1940-12-04

[Stage Direction]
Mr. GEORGE BLACK (Yukon) moved for leave to introduce a bill to amend The Divorce Jurisdiction Act, 1930.
[? * E. Lapointe.]
He said: Probably I cannot do better than refer to the explanatory note printed with this bill, which is very concise:
. The purpose of this amendment is to vest jurisdiction in the divorce courts of the several provinces to try actions for divorce at the suit of a married woman deserted by and living apart from her husband where the woman is domiciled in the province at the date of the commencement of such action.
As the law presently stands the woman may bring suit only in the province where the husband was domiciled immediately prior to the desertion. This condition of the law works a great hardship on the deserted married woman who by reason of such desertion may have been forced to move to another province from that where the desertion took place. It is unreasonable that she should have to take her action back to the former.
I could give a longer explanation and perhaps cite instances and precedents, but if the bill is allowed to be given first reading that can be done on second reading.
Mr. MACKENZIE KING:: Mr. Speaker, I have no desire to seek to supersede my hon. friend in the matter of the introduction of his bill, but I have already spoken to him about the matter. The procedure contemplated for to-day, as I think hon. members will recall, was that we would seek to proceed with the resolutions which were introduced by the Minister of Finance (Mr. Ilsley) on Monday last. It would not be possible under the rules to do this immediately without introducing a motion to proceed to government orders, and I am in a position to do so only on some measure that is debatable.
My hon. friend's motion for leave to introduce this bill is debatable. Therefore if he will permit me I am going to take advantage of this opportunity which the rules of the house afford^-I refer to standing order 48- to move that the house do now proceed to government orders. If this motion is agreed to the house will immediately reach the government order with respect to ways and means.
I might add, knowing the desire of hon. members for information on some matters, that to-morrow I will ask that leave be given the government at the beginning of the sitting to answer the questions appearing on the order paper and to deal with the notices of motion for the production of papers. I should say also to my hon. friend, to make the matter quite clear, that I do not wish to prevent him from proceeding with his bill, and that another opportunity of so doing will be given him at an early day.


Mr. BLACK (Yukon):: That will be quite acceptable as far as I am concerned.
Motion (Mr. Mackenzie King) agreed to.

War Budget-Mr. Hanson (York-Sunbury)



WAR BUDGET


[Stage Direction]
The house resumed from Monday, December 2, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
Hon. R. B. HANSON (Leader of the Opposition) :: Mr. Speaker, I realize that it is the
desire of the Prime Minister (Mr. Mackenzie King) and members of the government to expedite this resolution and the legislation to be based upon it, but the subject matter is of such importance and of such a character that I feel we would not be doing justice to it or to the occasion if we were to deal with it only in a perfunctory way.
I quite realize that I may not be the best qualified person to discuss such an abstruse and technical subject as foreign exchange, but I recall that in the session of 1935, while I had the honour of being a member of the government of the day, a statute was enacted which forms the basis of the operations of the foreign exchange control board.
It may be worth while to recall to the minds of hon. members just what was the position. It will be remembered that in the session of 1934 the Bank of Canada Act was passed, and that in the following year provision was made, by chapter 60 of the statutes of that year, for the establishment of an exchange fund. Section 6 of that statute, which provided for the control of exchange, was to come into effect only upon a date to be fixed by proclamation of the governor in council published in the Canada Gazette. Shortly after that the election came along; the government of the day was defeated and a new government was installed, and that government did not do anything with respect to this legislation until the war came on. On September 15, 1939, shortly after war broke out, the foreign exchange control board was set up under the provisions of the War Measures Act, and on the same day a proclamation was issued bringing into effect the operations of section 6 of the Exchange Fund Act of 1935. That section reads as follows:
(1) For the purpose of endeavouring to control the external value of the Canadian monetary unit or of checking undue fluctuations in its exchange value the minister-
Under the act that is the Minister of Finance.

may directly or through such agencies as he may designate cause any balances in the special account-
That is the account referred to in section 4 of the act.
-to be invested in
(a)	gold;
(b)	foreign exchange as defined in section twenty-six, subsection two (b) of the Bank of Canada Act; and
(c)	balances with any bank in London or New York designated by the Minister of Finance.
(2) Gold or other investments purchased under the provisions of the preceding subsection may be resold on instructions from the minister.
By subsection 3 it is provided that the statute shall come into effect upon proclamation. This section, together with the order in council which was passed on September 15, forms the basis of the present position with respect to the control of foreign exchange in Canada.
It is with some degree of pride that I call attention to the fact that under a government which was not supposed to be strongly characterized by foresight or to have much knowledge of business the foundation was laid for the functioning of this important body. It is a matter to which I think I should refer, especially since the man who conceived and promulgated the idea has been so often traduced, as he has been even during the present session, by certain hon. gentlemen in this house. I am sure the Minister of Finance would be the last to deny that had it not been for the vision of that man and his knowledge of finance and monetary problems, we should not have been so well equipped as we are to-day to deal with what to me is an abstruse and technical matter.
Under the order in council passed on September 15, which is P.C. 2716, to which I have referred, setting up the foreign exchange control board, complete authority was taken for the regulation and control of foreign exchange. The provisions are lengthy and technical, and intensive study is required to understand them. Control over foreign exchange, foreign trade and related matters is provided for in part II, which will repay perusal on the part of anyone interested. The board began to function immediately, and its operations have grown into great proportions. On the whole I am satisfied it has operated directly for the benefit of Canada and in accordance with the purposes of the promoters of the legislation authorizing it.
I am well aware that there is a school of thought in Canada which, shall I say, would be pleased if there were no such control. But anyone who has given even cursory study to the problem will realize that the old saying "what is one man's meat is another man's
648	COMMONS
War Budget-Mr. Hanson (York-Sunbury)
poison" is much to the point in relation to a matter of this kind. I know that it would be greatly advantageous to exporters in Canada if there were freedom from exchange control. I know that such freedom would redound to the benefit of some, and especially to the benefit of our paper companies and those who are manufacturing and exporting products of a similar kind. But I should like to emphasize the fact that in so far as some would benefit by what might be described as extreme profits, derived under an exchange market free from control, just to that extent would other interests in Canada suffer. On balance I believe that while a few would gain, and perhaps gain considerably, the public generally would suffer more than the extent of the advantage to those who had gained so much.
I may say therefore at the outset that I am fully in accord with the principle of exchange control and the elimination of speculation. I was going to add "profiteering," but I shall not use that word, because it would not be profiteering in the true sense; on the contrary it would be a quite legitimate transaction.
Having said this much may I return to the minister's statement of Monday last. It was of course a carefully prepared exposition of the government's policy and point of view. Let me say at once that this move on the part of the government was not unexpected by the public, and certainly should not have been unexpected on the part of hon. members who have been following with any degree of care our exchange position in relation to the United States and the mother country.
The balance of trade between Canada and the United States, over a long period of time, has been continuously adverse to us. The war has accentuated that position. When last month I had occasion to speak on the debate on the address in reply I placed on Hansard some figures showing the adverse balance of trade as between the empire and the United States and as between Canada and the United States, with respect only to commodities. These figures show that in the three-year period ending August 31 last the adverse balance of trade against the empire was
SI,624,000,000, and as against Canada alone it was $569,000,000. May I repeat that those figures are in respect only to commodities.
Without having any reference to those figures, I believe the minister said in effect, if not expressly-and in my opinion there can be no doubt as to the truth of his statement-that while these figures may have been substantially reduced by deductions made for gold sales and for invisible services such as 
tourist traffic, there must have been a substantial addition to the adverse balance of trade, particularly within the last three months, and it is progressively growing greater. The fact must be recognized that no attempt has been made to restrict the exportation of dividends on capital invested in Canadian securities by residents of what he describes as hard currency countries. Furthermore-and above all, I should think- the adverse balance of trade both as between Canada and the United States and as between the empire and the United States must have increased with remarkable celerity within the last three months, and in the succeeding months in my opinion it will grow considerably.
The problem, therefore, is one which not only confronts us in the immediate present but which I believe will become increasingly intense as time goes on and so long as we are a belligerent country having to buy extensively in the United States. Having regard, then, to the increased tension in the matter, if I may so describe it, the condition is one which demanded immediate and drastic action. I suggest to the minister not only that there has been delay, but in my view, and with the best information at my command, the provisions are not adequate to maintain the equilibrium which I believe is necessary if we are to continue the present ratio or spread between our dollar and the United States dollar.
As I intimated to the minister by an interjection I made during the course of his observations, unless we are told the full story and are able to predicate our deductions, assertions and recommendations on facts placed before us, we cannot fully appreciate the situation, nor can we deal with it adequately. With a good deal of temerity I shall at a later stage in my remarks offer some recommendations-realizing, as I said a moment ago, that possibly I am not best qualified to deal with the matter. But unless we are given more information, unless we are told the sum total of our present exchange deficit and the anticipated total of that deficit from time to time as the adverse balance grows, I repeat that we cannot fully appreciate the situation or deal adequately with it. I regret that the minister, for reasons which at least to me he did not make very clear, found himself unable to take the house and country into his confidence by stating what the deficit is.
I do not suggest that the minister declined to give the information on the ground that to do so might be in the nature of giving aid to the enemy. I cannot conceive that there could be any sound or common-sense basis for any such reason 'as that. There may be

War Budget-Mr. Hanson (York-Sunbury)
reasons which I have not yet been able to divine for his not giving the house this information. I ask the minister to give us at some stage in the proceedings reasons over and above those he has already suggested, and which were in the vaguest terms, as to why we should not have this information. It is my opinion that upon knowledge of the quantum of the deficit in our obligations in respect of the exchange position between Canada and the United States will depend the judgment we may seek to pass upon the measures the minister is promoting for at least the alleviation of the position.
I suppose if I were clever enough I could read between the lines and gather from the information the minister did give the house a reasonably close estimate of the present deficit. I am not suggesting that I am a statistician, but it should be possible for anyone versed in the exchange position to make such an estimate. I have endeavoured to do something of the kind, and I suggest to the minister with regard to his estimate of $200,000,000, that the actual figure is higher than that. If I understand his proposals correctly, he hopes to improve the position- shall I put it that way?-to the extent of between five and six million dollars per month. If that be the measure of his proposals, I say that they are wholly inadequate and that we shall have to deal with the matter at a later stage and perhaps in a more drastic and realistic manner.
It must not be supposed by anyone that this is the first move that has been made. During the course of his remarks the minister set out the steps which had been taken since the war broke out at least to touch the position-I shall not say to keep in step with it. In his comprehensive review on Monday he indicated that up to June last the general policy involved no restriction of import or export trade, with the single exception that the board refused to provide exchange for the export of capital from Canada except within certain narrowly prescribed limits and with certain exceptions for capital that had been invested in Canada after control was established. In April an important step had been taken in exchange control when the foreign exchange acquisition order was passed under which all our available liquid supplies of foreign exchange, United States currency being the most obvious, as distinct from such foreign assets as securities, were placed directly under the control of the board, and all our nationals had to turn in their United States money. A further step was taken as a result of the budget in June when the war exchange tax of ten per cent was imposed upon all imports except those from sterling
14873 -42
countries. In addition, special progressive excise taxes were imposed on automobiles. In July the board took further measures to prohibit the sale of foreign exchange to Canadians for pleasure travel abroad.
While some of these measures are not of substantial importance, I suppose they are all relatively important. But they have not been sufficient to keep the position in equilibrium, and as a result we had the budget of Monday last. In reflecting upon this budget certain questions have arisen in my mind. The first is: Are the new provisions adequate? I think I have answered that already. In my opinion they are not. They may be just the first dose to the Canadian people. That may be sound policy; I do not know what the reaction is throughout the country, but I am inclined to think that it is good. With the principle involved I am in accord. I am in accord also with the principle involved in the second schedule of the budget, which deals with the loosening up-I use that expression for want of a better one-of sterling exchange in this country.
Having read the resolutions, I ask myself: Are the safeguards against price rises adequate? Further, while I do not wish to deal at the moment with individual positions I am wondering what will happen with respect to magazines and periodicals. Would it not be better for parliament to lay down the rules with respect to this matter rather than to leave it to the Minister of National Revenue (Mr. Gibson)? It seems to me that this is a delegation to a minister of authority which ought to be retained by parliament.
Prior to 1935 the government of the day sought to deal with the question of the importation of cheap United States periodicals- not in relation to exchange, but in relation to their effect upon national literature and national sentiment. I remember that hon. gentlemen opposite, especially the Prime Minister, opposed the principle of the imposition of taxation upon the advertising in these magazines. The Prime Minister took the broad view that there should be no tariff on brains. That is a high-sounding phrase, but what was the effect of his action in wiping out the protection to Canadian periodical producers when he came into power? It has been this:	In five years the importation of these
periodicals-I was going to use another term -has increased in value from about $2,250,000 to $6,500,000. If hon. members will go with me to any large news-stand in this city and look at the periodicals on sale I think they will agree with me that, exchange considerations or no exchange considerations, the government should exercise some authority to

650	COMMONS
War Budget-Mr. Hanson (York-Sunbury)
keep these things out of the country and away from the Canadian people. There is no tariff on brains, but there should be a tariff on trash.


William Lyon Mackenzie King: I have never
supported the allowing in of any of these rotten sheets.


Richard Burpee Hanson: I dare say my right hon. friend did not think it would have the effect it did. I know the question was considered minutely with those in the trade and it was felt at the time that the only way to deal effectively with the matter was to tax the advertising. When the Prime Minister opposed those measures I do not believe he had it in mind that the traffic would grow to the proportions it has.


William Lyon Mackenzie King: I have always been in favour of prohibiting altogether certain classes of magazines or periodicals, particularly the type referred to by my hon. friend,


Richard Burpee Hanson: If my
right hon. friend has been in favour of that, he certainly has been slow to act. In bookstalls in any of the large cities in Canada I can show him magazines of the veriest trash which should never have been allowed into the country. Some are even worse than trash. Occasionally salacious magazines have been prohibited by action of the Department of National Defence-


Mr. ILSLEY:: The Department of National Revenue.


Richard Burpee Hanson: It ought
to be the Department of National Defence. I think it would be a good defensive measure to give the jurisdiction to that department. However, I appreciate the fact that it can be handled better by the customs than by any other branch.


James Lorimer Ilsley: I think I am safe in saying that hundreds have been prohibited.


Richard Burpee Hanson: There are hundreds more that ought to be prohibited. I shall not go further into the matter, but I suggest to the minister that parliament might very well be asked to deal with the question of policy rather than leave it to the discretion of the Minister of National Revenue. I do not question his good faith or his understanding of the situation, but this is an exercise of power on a matter of principle with which parliament itself should deal.


James Lorimer Ilsley: Parliament does deal with it.


Richard Burpee Hanson: I am not so sure about that. My reading is that a very

wide discretion is left in the hands of the Minister of National Revenue. That means, in his officers. They may or may not move. I do not for a moment suggest that the minister should have the duty and obligation of making examinations himself because he must rely on his officials. Many a time they have been asked to move, and many a time they have failed to move, but sometimes they have moved.
I shall not deal with that further except to suggest to the minister that we might very well in this house settle the principle upon which this action is to be based. I hope that, war or no war, the time will never come when Canada will allow these salacious magazines to appear again on the bookstalls of this country. I am thinking of generations yet to come.
There is another thought. When I heard the minister's explanation of his budget proposals I wondered what steps had been taken and what avenues had been explored by the ministry to increase the flow of our exports into the neighbouring republic. From our point of view that would be, I suggest, the ideal method of correcting the exchange position between the two countries. I referred to that when I spoke in the house on the 12th of November. It is astounding to me that a little nation of twelve million people should buy at least twentydive times more per capita from the United States than they buy per capita from us.


James Lorimer Ilsley: We are selling twenty-five times as much to them as they are to us per capita.


Richard Burpee Hanson: I say
it is astounding to me that a little nation like Canada, with twelve million people, should buy from the United States of America, with one hundred and thirty million people, twenty-five times more per capita than they buy from us. That is a situation which I suggest to the government and to the people of Canada has been going on altogether too long, and it cannot continue indefinitely if we are to keep our heads above water. In the old days we had a remedy for that situation. We had a settlement on a three-way basis, but that, as the Minister of Finance (Mr. Ilsley) himself stated, is no longer open to us. If that be so, what is ahead of this country if it is not national bankruptcy, war or no war. It is a situation that must be corrected, and we are now in a favourable position to have it corrected. The Prime Minister (Mr. Mackenzie King) has, he has told us, paved the whole way. He has got the United States to the point where they will cooperate with us in

War Budget-Mr. Hanson (York-Sunbury)
the defence of our nation, and financing is a part of the defence of this nation and of the north American hemisphere. I ask the minister to tell the house if any avenues have been explored with respect to sending our exports to the United States.


James Lorimer Ilsley: Certainly. That has been our policy ever since we came into office in 1935.


Richard Burpee Hanson: We are tied up to the Canada-United States agreement; and the minister in dealing with the question, in making an apology, shall I say, for taking no action in the matter of fresh fruits and vegetables, made it quite plain that we dare not go back to the United States and ask them to correct that position because it would put the agreement in jeopardy. That just shows the futility of having our tariffs made for us in Washington.


James Lorimer Ilsley: Does the hon. gentleman
want us to scrap that measure of extending our export trade to the United States?


Richard Burpee Hanson: No, I do not suggest for a moment that we should scrap it.


James Lorimer Ilsley: It would have that effect.


Richard Burpee Hanson: But I do suggest that if conditions are as ripe as has been indicated to the house and the country we can go to the people of the United States and say: We are increasing our purchase of United States products, particularly manufactured products, and especially war materials; we are finding great difficulty in paying for them; the load of adverse exchange is becoming increasingly burdensome, and because we are buying so much more from you than we did in days gone by, we think it a fair proposal that avenues should be explored with a view to increasing our exports to the United States.
I could indicate to the minister articles which the United States could use in their war effort right at the present time. I might mention base metals, for instance. Has the United States ever been approached to let down the bars against our base metals? Has the United States been approached to extend to us further facilities for the export of more of the natural products of this country?
Take, for example, the small item of cream. Cream is in the agreement, but the membership of this house could drink in one day all the cream that the United States is importing from us. But the dairy farmers of eastern Ontario, the dairy farmers of the eastern townships, the dairy farmers of Quebec counties lying along the Vermont and New Hampshire borders, and the dairy
14873-42}
farmers of my province, where we are just twelve hours overnight from the Boston market, could ship substantial quantities of cream to the United States every day of the year, to the advantage of the United States consumer and without any great disadvantage to the United States producer. These are matters which I think should be explored.
One of my colleagues suggests, what about quotas? I have no desire to go into details.
I am trying to deal with principles and leaving it to others to give specific instances and cases. I am questioning in my mind whether the government, in meeting this problem, have met it full face. It has two aspects. I have tried to deal with one of them, that of increasing exports as opposed to restricting imports. I suggest it is of the greatest importance, and I commend it to the government. We should make every possible effort to increase our exports to the United States in view of the fact that we are daily increasing our consumption of their manufactured products. I believe that in war time they would meet us in the right spirit.
I know that in peace time the situation was difficult. I know that in the winter of 1934 and the spring of 1935 we could do nothing with the officials of the state department of the United States with respect to two homely products of the maritime provinces, fish and potatoes. We got a quota for potatoes, a quota which a single county in New Brunswick could easily fill in any given year. What has happened this year with regard to potatoes? Does the minister know? We have no tariff against United States potatoes, and according to the trade reports of this country potatoes from Aroostook county are being imported into Canada via Windsor, to the detriment of the New Brunswick producer. That may be all right, but it is pretty hard to tell the farmer in the Saint John river valley that it is all right. Where is Manitoba getting its potatoes from this year? It may not be feasible to ship potatoes so far west, but my information is that the crop in that province is a failure.


Mr. WARD:: No.


Richard Burpee Hanson: My information is that the crop in Manitoba is a failure and that they are importing potatoes from the Dakotas.


William John Ward: That is just not true.


Richard Burpee Hanson: If the hon. member will go over to the bureau of statistics, he will get the information that North
652	COMMONS
War Budget-Mr. Hanson (York-Sunbury)
Dakota potatoes are being imported into Manitoba. The trouble with my hon. friend is that he does not want to hear the truth and he does not want to know the truth.
Let me come back to the more technical aspects of this matter. When war broke out and the control was established, the foreign exchange control board set an arbitrary rate. 'i do not mean, arbitrary in the sense that it *?as purely arbitrary; it was a rate which they h their judgment-and I do not know any >ody who would have better information on she point-deemed to be a rate which possibly liould be sustained without any ups and downs over a long period of years, and it had jhe merit of stability. I think that is a fair position to take with regard to it; and in so far as it had that merit of stability, it was an advantage to business people in this country and in the neighbouring republic. They fixed the rate on purchases at ten per cent, and the rate on sales at eleven per cent, the additional one per cent covering the charges of operation. The board thus came into possession of the substantial profit of one per cent, a portion of which, I understand, they had to give to the commercial banks of the dominion in return for the services which they rendered in carrying out the operations of the board. Just what that rate is I have heard, but I have forgotten. However, there must have been accumulated, in the fifteen months or so which have elapsed since that time, a very substantial fund, which the board, I assume, has made or will make use of in connection with stabilization operations. At all events, out of that fund will be paid the cost of the operations, and there will be, I assume, a substantial surplus as well.
I should say this: My understanding of the rate established was that it was about halfway between the value of the United States dollar and the British pound sterling-it could not be said to be pegged to either-and was fixed at that rate as the result of the exercise of the best judgment of those having charge, and for the reason that it was about half-way between the two currencies. I am bound to say, so far as my information goes-and I have made inquiries-it has operated well, although I am of opinion-and the necessity of this legislation bears me out in that opinion-that in recent months the rate charged for foreign exchange has been on the low side.
I have already outlined what steps, more or less important, were taken in the preceding months, and I have indicated in a general way what thoughts occurred to me with relation to the present proposal. The measures proposed have, broadly speaking, two ends. First, they are to help Canada finance war 
purchases in the United States. I think they have a second purpose, a psychological one, namely, to impress upon the Canadian people the necessity of not spending their money on articles they can do without; and that is all to the good. I have advocated that for a long time. I have no objection whatever at this time to the principle of that kind of legislation.
I shall have some objection, as we go into committee, with respect to the incidence of that burden. There is room, I should say, for honest difference of opinion with regard to that, and it may be that the minister- although I have found his mind rather inflexible in days gone by; having set his mind upon a certain course, he is loath to change it-will be in a position to say that he will give more than consideration to any suggestions we make with respect to it. But on the general principle I and my friends are in agreement. I think it serves the two-fold purpose of helping our war effort and of instilling into the Canadian people the necessity of sacrificing something. There will be, of course, some whom it will not affect because they cannot make any more sacrifices than they are making. There will be a middle class who will be affected. Then there will be a class of well-to-do people who will have, in spite of everything, what they want as long as they have money to pay for it.
In its second phase this proposal is to help Britain finance her purchases in Canada: and with that, too, I am in substantial agreement. But here again, in connection with the incidence of this lifting of restrictions on British imports, there will, I think, be room for honest differences of opinion, and we can argue those out in the later stages.
I have in mind at the moment the question of Nova Scotia coal. I do not think the importation of British bituminous coal free of duty will be immediately detrimental to the production of coal in Nova Scotia, because the information I have is that to-day coal is a scarce commodity. But I venture to suggest that, before this war is over, the question will become a very live one, and I am going to leave my colleague from Nova Scotia, the hon. member for Cumberland (Mr. Black) to deal with it.
Before I leave this question, I wish to say to the minister that Nova Scotia coal is the only coal which this free importation of British bituminous can affect. They both will have to go into the same market unless the market increases beyond what any of us visualize that it will increase to. Whatever is imported from the other side will displace Nova Scotia coal. If we are prepared to make that sacrifice, well and good. I know

War Budget-Mr. Hanson (York-Sunbury)
that all these changes in policy and all these diversions of trade are bound to affect somebody. They cannot help doing so, once a channel of trade is established. How about the effect on our policy of subventions? It will affect that policy indirectly. I wonder whether the minister has thought that through.


James Lorimer Ilsley: Yes.


Richard Burpee Hanson: Well, if
he did, he did not say anything about it. We shall have ample opportunity to discuss that on the committee stage. I personally would have preferred to delay my remarks until we were in committee, but we are faced with the rule of this house which I had in mind when I spoke briefly the other day, and which the leaders of the two groups to my left had also clearly in mind, namely, that if there were no general discussion on this resolution, then, when we got into committee of ways and means, we could not deal with the general principles and we would be held down to the item immediately under discussion. If, for that reason, the passage of these measures is delayed, it is because I think there would have been a too rigid application of the rule. With that I think the Prime Minister and members of the government will have to be content.
The government propose to deal with the first phase of our exchange position by restricting the imports which are listed in the resolutions tabled. I have already pointed out what in my view are some of the glaring omissions. I am not going to deal in any detail with the question of fruits and vegetables, but I would point out that in four weeks' time the Florida strawberry crop will be on the market. Florida strawberries are ready for local consumption in that state on Christmas day, and a week later they begin to move out in carload lots. Strawberries will come also from Texas, Louisiana and other southern states. Can the minister tell this country that fresh Florida strawberries in January are a necessity for the health of the Canadian people, or to help win the war?


James Lorimer Ilsley: No, they are not.


Richard Burpee Hanson: Of course not. Then take the case of citrus fruits; we all like citrus fruits, there is no doubt about it-and in passing I should like to say that there is no better grapefruit than that grown in Florida. But at the hotel we are eating grapefruit from Honduras and Jamaica, and oranges from Dominica and Honduras. I believe the health argument does not hold water; we can get these fruits from the sterling area. We can get them, and there is
transportation for them; the Lady boats are coming back half loaded at times.
The fact of the matter is that we have not dealt with this question of fruit and vegetables in a realistic manner; we have not been allowed to. I am not going to pursue that line of thought any further; the minister knows exactly what I mean. In my view, we have had the big stick held over us.
I will leave the question of new potatoes to my hon. friend on my left. Bermuda grows potatoes; they will be on the market shortly. And Bermuda is in the sterling area.
In the course of his remarks, as reported on page 555 of Hansard, the Minister of Finance indicated four principles which had governed the government in making up the list of goods to be restricted. He said:
The articles prohibited should he such as consumers can legitimately be expected to do without in war time or for which their requirements can probably be met from the durable goods which they already have on hand.
The list should include finished goods rather than raw materials or parts or equipment for Canadian industries so that disturbance to Canadian industry and to those employed in it will be kept to a minimum.
Wherever possible, goods used by the well-to-do rather than those used by the mass of the public should be restricted.
The items should be such as to require a minimum of administrative machinery and action in order to carry out the restriction.
The first three are important; the last one I do not think is. With the first three statements of principle I do not think there can be much quarrel, if any.
In the committee of ways and means there are to be two resolutions. The first of these precedes the introduction of a bill to be entitled the War Exchange Conservation Act; and appended to that resolution are two schedules. The first contains a list of items, based on the tariff classification, the importation of which from all countries except those in the sterling area and Newfoundland is to be subject to restriction; and with regard to part I of the schedule, no permits are to be granted for their importation from the so-called hard-currency countries. Part II of the first schedule comprises goods for which permits to import from hard-currency countries will be granted temporarily but on a decreasing scale.
I question the desirability of parliament vesting in any minister authority of that kind. In other words, the Minister of National Revenue may say to John Jones, "You may import under permit", and to Tom Brown, "You may not import." There is the opportunity for abuse, for discrimination, because this is to be left to the judgment, shall we say, of one man. No matter how reputable
654	COMMONS
War Budget-Mr. Hanson (York-Sunbury)
he may be or how high his character, I submit that is not good legislation. If it were not war time, I would fight that principle. I suggest to the minister that parliament itself ought to grapple with the principle that is to be followed here, and not leave it to the discretion of the minister. In the hands of a minister who might be weak, of a minister who might be susceptible to all kinds of pressure, I can visualize that great injustices might be done. I do not like the principle, but I am not going to labour that point any further.
In dealing with our exchange position, we must take into consideration the question of the cost of carriage, which is also important. Under present-day conditions we have to find, if I am correctly informed, no less a sum than $50,000,000 per annum for freight payments alone; and, so far as I know, there is no counterbalancing compensation. If the minister knows of any, I wish he would tell me for my information. Thar is a dead-weight debt on our exchange board. It is an extremely important item in arriving at the true adverse balance of trade.


James Lorimer Ilsley: Is that railway freight?


Richard Burpee Hanson: Yes, and express.
Mr. ILSiLEY: That is net?


Richard Burpee Hanson: I am told that that would be net, that there is not much offset to it. I may be wrong in that because my avenues of information are, of course, not nearly as adequate as those available to the minister. He has the official authority to find out these things; I have to get them as best I can. But I am informed that that is about the net amount we have to provide. And it will be increasingly great as we increase our imports.


James Lorimer Ilsley: I will check up on it.


Richard Burpee Hanson: Just a word more with respect to these fresh fruits. The Minister of Agriculture (Mr. Gardiner) intimated the other day that on his visit to England he was told that fresh fruits are not considered a necessity in England in war time; hence the failure to take any part of our apple crop. Canned fruits, I understand, are not barred, but even these are well down the line on their list of what are considered necessaries during this war-No. 9 I am told; I thought it was No. 12.
Then there is the question of substitutes in this country. Why should we not try to educate our people to use substitutes? They may have to come to this. I am told that the humble tomato contains exactly the same

kind of vitamins as the lordly orange that comes from the groves of Florida.


Mr. McCANN:: But not in the same quantity. It takes twenty times as much tomato juice to give the same quantity of vitamins.


Richard Burpee Hanson: My hon. friend is an expert, of course, but I think I would rather page another expert before I would be quite willing to accept that statement. However, that is a suggestion which I throw out in passing; I am not at all certain of my ground, nor do I believe my hon. friend is certain either.
I have already given my views on the matter of extending our sales to hard-currency countries, and I need not go over that field again. Something should be said, and I think I should say it now, with respect to the second part of the proposals, the extension of the British preference. The * schedules in connection with the extension of the British preference are extremely wide, and I am certain that we do not know all the implications. I should like to ask the minister a question just from the point of view of revenue. I understand that the government is not putting forward this proposal on the basis of revenue at all, nor do I think it should be put on that basis. If there is any man in this house who wants to help Britain win the war, it is your humble servant, and as far as I am concerned, I am willing to make any sacrifices that I may be called upon to make to further that end. But it is a problem that the government must keep in mind, because if we lose certain revenues from one source we have to make them up from another. The minister did not attempt to give us any estimate of the loss of revenue. I should like to ask this, though: Has he looked into the question of loss of employment that may be occasioned by some of these proposals?


James Lorimer Ilsley: It is not anticipated that there will be any loss of employment.


Richard Burpee Hanson: Has the
minister gone into the matter with any degree of particularity?


James Lorimer Ilsley: Pretty well.


Richard Burpee Hanson: let me
bring it home to him. In my county there is a cotton mill. There are three in New Brunswick. Two towns are dependent for their very existence on the operation of the mill in my county. Prior to the outbreak of war, these mills were running only three days a week; the operatives were living on a standard of existence that was below the border line. The war broke out; substantial

War Budget-Mr. Hanson (York-Sunbury)
orders were given; the mills ran on full time and on overtime for a long period. The war orders are now practically all filled, except in connection with those mills equipped to make cotton and wool goods. That is not the situation with the mills at Milltown or the mill at Marysville. The number of days worked per week has been steadily dropping since they filled their war orders. How is this going to affect them? I must ask myself that question, naturally, because it will be put to me by the first man or woman from the town of Marysville that I meet on the street.


James Lorimer Ilsley: Let me put it in just a word. The cost of production of cotton textiles in England is estimated to be up about 43 per cent, and therefore the price that will be charged for cotton textiles is so much higher than it would be under normal circumstances that the cotton industry of Canada does not require the very moderate protection it has had in the past.


Richard Burpee Hanson: I am glad to hear the minister say that the protection is very moderate, because during all the years I have been in this house and for longer than that-


James Lorimer Ilsley: I mean it is very moderate as against Great Britain.


Richard Burpee Hanson: It is very moderate as against Great Britain; I agree with that, but even then I have heard mutter-ings about it. Let us analyse the minister's statement. The cost of the raw cotton is the same to them and to us, and that is the big item.


Mr. CRERAR:: It costs them more.


Richard Burpee Hanson: I am
speaking about the raw cotton at -the point of production; that cost is the same.


Thomas Alexander Crerar: That is what I am speaking about.


Richard Burpee Hanson: No; the
hon. member is not speaking about -the same thing. He is speaking about the cost of the cotton landed. Of course it costs more in Great Britain, the carriage and the exchange have to be added, and it has to be paid for in a depreciated currency. We are in exactly the same position, but to a lesser degree; but the cost of raw cotton at Savannah or Atlanta -or any other big cotton market is exactly the same to Britain as it is to us, so there is no distinction at all. Of course there is the cost of carriage in war time and the cost of war insurance to England; but it must be borne in mind that this carriage is nearly all by water. As against that, ours is rail
carriage every mile of the way from Atlanta, Georgia, to Fredericton. I have often wondered why it was not brought in by water, but that has never been done. It comes up via Chicago; the freight is substantial, and it has to be paid in United States currency.
I have not had time to make any comparison, but I suggest to the minister -that altogether aside from the question of the difference in exchange, the cost of transportation is against Canada qua -the United Kingdom. I may be wrong in that, but that is the theory I have in mind, and I have given my reasons for it. There is the question of the adverse exchange. Undoubtedly on a pound of cotton -the amount allotted for exchange by the British converter will be slightly greater than the loss sustained by the Canadian converter, but the amount per pound or per yard of material will be so small as to be almost infinitesimal.
Then there is the cost -of conversion. I have always understood, and in this I think I am borne out by those who know, that the cost of converting co-tton goods in England is less than it is in Canada. How in the world, then, can the minister make the statement that there has been a rise of 48 per cent in the cost of production in England, without taking into account the fact that there must have been a rise in -the cost of production here as well?


James Lorimer Ilsley: I am informed that there has been an increase of 43 per cent, not 48 per cent, in the cost of production of cotton textiles in England. The hon. gentleman must not forget those two Atlantic trips.


Richard Burpee Hanson: I quite
agree that there is an ocean trip involved.


James Lorimer Ilsley: Two of them.


Richard Burpee Hanson: But I
would also point out to the minister that goods shipped to Canada come in ships that are seeking cargoes. The whole trend of commerce is from west to east; the heavy cargoes are going from Canada to the United Kingdom, and in some instances the ships are coming back not filled. The same thing will apply to coal. If British bituminous coal is coming to this country, I venture to say that it will come as ballast, bearing the very lowest rate. I would ask the minister to investigate that. It will not bear a commodity rate unless it comes in full shipload lots. I do not know what the situation is in Saint John this year, because the condition has been erratic, but for a long period of years most of the coal that has come to that city, most of the British anthracite which I myself burn, has come in as ballast, bearing the lowest possible freight rate.
656	COMMONS
War Budget-Mr. Hanson (York-Sunbury)


James Lorimer Ilsley: Can the hon. gentleman suggest anything we can do for England?


Richard Burpee Hanson: Oh, yes; I can suggest a number of things we can do for England and I am willing to go the whole way on cottons. I am only asking the minister if he has thought the thing through. I am glad to know that this provision is only for the duration of the war. Certainly I could think of things to do for England. I would buy some woollens from her, and would thereby do something for the woollen trade in England. That has not been thought of.


James Lorimer Ilsley: Has the hon. member thought that through?


Richard Burpee Hanson: I would
make the gesture, anyway. I know it would have a detrimental effect on some people. I have heard someone say that he was glad the woollen schedules were not touched. I would help England in any way I could, unless that help meant suicide to Canadian nationals and Canadian labour. I will go that far with the minister. I am anxious to that extent about the situation, and that is why I tell him I am going to support these resolutions.
I do not believe, however, that the minister and the officers in his department have adequately thought through the implications in the proposals, and I am certain they are wrong about cotton textiles. That is my conclusion from the information at my disposal.
Anything further I have to say I shall defer until the items in the schedules are under discussion. I have already indicated my desire to help England in her present position. I want it to be understood that we on this side of the house are in favour of the principle of aiding England by the means suggested or by other means. Let me say this: I have never forgotten the ringing words of the Prime Minister of the United Kingdom on the occasion of his ascendancy to that office. He said, "I have nothing to offer but toil, sweat, blood and tears." Neither have the British people in these days; and the people of Canada should emulate that example. That is why we are willing to make sacrifices to help England win this war.
The Minister of Justice (Mr. Lapointe) rose in his place last night and declared that he was a Britisher to the core. I am sure that statement will have a wonderful effect throughout the country. I felt like applauding him for making it, but I could not help thinking that if he had adopted that attitude years ago, there would have been much less trouble in Canada.


Mr. LAPOINTE (Quebec East):: My hon. friend is wrong in listening to his supporters.


Richard Burpee Hanson: Let bygones be bygones. I wish to tell the Minister of Justice right here and now that my admiration for him began to glow when I read the report of the speech he made on the question of the neutrality of Canada. I say to him that it was a noble speech, and after reading it I forgave him for much of what has happened in days gone by. I am willing to do that; that is my attitude toward this whole matter.
I was impressed with the declaration of the Prime Minister in England; and we in Canada should help, even if it pinches every last one of us. Therefore I say to the Minister of Finance that we will support these proposals, but we shall reserve the right to examine each and every one of the items he proposes to change.
There is just one other matter to which I might refer before I resume my seat. When the matter of foreign exchange came to the front, the thought occurred to me that the government of Canada might very well ask residents of the United States to leave their dividends in Canada to be invested in Canadian securities, just as we compel them to leave their capital assets in Canada, invested in Canadian securities, and not to be removed during the war. I wonder whether it would not be possible to ask the well-to-do in the United States who hold these securities to help us out in these times. Has that possibility been explored? If I understood correctly what the minister said the other day, it takes the total gold production of Canada to pay those dividends and interest. I believe my suggestion will have to be accepted by him sooner or later, and I believe it should be the subject matter of negotiation now rather than later.
I commend that suggestion to the minister. Already, in effect, we have frozen capital assets in Canada. Is it asking too much to do as I now suggest, or are we afraid of the repercussions on our own investments in the United States? I know it is a ticklish matter to deal with, but I suggest that we shall have to take drastic action in connection with it, and that the minister might well explore the possibilities.
I had toyed with the idea of suggesting that an arrangement be made between ourselves and the two nations now so closely associated with us, one of which is our mother country and our ally, and the other, our good neighbour to the south, for the tying of our respective currencies together for the duration of the war. That would be done along the same lines as were followed when

War Budget-Mr. Coldwell
the British pound and the French franc were tied, until the time of the fall of France. I have abandoned that theory, and I shall tell the house why. I am afraid the burden would be so great that it would fall altogether upon the shoulders of our neighbour to the south, and that it would not be decent to ask them to accept that burden.
But, over and above this reason, let me say to the minister I would oppose that theory to-day because I believe that so long as we are a nation, so long as we call ourselves Canadians, we must, by all means at our command, preserve if we can our fiscal independence. Once we lose that fiscal independence, the laws of economics will become too strong for us, and I am afraid that the next step would be the loss of our political existence. Therefore I reject that theory, and suggest to the minister that if I have made the suggestion, he ought not even to toy with it.
I have been impressed with the thought that I should urge upon the government the necessity of beginning at once negotiations with the United States toward the establishing of credits for us, and to enable us to borrow over there. I am afraid we shall have to come to that sooner or later. I realize, however, that there are certain legal impediments in the way. First of all, there is the neutrality act. I have no doubt that after the examination now under way in the United States senate, both the neutrality act and the Johnson act will be at least moderated. I believe the way will be opened. But let me say to the minister and to the people of Canada that borrowing is just a palliative; if is just a mortgaging of the future; it is just stalling off the day of settlement. If we create a heavy debt, at the conclusion of this great struggle we may find ourselves so far in debt to the United States that our economic and political existence will be in jeopardy. We ought to stall off that evil day to the last minute.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, I do not propose to discuss at any great length the details of the special budget. I realize of course that the new financial proposals with which we are faced are made necessary on account of our war expenditures, and that we have to face a grave economic and financial situation in the future.
While in the main supporting the proposals made by the minister at this time, we wish to offer some constructive criticisms, because we believe the proposals are insufficient to meet the needs of the country now and in the near future. We understand that in presenting this budget the government's objectives are the conservation of foreign exchange and
the encouragement of individual saving among our people so that the savings may be available for war purposes. Such revenue as may come from the excise tax must be considered to be purely incidental and not a primary requirement of the tax. It seems to me that an equally desirable objective is the maintenance of the Canadian dollar at a stable value in terms of foreign exchange and particularly in relation to the currency of the United States; hence I presume the proposals for the restriction, indeed the prohibition, of the import of many commodities.
On the other hand, large purchases by Britain in Canada make it essential that we should buy more from Great Britain. In other words, we have to conserve our United States dollars for purchases by Canada in the United States, and if possible expand the amount of Canadian dollars available to Great Britain in order that she may pay for the very large purchases she is committed to make in this country. We are heartily in accord with the proposals made to improve Britain's ability to purchase here. The criticism that we would make is that they are too timid and therefore largely ineffective. I do not agree with the leader of the opposition (Mr. Hanson) in that regard. I do not think that you can have it both ways. I do not think that you can keep certain British goods out of Canada and yet serve the British need to the fullest extent. Consequently we have to face the facts as they are before us; and so we approve of the removal of the duty on a fairly wide range of British textiles.
I notice that most other products, excepting coal, will be subject to a tax of ten per cent or more. This tax, together with the high ocean freight rates, constitutes a fairly substantial protective tariff. When I looked over the schedules a small matter occurred to me. For example, why should soap powders and soaps, of which Britain produces a very large quantity, not be included in the free list? In a previous speech which I made in the house I referred to soap advertising, and a few days later I read in the Montreal Gazette a reprint of an article which had appeared in one of the United States women's magazines in which it was stated that the soap companies spent upon radio time alone, exclusive of the voices and scripts, the enormous sum of 830,000,000 per year. This is a substantial sum of money, and I believe that there is a field for further taxation in connection with that industry, or else British soap should be allowed to come into the country free of duty. I make one further observation in that regard. To my mind, more British goods should be placed upon the free list. I have always been in favour
War Budget[DOT]-Mr. Coldwell

of British commonwealth free trade, and I am glad to see a step being taken in that direction. I wish that under the pressure of war the government had gone a little further. As I have said, high ocean freight and insurance rates give Canadian industry quite adequate protection.
We are in agreement with the policy of prohibiting the importation of certain articles from the United States, because we believe that an embargo or a prohibition based on a well-thought-out plan is preferable to increased tariffs. But this prohibition places a responsibility upon the government, and I noticed that during the course of his remarks the minister recognized that responsibility. We have to see that the prices of Canadian-made articles which receive protection through this prohibition are adequately controlled by the war-time prices and trade board. I hope the government will reconsider its policy in regard to price control. We do not agree with the present policy of allowing price increases and then permitting appeals, as it were, to the prices and trade board. I have always thought that when war broke out what we should have done was to set a basic date for commodity prices, as they did in Great Britain in September, 1939, for a large number of articles. Then if the industries felt they required a higher price they could appeal to the board for permission to increase prices beyond that which prevailed on the basic date. I believe that to be the better procedure of the two.
I think our income and excess profits tax legislation will reveal that considerable sums of money have been made out of price increases. For example, I have been reliably informed that certain people interested in sugar-not in the raising of the sugar beet but in the manufacturing of the refined sugar -have made vast sums of money this year because of the increased prices which have been permitted by our government. Unless efficient control is exercised and severe penalties provided in connection with other commodities, huge fortunes will be made out of the war situation. Unless we watch this condition closely there is danger of playing into the hands of the great monopolies or near monopolies which to-day control our oil industry, our sugar industry and our tobacco industry-to mention only three which were subject of comment in the price spreads report of several years ago. In adopting this budget parliament should make such provision as will ensure that our people shall be protected against any exactions because of this new measure.
I take it that the excise taxes proposed will serve a dual purpose. First, they will 
restrict consumption because of increased prices and, second, they will bring in some revenue. The question I asked when I saw these excise taxes was: Whose consumption will the taxes decrease? I venture to say that the people who will have to forego buying the articles taxed will be those in receipt of the lower incomes. Those in receipt of higher incomes will be able to buy as before. Some of the articles which are being subjected to fairly high excise taxes are not luxury goods but actual necessities for many persons in the low income groups. For example, electric and gas stoves. In this city there are many rooms and many homes in which no provision is made for a coal stove and where consequently -an electric stove is a necessity. Electric stoves, ranges, heaters, lamps, washing machines-even the toaster upon which many a poor working girl earning six or eight dollars a week gets her breakfast before she goes to business in the morning-are not luxuries to that type of person, and in that respect this is not a luxury tax but a tax upon something that is necessary to their way of life.
As I said a moment ago, for the well-to-do all that the new taxes involve is an increase in the price, thus depleting funds available to them for other expenditures, for luxuries, or for savings. Hence it will be seen that the incidence of the tax may not fall justly upon all our people. A twenty-five per cent excise tax on the range of goods to which I have referred is to my mind the most objectionable feature of the government's proposals, because it tends in some instances to lower an already too low standard of living.
Again I would point out in the same connection that we are trying to raise our war revenues all the time in the wrong places. We appeal for support for sales of war savings stamps and certificates. I recognize that such appeals are necessary and useful because every group of our people ought to be asked to do all they can in connection with our present effort. But these appeals are mostly to the small income groups upon whom the new excise taxes and increased prices will fall heavily, thus restricting their ability to buy war savings stamps and certificates. If, of course, the object is to divert the electrical supplies industry to war work, then perhaps rationing or licensing might have been preferable to increased taxation in this manner.
Canada must raise vast sums of money for the war effort. The method suggested will, I submit, not achieve the desired result. Neither the budget of last summer nor the supplementary proposals we are now considering will achieve that object. Therefore we must explore other possibilities.

War Budget-Mr. Coldwell
Fifteen months ago, in September, 1939, when the war broke out, and many times since, we of this group have said that if our manhood is asked to give its life for this cause, then wealth ought to be asked to give itself to the same cause. Yesterday I referred to a compulsory non-interest-bearing loan for the duration of the war and one year afterwards which was introduced in New Zealand last July. In justice to our people-to our farmers who are depressed on account of the condition of their industry, and to those who are being asked to sacrifice some of their privileges in the industrial life of the nation- we should ask those who control vast accumulations of wealth to make a sacrifice and contribution equivalent to that which the same classes have been asked to make in our sister dominion of New Zealand. Such a proposal is not confiscation; it is merely a loan made to the country in her hour of need, and repayable when the danger has passed away. If a country like New Zealand can do it, I suggest we should be able to do it also. There are not in New Zealand the vast accumulations of wealth, Mr. Speaker, that we have in Canada. Everyone who knows anything about that country knows that there is a greater equality of wealth there; that vast fortunes are less in amount and certainly fewer in number than they are in Canada.
We already have provision for a noninterest-bearing loan on a voluntary plan, to which there has been some response-but a relatively small response in dollars and cents. New Zealand had a similar voluntary loan, as the following extract from their Hansard will show. I have the New Zealand Parliamentary Debates of the second session, 1940, from which I read yesterday. At page 307, speaking on June 27 of this year, the Hon. Walter Nash, Minister of Finance, had this to say regarding New Zealand's voluntary loan and the proposed compulsory loan:
A start towards the provision of interest-free loans has already been made by generous voluntary effort on the part of many citizens, and to date nearly sufficient has been subscribed to balance the war expenses account to the end of last financial year. But that is not sufficient. It is not right that others equally capable of affording assistance should not make their due contribution. In this connection it is the intention of the government to formulate for the consideration of the house a procedure under which all who have _ means will be required to assist by subscribing to loans for these purposes. Those who already have or who may in the future voluntarily lend money free of interest may have the amount already subscribed taken into account in determining their total liability under this heading.
In order, Mr. Speaker, to bring this matter to the attention of the house more forcibly than can be done in the form of a speech,
I propose the following amendment to the resolution, seconded by the hon. member for Vancouver East (Mr. Maclnnis):
That all the words after "that" in the said motion be Btruek out and the following substituted therefor:
This house regrets that the government has not seen fit to introduce proposals for the raising of a compulsory war loan free of interest to be levied according to ability to subscribe.
We feel that this means of raising money should have been thoroughly explored by the government before new taxation was imposed on the people of Canada at this time. I know that the proposal I am making will meet with a response from a large number of our people, and I can say that because of an interesting experience that I had this autumn. When I was out in my constituency, one of the Cooperative Commonwealth Federation members of the Saskatchewan legislature, whose seat largely coincides with the southern part of my constituency, had been promoting the idea of a voluntary interest-free loan, to which, I may say, he himself, a farmer, had made a substantial contribution. I refer to Mr. L. H. Hantelman of Elrose. I was with him a good deal of the time as he went through his constituency and talked to the farmers and business men regarding the lending of money to the dominion at this time, free of interest, and he estimated that people in that constituency would raise among them a million dollars for our war effort-


An hon. MEMBER:: Those poor farmers!


Major James William Coldwell: Just wait a momenton this condition, that the government of Canada would accept wheat on the basis of the present price and take that as a loan for the duration of the war. The first proposal was that it should be for one year, but then they realized the implications of that, under the storage conditions which exist in Saskatchewan at this time, and Mr. Hantelman has since been going over the district and suggesting that it should be for the duration of the war. The response has been equally good. I rather think that the minister will hear from him again in the near future. Here we have a group of people who for a number of years have been depressed but who in the time of their abundance of wheat and at some sacrifice are willing to make a loan interest-free to the dominion.


Mr. TRIPP:: The hon. member would not suggest that Mr. Hantelman is "depressed" so far as wheat is concerned?


Major James William Coldwell: I am asked if I would suggest that Mr. Hantelman is depressed so
War Budget-Mr. Coldwell

far as wheat is concerned. I certainly would not, and I say that, wherever we go in any industry, we can find individuals who because of fortuitous circumstances are not afflicted with the depression with which their industry is afflicted. Mr. Hantelman happens to be one of the very few men in the province of Saskatchewan whose superior land and equipment are free of debt.


James Lorimer Ilsley: Will the hon. gentleman
permit a question? The offer is equivalent to an offer to lend cash, in view of our wheat board act, is it not?


Major James William Coldwell: Yes-interest-free.


James Lorimer Ilsley: There are facilities for that to be done now. It is just a matter of those farmers buying the non-interest bearing certificates which are available, if they want to do it.


Major James William Coldwell: But may I say this, that with a delivery of eight or even twelve bushels to the acre at 50 cents a bushel at the local point, they have not been able to meet their accumulated obligations. And while, in the district to which I refer, many of them have had crops running from thirty to forty-five and even fifty bushels to the acre, they can hand over surplus wheat which the government can turn into cash, but they cannot themselves turn it into cash because they cannot deliver more than twelve bushels, the proceeds of which are required to meet their own running expenditures and other obligations.


James Lorimer Ilsley: Because of temporary storage difficulties.


Major James William Coldwell: Storage difficulties,
yes, and of course those difficulties may continue a long -time. They are quite willing to make this loan immediately if the product is accepted instead of the cash.


James Lorimer Ilsley: We would have to find
some place to store it.


Major James William Coldwell: Well, I do not think the government would find -that an insuperable difficulty.
In our opinion, this whole field of noninterest-bearing loans should be thoroughly explored.
There are sources of revenue of other kinds.
I have in mind the increase to 100 per cent of the excess profits tax, and other means of improving our foreign exchange position. In our opinion the non-resident owners of Canadian property and securities should be taxed. The balance of interest payments against Canada, according to the Canada Year Book of 1939, the last issue which I happen

to have in my office, was $246-2 millions in 1937. It seems to me that the non-resident holders of Canadian securities should be subjected to an increase in taxation at the present time, because the war effort of the Canadian people will protect their property and their security, and they should contribute substantially to the cost of that protection.
Some people may think that these are drastic proposals. They are not too drastic under the circumstances. I fancy that as the war proceeds we shall have to consider proposals even more thoroughgoing than those which I have placed before the house this afternoon. But, because they are drastic, our people have the right to know that the money which is being expended is being expended wisely, without waste, and well.
Last evening the Prime Minister (Mr. Mackenzie King) announced that he had agreed to the proposal made by the leader of the opposition (Mr. Hanson), that a committee of this house should be established to give constant supervision to the expenditures of money used in our war effort. That is all to the good, but I submit, Mr. Speaker, that that committee should have been established already and should be sitting now. A similar committee was established in Great Britain just a year ago; speaking from memory, I believe the Prime Minister said, December 12 of last year; and that committee has been sitting continuously ever since. So that we are now twelve months late, and there should be no further delay. If the committee were established now it would be possible for it to present a report when the house reconvenes and we would be able to discuss much more intelligently our war effort than we have been able to do at this session. I should have 'liked to have seen our standing committees appointed and at work as soon as we assembled in November. As an hon. member remarks, private members want something to do; they want to feel that they are actually doing something to assist the country at this time.
One further word. The leader of the opposition regretted that the entry to Canada of fresh fruit and vegetables had not been prohibited. I think I can understand the desire regarding this matter of those who live in British Columbia, in Ontario, and perhaps in the maritime provinces. But there is another side to that argument. Those of us who live on the prairies know perfectly well that our people cannot produce green vegetables until away on in June, even July, and that fruit, with us, except in a very good year, is very difficult to grow and to ripen at any time. Consequently we have to rely on fruit at some seasons from the immediate south.

War Budget-Mr. Blackmore
Green vegetables, citrus fruits and other winter necessities we must get from that source. If it is ever found essential to prohibit the importation of these goods in order to protect the growers of British Columbia, central Canada or the maritime provinces, it should be done on a regional basis and the prairies should be exempt from such a prohibition.
We want Canada's war effort to succeed. We feel that under the leadership of those who are now directing the allied cause there is no danger of betrayal. For a good many years I felt that those who were leading the motherland and France prior to the outbreak of this war were desirous of seeing a strong Hitler and a strong Mussolini as a barrier against the rise of leftist movements throughout Europe. They showed that from time to time, I think, but they have gone, and have been replaced by men who all through the years were pronounced in their opposition to dictatorship of every sort. I believe we may have every confidence that our present leaders will carry on until the last threat to our democratic institutions has been removed and destroyed. For undoubtedly the fight now is against those who would destroy human freedom. Fortunately however the fight is not only against those who would destroy human freedom; it is also for a great extension of human freedom. That, it seems to me, is the positive attitude that we all ought to be taking in Canada at this time.
Believing this, we want to see the burden of the war placed more equitably upon the shoulders of our people, and particularly upon those who are best able to bear the burden. We want this war waged in a democratic manner until Hitlerism, fascism and dictatorships of all sorts and types have been removed from the earth.
I close, Mr. Speaker, with that thought. The suggestions that we have made and the amendment that we have moved have that objective in mind.


Mr. J. H. BLACKMORE (Lethbridge):: I must say that I was agreeably surprised when the budget was finally brought down. It was much less severe than I had feared. I found a great deal in it to commend. But at the same time there are several aspects of the budget which in my judgment are undesirable.
In the first place it is a budget of scarcity, just as have been all the budgets brought down by the ministers of finance in Canada since the depression, or even before. It is a budget which tends to starve the goose which lays the golden eggs, to bleed the goose to death rather than to feed it, heal it and
put it in an environment which will enable it to produce golden eggs of the finest quality and in the greatest number.
A nation might be likened to a farm. Granted that the farm is good, the owner will probably get out of it about what he puts into it, in time, labour and money. There are two types of farmer: the niggardly type, and the generous free-hearted type. The niggardly farmer, whose like we have all seen, spends as little as possible on his machinery, consequently is always having it break down just when he has a great pressure of work on. He works his land as little as possible, feeds his stock in a stingy way; his fencing is poorly done; his buildings are ramshackle and fastened together with wire; his attention to his farm generally is such as makes one feel that what he is thinking about when he is on his farm is how soon he can get away from it. He lacks that progressiveness and forward-looking quality which causes a man to rejoice in making his farm a home and a great productive enterprise, a place where he wants to be. He does not put into his farm love. The free-hearted farmer is exactly the opposite in all these respects.
Now I say this budget is a niggardly budget. The Minister of Finance (Mr. Ilsley) will probably feel that that is a severe statement. I make all possible allowances for his feelings in the matter and for his point of view, yet I repeat earnestly and sincerely that it indicates that the government of this land belongs to the type of the niggardly farmer rather than the free-hearted farmer. The farm they are administering is a magnificent one, of boundless resources, but they are so managing it that the goose will be killed, or at least its vitality reduced to the lowest level; and thereby they will fail to obtain the results which they and the people desire.
The budget is a backward-looking budget. It looks back to the last war and the years before the last war; it fails to face the facts of to-day and to-morrow. This is an age of plenty. It is astonishing how few people seem to realize that the last war was fought in an age of scarcity, while this war is being fought in an age of plenty.


Mr. CASSELMAN (Edmonton East):: Have we plenty of United States exchange?


John Horne Blackmore: That is not a very intelligent question, so that I shall not deal with it here. I will deal with it off the floor.
This is an age of abundance. Somewhere between 1913 and 1928 the world rounded a corner. It left behind the age of scarcity and entered an age of abundance, in which men could produce more than the people were
War Budget-Mr. Blackmore

enabled to buy. That fact has rendered it necessary for us to readjust our whole attitude toward the war if we would avoid mishaps.
As I have said, this is a budget of scarcity; it looks backward to the last war, not to to-day and to-morrow. This is an age of plenty, an age of machines, of science, of synthetic goods and improved processes, an age of colossal speed not only in aeroplanes, automobiles and ships but in every process that enters into the fabrication of goods and services for the use of humanity.
This budget is based upon the thinking of "have not" nations like Britain and France. It quite ignores the fact that Canada is a "have" nation. Canada's resources are so rich and so varied that to compare this country with a nation like Britain, whose resources are so much restricted, is to make the gravest kind of error. Canada is capable of being self-sufficient, of successfully applying the principles of economic nationalism.
This budget disregards the fact that a nation's fighting efficiency depends upon its people, their health, their strength, their morale and the productive power of the country both potential and actual. This budget tends toward inflation, because it tends to destroy productive power. The only thing that will prevent a great distribution of money in the country from becoming inflation is adequate productive power to absorb that money. This budget will tend to destroy production at the very time when, by loan or otherwise, vast quantities of money are being liberated into the country's avenues of trade. Therefore it has a tendency toward inflation.
The other day the minister spent a good deal of time dealing with the supposition that the proposals my group are making would cause inflation. Let the minister bear in mind that the very principles he is applying to-day are those which brought about the inflation of the last war; and if he pursues them consistently they will result in a greater disaster than any we knew as a result of the last war.
Now, having had some fault to find with the budget, may I point out some commendable features of it. In the first place there is a most refreshing frankness shown in the definition of exchange. I should like to read a sentence or two which particularly pleased me:
First, however, let us recall the nature of the problem. Foreign exchange means, essentially, the money of other countries, with which we can buy goods in those other countries or make payments to people there. It is not like our own money, subject to the control of our national government. We can only obtain it by selling things to other countries . . .

If only the people of Canada during the last ten years had been instructed by both Liberals and Conservatives on the hustings throughout the country that this was the thing which decided the exchange value of our dollar, they would have been in a far happier situation to-day. I continue:
We can only obtain it by selling things to other countries or by getting payments from them for services rendered, or by borrowing it. We cannot simply go and buy it with our own money. People in other countries cannot use Canadian money for their own internal transactions and naturally they do not want it merely to keep or to hoard-they want it only to buy things in Canada or to make payments in Canada for services rendered to them by Canadians.
That is an admirable expression. There is truth in every phrase, in every word, and the significance of that truth is not even dreamed of by the majority of hon. members of this house. As an example, during the last election campaign in Alberta the people everywhere were told, either openly or in whispering campaigns, "Why, the new money won't be any good in other countries." See how widely at variance that sort of thing is with the principle so excellently expressed here!
Let the people know the truth; be honest with them. If there is one thing for which the people of Canada hunger and which they need above all else, it is the truth, the honest, bare, bald truth about the great economic factors that enter into our situation. I commend the minister because in this respect he has told them the truth. Tell the people that what gives our money value in Canada is goods in Canada.
I am sorry that when the minister was answering me the other day he failed to quite follow that principle. He did not stop to tell the people that if a billion dollars were issued in Canada it might be inflation or it might not, depending upon whether or not there were over a billion and a half dollars' worth of goods in Canada to be bought with the money; and that if there were a billion and a half dollars' worth of goods in the country to be bought with the money, it would not cause inflation. He did not tell them that, but that was the vital thing that should have been told. The value of our money in the United States depends upon the goods we have here which we can sell to the United States, as the minister has so admirably stated.
Another commendable thing about this budget is that it frankly faces the development of what is called economic nationalism. For some time, Mr. Speaker, there has been a tendency on the part of certain prominent men in Canada to run away from economic nationalism as something dreadful. They

War Budget-Mr. Blackmore
"hush-hush" it; they say we must not have it, that it will cause war, and all that sort of thing. It was a grave error to talk like that. It was a grave error to think like that. Economic nationalism is a fact in the world, and Canadians need to face that truth realistically and courageously, and say, "Well, what are we going to do about it?" Here is the situation, and the minister does face it frankly in several respects. I commend him for having done so.
There have been definite trends towards economic nationalism in the world which everyone should have been able to see. Always, for the last ten or twelve years, when Canadian leaders have spoken of economic nationalism they have pointed to Germany, to Italy, or to some other country, when right across the line our next-door neighbour was taking every possible step to develop economic nationalism within that country.


James Lorimer Ilsley: No; the trend has been the other way.


John Horne Blackmore: That is what they say, but that is not the way they act. The Hawley-Smoot tariff against cattle was a case in point.


James Lorimer Ilsley: The hon. member said during the last ten years.
Mr. BLACKMORE; Yes, but they are still taking some steps the other way, too. For example, I am sure the minister has heard of the elaborate attempts being made in the southern United States to develop forests so that they can be free of the need of buying Canadian wood pulp. That is a definite step towards economic nationalism. I understand now, moreover, from a recent report, that the United States are taking careful steps to develop their own beet sugar seed production, so that they may be independent of the nations across the water. That, again, is a step toward economic nationalism.
I am sure I could find scores of such examples, if I took the trouble; and the minister could do so too. Perhaps the United States have been lowering their tariffs in certain respects. But so far as I can tell the only reason why they have been lowering their tariffs is that they have discovered that only by lowering tariffs and taking in certain Canadian goods would they be able to get Canadians to take in certain of the goods they desired to sell abroad. I will grant that the desire to sell goods abroad is not a tendency to economic nationalism, but to-day to a large extent the desire to sell goods abroad is the result of the failure to recognize and appreciate the existence of economic nationalism.
We find little Hawaii endeavouring to develop her own potatoes. Why is she doing that? She is doing it so as to be independent of maritime potatoes. That is the natural thing to do; it is the tendency toward economic nationalism. We read of Eire putting forth the very greatest effort to render herself self-sufficient. We do not condemn that action on the part of Eire; it is a tendency toward economic nationalism. The last report we have is that Great Britain is ploughing up hundreds of thousands of acres-I have even heard she is ploughing up millions of acres-and putting them into wheat. "Well," we say, "that is a sensible thing to do. Great Britain may be starved out." True, but the fact remains that that is a tendency toward economic nationalism. And if the British people once begin producing their own wheat successfully, it is not very likely that we shall recover that market after the war. It is a tendency toward economic nationalism. What causes it is another matter entirely. The thing that causes it is the tendency which is abroad in the world, a tendency which has arisen largely from the fact that we live in an age of machines. It arises, too, because of our monetary system, and because of several other factors it is not my business this afternoon to analyse, but which I could analyse for hon. members had I the time to do so.
It is noteworthy that Great Britain is becoming more or less economically nationalistic in her thinking. When the minister's budget was announced, the British trade commissioner, Mr. A. M. Wiseman, is reported in the press to have said, "Canada has been generous to Great Britain." Yes, she has,-in a niggardly sort of way. I will use the expression again; she has, in a niggardly sort of way. Canada believes that is the best thing she can do, under the system she is following. But it apparently has not dawned upon her leaders that she might change her economic and financial system, and thereby make a tremendous difference to the extent to which she might assist Great Britain.
Nevertheless the fact that Mr. Wiseman said that Canada had been generous to Great Britain indicates quite clearly that he realizes Canada is making a sacrifice. She is making a sacrifice by undertaking to buy British coal, when she can produce her own. The common-sense procedure would be, surely, to produce her own. The same is true of all the other commodities which Canada has "generously" agreed to accept from Great Britain.
The minister has said that Canadians can stand competition. Canada could easily
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produce the products to be admitted from Great Britain, and probably could produce them quite as satisfactorily as she will be able to get them from Great Britain-perhaps even more satisfactorily. How, then, did it come about that so many Canadians came to decry economic nationalism? The very same men who decried economic nationalism will stand on the floor of the house and tell the people that the solution for the problem of the western farmer is that he must stop growing wheat and begin to produce other commodities. In other words he must go into diversified farming. Diversified farming is economic nationalism on a small scale, and economic nationalism for a nation is simply diversified farming on a large scale.
Why does the minister not go farther than he has gone? No doubt he has his reasons. When he was delivering his address I listened most attentively for some indication that Canada was going to produce and use her own coal. A report I have before me indicates that in 1939 Canada imported 14,998,645 tons of coal, and paid $41,578,685 for it. Most of that coal came from the United States. There are immeasurable deposits of coal in Alberta, and the men ready to mine it. There is equipment ready for mining operations to produce coal at economic prices. There are large numbers of railway cars and tracks in excellent condition. Why not bring that coal from Alberta? Why not bring it from Nova Scotia? Since I have come to this chamber I have sought a satisfactory answer to these questions, but I have sought utterly in vain.
According to the records I have, last year Canada imported 10,343,626 hundredweight of sugar for refining purposes, and paid $20,225,605 for it. When I first came to the House of Commons I began to point out to the people of Canada how important it was that they develop their beet sugar producing capacity. What has been done? My pleas, of course, have been completely ignored. But the fact remains that every pound of that sugar could be produced in Canada. Fifty per cent of the total sugar consumption of the Canadian people could be produced in southern Alberta, in the district south of Calgary.
We talk about foreign exchange! Well, it does not look as though the importance of foreign exchange has even yet fully impressed itself upon the minister. What about the amount of wool we are importing into Canada, despite the fact that we are a nation admirably adapted to the production of wool? What about the corn we are importing for the purpose of making starch?


Mr. MACDONALD (Brantford City):: Why doesn't the hon. member produce wool?


John Horne Blackmore: I am noi discussing that point at the present time. I could discuss it with my hon. friend, but I do not believe I would be in order if I were to do so now.
Vegetable oils are coming into this country in quantities appalling to the western farmer who is producing animal fats. Petroleum and gasoline are being imported in vast quantities. I may be met with the reply that we are not now able to produce the petroleum and gasoline we need. Yet the other night the hon. member for Athabaska (Mr. Dechene) rose in his place and with a fine burst of oratory portrayed to the house the tremendous possibilities of the McMurray tar sands. What is being done about that matter? Definitely nothing,-notwithstanding the fact that we have in that district the repository of a quantity of oils which could render the British empire completely independent of every other source on earth. And we are rushing rapidly toward a time when the empire may sorely need those resources. But nothing is being done about it.


Mr. GRAYDON:: Why?


Mr. HANSELL:: Because they do not know where to get the money.


John Horne Blackmore: There is another
matter to which I must refer. If I remember correctly, the minister stated that he did not desire that the shutting off of certain goods from outside should result in increased production of those goods in Canada. I am sure the minister will excuse me when I say quite frankly that I do not agree with him. Of course he will not take that very seriously, but I believe he will in a year or two. Increased production is exactly what we want. There may be reasons to be offered otherwise, but I am quite sure they can be met. I fancy that the minister assumed that this would be a short war.


James Lorimer Ilsley: No, I did not.


John Horne Blackmore: I am glad to hear
the minister say he did not. If this war is to be of ten years' duration, and if the economic structure of this country and the economic system we are following change as much in each one of the five or six years to come as they have in the last year; if the thinking of our people changes as much as it has done, then we shall be in a different world entirely. It will then become highly important that we have all the production that we ourselves can use, as well as what might be necessary for the support of mother Britain. Economic nationalism may be forced upon us after the war by the very forces which are now causing Britain to plant all those acres of wheat. We cannot blame her;

War Budget-Mr. Blackmore
we know she has to do it. If we are not at that time in a position to produce the things we need; if we are unable to sell enough goods of which we have a surplus to buy the things we need, we are going to be in an unsound condition economically.
Finally, as I have pointed out, it is production of a wide variety that prevents inflation. Inflation has not nearly so much to do with the amount of money in circulation as it has to do with the goods in circulation. The minister assumes that there may be a shortage of these goods. All over the land to-day there is a tendency to make broad general statements and to swallow them without examining them in sufficient detail. For example, utterly unjustifiably optimistic remarks are being made in the press about the Rowell-Sirois report. It is necessary to examine the evidence for or against these statements. Let us examine the evidence with respect to the production of goods.
We are ready to agree that there may develop a shortage of such things as leather goods, assuming we neglect the production of live stock to the extent that we have no raw hides; or that we have to supply so many soldiers with shoes that we cannot meet the demand. But there is not going to develop a shortage of wheat, or of coal, or of various kinds of meat, nor need there develop a shortage of milk, or cream, or butter, or eggs, or cheese. For all practical purposes our capacity to produce these commodities is limitless. All we need to do is to see that we have the milch cows and the people who can learn how to milk. For the last ten years Canada has been doing her level best to deplete our milch cow population, and we may have to suffer for it now. If, however, we attack the problem in time, we may overcome the danger which threatens us. There are simply hundreds of kinds of goods in this country of which there is no chance that a shortage will develop, provided we use the simplest kind of common sense in managing this heritage of ours.
Our resources consist of our soil and climate, the forests, the mines and the fisheries. They are well-nigh limitless so far as our own national consumption is concerned. I repeat that while there may be a danger of a shortage developing in connection with certain kinds of goods, as I pointed out in my last speech there certainly is no sound logic in making people go without wheat in order to prevent them from using too many coonskin coats. The thing for us to do as a group of people managing this heritage is so to adjust our economy that our people may enjoy all they want of the kinds of goods of which we can
produce in abundance. Then no one would object to being restricted. But the trouble with the budget and the policy of the government at the present time is that it is endeavouring to make us lack every kind of thing regardless of the question whether we can produce a particular commodity in super-abundance.
We hear a great deal about the danger of a shortage of labour. I have not gone out on the streets of towns in Ontario to try to hire men, but I know that in the provinces of Alberta, British Columbia, Saskatchewan and Manitoba there are simply tens of thousands of people who cannot buy jobs, let alone get them.


William Ross Macdonald: Skilled labour?


John Horne Blackmore: If there is a skilled labour shortage, why in the name of common sense are we not putting our high school boys to learning the particular skills which are required? Everything is being left to chance. For example, a boy of eighteen who would be perfectly capable of learning to perform properly the most highly specialized technical task, within say two years, knows nothing to-day about the existence of that task, or where he can go to get training.


Frederick Clayton Casselman: Where would he get it?


John Horne Blackmore: If it is not known, then it is high time the government made it known. Facilities should be provided for training these boys. Is there any reason why we could not send our youth to the United States, to Britain, or to other countries where they could be trained? They could cross the ocean in a short time. No attempt is being made to meet this danger of a labour shortage.


Frederick Clayton Casselman: It
would take a lot of exchange to send them over there.


John Horne Blackmore: The little bit of exchange it would cost to send them there to be trained in the highly technical skills in which there is a danger of a shortage of labour -would not prove nearly as serious to the economy of the country as will the policy we are following to-day of allowing such a shortage of labour to develop, thus impairing our efficiency to produce the goods we need.


Ernest George Hansell: They should have been in training for the last five or six years.


John Horne Blackmore: There is another
aspect of this labour question to be considered. There are great numbers of older men and women who are still skilful enough to do good
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work. Let those people ask for jobs anywhere, and what answer will they get? They will be told that we must have the youth of 19 to 23 or 24; they will be told that we cannot think of anyone over thirty-nine. When I was a small boy it was the glory of a man to be able to do a real day's work at sixty-five. Hundreds of thousands of these elderly people-or scores of thousands, to be a little more careful-are still able and would be joyful to go out and do a day's work at sixty years of age. What measures are being taken to use these people?
Let me refer to still another aspect of this labour question. The United States has upwards of 11,000,000 unemployed.


William Ross Macdonald: Where did the hon. member get those figures?


John Horne Blackmore: International Labour News.


William Ross Macdonald: Are they recent figures?


John Horne Blackmore: Not recent-July, 1939.


William Ross Macdonald: What is the recent figure? It is much lower.


John Horne Blackmore: Is it lower than
6,000,000?


William Ross Macdonald: The hon. member said 11,000,000.


John Horne Blackmore: Is it lower than
6,000,000?


William Ross Macdonald: The hon. member is making the speech. He said
11,000,000, and I am asking him.


John Horne Blackmore: That was the last figure I had, and it may be lower than that. During the last election campaign in the United States the figure of 10,000,000 was given. But if there are only 6,000,000 unemployed, that means there are plenty of men there for us to employ.
The minister talks of increasing our exports as a means of overcoming our exchange difficulties. In that he is on safe ground. He fears to subsidize exports lest he encounter difficulties with the United States.
There are indirect ways of helping to increase our exports. One of these is to decrease the cost of production, thereby lowering the price of our goods for export. Why not so manage that there would be lower interest rates on loans; why not consider the remission of freight rates and the application of discounts to the prices of goods used in production?
For example, in the use of mill feeds. (Some hon. members smile about this pro-

posal. Last spring, Mr. Speaker, we gave to the Minister of Munitions and Supply and to the government absolute powers. If they have not used these powers to make the necessary adjustments, then so much more the reflection upon them because this parliament has done its share.) Why not a sales tax remission on goods entering into production so as to bring down costs and enable us to sell our goods on foreign markets? If we use our national credit, our goods-and-services producing and consuming powers, to increase production and modify the price structure, we shall be able to convert this country into a veritable arsenal to support the empire in war, and a veritable storehouse of goods to sustain our war effort.
May I commend the minister for his desire to assist Britain? We must help Britain; we must give Britain far more assistance than we can possibly expect Britain to pay for by sending over to us some of her bituminous coal and what-not. How are we going to do it? I say that Canada can assist Great Britain without debt to us, without taxation, and without taking away anything from our people, and she can give Britain goods up to the limit of Canada's ability to produce, so that the contrast between what we could do and what we are doing now would be enormous. We do not need to take Britain's bituminous coal or her other goods, fine gesture as it was on the minister's part to offer to do that. Does Britain need for other purposes her workers who are producing her coal? If she does, then in taking her coal we are causing her to put to work labourers who might be better employed. If she is not using those labourers, why not bring them to Canada and put them to work here?
We have in Canada, Mr. Speaker, a tremendous capacity for producing iron. Some people may say that our ore deposits are remote. Then why not bring them up close? Yes, laugh, with your prehistoric minds and antiquated thinking, but if the proposal were advanced that Hitler should have control of the Labrador iron fields, we should immediately become fearful because we know that Hitler would use them. How is it that Hitler could use them, and we cannot, when they are so much closer to us than they would be to him?
We have a tremendous capacity for producing iron and a wide variety of other products such as eggs, wood and lumber, copper, nickel, fruits, cheese; and all these things could be bought with Canada's credit and given to Britain in so far as we produce more of them than we ourselves need, and in so far as we can produce other goods which

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Mr. Blackmore
would absorb the money which would have to be created by Canada and spent to buy the iron, etcetera, in Canada.
May I say a word or two with respect to the amendment which has been moved by the hon. member for Rosetown-Biggar (Mr. Cold-well). We are going to support that amendment. Our social crediters believe in debt-free money. This proposal has been refused by the minister, but perhaps he will live to wonder why in the world he could ever have thought that it was not a sound proposal.
Social crediters took the stand last year that we should have conscription of finance, industry and man-power. By conscription of finance we meant that the government should take over the power and the function of turning into money Canada's goods-and-services producing and consuming power, that the government should monetize Canada's credit. Once that were done, the amount of money at the government's disposal would be highly gratifying I am sure to the Minister of Finance. We felt that if that were done, it would be unnecessary to conscript industry because a government can control industry through the technique of prices, and it would be unnecessary to conscript man-power because men will go to-day where they can get money enough. So that was our proposal.
The government must have money, and money that is interest-free because the interest burden on this country is rapidly becoming so colossal that it is causing anxiety to all serious thinkers. Since our own proposal was refused, we intend to back the proposal that has been made this afternoon by the Cooperative Commonwealth Federation, that those who are able to lend money, who have it to spare, who are not using it for production or for economic consumption in Canada, should be called upon to lend the money interest-free to the nation.


James Lorimer Ilsley: Is that what it means?


John Horne Blackmore: I take it that that
is what it means. I have not asked them what it means, but the words mean that to me. It merely proposes to borrow the money. That is not so bad as conscripting our young men. If I had $100,000 that I was not doing anything with, I would rather a hundred times that the government ask me to lend it to the nation without interest than that they ask me that I give one of my precious sons. It is a simple proposal. It might be pointed out that in the army a man is earning $1.30 a day, but I think I could arrange matters so that he could earn more than that outside the army, and so could any other man in Canada who is well situated.
I do not think the proposal contained in the amendment would be a serious handicap
to the Canadian people, although I wish to point out that the social credit concept does not envisage the taking away of money from the people.
I have given the reasons why I am going to support the amendment. I have also put my case with respect to the minister's budget. I wish to commend him for the moderation of the budget. I wish to commend him for all the various things I have mentioned, and I will say that considering the circumstances in which he is situated, the budget does him a great deal of credit. On the other hand I have pointed out the reasons why I oppose it.


James Lorimer Ilsley: May I ask the hon. gentleman a question just to clarify his position? He says he would not take money away from the people, but he would be in favour of a compulsory loan to the government. How does he reconcile those two statements?


John Horne Blackmore: Perhaps I did not
convey to the minister what I was trying to say, that is, that social credit as a philosophy does not envisage taking money away from people. But we are going to support the amendment moved by the Cooperative Commonwealth Federation, not because it is in accordance with social credit principles but because it offers a means whereby the government can obtain money without interest. Have I made that quite clear?


James Lorimer Ilsley: As I understand it, the
position is that the hon. member does not support the amendment as a matter of social credit philosophy or principle, but is supporting the proposal in this instance.


John Horne Blackmore: Because it is the
lesser of two evils. The minister is proposing one very serious evil, and the proposal in the amendment is a little bit less evil than some of the minister's proposals.


William Ross Macdonald: He is supporting the amendment because it is against his principles.


John Horne Blackmore: Against whose principles?


William Ross Macdonald: Against those of my hon. friend.


John Horne Blackmore: If the explanation
I have made has not been sufficient to make the matter clear to the hon. member, I am very sorry. It certainly does not reflect credit on his intelligence because I made my point perfectly clear.


William Ross Macdonald: The hon. member has not made his point perfectly clear. The two viewpoints he expressed seem to me to conflict entirely.

War Budget-Mr. Blackmore


John Horne Blackmore: They do.


William Ross Macdonald: The amendment says: We will force the people to give us their money. The hon. member is supporting that. Yet at the same time he says: I do not agree with taking money away from the people.


John Horne Blackmore: I can understand why the hon. member cannot get this straight because he did not even get the resolution straight, and for that of course there was some excuse because he did not have a chance to read it but just heard it read from the chair. The amendment simply requires loans without interest, which is a long way from taking money away from the people.


William Ross Macdonald: Do I understand that people would be free to lend their money without interest?


John Horne Blackmore: No; they would be required to lend it without interest.


William Ross Macdonald: Is that not compulsory, if a person is required to lend it without interest?


John Horne Blackmore: Exactly, but is not taking your boy to go to war compulsory?


William Ross Macdonald: I am not arguing that now.


Mr. MacINNIS:: The hon. member is, however, arguing against the other proposal.
On motion of Mr. Church the debate was adjourned.



PRIVATE BILLS


[Stage Direction]
Bill No. 7, to amend the Divorce Jurisdiction Act, 1940.-Mr. Black (Yukon).
At six o'clock the house adjourned, without question put, pursuant to standing order.
Thursday, December 5, 1940.