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JOHN ROSE, Minister of Finance, after the formal motions, introduced the Budget as follows : ,_ I think the most convenient order to follow, in placing the House in possession of all the information I desire to give, will be to state in the first place what have been the results of the operations of the present year, and to review the estimates of revenue and expenditure which were presented to the House in December last, by ^he light of the further expe- rience we have now obtained. In the next place I will state what the present position of the floating debt is, and what the changes are which have been made since December. It will then be convenient to say a few words in explanation cf the financial position of the various Provinces towards the Dominion; afterwards I will endeavour to state what the requirements of the year 1868-9 will be, and to place the House in possession of the means by which the Government propose to meet those requirements; and lastly, if the patience of the House be not exhausted before I have covered all this ground, I will refer, for a few moments, to the anticipated burdens which in future years the country will have to bear, and to its ability to sustain these burdens. (Hear, hear.) Without any exordium. Sir, I will at once enter into an examination of the results of the present year. It will be in the recollection of the House that, when placing in its possession, in December last, the rough estimates for 1867-8, I stated that the probable expenditure would be 116,226,801, of which 81,925,000 was fol* permanent works, leaving an expenditure for ordinary purposes of $14,301,801. The detailed estimates which were laid before the House the other night show an increase over the sum men- tioned in December last. These detailed estimates amount tc $17,265,019 to which are to be added the Supplementary Estimates since brought down 71,Q00 making a total of. $17,336,019 in place of the....,, ,. ,.....,„.,.,.......,.,., 16,326,^01 . ■ »"• ■■■■• y,J :' » mentioned in December last. But, Sir, it is necessary to explain to the House that there is really no perceptible change, and for this reason, that in the larger total I have mentioned are several sums which do not pro- perly belong to the services of the year, or of the Dominion, being arrears of the late Province of Canada ; and there is also a sum which it is pro- posed to strike out when going through Committee (included in the detailed estimates), because it will not have to be expended before July next. These two sums are : for arrears of the late Province of Canada. . $814,357 and the over estimate proposed to be struck put is 205,100 making together ....' $1,019,457 which, if deducted from the gross amount of the detailed estimates 17,336,019 leaves as the estimated expenditure for the services proper to the year 1867-8, of 316,316,562 which differs by less than a hundred thousand dollars from the rough estimate made in December last. (Hear.) I make the explanation with reference to the over estimate, because, in consequenco of the provisions in the new Audit Act, that the sums voted for one year shall not be allowed to lay over until a following year, but must be voted afresh, if not used within the twelve months, there would in fact be a double vote for the same service if they were not omitted now. Having thus compared the estimates of December with these now sub- mitted to the House, it may be stated that the real result of the year's operations is — Total estimated expenditure $16,316,562 Deduct for expenditure on capital account and redemp- , ,' ' tion - $1,863,498 1; and there must be further deducted such items as i. " r arrears of the Seigniorial Fund, the amount of ' ^'' ^ '* ' arrears for hospitals and charities 131 ,704 Total 1,995,202 which ought not to enter into the expenditure of the present , year. These two amounts being deducted from the estimated gross expenditure give as the ordinary expenditure of the year... $14,321,360 I now come to the statement of the anticipated revenue to meet this expenditure, and I hope the result will not be unsatisfactory to the House or to the country. It will be remembered that in November last, the Government anticipated that there would be sufBcient revenue to meet the expenditure, and a small excess besides. Well, judging from the experience of the nine months that have now expired since the beginning of our fiscal year, July 1st, I am enabled to state that I think those antici- pations will be fully realized, and that there will be some excess — a fair and moderate excess — beyond even that which in December last I said I expected. (Hear, hear,) 5 The cross receipts from Customs and Excise were then estimated at.?.... $« 000,000 The actual receipts from Customs up to the Slst December, were ; 5,318,063 Judging from the receipts of the three months since, and mak- ing a corresponding estimate for the future months, it is ex- pected that we shall have received between the 31st December and June 30th, a sum of. 3,681,937 making a totftl of. $9,000,000 The receipts from. Excise it is anticipated will reach 2,y70,000 and those from Miscellaneous sources have already been «2,947,100 : ';;^ from which I make a reduction because several sums found ' ■ their way into the account which do not properly belong to ii» ^i- i : > the MisccUamous receipts of the year, such as arrears be- ■' >' ''■' longing to the Provinces of Quebec and Ontario ; so that ^^i^' ' " • the total Miscellaneous revenue belonging to the Dominion is estimated at 2,725,500 shewing a total estimated revenue of (*)• • .$14,695,500 against a total estimated expenditure of. (f ) . . . 14,321,360 giving an anticipated surplus, at the 30th of June next, of. . $374,140 (Hear, hear.) I think. Sir, there is no xcason to doubt that these an- ticipations will be fulfilled. We have endeavored to bring the greatest care and accuracy to bear in ascertaining what the expenditure and income up to this time have been, and unless someth'ng unforeseen and extraordinary occurs, the statement I have just now laid before the House will bo re- alized. Up to the 15th March, out of a total sum for which tt ^^i*^ is asked, of. $17,336,019 there had been spent 9,542,000 leaving in hand for the rest of the year $7,794,019 and I hardly expect that the expenditure between that day and the 30th June next will amount to so much. I believe there has been an over estimate, and properly a liberal estimate, because under the stringent pro- visions of the Audit Act there is no possibility that the Executive can spend any more than Parliament has appropriat*-d, and it is ther^^fore necessary that any error should be on the side of an over estimate, rather than an under estimate, f Hear.) I have so much ground to go over that I now at once proceed to state the changes which have taken place in the floating debt since December last. It will be "remembered that the amount of our floating debt, in- cluding the interest payable in January, 1868, which was then in course e of truDsmission to England, was then stated to bo $6,911,901 There waa, however, a sum duo to the Court of Chancery, which was not included in that statement, being an amount which had been deposited at about that time of. 100,000 And there was further due a balance of subsidy account to the various Provinces, since ascertained, of. 146,775 »'■«;'! ;;i' —————— making a floating debt in December last, of. , $7,158,670 From this amount must bo deducted the Bank balances which, as they stood at that date, were 3,303,869 « leaving a balance of floating debt, then to be provided for, of. $3,854,807 Now, Sir, on the 15th of April, the floating debt stood as follows : — There was due to the English agents on all accounts, — as well on account of Novd Scotia and New Brunswick as on account of the old Province of Canada and of the Dominion $510,532 We have thus -educed these balances from the very largo amount at which they stood in December, to about £100,000 sterling. (Hear, hear.) ,r There was duo to the Bank of Montreal a loan contracted in December 2,500,000 There was due to the various Provinces, balances of their subsidy accounts 591,767 making a total floating debt on the 15th April, of $3,602,299 from this must be deducted the bank balances on that day, which were 1,893,523 shewing that the net floating debt had been reduced to the sum of I: (*).;. $1,708,776 In December, as I have shewn, it was $3,854,807. It will thus be seen that there has been a very important reduction. I trust, Sir, this sen- sible diminution will be satisfactory to the House. (Applause.) The floating debt has been so reduced by the sale of securities in England, and by the negotiation of Dominion stock in Canada. It will be recol- lected that there was a very large balance due on account of Nova Scotia for over drafts on their fiscal agents in England. This has been covered bj the sale, since December last, of Nova Scotia bonds, held by the fiscal agents, which have been endorsed by the Dominion, and havt been nego- tiated to the extent of •{•$1,002,153. Dominion Stock has been issued to the amount of |$1, 600,000. I think we may congratulate the country on this reduction in our floating debt, and I trust that before twelve months are over it will be a thing of the past. (Hear.) I believe we shall be able to issue securities so as to fund the whole floating debt and conduct our finances in future upon a thoroughly independent basis. (Hear, hear.) Now, in connection witJi the mode in which this floating debt has been * ;&35l,ll8 itg. t^206,920 stj. J ||^8,76r •i«.'- ' . . ' : V ' " . :. • I 4 diminished, allow itic to say a word or two as to the isHue of Domin- ion Stock, a kind ot security which I think it is of considerable importance the country should possess, and to the advantages of which I think the public is not yet fully alive. It is more advantageous to the public than ordi- nary bonds. It gives no trouble about cuttingoiF couponsevery six months. It is inscribed on the books of the Receiver General, similarly to Bank Stock, and there can be no possibility of any loss whatever to the holder. Then it possesses this other advantage that it is transferable at various points in the Dominion, and in small sums. Any person may invest any sum over $100 in Dominion Stock, and receive the inter- est upon it half-yearly. This facility for investing broken sums is an advantage which, it seems to me, is not sufficiently underdtood. Any broken sum whatever may be inscribed on the books of the Goverrment, and transferred in the regular way I am happy to be able to state to the House that the mode in which this stock was taken up by the country exhibits gratifying features. The number of tenders was 61 under par, and 145 at and above par. It is a pleasing circumstanfie connected with the distribution of this stock, that it was diflFused over the country in small sums, among trustees, executors, charitable institutions and individuals, seeking a permanent investment for moderate means. I consider it one of the most desirable features of the stock, that its distribution in small sums over the country gives the public at large an interest in the permanency and stability and honest admxuist'-ation of our aflFairs. {.niti &f.'? Hon. Mr. HOLTON — Will the Minister of Finance please also to state the number of allottees ? Hon. Mr. ROSE — If my hon. friend will have a little patience, till the return moved for by the hon. member for South Ontario is brought down, he will get full information on this point, and on all the others embraced in the motion. As I have already stated, the balance of the sum which has gone in diminution of the floating debt was raised by the sale of securities of Nova Scotia issued on the credit of the Dominion, I am happy to state, that although there were circumstances aiFecting the gene- ral relations of this country at that time which, it might have Ijeen appre- hended, would have prejudiced the sale, the first financial operation of the Dominion in England was carried out satisfactorily for the interests of the public. ' 'Hon. Mr. HOLTON — I presume it is the Nova Scotia bonds which you s-veak of as Dominion securities. _ Hon. Mr. ROSE— Yes ; they were part of the debt which the Domi- nion assumed. , " Hon. Mr. HOLTON— Was the form of the bonds changed ? &i nft Hon. Mr. ROSE — No ; but they were stated to be a part of the dfebt for which the Dominion was liable. The form of the security matters nothing, so long as it was issued as a Dominion security. (Hear, hear.) I will now only say one word more with reference to the balance of the floating debt which still exists. I think the House need feel no appre- henaioa but that the floating debt will, before the lapse of any long period of 8 time, be discharged. (Hear, hear.) I need only remind the House that there are sources, to which I stated in December that I looked for di- minishing the floating debt, which are not yet exhausted. We have in the legislation of this session the means which will enable the Governm'^nt gradually, oud without disturbance to any of the commercial intercuts of the country, to absorb the balance of that floating debt. We have made some progress in our negotiations with the Great Western Railway, with a virw to realizing the consid^^rable indebtedness of that corporation. We have not been idle either as to the indebtedness of the Bank of tipper Canada. There has been both legislation and executive action upon that. We also anticipate a fair amount from deposits to be made by Insurance Companies, as a security to the public ; and there is now a measure befor*; the House whi'^h will have this effect. Then there are tl e Post Office Savings Banks, which are doing a large measure of good ; not withdraw- ing money from the banks, as has been .stated, but accumulating the savings of the industrious classes in a vfp.y that must be productive of benefit to themstlves, and be of advantage to the country. The views of the Government with reference to Savings Banks v:ere explained in December, but so far action has been confined to the establishment of Post Office Savinfl^s Banks. As the House is aware, there have been established in the mother country not only Post Office Savings Banks but other Savings Banks whose money is invested ia Government Securities, the former being not in opposition to but in harmony with the latter. But we have thought it inexpedient to establish other Government Savings Banks at this moment, till we have had further experience of the working of the Post Office Savings Banks. If the advantage of the security of the Government is to be given to those who desire to place their small savings in its possession, it should be so effected that this direct security should be given to the individual the moment the money leaves his hands. It will not do to have intermediate institutions which will receive from depositors their savings, and hand them over to the Government, because under that system there would be a period dur- ing which the depositor would be without the security of the Government. It will be seen by the House that it requires a great amount of machinery, and attention to a great many complicated details before such a system can be put in operation, without involving too large a cost. Such a machinery has been provided by the Post Office Department with refer- ence to the Post Office Savings Banks, and it has been thought bettor that we should test this by time before we go further and establish what may more properly be called Government Savings Banks. Before passing on to another point, I wish to say a word with reference to a feeling which I have been informed exists t^ some degree in the country, that the Government is taking possession of too large an amount of the money which is needed for carrying on the commerce of the country. I think there is no ground for any such apprehension. I can assure the House that the Government will watch anxiously and vigilantly the effect of their naeasures ^n this respect, and will not withdraw from the banking institu- tions and the commercial interests of the country that capital which is needod to carry ou their operations. Auy check or stringency we are aware muHt necessarily cause the general prosperity of the country to suffer. Thero has been, it is true, a consi(loral>le amount received by the Government from the issue of^ominion Stock, and a further sum througli the Savings Banks, but the Savings Banks have merely received the small savings of individuals which would otherwise have lain unproductive. That is the legitimate use of Savings Banks. Since they went into opera- tion, the increase of deposits in the Banks has gont^ on steadily, and I think I am safe in saying that the amount received by the Post Office Savings Banks will not in any way interfere with the general deposits in the banking institutions of the country. The same may be said with reference to the other sources from which I have indicated that we look to obtain the means of meeting a portion of the floating debt. Take the deposits to be required from the Insurance Companies; the greater portion of them will come from abroad, and, generally, I think it right to say. in order to calm any apprehension which may have been excited, that it is the desire of the Government most carefully to guard against under- taking any financial operations which would havo the effect of depicting the Bank dt,j[iosits. (Hear, hear.) v .••,., ■■■%■, I now come. Sir, to explain the financial relations of the various Provinces to the Dominion ; and although up to the present time they are hardly to be looked upon as perfectly well defined and accurate, yet thfv are in a much more reliable and satisfactory sh.'ipe than they were in ji^ecem- ber last. The House will see that it is difficult to arrive at a correct estimate of the liabilities of the various Provinces towards the Dominion, or of the relations of the Dominion towards those Provinces, at once. I will begin, however, with Nova Scotia, and state the amount of its obliga- tions on the 1st of July last, when the Union came into effect, and what charges against it were then an> ipated. Its debt was then stated at S7,435,285 end as it was entitled to come into the Dominion with a debt of 8,000,000 this left "a balance to be given to it of. §564,775 But beyond that figure it was found that the obligations of the Province amounted to the very considerable sum of about $1,400,000. As is kaown to the House, under the terms of the Union Act the Dominion is bound to assume and meet all (ha enyagcments of the several Provinces entered into prior to the 1st of July, no matter by what amount they may be found to be in excess of the.debt with which they entered the Union. The debt proper was composed of debentures payable in London, debentures pay- able in Halifax, Barings' account, the amount due to Savings Banks, and tho amount of Provincial notes in circulation. The amount of liabilities >ve have had or now have to provide funds to moot, arc — , Arrears of appropriations paid $320,141 '^ Do still payable 119,599 ^j^ ~ Balance to Windsor and Annapolis Railway 833,662 ; Due Bank of Nova Scotia 52,25(T Balance to Pictou Railway r. 193,326 2 .. 10 Provincial Notes to be redeemed 90,000 Balance of Barings' account 315,293 Making together $1,924,271 Now, Sir, I think it is a matter of which every honorable member is sen- sible, that the inauguration of the Union has not been unaccompanied with very considerable financial difficulties. Under the terms upon which ', the sevoral Provinces came into the Union it devolved upon the Dominion to meet their engagements. The actual debts of the Maritime Provinces did not amount to $8,000,000 and $7,000,000 respectively ; and there arose the necessity on the part of the Dominion of providing the means to make up the debts of these Provinces to their quotas. But that docs not represent the whole amount of financing which was necessary in order to meet the engagements which the Dominion had assumed. There had to be provided in the case of Nova Scotia, in cash or otherwise, to meet these engagements, the sum of $3,019,628. This sum is made up of the items I have already given , $1,924,271 and of the overdrawn account with the Financial Agents of the Province amounting to^ , 1,095,357 m.iking the total for which we had to provide $3,019,628 Before I leave this b^-'nch of my subject, perhaps I may be allowed to state what the present condition of the account is, as between Nova Scotia and the Dominion. The total receipts from Nova Scotia, exclusive of the sale of its bonds in England, up to date of the last accounts were -, $1,159,298 The payments on account of Nova Scotia, exclusive of the payment to Barings, which was partly met by the sale of bonds, were ^ 1,821,222 showing an excess of payments over receipts of $661,924 Now, let me say one word in reference to a remark that has been made .11 regard to the amounts inserted in the estimates to be expAided on account of Nova Scotia and I'^iW Brunswick. It is to be remembered that under the terms of the Union Act they were entitled to come in with deits of $8,000,000 and $7,000,000 respectively, and that whatever sum in addi- tion to these amounts their engagements might come to had also to be assumed by the Dominion. Now, their real debts at the time of the Union did not amount to the eight anl se en millions stipulated, and a great portion of the expenditure on their account, now inserted in the estimates, is to bring their debts to these sums,'" ^d must not be considered as representing an outlay on the part of the Dominion in excess of their debt. I think it only just that this explanation should be made in order to remoye any misapprehension that may have arisen upon the point. (Hear, hear.) I mention the present state of the account with taese Provinces not as affording any indication of the ultimate advantages or disadvantages of the Union, but simply by way of explanation for the in- formation of the House. In alluding to it I do not. desire in the slightest Wi ' - ; m degree to refer to it for any sectional purpose, but simply as a matter ot account which the House has a right to know. (Hear, hear.) ,, (.j-,, I now come to the relations between the Province of New Brunswick and cho Dominion. The debt of New Brunswick at the time of the Union was 85,923,422 leaving, in order to make up its quota of $7,000,000 a balance to be paid to it, of $1,076,578 But the estimated excess of the debt of the Province beyond the $7,000,00u, is about $800,000 rt Hon. Mr. FISHER — That is made up by the subsidies? Hon. Mr. ROSE — No, it is the amount of debt in excess of that with which the Province was entitled to come into the Union. The Dominion, as I have already stated, is bound to fulfil the engagements existing on the part of No'-a Scotia and New Brunswick at the time of the Union. Those engagements will cause an excess on the pf.rt of Nev* Brunswick of $8C9,000 over the $7,000,000. This excess is made up in this way : Western extension subsidy $886,000 ; Eastern extension subsidy 360,000 :v'A>i»,f' Western extension stock. Fredericton branch St. Stephen's branch balance. Woodstock branch balance. . Land damages Add, what we have had to pay of the old liabilities- Bonds overdue ia November last Balances due to Barings 300,000 215,000 6,000 82,500 .. 20,000-, 4 $1,809,500 ; 151,970 viij 107,888 Making ?. total of $2,128,358 Hon. Mr. FISHER — How has the item for land damages arisen ? Hon. Mr. ROSE — I presume under an Act of the late Legislature. . Mr. JOHNSON — There is no such law in New Brunswick. 4 Hon. Mr. ROSE — Well, it is in the official statement of the account. It follows, therefore, that the amount which had to be financed for on account of New Brunswick was $2,128,353; which had to be met either in cash or at short dates, and which is now in course of payment. I will now state the present position of the account of New Brunswick. The total receipts from that Province up to the present time have been $760,668 to which add the cash on hand at the time of the Union .... 275,542 making the total receipts $1,036,210 Hon. Mr. HOLTON— What does my hon. friend mean by receipts from New Brunswick ? Are they on account of the Provincial Government ? Hoi. Mr. ROSE — No, they are receipts on account of the Dominion, The payments tc New Brunswick have been.... $1,393,940 ^wing ao exofese of payments over i-eceipte of. $367,730 12 Prom what I have stated it will be seen that the duty devolved upon the Finance Department of the Dominion, with reference to these two Pro- vinces, of finding cash, in order to meet the engagements and existing debts — Of Nova Scotia, to the amount of. , $3,019,628 Of New Brunswick, to the amount of 2,128,358 Making a total, to be provided for by the means I have " ' ' mentioned, of 85,147,986 Of course these Provinces were entitled, under the terms of the Union Act, to have all their engagements promptly met by the Dominion, even if beyond the amount of debt which was fixed upon in order to equalize the liabilities to which the inhabitants of all the Provinces of the Dominion are subjected, and I only mention the amount to show the large demands which have been made upon the Finance Department of the Government. With reference to Ontario and Quebec, the relations are simpler, because in their case it was a dissolution of partnership and not the taking in of a new partner into the concern. It is very diflBcult to say what the amount of the debt of these Provinces will be in excess of the $62,500,000, which is their quota under the Union Act. It has generally been estimated at $8,700,000, but the precise figure it is for many reasons impossible now to state. One reason may be found in the Estimates which were laid before the House some days ago, from which it will be seen that there are considerable arrears in regard to which it is questionable whether they belong to the Dominion or not. Take for instance the arrears of grants to charitable institutions which were under discussion the other day; take the payments of considerable sums as retiring allowances to the officers of the Senate who were recently dispensed with ; take the amount due by the Bank of Upper Canada ; the arrears due by the Great Western and tho Northern Railways, together with various other items, and it will be seen that at this time it is impossible to state the precise amount of debt which, will be divided between Ontario and Quebec when it comes to be adjusted. I should be doing grt^at violence to my own feelings if I did not here aoki owledge the manner in which the Treasurers of Ontario and Quebec have :.ctcvl m all transactions which have arisen between them and the Finance Dep<\rtment of the Dominion, I regard it as of the very greatest importance to the well-being of the country, and the satisfactory working of the Union, that there should continue to be the same amicable feeling between the officials of the various Provinces and those of the Dominion. And in referring especially to them I do not wish to except the officials of Nova Scotia, for although the Government of that Province is not very friendly to the Union, I must say that in their intercourse with the officers of the Finance Department, they have met every question that came up in a fair and straightforward manner, and have always displayed business like spirit highly satisfaciory and creditable. Tho same spirit, I must add, has also been shown by the Local Government and the Treasurer of Kew Brunswick. Hon* ^ir. HOLTON— Will my houorable friend permit me to ask a 13 question ? It is with reference to the subject of the debts of Ontario and Quebec. Do I understand my honorable friend to say thaft the debt of the Dominion will be aiFecttd by the settlement of the debt as between . the two Provinces ? , Hon. Mr. HOSE— I would rather not go into a statement as to'ae principle or mode in which those debts are to be settled. They are to form the subject of arbitration, and from the high character of the gen- tlemen who have been selected as arbitrators, I have no doubt that a satisfactory result will follow. I now come to the estimates for next year, which perhaps form not the least interesting part of my statement. I mean, Sir, the Estimates for the year ending on the 30th June, 1869, which were brought down this afternoon, (Hear, he. r.) In adverting to them, it will be seen from the observations I have already made that it becomes indispensably necessary, if we are to look straight in the fa^e what the current obligations and revenues of the Dominion are now and are likely to be in the future, that we should distinguish between what is ordinary and what is extraordinary expenditure. From the statement I have laid before the House, it is apparent that there are ex- tensive w6rks going on in various parts of the Dominion, payment for which cannot bo made out of the current revenue of the coi'.atry, and which must necessarily be met by means of loans. I therefore propose to distingi. ah between the expenditure for the ordinary services of the Dominion and this expenditure on account of public works, which is extraordinary and which I term capital account. I have in the statement I have laid before the House calculated everything which can by any possibility be taken into the account as ordinary expenditure ; and among the extraordinary expenditure I have included nothing which cannot, beyond all doubt, be fairly met by means of loans. It will be licen by the Estimates that the anticipated expenditure for the year 1868-9 on ordi- nary account is (*)... .$13,886,645. I propose to add to that amount, though l do not, propose ;?- to take a vote for it, the sum of. 154,516 for reasons which I shall presently state, making the total possible ordinary expenditure (f).... $14,04?, 161 This additional sum of ^154,516 I include for this reason: The anticipated outlay upon the Intercolonial Railway and the expendi- ture on account of fortifications may possibly begin in the year 1868-9. I have estimated that operations on the Intercolonial Railway Will extend over a period of four years, and on account of fortifications I do not sup- pose it is possible to limit the expenditure within a less period thati five years. I have estimated that, if these works commence this year, there may be an expenditure going on for a period of six months, during the financial year 1868-9, causing ah expenditure of one-eighth of the whole amount on the Intercolonial Railway, and one-tenth of the amount whibh my honorable friend the Minister of Militia proposes to ask for fortifiba- tions. TM interest and sinking fund upon tjfiis onfineighth of thfe exp^- * £2,843,U6 (terling. f £2,885,170 eteTliog. ,... .^-... diture oa the Intercolonial Railway and one-tenth on fortifications is thin sum which I have just now mentioned, $154,516 ; and I propose, in order that the Government may not be chargeable with omitting to make provision for any expenditure that may possibly arise, to regard that, when the House comes to consider the ways and means, as a sum which has to be provided for this year. In addition to what I term the ordinary expenditure of the year, and of which I shall give the heads in a few minutes, there is to be met by loans on account of public works, rrilways and other works of improvement now going on, the sum of $2,456,000 and for redemption of debt ,.., 1,618,267 making a -total of 84,074,267 With reference to the amount of the debt which has to be redeemed this yetr, there is a portion of it for which we need make no provision, as it will be met by the sinking fund. This amounts to $683,767, and the balance, 8874,500, represents the bonds bearing seven per cent, issued two years ago. It is further estimated that there may be an expenditure on capital account for the Intercolonial Railway and Fortifications on the principle I have now mentioned, for the six months operations, 1868-69, of the sum of $2,968,666. Of course this amount has to be raised by loan. These estimates, sir, undoubtedly call for a large measure of caution on the part of the Government. I can assure the House that I am by no means disposed to under-rate the burdens on the public ; and, when undertaking an expenditure of this kind, it becomes our duty to see whether we arc restricting our ordinary expenditure within as narrow limits as possible — there must be no waste of the public money — the civil Government must be carried on economically — and in all the branches of public administra- tion lavish or unnecessary expenditure must be avoided. And, undoubt- edly, now — in entering on a new state of political existence — is the proper time for considering and revising the whole expenditure, and making reductions where such are practicable. There are, it will readily be seen, certain items on which there can be no retrenchment ; these are — Interest on the Public Debt — the Subsidies payable to the va'-lous Provinces — Seigniorial Payments — amounts payable to the Indian fund — amounts payable for Post Office and Steamship service under contract — and the sums for the maintenance of the Public Works. None of these items are susceptible of reduction ; and they form a total of expenditure which amounts to some nine millions and a half or about seventy per cent, of the entire outlay for Dominion purposes. No matter what our desire for economy or retrench- ment, these items must remain as they are. Let me, however, call the attention of the House to it«ms with regard to which it is ihe desire of the Government to see whether it is not possible to make a reduction in the outlay. These are the expenditure for the Civil Government — for the Administra- tion of Justice— for Legislation — Militia — Public Works —Collection of Customs and Excise— Miscellaneous-^- Emigration and Fisheries. These items involve, altogether, an expenditure of about $4,000,000. The GoTWWueotr tov^ ooi beeo remiss in endeavoring to do-wbftt Qcmld be 15 thifl (lone, and as speedily as possible to analyse and to reduce this expendi- ture where it was proper, having at the same time a duo regard for the efficiency of the public service. The Audit Bill of last session was a step in this direction, and a very important one. Under it every shilling of expenditure for the current year must be submitted to the House. There will be no more old items voted in former years, on which the Grovem- ment of the day could fall back. Each shilling not spent, up to July 1, must be replaced in the Treasury, and a new vote taken for it. Now, Sir, the House, the other night, made important reductions in its own expenses, and the new Civil Service Bill, in which some progress has been made, will, when carried out, put the service on a much more satisfactory, and it is believed, economical footing. There is also the Bill with reference to Contingencies. That it will have some effect in reducing expenditure, and forming a check on the Civil Government may be seen by reference to the Estimates of next year, for we propose to ask for a very much less amount for Contingencies than was required last year. We think we see our way to a fair reduction under the provisions of the two bills mentioned. (Hear, hear.) I will now indicate to the House the sources from which we propose to derive our revenue, and the principles which have guided the Government in revising the existing taxation. Before doing so, however, I desire to appeal to the forbearance and patriotisra of members of this House, repre- senting various localities, not to ask at the hands of the Government at the present time any appropriations for new works. (Hear, hear.) I need scarcely say that it is of the last importance to the credit of the Dominion that we should not start with anything like a deficiency in the public exchequer. There must be an end to the deficiencies which existed in the Province of Canada years ago. The Government are now sustained by a large majority in the House and in the country ; and the Minister who will not, either by reduction in expenditure or by additional taxation, establish an equilibrium in the finances, is undeserving the confidence of the country. (Hear, hear.) It is of the utmost importance to our future that we should recognise and act on the principle that we will not allow even a possibility of a deficiency arising between the revenue and expenditure. If I were not supported in the enforcement of this policy I would not consent to hold my position for one hour. (Hear, hear.) However desirable it may be to promote local undertakings, and no one appreciates more fully than I do the duty of developing the great resources of the country, I think that until we understand fully the real state of our balance sheet, we ought to be very chary indeed in entering on new works not obligatory on us. (Hear, hear.) Another, and a powerful consideration which guides the policy of the Government is this: we feel that the duty of the present hour is to consolidate the Union, to avoid all changes which are not of pressing necessity. We feel that every new measure of taxation is liable to be misrepresented and misunderstood in Nova Scotia, and that until the Union is firmly established, until those who are not yet entirely reconciled to it have become «o, our pplicy^ought to be_pne of forbearance ! and couciliatiou towards theui. Such a course will, I believe, commend it- self to the great majority of the House. (Hear, hear.) We have tocon- sider, also, our position towards the United States. We are not insensi- ble to the circumstances in which Canada has been placed in consequence of the repeal of the Keciprocity Treaty, and the unwise and restricted l^ialation adopted by our neighbours on the other side of the line. (Hear.) We are not insensible to the fact that many of the principal products of this country have by the imposition of high duty been almost prohibited from entering their markets. The coal trade in Nova Scotia we know is languishing, the men working only two or three days in the week. Our lumber is subject to a heavy duty, and our grain and fish are in the same position. With respect to fish indeed, the duty is so high that even if we imposed a license fee at the rate of $4 per ton on American vessels — as we have been urged to do, not only abroad but by a Committee of the House— that would still fall far short of the duty they impose on our fish. We feel also that our trade on the lakes has . been subjected to excessive charges when our vessels enter American ports. We know that while all their agricultural products come in free, ours are almost excluded from their markets. It may be that hereafter we may be compelled to adopt a policy different from that which we are now pur- suing. But the Government have thought that anything like retaliatory or restrictive measures at this moment would not be conducive to the best interests of the country. We ought rather to show an example of lib- erality, and as far as we can relieve commerce and our mutual inter- course of all trammels and restrictions. (Hear, hear.) The House is aware that one great obstacle to the renewal of free intercourse between ourselves and the people of the United States has lately been removed. I allude to the almost entire sweeping away of taxes on their internal industry. We think we see in that an indication of a less restrictive policy. The feelings of irrita- tion which had something to do in prompting the action of Congress touching the repeal of the Keciprocity Treaty have we trust now passed away. We see that they have recently been instituting enquifj'^ a?, to the manner in which American interests were aflfected by the abrogation of that Treaty ; and by the information laid before Congress, it is evident that the Ameri- can people are alive to the ftict that this restricted irtercourae is operating injuriously to them. The coal and manufacturing interests in New York, Boston and other Atlantic cities, are clamorous for a repeal of the duty on Nova Scotia coal. Other important interests begin to feel the pinching occasioned by the restrictive policy adopted by the American Government. (Hear, hear.) We do not at all under estimate the impor- tance of having at our door a market of 40,000,000 of people ; we feel that in being debarred from that market we have suffered something and may suffer more. Yet it has not been an unmixed evil. It forced on the en- terprising people of this country the necessity of seeking other markets, and the resuH of this has been in the highest degree gratifying. Many of their products which formerly went to the United States have found other and more remunerative markets. The exports of Canadian products to other countries have gone on increasing in a very large proportion, although EH 17 the trade with the United States has fallen oiF. And here let me for one moment refer to a trade which I believe as firmly as I stand here might be laid hold of by the people of this country. I refer to the West India trade. (Hear.) In those Islands we might find a profitable market for most of the surplus products of Canada. The recent report of the Com- missioners called attention to the important fact, that the British and Spanish West Indies received from the United States products which we can just as well send, such as lumber, flour, butter, cheese, staves, shooks, boots and shoes, hardware, &c. The British West India Islands alone received of these articles to the extent of ten millions of dollars a year ; the Spanish West Indies to the figure of eight millions of dollars; and if we add Hayti and St. Domingo, we find ;in aggregate trade of nearly twenty- five millions of dollars with the United States, in articles which we p*-- duce and might supply. (Hear, hear.) Without trespassing on the House iurtL i to explain the motives and policy of the Government, I ma;y say, in brief, thu. our desire is to make as few changes in the tariff as possible. We desire that these should be in the direction of conciliating our friends in the Maritime Provinces, and, further, we desire not to restrict our inter- course with the United States at the present moment. (Hear, hear.) I will now proceed to point out in what respect we propose to reduce the present taxation, a portion of the statement which I am sure will be received with satisfaction. (Hear, hear.) We propose to take tj^e duty off flour, meal, grain, and breadstuffs of all kinds. (Hear, hear, from Nova Scotia members.) We j/ropose also to make a change in regard to another matter in which I know my hon. friend opposite (Hon. Mr. Savary) feels interested. We propose ti> follow up the course, the liberal and enlightened course which Canada <\li:K'.m rij-ioi/ > V For the Ist year (*)... $309,033 .. 2nd " (t)... 8618,066 ,1 3rd " (t).. $927,100 t. 5th " (II) .. $1,289,666 The latter year gives the maximum o^ the annual charge both for Interest and Sinking Fund on the Guaranteed Loans. At the rate I have men- tioned the debt would continue for twenty-eight or thirty-two years, according as the Sinking Fund was invested at six or five per cent., after which the annual payment would diminish for five years in the reverse order in which it increased, until the whole debt was extinguished, which would be in thirty -eight or forty-two years. In considering how this amount »o to be met without undue pressure on the resources of the country, some little reference to our past progress is not unadvisable, for my belief is that judging by that standard, these additional charges will not perceptibly increase our burdens, provided we husband our funds, and this House does its duty in enforcing an economical administration of public affairs. The increase of population and wealth and extension of trade in the new Dominion within the next few years will, I believe, be such that the public revenue must also largely increase, and the additional charges I have men- » £«3,500 Btg. t £127,000 8tg. t £190,500 Btg. J £254,000 stg. || £265,000 «tg. tioned be nearly met without any new burdens being imposed ou the people. I will not test the patience of the House by any lengthy statistics to prove my last assertion, but will merely refer to one or two points of our past progress as an earnest of what we may look to accomplish in the future. I do not risk much when I say, that it is as certain as I stand here now, that no new and comparatively unde .eloped country such as ours ever had a more certain future before it. We have vast a ^.d varied resources ; and though our growth has not been as rapid as some other Colonies, ur as some States of the neighboring Union ; though our Northern climate subjects us to many and great difficulties ; though our country is the reverse of compact, extending over a great length with but little breadth, and with some unpromising intervals between ; these draw- backs are not without corresponding advantages. (Hear, hear.) Notwith- standing our disadvantages. Sir, our progress during the last 15 or 20 years, has been a very satisfactory one, and such as we can very reasonably anticipate must follow in at least an equal degree during the future. During the last nine years the imports into Canada increased upwards of 81 per cent., while the exports of the country — a far better indication of her wealth — had increased 94 per cent, I am speaking now only in refer- ence to old Canada proper. As respects Nova Scotia and New Brunswick, though their per centage of increase is not quite as great, it is yet gratify- ing and satisfactory. During the same period in Nova Scotia the imports increased 72 per cent, and the exports 20 per cent. ; and in New Bnmswick the increase of imports and exports was 38 percent, and 25 per cent, respec- tively. As the new charges spread over five years, I will refer to the general increase of Canada quinquennially in the past. During the five years ending 1862 the imports into old Canada averaged $36,551,000. In the five years ending 1867 they increased to an average of $47,510,000. It is not, therefore, by any means an unreasonable estimate to suppose that the imports of the Dominion ought to increase at the rate of $1,500,000 to $2,000,000 a year* During the same time our exports had increased in even a greater ratio : — In the five years ending 1867, they averaged $26,812,000 1862, « 30,510,000 " « 1867, '' 40,645,000 Now let me make one remark on this head with reference to a subject which has formed the groundwork of so much discussion — I mean the debts that have been contracted in order to aid the construction of rail- ways. If you take the period when our railway system was completed, about the year 1860, the facilities which it gave to the trade of the country will be seen at once. About that time the value of products exported rose from $23,000,000 to $36,000,000 ; this increase arising, as I believe, in a considerable degree from the additional facilities given to our vario s productions to reach the markets of the world. (Hear.) Let me next say a few words by way of analysis of the character of our exports, 80 that an intelligent estimate may be formed of the growing wealth and capabilities of the country. I will take first our agricultural productions, the exports of which amoi\uted, in 1850, to $4,237,000 and in 1866-7 to no lew) than $16,765,000 4 9.Q . Hon. Mr. C ARTIER — That in the exports of Canada alone. Hon. Mr. ROSE — Yes, I have explained that these figures do not include the exports of the Maritime Provinces. When I referred to this subject in December last^ I said I would have given statistical information in regard to the trade of those Provinces had it been available. It is not, Sir, I assure you, from any desire to overlook, still less to depreciate the agricultural or other productive wealth of those Provinces that I make nu reference to it now. (Hear.) Now, having seen the increase that has taken place in our agricultural exports, let us take the exports of auunals and their products. Of these the amount was In 1850 «630,000 In 1865-6 $12,682,000 I admit that the year 1865-6 was one of an exceptional character in am- sequence of the repeal of the Recipr( city Treaty, and the vacuum created by the American war, causing an exceptionally large demand in the United States, But in 1867 this demand was very much diminished, yet the exports under this head amounted to $6,100,000, shewing a very lai^e and steady percentage of increase year by year in the exports of animids and their products. (Hear, hear.) I may now say one word with refer- ence to manufactures, which in this country are still in their infancy, but which are gi owing up, without any of the hot-bed fostering of i»'otective tariffs, but solely by the skill and energy and industry of cur population. (Hear, hear.) It ia only lately that we have begun to export anything except agricultural and other like products ; for our exports of manufac- tures in 1850 were only $26,000, while in 1867 they rose to $989,000. (Hear, hear.) There is one article to which perhaps 1 might have alluded boi^re, that of cheese, the production of which was lai^y increased and which is going abroad to the West Indies, Brazil, and other ports of South America, in large quantities. I do not include cheele among manufactures, but among animals and their prdducts. In 1861, instead of exporting we imported 2,250,000 lbs. of Cheeae, but in 1867 we imported only 294,000 lbs. and exported 1,500,000 lbs., in addition to an estimated home consumption of 6,000,000 lbs. showing it to be an important branch of the trade of the country. There are now no less than 180 cheese factories in Ontario and 17 in Quebec. (Hear hear.) Take next. Sir, the products of the forest, We find a corresponding increase. There was exported : Inl850 $5,442,000 > In 1867 $13,948,000 ' If we look at the extent not only to which the productive power of the coun- try has increased, but also the increase in its foreign trade, wo find the re- sults equally gratifying : Inwards. Ti, tn 1854 the foreign tonnage was 602,000 tons. In 1859. 594,000 « In 1864-& 938,000 " Mr. MACKENZIE — That is the tonnage at the sea portg tnly* Hoi! Mr. ROSE — Yes; the inland tonnage' has increased in almost th§ |(M^9 ratio. Outwards. 641,000 tons 605,000 " 953,000 " nat this tion lot, I the nu I has lals Mr. MACKENZIE— Much greater. " ' ' Hon. Mr. ROSE — There has been a very great increase, but I hardly think in a greater proportion. But I am speaking now more par- ticularly of the tonnage engaged in foreign trade. Let me take one other test of the progress of the country. — I mean the increase of the population. The average annual increase has been : In Ontario 4J per cent. In Quebec 2J " " In New Brunswick 2J " « In Nova Scotia 2 « « Say an increase of 3} per cent of the whole population. The same increase is shown if you take the number of ratepayers in Ontario, which was : In 1864 278,336 -■''^ In 1865 291,997 Inl866 296,995 Or an increase of 3^ per cent. There has also been almost the same increase in the number of assessed acres, which was : In 1864 18,144,000 In 1865 18,587,000 v^ i In 1866 19,017,000 - * Take next, the amount of Banking capital and business required for the operations of the country, and in this we find as good an indication as can be oflFered of its steady progress : In 1858 the Discounts were $30,364,713 In 1868 " " • " $51,175,582 >m An increase of 68 per cent, in ten years. A still more remarkable evi- dence of the growing wealth of the country is to be found in the amount of money deposited in the Banking Institutions, During the samt; period they rose from $8,358,437 in 1858 to $28,721,188 in 1868, or 350 per cent, increase. (Hear.) In viewing the facts. Sir, I think they point, under the blessing of a good Providence, to a certain and prosperous fu- ture before us. If we work together in harmony, if we tadeavor to ce- ment the Union, if we develop the varied and rich resources of the sev- eral Provinces, we have the elements within us to build up a prosperous Jtnd powerful community. In Lower Canada we have a people frugal, in- dustrious, and attached to the soil — not a nomadic, but a steady, contented people, well adapted for manufacturing pursuits ; while in the West we have immense agricultural, and in the East equally important maritime resources. I am not an enthusiast, but I say that although we have a rigorous climate and many diflBculties to combat, we have correspondingly hardy, energetic and thrifty population, and in the extent and variety of our resources we have as certain a promise of a good future as any country ever before enjoyed. (Hear, hear.) Now, Sir, I would not wish it to be sup- posed that, in calling attention to these indications of the future prosperity of the country, I am desirous that we should rush into undue expenditure. On the contrary, I say that we ought to be most careful in our outlay, and consider well every shilling we expend, (Cheers.) I trust that whatever Goverumcut may be in power, the people will demand at its hands a thrifty and economical administration of public affairs. I claim that we who now occupy these benches have shown a desire to follow that course. (Hear, hear.) I am not, however, insensible to the necessity of developing the wealth of the country. If we have resources we must be prepared to take such measures as will ensure their reasonable and progressive development. We must not stand listlessly by and allow treasures to remain buried in the bowels of the earth ; if we have agricultural and mineral wealth we must stimulate its development ; and we must not neglect the means necessary to bring our products of all kinds to a profitable market. What this country wants is care and judgment in the development of its resources. While we ought not to be backward in those things which arc for its advancement, we ought still to pause and make all our calculations with prudence, taking care not to burthen the revenue for objects which are not likely to yield an adequate return. (Hear.) Now, Sir, I am sure the House will be glad to learn that I have nearly come to the end of my remarks; but there is one other matter which I must refer to before closing. I have often heard it stated that this countrv is groaning under a heavy load of debt and taxation ; that it is not an inviting home for a poor man to come to ; that our condition r.s compared with that of other and adjoining countries is that we have heavy burthens to bear without corresponding means of revenue. But let us compare our con- dition not with that of some of the countries of the Old World, but with the New Coiocies which have been but a brief space in existence, and see what is the amount of debt those Colonies have to bear per head of the population, as well as the annual charge, as compared with Canada. Take the Australian Colonies, and see what their condition is as compared with ours : , V Per head. * In New Zealand the interest on the public debt amounts toabout $6 02 In Queensland it is 4 97 In New South Wales 3 21 ' In Victoria 2 88 '■ In South Australia 2 16 , In Tasmania 1 51 f While in Canada it is only 1 12J ♦ per cent. (Hear, hear.) It is to be remembered also that for the debt which we have incurred we have a great deal to show. We have perhaps the best canal system in the world. We have our railways, and important public works for every dollar of the debt which we have incurred. Some " of these works may not, perhaps, yield us a direct return for the outlay, but they do indirectly, and the people receive collateral advantages in return for a very large proportion of the debt which they have incurred. I have often heard comparisons instituted in tho press and elsewhere between our own condition and that of the State of New York, between our own rate of progress and theirs. Let me for one moment call attention to the burthens which the people there have to boar, as compared with our 29 i% low arO the the we ans ket. its arc lions own. I do BO uot upon the information contained in newspaper articles, or popular statements, but on the authority of the official report of the Finance Committee of the Constitutional Convention which was recently sitting at Albany, in which a view was taken of the indebtedness of the State. Let us see what the result was at which they arrived. The Federal taxation of the State is set down in the report at... 8118,000,000 the State taxation at 12,800,000 the taxation by cities, counties, towns, &c., at 50,000,000 making a total taxation of $180,800,000 which, on a population of four millions, gives an annual charge per head of ?45, Compare this now with the state of aflFairs in Canada. Our returns are not so complete ab could be desired, perhaps ; and I may take this opportunity of saying that the Government think it would be a great mis- take if they did not see that there was a complete system of statistical returns from all the Provinces of the Dominion, which might be made available for purposes of comparison. The estimated revenue of the Do- minion is 114,500,000 The estimated revenue of the Provinces, apart from subsidies, &c., paid by the Dominion 1,500,000 and the taxation by cities, towns and villages 4,700,000 Mr. MACKENZIE— Too low. Hen. Mr. ROSE — I think not ; there is hardly any in Nova Scotia. The total taxation of Canada, then : Do- minion, Provincial, and Municipal may be estimated at $20,700,000 which, on a population of 3,900,000, would give an annual charge of a little over 85 per head, instead of $45 as in New York. (Hear, hear.) The debt of the State of New York was set down in the same report at $48,381,682 of the cities, villages, counties and towns at 85,000,000 the proportion of the National debt at 500,000,000 making a total debt of $633,351,682 which, on a population of four millions, gave 8158 per head. Turning to Canada now, we have for the debt of the Dominion 872,000,000 That of the Provinces, in excess of the Dominion debt, is 17,000,000 That of the cities, counties, towns, &c., for Ontario, Que- bec, and the Maritime Provinces, together about 18,500,000 giving a total debt of 8107,500,000 which for a population of 3,900,000 is less than 828 per head, as com- pared with 8158 per head in the State of New York. (Hear, hear.) I think that, taking into account the valuable debts which are owing to US and the propetty we hold in connection with the- burdens' we have to m lear, any one who is disposed to look at our condition dibpassionately, as contrasted with that of the neighboring State, will say that the balanoe is entirely in our favor. (Hear, hear.) I believe I have now exhausted all the points on which I proposed to touch, and I am afraid I must have exhausted also the patience of the House. (Cries of No ! no !) But I have felt that it was my duty to lay before the TTouse all the material facts with respect both to our present financial position, and our prospects in the future. I have only now to thank the House for the indulgence with which they have listened to me, and to express the hope that the anticipations which I have very imperfectly foreshadowed will be more than realized. I have no fears whatever as to the future of this country. (Hear, hear.) With the same industry, the same thrift, the same indis- position to rush into rash and heedless enterprises, characterising us in the future, as have characterised us in the past, I think the prospect before us is the reverse of discouraging. Any one who looks at the population of this Dominion— of Nova Scotia, New Brunswick, Quebec and On- tario — must see that while they differ in very important characteristics, they agree in this, that they are not extravagant or ostentatious in their habits, they are hardy, persevering, industrious and energetic, and possess all the qualities fitted for developing the resources of a new country. Though our wealth may not increase as rapidly as in some other climes, we spend little in ostentation and extravagance. Reproduction is steadier and more continuous. If we are true to the duties of the position in which Providence has placed us, — if there continues to sit on those benches as vigilant an opposition as sits there now, endeavouring to keep this Govern- ment or any other Government up to ihe mark, and enforcing wise admin- istration of public affairs; if we avail ourselves of the advantages of a constitution which brings Ministers day after day face to face with the Representatives of the people, where evervthing we do one day may be scrutinised the next — depend upon it that with such advantages, and under such a constitution, if we are true to ourselves, we cannot but prosper. (Cheers.) If I might be permitted to say one word to our friends from the Lower Provinces, I would entreat them to consider what our position will be, if we do not work heartily together for the good of our common countiy. Believe me, we have in our institutions something worth preserving. Let us not rashly cast away this heritage of freedom, but transmit it unimpaired to our children. We but ask you, then, to come in and work cordially with us. The experience of the past few months must have convinced you, that yOu will find the men of Western, Central and Eastern Canada in accord with you in your sympathies and aspirations. With a future of freedom and material prosperity before us, and a thousand associations of the past to cement us together, why should we not, in all matters which concern us in common, as British subjects, strong in a common love for our Queen, and the determination to uphold her authority, and perpetuate her sway in British America, work out the constitution which She has intrusted to uB? Believe me, your interests will not be disregarded.- There is a desire— I lbave heard it expressed on all sides, by all olaseee and . i^U political partita SI in this country— a magnanimous and generous desire to deal tenderly, and kindly, and considerately, with every interest which affects the peculiar position and the well-being of the Maritime Provmces I think too the iolicy indicated to-night on behalf of the Government, must commend itself to men of all parties among you, as shewmg that if your numbers are not great, your voice and your remonstrances will be heard in every matter that coJcerns you. To use the language of one taken from us a short time ago, almost the last words he spoke in this House-- We hope yet to conquer you with kindness." (Loud cheers.)