nctive public life, the years of his life would be shortened, that 1 ceased to further urge upon him the arguments that I had made use of. Leaving this point, I will now turn to the grave questions which it is my duty to present to the House to-day. It is usual on these occasions to take into consideration a period of three years ; the preceding year, the current year, and the year that is to come, I desire, however, to-day, to extend my enquiries farther than has been customary, and to go over the first five years of confederation. I do so because there are in the House a good many new members — fully a third of the faces which I see being new faces — who have not had an opportunity of looking into and investigating the condition of the afiairs of the Dominion during the last five years, and because, also, there are many old members who have not had the same o^-portunity as members of the Grovernment and leading members of the Opposition have had, of enquiring into and investigating the financial condition ot the Dominion during that period. I do so, sir, because whatever may be said on this subject outside of Parlia- ment, through the press, by the Government or by the leaders of the Opposition, with reference to our financial condition in the past, still there may be some question as to the correctness or ac- curacy of these statements so put forth, as it may naturally be considered that from whatst office ts, how- ' a total ind also ure did e every ccess of 654,852. all that ccur in re to be a which w more he head ,492. I country i to ex- penditure under this head, but I think if there is one expendi- ture more than another, that the Govornmont can well defend it is this item of Civil tSorvice. I recently aske*.' the Auditor to prepare me a statement of the increase during the five years under this head, charging against 1807-08, several expenditures that were not lormerly charged against the Civil Service. For instance in the department of i*ublic Works, several engineers were employed in outside service, and the works to which they were attached were charged with their v; services. These, however, are now charged to the Department. ^1 Then, again the Adjutant General's branch oi the Militia Depart- I ment in 18^7, was charged against militia expenditures, whereas J it is now charged to the Civil Service. At that time a system prevailed in the Post Office service, by which large amounts of printing were obtained and were executed under the direction ol the different Postmasters throughout the l)( minion, while under existing arrangements, a very large portion of the blank forms and returns is printed by the contractor, and the accounts I appear in the contingencies of the department. Then there are the new departments — the Queen's Printer's and the Stationery Department, both of which branches, although adding to the ' expenses of the Civil Service list have been instrumental in saving large sums of money to the country. And let me say in addition that under the Post Office Department we have been establishing a system of savings banks in all parts of the country involving the receipt of three or four millions of dollars, and requiring additional clerks in the Department here, and addi- tional post offices all over the country. Taking all these things into consideration and deducting the salaries of the new Gov- '• ernors for the two new Provinces established since 1807 ; and notwithstanding the increased work of the Post Office Depart- ment, which alone had increased the expenditure by -^27,000 a year, the difference between the expenditure under the Civil Service in 1867 and 1872, is but |1 1,000. How has this been accomplished ? The fact that under the Civil Service Act rS50 a year was added to the salaries of the clerks would alone bring the sum up to the present amount, but by the reduction made in the contingent expenses of the Departments the sum has been reduced by an amount equivalent to the addition to the salaries of the clerks. Then there have been also the following reductions : Justice $13,153 Penitential ies 85^520 Legislation 23,500 Militia 95,333 Fisheries 25,331 Light and Coast Service 14,189 Public Works 654,852 • (Many of these works are carried over into the current year, and make the expenditure heavier than it would otherwise be.) Miscellaneous $167,864 Customs 18,666 Excise 67,867 Public Works, Railways and Canals 38,703 On the other side there was an increased expenditure last year on account of the subsidies to the new Provinces, British Columbia and Manitoba, which the House will recollect ; and there were also the increased subsidies under the new census, to Nova 8cotia and New Brunswick, none of which were contained in the statement of my honourable friend last year and had to be added to the estimates then submitted. Then there was an increase in the charges of the year of $199,704, for the management of the debt. I may say that this arose from the fact that the Bank of Montreal had nearly two years payment in that year, under the old arrangement ; and there was a large expenditure lor engraving, striking off and publishing of the Dominion notes under the Act of my predecessor. And then there were the payments to superannuated officers, amounting to $88,842. But, notwithstanding the refunding of the $200,000 on tea and coffee, the Revenue last year amounted to $20,714,813 against an expenditure of $17,589,468, leaving a surplus of $3,125,345, or, adding a sinking fund of $470,606, a total surplus of $8,595,961. 4 I come now to a more interesting point, perhaps, and that is to the operations of the present year. It will be remembered when my predecessor made his statement last year, he estimated the income at about $20,635,000, and the expenditure at about $19,630, )00, leaving a balance of $1,000,000. But he remarked, and very properly, that on that occasion as on all others, supple- mentary estimates would be brought down, and when that sup- plementary estimate was brought down, it was found that the sum voted by Parliament at the close of the session against income was $400,000, making the total estimated expenditure, $20,030,000, as against an estimated income of $20,635,000. I recollect that when my predecessor subsequently came to Par- liament and asked that resolutions should pass for the reduction ol' the duty on tea and coffee, Congress having decided upon the removal of the duty on these articles, it was stated by hen. gen- tlemen opposite that we were simply following the American example. (Hear, hear, from Mr. Holton.) But we must neces- sarily, ill dealing with the question of tariffs, have some reference to the laws of the neighbouring Republic, in order to arrange wisely for the purpose of securing a revenue and preventing illicit trade. (Hear, hear.) When my hon. friend brought in those resolutions, he stated that if they were carried there might be a 67,864 18,666 57,867 38,703 doficit'iicy of something like $600,000, bocivust^ the revenue obtain- ed in 1S70-71 on tea undeollec was n<'iirly 1^1,200,000. He then added that tlie I'xpendituie mi^;ht not reach the e8timat»>, but still, for various reasouM, he did not leel himsell" justilied in asking? lor the imposition of any additional duties until they had the experience of at least nine months, tuid until Varliainent met ttj^ain, in order to ascertain whether or not additional duties would be nect!ssary. What is the position in which we lind matters to-day ? We find that in all probability, notwithstanding the reduction or the removal of the duty uu tea and colfee, which amounted in 1870-71 to s^l, 200,000, there is every prospect that the revenue from Customs will reach, at the close of this year, the sum estimated by my predectsssor before that diity was removed. (Cheers.) In the ebtimati- that is made of the duty that will be derived from customs this year, we place the amount at !|1 2,500,000, just the sum at which my predecessor estimated it before the duty was removed. Let us Hee whether we are warranted in this conclusion. The receipts up to to-day from customs are $9,400,000, add one third to that, viss., #3,133,33-J for the remaining' three months, and they are the three best months of the year, and it amounts to $12,533,333. 1 think we are, therefore, safe in estimating the revenue from customs at twelve and a half millions. The revenue from excise was estimated at $4,625,000, we now suppose we will receive $4,550,000, a reduction in the estimate arising- 'om the cause to which I have referred, that in the previous year a very large amount of duties (about $200,000) on goods taken out of bond in (expectation of an increase of duty, went to the credit of the previous year, and reduced the amount of the current year, tip to the present time we Lave received $3,358,000, add one third for three months yet to come, and we have $4,470,666. We then come to the Post Oliice, and find that our estimate was $700,000. The revenue up to the present date is $546,000, add one-third and it will make $728,000, still the Department estimate it at $720,000 for the current year. Then for Railroads, C .nals and Public Works, the estimate last year was $1,610,000, and probable receipts $1,400,000 or $200,000 less than the estimate. Hon. Mr. MA.CKENZIE— Are these gross receipts '? Hon. Mr. TILLEY — They are. The difference arose from the fact that a sum was asked for in connection with these works supposing that the Intercolonial Railway would be open earlier, and, of course, the income was calculated on the same basis. While the receipts were less the expenditure would be less. But sir, the result is that lotwithsU.iding the statement of my honorable predecessor, tha. here migi«« be a deficiency, sup- posing the whole ex\ iiditure ook plac» for public works ot $600,000, it is found that, notWi''istandinj^' ihe supplementary estimate new before the House, covering an expenditure against income of ^200,000, that tho expenditure for all purposes during the year will reach $1 0,000,000, and insiead of leaving a defi- ciency, after tl- e reduced expenditure of $16r»,000 for the currtnt year, it is estimatt^d that the surplus will be $765,000. (Hear hear.) I may say that in the estimated reduction of the expenditui^, there are two or three items by which that reduction is covered, and two of these have been carried over in the estimates of the next year. There will be a reduction of $400,000 for public works, then the Militia expenditure will be $93,000 short of what w;is voted, and in the Census Department, the expenditure will be 1180,000 less than the sum voted ; these reductions bring the expenditure down to the sum named — $19,600,000. We now come to the expenditure of the coming year. It will be seen by the estimates that it is proposed to ask the House ibr a total expenditure of 131,008,423. Hon. Mr. HOLTON- rized by statute ? -Does that include the amount autho- Hou. Mr. TILLEY — It includes the expenditures authorized by statute lor construction of public works and all other charges. Of this sum $9,974,240 will be chargeable to capital ; railroads (Intercolonial), $1,335,240 ; canals, $5,277,000 ; public buildings, including the library and g"vounds, $362,000 ; making a total of $0,974,240 ; also deduct from this expenditure $93,000 in payment of debt ; this leaves to be provided Icr during the coming year, out of income, $20,941,183. This is in excess of last year, which was, as I have stated, $10,600,000, and is increased in part in the following manner : Interest on debt, ;:.4G4,3i)8, Intercolonial loan, which will have to be put in the market ibr the completion of that Railway. Then we have added to the expenditure, under the head of Greolo . ical Survey, Meteorological Observatories, &c., $26,792. This latter is for the purpose of providing that most important infor*- mation for all parties who are concerned in the navigation of the Dominion. (Hear, hear.) Last year the Minister of Marine and Fisheries brought this matter up, and the Grovernment feeling the great importance of the subject, asked Parliament lor a vote of $10,000, but that sum was found inadequate. The G-o- vernment have in the past five years expended large sums of money lor the construction of lighthouses and improving the t I im igrtinst luring la defi- mrrtnt I (Hear [dituFe, )vered, of the [public lort of iditure bring ar. It House autho- lorized larges. ilroads Wings, otal of yment year, tated, nuer : ive to Then > . ical iter is infor*- •fthe I and gthe teof ao- 18 of the I 11 navigation generally, thus reducing insurance and increasing the value of property shipped from this country, and following out the same policy, they will ask the House for an additional appropriation of $26,792 for this service for next year. Then we come to Penitentiaries. Under this head there will be found an increase of $91,672. This is principally con- nected with the expenditure for the new Penitentiary in the Province of Quebec, in the erection of buildings, salaries, &c.. Under the head "Miscellaneous," there is an increase of $111,- 736. Now under this head there will be found this year $144,000 in payment of the third instalment to the Imperial Grovernment for arms and ammunition purchased from them at the time the troops, or a large portion ol them, were removed from Canada. That appeared under the head of IMilitia formerly, but is now under "Miscellaneous." There is also an increase in the boundary survey. Last year the appropriation was $50,000, and from the report of the officers in charge, it is now estimated that $120,000 will be required for no^t year. I will now refer to the expense for the maintenance of Public Works. In this there is an increase ol $588,669, being principaly in the maintenance of the Railways and Canals — a small portion of it, inrrease of wages and salaries to officers in connection with the canals and railways, but the greater part of it is owing to the extended mileage to be opened for traffic o]i the Intercolonial Railway, and the payment ol' the running expenses, salaries of officers, &c. • Then in the Post Office, we find an increase of $304,000, and I desire to make a few observations on this item. A system has prevailed up to the present time, with reference to the mode of dealing with the Post Olfice Department, varying from ihat of all other departments of the service. In the other departments the monies received have been deposited to the credit of the Receiver , G-eneral. Not so with the Post Office Department. In the Post Offices in Toronto, London, Montreal, Quebee, and, until last year, the Post Offices in Halifax and St. John, they collected the revenue, paid the postmasters and officers out of it, and simply remitted the balance. It has been considered desirable, inas- much as at this time, these postmasters have largo powers under the money order system, that they should remit their receipts daily. It has been considered desirable in the interests of the public, and the interests of the officers themselves, that this course should be taken. It is but right that this Department should be placed on precisely the same footing as all the other Departments, and this increase, to a very great extent, or up- wards of $200,000 of it, arise from the necessity of paying the salaries of postmasters and clerks at Toronto, London, Montreal, and other large post offices ; therefore the increase is more nominal than real, and the estimated revenue of the post ofhces will of course be increased in about the same porporticn. Looking at the progress that has been made, the work that is l)erformed, and the facilities given to the public, in connection with this department, the increased expenditure for that service appears to be fully justified. I hold in my hand a statement by the Postmaster Greneral, showing the wonderful increase in the business during the last five years : No. of Tost Offiws. Mile- iimniiilly tnivellcd by mail No. of Itittors ]>y post in the voar No. oi' iicwsjiapcrs by post ill tlioyear No. of rogistori'd li'tton posted ill tlic year Amount of postal reveiUK.'. Amount of E.vponditures. . Amount of Mouoy (Jrdcr issues 1S6S. 3,638 lO,6-'2,21ti IS, KXjjCHM) |S,SrtU,(M)(> 7()4,(XH) $1,U1'4,7J(> §1,053,57(1 186'.). 1870. 3,756 11,261,897 21,92(>,(J(J() IS,7U(>,(KHJ 85(),(KJ(> !?, 973,056 $1,079,828 3,820 11,695,726 24,500,000 20,150,(K)0 1,0(J0,(K)0 $1,010,767 $1,155,261 1871. 1872. 3,943i 4,135 $3,342,574 $3,-551,55 11,992,898 27,050,000 22,250,(XK) 1,100,000 $1,079,767 $1,271,006 .\mount of i'ostoffitv niv-, ings Banks of Ontario and(iucl)oc ' $856,814 $3,898, 747l$4,537,902 $1,588,848 $2,497,259 12,548,389 30,600,000 24,250,000 1,277,000 $1,193,062 $1,369,163 $5,123,551 $3,096, 5(K) Now, I come to some of the proposed reductions of next year. Under the head of t)cean and River Steam Service will be found a sum of $!^0,51(3. This is under the new contract with Sir Hugh Allan. After conversation with the Postmaster Greneral on this subject, I think I am justified in saying that it is hoped that in a very snort time the receipts from that service will be equal to, if not in excess of the sum which it is proposed to pay under the contrart. (Cheers.) There has been a considerable increase in the last year or two in the number of the letters transmitted by that line, and it has arisen from the fact that the steamers of the Cunard Line do not now carry the mails, and the other steamers sailing to and from United States ports, carrying mails, do not make the passage as rapidly as those of the Allan Line. (Hear, hear.) The result is that parties in Europe communicating with Western States select the Allan Line as their letters reach their destination by that line earlier than by any othor. And now with reference to the Militia Department, It * fe post )rticn. bhat is [ection (ervice mt by lin the It 18 will appear by the estimates before the House as if there would be a reduction of #653,887, as compared with the estimates of the current year, but fairly there should be placed against that $144,000 that was Ijefore charged against Militia, being the third instalment for arms to which I have referred, as now chargeable under the head of "Miscellaneous." There should also be deducted from it $93,000, which it is estimated will not be expended this year. The difference therefore will be about $426,000 oi a reduction in the expenditure under the head of Militia. Then with reference to the Fisheiiss, there is a reduction of $61,900 under this head. This was an expenditure in the current year for the support of the marine police, and of the vessels that were to look after and protect our fisheries from the encroachmemt of American fishing vessels, and no longer required under the Washington Treaty arrangement. Now, the question arises, how is the G-overnment to obtain the means of paying for this increased expenditure. It was intimated last session, that after having made a reduction of $1,200,000 of duties, the Government would probably have to ask the House this session for increased taxation in some direction. And I can quite understand, sir, that hon. members and the country generally would not be disappointed if the Government were to declare on the present occasion that such was their intention ; but after having surveyed the whole matter carefully, and looked into it with a most rigid scrutmy, they have arrived at the conclusion that it is not wise nor is it necessary to ask Parliament this session to impose any additional taxation, (Loud cheers.) I know it may be asked, are the Government not prepared to make some readjustment of the tariff, and my answer is, that the Government will not, during the present session propose to touch the tariff in any particular. (Loud cheers.) There are I admit some few interests in the country, in relation to which if the tariff were opened at all, the Government would feel justified in asking, and would feel it their duty to ask for some readjust- ment, but under the peculiar circumstances in which we are placed, and with the certainty nlmo.st, looking at the increased expenditure of the next year, that some readjustment must take place next session, the Oovernment have concluded to make no present change, inasmuch as they l)elieve that they will have means amply sufficient to meet all the requirements of the country. (Cheers.) Their desire is to tamper with the tariff as little as possible unless some radical changes are found necessary in order fhat the people of the country may understand that it has a real permanency of character. Now. let us sde whether or not we are justified in arriving at the conclusions at which we ha\re arrived a,s to the means at our dispo'^al being ample for the public service. It is estimated that the revenue from customs during the y u ensuing year will be $12,500,000. I know that honorable gentle men opposite may say your estimate is excessive, as it is supposed that during the past autumn the imports were largely in excess of what they outyht to have been ; and that there are now lying on the shelves of the warehouses, goods unsold and unconsumed, that will come into competition and take the place of others, that under different circumstances would be imported in the fol- lowing season; But after a most careful examination of the whole matter T have arrived at a different conclusion and though I admit the excessive importation during the past autumn, I believe there is no good ground for uneasiness in connection with this matter. Let us for a moment look back to the history of the past live or six years and it will be found that during the first five years of Confederation there appears to have been an excess of imports over and and above exports of $60,000,000 or fli:,000,000 a year. I know it is very natural for persons looking at this subject cursorily to suppose that this cannot but lead to financial embarrassment, but let us examine into the matter. Here we have something like $12,000,000 a year excess of imports over exports. Add to that the interest on the debt of the Dominion payable in London $4,000,000 more, and we have $16,000,000 a year to be provided for which our exports do not appear to cover. But if we look into the matter more carefully we will arrive at the conclusion, and the just conclusion, that there are no good grounds for apprehension. Of course the matter can only be approximately estimated, but I have taken some pains in the matter and taking one city in the Dominion as an illustration, I find that in the case of the City of St. John, the city I have the honor of representing in this House, from a very careful examination made by the President of the Board of Trade it appears that the return freights from that city amount to $2,000,000 dollars a year, and if that be the case in the city of St. John, we may fairly estimate that from $5,000,000 to $6,000,000 of profit from freights are received every year, by which the surplus as between imports and exports is very materially reduced. If we go further and take into consideration the expenses incurred in the shipping of the produce of the Dominion, which amounts to $70,000,000 or $80,000,000 a year, for which disbursements bills of exchange are drawn, we shall find that these two items alone are suflicient to make up the difference. Let us now come to the question as to whether our estimate of $12,500,000 from Customs duties is likely to be realized or not. Our estimate for the present year is $12,500,000 and why should we not have as much in the ensuing year ? I have in my hand the returns of revenue collected for the first eight months of the current year, and I have examined it very carefully to ascertain wheiher we can gather from it that there was an excessive importation last year, upon which duty has already been paid, and that any considerable portion of 1ft gentle Apposed excess lying Isumed, others, Ithe fol- ]of the (ough I B these goods have not been sold, and are still unconsumed, and what do I find: I find a reduction of |h24,757, during the eight months, $761,702 of which was on tea and coffee. On the other side I find a total increase of $932,988, shewing a net increase of $108,231. What are the ite.ns on which this increase has occurred ? The increased amount on silk and satins, on jewellery and on other articles coming under the fifteen per cent head, is $370,000. This increase is not in excess of the increase on other goods, only taken out ol bond when required for consumption. Mr. MACKENZIE — Has the hon. gentleman a statement for the last two months as compared with the same two months of the last year. Hon, Mr. TIIXEY -Yes, I have, and to my surprise it shows an increase. I fully expect that in the next three months there will be a reduction, and my estimate has been made upon that expectation. Hon. Mr. MACKENZIE— I meant February and March. Hon. Mr. TILLEY — Yes, and I was surprised to find an in- crease. TVe have an increase on the amount of sugar entered for consumption of over $370,000 hi the eight months I have men- tioned as compared with the previous corresponding eight months. I desire to call the attention of the House to this fact, because it is very important and significant, as we all know per- fectly well as previously stated, thit merchants dealing in sugar and spirits on a large scale do not pay duty unless these articles are required for consumption. On fancy goods the duty, as a rule, is paid when imported, but this is not the case with sugar. Hon. Mr. MACKfiNZIwl— It is whcm for the refinery. Hon. Mr. TILLEY — Th^t may be, but this is to a large extent refined sugar imported. Th