RECOVERY IN CANADA

New Zealand Herald, Volume LXXII, Issue 22099, 3 May 1935, Page 5

RECOVERY IN CANADA

gradual restoration REDUCTION OF TARIFFS WIDER BRITISH PREFERENCE [from our own correspondent] VANCOUVER. April 10 The Federal Budget, which has just, been brought down, reduces the tariff on 50 items to facilitate the sale of more British goods in Canada. The nnnual trade review, presented by the Minister of Finance, Mr. Rhodes, indicates that Canada drove a hard W-' gain at the Ottawa Conference, as she gained from 15 to 42 per cent in her trade with the United Kingdom and other parts of the liiinpiro last jcar, during which the sale of British goods actually declined in Canada, while more than one Dominion complained that Canada was not reciprocating in Empire trade. The first reaction to the new tariff schedules came from the British High Commissioner, Sir Francis Floud, who said the British Government and the people of the United Kingdom would be grateful for the benefits ofl'yed in the Budget. The tariff schedules have not been sufficiently analysed to show the volume of benefit to the Dominions. Sufficient for Hie moment is that the preferences have been widened, a largo number of goods added to the free list, and British woollens and worsteds will benefit by the reduction of tho tariff. Gold Tax Abolished The deficit is £14,000,000, compared with £15.000,000 last year. Two main causes are assigned —the Canadian national deficit and the expenditure on unemployment relief, which reached a total of £12,000,000 this year, compared with £1.000,000 in the first year of the depression. There has been an improvement of £2.000,000 in the financial condition of the Canadian National Railway, but, the Minister of Finance continues to regard it as a serious drain on tho country s re- , financing or conversion. Now taxation takes the form of a super-tax on incomes in tho. higher grades, graduating from 2 per cent on £IOOO a year to 10 per cent on incomes above £3OOO. The tax on corporations is slightly increased. The excise tax on spirits is reduced by half, in order to counteract smuggling and bootlegging, which have reached the dimensions ot the prohibition era. ihe gold tax is abolished, after one year of operation. The excise tax is removed from imports under the British preference. For the first time since 1930, taxation receipts yielded the estimated return. Conversion oi Loans The relations between the Dominion and tho Provinces are the subject ot • serious thought by the Cabinet. Deep consideration is being given to the Australian type 4>f Loan Council. Mr. Rhodes is being swayed between the idea of repeating it in Canada and ol depending on the newly-established Bank of Canada and the advice its experts will be in a position to gno the Provinces and municipalities. Until the Mayor of Vancouver disturbed the credit of Canada by his threats oi repudiation, the time was becoming opportune for efforts at refunding outstanding issues at lower interest, but such times, for the moment, passed. "In the last five years," said Mr. Rhodes, "this Government has converted over £220,000,000 of public debt, with an attendant saving in fixed charges of £3,000,000 a year. During the present year, if market conditions continue favourable, we expect to effect further substantial economies. But as long as adverse influences continue in the international field, tlioy must be taken into our reckoning.

Industrial Improvement The Budget supplements evidence apparent a year ago that economic stability is being gradually restored. The physical volume of business in Canada early this year was 48 per cent above th»; low point of the depression. Progress iu 1931 was more general than in 1933, gains being registered in nearly all branches of activity. According to the League of Nations index numbers of industrial production, Canada occupies first placo. There was notable improvement last year in manufacturing, mining, torestry, transportation and agriculture. Conditions in agriculture still, however, leave much jto be desired. Ihe Government, for the past two years, has been concentrating on improving the condition of the farmer, who has been saved millions of dollars by marketing legislation. If the general improvement is maintained, Canada can regard the year as recording the widest range of progress that could be anticipated. ,