LLOYD HARRIS September 15 1921


LLOYD HARRIS September 15 1921



CANADA’S great need to-day is a true conception by the people of our problems and the need of efficient and comprehensive plans in their solution. After all, is not the management of a huge country a business proposition and does it not require the same handling to produce results? The difficulty in doing this successfully is magnified by the political system we have allowed to be created and the methods resulting from same.

In peace times we in Canada were moving along perfectly satisfied with our system of Government as the country was growing rapidly, population was increasing, trade was expanding, revenues were buoyant and the policy of our political leaders was to keep things humming by initiating policies requiring huge expenditures of money in the belief that money being spent freely meant employment of the people and stimulated immigration and kept a party in power. There apparently never was a thought of using surplus revenues to pay off the national debt and if only a surplus of revenue over expenditures could be shown, the Government was satisfied. Looking back, does it not strike one that, if during a period of ten years, when revenues were buoyant, the national debt had been paid off (which could easily have been done) that the country would be in a much better position today and that one of our most serious problems of to-day would be non-existent?

However that would have been good sound business and we were playing politics.

In the very able letter of Sir Joseph Flavelle to Premier Meighen on the Canadian Railway problems recently published, he says, “There would be no acute railway problem in Canada to-day if, in 1903, Parliament had refused the proposal to build the National Transcontinental line from Winnipeg to Moncton; if it had refused to grant a charter to the Grand Trunk Pacific to construct a railway from Winnipeg to the Pacific Coast; and had refused the builders of the Canadian Northern further financial assistance, except as for the western division of the Grand Trunk System, carried through to the Pacific Coast. If the Grand Trunk and Canadian Northern Companies had been told they must come together and constitute a second transcontinental line, the country would not have been called upon to face the present gravely serious situation.’'

' ' Parliament, however, chose to adopt the policy initiated by the Government of the day and voted to support same on the basis of estimated cost given as $13,000,000. The direct outcome of this ill-considered policy is that eighteen years later the people of Canada is burdened with a debt of more than $350,000,000 which we have to pay.

Mistakes of our “Business Managers”.

I COULD name many instances but this is perhaps the best example of what we are called on to pay for the mistakes of those to whom we have entrusted the business management of our affairs. I am not using this example to the detriment of one of our great political parties, as both were equally careless of the trust reposed in them, but to show what we who pay received for our money. This same thing will go on as long as the people will stand

That a truer conception, on the part of our legislators, of the trust reposed in them, is being more appreciated, is evidenced by the recent action of Premier Drury in his stand taken on the hydro-radial question in Ontario. The whole radial problem had been investigated by a commission appointed for the purpose which reported against the feasibility of the scheme. This scheme was rejected by the Ontario Government which backed up the Commission. Premier Drury in this public reference to his Government’s decision, is quoted as follows:— “We are being heralded in certain quarters by certain papers as opposed to public ownership. The worst foe is he who encourages unwise public ownership. The worst blow public ownership in Canada has is in the national-owned Canadian railways. And the best friends of public ownership are those who hold up for investigation, in order that they may be sure, public ownership enterprises—until they know that they will be profitable and feasible.

“While the present Hydro-electric radial proposal is confined to a comparatively narrow section, once we entered into it we could scarcely stop, because, if we listen to the demands from Toronto to Bowmanville, why not the demands from Goderich to Sarnia? Why not enter into wholesale onstruction? And have not the people of one section of the Province quite as much right to that sort of thing as the people of another?

“We have been charged with evading responsibility. But we are responsible. The commission has made its recommendation. The Government must be responsible for its policy. In view of the evidence, in view of the various new circumstan ces, in view of the great obliga-

TT OW much arc you paying because -*-•*Canada has been governed by poor “business managers”? Several businesses inform MACLEANS that if their businesses were run like the Canadian government, they’d be bankrupt in six months. This article is from the authoritative pen of I ,loyd Harris, who is a controlling director of several large industries, and was head of the Canadian Trade Mission, in London, England, 1918 - 19.

tions of the country in Hydro-electric development in a score of places, the Government must stand firm and refuse to guarantee any bonds for further Hydro-radial enterprise.

“In doing so we may have to face popular clamor. That will make no difference. I have faced popular clamor, and, Mr. Chairman, I am not so much in love with political life that in order to save my political life I would do that which might very seriously handicap the Province in years to come. I certainly am not going to mortgage the future of this Province, as the political parties in the past have mortgaged the future, in order to gain applause or political advantage.”

Commendation for Drury

T HAVE no brief fpr Premier Drury, but he must com-*• mand the respect and confidence of those who demand honest, efficient and courageous administration. Those who endorse Premier Drury on his stand in this matter will be accused of being against public ownership which is the fetish of the demagogue at the moment but I have noticed that the people who shout the loudest for public ownership do the least paying and these enterprises must be paid for—and by the people. This is evidenced by the Canadian National Railways which were initiated in 1903 and the account is rendered in 1921, eighteen years later, and it is a tidy sum and must be paid—and by the people. These are our costs for playing politics and I wonder if we will derive any lesson from it or decide to charge it off to experience and then go ahead and buy some more experience.

Perhaps our most serious national problem is our fi-

nancial position. This must be met with courage and soundness. We have an enormous total of debt piled up, part of it resulting from our cost of the war and a large part, from mistakes of our managers in the past. In approaching this problem it is necessary that each individual submerge self and think from a Canada-first view-

I have been in conferences with various groups of people to consider a well defined and comprehensive plan to submit to thp Government with the idea of offering a constructive suggestion as to how the burden could be spread equitably on the shoulders of the whole people so that each individual would bear his proper share. I have never been able to find a group of men agree on any specific proposal as each one at once gets out a pencil to see how any tax will affect him individually. The result is that up to the present no plan has been worked out to comprehensively cover the securing of sufficient revenue to pay expenses of administration and interest and sinking funds on our debt with the result that our financial position is anything but desirable.

Eliminate Playing of Politics

THERE are difficult problems ahead of us in this respect and they will require exceedingly careful handling as above everything Canada must keep its credit above repreach, otherwise there will be chaos.

This is a problem where politics must be eliminated and the leaders of the various groups, whose ambition is to assume the management of our business, should be forced to be very explicit on the policy they propose to put into effect to meet this problem and we should demand facts and figures and not mere general phrases as after our past experiences of management, we Canadians should all be from Missouri and insist on knowing.

I have been much interested in the figures recently quoted by the Finance Minister, Sir Henry Drayton, in replying to an attack in the Farmers' Sun in which the Finance Minister was accused of initiating a spy system to get at incomes of the farmers. The position of a Finance Minister is the most unenviable in the gift of the National Government. Upon him devolves the responsibility of finding the required revenues to keep the ship of state in untroubled waters, and the credit of Canada intact. This requires that he assume the burden of mistakes of former administrations and one of those burdens is to provide for payment of the bill now due and payable in connection with our policy of railroad expansion. This with the debt incurred by the war and for ordinary expenditures to carry on Government, requires the raising of approximately $500,000,000.00 each year.

It has been found necessary to resort to measures of direct taxation, thus the initiation of the Business Profits Tax and Income Tax. It is easy to get at the Business Profits Tax, and it is a popular tax with the masses of the people because comparatively few are required to be taxed and the masses are free so that politically it is a strong card to play but as to the economic soundness of it, is a question. The Income Tax is different however, as it affects a larger number and the editor of the Farmers' Sun thinks the farmers are being treated unfairly in the methods employed by the Government to get at their incomes and has so stated in the columns of his paper. Sir Henry Drayton publishes information which gives us some cause for thought. I quote from his letter as follows:—“You are, however, more immediately interested in Ontario. The Ontario total collections were $111,273,069, made up of $78,616,526 collected under the Business Profits War Tax Act and $32,656,475 under the Income War Tax Act. The total amount paid by farmers was $142,830, representing a fraction of 1-230 or a percentage of .0044 of the year’s income tax receipts.

“In the year ended March 31, 1921, Ontario ratepayer? paid $20,013,796 in income taxes. The total number of ratepayers was 72,560. In this year the total amount paid by famers of the whole Province was $40,973, and the total of farmer taxpayers was 1,870.

“The estimated population of rural Ontario is 40 per cent, of the whole.

“The result is that only 187 out of every 100,000 of the rural population paid taxes, as against 4,150 out of every 100,000 of the urban population; that while rural Ontario has a population of 2-5 of the whole, it contributes less than one five-hundredth part of the income taxes raised, or in percentages, .002047.”

Group Division Unfortunate

IT is unfortunate if we in Canada divide ourselves into groups as it would undoubtedly result in class legislation, the result of which could only be demoralization and cha''" no not the figures just cited indicate that one

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class is not doing its share in providing revenue from income taxation? But this is probably due more to the difficulties of collecting a tax of this nature than to the people who are not reached. It has been stated, and I think it is probably true, that if an income tax in Canada reached every individual who properly is subject to it, the cost of collecting would exceed 50 per cent of the amount collected. That would not be good business so it is important that we work out a plan to secure our necessary revenues from all classes on an equitable basis and which could be operated efficiently and at the minimum of expense.

I have dealt with a few matters which have been of public interest in the last few days as they will probably be uppermost in people’s mind and it is these that led me to the language employed at the commencement of this article, viz: “Canada’s great need to-day is a true conception by the people of our problems and the need of efficient and comprehensive plans in their solution.”

This is a matter for the people and if we have poor Government it is the people who are responsible as they elect the men who make up the Government. Now let us first get our problems squarely before us and a full realization of the magnitude of our task and go to the solution as a united people. The men are here but the men who can do the big job are not the men who are hunting jobs. They are the men who have the jobs hunt them. During the war our big men did the big jobs at home, while our heroes were doing their bit at the front.

There was never anything better done than the organization created for the Victory Loan, Patriotic Fund and Red Cross Campaigns, the results compelling the admiration not only of Canadians but of the world. The organization and operation of the Imperial Munitions Board and War Trade Board was an example of what can be done. These were organized and operated by Canadians with vision and ability and resulted in our people finding themselves as their ramifications extended over the whole country and everybody was doing something because they had leadership

and the work was assigned to them and when there is a job to do Canadians are no shirkers.

It is not necessary for us to go to the Government as a cure-all for every ache and pain. We should demand that the Government carry on its functions of administering the affairs of the country honestly and efficiently and in the best interests of all classes but we must realize the full responsibility of citizenship and govern ourselves accordingly.

The political situation in Canada at present is very confused. The reactionaries in the old parties are trying to bring the people into line by talking the glories and traditions of the old parties. The people are restless and are not so much interested in old traditions as they are in making new traditions, and refuse to be fooled. This is leading to new parties emerging from the confused situation and such new parties are largely being composed from classes. We may have to pass through a phase of group representation, and a government made up of a combination of groups and if we do it will only postpone the date when we can make a start in getting down to real work in mastering our problems whereby the country can commence the era of a sound and lasting period of development, expansion and prosperity.

In talking to people, I find there is an utter lack of interest in their minds as to the fate of the old political parties but what everybody is interested in is having our would-be leaders tell them what they propose to do, how they propose to do it and the men they propose to call to their assistance in running the organization which will manage our affairs. Canadians are not fools and all we want is to know that our Government can and will handle the affairs of the country with ability, efficiency, honesty and for the best interests of all classes of the. people. A new party will emerge from the present chaotic condition and it will represent the new National spirit for which we are groping and for which everybody is looking for leadership.