Province of Canada, Legislative Assembly, 8th Parl, 3rd Sess (16 March 1865)

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Date: 1865-03-16
By: Province of Canada (Parliament)
Citation: “Provincial Parliament”, [Quebec] Morning Chronicle (17 March 1865).
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THURSDAY, March 16, 1865.

The SPEAKER took the Chair at three o’clock.

After the presentation and reading of petitions—


Mr. BELL presented the final report of the Committee on Canadian Gold Fields, and moved that the said report, together with the evidence, be referred to the Printing Committee.


Hon. Mr. COCKBURN brought down a Message from His Excellency the Governor General, transmitting the Report of Mr. D. B. Read, appointed in the matter of the Parliamentary election for the County of Essex.


By Mr. COCKBURN— Bill to authorize the construction of a tram-way from the Marmora Iron Works to the River Treat.

By Hon. Mr. CARTIER— Bill to regulate the inspection of pots and pearlashes for the Provinces of Canada.

By Mr. POWELL— Bill to authorize the admission of William Lynn Smart as a barrister in Upper Canada.


Hon. J. A. MACDONALD desired to state, on behalf of the Government, that it was their intention, if the state of the public business permitted it, to prorogue the House tomorrow.


Hon. Mr. GALT said he did not propose to one the House into Committee of Ways and Means now. He thought it would facilitate the business if this motion were made in the evening, so that private and public bills could be got through and sent to the Upper House. He hoped hon. gentlemen opposite would offer no opposite in the evening, but would consent to this course being followed.

Hon. Mr. HOLTON said that as the object of moving the House into Committee of Ways and Means was merely formal he would not take any objection, provided that no new items would be introduced.


The following public bills were read a third time and passed:

Bill to prevent the spread of Canada Thistles in Upper Canada— Mr. STIRTON.
Bill to improve the proceedings in Prohibition and Mandamus in Upper Canada (and amendments.)— Mr. WOOD.
Bill to amend chapter 11 of the Consolidated Statutes of Lower Canada— Mr. IRVINE.
Bill to amend chapter 68 of the Consolidated Statute of Lower Canada, respecting Mutual Insurance Companies— Mr. GEOFFRION.
Bill respecting the weighing, measuring and gauging of certain articles of general consumption— Hon. Mr. ROSE.
Bill to define the right of property in Bees, and to exempt them from seizure in certain cases— Mr. GEOFFRION.
Amendments made by Legislative Council to bill to establish the validity of acts performed in Canada by certain clergymen ordained in foreign parts— Mr. DUNKIN.
Bill to amend chapter 109 of the Consolidated Statutes of Lower Canada, respecting Houses of Correction, Court Houses and Gaols— Hon. Mr. LAFRAMBOISE.
Bill to facilitate the apprehension and conviction of horse-thieves— Mr. J. S. ROSS.
Bill to amend the Act respecting Attorneys— Hon. Mr. CAMERON.
Bill relative to the Railway Tracks on the Toronto Espanade— Mr. M. C. CAMERON.
Bill relative to the Doon and Galt Railway— Mr. COWAN.


The following public bills were read a second time:

Bill to amend the Act to establish an institution of Landed Credit (credit foncier) in Lower Canada.— Mr. J. DUFRESNE.
Bill to amend Chapter 75 of the Con. Stat. for Lower Canada and to annex certain Islands to the County of Vercheres for electoral, municipal, and registration purposes.— Mr. GEOFFRION.


The following private bills were read a third time:

Bill respecting the Canadian Land and Emigration Company.— Mr. MACFARLANE.
Bill to incorporate the Montreal Investment Association.— Mr. IRVINE.,
Bill to incorporate the Montreal Warehousing Company.
Bill to legalize certain by-laws and debentures of the Counties of Frontenac and Lennox and Addington.— Mr. W. FERGUSON.
Bill to incorporate the St. Thomas Cemetery Company.— Mr. BURWELL.
Bill to amend the Act respecting the Toronto and Georgian Bay Canal Company.

A number of other measures were advanced a stage.

At six o’clock the Speaker left the Chair.

After the recess—


Hon. Mr. GALT said he was glad to have an opportunity of making a few remarks upon the financial state of the country; because, though there were some causes which might lead us to look with a supposed degree of apprehension at the future, he was happy to believe they were not so great and pressing as hon. gentlemen might possibly have supposed. If we look at the financial condition of the country, till the 31st December last, we would find a vast improvement had taken place over the proceeding five or six years. We found that, within the year ending 31st December last, so far from our having occasion to fear a deficit, there had been surplus of revenue over expenditure. As the returns had been brought down in the fullest detail, he did not propose to make more than a general reference thereto. While the country’s trade was subjected to certain checks, incident to the present war in the United States, it was satisfactory to find that the ordinary sources of revenue had, in all cases, during the past year, been in excess of what was needed yet the new taxes imposed in June last had not, to a great extent, been available in the course of the year past. In regard to the excuse duties on spirits and tobacco, and to the duty on stamps, he would briefly state what had been the result. It would be remembered that, at the time the tobacco duty— which was proposed as a principal source of revenue— was created, a question arose as to whether the stocks of tobacco in the hands of manufacturers or dealers ought to be subjected to excise. The House, after a full consideration of the matter, thought they should not, and consequently, the excise duty on tobacco not being productive during the last five months, is going to the fact of there having been a large stock in the hands of parties, at the time of the imposition of the duty, exempted from its operation. The quantity of tobacco stamped by the officers of excise, and exempted from duty on the imposition of the excise duty, amounted to no less than 4,584,000 lbs.; and if it be remembered that the ordinary average consumption of the country was somewhere between 5,000,000 and 6,000,000 lbs. a year, it would be readily seen that the exemption of this large stock from taxation, in point of fact prevented the tax being productive, for the purposes of revenue, during the portion of the financial year that expired on 31st December. At the same time we might rest assured that the operation of the excise law of the United States, and the way in which they treated this particular article was such that our excise duty on tobacco would prove in future a certain and reliable source of revenue, perhaps more so than almost any other source we now possess. With regard to the duty on stamps, he had the satisfaction of stating that the amount received from this source had very considerably exceeded the estimate. At first we had no reliable data upon which to found our estimate of what might be the result of the duty. Returns, however, obtained from the banks, upon which an estimate was framed; but it was satisfactory to know that it have been very nearly, if not quite doubled by the receipts. He thought that the amount produced by this tax, from the 31st August to 31st December last, was $82,000. At the same time he believed that the operation of this tax had not been found in any way obstructive or injurious to the business of the country. This tax had been met by the country in a spirit that showed it was prepared for this new mode of taxation.

(Hear, hear.)

Therefore, while we had to regret that our excise upon tobacco had not been productive during the early part of the financial year 1864-1865, we could congratulate ourselves upon having received from stamps a considerably greater amount than had been estimated. Also with regard to customs we had received considerably more than had been anticipated.

Hon. Mr. HOLTON— How much more?

Honorable Mr. GALT— It was impossible to say exactly. The estimate of the returns from this service was to 30th June next, having been made for the whole year; and while we knew the results for the first six months we could not tell what they would be for the last six of the year. It is supposed there will be an excess of $200,000 for the twelve months of the current fiscal year, over the preceding one; but the first six months of the present year had yielded a much larger excess over the corresponding period of last year. With respect to the increased excuse duty on spirits he must say that the amount of spirits in the country available for consumption at the time it came into force was so considerable that there had not been, during the first six months of the financial year, a very large increase of revenue from this source.

Hon. Mr. HOLTON— How much?

Hon. Mr. GALT— About $60,000. He was not, however, making a statement for six months of the ear, but was endeavouring to make only an ad interim one, with reference to the operations of the duties within the period passed.

Hon. Mr. HOLTON— Was this $60,000 all that was yielded by spirits and tobacco both?

Hon. Mr. GALT— Yes. Tobacco produced next to nothing. (On looking over a return the hon. gentlemen stated, correcting himself)—The amount of increase, in excise, during the first six months of the year, in those articles, was only $40,000; but, for the reason he had stated, the increased excise duty on tobacco did not come into force within the first six months of the current financial year. But, on the other hand, he would turn to a matter in which the House was much more concerned than the others. While on the subject he would be wanting in his duty to the House if he did not state that there had been a considerable, and, he might say, a progressive decrease in the customs duties since the 1st Oct. last. Up to the close of Sept.— in fact extending into October— those duties had shown a healthy steady increase. But from some causes, he presumed attributable to the evils of deficient harvest more than anything else, after that period, a somewhat serious diminution took place.—The hon. gentleman went on to give a comparative statement of the receipts for several months of this year and of last ear, to show the falling-off that had taken place, beginning with October last. In that month, he said, the amount of duties collected, was $358,000, as compared with $693,000 in the corresponding month of the previous year, and there was a proportionate falling-off in the other months up to January, 1865. The total decrease for these four months, as compared with the same period of the year before, was $328,000. He had stated that for February he would keep an account separate and distinct from the others, for from some cause he could not explain an apprehension had arisen that additional customs duties were about to be imposed, which caused unusually heavy importations. Probably the friends of the hon. member for Chateauguay had judged, from statements or prophecies that hon. gentleman had indulged in, that the import duties would be increased, and had gone and taken out of bond large quantities of goods and paid the existing duties thereon. In February the customs’ duties amounted to $309,000 against $447,000 in February of last year.

Hon. Mr. HOLTON.— Still a falling off.

Hon. Mr. GALT.— Yes, to the amount of $138,000— notwithstanding the efforts of his hon. friend to increase the revenue in this way and restore the financial equilibrium.


But he was happy to be able to say that there was something to set against this.

Hon. Mr. HOLTON.— Will the hon. gentlemen state the increase for the first three months of the year. We have got now the falling off in the three last months of the year.

Hon. Mr. GALT said he had not the returns prepared, not being aware that this question would be put. There was a considerable increase for the first three months. But alter the harvest of last year, which was not as prosperous as we could wish, the consumption of goods paying customs’ duties fell off to some extent, as he had said. Though this falling off was serious it was not alarming, and the falling off for the five months had been less than a half million of dollars. But while there had been a falling off in customs it was his duty to advert to the increase in the returns from excise duties. The hon. gentlemen then gave in detail the returns of the excise for the months of January and February, of this year. He did not desire to lead the House to suppose that he thought we could view with indifference the falling off in the trade of the country— far from it. There was no doubt that the same cause which operated the withdrawn from bond of large quantities of goods had the same effect as respects spirits in bond, and a considerable amount had consequently been paid into the exchequer during the month of February in consequence. This was owing to the apprehension of increased duties on those articles. It was worthy of remark that, during 1864, the new excise duty on tobacco and whiskey did not appreciably increase the revenue, and from the causes he had stated; but those causes would not be at work in the year 1865. We might put against the falling-off in customs the anticipated revenue to be derived from excise, and that revenue, if it proceeded with anything like the ratio of increase for the first two months of this year, would be almost if not quite equivalent to any falling-off in customs. The result he had arrived at was this— while we might, during the spring months, have to bear a continual decline in the trade of the country, and he believed that would continue, still should Providence bless us with an abundant harvest we should find that the deficit we are about to experience in spring would then be made up. There was one point which was beyond all others in importance— that the production of the new taxes, as far as they went, were a set-off against the decrease in the customs’ revenue and that diminution in the returns for the two months in question— namely, nineteen thousand dollars— was not sufficient to cause any serious alarm to the Government or the country. At any rate the Government were under the impression that the position in which the country stood was not such as to warrant it in coming here for any extraordinary or unusual means to meet its wants. The resolution in the hands of the chairman was one simply to put as a charge against the consolidated revenue the amount this House had in Committee of Supply specially voted for carrying on the public business; and it was not necessary to impose additional taxation upon the country to meet an deficit.

(Hear, hear.)

The position of the country in reference to the million dollars voted had been fully explained. The expenditure could not be made before the House again met. It was plan that if it met, as we hoped it would in June or early in July, it would have ample time to make provision for the supply of the funds appropriated by that resolution. He thought he had stated perhaps sufficient at this period of the session, and in anticipation of the fact that, at the session we would hold in summer, it would be necessary for the Government and the House to consider in the most careful manner the way in which they were going to make provision, not only for the ordinary but for the extraordinary demand that might be made upon us— when we had in view that a short time only must elapse before we would meet again to consider the whole financial condition of the country—he felt satisfied that the Committee would not think him wanting in duty if he closed his remarks by simply asking them to charge against the consolidated revenue the sums agreed to in the resolutions already passed.

(Hear, hear and cheers.)

Hon. Mr. HOLTON would not make any lengthy remarks on the statement just given us. He would say, on opening— respecting the allegation that our revenue had suffered owing to the war in the United States— that the Hon. Finance Minister actually calculated, in his budget of 1862, that our revenue was likely to benefit form the effects of that war.

Hon. Mr GALT— You omit the condition, which was that if the budget should be adopted our trade and revenue would benefit. But the budget was not adopted, and consequently the calculation could not be realized.

Hon. Mr. HOLTON said he merely adverted to the fact to show that the idea had been entertained that, from the way, our revenue might receive benefit— however the notion appeared to have been erroneous. The next point he would call attention to was that all the Finance Minister’s estimates as to the result of the revenue, this year, had been at fault. The customs produced a good deal more than he expected, as did also the stamp duties; but, as that duty was a new one, it was no matter of reproach to that hon. gentlemen that his anticipations regarding it had not been borne out. The customs had also exceeded his estimate; but now the excise imposition of last session on tobacco, the increased impost on spirits, had both signally failed to realize the results the hon. gentleman had foreshadowed.

Hon. Mr. GALT— How could we tell until the evidence was before us?

Hon. Mr. GALT said that he had stated distinctly that it was impossible, till the year closed, to announce what the result of the taxes would be. He had stated what sources were unproductive.

Hon. Mr. HOLTON said he was going to observe that this falling off in the receipts from tobacco— this failure to realize anything during the first six months was in precise fulfilment of his prediction when this matter was first brought forward. He stated then there was as stock of tobacco on hand equal to nearly a year’s consumption, and there the hon. gentlemen, in making the calculation he had, erred sadly.

(Hear, hear.)

He would remember that he (Mr. Holton) had urged upon him to impose his tax on the existing stocks, and although he concurred in the propriety of the suggestion, he had not seen fit to accept it. He (Mr. Holton) thought that, owing to the loose way in which the officers of this department acted, after the passage of the Excise Act of last year, that a very large amount of tobacco was manufactured and passed into the hands of consumers free of duty, subsequent to the passing of the act. He asked the hon. gentleman if that was not the fact, and undoubtedly the fact in Montreal?

Hon. Mr. GALT said that all he could say was that when an evasion of the duty came to the knowledge of the officers of the department, the Government gave an order to seize and sell the article. Of course we could not proceed in any case where the evidence was wanting.

Hon. Mr. HOLTON said he was informed that the preliminary course of stamping stocks was not followed till some weeks after the passing of the act, and that was while the manufacturers were visibly engaged in working off their free stocks—at least such was his information.

Hon. Mr. GALT said that no blame could attach to any one in the department. Orders were sent out in the most explicit terms, and perfectly understood, to all the officers of the department to look after the matter. At the same time it was quite true, as was said, that— either from ignorance of the law or a desire to evade it—the act did not come into operation immediately, from which the revenue consequently suffered to some extent. The truth was that the excise officers throughout the Province had been generally appointed with reference solely to the collection of licenses, and the discharge of other unimportant duties; but within the last few years these duties had been of a much more serious nature. Under these circumstances, there was no doubt that the gentlemen who were appointed for the purpose of collecting the inland revenue, two or three years ago, were not perhaps so well fitted for their duties as could have been desired. At the same time, the Government was compelled to use the machinery already at their disposal.

Hon. Mr. HOLTON— At any rate he was informed that such had taken place. His (Mr. Holton’s) statement as to what the result would be in this matter had been verified.

Hon. Mr. GALT— You do not give us credit for the other increase of revenue.

Hon. Mr. HOLTON said he had observed that the revenue was failing in all its branches. He could not speak of the tobacco or spirits, of course. His remarks had merely reference to the customs, but were true in the main with reference to these branches of commerce affected by the excise. To be sure a thirty per cent tax on two millions would produce more income than a fifteen per cent tax on three millions. There might be, for instance, a diminution in the consumption of spirits, and yet, owing to a rise of duty, there might be an increase in the revenue.

Hon. Mr. GALT—You will find that if there had been a decrease in the consumption of spirits there would be an increase in other directions.

Hon. Mr. HOLTON said there had been a diminution in the income from spirits, and according to the Hon. Finance Minister’s doctrine, there must be an increase in the consumption, and, therefore, in the revenue from tea and sugar. He would ask had there been such in this case? No, there had not, Therefore his (Mr. Holton’s) statement had been borne out, namely— that we had had a diminution in all branches of revenue. The excise had fallen off, owing to a diminution in the import of articles subject to duty. As to his (Mr. Holton’s) friends rushing to the Custom House and withdrawing their goods from bond, and thus increasing the revenue, owing to any remarks of his— to show how erroneous that statement was— he had only to recall the fact that, in the observations to which reference had been made, he had said that he thought the maximum of indirect taxation had been reached, that to deal with the deficit which he believed was and is likely to exist at the end of the year resort must be had to other modes of taxation. From no observation of his (Mr. Holton’s) could any intelligent man have supposed that the custom’s duties might be increased— quite the reverse. He had said, however, that the Finance Minister had got to the maximum of taxation, and he thought his mercantile friends were far too shrewd to have drawn such an inference from his remark. As to the deficit of nineteen thousand dollars, it must be borne in mind that the whole of the increased taxation, imposed last ear, to meet the existing deficit was in the shape of excise duties; and that, notwithstanding that increased taxation, we had still a deficit in the first two months of the year, as compared with the two corresponding months of last year, thus shewing that the whole falling off has been enough to swamp entirely the income from that increased taxation, imposed for the purpose of establishing an equilibrium between the revenue and the expenditure. Was that a stare of things upon which we could congratulate ourselves, and especially when we had so little hope for the future held out until after the result of another harvest had been obtained? Was there anything on which to congratulate ourselves in view of the enormous appropriations made this year— he did not speak of the millions dollars for the permanent defence as a charge on the revenue, but alluded to the sum of nearly one hundred thousand dollars a month, for nearly twelve months, for military serve on the frontier. He repeated, we were getting less revenue this year than last, and spending more money, which was an inevitable inference that we were rushing on towards a greater deficit than we had ever known before, and this with the maximum of indirect taxation already reached if not passed.

(Hear, hear.)

The Finance Minister had promised to state the amount of the unfunded debt, and the manner in which he had intended to deal with it, &c. He would like to hear the hon. gentleman on that point.

Hon. Mr. GALT (who was very indistinctly heard in the Reporters’ Gallery) was understood to say that the amount due to the agents in London had been reduced from about seven hundred thousand pounds sterling to five hundred thousand pounds sterling; that there had been no disposal of our public securities during the past year; that arrangements were made with the agents in London, authorizing them to raise a temporary loan upon the security of bonds, but that that loan was advanced by the agents themselves, who, it was agreed, should be allowed the bank rate of interest upon the balance due, and which they had a right to demand; and that the Government was consent to take the sum required from the agents rather than, in the present state of our securities, to attempt sales on the London markets; and that a portion of the advance to the Government from the Bank of Montreal had been repaid, and the remainder would be settled.
Some conversation across the House ensued on details, but it was so imperfectly heard in the gallery as not to be intelligible.

Hon. Mr. HOLTON thought the House was entitled to know something about the canal policy of the Government.

Hon. Mr. GALT, after some introductory remarks which were inaudible in the gallery, said it was not the intention of the Government to take off the tolls. There were a certain number of changes which would require to be made, but the were not of such a nature as to be considered any change in the policy of the Government.

Hon. Mr. HOLTON congratulated the Hon. Finance Minister and his colleagues in coming round to his (Mr. Holton’s) policy.

Hon. Mr. GALT said that the hon. gentleman’s congratulations were rather premature. His conduct reminded him (Mr. Galt) of that of the man who, after putting his finger in his eye, could not see the rest of the world.

(Hear, hear, and laughter.)

No question whatever had arisen in connexion with a change of policy, because the circumstances were not such as to require it. The hon. member for Chateauguay was always boasting about the correctness of his views, and congratulating the House and himself on the fact that his principles were being adopted by others; but the strangest feature of the case was that he never managed to carry out his own views himself.


The hon. member for Chateauguay never appeared in such good humor at any time during the present session as this evening. He (Mr. G.) regretted that his hon. friend should exult over the decrease in the revenuer of the last months.
Hon. Mr. HOLTON said he had at least a good precedent. We had hon. gentlemen opposite exulting last night over the success of their efforts in inducing hon. members to believe that war with the United States was imminent.

(Hear, hear, and oh, oh.)

After some further conversation across the House,

Hon. Mr. HOLTON enquired whether any offer had been made relative to the acquisition of the North-West Territory, and what was the intention of the Government with respect to the same?

Hon. Mr. BROWN said he regretted that he was unable to give full details in reply to the hon. gentleman’s enquiry. The ground taken was pretty much the same that had been taken by hon. gentlemen opposite themselves when in office— asserting strongly, of course, the right of Canada in regard to that territory. He believed the might say, however, that the negotiations were in a better state than they had been at any previous period.

Hon. Mr. HOLTON enquired whether anything definite in the way of an arrangement would be concluded before submitting it to this House.

Hon. Mr. BROWN was understood to reply in the negative.

Hon. Mr. HOLTON enquired respecting the negotiations relative to the Reciprocity Treaty?

Hon. Mr. BROWN replied that we could not negotiate with the American Government, directly, either at London or at Washington. We must communicate with the Imperial Government, and know what the position of affairs was.

After some further discussion—

A resolution for granting $3,380,000 to Her Majesty out of the Consolidated Revenue Fund of the Province was adopted in Committee.

The Committee rose and reported the resolution, which was concurred in and read a first and second time.

Hon. Mr. GALT then introduced the usual Supply Bill.


The orders of the day were then taken up and a large number of bills were advanced a stage— many being read a third time and passed— after more or less discussion.

The House adjourned at midnight.

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