1937-04-10

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, possibly the house would grant me permission, before the presentation of reports by standing and select committees and motions, to present as the first order of proceeding on what promises to be the concluding day of the present session, the resolution which appears in my name.


Mr. SPEAKER:: By leave of the house.


William Lyon Mackenzie King: In connection with the coronation ceremonies it has been arranged that addresses are to be presented to His Majesty the King by the prime ministers of the self-governing dominions and representatives of the Indian and colonial empire. It has^ seemed to me that the significance of the address from Canada would be enhanced and, also, that it would add to the pleasure of His Majesty in receiving the address were it to take the form of a resolution of both houses of parliament expressive of the sentiments of the people of Canada as a whole as conveyed by their representatives in parliament.
I have prepared an address which I believe will meet with the approval of members of all parties. It is intended to form part of the resolution. I have submitted the text of the resolution to my right hon. friend the leader of the opposition (Mr. Bennett) who has kindly consented to second it. At the beginning of the session the house passed a resolution expressing its sentiments of loyalty and support to His Majesty. As I spoke at some length on that resolution I shall not at the moment do more than read the resolution, which contains the proposed address, the words of which speak for themselves. I therefore beg to move, seconded by Mr. Bennett:
That an humble address, in the following words, be presented to His Majesty the King, on the occasion of His Majesty's Coronation:
To the King's Most Excellent Majesty:
Most Gracious Sovereign:
We, the members of the House of Commons of Canada, in parliament assembled, desire respectfully to renew, on the occasion of Your Majesty's coronation, the assurance of our united loyalty and support, and to offer our heartfelt good wishes for Your Majesty's reign.
Since your accession, we have not failed to recognize, in Your Majesty's public utterances, the assertion of those principles under which the prerogatives and powers of government, vested in your person, are held and exercised
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Coronation of King George VI
only according to law and custom sanctioned by general consent. Justice, civil liberty and ordered freedom, thus secured, constitute a most precious heritage. These time-honoured principles, permeating the relations of your peoples and their homelands one with another, have served to create a community of free states, responsible for their own destinies, yet resolved to conserve their common inheritance as one of the treasures of mankind. The solemn form and character of Your Majesty's coronation, comprehending both the old and the new, will, we believe, afford a more vivid sense of the meaning and value of the crown, thereby strengthening the bonds of mutual trust and affection between the sovereign and his peoples.
To Her Majesty Queen Elizabeth we desire also to express our sentiments of loyalty and devotion. We rejoice that the great responsibilities of the throne are shared by one who already holds a place in the affections of your peoples, and whose example fosters those simple and homely virtues which beautify character and enrich family life. The companionship in service thus enjoyed, while ensuring your personal happiness, will afford to Your Majesty support and strength in the discharge of your public duties.
Through this stormy and baffling era in human affairs, the throne has remained broad-based upon the people's will. The crown, symbolizing the unity and the free association of the nations of the British commonwealth, continues to embody the principles of government which they hold most sacred, and their common attachment to the ideals of freedom and of peace. We pray, that under divine blessing and guidance, the foundations of constitutional government may be firmly maintained, and that Your Majesty may be vouchsafed strength and wisdom commensurate with your exalted and exacting task.


Right Hon. R. B. BENNETT (Leader of the Opposition):: The language which has been used in the address we have just heard read appropriately expresses, I believe, not only the collective but the individual sentiments of the members of this house with respect to the throne and person of His Majesty the King, and with respect to his consort the Queen. I say "the throne and person," because it now is clearly apparent that but for monarchical institutions it would not be possible to maintain our commonwealth of nations. The monarchy is an absolute essential to the maintenance of that commonwealth. It will be recalled that in the days of great confusion in France the electors were asked to express an opinion upon a single question: Will you be governed by Louis Napoleon or by an assembly? And the electors answered: By Louis Napoleon. It is obviously clear that in the closing years of the nineteenth century and the beginning of the present one, we thought that democratic institutions had made such progress that any question of that kind would be answered unquestionably in favour of an assembly. Yet to-day as we survey Europe we realize that in at least

three of the great nations of the world the dominance of a single personality in government is apparent, and that the influence, the far-reaching influence, of a single individual upon the destinies of the world was never more pronounced in modem civilization.
It is therefore a matter of great satisfaction to us to know that amidst the conditions under which we have lived and are living, our limited constitutional monarchy has survived, "broad-based upon the people's will," and is likely to endure so long as the powers of the sovereign are exercised with the advice and consent of those whom the people select as their government. The reasons, therefore, for our attachment to the throne as well as to the person of the sovereign are apparent. The throne, the crown, express that sense of unity which is manifested by British subjects everywhere, and it is also the symbol of the free association of nations which constitutes our empire.
His Majesty, like his father, was a second son. He succeeded to the throne under extremely difficult circumstances. But he brings to bear upon the problems with which he must deal broad common sense, wide experience, and a devotion to duty second to that of no sovereign who has ever reigned. These qualities and that disposition will in the judgment of those well able to express opinions be of extreme value to us all in the days that lie before us. It was a great constitutional writer who said:-
The sovereign under a constitutional monarchy such as ours has three nights: the right to be consulted, the right to encourage, and the right to warn, and a king of great sense and sagacity would want no other.
I do not know that any words could more aptly express my view with respect to the functions of the sovereign, than those which I have just read.
I am sure that our attachment and loyal devotion to the throne and person of His Majesty find expression also in our devotion to Her Majesty the Queen. Her tact and charm, her hereditary claim to the affections of the people, give her a position of singular influence at this time. I think one might modify slightly the words of the great poet laureate and say that she commanded not only the reverence of the people but their affection, and that these are closed "in her as mother, wife and queen."
I regard it, Mr. Speaker, as a great privilege and a high honour to be associated by the Prime Minister (Mr. Mackenzie King) with the resolution which has just been read. The Prime Minister, speaking not as the

Elections and Franchise
chief of a party but as the leader of the House of Commons, has in the resolution spoken for us all. And as he presents it to our sovereign he will have the satisfaction of knowing that he expresses, not the opinion of a man or of a government, but of all Canadians, whose loyalty and devotion to the crown and person of the sovereign and his consort will find expression on all occasions so long as those constitutional safeguards are maintained which make for the peace of our country, the freedom of our people, and the rights and liberties of the subject.


[Stage Direction]
Motion agreed to.
Right Hon. W. L. MACKENZIE KING
(Prime Minister): Perhaps the Speaker will read the resolution.
The members of the house standing, Mr. Speaker read the resolution in both languages, and the house sang
God Save the King. ELECTIONS AND FRANCHISE

Mr. C. E. BOTHWELL (Swift Current):: Mr. Speaker, I move, seconded by Mr. Taylor (Nanaimo), that the second and final report of the special committee on elections and franchise acts, presented in this house on Tuesday. April 6, be concurred in.


Richard Bedford Bennett: Mr. Speaker, I had hoped that possibly the hon. gentleman would be content, in view of the fact that no final conclusions were arrived at, to permit the report to lie on the table without concurrence being moved. There are many matters of great concern that should be discussed when this report is before this chamber. I realize that the shortness of the session made i't impossible for final and definite conclusions to be arrived at, and I realize that the report contemplates a continuance of the work of the committee at another session. Under those circumstances might it not be wise to leave concurrence in abeyance, at any rate?
In a moment I propose to make a suggestion to the leader of the government (Mr. Mackenzie King) with respect to another matter; perhaps I can make it now. Might it not be desirable with respect to these matters which involve differences of opinion, sometimes acute, and which have to do with the consideration of matters of very great moment to us all and to
the people of the country as a whole, that it should be understood that the hon. member will have an opportunity to place upon the order paper next session a notice of motion for concurrence in the report? Then there would be an opportunity to discuss the matter before the committee reconvened to consider questions that are of such fundamental importance in connection with ascertaining the will of the people of the country in connection with their form of government.
In the second inquiry, that dealing with agricultural implements, the evidence has been veiy extensive, and there are many questions about which there are differences, one of them being as to whether the evidence warrants the conclusions arrived at, which of course is a vital consideration that necessitates the evidence being read over. The purpose has been served of holding the investigation, taking the evidence and making the report. So I suggest to the leader of the house that it might be quite satisfactory if an assurance were given that notice would be placed on the order paper by the chairman of the committee or someone in his behalf, if by any accident he should not be here next session. The matter then would be fully discussed and hon. members of the house in the meantime would have an opportunity to consider the evidence, which is highly important, remembering that there is not complete unanimity of opinion with respect to the conclusions that have been arrived at.
I make that suggestion not for the purpose of delay but having regard to the efforts which have been made by all to avoid as far as possible the lengthy discussion of matters that possibly we should have discussed. I suggest that a useful purpose would be served in the conduct of public business if we treated these matters as lying on the table, enabling them, by appropriate action, to be discussed next session from the standpoint of concurrence. I think then we would feel that we had made at least some contribution to the expedition of public business and the closing of our deliberations to-day.


William Lyon Mackenzie King: I thank my right hon.
friend the leader of the opposition (Mr. Bennett) for the suggestion he has just made. I would say at once that personally I concur fully in the view he has expressed. I greatly fear that it would be considered by the people of the country that we had accepted the report in a purely formal way if we were to adopt it without at least some discussion and without giving to its recommendations the careful consideration which their importance demands.
Farm Implements

In the circumstances I am inclined to believe it would meet with the approval of hon. members of the house generally if what my right hon. friend has suggested were understood to be the undertaking of the government with respect to the subject of the report, namely that at an early stage of the next session the chairman of the committee or any other hon. member may bring before the house the subject matter of the report with a view to a very full discussion of its recommendations. Meantime ample opportunity would be afforded hon. members not only to peruse the report itself, but to look into the evidence on which it is based. In the circumstances I hope the chairman of the committee will agree not to press concurrence at this stage.


Charles Edward Bothwell: I wonder if we might carry the last paragraph of the report, namely that part which recommends the printing of the evidence and report.


Richard Bedford Bennett: Quite. That could be done by a substantive motion.


Charles Edward Bothwell: I move:
That the evidence and second and final report of the special committee on elections and franchise acts, presented to the house on Tuesday, April 6, be printed in bluebook form, 2,000 copies in English and 500 copies in French.


Walter Edward Foster: The motion for concurrence in the report is dropped. It is now moved by Mr. Bothwell, seconded by Mr. Taylor (Nanaimo) that the evidence and report of the committee be printed.
Motion for concurrence stands.
Motion for printing agreed to.



FARM IMPLEMENTS COMMITTEE


Mr. J. F. JOHNSTON (Lake Centre):: Mr. Speaker, in order that the report of the special committee charged with the matter of looking into the prices of farm implements may be in exactly the same position as the report with which the house dealt a minute ago, I desire to move that the second report of the special committee on the prices of farm implements be concurred in. I shall then take the responsibility, so far as I am able, of concurring in the suggestion of the leader of the opposition (Mr. Bennett) and the Prime Minister (Mr. Mackenzie King). But I want also to move that the report be printed.


Mr. LAPOINTE (Quebec East):: And the evidence.


Richard Bedford Bennett: The evidence was printed from day to day.


Walter Edward Foster: Mr. Johnston (Lake Centre) moved, seconded by Mr. Bouchard, that the second report of the special committee on the prices of farm implements be concurred in. Dropped.


Mr. McLEAN (Melfort):: Mr. Speaker, before this is proceeded with or disposed of I should like to ask the leader of the government if his words with respect to the other report may be taken as an assurance that in all respects this report will be in the same position at the next session of parliament as it is at the present time, that is that it will be discussed as a report from a committee still in vigour, and not simply as a pious resolution on the order paper. If that assur-rance is given I am prepared reluctantly to forego the opportunity of discussing this very important matter. There are recommendations in the report which were adopted unanimously.


An hon. MEMBER:: No.


Malcolm McLean: Does anyone
contradict me when I say that there are resolutions in the report which were adopted? Certainly there are, many of them-not all of them, but some. I did not say all were adopted, but I did say some were adopted unanimously. On others which were adopted there were to a certain degree differences of opinion. But I believe no committee ever sat or carried on its work in a more reasonable manner, or came more nearly attaining unanimity.
Certain conclusions in the report are of the greatest importance to the people of Canada. I regret that they cannot be dealt with at this session, because the recommendations in the report I feel sure are much more important than some matters with which we will deal to-day, and if accepted would be of much greater benefit to the producers of Canada. However if the leader of the government will give me the assurance I have asked, that the matter will be considered as from a committee in full vigour, and that it will be discussed next year on that basis, I shall reluctantly agree that the matter be not further pursued at this time.


William Lyon Mackenzie King: Mr. Speaker, if the chairman of the committee on prices of farm implements will adopt the same course as the chairman of the special committee on elections and franchise, I am prepared to give to him and to hon. members of the house the same assurance with respect to his report as I gave with respect to the report on elections.

Diversion oj Water
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Mr. STEVENS:: May I ask one further question? It is clearly understood that the action we are now taking is not casting any reflection upon the report, or capable of interpretation by those who might be affected by it as an indication that parliament does not approve the recommendations in the report. Such an assumption on the part of those adversely affected would, I believe, be most unfair to the farming communities in Canada, and would perhaps have unfortunate results. That should be made abundantly clear.


William Lyon Mackenzie King: May I reply that far from the action being construed as casting a reflection on the report, I should be inclined to feel that it reflected a desire on the part of the House of Commons to give to the report the careful consideration it merits, thereby preventing any hasty action with respect to an all-important matter.


Mr. COLDWELL:: Mr. Speaker, there are one or two recommendations in the report which are of immediate interest. For instance, we came to a conclusion with respect to the possibility of increases in the near future in the price of farm implements, and expressed our opinion with respect to that point. I should not like to see that matter set aside, although I am in agreement with the procedure suggested, because I realize that at this late date in the session there is no time for debate. What will be the position in that respect?


William Lyon Mackenzie King: The report will be made public, and without doubt the parties affected by it will be prepared to take due notice of what a committee of the House of Commons has set forth. So far as the government is concerned, may I say that its members will be prepared immediately to consider the report, and such action as may be thought possible and advisable will be taken. I cannot say more than that at this time.


Walter Edward Foster: Dropped.


John Frederick Johnston: Mr. Speaker, as was moved by the chairman of the committee on elections and franchise, I desire to move that the report of the committee on prices of farm implements be printed in the journals of the house.


Ernest Lapointe: The evidence and the report.


Walter Edward Foster: I believe it is already printed.


Mr. ROSS (Moose Jaw):: With respect to both reports I notice Mr. Speaker has ruled " dropped should he not have said " stand "?


Richard Bedford Bennett: Quite.


Walter Edward Foster: The motions were not proceeded with, and that is why I said "dropped." Another motion has been made by the hon. member for Lake Centre with respect to the printing of the report of the farm implements committee. In that case I believe the motion made by the hon. member is unnecessary, because the report has already been printed in the votes and proceedings.


John Frederick Johnston: May I add that there are a few corrections to be made in the report of the special committee on farm implement prices, and I would ask that these be made in the printed copies to appear in the journals of the house. They are minor in character with the exception of one where "Canadian National Railways " was used instead of "Canadian railways." The language as used in the report would exclude the Canadian Pacific Railway, which was not the intention of the minister.
Motion for concurrence stands.



DIVERSION OF WATER


[Stage Direction]
On the orders of the day:
Mr. J. R. MacNICOL (Davenport):: Mr. Speaker, is the Prime Minister (Mr. Mackenzie King) now in a position to give an answer to the question I asked a few days ago with respect to the proposed diversion of water from the Hudson bay watershed, over the height of land into lake Superior, via Long lake, as proposed by the Ontario government?


William Lyon Mackenzie King: When answering my hon. friend the other day I mentioned that I should like to consult with the Minister of Justice (Mr. Lapointe) before attempting to reply to his question. I have done so and the minister and his officers have been looking into the matter. I might say that the officials of the Department of External Affairs have also been giving consideration to the question raised by the hon. member. This is a very involved matter as it affects international rights as well as the rights of the dominion and the province. I would for this reason hesitate to express any definite or final opinion at the moment with respect to it. The subject is too important to seek to give my hon. friend an immediate reply. I promise him, however, that when parliament reassembles I shall be prepared to make a statement. The matter will have to receive careful consideration before any official announcement is made.
Weights and Measures


John Ritchie MacNicol: Then I understand that the Ontario government cannot proceed with the completion of the contract with United States interests to promote the diversion of the waters of Long lake. The newspaper reports are to the effect that they have contracted to permit this diversion.


William Lyon Mackenzie King: That is just one of the involved aspects of the whole matter. No doubt the Ontario government will ascertain exactly what its powers are before proceeding, and certainly this government will seek to make known its views with regard to the situation to all parties concerned.



WEIGHTS AND MEASURES


[Stage Direction]
On the orders of the day:
Mr. JEAN FRANCOIS POULIOT (Temis-couata):: Mr. Speaker, I should like to refer to a judgment rendered this week by Magistrate Strike of Ottawa to the effect that the corporation of the city of Ottawa is not liable or punishable by a fine in connection with alleged infractions of the provisions of the Weights and Measures Act. It was alleged that there was a light, deficient and otherwise unjust condition of weighing machines for weighing goods, wares or merchandise, the said corporation charging and collecting tolls for the weighing of such goods, wares or merchandise on such light, deficient and otherwise unjust weighing machines. Is it the intention of the government to take any steps to redress the wrong that has been done and to protect the consumer? If so, how and when? Would it be possible to have a copy of the report made to the city hall by Mr. Cuddy concerning the condition of the public scales which he inspected?


Hon. W. D. EULER (Minister of Trade and Commerce):: I read in the press a day or so ago a report of the decision given by Magistrate Strike in connection with the prosecution under the Weights and Measures Act, to which the hon. member for Temis-couata (Mr. Pouliot) has referred. I admit that this decision seems to disclose a surprising and unsatisfactory situation. It is my intention to give careful consideration to the whole matter and if it is found that this act is defective in the matter of the protection of the public, I shall recommend to the government an appropriate amendment.


Richard Bedford Bennett: In the meantime we might take an appeal.


William Daum Euler: The whole matter will be taken into consideration and it is possible it may involve an appeal to a higher court to ascertain whether the act is defective. No amendment will be offered until the matter is clearly settled in our own minds and we have reached a decision as to the efficiency of the act with regard to such prosecutions. At the moment I see no objection to giving my hon. friend access to the report which has been rendered.



INQUIRIES FOR RETURNS


[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: I should like to inquire of the Minister of National Defence (Mr. Mackenzie) if it is possible to have answers to the questions which now stand on the order paper in my name?


Hon. IAN MACKENZIE (Minister of National Defence):: These replies were prepared yesterday by the Department of National Defence and forwarded to the Secretary of State (Mr. Rinfret). I see no objection to filing the answers during the course of the day.



FINANCIAL ASSISTANCE TO PEACE RIVER COUNTRY

Mr. R. A. PELLETIER (Peace River):: I should like to ask the government when I may expect the return ordered by this house on March 29 with respect to certain expenditures to be made in the Peace river district?


Hon. FERNAND RINFRET (Secretary of State):: I have been expediting all returns as much as possible. If more are available during the day, I shall table them. I cannot tell my hon. friend whether his return will be ready to-day, but I shall look into the matter.



CORONATION DAY MAIL DELIVERY

[Stage Direction]
On the orders of the day:
Mr. F. E. LENNARD (Wentworth):: I should like to inquire of the Postmaster General (Mr. Elliott) if he will consider seriously authorizing a minimum postal delivery service on Wednesday, May 12, coronation day?


Hon. J. C. ELLIOTT (Postmaster General):: I would say to my hon. friend, who as far as I am aware has not given me any notice of his intention to ask this question, that the matter will receive our best consideration.

Customs Tariff



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Sanderson in the chair.
Customs tariff-519.	House, office, cabinet
or store furniture of wood, iron or other material, in parts or finished: British preferential tariff, 15 per cent; intermediate tariff, 30 per cent; general tariff, 45 per cent.
Mr. GLEN:: to the conclusion that no increase in the intermediate tariff is necessary; but certain conditions to be mentioned hereafter seem to point to the advisability of an increase.
I should have thought that the very fact of an industry controlling the home market to the extent of ninety-seven per cent would be sufficient to justify any board in refusing to entertain an application for a further increase.


Mr. EDWARDS:: Would the hon. member carry through with numbers 7 and 8 of these sections?


James Allison Glen: I do not intend to do anything that is unfair. I Shall present all that can be said in favour of the industry. It needs all the assistance it can get.


Alexander McKay Edwards: Will the hon. member also state how much Canadian furniture goes into the United States?


James Allison Glen: Section 7:
(7)	Canadian furniture manufacturers are at a disadvantage, particularly in the higher-priced furniture, as compared with United States manufacturers by reason of duties on such raw materials as veneers, vegetable glue and glass.
That is one of the reasons given by the tariff board. Here we have the old vicious circle of an industry complaining of the cost of their raw materials which is added to and increases the value of their products. Naturally they want a reduction in the cost of the goods which they purchase as raw materials, but they want also an increase in the protection on their finished product. It is just like a cat chasing its own tail; round and round the cat goes but the tail can never be caught. I agree entirely with the suggestion made in section 7 that the industry should have the benefit of reduced tariffs on the raw materials going into its products. That proposal would have my support, and if it would make this business worth while, the government, I think, should consider the point.
I will also read section 8 in further explanation of the position of the industry as described by the board:
(8)	The greatest disadvantage suffered by Canadian furniture producers as against United States manufacturers is the smallness of the cut in the Canadian factory in respect of any one piece or suite of furniture. A cut of 50 is with few exceptions a maximum in Canada, and frequently the cut is much less, while in the United States a cut of 100 is regarded as the economical minimum. The result is that labour and material costs and overhead are relatively to production much higher than in the United States.
The reply which has been made in the case of section 7 will, I think, apply here also.

If the industry can be put upon an economic base, by all means give it that measure of freedom so far as raw material is concerned in order that it may justify itself.
But I will go further and read section 9:
(9)	The board's investigations show that furniture in carload lots can be and is being imported from the United States into Montreal, the largest retail centre for furniture in Canada, at prices laid down duty paid below the prices at which similar Canadian furniture can be landed in Montreal from southwestern Ontario, the main source' of Canadian higher-priced furniture. In considering this fact it must be borne in mind that a substantial proportion of such furniture manufactured in southwestern Ontario in 1936 was sold at a loss to meet the United States competition.
I suggest that that section brings up the question, is the consumer to be considered at all? Is he to be prohibited from purchasing furniture at a lower price than he is bound to pay to-day? If the consumer is not to be considered, then I say that the tariff board, in their point of view, their reasons and the excuses they have given for the industry, are justified in making the observations they do in section 9. But if we take the position that the purchaser is to be considered, the day has come when that forgotten man should be enabled to buy furniture at less than he has to pay to-day.
Section 10 is a continuation of the reasons why the tariff board arrive at their conclusion. I do not think I need read it and burden the record with it; it is already on Hansard. The same might be said with regard to section 11. Later I propose to make some general observations on both 10 and 11. I come now to section 12, and of all the reasons that could be given for the refusal of the association's application the gist is contained; in this section. It is a gem of purest ray serene of protectionist doctrine. Section 12 reads:-
While an increase in the intermediate tariff will not solve the problems of the Canadian furniture manufacturers, an increase of such tariff to 37J per centum, which being subject to a reduction of 10 per centum would make the effectual rate 33| per centum, would, in the opinion of the board, accomplish the following: First, it would affect the attitude of mind of the manufacturers whose perspective has been dislocated by the sudden drop in their protection from 45 per centum to 27 per centum.
I may say in passing that I never expected at any time in my life that we should have such a point of view, expressed by any board sitting in a quasi-judicial capacity, with regard to the mentality of the parties appearing before them, not to mention the mentality of the person who has to pay the increased prices. The consumers' peace of mind is not to be assuaged by any tariff board in

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Customs Tariff
their deliberations; only the peace of mind and the mentality of the manufacturers must be considered. Surely that is high protectionist doctrine of the most extreme type.


Alexander McKay Edwards: What justification has the hon. gentleman for suggesting that the manufacturers increase the price so that the consumer has to pay more? I would refer him to the price spreads commission report in which it was stated most definitely that the spread between cost of production and the price to the consumer was in the retail end of the business, in the distribution, and not in the price charged by the manufacturer.


James Allison Glen: Does the hon. gentleman mean to suggest that the manufacturers of these products are not going to take advantage of that tariff?


Alexander McKay Edwards: I certainly do make that suggestion. The competition within the industry is sufficient to take care of that.


James Allison Glen: I will deal with that point later. WThat I am saying at the moment is that so far as the doctrine of high protection is concerned this is a striking example of what protection means in the minds of the tariff board, and I presume that it was drawn from the evidence submitted to them. But they go on:-
Second, it would give them an opportunity to carry on substantially as they did before the change in their protection for a period during -which they might take stock of their position and perhaps work out a more economically organized industry than now exists.
If that means anything it means that the tariff board were convinced that without this protection the industry as now carried on could not operate by reason of dislocation of perspective and lack of organization, and they say so very definitely. Let me quote section 13:-
The boaTd suggests that it would be advisable and in fact necessary for the furniture manufacturers, particularly in southwestern Ontario, to begin immediately a study of their problems; and perhaps avail themselves of the conference provisions of The Dominion Trade and Industry Commission Act in an effort to preserve the industry and to maintain themselves in their position as important employers of labour in so many towns and villages in southwestern Ontario.
If words mean anything at all, that section plainly states that this industry, which has been carrying on for sixty years, is not in a position adequately and economically to supply the needs of the Canadian people unless it has a tremendous increase in its protective tariff. If my hon. friend is arguing
that the price is kept up by the retail merchants in the distribution of the product, well-


Alexander McKay Edwards: I do not want my hon. friend to misunderstand me; I do not say that the whole retail trade is included in that statement. What I said was that it was definitely proved before the price spreads commission that the large departmental stores used their purchasing power to beat down the price of the manufacturer and did not pass on the benefit to the consumer.


James Allison Glen: That point will be discussed
later by some hon. members. In the meantime I am pointing out that the demand is being made for increased protection, and my point is that the industry ought to solve its own problems. But it is to be given a further period to reorganize itself. These manufacturers have been in the business for sixty years, and they are going to be given further time to put their house in order.
Section 14 reads:
It will be seen from the foregoing that the board's findings are based largely on two considerations, namely: the very wide drop in the protection from forty-five per centum to thirty per centum less ten per centum, thus making an effective rate of twenty-seven per centum and what may be called the disorganized state of the industry particularly in southwestern Ontario. These considerations lead to the view that the whole situation ought to be considered again after, say, a period of two years and that any increase granted should be regarded as in the nature of a temporary relief rather than as a final view as to the amount of protection required by the industry.
It seems to me that the simple, logical and economical solution for the problem of producing furniture at a lower cost lies in merging these contending interests and closing up some, bringing them all to a higher level of production and thereby enabling them to compete without the high tariff protection that they have to-day. The tariff board have studied their case. The very condition they now deplore, wherein they claim that their cost of production is higher than it would be normally, is brought about by the thing they are now anxious to sustain, high protection. They complain rightly about these disadvantages they labour under by reason of the duties on raw material, such as veneer, glass and so on. I am suggesting to the minister that this item should be deleted; it should not be proceeded with at this time. It is an item which is not justified by the evidence before the tariff board, and it is one which is most repugnant to a large number of hon. members of this committee.

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Customs Tariff

Just while this debate was going on an article was published in the Winnipeg Free Press protesting against the imposition of this tariff. Only this morning I got a copy of a paper published in Saskatchewan, the Saskatchewan Liberal of April 8, containing a most vigorous protest against this item. I do not propose to read it, but I wish to say that the item may have much more far-reaching consequences than its mere passing or negativing in this committee. If the house passes this item there is nothing to prevent any industry in Canada from coming to the tariff board and making a presentation similar in kind to that of the furniture manufacturers' association, claiming that they must have protection against the influx of goods from any country in the world; and if this request is now acceded to. the government and parliament will be stultified in replying to them. We are creating that precedent, against evidence clear beyond peradventure. No increase should be given in this item because it would be harmful not only to consumers but also to the industry itself. I suggest that this item should be allowed to stand over until another session, that it should be referred back to the tariff board with the request that they inquire into the raw materials entering into the product and see whether it is not possible that these raw materials should be reduced in price to enable this industry to get on its feet. None of us wants to see the industry destroyed, but there are plenty of us who deny the right of the industry to charge excessive prices when they need not be charged.


Alexander McKay Edwards: They do not charge excessive prices.


James Allison Glen: They may say so, but we do not agree.


Alexander McKay Edwards: It is the distribution cost.
Mr. MoLEAN (Melfort): I think the hon. member is right in that.


James Allison Glen: Therefore in all earnestness I suggest that this matter be referred back to the tariff board for further inquiry, along with the related industries whose materials enter into the manufacture of its product; then in another year wh,jn it comes back they will find that we are not unreasonable, but we want them to be reasonable. And as someone has to pay for this period of probation I think I am not asking anything out of the ordinary in suggesting that this industry, which has been in existence for over sixty years, should itself bear the cost incurred, and that the consumers and purchasers of
IMr. Glen.)
furniture in Canada and the people of Canada as a whole should not be required to bear that expense.
I have thought it proper that this viewpoint should be presented, and I am only sorry that in this last day of the session time does not permit of that full discussion which the subject warrants, because it raises the issue between those of us who believe in lower tariffs or freer trade and those who espouse a closed market and high protection. At no time have we had the issue more concretely presented than we have it here, and it would be interesting and informative to the country to have a vote for and against put on record.


Alexander McKay Edwards: Before the hon. member takes his seat, in order to be clear in the matter, does he suggest that the furniture industry be merged, and some of the small factories wiped out, to make it more efficient?


James Allison Glen: It seems to me the logical outcome is that the contending interests in this industry will have to be organized; the industry itself will have to be organized, which would probably mean the closing of some of the concerns, and they would then get to the point of efficient production where they would not require the high protection which they now seek.


Alexander McKay Edwards: Then I understand the hon. member is not in accord with the hon. member for Moose Jaw (Mr. Ross) when he stated the industry should be put in its grave.


John Gordon Ross: I rise to a point of order-


Ernest Lapointe: Do you want to start another discussion?


John Gordon Ross: I did not make that statement. I said that any industry that had been a protected infant industry in this country for eighty-seven years surely should have got on its feet by that time or gone to its grave.


Alexander McKay Edwards: Then I understand the hon. member thinks this industry should have gone to its grave?


John Gordon Ross: If it cannot be organized efficiently in this country it should not be kept here by excessive prices, by a tariff that is far too high.


Mr. YOUNG:: I had intended to analyse this item a little more fully than I shall now do, for the reason that I regard it as involving a very important principle. However, owing to the fact that we have reached a late stage

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in the session, this probably being the last day, it is not my intention to go fully into the argument.
The hon. member for Moose Jaw (Mr. Ross) the other evening placed on the record very clearly the report of the tariff board, and I think probably he served the purpose, that of showing the people of this country on what a flimsy pretext this board reached the conclusion arrived at. When one takes evidence one necessarily inquires into the authority behind it. I have great sympathy with the government in the predicament in which they find themselves. They are accepting a report from a board constituted under a previous government, the members of which board do not hold the views of the party now in power. When I am driven to accept the findings of a board which is not in sympathy with the policies on which this party was elected, then to me there is something materially wrong with the constitution of that board. I have taken the trouble to look through Hansard to find the arguments presented by this party, then in opposition, when that board was being created, and I find that at that time there was unanimity of opinion in the Liberal party that if a tariff board were set up its term of office should not extend beyond the date of the retirement of the government then in power. I say very frankly that if a tariff board were set up today by the Liberal government I believe it should not stay in office one day after the Liberal government should go out of power. It is my conviction that when the two parties are divided on fiscal policy either party has the right, and it should be its duty, to see that they be advised only by men who think in terms in which they themselves think.
The chairman of the tariff board is an old personal friend of mine. When we were in the first university which I attended he was the editor in chief of the college magazine and I was its business manager. Therefore I had for years the opportunity of knowing him intimately, and I trust that no word will cross my lips which would be derogatory in the slightest degree to Hon. Mr. Sedgewick, now the chairman of that board, who is a man of character and ability. But I am not in sympathy with the idea of going to the bench for a man to head a tariff board, a railway concern or anything else. I think we make a great mistake when we do that. With regard to the other two members of the board I find that one was a strong Tory partisan in the province of Quebec, while I knew the third member both inside and outside of this house. I presume he occupies his present position merely because of certain services he rendered to the Conservative party while sitting in this house as a Progressive member.


Mr. WALSH:: Would the hon. member permit me to make a suggestion? I feel perfectly sure that the hon. gentleman is confusing the member of the board from Quebec, to whom he made reference, with that gentlemans father. This is the son, who has never participated in politics in the province of Quebec.


Alexander MacGillivray Young: I am just giving my views; the hon. member can make his remarks later. I have great sympathy indeed with the government, which had to present this serious matter to a board composed as this board is. What do we find? When the report is made it does not contain one reason why an increase in tariff should be given this industry. I am sure no hon. member of this house wishes to interfere in the slightest degree with any industry in this country, but here we find the report saying that if the tariff is increased it will not do the industry any good. They follow that statement by saying that the present condition is a result of the great mental shock received by the furniture industry when the tariff was lowered from 45 per cent to about 30 per cent. Surely, if that is so, a psychiatrist is needed to look after this industry rather than further tariff protection. Then the report says, as clearly as it could be said, that the present condition of the industry is due to the inefficiency of the organization, and those are the only two reasons that are advanced as to why there should be any increase in the tariff. If this matter had been considered by a tariff board holding the views presented by the Liberal party during the last election I am sure the conclusion of that board would have been very different.
Then the tariff board say, "We are going to keep our eye on the industry for the next two years." They have very long vision. This board are just seeking to lull us into forgetting that the time may come when the people of this country will rebel against this sort of thing; they just want to hold out that hope that they will keep an eye on the industry. What will be the effect of this change? To-day the industry enjoys more than ninety-seven per cent of the total business in Canada. Will this increase shut out the remaining two or three per cent? I think not, and even if it did, that would not be of very great interest to the furniture industry. Last year they sold furniture to the value of 823,000,000, while we imported furniture worth only 8600,000. What effect will this

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increase have? Will it raise the price to the
consumer? If not, what is the purpose of the increase? There can be only one hope in the mind of the furniture producer, and that is that if he succeeds in excluding that three per cent which is imported, he may be able to increase prices to the consumer. I was not elected to support higher tariffs, and I protest in this house against the increase in this or any other tariff. I do not believe it is good for the industry, for the consumer, or for the country as a whole.
Then the tariff board said the furniture industry was embarrassed by the tariffs on the products they imported to be used in their own factories. Well, Mr. Chairman, if that be true surely the obvious thing to do is to give that industry relief by removing those barriers to trade, which increase the prices of the materials used in furniture manufacturing. If we do that we will help the furniture industry and we will also help the consumers of Canada.
I repeat that I really feel very sympathetic towards the government. The Minister of Finance told us that after all is said and done the government must take responsibility for this action, that the recommendation of the tariff board is not final, and he added that it took the government days of consideration before coming to this conclusion. Well, I should think it would.


Mr. DUNNING:: No, I said the government gave the matter days of consideration.


Alexander MacGillivray Young: Quite so, and I take it that this conclusion was arrived at after days of consideration. I am not surprised at that, because it is a conclusion that must have been very hard for my good friend the Minister of Finance and the other members of the government to reach. What is the situation? Under the practice that has been followed in the last few years, if a matter is referred to the tariff board it is rather awkward if the government does not accept the recommendations of that board. What is the board there for? Its purpose is to bring out the facts, and they found the facts in this case. The conclusion is the only thing with which I disagree. The facts are very clear, and I must congratulate the board on the way they have been brought out, but I do not think the evidence justified the recommendations that were made. I am opposed to the present method of tariff board investigation. In former days we had public inquiries; the evidence was taken down and a Hansard was published, so the people of this country had access to the evidence. I think that should be done to-day. Following that I think a

report should be made to the Minister of Finance, and the recommendations of the board should be made available to the government, who must take the responsibility. To-day there is no Hansard of the evidence, but the recommendations of the board are made public. It is true that the evidence is laid on the table of the house, but it is not made available to the general public. That places the government in an awkward situation; unless they are prepared to accept those recommendations they may be fairly asked, "Well, why did you refer this matter to the board at all?"
I want to make a very strong protest against a Liberal government maintaining a group of men to investigate matters having to do with the fiscal policy of the country, which board holds views contrary to those of the party in power. When the people of this country elected the Liberal party they never expected that we would take our directions from a tariff board composed of three Conservatives. I want to make a strong protest against the retention of that board while the Liberal party is in power. As I said before, I want to be equally fair when the Liberal party is out of power. It would be reasonable to expect that another party would then select men to look into these matters who hold the same views as they hold. I am contenting myself to-day with the statement that the system is an embarrassing one, and should be removed. I am opposed to increases in tariff on this or on any other item. I believe all industry would be more beneficially helped by the removal of the restrictions on trade all along the line, so that all industries would be benefited thereby, and in addition the consumers of Canada would be very greatly helped.
I sincerely hope that after reflection the government may feel it wise to refer this matter back, even to the present board, to see whether it would not be the part of wisdom to have a further investigation and, let us trust, a proper conclusion from the facts which would be adduced.


Mr. MUTCH:: Mr. Chairman, there is a time to speak and a time to be silent, 'but if possible on this particular occasion I should like to combine both those injunctions, because while I cannot be silent, at least I can be brief. I do not need to consult the oracle or retain counsel or go into committee with myself or obtain advice from any one in order to say to the committee that I am as much opposed to a Liberal government implementing the various ideas of a Tory tariff board as I was to the implementing of similar ideas by the right hon. gentleman who created it.

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If I were to talk from now until the house rises I believe I could say no more than thait, and I could not express more definitely than I have in the words I have used the fact that I am utterly and unalterably opposed to the proposal as it now stands.


Mr. DEACHMAN:: Mr. Chairman, I rise merely to explain my own views on the item. I am opposed to tariff increases on furniture. I am opposed because I believe that tariffs lower real wages, and I am interested in the welfare and prosperity of the working man in Canada.


John Ritchie MacNicol: That is the one man you are not interested in.


Robert John Deachman: I am interested in the working men of Canada, not of one industry alone, but throughout the entire dominion. By that I mean everybody who works, whether he may work in a protected industry, in a sheltered industry, or in the production of products which must be sold on the open markets of the world.
I am opposed to the item because I believe it prevents the growth and development of industry. In proof of that statement I offer the fact that when tariffs in Canada have been lowered industry has prospered, and every time tariffs have been raised industry has gone on relief. I am opposed, because when a tariff rate is raised to a height greater than the wage content of the article itself, it tends definitely to cause unemployment, and an item such as that now introduced in the House of Commons is simply an act to promote unemployment.
I hold, further, that the only help for this and other industries is the development, under freedom, of the expansion of external and internal trade of the dominion. When the people of Canada have an opportunity to exchange their products without the restrictions which this government maintains, and a previous government established, there will be no cry of the hungry for bread; people will not walk the streets in idleness-there will be opportunity for industry.
Perhaps sometimes I have stated my case dogmatically, perhaps too bluntly. But I am delighted with the fairness which has been shown me by hon. members who differ from me, on both sides of the house. But I want to say to Liberals to-day that we are living in the year nineteen hundred and thirty-seven. This is the anniversary of a famous year. One hundred years ago the grandfather of the present leader of the Liberal party struck his stalwart blows for political liberty in Canada. The freedom which he then glimpsed has spread to wider fields. Freedom has increased, and broadened with the years.
Then stepped she down through town and field, To mingle with the human race;
And part by part to men revealed The glory of her face.
We have advanced in the way of religious tolerance. Even in my own time I can see the change of feeling which has come about in regard to these matters in Canada. There is the feeling that men are equal, that they have the right to feel and to express their own religious view. We have made progress in constitutional liberty; we can do practically what we want to do. Perhaps sometimes we may have to follow a roundabout road, but eventually we make our way, and we are going forward to still fuller constitutional freedom.
But to the Liberal party I make this appeal. Is it not now time to take up the great unfinished task, the movement for the expansion of economic liberty? Is that not worth while? We have the power to do so in the Liberal party to-day. We are overwhelmingly in the majority. We have the cause; we have* freedom on our side; we have truth on our side and we have the people with us. Would this not be the time to face the problem and to expand economic freedom in a forward battle on every front? What a splendid cause! What a flag to put at the masthead 1
Yet freedom! Yet, thy banner, torn but flying
Streams, like the thunder storm, against the wind.


Malcolm McLean: Mr. Chairman, for two very important reasons I should like to place myself on record with respect to the item of furniture, and the suggested increase in duty thereon. The first reason is that I believe it is an immoral action. An increase in tariffs at any time, on any subject and on any object the people of any country have to buy at a higher price or in a lesser quantity than otherwise possible is an immoral act, just as immoral as if someone were to come along and by his strength take a nickel out of my pocket. It would be difficult to get more, sometimes. In fact, it might be a miracle.


Charles Avery Dunning: There is a coin smaller than a nickel.


Malcolm McLean: The aspect of tariff increase which appeals to me at this time is that it is an immoral action to add deliberately to the cost of goods consumed in any country, to add to the cost of production, and then constantly to increase and to pyramid those costs until you have the high figures we have had in Canada in the last few years, making it impossible for the man at the
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bottom of the heap to reach up and to purchase the goods which have been so unnecessarily enhanced in cost.
One of the sad things is that the men who are getting the highest prices for their products are not in many cases getting as much in real wages as if industry had been left to stand on its own legs and at its own natural height, and to prosper or otherwise under the conditions obtaining in the country, by their own intelligence, initiative and skill. So that to step in and artificially increase prices is an immoral act. Many hon. members talk about industry as if it were only for the purpose of getting work for men. I do not think that is so, and I never held that view. I think the only excuse for industry of any kind is that it may produce in abundance goods which may be sold as cheaply as possible, so that the people as consumers may have as much as possible of the wealth they are able to produce.


Some hon. MEMBERS:: Hear, hear.


Malcolm McLean: For the first time in their history, my hon. friends applaud me.


Mr. BLACKMORE:: It is the first time you have seen the light.


Malcolm McLean: I agree with them that I am right. That wealth can be got only when it is produced in constantly increasing quantities and exchanged for the surplus production of others. It cannot be done by writing promissory notes issued by ourselves and payable to ourselves and never to be redeemed.


Charles Avery Dunning: On a point of order, Mr. Chairman, I believe the rule is that the discussion should be confined to the item before the committee. Not only do I see ahead of us a general discussion on free trade versus protection, but I smell social credit. I submit it might be a good thing to call the committee to order at this time rather than later on.


René-Antoine Pelletier: I suggest that that is a good reason why we should carry on.


The CHAIRMAN:: I think the point of order raised by the minister is well taken. I ask hon. members to confine their remarks to the item under discussion.


Malcolm McLean: I have great pleasure in agreeing absolutely with you. I hope hon. members do not think I am insinuating that social credit is so extreme that the Minister of Finance can smell it at this distance.
Another reason why I object to this increase is my belief that it is an economic waste to

increase the tariff on furniture at the present time. I shall give my reasons a little later. There are reasons why I should not take too much of the time of the committee. The house has always been very kind and patient with me and I do not want to embarrass anyone by talking too long. I do not want to weaken in any degree the speeches made by the hon. member for Moose Jaw (Mr. Ross), the hon. member for Marquette (Mr. Glen), the hon. member for Saskatoon (Mr. Young), the hon. member for Huron North (Mr. Deachman) and the hon. member for Winnipeg South (Mr. Mutch).


John Ritchie MacNicol: The hon. member will not weaken them; they were weak enough.


Malcolm McLean: When the hon. member for Moose Jaw was speaking the other night, no hon. member opposite was able effectively to answer him, because he had the record in front of him.


Mr. SPENCE:: He did not tell it all.


Malcolm McLean: No one would expect him to tell it all.


David Spence: That is the unfair part of it.


Malcolm McLean: I am not going to take the few minutes at my disposal to tell it all. I do not intend to weaken the excellent speeches of these hon. gentlemen. I was in thorough agreement the other day with the leader of the opposition (Mr. Bennett) when he said that an opposition must check and watch closely any expenditures made and so on in order to see that the interests of the country are protected. But I also claim the privilege as a private member supporting the government to check certain things.


Richard Bedford Bennett: Opposition to the government.


Malcolm McLean: I do not feel the least bit embarrassed by the stand I am taking in connection with this higher impost on furniture. I have heard other members in similar circumstances say that it pained them to do so and so, but it does not bother me at all. I do not propose to declare my loyalty to the Liberal party, to the leader of the government or to the Minister of Finance; I do not have to prove that. At times in certain provincial legislatures the Liberal party has had to develop within itself opposition in an informal way in order to maintain parliamentary government where there was not sufficient opposition.


Richard Bedford Bennett: Alberta is an instance.

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Malcolm McLean: When there is not sufficient opposition it behooves the members of the Liberal party to develop a type of opposition of that kind.
Mr. MaeNICOL: We can take care of ourselves.


Richard Bedford Bennett: How will they vote? That is the question.


Malcolm McLean: I am not worrying about how the opposition will take care of themselves; I am worrying about how they take care of the country.
Mr. MaeNICOL: We will do that in the next election.


Malcolm McLean: When the opposition is not sufficient, I consider it my duty to oppose whatever is not in the interests of the country. This is what is being done in Prince Edward Island, in Saskatchewan and in other provinces. I contend it is not wise to increase this protection at the present time, because increased protection is no remedy for the trouble facing the furniture industry. That is what the tariff board says, and although I have no faith in that board, at least some consideration should be given to their opinion. The troubles facing the furniture industry lie in maldistribution. The result has been that at the present time they are selling less furniture than was sold in 1929 and they are employing a smaller number of men in the industry.
The hon. member for Moose Jaw compared the action of the tariff board to a psychic bid. The hon. member for Saskatoon referred to psychiatrics. Not knowing the meaning of those terms, I am inclined to think they were referring to a physic, or perhaps a tonic. The tariff board may be telling us that the industry needs a physic, but I am convinced that what they need to do is to set their house in order. If they did not do that in the last seven years, there is not much chance of their doing it in the next two years. I support the assertion of the hon. member for Saskatoon as to having little faith in a policy suggested by the tariff board to this government. The suggestion to the government that this industry needs a little added protection reminds me of the fellow who was out all night, woke the next morning with a headache and wanted some of the hair of the dog that bit him so he could start out on another jamboree. If this industry did not see its way clear in the last few years to put its house in order, what hope is there that they will do this in the next two years? This tariff board is composed of some men whom I know and some whom I do not know, but
I would not put it past them to be willing to create a situation which would be extremely embarrassing to this government in two years time.


Richard Bedford Bennett: That is very unfair.


Malcolm McLean: If this increase is put into effect on the assumption that it will be withdrawn in two years, what is going to happen if it is withdrawn? What is going to be said to those men who have been lobbying for a higher tariff?


Richard Bedford Bennett: Ask the Minister of Trade and Commerce (Mr. Euler).


Malcolm McLean: Certainly I will ask him. I might tell the leader of the opposition that I am always welcome to ask my leaders any questions I want to ask about things I do not understand.


Richard Bedford Bennett: Then they must be constantly employed.


Malcolm McLean: The leader of the opposition says that they must be constantly employed, but I would remind him that my leaders have never claimed to have the infinity of knowledge claimed by some gentlemen whom I know.
In connection with this item of furniture, since we are in a hurry to get through, I wish to point out briefly, so as not to delay the work of the house, that before protection of this kind was given to the industry in Great Britain it was told that it had to rationalize itself in order that it might be fit to live and not be a burden upon the people. I suggest that in order to avoid the difficult situation which will be evident two years from now, if this provision is allowed to run so long, the furniture industry-this great industry indigenous to Canada; with all or nearly all its supplies obtainable, usually cheaply, in this country; with sources of labour reasonably priced, in fact, according to the figures of the tariff board, low priced as compared with coloured labour in the southern States; with lumber available at a low rate, with transportation favourable, with skill and initiative and machinery of a high class available-this industry should be told to put its own house in order rather than come to the government and ask for further protection. I happen to know that for nearly ten years the problem of distribution or maldistribution has been worrying the brightest minds in the furniture business, and it seems to me that during that time, and particularly in the last five years, they should have gone a long way towards solving their own problems. To shut out the three per cent of furniture in consumption that is coming into
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Canada from abroad is not going to help them; it is not going to give them wider knowledge of styles and of patterns to build to, and there is no reason why the people of this country should pay more for the furniture that many of them so badly need.
I would point this out in all sincerity, in perfect good faith, and without complaining too much about it. I would say to the Minister of Finance, seeing that my leader (Mr. Mackenzie King) is not here to be-is not here so that he may hear it-


Richard Bedford Bennett: Is not here to be
instructed.


Malcolm McLean: Not "instructed," no-no one "instructs" me in the Liberal party, and I do not "instruct" anyone else.


Richard Bedford Bennett: Hear, hear.


Malcolm McLean: But there is no reason why I should not pass on my opinion by way of observation. During the past month or so, or since the budget was introduced, two recommendations have been made by two different bodies with regard to two specific articles. One is furniture. A recommendation was made by a tariff board which was appointed at a time when they were hostile to the political philosophy of what is now this government, appointed under the chairmanship of a very dignified gentleman, who, according to what the hon. member for Saskatoon (Mr. Young) says, is honourable and fine and capable, but a gentleman with a Tory mind in connection with economic things.


John Ritchie MacNicol: Broad judgment.


Malcolm McLean: Broad judgment! I cannot see how anybody's judgment can be broad when he insists on narrowing and narrowing the pyramid of manufactured goods in this country until it comes to a peak, and someone sits on top of it, after ruining the business. In any case a board was appointed which is hostile to the present government; I have no reason to believe that they are anything but opposed to the philosophy publicly expressed by this party. They make recommendations at the last moment. The proposal is made that the recommendations be given effect before parliament prorogues. On the other hand a body of members of this house, a great majority of them friendly to the policy supported by this government and by the Liberal party, make recommendations which are extremely important to the people of Canada, yet there is no chance of putting them into effect at the present time. I do think that it would be better for all con-
cerned if these two recommendations were not given effect. One is prejudicial to the interests of the common people of this country, although it is going to be put into effect, and the other is desirable in the interests of the great body of consumers, and should be adopted. But I know it is difficult to expect that, so I suggest that at any rate the other be left alone.
I do not wish to delay the committee any longer, but I record my protest against bringing in a tariff increase at this late date. It is not wise economically, it will not really help the industry because it is likely to encourage competition within the industry itself to a suicidal degree. I would point out that some branches of the industry have been tremendously profitable during the last ten years. I pause a moment, and no one denies that statement.


Richard Bedford Bennett: What? In the furniture business?


Malcolm McLean: In the furniture business.


Alexander McKay Edwards: Would the hon. member name one of them?


Malcolm McLean: I will not give the name, but I will tell the hon. member where it is located and the authority on which I base my statement. Some of the leading industrialists in this house have told me quite clearly that in the province of Quebec there is a branch of the industry that has been established only fourteen years and in that time has piled up two million dollars of profits though at no time during that period was the tariff under thirty-five per cent.


David Spence: It was done at the expense of the man who works in the factory, because they pay very low wages.


Malcolm McLean: Is that the reason the industry wants a higher tariff-so they can go on paying low wages?


David Spence: That is only in Quebec.


Malcolm McLean: Do hon. members suppose that they are going to retain factories in Ontario if Quebec factories can turn out goods more economically and efficiently and sell them to the people at lower prices? Is it not clear to them that they are cutting their own throats when they ask for a higher tariff for a business of this kind, which is admitted by hon. members opposite to be going down? I have every sympathy with the workman engaged in this industry and with the owners of the plants, but I have a particular desire that the people

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of this country shall get as large a supply of furniture as is available to them, of the best quality, and for the least expenditure of the products of their labour.
At one o'clock the committee took recess.
The committee resumed at three o'clock.


William Allen Walsh: I had intended to reply to some of the remarks made on this item but I know that the chief purpose to-day is to provide ways and means of bringing the session to a close. I will therefore reserve what I have to say for some other occasion when the house will more readily appreciate my views on this subject.


Mr. PERLEY (Qu'Appelle):: I will not take more than a minute or two. It has been interesting to listen to hon. members from the west in this miniature filibuster, which I understand is the final kick from a Liberal caucus. There are a number of items which I think they could, to better their purpose, have brought to the attention of their front benchers. A discussion of some of those subjects would have been of more avail than the remarks that have been made on this particular item. The farmers of the west are not so greatly interested in the duty on or the price of furniture at the present time because not many of them can afford to replace their old bedsteads, wash-stands and so on. But they are very much concerned about such an important item as sugar, for example.


Frederick George Sanderson: Order. The hon. member must confine his remarks to the item before the committee.


Ernest Edward Perley: In the last day or two considerable latitude has been allowed in the discussion of certain items. I will be brief, and if I am out of order I suppose I cannot say anything further; but this is one particular item that is a considerable burden to the consumers.


Frederick George Sanderson: I must insist that the hon. gentleman confine his remarks to the item under discussion.


Richard Bedford Bennett: I protest against this discrimination. It matters not whether this is the last hour of the last day of the session, I protest. An hon. member on the other side was permitted to traverse the whole subject of free trade and everything else, and now, when an hon member on this side gets up to make a few observations upon another item by way of comparison with the item which is
before the committee, he is told that he is out of order. I propose to assert the rights of hon. members, and if a privilege is extended to one it must be accorded others. It does not rest with the chairman to treat hon. members with such discrimination.


Frederick George Sanderson: I may say to the leader of the opposition that this morning I called the hon. member for Melfort to order. I do not think the right hon. gentleman was in his place-


Richard Bedford Bennett: I came in afterwards.


Frederick George Sanderson: -when I gave my ruling.


Richard Bedford Bennett: I heard the hon. member for Melfort. I do not know what happened before I came in, but I know what happened afterwards.


Malcolm McLean: I must protest against that. On a question of privilege-


Frederick George Sanderson: Order.


Ernest Edward Perley: With reference to this furniture item, I would say that the efforts-


Richard Bedford Bennett: Say it on the bill.


Mr. TUSTIN:: Coming from a centre where the oldest furniture factory in the country is situated, I think I should bring certain facts to the attention of the committee. During this discussion we have heard a good deal about the forgotten man, the consumer, and the percentage of furniture that is imported into Canada. In 1929 we imported from the United States over $4,000,000 worth of furniture, approximately twenty-five per cent of what was sold in Canada during that year. In 1930 the tariff was increased and immediately importations began to decline, so that by the end of 1934 there was only $475,000 worth of furniture imported. There is no doubt that this reduction in furniture imports resulted in a great gain to the workmen in Canadian factories. In 1930 the tariff was raised to the highest level in the history of the country and notwithstanding that, the prices of furniture were reduced, and the reduction continued until 1935, when furniture was sold at forty-five per cent below the price that obtained when the tariff was at a lower rate. What do we find in 1936? In 1936 the present government reduced the tariff on furniture from forty-five per cent to twenty-seven per cent and immediately the prices of furniture began to increase, and to-day furniture dealers are telling their customers that the increase is likely to continue. In my opinion the tariff board has well considered this item.
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Several attacks have been made upon the industry, and the manufacturers have been told to put their house in order. I can assure the committee that in the past five years they have been doing this. One hon. member said there were 404 furniture manufacturing concerns operating in Canada. That may be true, but in 1935, eighty-one factories in Canada manufactured ninety per cent of the furniture produced.
Let me call attention to the increase in importations during the last six months of 1936. In July of that year the increase amounted to 281 per cent; in August it was 180 per cent; in September, 144 per cent; in October, 137 per cent; in November, 151 per cent; and in December, 183 per cent. I think I am justified in saying that the tariff board has been well advised in the report it has' submitted in connection with this item and I am glad to know that the Minister of Finance lias the courage to back up the findings of the board.


Major James William Coldwell: I have listened with a good deal of interest to the discussion on this furniture item. It is true perhaps that in the aggregate the increase in duty does not amount to very much but the principle involved is one in which, I believe, most of us, at least those of us from western Canada, are vitally interested. I listened carefully to the statement the Minister of Finance made the other evening. I notice that there has been a disposition to blame the tariff board, and while I am neither condemning nor condoning what the board has done it must not be forgotten that the minister said quite explicitly the other evening that the government was not bound to accept the recommendations or decisions of the tariff board. Consequently we cannot shift the responsibility for this particular provision on to the tariff board; the government must assume that responsibility.


Charles Avery Dunning: It does.


Major James William Coldwell: I do not know whether a motion would be in order for the reduction of the rate of duty in this item but that is something that we should consider, and I was hoping that someone on the other side of the house, where the protest might be construed as being more effective, would make such a motion. With regard to the wages paid in these highly protected industries, the inquiry that has just been concluded proves that wages do not go up when tariffs are increased and that in the highly protected industries- in the textile industry, for example-the scale of wages is low. While we realize that this may afford work in our factories for some

who require it, in my travels around Canada -and I am not confining my remarks to western Canada-I find that the homes of the people are in a most deplorable condition. They need replenishing with furniture to meet the ordinary necessities of decent life. It was unfortunate, to put it mildly, that at this time this item should have been selected for an increase in the duty. I remind my western friends particularly of this, that in our discussions of wheat and wheat marketing especially, our protests on this point have been largely that our farmers have to sell in an unprotected market and buy in a protected market. That is the point I have made over and over again. I have felt that if tariffs were adjusted, my argument would be met to that extent. But here we find in the last days of the session the tariff on an item important to the consumers is being increased. I am, tempted to move a motion, but I would rather see that motion come from the other side of the house. I am suggesting to those who have spoken in opposition to this increase that they bring the matter to an issue by moving an appropriate amendment to the item at this time.


Charles Avery Dunning: In the short statement I made at the outset I indicated the reasons advanced by the tariff board with respect to this particular recommendation, and also the grounds upon which the government decided to recommend to the house the change here proposed. I have of course no objection to the criticisms of those who differ with respect to this item, although when the discussion branches into a general tariff argument perhaps I might be permitted to remind the critics behind me that this is the one item in some six hundred that have been before the house this session in connection with which any increase is proposed. I think it important to bear that in mind in passing judgment upon the government. As a matter of fact the reduction of a year ago on furniture, as I clearly pointed out at that time, was in consequence of extending to the United States, in the trade agreement then entered into with that country, most favoured foreign nation treatment, which made available to them automatically the provisions of the Canadian intermediate tariff all along the line. And not only that; it rendered available to them the provisions of the French treaty, which entailed a ten per cent reduction below the Canadian intermediate tariff on the item now under discussion. That came about by reason of the Canadian tariff structure as it existed at the time the Canada-United States trade agreement was entered into. At that time, I say again, this question was referred

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to the tariff board, and what is the result? The result is that the duties imposed here to-day, the effective rates of duty against furniture entering this country from the United States, will still be 12 per cent below what they were one year ago on furniture coming from the same country. If one year ago the rate of duty in the intermediate column of the Canadian tariff had been the rate which is proposed here to-day, everyone would have regarded a 12 per cent reduction on furniture entering from the United States as a fairly satisfactory reduction. I think there is no dobut about that, because that was the attitude of the house with respect to many other items embodied in that agreement.
As the government of Canada we have to take into account the people engaged in manufacturing furniture, whether workmen or managers or whoever they may be, in just the same manner as we endeavour to give consideration to all other sections of the Canadian people. Now what do the government say? We find an admittedly disorganized industry. Following an examination by the tariff board we have a statement of facts brought out by the board with which I do not think anyone has quarrelled, although many have quarrelled with the conclusions drawn from those facts. I think that was the statement of the hon. member for Moose Jaw (Mr. Ross) and the hon. member for Saskatoon (Mr. Young) and others who have spoken. But there was a further recommendation, and a very important one, to which it is my duty to refer now. That is, having regard to the disorganized state of the industry, the lack of cooperation within it, the industry should be told, and is told in terms in the tariff board report, that it is necessary for it-the phrase "to put its house in order" has been used, but that is scarcely the correct phrase; I think it is correct rather to say it has been advised to apply those principles of cooperation within the industry which will enable it to resist influences without the industry which make it difficult for it to function successfully in this country, indigenous to Canada though it is, and one of our oldest industries, as has been said repeatedly. Those engaged in the furniture industry now know, as a result of what we are here doing, that they cannot sit back and presume that they can go on in the disorganized and noncooperative way they are going on now. They know that the industry will again be reviewed, and I can undertake now on behalf of the government to say that the industry will again be reviewed, in the light of these decisions. Having regard to the state of the industry as revealed, and without discussing
broad general principles of tariff and free trade and what ought to be done on the basis of principle, I am here and now discussing what I believe to be a practical problem relating to the livelihood of close to ten thousand Canadians. This industry ought to be able to succeed in this country. It is an industry which I believe can be made to succeed, and it should I think have reasonable time for adjustment on the basis of a twelve per cent reduction of the protection against the United States which they enjoyed one year ago.


[Stage Direction]
Item agreed to. [DOT]
Customs tariff-523-1. Woven fabrics, wholly of cotton, composed of yarns of counts of not less than 80 and not more than 99, including all such fabrics in which the average count of the warp and weft yarns is not less than 80 and not more than 99: British preferential tariff, 12J per cent.
Charles Avery Dunning: That is the last of the
four amendments of which I spoke. This item is already carried as regards the British preference rate, under the agreement. The budget item added intermediate and general rates, but since these would have entailed unintended increases against other countries this motion is to restrict operation of the item itself to the British preferential rate. It is a similar case to the one I dealt with Thursday night.


[Stage Direction]
Item agreed to.
4. Resolved,-That schedule B to the customs tariff be amended by striking thereout tariff items 1060 and 1063, the enumerations of goods and the rates of drawback of customs duties set opposite to each of the said items, and by inserting the following items, enumerations and rates of drawback of customs duties in said schedule B.-
Customs tariff-1060. Paper of all kinds, when used by the publisher or printer in Canada in the production of periodical publications enjoying second class mailing privileges, the pages of which are regularly bound, wire-stitched or otherwise fastened together: portion of duty (not including special duty or dumping duty) payable as drawback, 75 per cent.
Richard Bedford Bennett: I greatly regret that this item appears here. This is an increase from 50 to 75 per cent in the drawback on certain kinds of paper brought into Canada. One of Canada's chief exports is paper, newsprint and pulp from which paper is made. Instead of developing a Canadian industry that would supply our magazines with paper we are now told that the publisher of any magazine that is stitched or bound who desires to import this paper may secure a rebate of 75 per cent of all the duty thus paid upon that paper. This is injurious to Canadian trade;
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it is unpatriotic in the extreme. It results in the raw material of Canada being sent to another country for the manufacture of something that is brought back into this country on the payment of 25 per cent of the duty, and it is limited in its applications to a few beneficiaries. Why those few beneficiaries, controlling large publications, should be singled out in this way for the purpose of securing a rebate no man has ever been able to say. The late Minister of Finance commenced it. The present government, faced with the loss of some six or seven hundred thousand dollars in revenue by reason of the treatment accorded magazines from the United States under the treaty, then sought, shall I say, to conciliate the interests that were opposed by giving them a 50 per cent drawback on the duties they paid on paper which in some instances is manufactured from raw material coming out of this country.
I protest against this drawback as injurious to Canadian trade and as holding out an invitation to others to claim the same sort of treatment, to which they have the same right. It is of no use to talk about the privileges that are enjoyed by magazines in other countries. The real truth is that in Canada, a great paper exporting country, we are not desirous of building up an industry that would produce the type of paper that is used in these magazines; we encourage the importation of the paper that is required and rebate 75 per cent of the duty thus paid. Would the minister say what is the rate of duty at the present time?


Charles Avery Dunning: It is 221 per cent and 321 per cent, depending on whether or not it is calendered.


Richard Bedford Bennett: The highly calendered
papers, of course, have the higher rate. The result is that only 25 per cent of that rate is paid, or about 8 per cent as the maximum and 51 per cent as the minimum. In other words the Dominion of Canada, for handling this whole business, including the passing of the entries, the maintaining of the staff and the keeping of the accounts, is to receive a duty of about five per cent with respect to one type of paper and a maximum of about eight per cent if it is highly calendered. That is the position. Is that fair? Is it just? Is it conducive to the advancement of this dominion? Will it build up industry? Will it utilize our raw materials? Will it do other than promote the sending of our raw materials out of the country to be fabricated, giving employment to others, and its being then brought back to Canada?

Why is it done for a single type of magazine? At one time there were only about three people who utilized this type of paper. I do not know how many there may be now, and under our present system apparently we cannot get at who are the beneficiaries of these provisions. We can ask how much was allowed by way of rebate, and at the moment that is as far as we can go.


Charles Avery Dunning: I can give that information.


Richard Bedford Bennett: Under the general regulations in connection with the disclosing of the business of individuals we have not given such details in times past with respect to rebates, and that is not singular to this government at all. I formed an opinion, which I will indicate to this committee one day, though not to-day, as to what should be done with respect to rebates. That there have been abuses in connection with them, every minister knows. That the difficulty of administering them is very great, every minister knows. That the proposal we made the other evening to limit the time within which rebates could be claimed would have some beneficial effect if adopted I think is now admitted by everyone familiar with the problem.
I can only express in the strongest possible terms, as I did last fall and as I did when this rebate was first proposed, my opposition to this procedure. No doubt that will invite criticism and violent attacks upon myself by the interests concerned, but I have no apology to offer for standing here and protesting against our raw material being sent out of this country and then brought back in finished form on the payment of a duty of five or eight per cent for one particular type of magazine produced in this country. This is not a revenue tariff; it does not pay the cost of maintaining the necessary services. It is contrary to what I regard as sound business, and certainly it is contrary to the best interests of this country. Certainly it was apparent in 1930, when we took off the rebate entirely, that if there was any assurance that purchases would be made from Canadian producers they would develop the manufacture of that type of paper. The late Howard Smith sent one of his men all the way up here to confer with the proprietors of the magazine affected for the purpose of endeavouring to provide that very thing, but they made it perfectly clear that they would prefer to buy the American paper, and as soon as there was a change of government they obtained a 50 per cent rebate. That was not enough; it is now proposed to increase that rebate to 75 per cent which, as I have pointed out, means that

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instead of paying a tariff of 16 per cent on the importation of the highly calendered paper and 11 per cent on the less highfy calendered type, they now pay only one-quarter of the amount of the tariff, amounting to five and a fraction per cent in the one case and eight and a fraction per cent in the other, which is not enough even to pay the cost of keeping the machine going.
Then they talk about poverty in that industry. The very issue of the magazine that contained a complaint against what was being done in Canada also contained an illustration showing that the magazine in question once had been housed in very small premises, which had grown until then it was housed in one of the most magnificent plants in America. Those illustrations appeared in the same issue in which complaints were made with regard to the duty, and that issue contained a further statement showing that the circulation had expanded until it had reached a quarter of a million copies every issue. Under those circumstances to say that the taxpayers of this country shall contribute in order that this concession may be extended to a limited number of persons is, I say, nothing more than favouritism of the worst type, and can be attributed only to one cause, a purely political one.


Charles Avery Dunning: Well, Mr. Chairman, the facts are not quite as stated by the right hon. gentleman. The magazines affected by this item, which was fully discussed a year ago, have no tariff protection. This is not being proposed, nor was it proposed a year ago, for the benefit of any one magazine publisher.


Richard Bedford Bennett: I said a type of magazine.


Charles Avery Dunning: With respect to the argument that this commodity is partly manufactured in Canada, shipped to the United States and then brought back by the publishers of magazines in Canada under a drawback, the best evidence I can offer is the amount of drawbacks paid last year. That represents what the leader of the opposition calls the cost to the Canadian people, and that cost was exactly $662.59. This will indicate to the committee the extent to which the magazines in this class purchased American paper.
The problem is one which is well known to the house. As a matter of policy, magazines, newspapers and so on are free. The United States competitor of the Canadian magazine can and does enter this country without payment of duty. An effort was made a year ago. therefore, so far as possible to reduce the bearing of duties upon the raw materials entering into the production of Canadian
magazines, of which paper is a very important element. During the year it has been gratifying to find that the Canadian producers of this class of paper-and it must be remembered that this is not the newsprint section of the industry, but rather the magazine paper section, a section of the industry which does not export its product to any extent-in spite of the drawback provided last session, still continues to provide paper for Canadian magazines. A careful study of the matter leads me to the belief that the Canadian paper industry will continue to supply this high grade magazine paper, even with the increased drawback here provided. As I indicated in the budget speech, the industry is recovering. The development in connection with the manufacturing of this class of paper is a worth-while accomplishment on the part of the Canadian paper industry, and I do not believe it will be injuriously affected by increasing this drawback in favour of an industry which has no tariff whatsoever as against competing magazines entering the country from the United States.
That is all I can say about it. I have nothing to say regarding the attack made on the leader of the opposition with respect to the matter. He might have said with equal truth that strong attacks were made upon me with respect to another phase of the same problem. Those attacks have not lessened during the past year. I have endeavoured, as I am sure he would have had he been in my place, to meet the situation without regard to any personal attacks. One can only do one's public duty by endeavouring so far as possible to ignore that sort of thing. I deprecate fully as much as he does any attacks which may have been made, but I do not believe there will be any injury to the Canadian paper industry by the enactment of this increased drawback. I believe it is a measure of justice with respect to the production of articles, to wit, magazines of this class, which as I have said have no protection whatsoever by way of tariffs against their United States competitors.


Richard Bedford Bennett: Whatever else may have been said the minister has now proved conclusively my argument. First, there has been practically no importation, and the drawback amounted to less than a thousand dollars; secondly, Canadian magazines have utilized Canadian manufactured paper for their necessities. Ergo, why increase the drawback? For one purpose, namely to increase the importations of paper from the United States.


Charles Avery Dunning: Not at all.
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Richard Bedford Bennett: It does not require much mathematical power to leave that as the only conclusion which can be drawn. Why is it being done at all? If no good purpose is to be served by it, if it does not diminish by a single ton the use of Canadian paper, and if it is not to increase by a single ton the importations, why increase the drawback?


Charles Avery Dunning: My right hon. friend
knows the answer.


Richard Bedford Bennett: No, I do not. When the minister was making his statement I said, " I cannot understand " and I say to this committee that I cannot understand why he is increasing the drawback, unless the purpose be either to increase importations or to lessen Canadian production. There is no increase in the drawback payable to the importer unless he imports more. Why should we encourage the use of foreign paper when the drawback amounted to less than a thousand dollars? It is difficult for me to understand, because it amounted to many thousands of dollars under the old rule, which was fifty per cent. We all know why the 50 per cent did not bring about results. We know that under the N.R.A. and other considerations which applied to the cost of manufacturing paper in the United States, even with the drawback of 50 per cent the incentive was not sufficient to bring it in in large quantities. Now we are to increase the incentive. The minister now says, "Of course it is because Canadian magazines have no protection." Well, we shot up their circulation in this country by half a million copies. Now they are back to where they were before, with all that involves in shaping, moulding and developing the national character of Canadians. Not only that; the effect of advertising upon the national life of Canada must also be considered. I cannot understand why this is being done, unless it be for one purpose, namely, to increase the quantity imported.


Charles Avery Dunning: Perhaps I might answer by mentioning what was stated to be the object of applying for a tariff decrease in a commodity of this kind. The purpose is to have available the competitive price factor when they are bargaining with Canadian producers. That is the real element. Those asking for concessions in connection with this commodity made no secret of their abjective. They did not desire to import the commodity, but they did desire to have a competitive price factor which would operate in relation to their purchases from Canadian mills. I have no doubt at all that that is the fact. It is a tribute to the technique of the Canadian industry that it has been trying during the past five or six years

so to develop their processes in connection with the higher grades of paper as to make it possible for them to supply Canadian magazines and other requirements of high grade paper.


[Stage Direction]
Item agreed to.
Customs tariff-1063. Materials, including all parts, when used in the production of engines for use exclusively in the equipment of aircraft: portion of duty (not including special duty or dumping duty) payable as drawback, 60 per cent.
Richard Bedford Bennett: I hope the minister will realize how desirable it is that we in Canada should at the earliest possible moment begin to think in terms of production in our own country of not only aeroplane engines but also their parts. If those who have followed the story of Russian economy would be good enough to search their memories they would recollect that the first thing Russia did was to begin to manufacture tractors and engines, implements and instruments of production that might be necessary in the development of the defence of their country. I had intended to mention this point when the minister reached another item, but I can do so now. I think we should bear in mind the possibility of manufacturing to the maximum in Canada the commodities essential to the development of our own self-reliance-I believe that word covers What I have in mind.


Ian Alistair Mackenzie: I can
say that that is being carefully considered.


Henry Herbert Stevens: I believe under this item
I would be justified and in order if I were to bring to the attention of the Minister of Finance and also the Minister of National Revenue a matter I have previously discussed. I refer to the practice of invoking the protection of a patent in order to prevent the importation of goods on which a royalty has already been paid in a foreign country. Apparently the goods have been brought in under the customs laws without any violation thereof. I have in my hand a letter I received this morning supporting the view which on several occasions I have brought to the attention of the house. This is a letter from the Retail Merchants' Association of Canada, Saskatchewan provincial board. It is addressed to me under date of April 7, 1937, and is signed by Mr. McQuarrie, the provincial secretary. It reads:
We are very much interested in the fact that you raised the question of the bringing of electric apparatus into Canada from the United States.
We have one of our members here who is being pressed by Messrs. Smart and Biggar, Ottawa, barristers and solicitors for Ther-mionics Limited.

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Our member has brought in from a firm in Chicago radio tubes, and Thermionics Limited through their solicitors Smart and Biggar claim that his action in so doing is an infringement on the patent rights of Thermionics Limited.
Thermionics Limited, through Smart and Biggar, are insisting on our member furnishing them with a statement of the number of tubes imported and sold and the number of which our member has still on hand. They state they are willing to settle this matter as far as past infringements are concerned if our member will pay damages at the rate of 10 cents per tube on tubes sold. They are asking our member to deliver to Smart and Biggar or to Thermionics Limited at 159 Bay Street, Toronto, all the tubes that he has on hand and to sign the following undertaking:
Undertaking
In consideration of a settlement of damages for past infringement accepted by Thermionics Limited, I hereby undertake that I will not hereafter, during the life of the said patents, infringe any of the patents as set forth in the enclosed notice.
Dated at	, Saskatchewan, this
day of March, 1937.
In the presence of:
Now, Mr. Stevens, since Thermionics Limited are pressing our member for a settlement at once, I would be glad to hear from you by an early return of mail if there is likely to be any amendment to the present act or any changes in the regulation which will permit our member to dispose of the stock he has which consists of over 200 imported tubes, provided he pays Thermionics Limited 10 cents per tube either now or when these tubes he has on hand are sold.
There are two or three points I should like to bring to the attention of the committee. First, along with a score of other countries we are a party to a convention dealing with patents and copyrights. Under this convention any invention in Canada or in the United States or any other member country is patented in the various countries and protection is given to the patentee. The patent laws surround the patent with assurance of security and of right which I think is quite ample. If goods are manufactured in a country where the patent ij effective and if a royalty has been paid upon them, I submit it should be possible for those goods to move freely between the countries in which such patent rights are established.


Charles Avery Dunning: The royalty already
having become a part of the price.


Henry Herbert Stevens: Absolutely, and the importer having paid a duty upon the manufactured cost, plus the royalty. I want to make this as clear as I can. I am not attacking the protection of patents. I am simply saying that a merchant in Canada should have the right to buy goods where he likes as long as he buys
them lawfully and enters them for duty at the fair market value and otherwise complies with our customs law. To say that the moment these goods cross the border another royalty must be paid-in this case ten cents per tube-is in my opinion going entirely beyond the powers granted under the patent laws. If that is their right under the Patent Act, then my contention is-I contended this last year and the year before-that it should be rectified. This is not an isolated case. I brought this matter up in 1935; I had it up last year and I dealt with it also earlier in the present session. I have received a number of letters about it.
How can these little merchants stand up against a large combination? In connection with electrical equipment, there are five firms banded together: Northern Electric, Canadian General Electric, Westinghouse, and two others, the names of which escape me at the moment. This combination has retained firms of lawyers throughout Canada, not as individuals but as a collective body having a corporation name which escapes me at the moment, to watch these merchants and send out mandatory letters making demands of the kind indicated in the letter I have read. I appeal to the government to review the whole matter before the next session of parliament and to amend the law as it should be amended. My opinion, which I offer with considerable hesitancy, is that neither the patent law, the customs act nor any other statute of Canada warrants the action indicated in this letter.


Charles Avery Dunning: I have considerable
sympathy with the submission of the hon. member for Kootenay East (Mr. Stevens). In so far as the case he cites is typical of others, and he assures me it is, there would seem to be something calling for a remedy. I am not speaking with authority on the state of the law or upon the administration thereof. I am sure the Minister of National Revenue, who has to do with the customs end of the matter, will be able to give some information. In any event the hon. member has rendered a service by placing on Hansard the particulars of a specific case.


Mr. ILSLEY:: I do not intend to go into this matter at all fully, because this is really a question of patent law, not one concerning tariffs or customs administration. I would say that the holders of patents in Canada are within their rights in preventing the importation from the United States or any other country of patented articles for use in this country. For an importer to import patented articles, for sale or use in this country, is a violation and infringement of the patent held by the patentee in this country. Whether the
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patentee makes an unconscionable use of the monopoly which he has under his patent is another question. My impression is that there are provisions in the Patent Act covering this matter.


Richard Bedford Bennett: Three sections.


James Lorimer Ilsley: Which afford certain remedies.


Richard Bedford Bennett: Including the cancellation of the patent if necessary.


James Lorimer Ilsley: I agree with what the Minister of Finance says. I think there is something in the act referring to these radios and tubes. I shall undertake to discuss this matter with the Secretary of State (Mr. Rinfret) who administers the patent law.


Richard Bedford Bennett: I am not going to trespass upon the time of the committee except to point out that the conditions to which reference has been made have been closely examined. I recall being interested in an enterprise which it was alleged was violating a patent secured in the United States and Canada. As the particular commodity had been bought and paid for in the United States, I took the same view as has been expressed in this chamber, that it should not be subject to royalty. However, on looking up the matter I found that that was not the case because the right was given only with respect to production of the commodity in the United States and did not cover its production in other than the United States; accordingly we settled and paid up. The position with respect to radio tubes is just that. When they are patented in the United States and patented in Canada, the payment of a royalty in the United States is part of the cost which is paid out by the manufacturer when the articles come into this country. That does not give the patent any validity nor does it in any sense confer upon the importer immunity from royalty, because Canada and the United States are two different countries. It is covered not by our law but by an international convention, unfortunately, and it will be found by looking at either the Hague or the Geneva convention-I am not quite sure where the last meeting took place-that it deals with this situation. In our patent law, however, are two provisions which are in the standard law approved by the convention. One is that one must begin to manufacture the article in question within a given time if one is to preserve his patent. The second, to which the minister referred, is that if there has been .vhat may be regarded as an unconscionable use, notice may be given and steps may be taken that will entirely cancel the patent itself, and it may then be freely used. Those

provisions are easily set in operation and, I think, are comprised in three or four sections towards the end of the act-that is, the statute recently passed, not the old revised statute; my hon. friend has the old act, the one passed a few sessions ago. It does seem that the payment of two royalties should be unnecessary. That is why provision is made for the protection in the country in which the patent is granted of the patented article within a time limited.
Some will recall, no doubt, the observations of Mr. Lloyd George with respect to this matter during the progress of the war. The question of the protection of patent rights in countries other than that in which the patent was issued became at one time a very important matter of discussion. The international convention deals with it, and our statute follows the convention. The other phase is quite clear. The granting of an exclusive right in Paraguay does not confer as of right a monopoly in Canada, and the payment of a royalty in France on a patented article produced there does not in any sense render the person who has it in his possession in this countrj' immune from payment for the use of that patented article, the royalty being one that must be fixed, as the minister has said, under conditions that are provided for in the statute. I know to my sorrow what the law is, because an enterprise in which I was interested had to pay under just those circumstances, although for years it had been using the patented article, the royalty in the United States for the patent having been paid, of course, as part of the purchase price asked by the manufacturer when he sold it. Of course he did not get anything out of it; he merely collected the money and handed it on to the owner of the patent.
That is the position with respect to the law. It may be that it could be modified by common consent, but as it now stands the international convention provides that each country which is a sovereign country,-using the word in the broad sense-may issue patents; when those patents are issued they confer rights with respect to which every country has certain powers through its parliament or legislature to deal. But payment of royalty in one country does not and cannot relieve the person in possession of a given patented commodity from responsibility for a royalty in the country in which he is using it.


Henry Herbert Stevens: I certainly am not going to dispute any question of law either with the minister or with the leader of the opposition (Mr. Bennett), but I contend that there is an obvious inequality about the matter.

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Will the minister think for a moment of this? Assume that this argument is correct. We import every year millions of dollars worth of binders and other farm implements, sometimes to the extent of forty million dollars in one year. One class of these implements is the binder, which has perhaps a dozen or more different specific patented items in its make-up. Can it be argued that because those patents are fixed in the United States and in Canada we cannot import from the United States a binder or any other farm implement containing patented parts? The only reason these people are getting away with what they are doing is that they are five great corporations which have associated themselves together. They are powerful, they are exclusive in that particular line, and so they can impose their will upon the people. This applies to binders, to adding machines, to typewriters, to almost every article which is a subject of commercial transaction, yet as far as I know the article under discussion is the only type of manufactured article which is subject to this condition. In my opinion these firms are imposing unfairly and unjustly their will upon the people. I will say more: two years ago I demonstrated that in this city of Ottawa retailers were able to purchase from the United States incandescent lamps, pay the royalty over there, pay the regular price, import them, pay the duty, and sell them here at thirty to forty per cent less than the price at which Canadian manufactured lamps were being sold at in Canada. In regard to these tubes the same proportionate increase of price to the consumer obtains. To anybody who knows the business, the price that is being paid by Canadians for radio tubes is a scandal.


An hon. MEMBER:: The same is true of bulbs.


Henry Herbert Stevens: And bulbs. Is parliament going to be satisfied with a statement that the patent law says thus and so? Are we to throw up our hands and do nothing, when if that doctrine were applied straight along the line you would shut out every machine that contains a patented part?


Richard Bedford Bennett: Not so.


Henry Herbert Stevens: Well, substantially.


Richard Bedford Bennett: No, no.


Henry Herbert Stevens: Substantially so.


Richard Bedford Bennett: No, not even that. If the hon. member wants me to explain, I will do so in one minute.


Henry Herbert Stevens: I am not arguing about the law; I am arguing against the unfairness 31111-184
and injustice of the thing. I have said over and over again that I do not offer my opinion as to the law, nor have I ever done so. But I say the thing is grossly unjust.


Mr. VIEN:: What is the remedy?


Henry Herbert Stevens: The remedy, I submit, is under the Patent Act: it is for the government to bring the matter to the exchequer court or whatever is the proper authority, call attention to the imposition of these extra charges and the refusal of these people to permit importation, and to cancel the patent or deal with it under the Patent Act. I submit that those particular clauses in the Patent Act, with which I am thoroughly familiar, are intended to prevent the manufacture in Canada of these articles. I think a close study will indicate that.


Richard Bedford Bennett: Just the opposite.


James Lorimer Ilsley: It is a well-established principle that importation for use or sale of an article patented in Canada is an infringement of the Canadian patent.


Henry Herbert Stevens: Then I say it is time
that the law was changed.


James Lorimer Ilsley: It has always been that
way.


Henry Herbert Stevens: That it has always been
so is no reason why it should remain so.


James Lorimer Ilsley: If I took the time of the
committee for a few moments I would point out that a patent otherwise would be practically valueless.


Richard Bedford Bennett: Certainly. There would
be no patent without it.


Henry Herbert Stevens: I do not agree with that, because it lays itself open to the doubts to which I have referred. Nobody can dispute that with regard to electrical equipment for automobiles, various other electrical machinery, incandescent lights, radio tubes and parts -particularly in that field-right down the line the people of this country are paying unfairly high prices, and it is all due to the alleged rights under the Patent Act. I am not quarrelling with the interpretation of the law as given by the minister and the leader of the opposition, but I say it calls for attention by the government. Steps should be taken to see to it that merchants may enjoy some degree of protection, and, the consumer particularly, some measure of fair treatment in the matter of prices.


Richard Bedford Bennett: When I interrupted the
hon. member for Kootenay East (Mr. Stevens) it was with no desire to interfere with his speech, but he had overlooked the one fact

Special War Revenue Act

which governs the whole matter, namely the licence from the patentee. If the licence which was granted covers Canada, then the matter ends, because no further royalty can be collected, the licence having been granted, and all farm machinery and everything else is subject to the fact that the patentee has licensed the use and received payment therefor in every country in which the export trade takes place. We have therefore no difficulty. As a matter of fact we went to law about it. We realized that it was necessary to settle the matter for this reason. No licence had been obtained from the owner of the patent to use his patent in Canada, and, as the minister has pointed out, until that is done its use here is an infringement of the terms of the patent. All that has to be done is for us to insist when buying in the United States that these goods are guaranteed against the payment of any further royalty with respect to patents. Some buyers are now realizing that and taking steps to protect themselves. All you have to do is to get from the vendor an assurance in proper form if necessary that these goods are subject to no further payment of royalty in Canada or elsewhere, and for that the licencee usually has to pay. But when he does pay, that ends it. I could mention dozens of instances, apart from agricultural implements, in which the patentees have disposed of their rights over licences, naming the countries-England, France, Canada and so on. But if you make no arrangement for the use of the patent in this country, then to bring it in here is an infringement of the patent. All that is necessary is for the retail merchants and others concerned to get a satisfactory assurance from those from whom they buy that the use of the patented articles in the production of the commodity are not subject to the payment of further royalty.


[Stage Direction]
Item agreed to.

[Stage Direction]
Resolved, That it is expedient to introduce a measure to amend the Special War Revenue Act, chapter one hundred and seventy-nine of the revised statutes of Canada 1927, and amendments thereto and to provide-
1.	That schedule III to the said act, being the list of articles exempted from the consumption or sales tax be amended as follows:
(a)	by striking out the paragraph reading as follows:
"Fire brick, containing not less than ninety per cent of silica; magnesite fire brick or chrome fire brick; other fire brick when for use exclusively in the construction or repair of a furnace, kiln or other equipment of a manufacturing establishment, and articles and materials to be used exclusively in the manufacture of such fire brick; materials, not to include plant equipment, consumed in the 
manufacture or production, and which enter directly into the cost of the manufacture of such fire brick";
and substituting therefor the following:
"Fire brick, plastic refractories, high temperature cement, fire clay and other refractory materials for use exclusively in the construction or repair of a furnace, kiln or other equipment of a manufacturing establishment, and materials to be used or consumed exclusively in the manufacture or production of such fire brick or refractory materials."
(b)	by striking out the item reading as follow's :
"grain or seed cleaning machines;" and substituting therefor the following:
"grain or seed cleaning machines and complete parts therefor;"
(c)	by adding to the said schedule the following:
"Raw and salted hides;
Photographs, paintings, pastels, drawings and other art work and illustrations of all kinds, whether originals, copies or proofs, and printing plates made to reproduce the same for use exclusively as non-advertising news pictures or for illustrating non-advertising articles or stories in periodical publications enjoying second-class mailing privileges, the pages of which are regularly bound, wire stitched or otherwise fastened together;
Materials used as ingredients in canned fish;
Goods enumerated in customs tariff items 236B and 698."
2.	That any enactment founded on paragraph one of this resolution shall be deemed to have come into force on the twenty-sixth day of February, one thousand nine hundred and thirty-seven, and to have applied to all goods imported or taken out of warehouse for consumption on and after that day and to have applied to goods previously imported for which no entry for consumption was made before that date.
3.	That subsection four of section eighty-six of the said act be amended by deleting the word "six" and substituting therefor the word "eight."
4.	That any enactment founded on paragraph three of this resolution shall be deemed to have come into force on the second day of May, one thousand nine hundred and thirty-six.
Mr. BENNETT; I wonder if it is too late to say a word with respect to a matter brought to my attention in connection with these income tax resolutions. Why should widows have exemption only for one child?
Charles Avery Dunning: These are not income tax resolutions.


Richard Bedford Bennett: Then I cannot discuss the matter. I might, however, be allowed to make this observation. A widow wrote to me the other day stating a case of extreme hardship. She has three children and gets exemption for one. I did not know that was the law, I must confess.

Customs Taiiff Amendment


Charles Avery Dunning: It is new to me. A note will be made of it.
Resolution reported, read the second time and concurred in.



EXCISE ACT

[Stage Direction]
Resolved, that it is expedient to introduce a measure to amend the Excise Act, 1934, to give statutory authority to the validation fee of twenty cents per proof gallon upon spirits exported, which was imposed by regulation approved by order in council dated the second day of December, 1933; and that any enactment founded on this resolution shall be deemed to have come into force on the second day of December, one thousand nine hundred and thirty-three.
Richard Bedford Bennett: Perhaps the minister will explain this.


James Lorimer Ilsley: In 1933, I believe, what was called a validation fee of 20 cents per gallon was imposed upon spirits for export, and a very substantial sum has been collected under it. It has been suggested that the validation fee was not regularly imposed upon spirits for export and it has been decided to validate it by legislation. That is the resolution.


Richard Bedford Bennett: What was alleged to be the difficulty? As I remember, the law officers were certain about it, and the form of certificate was approved by the exporters themselves because it gave authenticity to their product and they utilized it in the sale of that product in foreign markets.


James Lorimer Ilsley: It is suggested that the minister under his power to make regulations has not the power to impose what is alleged to be an export tax. The fee is twenty cents, which is out of line with the cost of the service performed, and it is therefore argued that this is not a fee for certifying export entries, but is in effect an export tax.


Henry Herbert Stevens: Is this resolution reflected in Bill 119?


James Lorimer Ilsley: Yes.


Henry Herbert Stevens: It will be discussed when we come to the bill?


James Lorimer Ilsley: Yes.


Henry Herbert Stevens: And it is retroactive?


James Lorimer Ilsley: Yes.
Resolution reported, read the second time and concurred in. Mr. Dunning thereupon moved for leave to introduce Bill No. 121, to amend the Customs Tariff.
Motion agreed to and bill read the first time.



CUSTOMS TARIFF AMENDMENT

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance): With the consent of the house I should like to move that Bill No. 121, to amend the customs tariff, be now read the second time.
David Spence: I understand that on this motion I was to be given the privilege of making a few remarks in connection with an item in ways and means which I intended to oppose. Yesterday the Prime Minister (Mr. Mackenzie King) agreed to that.


Charles Avery Dunning: If it relates to the tariff.


David Spence: What I wish to refer to is the appointment of Mr. C. P. Blair for the revision of the Customs Act. I am utterly opposed to any more technical appointments in the customs department. There are enough of them to-day to upset the whole business world, and now we are injecting another one for the purpose of putting into force harassing and conniving schemes in connection with a bill such as the one that came before the house the other day. It received its first reading on March 31, and the second and third readings on April 2, without any knowledge on the part of the people interested in it. When the Minister of National Revenue (Mr. Ilsley) was in the committee of the senate piloting it through he had his technical men and also the man who is employed continually by the senate, who advises as to and frames their legislation. What chance has the public against an army of people of that kind?
The bill to which I refer is to amend the Customs Act, and it affects particularly the fruit and vegetable industry. I was connected with that industry for forty years, from 1895 until a few years ago, and I know something of what I am talking about. Even back in 1895 the customs house was domineering and autocratic. I shall give some instances of the treatment people get when they attempt to do business with the customs house. I am not condemning the present minister or any minister, but I am condemning the men who are to-day running the country, and they are not the minister or this government. Everyone knows that people in the wholesale fruit business cannot buy stuff and sell it subject to change of duties. That was done during the war, but the day is over when you must mark every item you sell "subject to change of tariff." The trade I represent has been ridiculed in this house. Someone said some promoter was instigating the demand we are making for return of duties to which the trade all over Canada are entitled, and it amounts
Customs Tariff Amendment

to a considerable sum. But it does not make any difference whether it is $50,000 or $50,000,000, if they are justified in getting .refunds, as I think they are, the government should at least make a fair proposal. If they have not sufficient money to pay their debts, they should do the same as any other trader- call a meeting of their creditors and offer them at least fifty cents on the dollar, and not put them out of business altogether; because that is what the government are doing. There are many voices from all sides of the house to speak for the big interests, but there is no one who understands the small man in that business I have been in. We are looked on as a bunch of pirates, but the pirates are not in our business; they are in the customs house. You cannot talk to customs appraisers; they run the whole show; they know more than the minister. We are not opposing dumping duties but we are opposing the unethical application of the dumping duties which has caused us so much loss and worry. We all realize that during the hard times We had to have dumping duties, because the price of everything was so low. The producer was losing money; he could not produce for the price he was getting, so that something had to be done. Unfortunately that came at the time my honoured leader was in power.
Now, I shall cut my remarks very short. I have been trying to cooperate with the government to get through with the business of the session. I have sat here two or three days when I might have been talking and while others were talking for hours, but I do not wish to be talking all the time. What the technical men in the customs department are doing to-day is continually devising ways find means of depriving the people of their just rights, as shown by this bill to amend the Customs Act. I do not think that is their duty. The minister introduced this bill on March 31. Just before that time there was a resolution read that no one could understand except a Philadelphia lawyer, and perhaps the minister himself. The bill was read the first time on March 31 and the second time on April 2, and the people interested knew nothing about it until they read the report in the press on the following Saturday morning. Is that a fair state of things, after the government had given the wholesale fruit trade all over Canada a fiat to sue, and arranged with them for only two people to be selected to sue the government? The suit is now in the courts in Ottawa. They have been dilly-dallying there for the last nine months in order to give this government, or the minister, whoever did it, the opportunity to

put through a bill which should not have been introduced. It should be beneath the minister's dignity to deprive people of their just rights.
A statement was made in this house that a promoter was behind this whole proposition. Mr. Mclvitrick is paid a salary. We have been fighting the customs house for so many years that the individuals concerned got sick and tired of it and engaged a man to fight for them. The same applies to the railways; he looks after dumping duties and railway freight rebates as well. So he has a big job, and he knows his job. The Minister of National Revenue would not have beaten him in the senate committee had the senate committee known as much about it as I know; nor do I think it would have gone through this house if hon. members had known the purport of the thing, because I think most people want fair play.
It was also stated in this house that these illegally collected taxes had been passed on to the consumer. That is denied by the importers all over Canada, and I specifically deny it. If there were only one dealer or importer in a city or town he might take advantage of the situation, but in this business your neighbour does not let you. The fruit business has to be handled hurriedly; you buy the stuff in the morning and you are through at noon.
What we are kicking about so much is the amended entries. They are something horrible. Let me give an instance, but before doing so I want to tell what is happening. Legislation of this kind condones the usurpation by departmental officials of the powers of parliament and of the governor in council in connection with the tariff. It usurps the normal functions of the courts, and it is made retroactive, which makes it much worse. That is what we are opposing-retroactive legislation.
Now I will give instances of what has been happening in the last thirty-five years in connection with this business. One concerns a car of stuff which was bought; two months afterwards customs demanded an amended entry and collected S150, and a week after that they came along again for another $30. You simply have to pay, under protest, or the next time you have a car on the track they lock the door and tell you to take a walk. I know another instance of a car of tomatoes on the track at Toronto esplanade. They arrived in bad condition. Under those circumstances the importer loses about twenty per cent, the first loss, and the government takes the greater part after that. This car was on the track and they were trying to

Customs Tariff Amendment
fix it up. Along came the city department of health and condemned five hundred cases, confiscated them and took them to the dump, yet the man who had imported the stuff was forced to pay five cents a pound dumping duty and the ordinary duty, and never got a cent back. Is that a fair deal? The customs houses have put more people in their graves and driven more people out of business in the last twenty-five years than the great war. Some people are thinking it is time to burn them down. It is not the fault of the government; it is the fault of the customs administration.
Let me give another instance. It was beween 1930 and 1935, I believe, but it does not matter when it happened, because it is never known by the minister. An order- they call it a bulletin-went out to put the dumping duty on tomatoes, I think about June 15. As a rule the dealers govern their action accordingly when they are told the dumping duty is going on. Unfortunately they loaded up the tracks in Toronto with a great many cars; one man had thirty cars. To-day he is out of business, without a dollar to his name, and we can thank the customs people for that. While I do not approve of anyone taking advantage of the dumping duty if they know it is coming on, at the same time the government should not have cancelled the imposition of that duty, which was supposed to be applied that day. I wonder if the minister would kindly listen to me. I am trying to interest him more than anyone else.


Charles Avery Dunning: It is the Minister of National Revenue who is concerned.


David Spence: The Minister of Finance may not think it worth while listening to me, but I want to give him some information of which he is probably not aware.


Charles Avery Dunning: I am sure the hon. member is always worth listening to, but I understood him to be addressing his remarks to the Minister of National Revenue.


David Spence: I want the Minister of Finance to listen too, because some day we might have to talk to him. When the fifteen day period was up and the time arrived for the application of the dumping duty, the man who sends out the bulletins changed his mind and extended the time for another fifteen days. That is the person we are blaming for the big losses on the track at that time, when the large number of cars was brought in.


Charles Avery Dunning: That was not under this government.


David Spence: It does not make any difference. It is not the government that is to blame; it is the person who sends out the bulletins. I am not blaming this government, though it is going back to the old method of administration.
In the old days we were forced to take, say, ten cases of cabbage, costing probably from $3.50 to 87, though it did not matter what they cost, up to the examining warehouse. We were allowed to take them there but we were never allowed to bring them home; red tape prevented that. They would keep them there until, as the saying is, they were as yellow as a duck's foot, and then we would either have to dump them or sell them to some cheap restaurant at a loss of perhaps. $30. The same thing applied to beans and every other commodity. In those days there were no California grapes; all our grapes came from Malaga, in Spain. The Malaga grapes were brought in by the Allan line from Liverpool in two or three hundred keg lots. You would be asked to send up ten kegs of grapes, and they would be kept there for a week, until everybody in the customs house had carried home baskets full. When you got back your ten kegs there would not be enough left in them to fill two kegs, which would mean another loss of about $160. So the administration was not half as good as some people think. They put us to all the trouble of lugging the stuff a mile or a mile and a half and then upstairs to the examining warehouse; then, when it was no good, when it had rotted, they would let us have it back. We finally got that stopped when Mr. Reid was Minister of Customs.


Charles Avery Dunning: That was a good many years ago.


David Spence: Yes, but we are slowly
returning to the same condition. Mr. Reid stopped that and made the inspectors go to the cars and examine them, so we had no more trouble of that kind after that. Then an appraiser at the port saw fit to interfere with a car of lettuce that came in one day, and I was asked to interview Hon. Jacques Bureau. I do not remember what year that was. This appraiser took it upon himself to increase the price of that lettuce from $1.50 to $2, something he had no right to do. I brought the matter to the attention of Mr. Bureau, who said, "Do you want me to fire that appraiser?" I told him this man had difficulty with everybody; he was fighting with everyone and giving service to no one, making himself generally obnoxious. I said, "No, I don't want him fired, because we
Customs Tariff Amendment

might get somebody worse, but I want him disciplined so that he will give the trade a real chance to do business." We got reasonable cooperation from Hon. Jacques Bureau. Mr. Boivin was another man who understood business and who would do anything he could for the trade. I think we had some dealings with Mr. Euler, and he was very fair also.


Charles Avery Dunning: He was not too bad,
was he?


David Spence: I think at one time he
was minister of customs, and we got a fairly good deal from him. Then Hon. E. B. Ryck-man came in, a man well trained in the business world as well as in law, with a soul and a heart like the other fellows. He tried to give us a decent deal, but it was nearly impossible.
I should like to give the house an instance of what happened during the time Mr. Ryck-man was minister. Three cars of carrots were shipped from California, and then somebody sent out one of those bulletins putting a dumping duty on carrots and applying it to cars rolling. I went to Hon. E. B. Ryckman and told him the story. He said, "You are right, Dave; nothing should apply to cars rolling. After the deal has been consummated no dumping duty should be applied." Let me tell you, Mr. Speaker, that sometimes if a man knew the dumping duty was going to be applied he would never buy the stuff at all. In this particular instance the dumping duty on the carrots was about $4 a case, which brought the cost up to $7.50 or $8 a case laid down in Toronto. Those carrots could not be sold for more than $3.50 or $4, and we were wondering whether it would be better to pay the freight, pay for the carrots in California and then let them rot on the tracks at the customs house instead of paying the dumping duty, or whether to take the loss we would incur by selling them, but Mr. Ryckman saw fit to overrule Mr. Breadner at the time. I went in to see Mr. Breadner. No doubt he was a brilliant man working entirely for Canada, but not for the people. Sometimes, you know, it is a good thing to have a little money in the pockets of the people as well as in the treasury of the country. I went to Mr. Breadner and tried to convince him that this duty should not be applied. He swore at me like a trooper; I had to go back at him, and I may tell you I did go back at him. I told him he was worse than Jesse James in his palmiest days; I asked him why he did not get a gun and keep it on the table in order to shoot a man like me. And he was not the only man of that kind we have had to deal with. I

became disgusted going to the department; after Mr. Scully was appointed I had very little to do, because when Mr. Matthews came in I had a few fights with him, and rather than have a quarrel I took myself out of the department entirely and forgot all about it.
Now the present minister is getting back to the old fashioned ideas and making the dealers send their stuff up to the examining warehouse. I think that is too antiquated a procedure for the minister to institute at this time. I should like to give an instance of what happened within the last six weeks, concerning one of our dealers who is just as honourable as any man in this house, and let me say that the whole trade throughout Canada is equally honourable, yet they are depicted as a bunch of burglars trying to rob the country. They are simply trying to get what is coming to them, but when they try to get it they are ruled out of court. Within the last six weeks a car of beans was brought in, on which the duty was paid. A week later the customs people came back and asked for an additional $55 of duty. I suppose that is something the minister cannot help, but the excuse given was that the car was not bought f.o.b. It was bought f.o.b., but it had been moved out of the little loading station in Florida down to the terminal, probably thirty or forty miles away, where it could be put to one side. The man who bought it simply secured the number of the car and purchased it by wire, as everything is bought. The department said the man had to pay duty because that car had been moved forty or fifty miles. Did you ever in your life hear of such a public persecution of people trying to do business? You never know what you will have to pay for anything; you never know how to get along; the government keep at you from day to day until you get so disgusted that you do not want to do business at all.
I do not know that I have very much more to say, except that I think it is time the man in the business world received some consideration. Lots of consideration is given the great big fellow; every move made in this house creates another monopoly, because the small fellow cannot stand the pressure and the big fellow can. The small fellow falls out and the big fellow gets his business. That is the way things have been going for a long time. There never has been such a loss to men operating in the trade as there has been since 1930. I think they were a useful body at one time. They provided money with which to buy the farmer's products, and they took

Customs Tariff Amendment
everything he had to sell in the winter. They cleaned his place right up, and provided the money which made everything go.
A lot of people who thought they were doing something for the country were buying bonds and hiding them. I say that the man who did nothing but buy government bonds, who put no money in industry or business, did nothing for his country; and I am glad to see him getting only about half the usual return now because that is what he deserves. They squeezed the business world for money to buy bonds.
I appreciate this opportunity of saying a few words and letting hon. members know something about the persecutions which go on in the customs house. If the Minister of National Revenue wants to know anything in particular about his department, I can tell him something about it. It took us two years at one time to bring about a change. We who are in the legitimate business-I should not say " we " because I am not in it now; I cannot afford to be in it any longer; I could not stand the pressure-the people in the business were losing money continually. The man who brings in carloads of produce cannot cheat the government. The car is opened by customs officials. For years we told the government that there was bootlegging by trucks coming in from Niagara, Black Rock, Buffalo and Detroit; we tried to convince the government that there was something wrong. This is how it was done. When the duty of one cent per pound was put on grapefruit the truckers with their big ten-ton trucks went to Detroit and Buffalo, put fifty boxes of grapefruit in the centre of their truck, loaded the sides with oranges which carried no duty, and were able to sell their stuff for fifty cents a box less than the man who imported by the carload. They could do that, and still make half a dollar more than the other man. The same thing was done with regard to grapes from California. They would put a hundred lugs in the middle of a big truck, and when we were paying two cents duty they were paying nothing, because the outer sides of their trucks Vere covered with materials which were not dutiable at all.
We fought the Department of Customs for two years before we were able to convince them that that was going on. To-day that is all changed, and it has been changed for some time. Now they have to unload their trucks at Black Rock, or Niagara Falls, and show what is in them. But they did not do that formerly. I should not like to say that the port of entry or the man in charge was at fault, but even yet we find that some things
are crooked in connection with importations from Detroit and Buffalo. So you have to keep your eye on what is going on over there, instead of keeping your eye so much on the legitimate dealer who has a large amount of money invested. That is the man you are after now, and you are putting him out of business. I am not one of them, because I have not the money.
I think I have given the house a little information about the manipulations of the National Revenue department which have the effect of working against the trade. I wish the Minister of National Revenue would keep the unfair side of it in his mind, namely, the levying of duties or asking for amended entries after a car has been bought and sold. I will leave it to the Minister of National Revenue himself. He may be hard up, but the people he is robbing are just as hard up as he is.


Richard Bedford Bennett: Mr. Speaker, I have refrained from making extensive observations on the various items in the tariff bill now under consideration, but in view of certain observations which were made to-day I think it desirable to direct attention to one or two matters.
The arguments presented by the hon. member for Huron North (Mr. Deachman) and hon. members in other parts of the house were to the effect that we should have greater freedom of trade. I recall that the Prime Minister in this house in 1932 made several references to South Huron. He said:
In order that there be no mistake as to where the Liberal party stands on the matter of the preference, may I repeat here what I said in South Huron, and what I have said repeatedly at other times and in other localities, that the policy^ of the Liberal party with respect to trade is to encourage greater freedom of trade, to remove restrictions and barriers rather than to increase them, and that if as a party we were returned to office our first objective would be to bring the tariff of Canada back to where it was at the time we went out of office.
That was the so-called Dunning budget. I am not unmindful of the fact that my hon. friend the Minister of Mines and Resources (Mr. Crerar) resigned his office in the government of that day because he felt that the tariff increases that were then made were not warranted, and because he did not believe in a policy of protection.


Mr. CRERAR:: My right hon. friend is mistaken; it was not because of tariff increases at that time.
Customs Tariff Amendment


Richard Bedford Bennett: The maintenance of
tariffs, I should have said; the minister is quite right. I was going to read what he (Mr. Crerar) said. He put it this way:
I have never been able to see any virtue in the principle of protection.
Then he discussed a number of items: one of the agriculture items; steel and then binder twine, boots and shoes, and textiles. With respect to boots and shoes he said:
There is absolutely no need of a protective tariff to the extent of 30 per cent to keep American shoes out of Canada, but I am afraid that if the hon. member will search his sources of information a little more closely he will find that the facts do not substantiate entirely what he has stated.
Then he took the case of a suit of clothes, and proceeded finally to say:
In all reason and conscience is it necessary to have a protective duty of 30 per cent on textiles coming into this country in order that concerns like the Dominion Textile Company may make such profits as I have just mentioned? Let me ask again, do our manufacturers really require the protection they enjoy? I am satisfied that they do not in the case I have just cited. But we have further evidence.
And so on. That was when the hon. gentleman left the government of the day. He gave his reasons for so doing, and they are set out at length in Hansard.
Then there was a statement by the Prime Minister to the effect that we should return to the tariff as it was when his government went out of office in 1930. Remember that one of the restrictions on domestic trade in this country is the increased sales tax of 8 per cent; and remember also the attacks that were made when the 3 per cent excise tax was placed upon the statute books by the late government. I have taken a number of invoices in connection with items and applied to them the tariffs under the Dunning budget so-called of 1930, and under the present budget of 1937, with the 8 per cent sales tax and the 3 per cent excise tax, for the purpose of showing just what proportion of the invoice cost of those goods laid down in Canada from the United States was paid by the consumer in 1930 under the so-called Dunning budget and what is paid at the present time. I shall content myself, in view of the lateness of the session, with merely placing the list on the record in order that during the recess the hon. member for Huron North (Mr. Deacb-man), the hon. member for Melfort (Mr. McLean), and the hon. member for Moose Jaw
 .
(Mr. Ross) may have an opportunity of examining them.
Table showing percentage of laid-down cost of certain goods entering Canada from the United States because of customs and excise duties and sales tax.
At
present After after Dunning budgets Article	budget 1936 and
of 1930	1937
Per cent Per cent
Artificial silk marquisette,
piece goods..	361	741Artificial	silk	fabrics.. . .	36i	58Artificial	silk	fabrics. . ..	361	64JArtificial drapery	silk and cotton, fabrics	36|	981Artificial fabrics.	silk	and cotton	36|	86fArtificial fabrics.	silk	and cotton	351	761Artificial fabrics.	silk	and cotton	361	68JArtificial	silk	dresses.. ..	39	62Artificial	silk	dresses.. ..	411	631Artificial	silk	dresses.. ..	41	65}Artificial	silk	dresses.. ..	41	591Artificial	silk	dresses.. ..	391	611Artificial	silk	dresses.. ..	401	58Artificial	silk	dresses.. ..	411	52}


Charles Avery Dunning: I must question my right hon. friend's figures.


Richard Bedford Bennett: They are taken from actual invoices.


Charles Avery Dunning: Including what?


Richard Bedford Bennett: Including customs duties, excise tax and sales tax; I said that at the 3tart. I have taken goods coming from the United States so that they may have the benefit of the United States agreement of last year.


Charles Avery Dunning: There was a one per cent sales tax in 1930 when I brought down that budget.


Richard Bedford Bennett: It was reduced to that in the face of a deficit.
Mr. DUNNING* There was 847,000,000 of a surplus.


Richard Bedford Bennett: There was a deficit in sight of nearly 850,000,000. The minister should have known of that if he did not. I always thought he did know.


Charles Avery Dunning: I am speaking of a surplus.


Richard Bedford Bennett: I am talking of what I know. I continue with the list:



IT), 1937

[Stage Direction]
Customs Tariff Amendment
	After	At present after
	Dunning budgets	
Article	budget 1936 and	
	of 1930	1937
	PeT cent	Per cent
Artificial silk cushion slips.	38|	76Artificial silk and cotton pillows	39	781Artificial silk and velour scarfs	41	107}Compacts	36}	61§Powder cases	361	63Cotton fabrics, bleached, not coloured	26i	391Cotton fabrics (yarns of more than one colour) ..	311	451Cotton fabrics (yarns of more than one colour) ..	311	481Cotton fabric, yarn dyed..	311	45Cotton fabric, yarn dyed..	31	45}Cotton fabrics, yarn dyed..	311	43}Cotton fabrics, piece dyed. . Dyed cotton fabrics	28}	46}29	49}Printed cotton fabrics.. ..	311	47Men's fur felt hats	371	53Ladies' straw hats	36}	63Novelty jewellery	36J	55}Knitted cotton dresses.. ..	36J	56}Knitted -wool bathing suits.	361	591Knitted cotton girdles.. ..	36}	67}Knitted elastic girdles.. ..	361	711Knitted wool ties	36}	54Linen upholstery fabrics..	34	49}Leather purses	361	53Raincoats	371	70Ladies' leather shoes.. ..	301	49}Silk fabrics	361	66}Printed silk fabrics.. ..	37	63}Silk dresses	411	60}Silk dresses	391	65Silk dresses	401	60}Silk dresses	411	54}Silk dresses	411	51}Silk blouses	40}	75}Silk blouses	42	85}Silk neckwear	411	62}Silk neckwear	41}	64}Silk pillows	39}	1901Ladies' silk slips	41}	73}Silk negligees	41	64}Toilet soap	35}	481Toilet preparations (nonalcoholic	34}	721Small cedar chests containing toilet preparations..	36}	61}Toilet preparations containing alcohol	931	100}Wool tapestry fabrics.. . .	361	70Wool dresses	38}	63Ladies' wool suits	38}	62Woven wool bathing suits	39	641
That is the list as I have been able to compile it in the limited time at my disposal. I direct attention to it only for the purpose of accentuating the argument presented to the house by the hon. members for Moose Jaw (Mr. Ross), for Saskatoon (Mr. Young), for Huron North (Mr. Deach-man) and for other constituencies. These hon. members have pointed out so vigorously
and well during the last few days the excessive imposts placed upon the consumers of this country in order that free trade might be maintained by the Liberal party at election time and protection practised when they are in office. I would think the argument they presented was so magnificent that it would appeal at least to the Minister of Trade and Commerce (Mr. Euler).
William Lyon Mackenzie King: Does not my right hon. friend agree with them?


Richard Bedford Bennett: He does not have to agree because he is now in the happy position of listening to the warring elements in the Liberal party expound their diverse views in connection with principles for which, as they said when the elections were on, they were fighting shoulder to shoulder. That is what they said they were doing when the elections were on; but now it is no longer shoulder to shoulder, but back to back. I am sure it must make a tremendous appeal to my hon. friend the Minister of Trade and Commerce. When I welcomed him back I pointed out that during his absence great progress had been made for the cause of protection. As I listened to the speech of the hon. member for Moose Jaw, I realized how true it was that furniture had triumphed, and the battle flag of victory had been hoisted now on Waterloo.


William Daum Euler: Just for the sake of accuracy let me say-


Richard Bedford Bennett: Is it not Waterloo? Is it Hespeler?


William Daum Euler: I should like to assure my right hon. friend that the action taken was decided upon before the Minister of Trade and Commerce returned from Australia.


Richard Bedford Bennett: That makes all the more apparent his tremendous influence which can be exercised by absent treatment. I am sorry if I placed the flag in the wrong place. Perhaps it should have been Hespeler or some other community from which the flag of victory flew. But that it flew, there is no doubt. The fact that the government adopted that policy and relieved the tariff board of any responsibility is, I fancy, another star in the crown of the Minister of Trade and Commerce. I mention these matters because they indicate the great advances that we have made in freedom of trade. They represent the tremendous progress we have made in relieving the people of some of the fearful burdens placed upon them by the past administration.
Customs Tariff Amendment


Charles Avery Dunning: I would suggest to my right hon. friend that he has not made a comparison with the past administration. If he did, his figures would be of astronomical proportions.


Richard Bedford Bennett: Not quite, because the minister increased the sales tax from six to eight per cent, and that is included.


Charles Avery Dunning: And reduced the tariff.


Richard Bedford Bennett: I remember when they were fighting shoulder to shoulder; they were about to remove these barriers against trade and this three per cent excise tax; and these tremendous duties that were imposed under the British preferential tariff, were to be reduced fifty per cent. I can remember the ancient days long since past in the legislature of Saskatchewan when the Minister of Agriculture (Mr. Gardiner) and the Minister of Finance (Mr. Dunning) fought shoulder to shoulder in passing resolutions year after year demanding a fifty per cent cut in the British preferential tariff, and freedom of trade in all articles of household furniture. They used the term " household machinery." Fertilizers and implements were to be put on the free list. Here their cohorts are all gathered together, but they are not fighting shoulder to shoulder. The Minister of Trade and Commerce was not a vigorous applauder of the speech of the hon. member for Moose Jaw.


William Daum Euler: I did not agree with it.


Richard Bedford Bennett: I can fancy the sorrow there must be in some of the homes of Saskatchewan as they read the speech of the Minister of Finance. How they must recall the halcyon days when he inveighed against the doctrines of protection and told them that he would lead them, not into the wilderness, but into the promised land of a fifty per cent cut in the British preferential rate and free trade in everything they had to have. But those days are past. He says he is no free trader now. He is a protectionist in some items and a free trader in others.


Charles Avery Dunning: He did not say that.


Richard Bedford Bennett: He said the other evening he never had been a free trader. I thought he would say that, and I wanted to see what he had said in the Saskatchewan legislature. I find that he advocated placing upon the free list all foodstuffs.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: He demanded:
... the reduction of the customs duty on goods imported from Great Britain-


Charles Avery Dunning: Exactly.


Richard Bedford Bennett: -to one-half of the rates charged under the general tariff.


Charles Avery Dunning: Yes.


Richard Bedford Bennett: He demanded:
... and that further gradual uniform reductions be made to the remaining tariff on British imports that will ensure complete free trade between Britain and Canada.


Charles Avery Dunning: Does that make me a free trader?


Richard Bedford Bennett: I should think it did. He demanded:
The placing upon the free list of all agricultural implements, farm and household machinery, vehicles, fertilizers, coal, lumber, cement, gasoline, illuminating fuel and lubricating oils and all raw materials and machinery used in their manufacture.
That would seem to indicate that there was not much to protect after he achieved free trade in all these items. The only protection to be afforded would be to that idea which it was necessary to disseminate in the east in order that the west might realize that its noble champions of free trade were fighting the battle for them while in the remote and effete east they were leaving it open to say: "We are not free traders outright; we are only free traders, you know, in respect of all the items I have mentioned, but we reserve to ourselves the right of protection to those commodities not named." Perhaps the minister would be good enough at some time to indicate just what would be left, so far as the western consumer is concerned, after you had free trade in all these items.
Then I cannot help thinking of my hon. friend the Minister of Mines and Resources (Mr. Crerar). I recall the days of his noble past when, under the banner of progress, he marched upon Ottawa and attacked the citadel with fifty-eight gallant supporters called Progressives.


Thomas Alexander Crerar: Sixty-five.


Charles Avery Dunning: Sixty-five. Get it right.


Richard Bedford Bennett: Excuse me for underestimating them. It only shows that his desire to achieve free trade was stronger than I thought.


Thomas Alexander Crerar: I was sure that my right hon. friend desired to be accurate.


Richard Bedford Bennett: I do not want to minimize the confidence placed in him by so vast a number of the people's representatives in western Canada. But when he advanced on the citadel and attacked the dragon of protection in its lair, we realized that for some

Customs Tariff Amendment
strange reason he seemed to have forgotten the past; its memories rolled away like the great burden of which John Bunyan wrote rolled from the back of the pilgrim who was endeavouring to achieve his goal. That great burden rolled away and the hon. gentleman became a vigorous free-trader to the extent of one hundred per cent of the invoice cost being paid by the consumer to get his goods into his house. What a magnificent type of free trade we have! I am sure that those who recall the splendid consistency manifested in those addresses will regard events with some degree of satisfaction, and perhaps in moments of leisure, when they are quiet and calm, will reflect that after all there is something in the words of a great British statesman that "an organized Liberal government is an organized hypocrisy."


Some hon. MEMBERS:: Oh, oh.


James Lorimer Ilsley: It was said about a Conservative government.


Richard Bedford Bennett: Oh, certainly, and a great deal worse than that was said about a Conservative government, and no one said it better than my friend the Minister of National Revenue (Mr. Ilsley). No one said it more vigorously than he; and no one in power practises more than he does the things he denounced when in opposition. "Consistency, thou art a jewel" has no application to the Liberal party. In election time, said the hon. member for Moose Jaw (Mr. Ross), we fight shoulder to shoulder, but when we find ourselves in office there is left still a saving remnant. I heard the hon. member for Melfort (Mr. McLean) say that "to save this country it is necessary to develop within our party that opposition which is lacking in those who sit opposite." It will be remembered that the Prime Minister (Mr. Mackenzie King) was not in the chamber this morning when the hon. member for Melfort explained that the real attitude he took was one of benign observation and of an earnest desire to serve the body politic, and that to do so it was essential that he should oppose the furniture item because it afforded him an opportunity to express his belief in the sound principles of Liberalism as he had learned them, but which unfortunately, he found, were not being expressed by the government that he generally supported. It was a rather difficult admission to make, but he made it with an ease of conscience and smoothness of speech which commended itself to every one who heard him.
So I congratulate the government at the end of the session upon having maintained
in office the principles that they opposed when they sat on this side of the house. It is a striking exhibition of how regard for the interests of the country can overcome preelection statements, and I congratulate the country that we have on the treasury benches men of such flexibility and adaptability that they are able to accept the great principles of protection which have saved this country in the past and will continue fo preserve it in the future. It is desirable, no doubt, that this measure of reasonable protection should be afforded the industrial life of this country, notwithstanding that, in days long since past, my hon. friend the Minister of Mines and Resources said he could not see anything in it at all. It is not necessary to see it now; he feels it; and the Minister of Finance does better than that-he smells it.
Under the circumstances I can do nothing more than warmly compliment the administration for having this session accepted the doctrines they so strongly denounced when they were out of office, and I earnestly hope that they may long continue to practise while in power what they have done so splendidly in the last few months, and a departure from which might lose them the support of some few who to-day supported them generously in maintaining that high protection which they so stoutly denounced in days long since fled. De mortuis nil nisi bonum; the dead is past and gone, and we will speak nothing but good of it and all the noble achievements that it represents. It is a matter of satisfaction to feel at the close of this eventful session that the government has so excellently manifested a belief in that measure of inconsistency which constitutes the variety in public life that is so essential to maintaining its interest-to say nothing of the amusement it affords. If the British manufacturer finds it difficult to discover here a market for his goods, it is well to remember that he had reason to believe that when the change came, only fifty per cent of the general tariff would be charged him. But what of the ships of which we used to hear in our friends' speeches, the ships which according to their imagination were to ply from Churchill to England and back again with goods upon which only fifty per cent of the general tariff would be paid, with a gradual reduction to a basis of free entry? Somehow or other that has not materialized. But we must give hon. gentlemen time. Time is the great healer, and it also affords a great opportunity.
I could not but think that even the Minister of Agriculture (Mr. Gardiner) had his moments of calmness, for in a speech
Customs Tariff Amendment

which he made, and which I have frequently quoted with great approval, he said:
The most harmful slogan ever introduced into the consideration of western public matters was the cry, "down with eastern vested interests" which has developed into an attempt to organize the east against the west and the west against the east. Members of the party to which I belong, in the past were responsible for the introduction of that cry, and I pledged myself as a leader of that party to put forth every effort to remove from the appeals of the organization to which I belong, any such unworthy sentiment.
I am sure that those of us who have read with becoming modesty the report of the special committee on agricultural implements and its conclusions will realize how splendidly he has lived up to that declaration of faith. It is a matter of interest to read that statement at this time, because it expresses so clearly and neatly a consummation devoutly to be hoped for. I can only add that-
.	.	. the cry, "down with eastern vested
interests,"
which was introduced by . . .
. . . the party to which I belong,-
I assume that that was not the Progressive party, but the party with which he was associated, which did incalculable harm to the country. I have frequently said when the minister was not in this house that his attitude commends itself to the judgment of every hon. member, but it makes the homogeneity of the government a little more difficult, for the flag that flies at Waterloo is not the flag that flew at Austerlitz; and conditions have changed since the appeal was being made to the electors, "shoulder to shoulder under the banner of victory "-


Charles Avery Dunning: Hear, hear.


Richard Bedford Bennett: The minister can hardly contain himself as he recalls those ancient days when he shouldered his crutch and showed how fields were won. In the circumstances, Mr. Speaker, in taking my seat I can only congratulate the government upon this masterly demonstration of their ability to hold under their banners troops who are marching to different objectives; who in times past marched shoulder to shoulder in a battalion to accomplish the defeat of a common enemy; and who, that victory having been won, find it no longer pleasant to reflect upon that past, and instead of fighting shoulder to shoulder, are now fighting back to back, not for the purpose of destroying protection but for the purpose of rendering some assistance to a downtrodden country. And in the meantime the consumer who is not a member of the league can but hope some day to join it.

Hon. CHARLES A. DUNNING (Minister of Finance): I shall not endeavour to emulate my right hon. friend (Mr. Bennett). I rise for two purposes only, first to congratulate him on having come through the session in such excellent good humour and in such good form as to be capable on this the last day of delivering an address replete with the wit that is so characteristic of him in his better moments, and to express the hope, which I am sure will be shared by all in this house regardless of party that the address to which we have just listened is not his swan song.


Richard Bedford Bennett: He has another one
coming.


Charles Avery Dunning: We have another one coming to-day, I know, and it will not be of quite the same character. The second purpose I had in rising was to protest as strongly as I can against the use of figures which, while in themselves correct possibly in relation to the matters discussed, do not present a correct picture of other matters that they develop.


Richard Bedford Bennett: They did, between 1930 and 1935.


Charles Avery Dunning: To add a sales tax to
a duty paid value in two years so far apart, two years in one of which the sales tax was one per cent and in the other eight per cent; and then to build an argument on that basis to convey what I am sure the general public would take from the remarks of my right hon. friend, namely, that the Liberal party was maintaining much higher tariff rates than are in fact the case, is something I must protest against. If one desired to apply the same method of calculation to the duties which were in effect between 1931 and 1935, why, of course, the results would appear utterly ridiculous; in fact, the figures would be astronomical.
And now may I thank all members of the house for their forbearance with me in my task this session of putting through a most complex series of tariff amendments as related to the trade agreement with Great Britain and with respect to our tariff generally. If I have appeared a little edgy at times I trust I shall be forgiven. I wish to thank all hon. members for the consideration they have shown in the very difficult discussions which it has been necessary to have.
Motion agreed to and bill read the second time.


Charles Avery Dunning: Perhaps it would suit
the convenience of the house if I were to introduce the other two bills so that we might go into committee on the three of them at
APRIL 10, 19C~
Special IFar Revenue Act
the same time. My colleague informs me that the excise bill was introduced yesterday.



SPECIAL WAR REVENUE ACT

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved for leave to introduce Bill No. 120, to amend the Special War Revenue Act.
Motion agreed to and bill read the first time.
Mr. DUNNING moved the second reading of the bill.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
On section 1-Definitions.
Mr. CAHAN:: If this bill is printed it
has not been distributed.


Charles Avery Dunning: My hon. friend will
recollect that in connection with ways and means it has not been usual to delay the passage of bills based upon ways and means resolutions when adopted. If there are any additions to the amendments apart from those contained in the resolution which passed the committee and the house the Minister of National Revenue must, of course, give full information with regard to them.


Charles Hazlitt Cahan: I do not wish to delay the
house but I suggest that we are entitled to have printed copies of the bill if they can possibly be supplied.


Charles Avery Dunning: The bills were not introduced until to-day.


Charles Hazlitt Cahan: If the Minister of Finance
postponed the introduction of his bills until to-day, he should have seen to the printing of them beforehand.


Charles Avery Dunning: I have followed the
immemorial practice.


Charles Hazlitt Cahan: Perhaps the minister will
explain the purpose of the bill.


James Lorimer Ilsley: It was thought that the
words "used in" as they appear in the old section were open to a wider meaning than was intended; it might be said that the machinery in a plant was used in the manufacture of a product. While the present change does not alter the administration of the act it is thought that in the interests of clarity the change should be made.


[Stage Direction]
Section agreed to.
Sections 2 to' 4 inclusive agreed to.
On section 5 -Schedule III amended.
Charles Hazlitt Cahan: There is no explanation of this section. How can we inform ourselves of what is implied in the striking out of these words unless we have some explanation? The bill is not properly printed, because on the other side there is no information with regard to the purport < f these amendments.


James Lorimer Ilsley: I can explain that. The first exemption, in subsection (a), is to include the parts for grain and seed cleaning machines, which parts have hitherto been taxable. At the present time grain and seed cleaning machines are exempt. Hereafter, grain and seed cleaning machines, and complete parts therefor, will be exempt.


Charles Hazlitt Cahan: What about paragraph (b)?


James Lorimer Ilsley: The exemption for fire
brick is to include certain plastic refractories, high temperature cement, fire clay, etc., when for use as stated, these not having previously enjoyed the exemption. It was felt unfair that the brick alone should enjoy exemption for certain purposes which was denied to other materials used for the same purposes.
The next change is in reference to consumable materials. The change in the wording is for clarity. It is thought that the proposed wording more adequately expresses the intention. The application of the exemption is not changed.


Charles Hazlitt Cahan: What about the rest?


Charles Avery Dunning: It is all in the resolution ; it was all dealt with in committee of ways and means.


Charles Hazlitt Cahan: That may be, but I want the explanation.


James Lorimer Ilsley: The provision for raw and salted hides is to overcome an administrative difficulty. The hides are of no use in their raw state and must be further manufactured. and by placing the exemption here a considerable number of licences need not be issued; also audit work will be curtailed where no tax is involved in any case.
The provision for the exemption of photographs, paintings, drawings, etc., for magazines is designed to allow the Canadian publisher to compete with American publications, as the latter pay no sales tax on importation, whereas the Canadian publisher must pay on the art work and printing plates he uses.
The provision for the exemption of materials used as ingredients in canned fish is to exempt mustard, olive oil, tomato puree, etc., when used for this purpose. Competitive canned fish can be imported free from
Customs Tariff Amendment
COMMON?
sales tax, whereas the Canadian producer is obliged to pay the sales tax on the ingredients I have mentioned.
The provision for exemption of spinal braces and parts thereof, and articles for the use of the blind, is intended to provide some relief for these unfortunate persons.


[Stage Direction]
Section agreed to.
Sections 6 and 7 agreed to.
Bill reported, read the third time and passed.

James Lorimer Ilsley: (Minister of National Revenue) moved that the house go into committee on Bill No. 121, to amend the Customs Tariff.
Motion agreed to and the house went into committee, Mr. Sanderson in the chair.
On section 1-Governor in council may order that certain duties and taxes be disregarded.


Charles Hazlitt Cahan: I presume this bill is simply a reproduction of the items as they appear in the ways and means resolution?


Charles Avery Dunning: Yes.


Charles Hazlitt Cahan: Section 1, subsection (2A)
is new, is it not? Is that section identical with the resolution that we had before us?


James Lorimer Ilsley: Yes, that is identical. What was before the house on a former occasion was an amendment to the Customs Act. This is an amendment in identical terms to the customs tariff. This relates to the imposition of dumping duty; the other related to the imposition of regular duty.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-Schedule B amended.
Henry Herbert Stevens: There are no clauses in
this bill amending the customs tariff other than the amendments which have been effected by the resolutions before the committee?


Charles Avery Dunning: There was an amending bill on the customs tariff yesterday. There are none in this bill.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
Schedules A and B agreed to.
Charles Hazlitt Cahan: In the twelve years or more that I have been in this house I do not remember that I ever saw so many important

bills introduced in the last ten days of the session. This session I think is without precedent in that respect.


Charles Avery Dunning: As far as these three
bills are concerned I can only say that they are introduced precisely as they were in all other sessions during which I have been a member of this house, immediately following the reporting of the resolutions in the customary manner. As to my hon. friend's other remarks, they do not apply to me, as my legislation otherwise has been down for some time.
Bill reported, read the third time and passed.



EXCISE ACT AMENDMENT

[Stage Direction]
Hon. J. L. ILSLEY (Minister of National Revenue) moved the second reading of Bill No. 119, to amend the Excise Act, 1934.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Sanderson in the chair.
Section 1 agreed to.
On section 2-Refund of duties.
Charles Hazlitt Cahan: What is the present practice with regard to refunds of excise duties? Is there any time limit within which the application must be made?


James Lorimer Ilsley: There is no limitation in the present act as there is in the Customs Act and the Special War Revenue Act. Under the Excise Act there is no limitation.


[Stage Direction]
Section agreed to.
On section 3-Certain spirits subject to an abatement.
Henry Herbert Stevens: I should like to get the assurance that there are no new sections introduced here that vary the principle of the bill. Does it just carry out the resolutions that have been passed in committee?


James Lorimer Ilsley: No, that does not apply to this act. I am informed that only one clause is covered by a resolution which was considered in committee; but this bill had its first reading yesterday and has been distributed.


Henry Herbert Stevens: From just glancing over the bill-we have been so busy that we have not had time really to read it-it appears to make quite a substantial amendment of the Excise Act.


James Lorimer Ilsley: Not substantial; a fewmiscellaneous amendments of a minor character.


Henry Herbert Stevens: It is pretty late in the session to bring down a new bill.

Excise Act Amendment


James Lorimer Ilsley: The reason it was not given first reading earlier was because a resolution has been on the order paper for weeks, and it was not desired to proceed with the bill until the resolution was disposed of.


[Stage Direction]
Section agreed to.
Sections 4 and 5 agreed to.
On section 6-Recovery of penalties.
Charles Hazlitt Cahan: What is the effect of the new provision in this section?


James Lorimer Ilsley: Section 6 merely makes a grammatical correction, changing the wording. It does not make any change whatsoever in the effect or meaning of the section. It is a clerical amendment to correct a typographical error, also to define more clearly the punishment referred to in paragraph (b). Personally I have some doubt as to the necessity for it.


[Stage Direction]
Section agreed to.
Sections 7 and 8 agreed to.
On section 9-Importing or manufacturing apparatus.
Charles Hazlitt Cahan: Why is there a reduction in the licence fee from $20 to $2? Is this intended to develop the home brew trade?
Mr- ILSLEY: Oh, no. These are chemical stills used in universities and laboratories, and that sort of thing. There was no reason for a licence fee of $20.


Charles Hazlitt Cahan: Are they restricted to laboratory use?


James Lorimer Ilsley: No, but numerous persons and firms after paying for licences to have and use a chemical still have strenuously complained of being required later to pay another licence fee of $20 for the privilege of importing or manufacturing the same. In the case of those engaged in the business of manufacturing stills on a large scale, a licence fee of $20 per annum is not complained of; but when it is desired to build one still only, it is claimed that the additional licence fee makes the cost prohibitive. Universities, laboratories and various industrial concerns quite frequently desire to construct their own stills. The reduced licence fee provided by the proposed amendment makes this feasible, and at the same time provides definite control. The all important thing is to know where the stills are.


Charles Hazlitt Cahan: And the use to which they are put.


James Lorimer Ilsley: There is no doubt about that. That is not controlled by the difference between $2 and $20, however.


[Stage Direction]
Section agreed to.
Sections 10 to 14 inclusive agreed to.
On section 15-Least quantity to be ex-warehoused for consumption.
Charles Hazlitt Cahan: You must remember, Mr. Chairman, that this bill was distributed only a short time ago, and we can hardly follow the text rapidly enough to keep up with you.


Frederick George Sanderson: I have no desire to hurry the hon. gentleman.


[Stage Direction]
Section agreed to.
Sections 16 to 20 inclusive agreed to.
On section 21-coming into force of section eleven.
Henry Herbert Stevens: This section provides: Section eleven of this act shall be deemed to have come into force on the second day of December, 1933.
This question of making sections of a bill retroactive is a very serious' one, and I should like to have an opportunity to see just how this applies. Is there any significance to the retroactive feature of this section? Would the minister explain that?


James Lorimer Ilsley: I explained that briefly a few moments ago. In 1933 the Minister of National Revenue fixed a validation fee for the certifying of export entries of spirits being exported.


Richard Bedford Bennett: In bottle.
Mr. ILSLE1 : In bottle or in any other container. It has been suggested that the power of the minister did not extend to the fixing of a fee larger than was proportionate to the actual cost of the work performed, and of course 20 cents per gallon is disproportionate to the amount of work performed in certifying these export entries. A large amount has been collected between 1933 and the present time The distillers are very anxious to have the fee either reduced or removed.


Charles Hazlitt Cahan: And to have the fee returned.


James Lorimer Ilsley: No.


Charles Hazlitt Cahan: If any fees have been collected since the date mentioned here, they will have to be returned.


James Lorimer Ilsley: Of course, in their discussions with the department they have hinted or intimated that there perhaps is a legal point under which they could recover several millions of dollars in fees they have already paid. It is important to have this validated.
292S
Excise Act Amendment

I do not know what the legal opinion of the last government was, but I presume it was that it was validly imposed. Certainly I do not think there will be a single member of the house at this date who would be in favour of the government being involved in a lawsuit on this more or less technical point which might result in the return of several millions of dollars to the distillers.


Richard Bedford Bennett: There can be no real
discussion in a court of law as to the amount of a fee in terms of the service and cost, notwithstanding any suggestion of that kind.
I remember that when the fee was fixed, the law officers were of the opinion that a fee of twenty cents was the maximum reasonable amount. But to suggest, as has been suggested. that because it does not cost anything like twenty cents to have the certificates prepared and numbered, and a record kept of them, that therefore you should not be able to get the fee, is a wholly erroneous view. It was not that the certificate was important; but it was important to have a record of the price because the validity and the authenticity of the spirits contained in the receptacle that bore the certificate were thereby clearly indicated to everybody. A much larger fee was suggested at first, but twenty cents was agreed upon, and my memory is that the people who were most anxious for it were the exporters themselves, because it gave an added value to their statement that their goods were pure, unadulterated, and just as they had left the bonded warehouses of the country. If there is any question, I think this is a highly desirable piece of legislation.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
Hon. CHARLES A. DUNNING (Minister of Finance) moved the second reading of Bill No. 118, for granting to His Majesty certain sums of money for the public service of the financial year ending March 31, 1938.
['I have the honour to inform the house that I have received the following message:\nSir,\tOttawa, April 10, 1937.\nI have the honour to inform you that His Excellency the Governor General will proceed to the Senate chamber on Saturday, April 10, at 9 p.m. for the purpose of proroguing the present session of parliament.\nI have the honour to be, Sir,\nYour obedient servant,\nA. S. Redfern,\nSecretary to the Governor General.', 'Combines Investigation Act']
John Horne Blackmore: Mr. Speaker, the fact that the report of the Bank of Canada recommends that money should not be granted to Alberta, as it was granted to Manitoba and Saskatchewan, in my view requires some discussion. Naturally hon. members of the house are not as familiar with the situation which exists and has existed in Alberta as we whose lives have been spent there. We have been impressed with the sympathy and interest which have been shown to us by hon. members since we have come

here. We appreciate that fact even more when we remember that many of those hon. members can see no sense in what we are trying to do, and that they have to depend entirely on the apparent sincerity with which we speak. We are doubly impressed by the tolerance and evidence of good nature which have been accorded us from all sides. We desire further tolerance and consideration while we discuss this problem which is raised by the report.
As I have stated, we believe there has been grave discrimination against Alberta. Hon. members of the house doubtless do not see eye to eye with us, but we wish to discuss the matter frankly and straightforwardly. First of all, may I say a word or two with respect to the report. I have read it from beginning to end with great care, and have been favourably impressed by many of the statements contained therein. I have noticed that in form it is painstaking and detailed, that it is restrained, that there is nothing harsh or offensive in it. It is kindly worded, and it contains no imputations or insinuations. All these facts we greatly appreciate. It is also accurately and justly weighted. By that I mean that due stress has been placed upon the various aspects which have a bearing upon the situation in Alberta, not only as it affects the dominion but as it affects the people in Alberta who are vitally concerned. It is frank and dignified, and in all these respects it does credit to its authors.
It is marred, however, in that it recommends to the government what we consider a very unjust discrimination against Alberta, namely, that the dominion government do not give Alberta financial assistance between this time and the time of the findings of the proposed commission on taxation.
In the first place, I should like to bring to the attention of the house the financial history of Alberta. This is done very well in the report, but may I review the facts briefly because they have a tremendous bearing upon the situation. A failure to understand those facts might lead hon. members to have less sympathy with the struggles of a people who are trying to be honourable in the eyes of the world. Let me point out that Alberta commenced her history in 1905. Between 1905 and 1922 certain things occurred, the effects of which are still being felt in Alberta. The bank report points this out frankly and stresses it adequately when it says:
The roots of many of Alberta's present problems were developed during this period.
The report characterizes this period as being "extravagant" and as manifesting "poor judg-

Alberta Financial Situation
ment" and "loose administration." Those are severe words to apply to the government which existed in Alberta during those times. Hon. members must realize that the people who are trying to-day to get Alberta out of the morass of debt into which she was thrust had nothing to do with the public affairs of the province at that time. They are struggling against a set of circumstances which were more or less thrust upon them. When hon. members realize that, I think they will give us more sympathy than they have in the past, or perhaps I should say consideration rather than sympathy. All we want is consideration.
It is pointed out that there was an ambitious telephone policy which threw the province into debt to the extent of $21,000,000. There was an ambitious railway policy which added another S15,000,000 to the indebtedness of this young province. A highway policy was adopted which proved to be extremely costly, as Alberta is a foot-hills province. The need for roads was greater than in provinces where the topography was more level, and the expense of constructing those roads was greater because of the grades and the necessity for bridges, culverts, and things of that sort. Guarantees of agricultural loans accounted for another $7,000,000. Bonds of the university of Alberta to the extent of $4,000,000 were guaranteed. Irrigation bonds to the extent of $6,500,000 were guaranteed and later on had to be assumed. The governments of the day almost consistently fell behind in their estimates of current expenses. The result was that by 1918 they had fallen behind $3,500,000 in that respect. Another $2,000,000 was added in 1921, and another $2,000,000 in 1922.
There then developed another condition from which we are suffering to-day. The province of Alberta started to sell what were known as savings certificates. This method provided cheaper money, and they went into the sale of these certificates on a rather large scale. The result was that the province became indebted to many of its citizens. The money taken in as savings was spent to a great extent, if not completely. The result was that when the people called for their money which they thought was on deposit, the money was not available. This is what happened just as the social credit government came into power. There was a run on these savings certificates which shook the credit of the province to its very foundation, and destroyed the confidence of great numbers of the citizens who did not understand just why it was they were unable to get their money when they called for it. Many people, careless in their thinking and not very well informed, blamed the social credit government. This was not right. The sales of savings certificates had amounted to $4,500,000 by 1922.
Going on, the report states:
A further weakness lay in the inadequate sinking fund provision of one-half of one per cent.
By 1922 the debt of the province had mounted to $95,000,000. The people of Alberta became aware of this debt and the result was wide-spread alarm. I can remember quite distinctly when that feeling ran through the province. It was at that time that the United Farmers of Alberta were organized. I took part in the organization of that party shortly after I had left the university. In 1922 the debt was $95,000,000.
Another period in the financial history of Alberta occurred between 1923 and 1930. I quote from the report regarding this particular period, as follows:
It is true that the mere maintenance of its position, judged by standards then prevailing, was a creditable feat, but the 1922 position had been so unfavourable in itself and so seriously out of line with that in other provinces that there is little excuse for the failure to take more determined steps to correct it.
May I comment on that statement just for a moment or two ? TheUnitedF armers of Alberta government came into power in 1921 and immediately they set about to deal with the problem of the provincial debt. As a result of the efforts put forth between 1922' and 1930, no additions were made to the debt; in other words, the debt was maintained at $95,000,000. The bank report seems to be of the opinion that the United Farmers of Alberta administration was blameworthy to some extent because it failed to pay off some of the debt during the good times of 1926 and 1927. It is easy enough to look back and think of what might have been, but I think hon. members will remember that during those years we all had a sort of feeling that we were being reconstructed from the war, and that we were going to be much better off in days to come.


Charles Avery Dunning: The sale of the railways during that period was an important factor.


John Horne Blackmore: I did not intend Intake the time to refer to that.


Charles Avery Dunning: It had a bearing on the debt situation. There is no need to develop it.


John Horne Blackmore: The point I want to make is this: If the United Farmers of Alberta administration, which I believe is generally acknowledged to have been an

Alberta Financial Situation

honest, sincere and efficient administration, found themselves unable to pay off any part of the $95,000,000 debt during those prosperous years, what chance has the administration of to-day to pay off this accumulated debt? It is a serious question which we must ask ourselves. We in Alberta have asked ourselves this question thousands of times. As I shall point out as we go forward, it is not that we wish to avoid our debts; what we want to do is to get our indebtedness into a form where we will have some chance of paying it off.
The next period was from 1931 to 1936. The net outstanding liabilities of Alberta increased in those years by $52,000,000. The bank report says:
About half of the net increase took place during the first two years of the period.
This statement is also found on page 33: that nineteen millions of these fifty-two millions was spent on relief and relief works.
May I be pardoned for spending a moment or two on a matter which will be a sore point with members of the United Farmers of Alberta administration? The Social Credit movement expelled completely the United Farmers of Alberta. We do not wish to disparage that body. I have always felt that the United Farmers of Alberta did as well as they could. I said that all the time during the election, and I am taking care to bring this point out, because there are many good men who struggled in that administration who may read the words which I am saying. I look upon it as a shame when a man has done well, has done his best, that any one for political or any other reasons should detract from his good reputation. That is a contemptible proceeding to which I will not be a party. Consequently I stress it in this house so that hon. members will understand that I am not laying more blame than is necessary on the United Farmers of Alberta administration.
The result of all this experience of Alberta was that we owed $147,000,000 when we bestirred ourselves in the great social credit movement. I do not blame hon. members for looking upon social credit as something rather crazy. When I first heard of it, it appealed to me in that light, but we who are in that movement took it with tremendous seriousness, and the main reason why we did so was that we believed we saw in it a means whereby we might extricate ourselves from the morass of debt in which our fair province found itself. I quote again from the bank report, page 26:
By the summer of 1935 Alberta had largely exhausted its liquid and realizable assets in
[Mr. Blackmore.l
order to meet its chronic cash deficiencies, and when a run on the savings certificates took place in August, 1935, the necessary funds were not available.
There has been noticeable a disposition among some hon. members to blame Alberta's difficulties upon the social credit government. Now, just as I explicitly stated a moment ago that I considered it contemptible and dishonourable to place blame where it does not belong, so I resent any tendency on the part of anyone to place blame on the social credit government for that for which it was in no way to blame. Consequently I read that passage from the bank report as an example of splendid restraint and fairness, and I so commend it and draw it to the attention of the house.
Let it be noted that the realizable assets were all gone long before Premier Aberhart or the social credit government had any chance to deal -with the situation. In speaking to hon. members, fellow-Canadians, I appreciate the sympathy which is so generally apparent. There was that debt. What were we going to do about it? What are we going to do about it now? What can we do about it? The whole question of debt must be faced realistically.
May I draw attention to figures which were quoted not long ago by one of my colleagues in dealing with the debt situation. Thus far I have said nothing upon this subject. What more than any other one consideration drove us into the social credit movement was the vivid realization of the appalling debt situation which was developing throughout the world. Professor Rautenstrauch, of Columbia university, who conducted investigations into this matter, stated among other figures, according to information I have, that the debts of the world increased forty-seven per cent in the 16 hundreds, 466 per cent in the 17 hundreds, 12,000 per cent in the 18 hundreds, and in the 19 hundreds an amount in a similar ratio. That situation must be faced by this generation and remedial measures must be applied, or there can be but one possible result.


William Lyon Mackenzie King: Will my hon. friend excuse me for interrupting him for just a moment? There is always a difficulty in arranging for prorogation because of uncertainty as to the time when the business of the house will be concluded. It looks now as though it were going to be possible to prorogue this evening. This measure is, I believe, the only one which remains to be considered by the house, with the exception of one bill which is before the

Alberta Financial Situation
Senate and which will be dealt with when it reaches here. If hon, members are agreeable, I should like to move:
That the present sitting of the house be continued after six o'clock until motion is made for adjournment.
This motion if carried will permit the present discussion if it does not last too long to run on until it is concluded. If it continues too long we may adjourn at any moment. If the debate is concluded in time to arrange for prorogation at a later hour this evening, the definite hour of prorogation could then be given. I infer that the house will consent to this motion. If there is unanimous consent I should like to present the motion.


[Stage Direction]
Motion agreed to.
["Will my hon. friend excuse me for interrupting him for just a moment? There is always a difficulty in arranging for prorogation because of uncertainty as to the time when the business of the house will be concluded. It looks now as though it were going to be possible to prorogue this evening. This measure is, I believe, the only one which remains to be considered by the house, with the exception of one bill which is before the\n\nAlberta Financial Situation\nSenate and which will be dealt with when it reaches here. If hon, members are agreeable, I should like to move:\nThat the present sitting of the house be continued after six o'clock until motion is made for adjournment.\nThis motion if carried will permit the present discussion if it does not last too long to run on until it is concluded. If it continues too long we may adjourn at any moment. If the debate is concluded in time to arrange for prorogation at a later hour this evening, the definite hour of prorogation could then be given. I infer that the house will consent to this motion. If there is unanimous consent I should like to present the motion."]
William Lyon Mackenzie King: I thank the hon. member for Lethbridge very much.


John Horne Blackmore: I have been dealing principally with the debt situation in the world. There are many other figures which might be quoted, to which I shall not now refer. I believe that every hon. member has been disturbed to the depth of his being by the mounting debt in Canada. Alberta means to pay her debts. Please accept my sincere assurance on this point.
What has she done to prove it? She has been strictly scrutinizing her affairs for upwards of twenty years. She has learned, therefore, much about what she can and what she cannot pay. In 1921 she elected a United Farmers of Alberta government pledged to get her out of debt. That was the specific pledge, Mr. Speaker-to get the province out of debt. Honestly and effectively, I think it can safely be said, the administration of that day struggled with their problem. Sternly resolved to take no chances, Alberta returned them term after term. The record of that determined effort is well set forth in pages 12 to 26 of the report. During the depression debts again began to mount. Anxiety about this fact contributed greatly to the sweeping return of the Social Credit party on August 22, 1935. Mr. Aberhart constantly repeated, "You cannot borrow yourselves out of debt." Now what has the Social Credit government done since going in? In the first place let me indicate a little more definitely than I have done so far, the situation they had to face, and let me show what they have done in that situation. I quote from the bank report at page 27:
The situation which developed in 1935 made it impossible for Alberta to borrow in the public market. As a result it became necessary to provide for all current and capital expenditures from the province's own resources.
Mr. Aberhart said, over and over again, that when he came into power he found the treasury empty; indeed, not only empty but with the bottom scraped out of it. His vigorous way of putting it was not an exaggeration. The point to remember is that he was there; the debts were there; the condition was there; the province was there, faced with the worst crop failure it had ever known, stretching from the north to the south boundary. He could not escape. What could he do? There were two disastrous years; it is only fair to bear that in mind. In 1935 we were rained on and flooded out in the Peace river area, we were burned out in the south, and hailed and frozen out all through the centre. The result was that there was scarcely a provincial riding in Alberta in the fall of 1935, when the new government took the reins of office, that did not come pleading for assistance. Constituencies that had never known what it was to ask for assistance now had to have it, and this only added to the stringency of the situation. In addition to that we may justly complain of something which in my opinion, when the history of these times is written, will stand out as a reflection upon the justice of the press of this land. For we were constantly subjected to opposition from the press, propaganda, whispering campaigns, and definite antagonism on the part of the big interests-all of which, in my judgment, is an utter disgrace. I do not believe there has ever been a time in the history of the country, when, a year and a half after the election of a new group to office, there were still newspapers from one end of the country to the other, directly, persistently, and malignantly attacking the administration, no matter whether it had a record of probity and honour and efficiency or not. And that thing, sir, is going on to-day. It weakened from the beginning the chances of the province to help itself.
This bears on the situation which I am presenting to the house to-day. What efforts did the province make? In the first place Mr. R. J. Magor was brought in. As I understand it, he was chosen because he was an expert in orthodox finance. His task was to reveal to the new administration exactly the state of the provincial finances, and I should not be surprised if much of the fulness and completeness of this report of the bank was made possible by the good work of Mr. Magor. He was kept there until his work was complete. The result was that we found out exactly how we stood. And that is the first thing that any government could do under the circumstances, is it not? Mr. Aberhart declared from the beginning that he would have a balanced budget. What group could ask for any more?
Alberta Financial Situation

Now there are Social Credit enthusiasts in Alberta who are condemning him because of these measures; but surely no orthodox financier can condemn him. As soon as he came into office he attempted to refund the debt. He said: Let us have this debt refunded at three per cent, which is 'high enough; it is all that this province cam pay. And his request was disregarded. But the request was sound. Surely a device which has been used by our old motherland over and over again since the war is a sound one, judged from the standpoint of orthodox finance. Besides that, he made requests over and over again for assistance before he should default. Much has been made of the fact that Alberta defaulted, but I submit that under the circumstances there was nothing else that Mr. Aberhart could do. The province did everything in its power to avoid default, but defeat came nevertheless. And now there are those who say that Alberta should have accepted the loan council.
I have not discussed the significance of the loan council; when the time comes I shall do so. But it was utterly impossible, as we understood it, to put in social credit if Alberta subscribed to a loan council. Whether rightly or wrongly I know not, but as I understood it, the day we signed the loan council we signed away all possibility of putting in a social credit system, which was the thing we were elected to do. That is why we had to resist the loan council in the form in which it was, as I understand, presented to us.
Since Mr. Aberhart took charge of the Social Credit government they have done everything in reason that lay in the power of man to eliminate the unnecessary costs. There were in the province departments in which thousands of dollars a month in extra costs were eliminated. Then the 1936 budget was brought in. The bank's report refers to that budget. May I give the words in which the budget is referred to-and please remember that I am not speaking as a social crediter, but as an ordinary Canadian to Canadians asking them to help us face the situation that confronts us, and to look at it in a plain common sense, orthodox way. Here are the words, at page 34:
While final figures are not yet available, we estimate that in the 1936-37 year the province covered all its current and capital expenditures, redeemed $1,600,000 of debt, and also provided funds to meet some two-thirds of its share of relief costs.
It would be difficult to find a better record than that, let the administration be the most orthodox on earth.
Then came the 1937 budget, the budget that is causing all the trouble in Alberta

to-day. And remember that the trouble is from the Social Credit standpoint, and not from the orthodox finance point of view. This report is written from an orthodox financier's standpoint. I contend that, from that standpoint, it is somewhat unjustified. Here are some words which are strikingly significant, dealing with the present budget, which has been postponed in Alberta because of the activities of the more determined social crediters:
Attention should be drawn to the determined effort to increase the revenue during the fiscal year which has just ended and that which is now beginning. We are of the opinion that the scale of taxation in Alberta in 1937-38 will be approximately the same as in the other prairie provinces, and we are not prepared to say that a further increase in taxation would be practical or desirable under existing conditions.
May I interpose to say that if there is nothing else you can do, what can you do? The report declares that everything has been done that could be done. Then how can we expect more? The report continues:
The amount of the increased revenue which is being utilized for additional expenditures on ordinary account may be estimated at $1-2 millions compared with 1935-36. As in the case of the provinces of Manitoba and Saskatchewan we are prepared to say that expenditures could not be kept down to the low point of the depression years, and that some increases were inevitable. Education and health services have to be maintained, and attention must be paid to the preservation of the road system. The appropriations for the first two mentioned services are still on the low side.
May I interpose again. Everything has been done that can be done, according to the understanding of orthodox finance. The report continues:
On the other hand it appears to us that the amount provided for capital expenditures on roads, bridges and equipment in the 1937-38 estimates must be considered rather large if the exigencies of the present financial situation are borne in mind, and we are inclined to think that the program is relatively a more extensive one than is being undertaken by either Manitoba or Saskatchewan.
I am not prepared to say that there is any injustice in the conclusions of the report. But because of the topographical conditions of Alberta it must be remembered that it is extremely important to keep those roads up. That is the way the people feel, and that is the way the government must feel.
Now going on with what the province has done, we wish to guarantee our interest rate; Mr. Aberhart has declared that over and over again. We wish to secure the principal for those to whom we owe. It is largely to maintain that integrity of the principal, and to

Alberta Financial Situation
ensure the interest which we do undertake to pay, that we have leaned toward such extreme measures as in some respects we have taken in Alberta. What further could they possibly have done? What further could any government, be it Liberal, Conservative, U.F.A., C.C.F. or any other brand, have done? What could be done if a new government were elected?
Now let me deal for a few minutes with what Alberta needs. I quote again from the bank's report:
The revenue and capital receipts anticipated for 1937-38 will be sufficient to cover all ordinary expenditures, all capital expenditures, and the province's share of unemployment relief costs.
It then goes on to say:
We find that Alberta can maintain its governmental services on as favourable a basis as Manitoba or Saskatchewan -without receipt of additional assistance.
Right here a mistake has been made in the bank's report. The author of the report has assumed that the new budget has functioned until it has produced results; which is not so, for the new budget is not yet passed- What we must have is sufficient to carry on with until the new budget begins to function. Alberta might be able to supply her own needs after her new taxes begin to yield revenue; but she needs money now. If that money is denied, she will suffer. This point should be brought to the attention of all hon. members. The reduction of the interest rate is not helping people as individuals in Alberta. By that I mean it is not helping the farmer to put in his crop or to supply the needs of life; it is a financial consideration of the government. It is not helping the people individually; it is helping the financial position of the government. If we deny Alberta the assistance she asks for, we shall injure the people themselves, who, according to every standard by which you can measure men and women, have done the best that lay in their power to get themselves honourably out of the debt situation in which they have unfortunately been placed.
Now whence is Alberta to get the money? She must get that money from the federal government. There will be many people, as there already have been throughout this country, who will say: Yes, Alberta comes to us and asks for Canada's money. As though Alberta were not a part of Canada! But the people of Alberta have been paying revenue to the government of Canada. These many years, they have been paying their full share of the tariff levies, amounting to perhaps 819,000,000 a year more than they are getting out of the tariff directly. Alberta has been paying her full share of the excise levies, the
levy on sugar, on matches, on wines, on toilet preparations, toilet soaps, cigars, and so on up to the full limit of the twenty-two items listed in the return given to the hon. member for Temiscouata (Mr. Pouliot) on January 28 last, sessional paper 125. Alberta has contributed the money under these items just as much as the people of any other part of the country. When she asks for a share of that money back, she is asking only for what she has a just right to. And she is asking it of the government to which the money was paid. She pays her full share of the dominion sales tax, of the revenue from stamps, and many other items of revenue which are collected regularly in this country. To the federal government the people of Alberta must look for protection from depressions. It may be argued that the depression is beyond the power of any government to deal with, but if any government is to deal with depression at the present time, it must be this dominion government. She has to look to this government, which should be her protector against discrimination in regard to price spreads, which are onerous indeed in their effect upon a province producing mainly primary products. To whom can she possibly go for assistance if not to this government; and who in justice can deny such a request?
There is one more point that should be borne in mind. The money which Alberta has saved by cutting down the interest on her bonds is going to help that province pay her relief costs, and to that extent it is relieving this government of a certain portion of its burden. If that is not so, I am subject to correction.
Considering the fact that a careful review of the financial history of Alberta shows that the main causes of Alberta's troubles developed between 1905 and 1922; remembering the further fact that the present government of Alberta is in no way responsible for the deplorable conditions that had come into existence in that province by 1935; bearing in mind that the present government has ably, earnestly and honestly striven to check the growth of debt in Alberta, surely every hon. member must find that there is being rapidly dispelled from his mind any predisposition he may have had against the Aberhart government. And there are other matters we must not forget. The present economic system is breaking down. Debts are becoming intolerable, yet they continue dangerously to increase. We must find a way out. Who can be sure social credit is not that way out? We believe it is. Certainly he is unwise who obstructs the development of social credit, and the government that obstructs that development will be unwise also.
Alberta Financial Situation

It will stand to the lasting credit of the right hon. the Prime Minister (Mr. Mackenzie King) that he has made public pronouncement on several occasions that he would do nothing to interfere with the bringing in of social credit in Alberta, and I feel sure that if there is any injustice in this matter, as we believe there is, it is entirely without the will or disposition of the right hon. gentleman or any member of his cabinet. We do feel that there is an element of injustice and discrimination, and that is why I am putting this matter before the sympathetic members of this house this afternoon. The Liberal party prides itself upon its record. Any discrimination against Alberta at this critical moment will be long regretted by Canadians. Little or no harm can be done by granting help to Alberta. Great harm may be done by denying that help. Having regard to all these considerations, I urge the government to disregard the recommendation of the Bank of Canada and to grant Alberta financial assistance pending the findings of the royal commission that is to be set up.


René-Antoine Pelletier: Mr. Speaker, in rising to speak on the second reading of this bill I hasten to say that I am not looking for sympathy. I am looking for justice. Just before the house adjourned at eleven o'clock on Wednesday last the Minister of Finance (Mr. Dunning) laid on the table a report of the Bank of Canada on the financial position of the province of Alberta, dated April 7, 1937. We had no opportunity to study this report that night, and this is the first opportunity we have had to make any observations with regard to it.
May I express great pleasure on noting that the condition of the province of Alberta is such that it does not require assistance? At the same time I should like to extend my sympathies to the people of Saskatchewan and Manitoba because of the situation in which they find themselves. The report admits that because the government of Alberta reduced the rates of interest payable on its bonded indebtedness, thereby saving the province some $3,400,000 per year, the province will not require any financial assistance from this government in order to carry on its administration-a most unique achievement in administration in the west and elsewhere, since I note that the province of Quebec expects a deficit of some $70,000,000 during the course of the present year. At first glance, therefore, financially speaking it would appear that in the province of Alberta at the present time all is serene; but closer inspection of this report reveals some rather unusual statements.

In the first place, the report begins by saying that the bank was charged with an examination of the financial position of the province of Alberta along lines similar to those followed in Saskatchewan and Manitoba. In part the report states as follows:
As regards Alberta, vre must note, in the first instance, that the decision of the government to pay only 50 per cent of the interest due on bond issues and savings certificates has had a major effect on the budgetary position and on the amount of the province's cash requirements.
It seems to me, Mr. Speaker, that this is sufficient to indicate a definite fact, since this is a financial report; but the bank does not stop there. It goes beyond all that and mistakenly imagines that it is its business to criticise government policy in a report intended to disclose a financial position only. By what possible stretch of the imagination can the Bank of Canada conclude that its opinion was asked with regard to government policy? What possible business of theirs was it to say in a report of this kind-and I repeat the words "of this kind"-such words as these:
Yet we cannot report on the financial position of Alberta without expressing regret that this repudiation of interest liabilities should have taken place.
And further on:
There are legal and moral reasons for the fulfilment of contracts-
And still further:
Default produces a lack of confidence-
I submit that statements such as these have no place in a report of this kind. The bank was directed to examine into the finances of the province, not to criticize government policy. The report states that because Alberta reduced the interest on its bonds and securities, its cash position is such that it does not require assistance. That conclusion appears to be based on facts and therefore must be accepted; but what does this reduction of interest really mean? It simply means that this federal government has not had to advance funds for the payment of the relief bills of that province, as it has had to do in connection with Manitoba and Saskatchewan. Alberta has bettered its cash position by $3,400,000, and needs no assistance.
I am glad this report follows so closely upon the discussion in this house recently in regard to refunding operations in Saskatchewan. I am sure hon. members will recall vividly the vast amount of debt lifted off the backs of the people of that province, in part by this government. I believe the total was about $75,000,000, the share of this government being something over $18,700,000.

Alberta Financial Situation
I hesitate to make my next remark in the absence of the Minister of Agriculture (Mr. Gardiner), but perhaps he may be made aware of the statement. We recall how the Minister of Agriculture swelled with pride at having so materially assisted in improving substantially the financial position of the province from which he comes. Remembering that, in the final analysis, public revenues must be extracted from the* public, how then can it be maintained that a province which improves its lot by 3-4 millions ceases to require assistance, while another one having bettered its position twenty-five times more than the first must continue to receive assistance? Either the Bank of Canada has mislaid logic, or else the financial administration in the second province was twenty-five times worse than in the first one. If this be true, then Victor Hugo's immortal story of reward and punishment could nowhere be more justly applied than in this case. All hon. members recall the story of the individual who permitted a cannon to become loose in the hold of a ship and then, at the risk of his life, succeeded in spiking it in place again. The offender was decorated for his bravery, and was later shot because of his negligence.
I deeply sympathize with the people of Saskatchewan and Manitoba. They will be taxed to the breaking point to pay the bondholders their blood money and will be compelled to borrow to feed themselves. In the province of Alberta, too, they have tried in every possible way, short of selling themselves into abject slavery, to refund their debts. But the conditions they were asked to fulfil were conditions differing from those facing the other provinces. It was held at that time that Alberta must agree to a loan council scheme before they would be granted any money; but since that time other provinces have been granted funds time and again without being compelled to agree to any such refunding scheme. So I say the province of Alberta has definitely tried to materially improve its conditions. They found that interest charges and payments outside the province were heavy and certainly not warranted by the conditions obtaining at that time.
The people of Alberta have faced the depression with courage, and plenty of it. The farmers cheerfully carried on although their revenues decreased. At the same time wages of employees decreased. Everybody's revenue was smaller, and the people came to the conclusion, as the Prime Minister who is not now in his seat has often told us, that the wages of money must not be greater than the wages
of men. Could the Prime Minister to-day stand in his place and blame those people for following the counsel which he himself has given, and which to a great extent he has offered in many parts of western Canada?
Notwithstanding the bank's report, let us see if Alberta deserves consideration. I believe that on this point my hon. leader (Mr. Blackmore) has shown that so far as orthodox finance is concerned, Alberta has tried to do its share. I do admit that I have not the patience of my leader, and on questions such as these I hesitate to say that Alberta should not have gone ahead a bit faster simply because she required assistance. When the bondholders of the province saw their plight, they should have given consideration to the matter. They had twenty years in which to act, but they did not choose to do so. They kept insisting on the last farthing of their interest. So I say: Is it any wonder the people of Alberta finally came to the conclusion that the wages of money should not be greater than the wages of men? I do not intend to go further on that point.
I wish simply to say that I am not a provincial member and I am not concerned with the manner in which they are doing things in _ the province of Alberta. But I am a citizen of Alberta, and as such it is my duty to stand in my place and to protest against the discrimination by this government against Alberta. I know the Minister of Finance (Mr. Dunning) will rise in his place and say: "Why, this was done at the request of the premier; this was done by an impartial commission; this was done by someone with whom we have no connection"-but that is not true.
The Bank of Canada is the creature of this government, and I say the government cannot forever escape responsibility for the actions of its creature. The government cannot forever hide behind commissions; it cannot forever evade responsibility by hiding behind such bulwarks. Commissions are falling upon Canada like April showers. We have a commission for this, that, and every other thing, and we seek to place these commissions in front of our government to the point where we have succeeded in creating government within a government. Perhaps by that means we are trying to escape our responsibility. I repeat, this government cannot forever get away from its responsibility by hiding behind a bulwark of commissions. The Bank of Canada is a creature of the government, and so I say that the government cannot hide behind the bank's report which discriminates against the province of Alberta
Alberta Financial Situation

In conclusion, I should like to say this, particularly to the press of Alberta. I am not, as I said a minute ago, concerned with the actions of the provincial government of Alberta or with the actions of the supporters of the premier of that province; but I must say that the press of Alberta has definitely publicized and grabbed hold of the dissensions of which we are aware in the ranks of the supporters of the premier. The press has publicized the antics-I call them antics-of certain supporters; there is no doubt about that. I believe the press of Alberta would be well advised not to seek to gain political advantage or political ends by attempting to destroy a patty within its own ranks; but they are doing that by grabbing hold of the dissensions within the ranks and publicizing the facts far and wide. I should like to warn the press of Alberta that it would do well to examine upon what monstrous fallacies some of these dissenters have suddenly swelled up with authority and have suddenly become awakened to their new born knowledge of the complete autonomy of the province. I say that the press of Alberta would be well advised to consider these facts. Why? Suppose they succeed- and I doubt that very much-in gaining their political end of destroying or defeating the government by that sort of propaganda; what would happen? Would it be a Liberal administration? Surely not.


An hon. MEMBER:: Hear, hear.


René-Antoine Pelletier: It will not be. You have simply to look at the reports of the province between the years 1905 and 1922, where the record of the government then in power is so clearly written; if that is done, hon. members will realize that there will never be that kind of administration in Alberta. Read the report, and you will see what loose administration did for the province between 1905 and 1922.
So far as Conservative thought in the province is concerned, may I say to the leader of the opposition (Mr. Bennett) that so far as Alberta is concerned we consider he is fully capable of representing every vestige of Conservative thought in that province, and no thought from another source is required.
In conclusion, I Should like to protest emphatically against the discrimination made in the report against Alberta. Unlike my leader, I am not in a position to know whether Alberta does or does not want any money. For my own part I sincerely hope that they will not have to borrow any more. What I want to point out is that we as members of this House of Commons should be prepared to give the province of Alberta every consideration if ind when any consideration is required so that

it may not be said in the outside world that Canada punishes those who dare to express political ideas which are not considered as orthodox. In the name of democracy and liberty, therefore, I believe it is our duty to protest against discrimination.


Mr. C. E. JOHNSTON (Bow River):: Mr. Speaker, I should like to say a few words with regard to this report. The hon. member for Saskatoon (Mr. Young) received considerable. applause this afternoon when he said that when he found a report of the tariff board to be not in sympathy with the principles of the party in power, he felt there was something wrong. As I read over the report of the Bank of Canada I am inclined to believe that there is something wrong. As the previous speaker (Mr. Pelletier) said, the Bank of Canada can be said to have been created by this government, and therefore it is bound to carry out the policies of this government. As I read the report I cannot help but feel that that is exactly what is taking place. I am not sure that this bank report is such an impartial thing. It seems to me to be prejudiced right from the first. I do not think the Bank of Canada was ever asked to comment upon the policies of any government, yet we find the following on page 37:
In our report on the financial positions of the provinces of Manitoba and Saskatchewan, we expressed the opinion that the dominion government would be justified in extending temporary financial aid, pending the report of the commission referred to above.
And again:
Yet we cannot report on the financial position of Alberta without expressing regret that this repudiation of interest liabilities should have taken place. There are legal and moral reasons for the fulfilment of contracts,-
What business had the Bank of Canada to say whether the reasons were legal or moral? I continue:
-but, leaving these entirely out of consideration (although we do not minimize their importance) we believe that self-interest alone should have induced Alberta to fulfil its contractual liabilities in respect of interest. Default produces a lack of confidence which is not confined to prospective buyers of government bonds.
And again:
Whatever opinion may be held in regard to the non-payment of interest at contractual rates, the fact remains that this is the policy which has been adopted and is in effect.
The hon. member for Saskatoon referred to the tariff board carrying out certain policies, but according to this report the Bank of Canada is reporting on the policy of the government of Alberta. I do not think that is in the best interests of this government or

Alberta Financial Situation
of any commission that may be set up to investigate the financial position of Alberta. Politics should have been left entirely out of the matter. Whether or not the social credit government of Alberta is a success is no business of the Bank of Canada. The Bank of Canada was set up for financial reasons. They should have reported on the actual conditions, and then this house could have decided whether or not the report should be accepted or whether or not assistance should be offered to the province of Alberta. I am convinced that there has been discrimination. I may be wrong, and because of that doubt I should like to read a few figures which were tabled in this house.
I shall quote first from sessional paper 261 which outlines the appropriations made by orders in council. These amounts were not handed over because of statutes passed by this house; they are not similar to the JIS.OOO.OOO granted to Saskatchewan and the $8,000,000 to Manitoba. These moneys were granted by orders in council. Under P.C. No. 278 Saskatchewan received $5,005.44. Under P.C. No. 279 of February 4, Manitoba received $2,214.74. Under P.C. No. 2137 of July 24, Alberta received $21.69. Under P.C. No. 3835 of December 17 Alberta received $3.79.


Charles Avery Dunning: Is my hon. friend quoting from a statement of loans? I cannot identify the paper he is reading from.


Charles Edward Johnston: These are the amounts given under orders in council.


Charles Avery Dunning: No.


Charles Edward Johnston: They were renewal loans made by the dominion to the provinces of Alberta, Saskatchewan and Manitoba since October 15, 1935.


Charles Avery Dunning: The misunderstanding between my hon. friend and myself is that he says the moneys were given whereas, in fact, the moneys were loaned. There is a difference between a gift and a loan.


Charles Edward Johnston: Yes,
there is.


Charles Avery Dunning: Alberta had the right to borrow under precisely the same authority and she did it to the extent that she desired. She was not debarred in any way. If there are no amounts there for Alberta, it is because she did not apply for them during that period.


Charles Edward Johnston: The more credit to Alberta.


Charles Avery Dunning: I am not trying to discredit Alberta.


Charles Edward Johnston: I was just giving the moneys loaned to the provinces.


Charles Avery Dunning: Surely my hon. friend should not quote those in an attempt to prove discrimination.


Charles Edward Johnston: I notice that considerable emphasis was placed in the report on the road construction which has taken place in Alberta. The report criticized the province very severely for its road program. I should like to quote from an article which appeared in the Ottawa Citizen of this morning with regard to the same type of construction in connection with which Alberta is criticized for spending too much. During the same period Manitoba, Saskatchewan, Quebec and Ontario were spending much more than Alberta. I quote:
Nevertheless, expenditure on highways is a sound investment, and both provinces will be repaid in the long run. The tourist harvest is only in its infancy.
That referred to expenditures in Ontario and Quebec. The sort of expenditure for which Alberta was criticized by the report is advocated in this article as being a sound investment. I should like to quote from sessional paper No. 192A, being a return showing what sums of money were allotted by the federal government in 1936 on relief work projects in connection with the various provincial governments, and what sum has been allotted by the federal government to each separate province for such projects. The figures given are as follows:
Nova Scotia	 $ 25,000
Quebec	 346,772
Ontario	 372,133
Manitoba	 266.667
Saskatchewan	 69,000
British Columbia	 296^851
Alberta	 Nj]
I have before me sessional paper No. 192B, being a return showing how much the federal government contributed to each of the provinces, last year and in the current year, in the form of cooperative public works and enterprises, to assist in the relief of unemployment. The figures are as follows:
Yukon	
Northwest Territories British Columbia.. .
Saskatchewan	
Manitoba	
Ontario	
Quebec	
Nova Scotia	
Alberta

Nil


Charles Avery Dunning: Would my hon. friend
say that that is discrimination?


Charles Edward Johnston: The minister may be correct in saying that it is not
Alberta Financial Situation

discrimination, but I contend that if Alberta had not requested money, on this basis and now requires assistance, she should be given assistance. It seems to me that that is logical. The fact remains that she has not received the financial assistance that the other two provinces have had. That in itself, I think, is evidence that the province has been discriminated against. In my opinion this report isv based upon political presuppositions and should not be taken into consideration by this house. When the government makes its decision on the matter it should disregard the report and should assist Alberta if Alberta needs its help.


Richard Bedford Bennett: Mr. Speaker, in view of
the lateness of the hour, the desire to conclude the business of the house, and the intention of the minister to make a statement, I shall be brief. The minister does not regard what has taken place as constituting discrimination against the province of Alberta. I accept his statement that there is no intention to discriminate, but the result is discrimination. That is the point I endeavoured to make last evening, and I still think it is warranted.
I shall not discuss the merits of the report; that has been done by hon. members to the left. I suggest, however, that it makes clear that had Alberta been provided with funds to the same extent as were other provinces, and had it not made the effort to meet the situation that it did make by means of fresh taxation, undoubtedly the position qua the federal government would have been much better than it is now. For whatever else may be said about the report this at least is evident, that it indicates that the present provincial government has not been averse to the imposition of fresh taxation in an endeavour to meet the extraordinary conditions which confronted it. It is also quite apparent that had that government been less anxious to balance its budget, less concerned about making a better showing as between income and outgo, it would have secured assistance from this government.


Charles Avery Dunning: Of course the loan privilege has been available right along. That is correct.


Richard Bedford Bennett: I think that is clear.


Charles Avery Dunning: As far as the loan privilege is concerned.


Richard Bedford Bennett: Instead of doing that the government of Alberta imposed on the people fresh taxation, a two per .cent sales tax and other taxes, and reduced expenditures

to the point indicated. It is a matter of some satisfaction to me to read that report. From 1905 to 1922 constitutes one period. During all that period there was none other than a Liberal government in control in Alberta, and during that time the public addresses I made about the Alberta situation were mainly confined to its financial position. I pointed out that in the early years of the province they exhausted the whole field of taxation, with results which were inevitable, although I had not expected that in my lifetime I would find a report such as this. What followed from 1922 until the advent of the present administration was a government by the United Farmers of Alberta. In the early days of their administration, as will be apparent from looking at the report, the situation was not bad. Latterly they became careless-to use a mild term. The result is that the present government succeeded to an intolerable condition, one which represented obligations on the part of Alberta far beyond those of the other prairie provinces, obligations in connection with telephones, railway guarantees, irrigation guarantees, all the results of what may be termed a reckless expenditure of public moneys on matters for which no government, in the opinion of most of us, should undertake financial responsibility. That being so, I think the present government in Alberta has not received the financial assistance to which it is entitled. I say that not absolutely but in comparison with Manitoba and Saskatchewan.
I am not going to dwell upon this topic. Hon. members to the left have referred to it at some length. This, however, I will say. The minister made a declaration of policy, and it involved the idea that the western provinces were to care for themselves. It became essential, in the judgment of the minister and the government, to adopt another view, but in the meantime the injury to Alberta had been done; I do not think that can be successfully controverted. The minister pointed out on other occasions and indicated last night his dissent from the views I expressed in connection with this matter. But I merely put this to the government: had Saskatchewan and Manitoba received the same treatment as Alberta they would have defaulted.


René-Antoine Pelletier: Right.


Richard Bedford Bennett: That, I submit, is the test. I think it is a fair test. Had they received the treatment accorded to Alberta they would have defaulted.


René-Antoine Pelletier: There is no question about it.

Alberta Financial Situation


Richard Bedford Bennett: Instead of defaulting in toto, the government of Alberta imposed fresh taxation, and paid only half of the interest called upon by the contract. The province could not pay the whole of it unless it took the money from other services, including relief, and then borrowed from the present federal government.


Charles Avery Dunning: Which is precisely what the others did.


Richard Bedford Bennett: I was going to say-which was the policy adopted, not by the present Minister of Finance, but by his predecessors; that is, that when a province found it essential to secure fresh money to enable it to meet its obligations, both principal and interest, we did advance by way of loan the money for that purpose. As I have said previously, I am not sure in the light of subsequent events that the policy was wise, but we believed that at that critical time it would not be wise that the province should default. This report would seem to indicate some belief on the part of the Bank of Canada that that was a sound view.
But the difficulty is that we have permitted one province to default. The federal government says that that is because the province of Alberta did not take appropriate steps to secure for itself the money that might have been available to prevent default. That is the position of the federal government. On the other hand the province asserts that the attitude taken by the federal government was such as to make it impossible for the province to survive and pay the whole of the interest on its obligations. I am not going to discuss that issue, beyond saying that I feel a warm interest in that great province. I saw it come into being on September 1, 1905. I had been a member of the old territorial legislature before it was a province. I warned-I trust no one will think the word is too strong-the government of the day of what the inevitable result must be, with a population so small and an area so great. The illustration I used to use was that there was a new book opened without an entry in it; it was full of white pages, and we began to write our history, and our financial history is a long series of extravagances that culminated in 1922 in the then government being destroyed. There was some improvement, and then events followed quickly to the present position.
The second point I desire to make-and I am not going to develop it-is that I think Alberta has the right to say it has been discriminated against by the Bank of Canada. I have explained to the minister what I mean
by that. It is only necessary for me to say that the only province in Canada to which an advance was made by the Bank of Canada was Saskatchewan, and that Alberta applied to the bank and was refused. The answer is that it was fully believed by the bank that a loan council was to be established such as Australia had, and in the light of that belief the bank acted. I will not traverse the matter further than to say that I cannot but think that that action constituted discrimination against Alberta.


Charles Avery Dunning: But they were offered the same.


Richard Bedford Bennett: They were offered the loan council. The minister will recall what took place in this chamber. There was a modification of the proposals which came after they had refused.


Charles Avery Dunning: No.


Richard Bedford Bennett: Then the minister said he
made known the fresh proposals to the province of Alberta.


Charles Avery Dunning: That is right. That was not after the default, though. My right hon. friend is in error.


Richard Bedford Bennett: Oh, no. The minister misunderstood me. It was after the first proposals had been declined: that is what I wanted to make clear. The modified proposals were not presented in the same way that the matter had been dealt with in the first instance, for reasons which the minister made clear last year. On the whole, therefore, we have some reason to complain. I do think that on the strength of that report the government should have included a conditional item in the estimates. Alberta cannot get any money from the federal government, but this report says that if the province puts itself in the same position as the other two they will recommend that advances be made. Let us assume that Alberta says to the unfortunate lenders, "We are going to pay you your interest in full;" this government cannot assist the province. But this report states that if Alberta had put herself in the same position, qua the federal government and qua her creditors, as the other provinces did, recommendation would have been made that assistance be given.


Charles Avery Dunning: Because they would not have had the cash then to carry on the normal functions of the province.


Richard Bedford Bennett: I am not talking about the past. I quote the language of the report itself, which says that mistakes of the past will not help the immediate moment.
Alberta Financial Situation


Charles Avery Dunning: Not past, I said "cash." They would not have had the cash. They would not have had the money to carry' on the normal functions of the province.


Richard Bedford Bennett: The fact is that by cutting the interest rate they had an additional sum for general services.


Charles Avery Dunning: Three and a half millions.


Richard Bedford Bennett: The figure is $3,400,000. That additional sum thereby became available for relief and other purposes, and that is not the sum which it was necessary to ask the federal government to advance. Now assume that the government of Alberta, in order to meet the views of the Bank of Canada and restore its credit, said, " From now on we will pay all our instalments in full," there is no provision in the estimates to enable such advance to be made, and the legislation that is before the house in the name of the Minister of Labour is not broad enough to deal with [DOT]that situation. That is my difficulty.


Charles Avery Dunning: I will deal with that.


Richard Bedford Bennett: If, for instance, it is contemplated that Alberta may receive money to enable her to meet the situation, the fact that the province has met it in a special way results in her being deprived of any help; and if, in the face of that, She endeavours to make other arrangements, this government should be in a position to make advances. And it is not. In other words, if the supply bill contained a provision by which, in a certain contingency, Alberta could be placed on a par with Saskatchewan and Manitoba, then certainly I as an individual member of the house would be content.
At page 40 of the report the bank states:
Our recommendation of dominion government assistance in the cases of Manitoba and Saskatchewan was based on urgent needs of those provinces for cash during the time required for the examination which will be conducted by the royal commission.
That is Alberta's position, and there is no provision to meet it.
If Alberta were now paying full interest on its obligations, the province in 1937-38 would presumably have to borrow its full share of unemployment relief from the dominion, and on the basis of budgetary estimates (not including debt retirement) would have a cash shortage of about $600,000. Its position would be a little worse than that of Manitoba, but distinctly better than that of Saskatchewan; and a claim for assistance would, no doubt, be considered in the light of these facts.
Now, h-ow can that be done under the present arrangement? The premier of Alberta and his government may say, "Pending this commission's report, we will pay our coupons

in full, and we will then go to the federal government and ask for advances to enable us to discharge our obligations which heretofore have been paid out of local taxation." There is nothing in the statute that enables them to do it. That is a discrimination.


Charles Avery Dunning: If that is the only discrimination which my hon. friend thinks exists, I am pleased indeed.


Richard Bedford Bennett: I have traced what I regard, but the minister does not, as a discrimination. But it is real, because if I were responsible for the government of Alberta, in the face of this report I would say, "Well, a royal commission is going to deal with this matter, and in order to ensure that our position will be satisfactory from the standpoint of the Bank of Canada, we will provide that our treasurer pay the coupons as they fall due between now and the time the report of the royal commission is submitted." Can the minister provide the necessary money for that purpose?


Charles Avery Dunning: I will deal with that.


Richard Bedford Bennett: If he says he can, then I am very much easier in my mind. If he says he cannot, then I submit that there has been created a situation that is unfair, unjust and inequitable according to the terms of the report itself. For in the estimates we have provided for the two provinces of Saskatchewan and Manitoba. And remember, the government was dealing with a budgetary condition in future, and not a present condition; and as it was. not, dealing with the present, it follows that to put the province on an equality with Saskatchewan and Manitoba, provision should be made to deal with whatever situation the actual results of the present budgetary provisions disclose. But that has not been done. If the minister tells me that there is authority under the law to enable him to deal with the situation, I shall certainly be not only content but pleased to think that provision has been made for a contingency which, in my opinion, may very easily arise.
There are many aspects of the subject that might be discussed, but in view of the lateness of the hour I desire only to summarize the position as it appears to me, and I suggest that if it were possible in the supply bill to add a section that would provide for payments in the event of the contingency arising which is contemplated by the report, then there would be no cause for complaint on the ground of discrimination. I hope the report will be printed the same as the others.
Hon. CHARLES A. DUNNING (Minister of Finance): It will be. All members of the

Alberta Financial Situation
house will agree, I think, that no matter within the purview of the administration of the government of Canada during the past number of years has been more difficult than the type of problem which is now under discussion. Whether it relates to one province or another, it is embarrassing not only to the government, but also to the members of the house. We are here, sir, I take it in the relation of trustees for the people of Canada in respect of the moneys which come within our control-and I am speaking now of control by parliament. Unfortunately as a deliberative assembly we suffer from the peculiar handicap associated with a federal system of government. We all come from provinces having local self-government, provincial self-government, within the ambit of our constitution. And so at times there must be in the mind of every man here in some degree a conflict of interest, if he follows the maxim enunciated by Burke, one which has been often expressed in this house, that the member of parliament is a representative of all the people of Canada, rather than merely of the people of his particular constituency. In our case it is complicated further by the fact I have just stated, that we have our provincial entities with their responsibilities and their peculiar constitutional relationships with the federal government. I do not intend to labour the point, but problems of this kind do emphasize once more how difficult a country Canada is to govern.
I listened with great care to the leader of the social credit party (Mr. Blackmore) and I know that other members of his party will forgive me if I accept his assessment of the value of the report made by the Bank of Canada upon the affairs of Alberta, rather than the assessment made subsequently by the hon. member for Peace River (Mr. Pelletier) and the hon. member for Bow River (Mr. Johnston). I thought the leader of the social credit party was restrained in his remarks and very fair with respect to the work done by the bank in this investigation. In passing I just wish to mention, in fairness to the bank-and I suggest it particularly to the two hon. members who were criticizing the bank-that the Bank of Canada made its examination on the specific request of the premier of Alberta, who asked for what? He asked for an examination based upon the same principles as the examinations conducted in Manitoba and Saskatchewan. Presumably the premier of Alberta knew the basis of those examinations and expected to get the kind of report which was made with reference to the other provinces. I think any impartial reader of the report will say that if the
criticisms of my hon. friends from Peace River and Bow River are well founded with respect to this report, they are equally well founded with respect to the other two. I disagree entirely of course with their view in that regard. I believe all the reports are models of restraint, and deal in clear-cut fashion with the problems set before the bank for examination. In fact I believe that we have here an indication of the valuable service which a central bank can render to a country in times of difficulty such as these.
I shall go back but a moment to the past, referred to by the leader of the opposition (Mr. Bennett)-a past as far as this government is concerned. It will be remembered that a year ago we faced a problem in connection with all four of the western provinces, including British Columbia. This government reached the conclusion, after grave, lengthy and serious deliberation, that the dominion could not continue to take over the debts of the western provinces; in other words, the dominion could not continue to advance money to the western provinces to enable them to pay off their debts. Regardless of the other purposes for which we might consider it desirable to advance money to those provinces, we did not deem it sound policy to get into the position where the principal creditor of the provinces would be the federal government. We believed, and believe still, that such a relationship would negative our constitutional relationship as between province and dominion. We did not believe that the whole people of Canada were called upon to assume the debts of the provinces. So we said there would be no more advances to enable any province to meet maturing obligations.
Sir, we applied this policy absolutely and entirely without discrimination. We had applications from all the western provinces. Then, in an attempt to meet the situation, the dominion-provincial conference came to the unanimous decision to adopt a modified loan council idea, and they had our assurance that we would place the matter before parliament. While that process was going on maturities took place in British Columbia, Alberta and Saskatchewan, and I think a small one in Manitoba. It seemed to us that anything which could be done to anticipate the coming into force of the then contemplated loan council legislation, in order to prevent any of these provinces from being the first among Canadian provinces to default, would be worth while. But of course in order that it might be effective the province concerned necessarily had to consent to take
Alberta Financial Situation

advantage of the loan council plan. British Columbia said, no; British Columbia got no advance to meet its maturity. Alberta said, no; Alberta got no advance to meet its maturity. Manitoba said, yes, conditionally; we were not in a position to accept conditions, and Manitoba got no assistance. Saskatchewan said, yes, we will go in. But by the time they said yes, this government had no authority from this parliament to loan money for that purpose. The old peace, order and good government legislation had expired and we had no authority. They went to the Bank of Canada, and the Bank of Canada, without being prompted by this government in the slightest degree-in fact I had no knowledge of the initial negotiations-expressed a willingness to advance the money to save default, provided it had satisfactory assurance from the government of Saskatchewan that it would introduce the necessary provincial legislation to enable that province to enter the loan council scheme, and provided that the bank had assurance from the government of Canada that it intended to proceed with the loan council scheme. Saskatchewan gave the necessary assurance. Naturally we also gave the assurance, and the funds were advanced to Saskatchewan by the Bank of Canada to meet that maturity. Were it not for that particular instance there would be no question of misunderstanding between the leader of the opposition and myself. To him the history of that transaction involves discrimination against the other western provinces. To me it does not, because I have been conscious of nothing throughout this whole difficulty more than a desire to treat each of those provinces absolutely equitably. When I say equitably, I do not mean equally. Equal treatment is impossible. Equitable treatment is possible, and I maintain has been extended by this government since we came into office. What do I mean by equitable treatment? I mean the establishment of a principle which is available to all, which applies equally to all, and which depends for its working upon acceptance by each.
The hon. member for Bow River read a list of loans, showing as he said discrimination between Alberta and the other provinces. The only reason the province of Alberta did not get money during that period is that it did not ask for it. Surely it is a poor argument to say that when we have here on the statute books legislation which would enable the province to borrow, because she did not choose to avail herself of it, therefore we discriminated against her.


Richard Bedford Bennett: What does the minister
mean by saying she did not ask?
(Mr. Dunning.]


Charles Avery Dunning: Last year. My hon.
friend read a list of loans made to the various provinces under the provisions of the unemployment and agricultural relief legislation of my friend the Minister of Labour.


René-Antoine Pelletier: I would like to correct
that statement. It was a list of grants by the Department of Mines and Resources for road construction in the province. I read that from the sessional paper.


Charles Avery Dunning: I am now speaking not of the hon. member for Peace River but of the hon. member for Bow River. Everything which was available to the other provinces was available to Alberta during the past year since the passage of that legislation. I think the Minister of Labour and the Minister of Agriculture will confirm that.


Richard Bedford Bennett: The statement made by
the premier of Alberta is that he did apply for loans and was refused.


Charles Avery Dunning: He has been refused no loan under the terms of that legislation.


Richard Bedford Bennett: What legislation?


Charles Avery Dunning: The legislation of a
year ago.


Richard Bedford Bennett: But there was no loan
council.


Charles Avery Dunning: No, I mean the relief
legislation under which the Minister of Finance was empowered to lend to a province its share of direct relief which the province was unable to finance itself, and also its fifty per cent or other share of the cost of any of the joint works entered into under agreement with the Minister of Labour.


Richard Bedford Bennett: In other words the whole of the cost.


Charles Avery Dunning: The other half being a
contribution, but the Minister of Finance was empowered to lend the half which must be supplied by the province. The other provinces took advantage of that in varying degrees, but precisely the same machinery and precisely the same treatment were available to all the provinces. My hon. friend the Minister of Agriculture (Mr. Gardiner) points out that the other provinces did it in advance, while the province of Alberta spent its own money and afterwards applied to us, and in spite of that fact they got the money last year to the extent of over 5600,000, if my memory serves me aright.


Richard Bedford Bennett: That would be a proper way under the act, I should think, to come in afterwards and ask for it.

Alberta Financial Situation


Charles Avery Dunning: The agreement, of
course, must be antecedent. The same applies with respect to seed grain. A year ago Alberta did not ask for guarantees with respect to seed grain; it did the business in a different way and secured advances in a different way, under its own special legislation. In Saskatchewan the matter was dealt with by the legislation of a year ago and by guarantee. This year Alberta and Manitoba both decided that the guarantee method was more efficient and probably would tend to bring about better collections of the amounts advanced. Alberta comes along and gets $1,600,000 of a guarantee in connection with seed grain. Saskatchewan gets a vastly larger sum. I ask my hon. friends in the corner, was that discrimination? Saskatchewan gets a guarantee of S6.600,000 for seed grain; Alberta gets $1,600,000. If what my hon. friends refer to is discrimination, then surely this is discrimination also.


René-Antoine Pelletier: That is a different thing.


Charles Avery Dunning: My hon. friend says that is a different thing. Why? Because the basis in each case was the need.
Now I come to the problem which we faced a few months ago in connection with Manitoba and Saskatchewan, following the economic effects of the last crop, or lack of crop. We had this condition. Neither Manitoba nor Saskatchewan nor Alberta could borrow more money other than from the government of Canada. Manitoba and Saskatchewan were borrowing and did borrow to the limit permitted by the legislation of last year, under the agreements to which I have been referring. Alberta has not required to do so to so large an extent, for the reasons set out in the bank's report. She did not need cash from this government for all of the provincial share of relief expenditures because she withheld cash from her bondholders in the form of one-half of the interest on all Alberta bonds, to the extent of $3,400,000 in a full year.


Charles Edward Johnston: That was a direct assistance to the government, was it not, and not to the province?


Charles Avery Dunning: It did not assist the dominion; the province of Alberta decided to do that of its own volition. I am not commenting on the wisdom of that action or anything of the sort, but I can say that it seriously reflects upon the credit of this dominion that one of its provinces should arbitrarily cut in half its interest obligations. As Minister of Finance of this country I have to say that, because it is the truth. If we have three or four or five provinces doing
the same thing it will make matters very difficult for this country and for the people of the country as well.


Mr. LANDERYOU:: It assisted the dominion government; the money was used for relief purposes.


Charles Avery Dunning: My hon- friend is not following my point at all.


Richard Bedford Bennett: The answer is that they can no longer complain that they did not get the money.


Charles Avery Dunning: You cannot have it both ways. If you take $3,400,000 from the bondholders and distribute it in relief you surely cannot justify asking for the same $3,400,000 from the people of Canada for relief. That is taking an extreme view of the case.
We found this condition, as I say. Three provinces could not borrow save from the dominion government. Under what conditions should the dominion government advance money to any province, for the purpose of carrying on the ordinary essential services of that province-not relief, remember, because the legislation with regard to relief provided two things: a cash grant from the dominion and ability on the part of the dominion to lend to the province the whole of the remainder which was the province's share. It was a question as to how far the people of Canada should go and under what conditions the money of the people of the whole of Canada should be granted to the people of a province in order to maintain the ordinary essential services of that province and enable it to meet its obligations.
It was for that reason that the Bank of Canada was asked to examine the situation, by Manitoba and the dominion in the case of that province, by Saskatchewan and the dominion in the case of Saskatchewan. What was the basis of it? The basis was this: First, is the government or the legislature of the province taxing its people to the limit that might reasonably be expected under prevailing conditions; second, is the legislature and the government of the province as economical in its expenditure on services as can be reasonably expected under prevailing conditions; third, what is the cash position? In other words, the first two conditions having been determined as accurate and sound, what then will the set-up be to enable the people of that province to receive a reasonable minimum of essential services from its provincial government? That really was the simple question. It was a question of how much cash was there, not where it came from. What amount of cash would be made avail-
Alberta Financial Situation

able by the budget of the province, having regard to the two factors that I have mentioned as principal factors, that is: are they taxing as much as reasonably can be done, and are they as economical as can be reasonably expected under the circumstances? The reports of the bank on all the provinces go into all those matters very fully, and the leader of the social credit party was very frank in his praise of the dispassionate manner in which that was done in all the reports.
Having reached Alberta, what do we find? We find that because the province is not paying 83,400,000 to its bondholders it therefore has that much more cash which, if it wishes, it can apply with respect to relief, and thus not borrow from the dominion to meet that expenditure.


Richard Bedford Bennett: As it did.


Charles Avery Dunning: As it did to a degree; I think $600000 was borrowed last year. Of course it can do anything else it likes. But the fact is that the bank find they have in sight from their own budgetary position this year, including that saving of $3,400,000, sufficient to take care of all their expenditures, including relief, except funds desired actually to pay off $1,200,000 of Alberta's present debt.


Richard Bedford Bennett: If their hopes are realized.


Charles Avery Dunning: Yes. Well, can it be argued for a moment that when a province has sufficient cash, no matter by what means secured, to meet all its budgetary requirements except the retirement of $1,200,000 of its debt, we would be justified in taking the money of the people of Canada and granting it to that province? That is the whole point. To enable the province to retire its debt, we would thereby be increasing Canada's debt.


Richard Bedford Bennett: But it is not cash which it has, it is only expectations. That is the only point between us.


Charles Avery Dunning: I therefore must rely upon the examination made by the bank. The bank's opinion is that the budgetary estimates of the treasurer of Alberta are reasonable, and that the results may reasonably be expected to be what is forecast.


Richard Bedford Bennett: Although last year they were sadly disappointed.


Charles Avery Dunning: Yes. But they have the advantage of last year's experience in arriving at what the yield of the new tax instituted last year will be this year.


Richard Bedford Bennett: But they had a sales tax last year.
[Mr. Dunning.l


Charles Avery Dunning: Yes, for the first time. And I am saying that the experience of last year certainly will make their estimate for the coming year much more reliable.


Richard Bedford Bennett: It produced less than half of what they had expected.


Charles Avery Dunning: And the estimate for the coming year is based upon last year's experience. The Bank of Canada's opinion is that the budgetary expectations of Alberta may well be realized. If that is so-


Richard Bedford Bennett: " If " is the trouble.


Charles Avery Dunning: If they are even a million dollars out would we be justified?-because remember that $1,200,000 is to be used to reduce the capital debt of the province.


John Horne Blackmore: If the minister would permit me, I should say that that $1,200,000 is to go to cover some of the Alberta savings certificates, and really I do not think we should look upon that in exactly the same light as we would upon a regular debt. It seriously affects the credit of the province.


Charles Avery Dunning: Not from the standpoint of affecting the credit of the province. But I can assure the hon. member that I would like to show him scores of letters-yes, it will run into hundreds-from people who are unfortunate enough to hold Alberta bonds in small amounts, and who write to me protesting bitterly that because they do not live in Alberta and hold an Alberta savings certificate, but instead hold a $1,000 bond of Alberta, they cannot get any money, or, I should say, can get only half their interest. It is only in connection with the savings certificates that an effort is being made to pay off in full. That is the complaint which is made. I am not making it, but I point out to t'he hon. member that in the eyes of those to whom the money is owing under contract their interest is being taken and is to be used, according to the plan for the coming year, to the extent of $1,200,000 for the purpose of redeeming in full the Alberta savings certificates, which are just as much a part of the debt of Alberta as is the bond of indebtedness, the only difference being that they are owed to the residents of Alberta, whereas the poor people who hold bonds in small amounts have their interest cut in half-one of the unfortunate incidents connected with any blanket scheme of arbitrary interest reduction.
However, the point is that if Alberta needed cash this year, subject to imposing taxation, which the bank reports they have done to a reasonable extent, and subject to the economic administration of which there is a slight criticism with respect to the contemplated expendi-

Alberta Financial Situation
tures on roads and bridges, it would be a different story. But they have reasonable expectations of having enough cash to perform the essential services of the province, including relief, and their estimated deficit arises merely from their desire to pay off a substantial amount of the savings certificates to which I have referred.
I now come to the final point brought up by the leader of the opposition. He visualizes the possibility that during the year Alberta might decide to pay the interest charges in full. I have no opinion to offer as to whether or not that is likely, but the leader of the opposition is of opinion that the dominion in such circumstances should be prepared to assist.


Richard Bedford Bennett: To deal with them the same as in the other cases.


Charles Avery Dunning: I can only say in that regard that if we assume such a condition, and assume also that the budgetary position of the province is as reported by the bank, we assume in that case a shortage of SG00,000 in Alberta this year, according to the bank's report. May I suggest to my right hon. friend that such a shortage obviously would not become a serious matter until towards the close of the fiscal year, and I am quite sure that under those circumstances no dominion government could refuse to propose to the house at the proper time, and as soon as convenient, terms precisely the same and on the same principle as those accorded to the other provinces in like circumstances. Because instead of our changing our principle to conform to what an individual province wishes to do, we would have the situation of a province conforming to the principle which had been applied to the other two. I am in the judgment of my colleagues in the house when I say that I am quite sure that under such circumstances provision would have to be made to meet the situation.
I do not think there is anything further I have to say, but I do hope that if I have done nothing else I have at least convinced hon. members of the social credit party of Alberta that this government, and myself as the officer responsible for advising the government in regard to these matters, have laboured to avoid the slighest hint of discrimination in our attitude towards any of the provinces which have been involved in these difficulties. As I pointed out, British Columbia was refused under precisely similar circumstances, and I venture the statement to-day that British Columbia is glad rather than sorry that it was refused the loan on that occasion.


René-Antoine Pelletier: What funds did it use in lieu of the loan?


Charles Avery Dunning: I cannot say offhand, but I do know that on the basis of its own credit-


René-Antoine Pelletier: It was sinking fund, was it not?


Charles Avery Dunning: I believe they used some of their funds, and the credit of British Columbia in the markets of the world has gone steadily upward since that refusal. I believe that is all I have to say.


[Stage Direction]
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Sanderson in the chair.
Sections 1 to 6 inclusive agreed to.
Schedules agreed to.
On the preamble.
René-Antoine Pelletier: There are two statements which I cannot let go unchallenged. The Minister of Finance stated that the three western provinces were treated alike so far as the loan council scheme was concerned. I should like to ask if the province of Alberta was given the opportunity of refusing the same terms offered to the province of Saskatchewan?


Charles Avery Dunning: Exactly.


René-Antoine Pelletier: The minister stated that the credit of the provinces affected the credit of Canada as a whole. It is a fact that Alberta has had to default on a portion of its interest. I should like to know if the minister feels that if the federal government does not provide the necessary assistance to Manitoba and Saskatchewan, those two provinces will be forced to default.


Charles Avery Dunning: I am not prepared to answer that latter question. I am in a position of too great responsibility in relation to the credit of Canada to answer such a question.


[Stage Direction]
Preamble agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
prorogation of parliament
Walter Edward Foster: I have the honour to inform the house that I have received the following message:
Sir,	Ottawa, April 10, 1937.
I have the honour to inform you that His Excellency the Governor General will proceed to the Senate chamber on Saturday, April 10, at 9 p.m. for the purpose of proroguing the present session of parliament.
I have the honour to be, Sir,
Your obedient servant,
A. S. Redfern,
Secretary to the Governor General.

Combines Investigation Act



COMBINES INVESTIGATION ACT


[Stage Direction]
Hon. NORMAN McL. ROGERS (Minister of Labour) moved the second reading of and concurrence in amendments made by the Senate to Bill No. 41, to amend and consolidate the Combines Investigation Act and amending act.
He said: Mr. Speaker, perhaps it will meet the convenience of the house if I deal briefly with the main features of the amendments to Bill No. 41 as returned to this chamber from the other house. When Bill No. 41 was sent to the Senate and referred to the banking and commerce committee of that house certain objection was taken to the bill upon the ground that sufficient time did not remain for the proper consideration of its provisions. Without conceding that point, we recognized that it was desirable that we ought not to give any basis for objection upon that score. Therefore it was arranged that the act of 1935 should be substantially re-enacted as an amendment to Bill No. 41, with certain significant changes. These changes are in the following terms. Fjrst, that the administration of the combines act should be transferred from the trade and industry commission to a commissioner under the Minister of Labour. Second, that the provision with respect to the admissibility of documents which had been twice rejected by the Senate should be incorporated in the present bill.
Richard Bedford Bennett: With slight changes.


Mr. ROGERS:: I may say that most of the other amendments in the bill as now returned from the senate are consequential upon the changes I have indicated. There is one further change to which I wish to direct the attention of this house. The senate has made an amendment to provide what might be described as judicial intervention before the commissioner under the combines act can exercise his compulsory powers with respect to the summoning of witnesses and the production of papers.


Richard Bedford Bennett: And the holding of other than a preliminary investigation.


Norman McLeod Rogers: And the holding of other than a preliminary inquiry under the provisions of the act. I do not think it is necessary to deal with the arguments advanced in the senate in support of that provision. I think it will suffice to say at this stage that we are prepared to accept that amendment with considerable reluctance. That reluctance is not based upon any lack of confidence in the matter in which the functions imposed
[Mr. Speaker.l
upon the chairman of the Dominion Trade and Industry Commission or the president of the Exchequer Court of Canada may be discharged. My reluctance is concerned solely with my desire that no change in the existing legislation shall serve to impair the effectiveness of the method of investigation which was contemplated originally in the anti-combines legislation, and which has been provided for in all the subsequent amendments. My fear was, and is, that to require judicial intervention may lead to a dilatory procedure, which in turn may interfere with the effective administration of the act.
It may well be that my fears in that regard are groundless. I would say that during the coming year we shall have ample opportunity to determine how far the legislation as amended by the senate will enable us to achieve the legitimate purposes of the Combines Investigation Act. If we find in practice that the amended legislation does not enable us to realize the purposes of adequate investigation of the large scale business operations of this country, then we will be prepared to introduce further amendments in this house at the next session. We have accepted the amendments, particularly in view of the fact that as we approach what is generally conceded to be a phase of rising prices, we believe it is most imperative that the government should possess a combines act which will enable it to deal effectively with any abuses which may qccur through the great power enjoyed by some business corporations or combines in producing an artificial enhancement of prices which is not due to the normal working of demand and supply. Mr. Speaker, subject to what I have said, I now move concurrence in the senate amendments.


Richard Bedford Bennett: I have only had an opportunity of reading very rapidly through the proposed amendments to Bill 41, but I followed with extreme care the statement made by the Minister of Labour (Mr. Rogers). I cannot but think on looking over the amendments that we have done something by their acceptance at least to give greater assurance of civil liberty in this country. Whether or not the result is as indicated by the minister, I feel quite certain that there will now be greater confidence in the measure, for it does not arbitrarily subject suspected persons to penal treatment until such time as they have been found guilty. To that extent the amendments are a distinct improvement.
Also, although it had not occurred to me that the matter should be so dealt with when

Combines Investigation Act
we were considering it in this chamber, I believe that on reflection every hon. member will agree that it is in the interests of the country at large that there should be judicial intervention and what amounts to the fiat of a judge before the powers conferred upon the commissioner are exercised with respect to either (a) an investigation under oath, or (b) the punishment of witnesses, or (c) the production of documents, in view of the fact thet the contention which we made as to the admissibility of evidence of documents has been conceded, subject, of course, to the provision that they must be used in a trial for infringement of the provisions of the act or of section 498 of the criminal code.
I feel it is only fair to say, in view of the strenuous attitude taken by the minister with respect to the legislation, that he should be congratulated upon having accepted what I cannot but think will be regarded as a reasonable compromise, protecting on the one hand every legitimate claim that any person in Canada could make either as to regularity of procedure, opportunity to be heard, or deprivation either of property or individual liberty; and on the other hand he will find that in operation the bill will be satisfactory.
There is one section which I certainly still think is wrong, and that is the one which takes away from the Dominion Trade and Industry Commission the powers which would, for instance, be called into operation if the furniture manufacturers of Canada Were to be asked to meet together to submit plans for reorganization.


Norman McLeod Rogers: It was to be exercised at discretion by the governor in council.


Richard Bedford Bennett: I was not quite sure.


Norman McLeod Rogers: Yes.


Richard Bedford Bennett: That is what is to be done about it?


Norman McLeod Rogers: Yes.


Richard Bedford Bennett: Well, that is better than the proposal as I saw it originally.


Norman McLeod Rogers: It was originally so.


Richard Bedford Bennett: No.


Norman McLeod Rogers: Yes.


Richard Bedford Bennett: No, no. The minister and I are at cross purposes.


Norman McLeod Rogers: I am sorry.


Richard Bedford Bennett: As the act now stands, the Dominion Trade and Industry Commission could call together certain people for the purpose of accomplishing certain ends.


Norman McLeod Rogers: Fair trade conferences.


Richard Bedford Bennett: As a matter of fact I
have made some inquiries, and I find that the present chairman of the tariff board in his capacity as commissioner has adjusted a very large number of intricate and difficult cases- some that I was astonished to hear had been adjusted-and that other applications had been made. My information, although I could not hear quite clearly on the telephone, was, I gathered1, that the furniture people themselves suggested the desirability of an early meeting with the commissioner to see what could be done to improve their position. I cannot believe that the commissioner would be quite as good a tribunal before whom to appear to accomplish that end as the commission would be as defined by the Dominion Trade and Industry Act. But that is a difference of opinion, and the minister has succeeded in impressing the Senate with the desirability of having his views prevail. However, I still hold my opinion-which shows that after all there may be differences with respect to important matters of this kind. That does not detract from what I desire to say, which is that I think the minister and the government are to be congratulated upon having accepted these proposals as being more consistent with the general principles enunciated the other day, for instance, by the Minister of Justice (Mr. Lapointe). They are generally in keeping with the British-Canadian conception of the administration of justice as to the conviction of those who may have offended against the statute law of the country, which always contemplates that the accused are innocent until they are proved guilty, and that they shall have the utmost and the freest opportunity of presenting their case before any person who is empowered by statute or otherwise to adjudicate upon their guilt or innocence. For that reason I join with the minister in his motion that the amendments be concurred in, with the earnest hope that nothing which is of importance in the measure under consideration has been taken from it, and that in practice it will have behind it a body of opinion and confidence which it would not otherwise enjoy.
Motion agreed to; amendments read the second, time and concurred in.


[Stage Direction]
SUSPENSION OF SITTING
William Lyon Mackenzie King: Mr. Speaker, I am about to move that the house suspend its sitting until nine o'clock. However, I should not like the session to close without expressing on behalf of my colleagues and myself to
Suspension of Sitting

hon. members on both sides of the house our very warm appreciation of the manner in which they have cooperated with the government throughout the entire session in the work of legislation which has been before us. We have realized from the beginning that without the cooperation of all hon. members it would not be possible to complete the legislative program we had planned in time to permit of prorogation before the coronation. Fortunately we have been able to consider practically all the measures which we had hoped it would be possible to present to the house at this session, and1 although the session has been shorter than some others there has been no sacrifice of any public interest. The results have been effected through continuous concentration on the measures before the house, and also by cooperative effort on the part of all to effect the result which he have happily achieved.
I should like particularly to thank my right hon. friend the leader of the opposition (Mr. Bennett) for the help which he has given to me and to the ministry during the session.


Some hon. MEMBERS:: Hear, hear.


William Lyon Mackenzie King: My right hon. friend's long experience in public life has taught him the art of making the path of a ministry very difficult if he cares to do so, and also comparatively smooth if he is of a mind to help in that way. Fortunately since his return from his trip around the world he has been full of sunshine and good humour, and that has been reflected in the proceedings of the house this session. I thank him very warmly, because I realize that without that cooperation we could not have achieved the results which we have, nor could we have brought the session to its conclusion at this time.
I would say just one further word; it is that the significance of the work of the session itself is reflected in the number and the importance of the measures which have been passed. They will, I believe, bear favourable comparison with those of any session of the Canadian parliament.
I beg to move that the sitting be suspended until nine o'clock.


Richard Bedford Bennett: Mr. Speaker, it is not easy for any leader of an official opposition who has been recently in office and passed through the trying times that we had in Canada to adapt himself readily to the role of the candid friend, especially if he recalls, as sometimes he must, what he had to endure during the period
(Mr. Mackenzie King.]
of time to which I have referred. All I can say is that if my right hon. friend does contemplate the possibility of ever being in opposition again, and if he thinks a trip around the world has such a mellowing effect, he should arrange to take one at the earliest possible moment. But I should hope that he would not go alone; I should earnestly hope that he would be accompanied at least by some of his present colleagues, and some of those who would not be unwilling to be his colleagues if the opportunity offered.
It has been a matter of great difficulty to determine exactly what is the duty of one situated as I am at a time such as this. Here is a government charged with great responsibilities, whose prime minister must of necessity represent the country at one of the most important functions in our history, the coronation, which is to be followed by an imperial conference involving the discussion of questions of great magnitude affecting vitally the happiness, well being and prosperity of a great nation, in fact, of many nations. Under these circumstances, as I indicated yesterday, it is really the duty of the leader of the official opposition to discuss the situation with those with whom he is associated, and on balance to determine which course is best in the interests of the country. I do not for a moment deny that great opportunities to make political capital have presented themselves since the day this house opened. There were grave constitutional problems that might have been discussed in a partisan manner, which could have brought no good to anyone, except possibly and momentarily to the participants themselves, but which in the very nature of things could not have been advantageous to the country as a whole.
With respect to the legislation, I believe the prime minister will not think me ungenerous when I say that much of what we have passed might have been presented a little earlier; for I believe that some of the measures would have been the better for more mature and careful consideration. I know, too, that he will not regard it as in any sense a critical observation when I say that we should like to have had these measures go further. It may be suggested that we perhaps take too pessimistic a view of conditions. I hope not. But I do not for a moment deny that after an absence of some months from the country, and on my return looking about me and contemplating the problems that face us, I cannot help thinking that there are very many difficult situations which we shall have to meet before we are firmly established in prosperity. I cannot believe that these will be regarded as the

Prorogation
observations of a pessimist, for my outlook has always been that of an optimist as to the future both of the country and of the party with which I am associated.
On behalf of my associates and myself I thank the prime minister for the kindly observations he has made. It has been a real pleasure to endeavour to assist those who are charged for the moment with responsibility, and to offer such knowledge as experience has brought to one who has been in public life for a long time. The duties of a leader of the opposition were best described, I think, by the late Marquis of Salisbury, who said: The people have decided that the policies and the administration of the late government did not meet with their approval.
A new government has come into office. It is the duty of every one of us to adapt himself to the new conditions in so far as may be possible without the sacrifice of principle, and to aid those charged for the moment with responsibility for the administration of the country's affairs, with all the knowledge and experience and wisdom which this house possesses. For even then the collective wisdom of two hundred and forty-five members does not do more than ample justice to the demands made upon the House of Commons at the present time. I do feel certain that an earnest effort has been made to put upon the statute books legislation, whether affecting trade and commerce, the administration of laws, or the domestic happiness and contentment of the people, which will inure to their benefit, and make this country ever more prosperous, ever greater, expanding always-the oldest and in point of fact the richest and most important of those great nations which with the motherland constitute the British Empire.


[Stage Direction]
Motion agreed to.
At 8.05 p.m. the sitting was suspended until 9 p.m. this day.
The house resumed at 9 o'clock.

[Stage Direction]
A message was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, His Excellency the Governor General desires the immediate attendance of this honourable house in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the house went up to the senate chamber.
In the senate chamber, His Excellency the Governor General was pleased to give, in His Majesty's name, the royal assent to the following bills:

[Stage Direction]
An Act for the protection of the Dionne Quintuplets.
An Act to repeal the Biological Board Act and to create The Fisheries Research Board of Canada.
An Act respecting the establishment of a National Park in the Province of New Brunswick and to amend The Nova Scotia and Prince Edward Island National Parks Act, 1936.
An Act to authorize an agreement between His Majesty the King and the Corporation of the City of Ottawa.
An Act to amend the Department of National Revenue Act.
An Act to amend the Supreme Court Act.
An Act to revive and amend The Business Profits War Tax Act, 1916.
An Act respecting a certain Trade Agreement between Canada and Uruguay.
An Act for the relief of Clara Emily Taylor Elkin.
An Act for the relief of Yetta Ginsburg.
An Act for the relief of Marguerite Emily Coombe Low.
An Act for the relief of Mary May Rowell Thom.
An Act for the relief of Eva Josephine Millicent Good Ross.
An Act for the relief of Eva Schiller Light-stone.	_
An Act for the relief of Ruth Jessica Kimp-ton Shiells."
An Act for the relief of Grace Ellen Doris Newman.	_
An Act for the relief of Gretna Golden Laird Rankin.
An Act for the relief of Frank Horace Wood.
An Act for the relief of Edith Mary Bowers-Hill O'Hagan.
An Act for the relief of Isobel Jean Herbert Fleming Johnson.
An Act for the relief of Emilie Letsch Rutishauser.
An Act for the relief of Miriam Silverman.
An Act for the relief of Alice Mary Hickman Ings.	_
An Act for the relief of Norah Clara Simson Warden.	_
An Act for the relief of Muriel Beatrice Brown Gray.
An Act for the relief of Joseph Gideon Emilien Tanguay.
An Act for the relief of Mabel Marjorie Powter Johnston.
An Act for the relief of Evelyn McCaughan McBride.
An Act for the relief of Marie Liette Fortier Mickles.
An Act for the relief of Cecile Snyder Rashback.
An Act to amend the Customs Act.
An Act respecting Foreign Enlistment.
An Act to incorporate Trans-Canada Air Lines.
An Act respecting Department of Transport Stores.
An Act to Control and Regulate the Sale of Feeding Stuffs.
An Act respecting the Testing, Inspection and Sale of Seeds.	.
An Act to amend the Royal Canadian Mounted Police Act.
An Act respecting a certain Convention between Canada and the United States of America, for the preservation of the Halibut Fishery of
Prorogation
[Stage Direction]
the Northern Pacific Ocean and Bering Sea, signed at Ottawa on the 29th day of January, 1937.
An Act to assist the Provinces of Alberta, Manitoba and Saskatchewan in financing the cost of seed and seeding operations for the crop year 1937.
An Act respecting Gold Clause Obligations.
An Act to amend the Customs Tariff.
An Act to assist in the alleviation of Unemployment and Agricultural Distress.
An Act respecting a certain Provisional Trade Agreement between Canada and Germany.
An Act to provide for cancellation of capital stocks and certain indebtedness of the Canadian National Railway System to His Majesty and for adjustment of the accounts of the System.
An Act for the relief of Albert Henry Pergley.
An Act for the relief of Suzanne Rosenthal Winnikoff.
An Act for the relief of Kate Mary Briggs Robinson.
An Act for the relief of Mildred Gordon Kahn.
An Act for the relief of Ernest Arthur Allen.
An Act for the relief of Florence Rose Wright Clark.	6
An Act for the relief of Constance Hope Davidson.
An Act for the relief of Rosalie Annie Arathoon Webster.
An Act for the relief of Minnia Sidilkofsky Sadegursky.
An Act for the relief of Simone Baillargeon Mann.
An Act for the relief of Thelma Lucille Farr.
An Act for the relief of Sybil Geddes.
An Act for the relief of Maurice Amedee Tremblay.
An Act to amend the Immigration Act.
An Act respecting The Premier Trust Company.
An Act to incorporate The Canadian Mercantile Insurance Company.
An Act to amend The Excise Act, 1934.
An Act to amend the Special War Revenue Act.
An Act to amend the Customs Tariff.
An Act to amend the Combines Investigation Act and amending Act.
An Act for granting to His Majesty certain sums of money for the public service of the financial year ending the 31st March, 1938.
To these bills the royal assent was pronounced by the Clerk of the Senate in the following words:
In His Majesty's name His Excellency the Governor General doth assent to these bills.
Then the Honourable the Speaker of the House of Commons addressed His Excellency the Governor General as follows:
May it Please Your Excellency:
The Commons of Canada have voted supplies required to enable the government to defray certain expenses of the public service.
In the name of the commons, I present to Your Excellency the following bill:
An act for granting to His Majesty certain sums of money for the public service for the financial year ending the 31st March, 1938.
To which bill I humbly request Your Excellency's assent.
To this bill the Clerk of the Senate, by command of His Excellency the Governor General did thereupon say:
In His Majesty's name, His Excellency the Governor General thanks his loyal subjects, accepts their benevolence, and assents to this bill.

[Stage Direction]
After which His Excellency the Governor General was pleased to close the second session of the eighteenth parliament of the Dominion of Canada with the following speech:
Honourable Members of the Senate:
Members of the House of Commons:
I desire to express my appreciation of the care and expedition with which you have conducted the proceedings of the session of parliament now being concluded. The close and continuous attention given your parliamentary duties is reflected in the number and importance of the measures enacted.
The widespread and substantial improvement in economic conditions is evidence of continued progress towards national recovery. Export trade exceeds in value that of any year since 1929. Expansion in employment is now accompanied by a pronounced decrease in the number of persons on relief.
Convinced that recovery is dependent upon the development of trade, my ministers have pursued their efforts to negotiate agreements with countries willing to trade with Canada on a reciprocal basis.
The trade agreement concluded between Canada and the United Kingdom has received your approval, and effect has been given to the changes in the customs tariff for which it made provision. Ensuring as it does a freer exchange of commodities, through a lowering of trade barriers, the new agreement will, it is believed, bring substantial benefits to producers and consumers alike. It will serve as well to strengthen understanding and goodwill between the United Kingdom and the dominion.
Approval has also been given to a trade agreement with Uruguay and to a provisional trade agreement with Germany. Progress has been made in negotiations with the government of the Commonwealth of Australia for the revision of the existing agreement with that country.
Special provision has been made for the promotion of the sale of farm products.
Appropriate action has been taken to give effect to conventions between Canada and the United States for the preservation of the socke.ve salmon and Pacific halibut fisheries.
With a view to fostering increased activity and employment in the construction industries, an act has been passed to facilitate the granting of loans to finance improvements in rural and urban homes. Provision has also been made for the extension of the work of farm rehabilitation in the drought areas of western Canada, for assistance to the fishing industry, and, in cooperation with the provinces, for the further alleviation of unemployment and agricultural distress.

Governor General's Speech
Provision has been made for pensions to blind persons who have attained the age of forty years.	_
Measures have been enacted to provide for the establishment of a trans-Canada air service, and for revision of the capital structure of the Canadian National Railways.
More effective provision has been made for the defence of Canada.
Measures have been enacted to prevent enlistments from this country in foreign wars, and to provide for the control of exports of munitions and war materials. The profound desire of the Canadian people to discourage resort to armed force, and to promote peace has found further expression in departmental measures to control profits in the manufacture of defence equipment and supplies.
In the opinion of my ministers, economic and social developments since confederation necessitate re-adjustments in the governmental structure of Canada. As a necessary first step, it has been decided to appoint a royal commission of inquiry to investigate the allocation of financial powers and responsibilities as between the dominion and the provinces.
The coronation of Their Majesties King George the Sixth and Queen Elizabeth, on May the twelfth, is an event of unprecedented significance to the nations of the British commonwealth. Arrangements are being completed for the appropriate representation of Canada at the ceremonies.
Canada will also be duly represented at the imperial conference to be held in London immediately following the coronation.
Members of the House of Commons:
I thank you for the provision you have made for the public service.
Honourable Members of the Senate:
Members of the House of Commons:
In taking leave of you at this time, I pray that the blessing of Divine Providence may rest upon your labours.
This concluded the second session of the eighteenth parliament.