1941-11-13

ALASKA HIGHWAY COMMISSION


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I lay on the table the report of the British Columbia-Yukon-Alaska Highway commission, together with the evidence.
I have a statement of the main features of the report. It might be of interest to the house to have that statement on record. If it is agreeable I ask that it be placed on Hansard. It simply sets forth the main features of the report.
Report of British Columbia-Yukon-Alaska Highway Commission (Canada)
This commission was appointed by order in council of December 22, 1938. It was instructed to inquire into the engineering, economic, financial and other aspects of a proposed highway to connect the Pacific Northwest of the United States with Alaska by way of British Columbia and the Yukon.
This project had been under consideration by various official and unofficial bodies in Canada and the United States for some twelve

Alaska Highimy Commission
years or more, and reports had been made by a United States commission in 1933 and by a Canadian interdepartmental committee in 1938. This latter report was not published. In 1938 representations were made to the Canadian government by the government of the United States with regard to the desirability of providing for the construction of such a highway, and the Canadian government was informed that the president of the United States had appointed a commission of five members ''to cooperate and communicate directly with any similar agency which may be appointed in the dominion of Canada in a study for the survey, location and construction of a highway to connect the Pacific northwest part of continental United States with British Columbia and the Yukon Territory in the Dominion of Canada and the Territory of Alaska."
In the spirit of these instructions to the United States commission by the president, the Canadian commission which also consisted of five members, was instructed by the Canadian government "To meet for the purpose of discussion and exchange of information with the United States commission appointed for that purpose."
The Canadian commission, which consists of the Hon. Charles Stewart, Major General Thomas L. Tremblay, Mr. J. M. Wardle of the Department of Mines and Resources, Mr. Arthur Dixon of the Department of Public Works of British Columbia and Mr. J. W. Spencer of Victoria, with Mr. Stewart as chairman, held a series of public meetings in British Columbia and the Yukon in the summer of 1939, and, under its direction, reconnaissance surveys were carried out by the dominion and provincial engineers, both by air and on the ground.
The substance of these hearings and surveys was communicated to the government in a preliminary report in April, 1940. The commission at that time felt that further ground work by engineers would be necessary before it would be in a position to give a reasoned opinion on the respective merits of different routes that had been proposed for a highway. These additional surveys were carried out in the summer of 1940, and when the reports of the engineers had been received the commission proceeded to consider and digest all the available information. It also, in accordance with the instructions of the order in council, held meetings from time to time with the members of the United States commission, and discussed with them various problems arising out of their respective investigations.
The commission, having completed its investigation and deliberations, prepared for the information of the government of Canada the very comprehensive report which has now been tabled. This report, after surveying the results of previous inquiries, and summarizing the evidence obtained at the public hearings, describes in detail the various routes investigated by the commission, and analyses the information collected on the natural resources of the regions traversed by various proposed routes, the character of the country, its climate, snowfall, and so forth.
The commission has embodied in its report a great deal of relevant data, including estimates of costs. The commission itself reports that either of the two main routes investigated, known as the "A" and "B" routes, is practicable from an engineering point of view. It is understood that the United States commission concurs in this conclusion.

These routes, the former nearer the sea and the latter nearer the mountains, are shown on the map accompanying the commission's report. The "A" route runs roughly from the vicinity of Fort St. James, in northern British Columbia, and by way of Atlin. near the British Columbia-Yukon border to Whitehorse, and from there to the Alaskan boundary. The "B" route from Prince George extends north through what is known as the Rocky Mountain Trench to Liard River and down the valley of the Pelly to the Yukon and from there to Dawson and the Alaskan boundary. The commission, after balancing the advantages and disadvantages of each route, concludes that the "B" route would best fulfil the purposes of the proposed highway.
In its consideration of the proposed highway the commission has assumed that the existing roads of British Columbia from the international boundary north to Prince George and Fort St. James would form part of the highway whatever route might be adopted, and confines its consideration of these existing roads to an estimate of the cost of bringing them up to the suggested standard of the highway.
The commission finds that the length of the highway from Vancouver to the Alaskan boundary would vary from about 1,700 miles to about 1,900 miles according to the route adopted.
The commission estimates the cost of a highway completed to the required standard, but exclusive of paving, at from $25,000,000 to $30,000,000, but as these figures are based upon reconnaissance surveys they are only approximate. The "B" route would be somewhat shorter than the "A" route and would cost less both to construct and to maintain.
The commission expresses its appreciation of the cordial cooperation of the government of British Columbia in placing all relevant maps and engineering data at its disposal and in authorizing at considerable expense additional field surveys by its engineers.
PRIVILEGE-Mr. GILLIS



REFERENCE TO ARTICLE IN MONTREAL &quot;GAZETTE&quot; OF NOVEMBER 12

Mr. CLARENCE GILLIS (Cape Breton South):: Mr. Speaker, I rise to a question of
privilege. In the Montreal Gazette of Wednesday, November 12, in the column written by Mr. F. C. Mears, the Gazette's parliamentary correspondent, the following statement appears:
Labour has its mouthpieces in the house, Angus Maclnnis and Clarence Gillis. The latter yesterday in the house sought to tell fellow-members that there would be trouble in the mining area if labour's demands were not heeded. Then he coolly informed them that he foretold to them what happened in Cape Breton. But Gillis was not just an innocent onlooker of the disruption of coal production in Nova Scotia. It wasn't that he feared there would be trouble down there; he was closely associated with those who caused the trouble.
But how long is the government of Canada to submit to the humiliation of having to listen to people who would have the world believe they are just onlookers, even shocked at what is happening, or assuming the role of the prophet and seer and telling fellow-Canadians they told them so.
Privilege-Mr. Gillis

I strongly resent the insinuations contained in this article, and I think the correspondent has violated his parliamentary privileges in classifying the elected representatives of the people as mouthpieces, a term which in the public mind is associated with those who specialize in the defence of criminals. I want to state emphatically that I am the mouthpiece of no one in this house. I am the elected representative of a constituency that is largely labour, and at all times I endeavour to represent my people as best I may.
With reference to the insinuation that I was a party to organizing the disruption of the mining industry of Nova Scotia, I should like to point out to the Gazette and its correspondent that this dispute was going on for two and a half months while I was attending the sittings of this house in Ottawa. Therefore I desire to make it publicly known that I had much less to do with those responsible for the slow-down in Nova Scotia than the newspaper for which the gentleman in question is writing had to do with some of the financial interests who have been responsible for the economic conditions that bring about labour disputes which to date have frequently disrupted industrial relations in Canada. It ill behooves any man who has already sold his pen to the financial jackals of St. James street to refer to any of his majesty's elected representatives as mouthpieces.


Some hon. MEMBERS:: Order.


Clarence Gillis: I am answering the insinuations contained in this article; and the language I am using is exactly the sort of language used by the writer of this article, who has referred to his majesty's elected representatives as mouthpieces.
In the last paragraph the writer in effect recommends to the government the suppression of any minority opinions in the house and he who thinks along these lines is not too far removed from Hitler. We endeavour to avoid industrial disputes by pointing out to the government the economic injustices that exist
among the common people. We do not set ourselves up as prophets or seers. We represent the broad masses of the people, with whom we are closely in touch in their every-day life. We intend to continue to expose the manipulations of the financiers and industrialists of this country who, if allowed, will travel the same road that was travelled by the ruling classes of other countries who are responsible for Hitler's domination of Europe to-day. If trouble develops at Kirkland Lake it will not be the responsibility of the common people in that area, but the responsibility of a small group of profit-mad mining magnates who place profits above patriotism at this time.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. CASTLEDEN:: 1.	How many persons have been granted postponement of services under the Department of National War Services in each province?
2.	How many conscientious objectors, other than Doukhobors and Mennonites, have been granted postponements in each military district?


Mr. THORSON:: Statement showing by provinces the number of men whose military training has been postponed
(Not including conscientious objectors)
Province	No. of Men
Ontario	 9,071
Quebec	 14,804
Nova Scotia	 1,286
New Brunswick	 1,418
P.E.1	 217
Manitoba	 1,743
British Columbia	 3,303
Saskatchewan	 1,180
Alberta	   2,020
Total	 35,042
Number of Conscientious Objectors, Other than Mennonites and Doukhobors, who have been Granted Postponement of Military Training in Each Division
Administrative Divisions
Period	A	B	C	D	E	F	G	H	i	J	Iv	M	N	Total2....	3	3	4	i	i	i	28	37	783....	i	72	21	34	1284. .. .	8	8	11	6	335....	i	5	8	1	156. .. .	1	5	67....	12	i	17	2	si	838. ...	4	i3	4	4	259... .	1	i	210....	i	1	5	1	8Totals.	16	15	6	1	13	1	l	l	5	113	77	129	378

Questions
BUTTER AND MILK PRICES*


Mr. LECLERC:: 1.	Is it the intention of the government to set a minimum price for butter this month and during the winter season?
2.	Will the government control the price of milk in the different municipalities?
3.	If so, will the winter price be fixed soon?


Mr. ILSLEY:: This is a question as to the intention of the government, having to do with a mater of policy. I am not sure whether it is a matter with which I should deal or with which the Minister of Agriculture should deal, but in any event I think there could be only one answer, that the intention of the government will have to be made known in due course.


OIL CONTROLLER
Mr. FAIR:: 1.	What is the name of the oil controller?
2.	What position or positions did he hold at the time of his appointment?
3.	Is he a shareholder in any oil or other company?
4.	If so, what company or companies?
5.	What remuneration does he receive as controller?


Mr. HOWE:: 1.	George R. Cottrelle.
2.	President, Western Canada Flour Mills. Maple Leaf Gardens. Sawyer-Massey Limited of Hamilton. Director, Canadian Bank of Commerce. Asbestos Corporation, Limited. Foster Wheeler, Limited.
3.	Mr. Cottrelle is not now, and never has, been a shareholder in any oil company. No information on Mr. Cottrelle's investments in other companies.
4.	Answered by 3.
5.	No remuneration. Mr. Cottrelle receives actual out of pocket expenses incurred in his duties as oil controller.


SALVAGE CAMPAIGN
Mr. JOHNSTON (Bow River):: 1.	What are the names, addresses and occupations of the six salvage campaign organizers?
2.	How much is paid salvage organizers as,
(a)	per diem allowance, (b) travelling allowance, (c) remuneration other than salary?
3.	Are any others employed in connection with salvage campaigns?
4.	If so, who are they and what are they paid in, (a) salary, (b) per diem allowance, (c) travelling expenses, (d) other form of remuneration?


Mr. THORSON:: 1.	Name	Address	Occupation
Roger Charbonneau	7396 St. Denis Street, Montreal,
P Q	Insurance agent, Confederation
Life.
B. A. Cox	238 St. Clements Avenue,
Toronto, Ont	Hydro Electric Power Commission (Accounting department).
G.	II. Hummel	Nokomis, Sask	Farmer.
J. 0. Laird	1252 Victoria Avenue, Windsor,
Ont	District representative, London
Life Insurance Co.
Andrew Sheline	902-18th Avenue West, Calgary,
Alta	Auctioneer, Calgary.
H.	N. M. Stanbury	Room 69, 71 Spring Garden
Road, Halifax, N.S	Last position - manager of
Canadian Permanent Mortgage Corporation and the Canada Permanent Trust Company.
2.	(a) Nil.
(b)	Nil; out-of-pocket travelling expenses, paid according to travelling regulations, authorized by order in council.
(c)	Nil.
3.	Yes; at departmental headquarters, Ottawa.

Questions as Orders for Returns
Salary
4.	(a) Name	Position
William Knightley	Director. (Supervisor of stores
and plant, Department of Transport, seconded to Department of National War
Services)	S3,720 per annum.
J. F. McCallum	Assistant to the director	$3,120	per	annum.H. S. Athey, C.P.A	Accountant and statistician... $2,880	per	annum.A. A. Pariseau	Clerk, grade 4	$1,620	per	annum (plus	cost	of
living bonus).
Mrs. E. F. Scrim	Stenographer, grade 2	$1,080	per	annum (plus	cost	of
living bonus).
Mrs. K. Bresee	Stenographer, grade 2	$1,080	per	annum (plus	cost	of
living bonus).
Mrs. P. Liston	Stenographer, grade 1	$720 per annum....	.	living bonus).Miss Agnes Heidgerken... Stenographer, grade 1	$780 per annum...	living bonus).(b)	Nil.(c)	Out-of-pocket travelling expenses, paid according to travelling regulations, authorized by order in council.(d)	Nil.
(plus cost of (plus cost of



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. REID:: 1.	How many applications for loans were received from each province by the farm loan board during each of the past ten years to the 31st March, 1941?
2.	What number of such loans were granted and to what amount in each province during each of the above years?
3.	What was the percentage cost of administration of the said board, each year during the above period, according to amount of money loaned and collected?
4.	What was the cost of operation of the board's offices in British Columbia each year, from its inception to the end of March, 1941?



H. R. MACMILLAN

Mr. REID:: With what companies or firms is Mr. H. B. MacMillan, chairman of war time merchant shipping board, connected or director of?



QUESTION OF APPLICATION OF ALL SALES TO THIS YEAR'S CROP

[Stage Direction]
On the orders of the day:
Mr. T. C. DOUGLAS (Weyburn):: Yesterday the Minister of Trade and Commerce (Mr. MacKinnon) intimated that discussions were under way regarding the sale of wheat to the cereals import commission of Great Britain. Some time ago the Minister of Agriculture (Mr. Gardiner), speaking in

western Canada over the radio, said the government had under consideration the possibility of applying all sales of wheat to this year's crop. In view of the fact that the minister has intimated that a very large sale may take place in the near future I would ask him if he can tell the house whether the government has finally decided to apply all sales to this year's crop.


Hon. J. A. MacKINNON (Minister of Trade and Commerce):: The government has not so decided.



AIR TRAINING SCHOOLS


[Stage Direction]
On 'the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: Is it the intention to establish any additional training schools in Saskatchewan within the next two months? As no doubt the air minister knows, several surveys have been made in that province and, since the accommodation and all other factors seem to be satisfactory, perhaps the minister would care to make a statement.


Hon. C. G. POWER (Minister of National Defence for Air):: I thought that point was made fairly clear to the house in the statement I made 'the other day. So far as the empire training scheme is concerned, it is

The War-Mr. Harris (Danjorth)
complete and there is no immediate probability or even possibility of further aerodromes being constructed in connection with it. It is to be looked upon as a whole, and the whole scheme is complete.
With regard to other schemes, transferred United Kingdom schools, a programme has been laid down, and I think it is pretty generally known in which localities these aerodromes are to be constructed. So that at the moment there is nothing else in prospect, nor is there likely to be so far as we can tell. But of course I cannot tell, any more than anyone else in this house can tell, what developments may come about as the war progresses.
The hon. member mentioned surveys which had been made. During the last two years the Department of Transport has been constantly making surveys of localities which might make good aerodromes. I do not know that they are continuing at the moment, but it is possible that they are. It is not that we have anything in prospect, but we might as well be prepared against some future contingency.



THE WAR

[Stage Direction]
INTERNATIONAL SITUATION SINCE JUNE 14, 1941 [DOT]-Canada's war effort
The house again in committee of the whole, Mr. Vien in the chair.
Mr. J. H. HARRIS (Danforth):: Mr. Chairman, when the house rose last night I had completed a series of questions in the interests of national economy, more particularly with regard to the duplication of services to be found not only in the war departments, but in other departments as well.
In the form of some further queries I should like as precisely as I can to make a few more observations which to my mind are in the economic interests of Canada. I shall not refer to the work of the war expenditures committee, in deference to the Prime Minister's suggestion that that should be left until the next session- although I disagree entirely with that suggestion. At the same time I chafe under the inactivity resulting from lack of opportunity to do anything to help the general situation.
I have dealt with the matter of medical supplies and services. I come now to the hospitalization of our citizens, no matter what vocation they may be following, and I ask the administration to watch carefully that there is a minimum of duplication. When I make that request I have in mind that the government is charged with the responsibility of operating hospitals for the Department of Pensions and National Health, military hospitals, hospitals for the Department of National Defence for Air, and those for the naval 14873-275
services. I admit that these services call for specialization in taking care of patients in those different classes. At the same time we have in Canada also a considerable number of civilian hospitals recognized as class A on the north American continent. When I refer to class A hospitals I have in mind institutions which have the approval of a body known as the American College of Surgeons. Hospitals have as their objective that of being known as class A hospitals. I suggest that the policy advocated-not strongly enough, to my mind- of using, by contract or otherwise, space in the civilian hospitals, should be pursued.
I suggest that soldiers in the national defence forces who require hospitalization could be treated in civilian institutions, and the same would apply to patients from the Department of Pensions and National Health. There would be facilities in those civilian institutions to take care of all and sundry, thus obviating the expense of building new hospitals in different centres throughout Canada. That would seem to be the proper course, when hospital equipment of one kind and another is already available.
Secondly, it would be sound business, and in the interests of national economy, to canvass the possibility of extending the organizations at present giving hospital service, and make those increased facilities available to the military organizations, whether the air force or the army.
I am sorry to see the attitude of those charged with the responsibility of giving medical attention to the men in their charge. For example, depositions were given that it was difficult for the medical branch of the Department of National Defence for Air to treat men hospitalized from the army, because it was hard to become intimate, one branch with the other. The impression was left with us that it was necessary to have medical men from the Department of Pensions and National Health to look after the patients from that department, those from the Department of National Defence for Air to look after the patients from that branch of the service who were hospitalized, and in like manner those from the Department of National Defence to look after the men in khaki. I can visualize that in small centres there may be one, two, three or four set-ups of the kind. An organization of medical men looking after a hospital is a big organization. The ordinary 200-bed hospital requires a staff of fifty to take care of the different branches. It should not be said that it is difficult for a man in blue to look after a sick soldier in khaki, and we should strive to get more cooperation in that regard. Particularly it should be our aim to



The War-Mr. Harris (Danjorth)
encourage the civilian institutions to extend their services permanently, where it appears sensible to do so, and make themselves available by contract or otherwise, for the care of patients from the armed forces.
That is one point I should like to leave with the committee, in view of the fact that we are not to discuss the results of the war expenditures committee. I move from that point to another duplication which seems to be springing up in our midst, and which is not in the interests of national economy. I have in mind the question of salvage. At present there is a most competent salvage officer looking after the salvage operations of the Department of National Defence, and in like manner there is a salvage officer in the Department of National Defence for Air. The navy, following the English system, which is perhaps more than a hundred years old, have their own way of doing things. Then, in addition, the Department of National War Services handles a salvage problem. In my view there is a duplication of effort which is not in the interests of the country. There should be coordination among the different departments in respect of salvage. In his letter of December 5 the Minister of National Defence for Air made a good move when he asked an interdepartmental committee to sit around a table and thresh out some of their differences. Such coordination of effort should take place in the interim between now and the next session. It should not be delayed until the next session opens.
In the Department of National War Services are found some first-class men who are trying to do a job. Mr. Knightley, borrowed from the Department of Transport, is a man who can stir up the public imagination and public opinion as to what might be done with salvage. We know that in that organization there must be someone who can tell them what can be done with the salvaged material. Mr. Mark Cohen has been conscripted to see to the conservation of these secondary materials. He is located in the central part of Canada and is doing a really good job.
The difficulty has been that there are not enough materials in the different centres to warrant establishing an industry to convert these secondary materials into manufactured goods which can find their way on to the market. Another difficulty which has been referred to several times is the fact that quite often freight rates represent more than the value of the materials. It was disappointing to me to hear the Minister of National War Services (Mr. Thorson) say that 200 organizations had gathered salvage material to a value of $253,700, or an average of $1,270 each. That is not enough. I can point to one TMr. J. H. Harris.]
organization in Montreal which is doing that much every day, and there is a similar organization in Toronto'. However, these are both large centres of population where the problem is not as acute. I know of an organization in Quebec city which is doing at least $400 worth a day, and another one in Chatham which is doing $600 or $700 worth a day. There is still another one in Brantford doing $1,000 a day. Instead of each one of these organizations doing $1,270 a day, they should be doing ten times as much.
I do not want to be critical; I simply want to encourage these men to go further in this regard. In this connection I should like to offer a constructive suggestion for all who will read. As I said, in Chatham, Brantford, Toronto, Hamilton, Montreal and Quebec city there are industries which help to conserve these secondary materials and turn them into merchandise which is readily marketable. Large quantities of these finished products are being imported. At the present time there is a shipment in Montreal valued at $31,000 which was damaged by enemy action on its way from England. Other shipments come in from Australia. We do not object to importing from the sterling countries, but over and above these importations are the importations from the United States, and these take up United States exchange.
The constructive suggestion I have to make is that the activities of all the salvage organizations which work under the different departments of government should be coordinated. An inventory should be taken of everything available, and the industries already established should be given every encouragement. The Minister of Finance (Mr. Usley) will come into the picture now. He knows something about the salvage operations carried on under the treasury branch. These industries already established could be encouraged. If they were willing to extend or expand their facilities to take care of everything that came to their factory the government could then consider assisting them by allowing them to write off a substantial depreciation. We should not forget that the men operating these industries would have to make a substantial capital expenditure to expand their plants. This depreciation allowance could be 25 per cent or even 33J per cent, but all returns over and above five per cent upon the capital investment might be returned to the government of Canada. This suggestion applies to the highly populated centres or areas in which an industry is operating at the present time. I might mention here that one is operating in British Columbia.
There are other places in Canada which present some difficulty because of freight

The War-Mr. Harris (Danforth)
rates. I refer to the three western provinces; Such an industry might very well be established in Moose Jaw. It would require coal, power, naphtha otherwise known as gasoline, and so on. The process is really a dry-cleaning process where gasoline is used to extract all matter which is of no value and thus place the product in condition to be finished. Fifty thousand dollars would be required for land and buildings, about $100,000 for machinery and $50,000 as working capital, a total of $200,000. Assurance would have to be given that the necessary priority orders would be given for the steel required and to permit the importation of the necessary machinery.
A similar industry could be established in the maritime provinces where at present there are no facilities to take care of these products. This plant could be established at Moncton or Sackville or Amherst at a similar cost. If $200,000 could be found in each of these places to establish such a plant, another $200,000 would be needed for the extension of plants already in existence in British Columbia, Ontario and Quebec. This would mean a total investment of about $600,000. The return on the investment by saving these products which are being wasted to-day would gross about $1,000,000 per year. Perhaps I could break up these figures.
The cost of the materials necessary to produce that $1,000,000 worth would be $500,000. This means that by salvaging this waste material we would be putting into the treasury of Canada or into the national economy an amount of $500,000. The cost of production would be about 20 per cent, or $200,000. The management would cost about five per cent, or $50,000. Interest on the investment at five per cent would be another $50,000. Depreciation charges on the fixed assets at the rate agreed upon-I suggested 33J per cent-taking the ' first asset of $500,000, would work out at about $150,000. This gives us a grand total of $950,000 on the cost side of the balance sheet versus $1,000,000 or even more on the sales side. The other five per cent or $50,000 could be taken by investors or returned to the administration. The common shareholders, those who had put up the original $500,000 or $600,000, could gamble as to whether or not they were making a few dollars for themselves.
I throw out this suggestion in order to bring it to the attention of citizens in the maritimes and the west hoping that they may see the possibilities of establishing an industry of this kind in their particular centres. What obtains in the civil life of this country with regard to salvage obtains in a greater degree in army camps. We all know that war is wasteful, and 14873-2754
that there are no facilities of any real consequence to guard against waste in the particular areas that I mention.
I am sorry, Mr. Chairman, that we have to bring the Minister of National Defence for Air back to the chamber to-day because in common with many of us he is suffering from a bad cold. But when I make these remarks I do so in the interests of our national economy and in anticipation of the discussion which will come on the report of the war expenditures committee.
When we make inquiries into the departments, please let it be understood that we are not criticizing these men who are in uniform. We are not trying to stir up something of a political nature. I do not like to be called a politician working for politics alone while there is a war on. I have a hide like a rhinoceros and I can take it, but it is all so unnecessary, and I am sure that not one of the twenty-four members of the committee will rise and say that during all the time I have been on the war expenditures committee I have ever mentioned politics. I know that politics is the science of government and all that eyewash and humbug. But there is a war on now; let us do all we possibly can to win it. I say that these gentlemen who are sometimes called, although I do not like to hear it, members of the Penguin club or of the fraternity of brass hats, should not be almost belligerent, as one member put it, when we ask them questions pertaining to their departments or inquire into what they are doing. If I go with a group of members of parliament to Peta-wawa camp to look into the situation there and see what we can do to help out, I do not want a brigadier to say to us, "What are you doing here?" And when I say, "We want to see this camp," I do not want to have him say, "You cannot do so now. The place is not so tidy." I think members of parliament should have some freedom to move about and see conditions, with a view to helping out the situation. I say to the Minister of National War Services that when I made a humble request to get some sort of pass to permit me to pass the guard at the gate so that I could go into these camps to see if I could be of service to them-not to snoop around and find out what, was not right-I got this letter from the hon. member for Swift Current (Mr. Graham) chairman of subcommittee No. 2-and as it is not marked "personal" I might as well read it. The request had been made that we members of parliament who were members of the committee might be permitted to go and visit
The War-Mr. Pouliot

the camps and look things over with a view to carrying on our war work as best we could. This was the reply I received under date of August 9, 1941:
I discussed with Mr. Thorsou last evening your request to secure a pass that would enable you to enter certain buildings, camps, et cetera. He was of the opinion that no general pass can be secured.
I am sure that the Minister of National Defence for Air would give me a pass to go anywhere to look into anything.


Charles Gavan Power: Absolutely.


Joseph Henry Harris: But we do not know what needs remedying until we are permitted to see what exists. We are not trying to dig up anything of a scandalous nature. If I happen to be in his fair city of Quebec- and I am there very often-and have a few hours on my hands, surely I do not have to wire to Ottawa to get a military pass to go and see a camp at Quebec, and the same with every member of the House of Commons who is interested in any particular subject. Surely we are the brigadiers in this brigade. Well, if we are, let us function as such.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): I wish to congratulate my good friend the hon. member for Danforth (Mr. Harris) upon his constructive speech. He and my hon. friend the member for Broadview (Mr. Church) have made eloquent speeches at this session. I particularly appreciate what the hon. member who has just spoken has said, also one of the suggestions made by the hon. member for Broadview regarding the information bureau.
There is another thing which should be said from the point of view of national defence, and it concerns the mobility of our defence. The air training plan from that point of view will prove very valuable to this country by permitting airmen to go quickly from one part of the country to the other. Of course our railways are operating at full capacity, but all communications between the various parts of Canada should be improved, and I may mention particularly communications between the St. Lawrence river and the United States.
Frequently I have urged the repair or reconstruction of that section of route 2 between Riviere du Loup and Edmundston, New Brunswick, and from Madawaska to Maine, on account of the necessity of improving our communication facilities between the St. Lawrence river and the United States. We have now three main highways: the Montreal highway, what is called the Sir Wilfrid Laurier highway; the Levis-Jackman route, and the Madawaska-Riviere du Loup-Edmundston route. So important is road communication that
fMr. .T. H. Harris.]
the province of Ontario has received in past years $14,500,000 from the dominion government for the trans-Canada route, while up until last spring the province of Quebec had received only $400,000. It is only fair that the province of Quebec should have its share of the amount granted by the dominion government to the provinces for the construction of that route. Of course it may be said that expenditures have to be curtailed during the war. But this is strictly a war proposition. It is essential that we have as many avenues of communication as possible. We shall need material from the United States not only for ourselves but also for Great Britain and our allies, Russia, for instance, and we shall need many first-class highways for that purpose as well as the railways.
I regret the establishment of two military camps, one at Montmagny, thirty miles from Quebec, and one at Rimouski, a considerable distance from Quebec. It would have been much easier to establish a military camp at Riviere du Loup, where there were a number of most suitable locations. It would have served a better purpose at much less expense, and it would have been much more convenient for the boys, too.
With regard to what the hon. member for Danforth has said, I must remind the members of the government that it is not only the large cities in this country that should have something to do in connection with war industries. In the rural districts you will find men who are skilful workers, but they are not considered as tradesmen just because they do not belong to some labour union. But hon. members who live in the country know that in the rural districts there are many men who can do wonderful work with metals and woods, and they only need the opportunity to be of service. The situation is difficult for rural people to-day. Many of them have had experience which they could turn to good account in our war effort but they have not the opportunity now to do what they would like to do for their country. Some are over military age but still in good health, and they are experienced workers. I think it would be an excellent thing for this country if our industrial war effort were decentralized. That would give these men who have leisure an opportunity to take part in our war effort.
At the same time it would give an opportunity to men who work all the time in cities to enjoy a little rest from their ordinary work. Of course there should be consideration and discussion between the Department of Trade and Commerce and the various war departments before coming to that conclusion. There are very important data in the Department of

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Trade and Commerce. Information should be obtained from there; it would prove extremely helpful to the war effort, by enabling skilled mechanics-carpenters and others-to do their share in this war effort at an age when they could not be accepted in the army. It would also give similar opportunities to young men who are not able to get into the army.
There is another thing. It is pretty difficult to establish a strict division between those who are healthy and those who are not. I understand that it is a main requirement of those who would enlist in the army that they must be healthy. That is only reasonable, because their task is hard, and they have to live under difficult conditions. But in industry also, including farming and the railways, we need many who are physically fit. I mentioned that the other day, and I will not enlarge upon it;
I just repeat it in order that hon. members may have another opportunity to think about it. What do you think of having men who have passed the military age, or who are unfit physically to be firemen on the railways, to work in the metal industry, or even in the lumber industry? That could not be always satisfactoiy.
Before concluding, may I, in mentioning another subject, quote two speeches which were made on Friday last at the opening of the war relics exhibition. They express two different points of view. One was voiced by a layman; it reads thus:
I can think of nothing more inspiring than to see these relics, in order that we may reach in ever-growing measure the conclusion that this is our war, that waiting for it to get to Montreal is the surest way to guarantee that it will come to Montreal, and that meeting it as Canadians want to meet it with everything we've got is the surest way of making certain that the kind of damage which is exemplified will not be done here.
That is one point of view, and it was expressed by a layman, Mr. Dunning. On the other hand, there was another speech made on the same occasion, by the officer commanding the military district of Montreal, which was diametrically opposed to that. He said: Menace Closer
Speaking to the French audience, Brig.-Gen. E. deB. Panet, officer commanding military district No. 4, drew attention to the reports of submarines along the east coast of Canada.
"The nazi menace is geting closer and closer to our shores", he warned.
This is a serious matter, and it is brought forward by one who has technical experience in the army. Of course, all army matters, like everything else, may be considered from the point of view of logic and common sense. The man in the street may pass his own judgment about what he finds, in any matter, not in
conformity with logic and common sense. That is why judges at times have occasion to>
decide upon such purely technical matters as electricity, although the judges themselves are far from being electricians.
That being so, I hope that the minister will take careful note of what has been said by the hon. member for Danforth (Mr. Harris) and. myself regarding the establishment of industry,, and that he will take note also of the suggestions regarding the necessity of improving the mobility of our defence, and that in due course they will prove helpful to this country. We cannot wait to organize the defence of this country. There are many things lacking in many respects. I will not enumerate them, because this is not the place to do so, and I did so privately the other day. I do not want to create trouble or anything of the sort, but I want this country to be well defended, and I can point my finger to many things which are deficient. This country must not be exposed in any respect. We-all the people of Canada-must be well-protected. That is the first duty of the Department of National Defence. This is the Department of National Defence of Canada, it is not a department of international defence of the world; it is a Canadian department for the defence of Canada, and whatever we can do after that for Great Britain and other allies, we will do it with great pleasure.
I would ask the minister to be kind enough to answer the question I put to him yesterday, namely, whether the extension of the training from four months indefinitely has-been done by order in council or by the minister himself under his signature.


Charles Gavan Power: If my hon. friend (Mr. Pouliot) will permit me, I will first refer to-the observations of the hon. member for Danforth (Mr. Harris). I appreciate his good-will and good intentions in saying what he did. I would be -the last to assert that any of the defence departments were above criticism; and I entirely 'agree with him that, when hon-members criticize expenditure, waste, and duplication, they are not only within their rights but are only performing the duties for which they were sent here.
With respect to the salvage question I a at fully aware that no one in this chamber is-more familiar with the matter than my hon-friend. I have always felt personally that there was a great deal of waste in all military camps or camps of a military nature. That is almost inevitable; and anything which can be done to stop that waste will be to the best general interest of Canada.
Now, with regard to visiting the camps, let me put the other side of the case to my hon-
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friend and to this committee. Personally I feel that any hon. member should be entitled to visit the camps whenever he pleases. But we ran into this kind of difficulty. Hon. members would go to see our air training camps, or perhaps our operational aerodromes on the coast, and bring with them a party of ten or fifteen women and children. That involves an officer or more, a staff, really, at the station having to be detailed to look after them and see that they do not run into propellers, and so on. If we were always certain that the member would go by himself or with a small party, or accompanied only by persons of whom he could take full charge and responsibility, there would be much less difficulty. But we have had that kind of trouble, and the officers of the air stations particularly, where we have been up to the present and still are in a bit of a hurry to get our men out, and do not like to have the training interrupted, sometimes felt that it was perhaps a bit too much when we must detail someone to look after tourists. But as a broad general principle I entirely agree with my hon. friend that the members of this house are the representatives of the people, they have their responsibility, they should know what is going on and they should certainly have fullest permission to visit any station, any training camp, and, as far as the limits of safety permit, any of the munitions plants we have.
The hon. member for Temiscouata yesterday asked me some questions. He asked me with regard to the religious service for the Roman Catholics at Pennfield Ridge. I inquired and have a report from Rev. Monsignor Charest, the senior Roman Catholic chaplain in the air force, which I forwarded to my hon. friend personally. The sum and substance of it is that there is a shortage of Roman Catholic chaplains in that particular district, but we hope to overcome that shortage within a short time.
A further question asked by the hon. member for Temiscouata was on what authority training was extended, first from one month to four months and then from four months to an indefinite period. The hon. member said:
If he (the minister) is good enough to-morrow to tell me whether it was done by order in council, or done under the minister's signature, by virtue of the regulations, that will be sufficient.
The enabling statutory authority for the calling out of men is contained in section 2, chapter 13, statutes of Canada, 4 George VI, assented to on June 21st, 1940:
An act to confer certain powers upon the governor in council for the mobilization of natural resources in the present -war.

Section 2 reads as follows:
Subject to the provisions of section three hereof, the governor in council may do and authorize such acts and things, and make from time to time such orders and regulations, requiring persons to place themselves, their services and their property at the disposal of His Majesty in the right of Canada, as may be deemed necessary or expedient for securing the public safety, the defence of Canada, the maintenance of public order, or the efficient prosecution of the wrar, or for maintaining supplies or services essential to the life of the community.
Section 3 of the act states:
The powers conferred by the next preceding section may not be exercised for the purpose of requiring persons to serve in the military, naval or air forces outside of Canada and the territorial waters thereof.
Under the authority of the act and under these regulations, order in council 4904 was passed on September 17, 1940, and published in the Canada Gazette on September 21,
1940.	The period of thirty days' training is referred to in clause 5 (f), which states:
Upon his being so posted to a corps of the nqn-permanent active militia, a man shall forthwith undergo training for a period of thirty days, or for such other period as the Minister of Defence may from time to time prescribe, unless he is required for service or duty. Thereafter, so long -as he remains a member of the non-permanent active militia, he shall be liable to perform such training, service or duty, but only within Canada and the territorial waters thereof, as the minister of defence may from time to time require.
It will be noted in the above and following clauses that the minister of defence is empowered not only to prescribe or amend the period of training, but also to prescribe the liability of each man so called out to perform such training service or duty as the minister may require, -within Canada and the territorial waters thereof.
By order in council P.C. 1910, dated March 18, 1941, clause 8 (f), the thirty-day period was amended as follows:
Upon so becoming a member of the active militia each "R recruit" shall forthwith undergo training for a period of four months, or for such other period as the minister of defence may from time to time prescribe, unless in the meantime he is required for service or duty.
In pursuance of the authority granted to the governor in council by the statute and of the delegation of such authority in the two orders in council referred to above, the Minister of National Defence issued the following order, which was signed at Ottawa on July 2,
1941,	and published as an appendix to Canadian Army Order No. 132 of July 10, 1941:
Requirement for service, duty or additional training in respect of men called out in pursuance of the National Resources Mobilization Act, 1940.
In pursuance of the powers vested in me by Section 8 (f) of Reserve Army (Special) Regulations, 1941, as made and established by

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order in council dated March 18, 1941, P.C. 1910, and amendments thereto, I, the undersigned Minister of National Defence, do hereby require all men now undergoing training in pursuance of the said seotion 8 (f), and all men who hereafter may be called out for training pursuant to the National Resources Mobilization Act, 1940, and who, under and by virtue of seotion 8 (d) of the said Reserve Army (Special) Regulations, 1941, have become or will become members of the active militia, to perform service, duty or additional training on the completion of such training for which they were called out, or on the termination of any postponement of such service, duty or additional training, but only within Canada and the territorial waiters thereof, and for the period of the duration of the war existing on the 21st day of June, 1940, except when from time to time during such period I may not require them to perform such service, duty or additional training.
Dated at Ottawa, Ontario, this second day of July, A.D. 1941.
(Sgd.) J. L. Ralston,
Minister of National Defence.
Also published in Canadian army order No. 132 is the following order of the Minister of National Defence, concerning the further training, service or duty of thirty-day recruits:
Requirement for training, service or duty in respect of men called out in pursuance of the National Resources Mobilization Act, 1940.
Thirty-day Recruits
In pursuance of the power vested in me by Section 5, subsection (f) of Militia (Special) Regulations 1940, as made and established by order in council dated September 17, 1940, and amendments thereto, I, the undersigned Minister of National Defence, do hereby require those men who were called out under The National Resources Mobilization Aot, 1940, being Chapter 13 of the Statutes of Canada 1940, and now enrolled in the active militia, and who have undergone training under and by virtue of Militia (Special) Regulations 1940, to perform further training, service or duty m such numbers and at such times as I may from time to time require for the period of the duration of the state of war existing on the 21st day of June, 1940, but only within Canada and the territorial waters thereof, except when from time to time I may not require them to perform such training, service or duty.
Dated at Ottawa, Ontario, this 30th day of June, A.D. 1941.
(Sgd.) J. L. Ralston,
Minister of National Defence.
The Canadian army order No. 132 and appendix were approved by the war committee of the cabinet at its meeting held on April 23, 1941.


Mr. POULIOT:: Was it published in the
Canada Gazette?


Charles Gavan Power: My hon. friend asked me if
I recollected by what machinery the period of training became four months. That machinery was an order in council published in
the Canada Gazette. Subsequently, under the powers conferred upon the minister in pursuance of the authority granted to the governor in council by the statute, and the delegation of such authority by the two orders in council, the minister issued an ordel which was published as a Canadian army order. I could not say offhand whether that appeared in the Canada Gazette or not.


Jean-François Pouliot: I do not think so. The
Minister of National Defence told me that the orders are not available to hon. members, although they could get them at any bookstore. I find it very strange, because there is an order in council to the effect that each member is entitled to a French and English copy of all publications. But I am delighted that the text of the order has at last been made public. But what I cannot understand is that the principle delegatus non potest delegare has been overlooked. The government has been delegated some powers by parliament, and therefore under the militia act and the Borden act, every regulation of the kind is made by order in council. Of course the minister is in charge of the department. I find it hard to think that the minister could change by his own signature and under his own authority what has previously been decided by order in council, and though the order in council gives him a free hand-


Charles Gavan Power: For service or duty. He
has always had authority under all acts to call the militia out for service or duty.


Jean-François Pouliot: But it has been done in
a strange way, the minister will probably admit. If the principle that the delegate cannot delegate is overlooked to that extent, then the minister will be able to transfer his authority to someone else, and what will be the end of it? The only way to save the situation would be to make public, by inserting them in the Canada Gazette, all orders of the kind made by the Minister of National Defence.


Mr. HAZEN:: Will the minister tell us how many of the 110,209 men who were serving overseas in various theatres of war as of October 25 last were in the army, how many were in the navy, and how many were in the air force? Would he tell us also, if he can, how many of those men were serving in the British isles in the various branches of the service?


Charles Gavan Power: The 110,209 men were all in the army. I will not tell my hon. friend how many I have in the air force overseas; I am not allowed to do so. I will not tell my hon. friend how many of the overseas men are in
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the British isles, in Newfoundland or elsewhere; I am not allowed to tell him that either.


Douglas King Hazen: This is all the army, then?


Charles Gavan Power: The 110,209 men are all the army. The navy and air force are separate and apart from that.


Douglas King Hazen: I should like to ask the minister a question having to do with leave for trainees. As I understand the matter, when a man is called up for training the divisional board has power to grant him at least one postponement, for a period not exceeding six months. After he is called up and starts his training, however, the divisional board has no further jurisdiction; the man then comes under the military authority.
The circumstances of a man may vary greatly from the time he is called up until he completes his training. I have in mind an instance of this kind. A man may have been on a farm with his father; they were working the farm between them. During the course of his training his father dies. There is no help employed on the farm; the soldier is the only one who can take charge, but he is now under the authority not of the divisional board but of the army. In these circumstances how does he go about applying for leave? Does he apply to his commanding officer; and, if so, does the commanding officer have to forward that application to a higher authority? A further question arises: does his commanding officer or any higher authority have to regard the matter in the same rather judicial light as that in which the divisional board would examine it? Would they take into account all the facts underlying the application and give them full consideration, or would they perhaps be activated or influenced more by their desire to have another man added to their strength? Is that matter being considered?


Charles Gavan Power: I do not know whether this is simply a hypothetical case, but if it is a case of which the hon. member has knowledge I should like to ask the officers of the department to have a look at it. Broadly speaking I would say that as soon as the man is ordered by the registrar to report he comes under the jurisdiction of the army. Then so far as I know there is nothing to prevent his commanding officer from granting him compassionate leave. As to what attitude the commanding officer will take with regard to the man under his control, again that depends on the commanding officer. I see sitting opposite me the hon. member for Royal. I should say he might allow his compassionate feelings to sway his judgment; and in all
probability if he were the commanding officer in a case like this the application would be granted. I know other men who would not do that, but I think the same argument might be applied to the divisional registrar. I do not think a man would become more hard boiled just because he happened to put on a uniform. Each case would have to be judged on its merits. I am sorry I cannot give any better answer than that.


Mr. BROOKS:: Just before the minister
rose I made a note on my pad that the man would be granted leave on compassionate grounds. That is the usual thing.
Mr. D1EFENBAKER:	Last evening I
directed a question to the minister in regard to the imposition of the national defence tax on pensions. I should like to ascertain now from the minister what is the attitude of the department.


Charles Gavan Power: 
Ernest Edward Perley: They must be all in Saskatchewan.


Charles Gavan Power: I believe that completes the list of questions. There may have been others, but I believe they have been answered.


Mr. DIEFENBAKER:: There is one anomaly to which I suggest consideration should be given. I have in mind the provision I have already brought to the attention of the Minister of Pensions and National Health. The provision now in effect is this: A soldier discharged prior to July 1, 1941, may make
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application for pension, and his application may be turned down. He may then launch an appeal, but he will receive no gratuities or assistance during the time he is awaiting the outcome of the appeal. Similar cases have now come to my attention respecting men who returned from overseas service, arrived in Canada prior to July 1, 1941, and have been discharged and denied a pension. The instance I have in mind at the -moment is that of a man resident in my own constituency who returned from overseas prior to the date mentioned, and who to-day is living in a state of destitution because he can get no assistance whatsoever. He cannot obtain relief because of the attitude of the municipal authorities, who take the view that he is a charge on the federal government.
Hon. IAN A. MACKENZIE (Minister of Pensions and National Health): Is he pensionable?


John George Diefenbaker: His application for pension was turned down. The circumstances in connection with his case were these. He went on leave at Christmas, 1941, while in England. The pension authorities take the position that he was injured at that time. His claim is that he was injured on service on November 11, 1939, in England. He has returned to Canada, and to-day he is living in a state of destitution.
I know about the sympathetic attitude of the Minister of Pensions and National Health, but here is an arbitrary position that is doing harm to recruiting throughout my constituency. It is only one instance, but I suggest that consideration should be given by the government to the removal of that anomalous provision. Why should the date have been set as at July 1, 1941? Why should it not have been set earlier, so as to cover every possible contingency? This man cannot get work because he is unable to work, and he cannot get relief because of the attitude of the municipal authorities that he is a charge on the government of Canada. There he stays, with his wife and family, living in the town under circumstances which will constitute a detriment to recruiting, and which are most unfair to a man who tried to give his best services, but who has been returned to Canada as a result of circumstances over which he had no control.


Mr. MACKENZIE (Vancouver Centre):: I presume my hon. friend is referring to the case he brought to my attention yesterday. It is being thoroughly investigated.
The date of July 1, 1941, was inserted in the order in council of October 1 to make its

operation parallel with that of the Unemployment Insurance Act. That, of course, deals with a separate phase of reestablishment, in various instances.
Those awaiting decision With respect to pensions are, so long as they are in hospital, entitled to pay and allowances for their families until pensionability has been determined. This applies to the first hearing. I do not believe provision has yet been made as to pensionability while they are awaiting the second hearing. We are now considering making a provision for pay and allowances to families over a period of four months, and I believe that would meet the case mentioned by the hon. member. This, however, has not yet been approved by council.


Mr. DUPUIS:: The instance referred to by the hon. member for Lake Centre (Mr. Diefenbaker) brings to my mind a number of cases I have been in a position to study. I have in mind particularly one which came to my attention recently. It had to do with a soldier who enlisted in the early days of the war, went to England and came back disabled. It was impossible for him to work, because his health was completely ruined. The report shows that his request for pension was refused on the ground that his disability was caused by a defect which existed prior to enlistment. I wonder if the government and the department would study this point and consider adopting the principle that when a recruit is accepted it is presumed he is in good health. There are many cases in which the pension board refuses a pension on the ground that the disability had its origin before enlistment. I have pleaded many cases before the boards and at all times the onus of proof is upon the soldier; he must prove that he was in good health when he enlisted. The particular case I have in mind covers a soldier who told me that he was placed in category A-l. A man placed in that category should be considered to be in good health, and it would be good policy for this government, or for this country -it is not a question of party; it is something that concerns the country as a whole-to decide that as soon as a man is accepted it is presumed that he is in good health.


Mr. ROWE:: I want to add a word or two to what the hon. member has said. I am in full agreement with his suggestion that when a soldier enlists he should be assumed to be in good health. I have long felt that the responsibility should not be upon the returned man to prove his case when applying for pension. Nothing will do more to deter enlistments than a continuation of the treatment which has been given in many eases.

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It is a long time since the last great war, and quite often it is difficult for a soldier to produce sufficient evidence to support his claim. He may have lost some papers, or he may have been in poor health for years before deciding to put in a claim. Often a man was too proud to put in a claim for compensation and he goes on for years until his health is ruined and he finds himself unable to provide a living for his wife and family. In many cases men have passed on perhaps fifteen and twenty years sooner than they otherwise would.
The government should consider making a change in the treatment of returned soldiers, not only those who came back from the last war but those who will return from this war. I hope the government will carry out its announced intention of granting a cost of living bonus to the pensioners of his majesty's forces. If we are to have equality of service all down the line it is high time we realized that if the man getting $5, $6 or $7 a day is entitled to a cost of living bonus, the dependents of the man receiving only $1.30 a day should receive a similar bonus. This is only fair if we are to have equality of service and the unity of which we hear so much. If we are to have the all-out war effort we are aspiring to, we must pull in the loose ends and realize that, even though there may be strong groups or associations which do not like this idea, even though it may be politically unpopular here or there, even though there are those who say that the returned soldiers' dependents and other pensioners are getting enough now, we must look at the picture as it is. If we are to have equality of service and an all-out war effort we must give fairness in treatment and an all-out square deal to those who are winning this war.


Mr. LOCKHART:: I want to associate myself with the remarks which have just been made. I should like to have some information as to the connection there may be between men who are in the category outlined this afternoon and unemployment insurance. There seems to be an impression about that these men are to be taken care of-that is, those who are not able to establish their right to a pension.


Ian Alistair Mackenzie: I have not the full tabulation under my hand, but it will be recalled that after this session convened a copy of the order in council itself, along with an explanatory memorandum, was sent to every hon. member. The basic and fundamental reason for this order in council
was to establish the principle that anyone who enlisted for overseas service would not lose as compared with the civilian who was engaged in an insured occupation. The time spent by a man in the forces will count, and there will be a contribution by the treasury. As my hon. friend will recall, benefits were also provided for occupational training, for industrial training, for university or professional training, and also for those who could not get into insured occupations. These might be termed out of work benefits. The men would be given credit for their service and would draw benefits while awaiting employment. There is a further provision in the order in council covering those who might come back from overseas and who in the opinion of those who were supervising the provisions of the order in council could be reconditioned-someone objected yesterday to the use of that word, but that is the only one that I can think of-made over again for industrial life. These men would be' given benefits while they were being reconditioned. Briefly speaking, these are the important provisions of the order in council.


Norman James Macdonald Lockhart: I suggest to the minister that these provisions be put into effect as quickly as possible.


Ian Alistair Mackenzie: They are in effect now. That is why we passed them by order in council.


William Earl Rowe: Has the government considered giving special preference in the civil service to men who enlist voluntarily for overseas service as compared with those who might be conscripted for home service where there is not likely to be any fighting?


Ian Alistair Mackenzie: There is a preference clause in all government contracts covering ex-service men of the old war or of the present war. During the second or third day of the present session I tabled an order in council which extended the provisions of the Civil Service Act having to do with ex-service men of the great war to ex-service men of this war, with the limitation that they must have resided in Canada before enlisting in the present war.


Ernest Edward Perley: Mr. Chairman, I hear many rumblings about me; members are asking how long this is going to continue, how long they are going to be kept here. I have been sitting here since November 3, wondering just what benefits the country and the government itself have derived from what has taken place in this house. What have we learned, I would ask, that we did not know before from the press releases furnished by the information bureau? We get them
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every other day or so, and incidentally I think there is a considerable waste of money there.
Frankly I think this parliament should have prorogued and we should have entered upon a new session. It would have saved all this discussion which is going on across the floor of this house and which will all be gone over again next January. As it is now, private members have no rights, no resolutions to discuss, and there are no bills before the house. True, we have the privilege of questioning members of the government, and we have had five pretty fair statements from five members of the cabinet. Some of them were quite lengthy. They gave some information, but a lot of it was in our possession already through the press releases from the information bureau.
I deem it my duty to make one or two observations on our war effort, and I shall try to be constructive. We often hear the phrase repeated, "an all-out war effort" or "a 100 per cent war effort." I believe the Canadian people are not all convinced that we are having an all-out war effort, and to prove that the Canadian people are looking for a greater effort I should like to quote from resolutions I have here. One is from a large organization in the west. In a letter which I have just received they state that they passed a resolution asking that members of parliament insist forthwith the passing of the necessary measures to place Canada on a total or all-out war effort. They go on to state what they mean by that. They mean the complete mobilization of all industry and everything else, even the intellectual resources of Canada. The Canadian Legion is already on record for an all-out war effort. Before I came to Ottawa this session I was put on the spot by the branch of the Canadian Legion in my constituency, and I did not hesitate to agree with some of the things which they advocate should be done in order to have an all-out war effort in Canada.
Let me review our war effort as I see it as a lay member, so to speak. Since we entered the war in 1939, our war effort has developed in three phases. The first two years of the war were the development period. We were building factories, developing plant capacity. That required a lot of men, a lot of work, a lot of complicated machinery and tools. We now have these factories, some of which have received large financial assistance from the government, running in the aggregate into hundreds of millions of dollars. These plants are all interlocked, so to speak. Not one of them is producing a complete tank or aeroplane, for instance, but is engaged in manufacturing component parts. They are all
[Mr. Power.
interlocked, and as I said a moment ago, the government has contributed to their establishment hundreds of millions of dollars. There may have been mistakes made and waste in many instances. We had a committee of this house set up to inquire into government expenditures. I shall not comment upon its report, but it is only fair to say that under no government could all this development work have been done without mistakes and some waste. It is the duty of parliament and of the government now to tighten up on waste. That was the development phase.
The second phase is production. It is now necessary for the government to see that all these factories engaged on war work click, work in unison, work together as a unit. I have heard rumblings as to what is going on, that there is not the unison there might be. It is the duty of the government to see that these war plants click. The Minister of Munitions and Supply referred to that matter the other day. He said that the production of one gun or one tank might take one month, that in the second or third month six might be produced, in the fourth or fifth month, thirty-six, and I believe we have now reached the stage where we might produce 336 in a month if the government would see that these plants are clicking.
The third phase is the output of materials and a system of priorities. Tremendous production capacity has been provided. I think it is only fair to the government to say that. But now it is up to the government to see that the materials required are provided. I have in my hand a little pamphlet entitled, "Priorities and Controls in Canada" which I think it would be well for every hon. member to read. We are now at the stage where there is a strain on the capacity of the organizations which are producing materials such as steel, brass and copper. We are now in this third phase, producing the materials which are necessary. But we must have coordination so that one plant will not hold another one up.
Since the start of the war training schools have been set up. I think that is right, and a great deal of good work has been done by the schools. The men are now ready to come out of these training schools and go into factories wherever they may be required. I believe it is the duty of the government to enrol and train more men in these training schools. But the government also has a responsibility to see to the proper distribution of these men.
At this stage surely there should be no more strikes in Canada. We are at war; it is a very serious war, and strikes should not be permitted to interfere with our war effort.

The War-Mr. Perley
Since the war broke out, we of the opposition in this house have been responsible to a considerable degree in bringing our war effort up to its present stage, by pepping up the government, jacking them up by constructive criticism. At the very outset of the war our leader said that as far as he and the group he represents were concerned we would support the war effort at all times and give constructive, helpful criticism, and I believe that considerable credit for what has been accomplished is due to the opposition and the constructive suggestions they have offered1.


Mr. MARTIN:: Why don't you keep your good leader? We all like him.


Ernest Edward Perley: The hon. member can speak after I have finished. I have said very little during the last two weeks, and I am trying to suggest something that might be helpful to the government and its war effort.
From what we have heard from different ministers, there has been a shortage of recruits for the armed forces. Men are not available. By all military authorities whom I have heard or have seen quoted it is agreed, I believe, that we must have more men in the forces both to attack and to hold the ground after the attack. Those who have had the opportunity and privilege of going overseas and seeing what is going on there say that men are needed. All of them may not have said so publicly; there is a lot of secrecy in connection with this business: maybe the delegation which is now on its way back will have something more to tell us.
It is the government's responsibility to protect the projects which they have assisted, the factories and industrial organizations which they have helped to bring to the point of production, by providing them with the men needed to do the job in the factories. The other important job is to provide for the needs of the armed forces. I believe there are enough men in Canada to take care of both, but the situation now is rather like this, that if ten men who are roaming the streets have it put up to them that there are two great jobs to be done, what is going to happen if all of them say, "We will go into the army", or if they all say, "We will go into industrial plants to make good wages"? I say, therefore, that it is up to the government to protect both these two great activities by seeing that there is a proper distribution of men.
That brings me to the point that I think there must be some plan and some direction given by the government. Those men who are not now in the forces or even in the trainees' camps must have direction. Let me
illustrate. There is Mr. Jones out in Saskatchewan; he is a farmer and he has a crop to take off; he has five or six new binders, and there are five or six men for the job. Suppose he had not the power of direction, to say to the six men, "Get on these six binders and complete the job". The men might say, "Oh, the heck with it"; perhaps three would say, "We are not going to get on the binders," and the others might decide that they would wait for the threshing season, or one or two might make up their minds to wait until the farmer was trucking it out, because that is where the money is. If he were without power of direction to put the six men to work at the right spot, the crop would be ruined, perhaps by snowstorms-we have had a lot of them this fall. But if he had the power to say, "You get on to that job", the job would be completed properly and in time. I say that that is what the government should do now. They have the power. To my mind the only way in which it can be done is by a system of selective national service.
We have arrived at the point that the government have the responsibility to protect the industries which they have assisted with millions of money and which are now tooled up and ready to go. They are the only ones who can give the direction we need in Canada to-day. I for one do not care how it is done, or whether it is done by this government or some other government. This is the suggestion that I have to make: use selective national service and get to work on the job.


Mr. MUTCH:: It seems to me that in the last little while we have wandered a long way from the Department of National Defence. Is the minister now in a position to answer questions in his capacity of minister for air? If he is, I would recall the statement which he made the other day, when, speaking in this chamber, he mentioned the unconditional nature of enlistment in the Royal Canadian Air Force, and referred to the fact that all those who enlisted in the Royal Canadian Air Force enlisted for service wherever they were sent. Would he care to expand that statement a little bit about the liability of ground crews, and many others in the service, for service anywhere? I do not think that is generally understood.


Charles Gavan Power: In the air force there is not any such thing as enlisting for home defence or for the defence of Canada. Just by way of digression, at one time there was a suggestion that certain Free Frenchmen would like to enlist on the condition that they should not fight against their own country. I did
The War-Mr. Ross. (St. Paul's)

not think that was advisable. I said that if they enlisted in the Royal Canadian Air Force they would go wherever they were told and fight wherever they were asked to fight. I can quite understand their feelings in the matter, and I do not think those who did feel like enlisting were deterred by that reply.
Some time last summer it was decided that, instead of sending overseas only aircrew, that is those who man the aircraft on actual operations, we would also send over a number of men to carry on ground duties, to maintain the aircraft and do work as aero-engine mechanics and all the various duties that go with the care and maintenance of aeroplanes. We have been sending such men overseas and shall continue to do so. In view of the number of our squadrons overseas, I expect that before long there will be several thousand ground crew also over there, and any one in the Royal Canadian Air Force, in any one of the categories, is liable to be called upon to go overseas at any time.


Mr. D. G. ROSS (St. Paul's):: I should like to make a few remarks at this time. The city of Toronto is in military district No. 2, and a number of regiments are there. One battery of artillery is being formed by our famous former manager of the hockey team, Connie Smythe, and he is doing a magnificent job, but he is finding it very difficult to get men. Great efforts are being put forward to get recruits, and many people are helping, but the thing which disturbs me more than anything else is, what will happen when we cannot get them? Yesterday I listened with great interest to the Prime Minister (Mr. Mackenzie King) when he made his statement to the House of Commons, and I was very much disappointed at his closing remarks, when, speaking of conscription for overseas service, he said:
So far as I am concerned, without any consultation of the people on that subject, I do not intend to take the responsibility of supporting any policy of conscription for service overseas.
The Prime Minister has told us that he has a mandate from the people to lead this country during war time. He has told us that we must fight an all-out war and that we must have an all-out effort. The Prime Minister must take the full responsibility for fighting this all-out war and exerting this all-out effort. He must take such steps from day to day, even from hour to hour, as may be necessary for the safety of the state. Now is the time for the Prime Minister to lead this country in the light of all the information which he has and the information which he has obtained from the Prime Minister of Great Britain and

from Mr. Roosevelt. The members of this house should in some way be enlightened as to what information he has so that we can understand why he still takes the stand he does. Does the mother of parliaments not have closed sessions every three or four weeks where information is disclosed to the members? Is it not better and more helpful if such information is disclosed to the members of the house? We are in dire peril these days; I think the Prime Minister knows that. We ought to be told how dire the peril is. We know what Hitler proposed to do; we know how he has carried out his plan. Do we believe it?
The defence of Britain is the defence of Canada, and our Canadian soldiers are taking part in that defence. We cannot let them down. How can a population of forty to fifty million people provide the men for ultimate victory? That is the population which Great Britain has to draw on. The combined efforts of all the nations of the commonwealth as well as all the democracies of the world are going to be needed to do this job. We must do our part. It is not a party matter; it is not a political matter; it is a national life and death struggle. The Prime Minister must put into force fearlessly and regardless of criticism and of party those policies which will be best for the preservation of Canada, knowing full well that the Canadian people and this parliament will back him up.
He has been urged from time to time to form a national government, but has refused and has given his reasons. He has taken into his non-parliamentary ranks many prominent men of varying and non-political views, and a certain amount of satisfaction has been obtained from that. The public have been satisfied to a certain extent. But party lines are different now. Old differences such as tariffs, et cetera, mean little to-day. The major differences can be only between those who are for an all-out war effort and those who are not. The knowledge of the truth will come to all eventually, but if the Prime Minister waits for it to come to all before acting, it may be too late.
Are there any who still disbelieve Hitler's programme laid down in Mein Kampjf Many thought he was a mad fool in 1936, 1937, 1938, even up to 1939, but he put into practice the plan set down in his book. The conquest of Poland, Czechoslovakia, Denmark, Holland, Belgium, France, Norway, Yugoslavia, Greece, Roumania, almost all on time. It is true his time-table was held up by the valiant Poles and Greeks and some of the others to a certain extent. The Russians are doing the job now, and we cannot let them down.

The War-Mr. Casgrain
I ask the question, who comes next? There is no doubt he will attempt an invasion of England. It will fail. Then the forces of right, including those of Canada, must be prepared to invade Hitler's domain, fight him to a finish and smash him once and for all. We must prepare now. Mr. Churchill yesterday told us that by 1943 we shall be able to invade the continent. We must be ready. What is the alternative, if we do not go on and smash this man Hitler? The axe will hang over our heads until it is done. Are we not in the same position as Great Britain? Are we to be outdone by that great, indomitable leader, Winston Churchill? He said:
If the battle is to be won we must provide our men with ever-increasing quantities of weapons and ammunition. We must have quickly more aeroplanes, more tanks, guns, shells. There is imperious need for these vital munitions, and then in the emergency we shall not hesitate to take every step, even the most drastic, to call forth from our people the last ounce, the last inch of effort of which we are capable.
The interest of property, the hours of labour, are nothing compared with the struggle for life and honour, for right and freedom, to which we have vowed ourselves.
Have we not vowed ourselves to the same principles? Are our interests any different? I say now that we as Canadians must not hesitate; that the Prime Minister can and should lead this country and that the people will follow him, regardless of how drastic the action required. There has been no hesitation on the part of the government in bringing in drastic legislation, in fact revolutionary legislation, by order in council. I have no doubt that the people would have accepted this legislation perhaps a little better than they have-they have accepted it very well, but it would have been better to bring it in as legislation on the floor of the house so that it could be discussed. There might be useful information brought out and possibly a few changes made.
There must be equality of sacrifice and service in this mobilization of our full human and material resources for whatever eventuality, each man in his right place. The welfare and safety of Canadians, of the British commonwealth of nations, yes, of the whole world, are at stake. This must override our traditional individual choice of action.
I have hesitated to speak before, feeling that the Prime Minister, by reason of his words spoken so often in his appeals to the people that he intended to have a total effort, that we must have a total effort, must fight a total war, would, when the time came, make good these words with action. T cannot say
how disappointed I am that the Prime Minister is not willing to take the full responsibility for this total effort, as he told us yesterday.


Hon. PIERRE FRANCOIS CASGRAIN (Secretary of State):: Mr. Chairman, I had not intended to take part in this debate, but after listening to some of the speeches that have been delivered by hon. gentlemen opposite I feel it my duty to express my views to this parliament and the country.
A great many members of this House of Commons are advocating a total war effort and are seeking, both within and without this house, to promote the idea of conscription for service overseas. Let them not contradict me; that is what they want. We are in this parliament as representatives of the people of this country. During the campaign preceding the last general election the Canadian people were made acquainted with the aims and aspirations of every party. At that time the people of Canada from the Atlantic to the Pacific were told that no party, including the Liberal and Conservative parties, was in favour of conscription for service overseas. Therefore the mandate given the Liberal party to govern the affairs of the country during this war was given on the principle of voluntary service. Parliament has no mandate to change this policy now without consulting the people. Canadians have not changed their minds; they still approve the present programme of the government. There have been several byelections throughout the country, at which Liberal candidates have been elected by large majorities, which proves that the policy of this government still has the support of the people. At the last by-election held in Alberta the hon. member for Edmonton East received a real mandate from the people of that constituency; and her campaign was conducted on the slogan, "No graft and no partisanship." That showed a real approval of the actions and policies of this government.
Hon. gentlemen opposite now seem to want compulsory enlistment for overseas service. I say the great majority of the Canadian people do not want it, and I know the vast majority of the population of the province from which I come are against it. The other day I listened with great attention to the hon. member for Danforth (Mr. Harris), who referred to the absence from this house of the right hon. leader of the Liberal party in the province of Quebec, the gallant hon. member for Quebec East (Mr. Lapointe), who at present is ill, and also to the absence of the Minister of Public Works (Mr. Cardin), who is away for the same reason. I am not
The War-Mr. Casgrain

going to try to speak for those hon. gentlemen, but I am going to speak as one representing the province of Quebec. I can say that the entire population of that province is as one in supporting the policies of the right hon. Prime Minister (Mr. Mackenzie King). The feeling of the province of Quebec is that we should follow the provisions of the mobilization act that was adopted about a year ago; and my compatriots in Quebec are ready to serve anywhere from the Atlantic to the Pacific in the defence of our country, which is a sacred duty and obligation which all decent Canadians understand. Up to the present that mobilization act has done all that it was expected to do; according to the speeches of the ministers of defence, within the last six months 105,773 men enlisted in the army, the navy and air force, which I think is a very good record. In addition we have some 110,000 of our compatriots serving in England, ready to go into action whenever their services may be required. The right hon. Prime Minister was in England only recently; he saw our men over there and has reported, as has been stated in the press throughout Canada, that at the present time there is no body of men in England better equipped than the Canadian corps. At the time of Dunkirk in 1940 the only corps in England equipped and ready to face the enemy was the Canadian corps.
These are facts of which we should be proud. Under the policies of the present government, since the beginning of the war we have been able to bring about these results and it has been made known throughout the world that Canada is doing its full share and will continue to do so. Under the mobilization act the government has at its disposal adequate forces for the defence of the country, wherever they may be required and provision has been made whereby those who of their own free will wish to serve overseas, for the defence of the empire at large, are permitted to do so.
Before it could be agreed that the statements of hon. gentlemen opposite were true and ought to be considered seriously, it would have to be shown that the mobilization act and the laws of the land had not brought about the results which were expected. Far from that being the situation, I say, and I do not believe I can be contradicted, that at the present time we have in England an army consisting of four divisions and one tank brigade. With all the Canadians who have enlisted in the air force, the navy and the other services, I believe we have about twelve divisions compared with the four divisions we had in the last war. I think that is a brilliant record, of which we should all be proud.


Mr. HANSON (York-Sunbury):: Surely the hon. gentleman cannot say we have twelve divisions, if he knows what a division is.


Pierre-François Casgrain: There is another point
I should like to bring to the attention of hon. members. Sometimes people wish to make it seem that the province from which I come has not done its full share. I do not say that these people point directly at us and single us out, but they claim that if recruiting is not as active as they would like it, that has been due to lack of interest in the affairs of the country and because our people have not done what they should. I wish to say most emphatically that the people of Quebec have responded to the call to the best of their ability; and if some changes had been made and improvements brought about, the response would have been even better. Only yesterday I read in one of the Ottawa newspapers a letter signed by a former member of this house, Mrs. George Black, who said:
With extreme regret, as well as great annoyance, I have noted a growing habit of accusing Quebec of lack of loyalty to Canada and the empire, because of an aversion to compulsory military service.
Probably no member of parliament, with his wife, does of necessity cover more of Canada from the far north to the east than do George Black, M.P. for Yukon, and I. In our many trips across Canada, we have observed as much apathy and lack of enthusiasm for active service in the armed forces of Canada in other provinces as in Quebec.
Let us of the other parts of this dominion forget our smug complacency and force ourselves to realize that Quebec is as loyal as the other provinces.
We are component parts of a great empire. Let each one do his, or her, part to unite Canada in support of that empire, forgetting petty racial and religious prejudices. We must work, we must fight for the right to worship one God, to be loyal to one king, and to hold a united empire, that our children's children may enjoy the freedom we hold so dear.
There is a great deal in this letter over which some hon. members in the house, and other people outside, should ponder. I do not wish to carry on this debate much longer. We have heard in the house many speeches from quarters directly opposite the government. They have pointed out that the government has been lagging and derelict in its duty. I want to ask hon. members if there was foundation for any of those criticisms.
The government of the present Prime Minister has at all times been able to handle the situation with one thing in view, that of maintaining unity in this country-unity of the various races in Canada. Without that we would not be able to carry on this war. I do not wish to attribute motives to any other

The War-Mr. Rowe
persons, but some who are facing me to-day, and others in other parts of the country, are carrying on certain propaganda in the press. I say to them, and to all those who hold such views, to consider that they are not giving good service to the Canadian people and the empire at large.
In all the provinces of Canada are to be found peoples of various races, creeds and religions. It is the aim of the country to keep all those various elements united together in order that we may present a united front, and be able to carry the burdens of the day and to give to this dominion of ours and to the empire the greatest service possible. It is helping the empire to defeat Hitler, and that is the aim of this country. It is the aim of this government, and it is the aim of all British countries.


William Earl Rowe: Mr. Chairman, I have listened with considerable interest to the Secretary of State (Mr. Casgrain). I, like him, do not rise more often than many other hon. members who have not been here as long as the minister or myself. WTith much of what he has said I can agree. I join with him in wishing for this country national unity of the highest order. There is no greater purpose that any member of the house, or any elector in the country, can have than that of national unity.
But, Mr. Chairman, may I draw your attention to the fact that consideration must be given to a great section of this country if we are going to maintain the necessary unity, and bring about that all-out war effort about which we are all talking. I have every respect for the hon. member who has just taken his seat. He and I have sat in the house for many years. I know he bespeaks at least the feeling of those who elected him. But when he speaks of pre-election pledges, may I point out to him that I am not going to indulge in them to-day, because he knows them better than I-and I know them better than I am going to tell the committee now.
I do not believe that to-day this government has a mandate from the people of Canada for many of the things it is doing. It is all very well to say that it has no mandate for selective conscription; but when I hear the Minister of National Defence (Mr. Ralston) on the one hand, saying that we are out for an all-out war effort; that the Canadian front is on the English channel, and that the defence of Canada is over there, and when I hear on the other side someone saying that he has election pledges, and that we cannot have selective service for overseas, but that we will adopt conscription or compulsory service for Canada, then I begin to wonder
where the front line really is. This government has inaugurated conscription. Did they tell the electors of Quebec or of Ontario that they were going to inaugurate conscription? Did they say to the farmer boys throughout the country that they would take them off the farm, whether their fathers were ill or their mothers in hospital, whether the farm went idle, or whether they had to have auction sales? No-silence gives consent.
My hon. friend who once followed the views of the farmers in another part of the house, did not talk that way. The Minister of Agriculture (Mr. Gardiner) did not talk that way, when he was travelling down the middle of the road looking for votes. The-Secretary of State did not tell the electors that, when he visited Ontario, nor did the Minister of National Defence for Air (Mr. Power), who is very popular wherever he goes. Yes, there are many things they did not tell. But I am not going to take time to refer to some of the things the minister did tell the electors throughout Quebec. I have too deep a conviction respecting my own responsibilities in the house, and yours, Mr. Chairman, and this parliament's, in this time of terrible crisis.
I am not going to stir up dangerous issues, but I was surprised by the statement made by the Prime Minister last night. I think he went only far enough in that regard to leave us where we are. But I do say that this government has no more mandate to conscript the boys of this country for home defence than it has a mandate for selective service where the Minister of National Defence says the front line is, namely, on the shores of Great Britain.


An hon. MEMBER:: A hundred and eighty to forty.


William Earl Rowe: That is all my hon. friends can think about-elections, elections. They are fearful of another election, and boasting still about the last one. They are playing politics, just as Nero fiddled while Rome burned. Let me say to them that they cannot blow hot and cold on this great issue.
Yet the Minister of National Defence says that the defence of Canada is overseas, and someone else rises in his place and says, "We will conscript men only for the defence of Canada." From the same government someone else says, "We have no mandate for conscription". Then, on the other side of the picture someone says, "We have a mandate for this form of compulsory service in our dominion". In other words, they say, "We will not tell the electors we would compel anyone to join the army, but after the election
The War-Mr. Rowe

is over we will compel the men to join the army-not where there is going to be any fighting, not where the Minister of National Defence says the danger is. We will not take a chance and give it further effect without going back for a political squabble in the country."
Let us face the facts. I believe the hon. member for Qu'Appelle (Mr. Perley) said this afternoon that it was almost unnecessary to be here, and that he would like to get away. I think he is right. I wonder now why we came here. The newspapers of this country have been filled to overflowing with legislation passed by orders in council. The newspapers suggested there would be legislation when we came here, but when we arrive we find the order paper has nothing on it but a few unanswered questions and a few discarded resolutions. Talk about depending upon the people-why, this government has scarcely depended upon parliament.
I have sat in the house and listened to the present Prime Minister (Mr. Mackenzie King) and other hon. members, condemning the Bennett government for legislating by order in council, condemning them for issuing blank cheques, and talking about dictatorship through order in council. Never since confederation has a government passed more orders in council than the present one.
I do not wish to be unfair to the Prime Minister, because he is carrying a terrible load. Yes, he is carrying a load heavier than he would have to carry if he would take parliament into his confidence. He is carrying a heavier load than he would have to carry if he took the country into his confidence.
I make no apologies for my own party. We hear much talk about a mandate, but neither party knew in 1939 what was going to happen. Billboards were put up all across this country when we were both seeking election. We had a similar policy on this issue as those who sit to your right, Mr. Chairman, we stated that there would be no conscription. But we are now in a crisis; we are in the midst of the flash and flame of the greatest peril this country has ever faced. An hon. member says that the government has the support of 180 members. I plead, then, with the Prime Minister of this country to face these facts that confront us. We are facing the greatest peril the British empire has ever faced. There are 180 members behind him, so surely he will have sufficient-I shall not say courage -confidence to go ahead; surely he will not be afraid.


An hon. MEMBER :: Afraid of what?


William Earl Rowe: Afraid of the ballot box; that is what hon. members opposite are afraid of.


Mr. CHAMBERS:: They will not need to come back by acclamation.


William Earl Rowe: I have come back far more often than my hon. friend, even by election.


Alan Chambers: The hon. member has a long way to go.


William Earl Rowe: This government is putting into force many orders in council. It has a right to do that in many instances because no government could face the problems that this government must face without passing orders in council. The Prime Minister and his cabinet have passed many orders in council which we all know were necessary to meet emergencies, but they have also passed many that were not necessary, especially while parliament was sitting. For instance, we had the price control or price ceiling legislation which we have heard about and which is not yet in effect.
I urge the government to take this house into its confidence. This cannot be classified as emergency legislation. This is the forum where these propositions and proposals should be dealt with. They should be brought here no matter how badly money is needed in the treasury. We met last spring; we met again this fall and yet we read about more legislation in the newspapers than we hear about on the floor of this chamber. We ask, but I have before me a list of unanswered questions. There are also on the order paper a number of discarded resolutions. These have not been reached no matter from what corner of the house they may have come. To my mind this parliament has been made an absolute mockery, more so than at any time since confederation.
The time has come when this government should take vigorous action. I should like to see the Prime Minister of this country provide by order in council for compulsory selective service and then come back to parliament and say, "I did not have a mandate to pass compulsory selective service for home service, let alone a mandate to send the boys overseas, but this is what I have done." I should like him to tell us that he had gone down to the compatriots of the Secretary of State in the province of Quebec and explained to those loyal people that the home front for the defence of Canada was overseas, that without a mandate he had brought in compulsory selective service to defend the shores of Canada and he therefore had provided for compulsory selective service for where the fighting is going to be.
Do not dodge the issue. If there is anything I can do to help this government, I am ready to do it. I have endeavoured, privately and otherwise, to make suggestions and offer

The War-Mr. Rowe
proposals to this government which I believed might help. Surely we can get away from politics for a while. Talk about national unity-


An hon. MEMBER:: Hear, hear.


William Earl Rowe: My hon. friend says, "hear, hear." Nobody has played politics in Canada with greater success during the last quarter of a century than has my hon. friend. No other hon. member has been better recompensed for it either. This war far transcends any of our personal ambitions.


Paul Joseph James Martin: Hear, hear.


William Earl Rowe: The hon. member for Essex East says, "hear, hear." The front line of this country is overseas; Canada must be defended where Hitler is charging, and not upon the banks of the St. Lawrence. We have had a compulsory service which takes boys from the farms and leaves only old men to work them. I have heard hon. members to my left refer to that and to the many auction sales which have taken place because boys from the farm have been compelled to serve in defence of Canada. This service is supposed to be here in Canada, but when the boy gets in the army he finds he is bludgeoned into joining up for service overseas. He suffers humiliation and embarrassment and feels that if he does not enlist he will be like those to whom the Prime Minister referred in western Canada. To my mind this is a shameful and-I shall not use the other term I had in mind because I believe "shameful" and "cowardly" are both unparliamentary-it certainly is an inadequate and unjust means of serving the purpose which every member of the government has said must be served.
The Minister of Finance (Mr. Ilsley) says that this is an all-out war, and that we must have from the people dollars and more dollars. I have endeavoured to cooperate with him in every way in order that more war savings stamps and victory bonds may be sold. I say to the government that this tremendous task is their obligation. I know their purpose is to keep prices at a reasonable level in order that there may be a basis upon which they can collect this enormous volume of money which is going to be necessary to meet the most gigantic conflict in the history of civilization. I ask hon. members to pause for a moment and compare the task of to-day with the task of the last great war. Canada is not the country she was in 1914. She is not as advanced as she might have been, but she is a stronger and greater country in both materials and man-power.


Mr. CRUICKSHANK:: And as far as
government is concerned.


William Earl Rowe: My hon. friend says, "and as far as government is cone -ned." He that complies against his will is of the same opinion still. I know my hon. friend feels quite keenly about this. While he may appear humorous in the midst of adversity, I know that when he pauses in the silence of the night he will ask himself the question: Why have we compulsory sendee to defend our shores where there is no fighting and yet no compulsory service to defend our shores where our only defence lies? Think it over. We speak about national unity, but I see no reason why we should have disunity in this country on this issue. If there is reason why we should have disunity on this issue, it is not on account of the great French people of the province of Quebec, those people who were the earliest settlers of this dominion, those loyal, conscientious people who sent thousands of sons to the last great war.
The Liberal party has played politics with this most dangerous issue. I plead with them not to play politics again in this grave hour, but to go to the people of that great province, many of whom bear upon their breasts decorations from the last great war and many more of whom will be decorated overseas in this conflict; let the leaders of this government go to the people of the province of Quebec and say, "You people who were in this country first, and who love Canada, you who know that our most sacred freedoms were achieved under the union jack, we ask you to join us now in protecting not only the shores of the Dominion of Canada but the very shores of our freedom, the shores of Christian liberty, the shores of every right we have enjoyed for so long." If the government will do that, I ask the people of this country who are harping so much on unity to say whether such an appeal would not unite other great forces in this country, and who can doubt that the great province of Quebec would march on with all of us together?
There is and has been for many years another vital part of the defence of Canada-the British navy. The United States of America realizes that very keenly to-day, and we can unite with this great force with greater hope of success than we can ever hope to achieve by standing alone until Hitler takes us one by one.
It is all very well to say that we are going to have our men employed in their proper place, that we are going to produce aeroplanes and tanks. It is not so long ago that we were told we could not produce tanks in this country, but to-day we are producing tanks, aeroplanes, and guns, and our war industries are humming all across this country, playing the game and doing their best. The challenge is up to the government to work along with them.
The War-Mr. Rowe

Name a national coordinator, if you will, who will cut the red tape that is strangling our war effort at the present time, who shall also rip off the strait-jackets from these dollar-a-year men and let them go to work. We are facing the greatest crisis in our history, and before I conclude I would urge this proposal upon the government. I do so now because this is about the only chance we get to debate issues of vital importance. All we can do, the way this government carries on the administration of the country, without consulting parliament, is either to express our thoughts in advance or to criticize after action has been taken by order in council. Otherwise we come back to parliament and find that all we can do is to criticize what has been passed. Therefore, before we leave we had better anticipate the new orders in council that will be passed after we go home. We do not know whether the government in its price-fixing policy will take fifteen cents off eggs and add two dollars a hundredweight to bacon, or add fifteen cents to the price of eggs and take two dollars a hundredweight off bacon. Even when parliament is sitting, orders in council are passed regulating these things under this new-fangled economy.
Let me warn this government, which will be rapidly passing orders in council in connection with this new-born system, that they beware lest they defeat the purpose for which it was created. Let the government ask themselves in fixing prices of farm products to be as sure of the costs of production as they are of the manufacturing costs of industry, which gets its costs, plus ten or fifteen per cent. Let the government ask themselves whether it is fair to fix prices on the same basis for industry and the farmer, who cannot pay off his mortgage or meet his bank overdraft, and who works longer hours for less money, while labour in industry works shorter hours for more money.
Think of the farmer in the cost of living bonus plan. No one has been stronger than I for the man who toils at a machine. No one has worked harder and spent more, politically and otherwise, than I have done to see that labour gets a square deal, and I still stand by labour. But in this price-fixing scheme I urge the Minister of Finance, who probably has not worked the long hours some farmers have, to pause for a moment and ask himself if he should fix prices for the farmer who is working twelve and fourteen hours a day, on the same basis as he fixes prices for industry working eight hours a day.
I urge the government-and I am giving advice that may have little effect-to take into the cabinet, in the interests of our war effort, more men who understand the problems

of labour and agriculture, just as the government of Great Britain has done, and I say that without intending any reflection on any member of the cabinet. If you want to unite this country, have all elements in our country properly represented in the cabinet, and then tell the country what needs to be done. Tell the country that winning this war is not going to be an easy matter, that this government has a job to do, and that if it fails to do it, history will hold it forever responsible. If our empire's history is to be brightened by Canada's contribution as it was in the last war, not only must we stand united, but we must march on together to the end. There are more critical days ahead, and it is the duty of the government to spur the people of this country on to greater effort. Do not pause to ask yourselves whether you have a mandate to do what the situation demands, because nobody is going to bother you even if you go a little further than your mandate to carry out an all-out war effort. Do not think so much about mandates, and politics. Think about the challenge that faces you to-day. Think of the return of freedom and liberty to the enslaved countries of Europe, which depends so much on the efforts of Canada, the richest country in the empire, the country that is attracting the eyes of the world to-day, a country that our great neighbour to the south is watching. The United States have compulsory selective service even before they are at war. Let the government concentrate on the crisis that is facing us to-day and ask themselves whether they can afford to play politics as it has been played in normal times.


Mr. McIVOR:: I am not sure whether I heard the hon. member for Dufferin-Simeoe (Mr. Rowe) aright, but I understood him to say that our war effort was being hampered by red tape. Those were not his exact words, but that is the substance of what he said. That certainly is not true or fair. I have in my hand a pamphlet containing an address given by a member of this house in the last parliament, Mr. J. A. Marsh. He was a defeated candidate in the last election and now occupies an honoured position in the Department of Munitions and Supply, where he is engaged in the examination of contracts. In this address he says, "There is no political patronage in the Department of Munitions and Supply."


Mr. E. G. HANSELL (Macleod):: I think there is just enough time before six o'clock for me to say what I desire to say. My voice is not quite so loud as that of the hon. member for Dufferin-Simeoe; my frame is not

The War-Mr. Hansell
quite so large; but I trust that my logic is
as sound; and anything that I say now I do not say in defence of the Liberal party.
I agree with the sentiment which has been expressed that in the last general election the people of this country were under the impression that by voting Liberal we would not have conscription. I have searched records;
I have gone back over newspaper articles, and I cannot find that anywhere any mention was made of or any distinction drawn between, overseas service and home defence; and the people themselves voted at the last election against any kind of conscription.
Coming to my hon. friend's remarks, I fail to understand how our Conservative friends could have changed their minds so quickly. The fact of the matter is that we have not heard very much about this conscription business until the last few days.


Mr. ROSS (Souris):: Has the war changed since then?


Ernest George Hansell: The war has not changed in the last few days; but supposing it had, I will come to that in a moment. In the last election, about eighteen months ago, this group which I represent made their stand definitely clear. They had the foresight to anticipate that we would have a long, hard battle and that the time might come when the entire resources of the dominion would have to be brought into the war effort. Our stand then was: begin the right way, by mobilizing the financial resources or-should I say?-the financial institutions of this country, that the government might take unto themselves that which they had delegated to the financial institutions and control the credit facilities of this country to aid in the war. That, we said, was the first thing to do. We went out on the platform in the election and said the same thing. Did our Conservative friends advocate conscription at all in those days? They did not go even as far as we did. But now, in the last few days, there suddenly springs into existence a cry by these hon. gentlemen for some type of conscription.


Mr. JOHNSTON (Bow River):: They do not say even yet what they want.


Ernest George Hansell: To-night's paper has a rather large headline:
Arthur Meighen accepts leadership of Conservative party.
To urge compulsory service over whole field of war.
I suppose that means foreign service as well as home service. We did not hear anything about that eighteen months ago. One can come to only one of two conclusions: either
my hon. friends are indulging in political opportunism by grasping at what may be regarded in some opinionated circles as a growing public sentiment over the subject of conscription, or, they were not far-sighted enough to see what might happen eighteen months afterwards. For a party to bid for power that cannot see eighteen months ahead is-well, I would not vote for them anyway. I do not think I shall ever vote for an old-line party again.


Charles Edward Johnston: The
Liberals are no better.


Ernest George Hansell: Quite true. I think we can say that the same thing applies to the Liberal party.


James Arthur Ross: That does not apply to some of us. Some of us predicted what would happen.


Ernest George Hansell: Are we planning now for that which may be a year, two years, three or four years ahead?


Charles Edward Johnston: The
Liberals cannot see six months ahead, and here is the evidence.


Ernest George Hansell: I said I would not vote for an old-line party again. I did so once; I voted once upon a time for-believe it or not-the gentleman who is now Viscount Bennett.


Charles Edward Johnston: Shame on you! You should have known better.


Ernest George Hansell: I will ask the hon. member for Bow River not to rub it in too hard.
Those are all the observations I wish to make. The hon. member for Dufferin-Simcoe may rise in his place and say, "Let us not play politics"; but if politics is played at all, it is played on the grounds of political opportunism. Let us not be political opportunists; let us be in this whole matter as statesmanlike as we can.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.


Mr. STIRLING:: We are discussing the proposals of the Minister of Finance?


James Lorimer Ilsley: Yes, as the Prime Minister intimated just before recess.


Grote Stirling: I listened with very great interest to the statement of the minister the other night in which he described the considerations which induced the government to proceed

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by the particular method which it has adopted. As far as my observation goes, I would be inclined to think the country has received it, as a declaration of policy, with a good deal of acquiescence. But the minister realizes, as I think the public realizes, that the government has embarked upon an undertaking the working out of which, on the administrative side, will be accompanied by intense difficulty. The minister has not belittled the difficulties. I assume the committee will wish to discuss those difficulties as hon. members see them.
A difficulty which, it seems to me, will have to be met is that the retailer finds himself in this position. Following the accustomed method of trade, he has ordered ahead. In some instances he has had to order, months ahead, the commodities which he needs to maintain his stock. In those months the wholesaler's price to the retailer has in all probability risen. The retailer has his shelves somewhat full of those articles that he is accustomed to deal in, has probably not raised his prices; the prices which he has been charging the public relate to the costs at which he provided himself with those goods. But those prices ruling through the period of September and October will no longer recompense him for what he will have to pay for the goods ordered in the months preceding the period. I wonder whether the government have given consideration to that matter, and consider it as one which must be met, and whether the minister can describe any methods by which it may be met.
It appears to me that recognition must be given to that difficulty. If it is not given, as far as I can see, it just means that the retailer is left in the position of having to take that loss. If the retailer at large through this country, be he the small man or chain-store shareholder, has to pay more to the wholesaler for the goods he has ordered prior to this period, then he will have to absorb the loss. I do not know if the government is preparing to load that loss on to the retailer who appears to me to be alone in having to carry it.


James Lorimer Ilsley: It is not a problem peculiar to the retailer. It may apply to the wholesaler as well, or the processor. The problem is a very real one, and consideration has been given to various methods of meeting it. I am not in a position to say which of those methods or what method will be adopted. I should like to hear hon. members present the difficulties, and shall take note of their representations. But I think it would prejudice the whole working of the scheme if I were to indicate what the board may or may not do. I am not in a position to say that at the moment.


Richard Burpee Hanson: Does the minister not think that at the beginning at all events, no matter how much good-will there may be toward the aim which the government has in view-and I do not think anyone has disparaged1 that aim, at least I have not; I was criticizing the means by which it was to be achieved, not the end in view-does he not think that in a great experiment like this it w'ould be fair to say that the whole thing will be more or less a matter of trial and error until the weak spots are found and the holes are plugged?
I have in mind the case of a manufacturer who has to bring in parts, some from the United States, if he is allowed to do so, where he thinks he can buy them more cheaply than locally, even after paying the exchange and duty. The manufacturers are fearful that their costs will be increased but that their selling prices upon which they base their bids to their customers in the ordinary course of dealing will be frozen. They send their travellers out months in advance to take orders before the goods are made, for example boot and shoe manufacturers. On a rising market a manufacturer simply cannot sell at the prices at which he has been asked to, and he just has to cancel his order. I have found that case. I assume that in a case like that, if he makes the proper representation to the board and if the board are satisfied as to the bona fides of his position, they will grant him some relief. Is it to be a case of every man applying on his own behalf, or will they be heard in classes? These are thoughts that have been running through my mind. I do not see how any hard and fast principles can be laid down to govern a position like this.
While I am on my feet may I offer a suggestion to the minister, who rather deprecated the suggestion I made the other day that these prices had been frozen on an uneven level. That may not be true with regard to the whole commodity picture, but certainly it is true with regard to certain commodities. I think it is true with respect to agricultural commodities, other than wheat, because definitely this does not govern wheat. I think it is true with respect to agricultural production in my own province. That production is not as large as it might be, but that is the reaction I get from those in the business. Take, for example, those who raise potatoes, one of the most important productions we have in our province. The hon. member for V-ictoria-Carleton (Mr. Hatfield) knows very much more about it than I do; and I know he holds that view very strongly.
I suggest to the minister that it must of necessity become more or less a matter of trial and error, and I am afraid that the man

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who pushes most strongly, who pulls the hardest, who is capable intellectually and financially of making out the best case, will win out, while the little man, who perhaps cannot make himself heard, who has not the money to present his case, may suffer.


Mr. KINLEY:: He always has.


Richard Burpee Hanson: I have grave fears for the safety and the future of the small dealer in this country under this project. The big chain-store man or the big department store is in a better position to sustain any shock that may come. The little fellow who marks his goods, not on the basis of the cost of replacement but rather on the basis of the cost to him on the shelves, is going to take what will be to him a very severe licking. That is my fear, though I hope I may be wrong.
On the other hand, I believe that if the government wdshes to perform a national service, with which I think in principle we all agree-namely, to prevent inflation-we ought to ask for the whole-hearted support of everybody to see if this thing cannot be put over. That is my attitude at the moment; yet I do not see how it can be done by a central body here in Ottawa, in a far-flung country like Canada, where the little fellow cannot make himself heard. Perhaps hon. gentlemen opposite may be able to help the minister; I hope they can.


Mr. NEILL:: I should like to endorse the remarks of the two previous speakers. Unfortunately it is the man who has acted from the decent point of view who is going to suffer most. A retailer, confronted with a sharply advancing price, has two alternatives; I was a retailer during the last war and I know how it worked out. When he sees prices going up he can do what the better element perhaps would do, continue to sell at the old price until his stock is exhausted, and then raise his price; or he might say, as the leader of the opposition says, "Well, I will only regard the cost of replacement," and thus take advantage of the rising market, knowing that people can not buy the commodity for less from any other retailer. In that way he could secure a greater profit than ordinarily would be the case.
That is what has happened here. The man who said, "I will not increase my price beyond the basis of what I had to pay," is going to be stung. The man who increased his price because he saw the market rising will get off, because he raised his price during the control period. The result will be that the man who did the fair thing will be stuck, not only for the immediate future but apparently for a good long time, because whoever drew up these regulations appears not to have taken account of that lag, so to speak, between the wholesale and the retail price. Some retailers buy their stuff six months ahead; but whatever the period may be, there is a lag. The leader of the opposition spoke about the small man not making himself heard. I can tell the committee that the small man in my district is making himself heard, because since this thing was announced I have received nearly a hundred letters begging me to bring the matter to the attention of the minister or the house.
As I say, this is going to be a permanent thing; it will not be only one temporary loss, for the sake of the convenience of the departmental official; it will go on indefinitely, because the merchant will be compelled to sell at the price obtaining during the control period. But the price has been raised already by the wholesaler, and even if he is not permitted to increase it any more, it remains at that level. I have a letter in my office now in which a man mentions one brand of coffee. He says he is paying more for that coffee now than he was retailing it for during the four-week period. He anticipated having to increase the price as soon as his stock ran out, but unfortunately he did not increase his price during the period in question and now he is condemned to sell at the lower price for the duration of the war. On the other hand, the wholesaler will be able to sell the coffee at the price fixed during the latter part of the four-week period, which will create a gross injustice as far as the small man is concerned, as the leader of the opposition has said.
It seems to me it should not be very difficult to take care of that situation. Any adjustment would have to be made only once; then the wholesaler would not be permitted to increase his price again, and there would be no more trouble. In the case of almost every retailer there has been some increase in wholesale prices during that period, but unless an adjustment of this kind is made, the man who was decent about the thing will be the sufferer.


Mr. MacINNIS:: In saying a few words with regard to this matter I do not wish either the minister or the committee to take it that I am criticizing control in itself. I think we are all satisfied that under the circumstances controls of various kinds will have to be put into operation, and the only matter about which I am concerned is that .these controls should affect everyone as equally as possible. We are not going to put into operation controls which will impose

The War-Finance-Price Ceiling
restrictions in any way without hurting somebody, but what I do wish to avoid is any grossly unequal distribution of the burden that will be caused.
In reply to the hon. member for Yale the minister suggested that the wholesaler was affected in much the same way as the retailer. To a certain extent that may be true, but I believe the minister will agree that, generally speaking, the wholesaler will be better able to carry the burden than the retailer. The man who will be concerned most of all is the retailer with a small business, because it will affect his living. There is only a very small margin between what is sufficient to keep him going and what will cause him to close up shop altogether.
The minister has made out a pretty good case; obviously he cannot say at the moment what his department will do in the matter, but if we could have an understanding that these questions will receive the utmost possible consideration, then I think we shall be satisfied. It may be said, I suppose, that many of the small retail businesses are uneconomical. I believe that is true; but until we find some method by which the people who are in these businesses, and who would be put out of business by the control, can make a livelihood in other occupations, great care should be taken to see that they are not unduly affected by the controls instituted, as has been outlined by the hon. member for Yale.


Joseph Henry Harris: When the Minister of Munitions and Supply was introducing the subject matter which he reviewed in a previous speech, this matter was discussed with particular reference to raw materials required for war industries. That is a problem as far as his department is concerned; discussion appears at page 4241 of Hansard.
Now, on the invitation of the Minister of Finance, I direct the attention of the Minister of Finance to the same subject. A portion of the raw materials referred to is used in the manufacture of war materials, but a larger portion is used in the ordinary commerce of the country. In days gone by, the market for primary products was usually based on what could be obtained for the exportable surplus. Invariably, in common with agricultural products, they found the price which prevailed for the exportable surplus, especially if it were shipped to the United Kingdom, in view of the fact that, in days gone by, the United Kingdom had received their supplies from India and Europe, was considerably lower than the price on the domestic market in Canada.

To-day, either fortunately or unfortunately, the only export market of any value that we have is in the United States, and prices in that market are riding anywhere from 10 per cent to 60 or 70 per cent higher than the ceiling price in Canada.
I arrive at the ceiling price from this deduction.: through the years raw materials have been contracted for. As I said before, contracts were ordinarily made in the months of November and December for the twelve-month period following. The contract prices of December, 1940, provide the ceiling prices and the base period in this legislation. Meantime, due to industrial activity in the United States, the market in that country has risen considerably above the Canadian ceiling price.
I appreciate that the minister's problem is a very difficult one, and I am going to offer him one suggestion to which he might give some thought, and which I believe would help him with his problem.


James Lorimer Ilsley: Is the hon. member talking
about rubber?


Joseph Henry Harris: I am speaking
about hides, in particular-hide trimmings, and commodities of that kind. I refer not only to hides alone, but to split trimmings. I am afraid if I gave the minister the complete nomenclature of all primary products, he probably would not understand it all. Hides, however, constitute one commodity among a number of others.
For instance, murrain hides in Detroit are selling anywhere from two cents to six cents a pound higher than in Windsor. I know about the export situation in that connection. But in respect of by-products from split trimmings -that is, after the hides are split-a million pounds were shipped out of this country last year. The contract price in December, 1940, in the case of wet was $22 a ton, and dry, $30. The value to-day in Boston is $45 for wet and as high as $60 for dry. That is an example of the commodities I have in mind.
Of course this is not a commodity which will upset the whole economic set-up of Canada, but it is an illustration of many other commodities. The trading in this commodity amounts to probably only a thousand tons a year. But the suggestion I am going to put on record is that the minister should have access to the records of exporters of raw materials of this and other kinds to the United States for the preceding year. It may be that he would have the information for two or three years preceding. He would ascertain the names of those desirous of shipping products out of Canada, and bleeding this country of raw materials so necessary for the making

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of war requirements. The minister's department could take a record of the individual shippers and, before issuing export licences, could have those shippers declare what they had shipped in years gone by. In that way he may be able to hold the situation in hand.
What will happen will be that shippers who have been loyal to Canadian industry by selling their products at home will be in the unhappy position of receiving a little less for their products, if they sell them for the ceiling price in Canada. On the other hand, those who through branch plants connections in the United States still ship to that country will get the advantage of a higher market. I therefore suggest that the minister's department see to it that shipments abnormally large compared with those in previous years are not allowed to leave Canada, and in that way avoid a scarcity of raw materials to keep Canadian industry supplied.
I know the minister's department has already received representations in that respect, because I was interviewed in Toronto by a Chicago concern which made representations concerning the export of beef hides and calf skins from Canada to the United States. That is one example. If his department takes a firm stand, I am sure he will get the cooperation of Canadian industry. I realize some of the difficulties, but I hope he will give consideration to the suggestion I make.


James Lorimer Ilsley: Yes.


Thomas Clement (Tommy) Douglas: How do these price control regulations affect the price of wheat? As I understand it. the ceiling price will be the average between September 15 and October 11, which was about 77-3 cents.


James Lorimer Ilsley: That was the highest price.


Thomas Clement (Tommy) Douglas: The highest in that period was about 77-3 cents. But the minimum price would still be in effect. The price would be allowed to fluctuate between 70 and 77-3 cents.


James Lorimer Ilsley: That is only for domestic sales, and does not apply to export sales.


Mr. VICTOR QUELCH (Acadia):: I cannot help being amused at the apparent about-face on the part of the government in respect of certain matters in their financial policy. For instance, on various occasions between 1935 and 1939 we stressed the fact, when it was desirable to put certain projects into operation, that provided we had the necessary men and material to carry out those projects, it was quite a simple matter to arrange for the financing of them. In other words, we stressed the fact that anything physically possible and 14873-276
desirable could be made financially possible. We remember that whenever we suggested such a thing in the house we were ridiculed by the former Minister of Finance.
It is interesting to note that since the declaration of war the Prime Minister (Mr. Mackenzie King), the Minister of Finance (Mr. Usley) and the Minister of National Defence (Mr. Ralston) have stressed on various occasions that everything that in the physical sense can be done to win this war will be made financially possible. In other words, they are taking exactly the same stand as we took in peace time, but apparently they are not prepared to take that stand in peace time. They will take it only in war time.
Between 1935 and 1940 we stressed on many occasions that in order to develop our resources to their fidl capacity and maintain as high a standard of living as possible, it would be necessary to institute price control and, in certain instances, some degree of rationing. The present Minister of Finance took exception to that statement; in fact he took a very strong stand against any suggestion that we should introduce price control. May I read to the committee what he said on November 21, 1940, when the proposal was made by one of this group that we have price control. These are his words:
Price fixing of a few commodities, indeed rationing of a few commodities, is possible and need not have a very serious effect, but price fixing and rationing on a general scale have at least two disadvantages.
In the first place, this would call for bureaucratic interference in the private affairs of all Canadian citizens. Perhaps I am speaking a little bit figuratively here, but generally speaking there would have to be a government spy in every grocery store. The Germans did this with some success, but the Germans are experts as spies.
And then:
The whole habit of thought of the Canadian people, the dislike of intensive and general government intervention in their personal transactions and private affairs, would make a universal system of price fixing and rationing, even if it were practicable in Canada, far more odious, 1 am satisfied, than a system of taxation and borrowing out of savings, which is the policy of this government.
Every detail of our economic life would have to be controlled by someone sitting here in Ottawa.
It is true that the nazis in Germany have gone nearly as far as this with their price fixing and rationing. But even they, with a dictatorship and with years of experience before the war, have had to combine this price fixing with very heavy war taxation and with borrowing enormous sums at interest rates higher than we pay in Canada.
The minister made that statement as recently as November 21, 1940. According to

4378	COMMONS
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the minister, price control would necessitate placing a spy in every food store. If the minister is still of that opinion, I wonder whether he is starting to organize a gestapo and put spies in stores throughout the country. That is what he said in order to ridicule our proposal. I agree that his statement at that time was nonsense, but that is the language used by the Minister of Finance and the former Minister of Finance (Mr. Ralston) on almost every occasion when we made proposals to better the financial system. I agree that there is no reason of sense in that statement, that the minister went to extremes.


James Lorimer Ilsley: I said I did.


Victor Quelch: I am glad to hear the
minister admit that.


James Lorimer Ilsley: Not now, but I did then. I said that I was speaking figuratively, that that would bring about a system of regimentation, and so it will. We are going very far in that direction.


Victor Quelch: I am not criticizing the minister for introducing a form of price control. I think it is necessary, but the proposal made is a clumsy one. The minister would be well advised to adopt the price control proposal suggested by Major Douglas. That is what they have adopted to a certain extent in the United States with the stamp plan, and also in Great Britain with the system of compensated prices. I shall not deal with that now, but I may at another opportunity.
In his speech, the minister admitted that we in this group had always opposed inflation. I doubt if there is any group in this house more opposed to inflation. On the other hand, the minister stated that he was of opinion that our proposal would cause inflation. Let us go back to the years 1935 to 1939. We had half a million unemployed; industry was running in low gear; many plants were closed down or running at a small percentage of their capacity, and we had a favourable balance of payments in those years amounting to around 8200,000,000. In addition, there were a million people on relief. The ministers of the government were travelling all over the world in an effort to obtain foreign markets, but they were absolutely blind to the fact that in Canada there was a tremendous undeveloped market in the million people on relief and the many others who were having to accept a standard of living far below what was necessary.
Our proposal during that period was, first of all, that we should take steps to obtain effective control over the issue of currency

and credit. We realized that this wrould be necessary before we started any other financial reform. Then we contended that a certain proportion of the unemployed should be put to work on capital projects and a certain proportion in industries producing goods for consumption. The money paid out for capital projects would help to create an effective demand for the goods produced by the consumption goods industries. But we also stressed the fact that it was necessary to maintain a certain definite relationship between the production of capital goods and the production of consumer goods. We contended that capital production should be maintained at a sufficient volume so that the money paid out in its production would be at least equal to the deficiency which existed between the total price of consumer goods available for distribution and the effective demand against them.
I think we all know that from 1935 to 1939 our capital projects were down well below normal. On many occasions we advocated that these capital projects should be increased. We advocated slum clearance, road building, reforestation and many other projects. The money paid out to carry on these projects would have created an effective demand for consumer goods which could have been produced but which were not. Every time we made such a suggestion the Minister of Finance woidd ridicule it as being inflationary; at times he became almost hysterical.
We said that such a programme could be financed by the Bank of Canada, but we suggested that before the Bank of Canada was used for that purpose it was most necessary that we should obtain effective control over the issue of currency and credit. We had not that control at that time and we still have not that control. We suggested also that it would be necessary to institute a system of price control. I defy the minister to say that such a proposal as that could possibly cause inflation. The effect of carrying out that suggestion would have been to maintain production at its maximum level, or at least at a level sufficiently high to maintain a decent standard of living in this country. It was not inflation; it was simply stabilizing supply and demand.
We realize too well that since the declaration of war the situation has changed entirely. To-day we have a great expansion in the production of capital goods and the money paid out in this production is causing an increased demand for consumer goods. There is no longer a proper relationship between

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the production of consumer goods and the production of capital goods. As the war goes on and we find it necessary to make a greater effort, we shall have to increase the production of capital goods. When we have exhausted our supply of labour it will become necessary to decrease the supply of consumer goods. We realize that it is absolutely necessary to have this relationship in war time.
The Minister of Finance says that this excess purchasing power should be drained off by a system of taxation and the sale of bonds. We agree that the people should be allowed to invest a certain amount of their money in savings certificates, to put aside a little for a rainy day, but we cannot understand why the people of this country should be forced into debt in order that certain people may have an investment, or, in other words, that we should curtail spending. We have always attacked the sale of bonds as being a dishonest and unsound system. We claim that it is	dishonest	because	it	is nothingmore or less than a misappropriation of the funds of future generations. We maintain that it is	unsound	because	we	shall bebuilding up a debt that can never be paid under the	orthodox	system	of	finance. Ihasten to add that when we say that we do not mean-the minister sometimes jumps to conclusions-that the people who are buying bonds to-day are not going to be paid. Of course they will be paid, but in paying those people the government will not be reducing the debt;	they will do it	by	refunding,
just as it has been done in the past.
The minister has stated that the ideal method of selling bonds would be to distribute them as evenly as possible throughout the nation. If we could make this a one hundred per cent distribution, if everyone held an equal amount of bonds, then everyone would be taxed to pay his own interest. We would all be taking in each other's washing and we would be no further ahead. The same thing could be accomplished by taxation. But this is not the situation; we know very well that a large percentage of the bonds are held by a small number of people. I know that the figures issued by the minister show a wide distribution, but that does not alter the fact that a large proportion of the bonds are held by a comparatively small number of people. We shall be taxing all the people to pay the majority of the interest due to a small number of the people, and that is not a desirable state of affairs.
As I say, we shall never be able to pay back this debt. That must be quite obvious. If the people to-day are not able to pay for
current production, then the people of the future will certainly not be able to pay for the goods they consume at that time as well as the goods we are using to-day but not paying for. If we adopted a real pay-as-you-go system, we would be paying for these goods as we used them and not be calling upon generations of the yet unborn to pay for the cost of this war. Some people will argue that we are fighting for democracy and therefore we have the right to expect the people of the future to help pay the cost. That argument has been used in connection with every war fought in the past. We are still paying for wars fought one hundred years ago. Every time we have another war our debt mounts and the problem becomes greater. The same thing will happen in the future. The people of that day will be asked to pay for this war. But I suggest that the people of the future will have sufficient troubles of their own without being asked to pay for the war we are fighting to-day.
The minister likes to hope that the tremendous revenues we are obtaining to-day will continue after the war. Why is it that we have such large revenues to-day? What is the main reason? I put forward two main reasons. In the first place we had monetary expansion to provide for maximum employment and increase the production of industry. Second, and perhaps more important, the government has become the largest purchaser of labour and commodities in the country. Is the government prepared to continue that policy after the war? If it is-and mind you, it is a complete change from the policy of the past-there is no reason why we cannot have in Canada after the war the greatest era of prosperity which the world has ever seen, because all the productive capacity for war purposes to-day will be available after the war to satisfy the needs of the people. But if we are going to be told, as we have been told already, that we shall have to tighten our belts to pay for the war, that all government projects will be curtailed and that there will be a general contraction of credit, then undoubtedly we are going to have in this country the greatest depression we have ever seen. I recall what was said of the last depression. Mr. Spinney, general manager of the Bank of Montreal, said that the main reason for the last depression was the great debt which had been incurred in the last war. Then I ask the Minister of Finance, if a two billion dollar debt for the last war caused a ten-year depression, what will the war debt at the end of this war cause? There is no question in my mind that we are headed for one of the worst depressions we have seen in

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this country unless the government is prepared to depart from its former orthodox financing.
There is one other question to which I wish to refer. In the past in this house we have urged and we are still urging that to the extent that taxation and the sale of interest-free certificates will not provide the necessary revenue for the government, the services of the Bank of Canada should be used. It is interesting to note that many prominent bankers and economists are showing a complete change of mind on this subject, especially as regards the sale of bonds. If anybody went out during the last victory loan campaign and suggested that the sale of bonds was not the correct method of financing the war, his patriotism was likely to be called in question and he was likely to get a visit from the police the next day. As a matter of fact the police did visit people who criticized that method of financing the war. I have criticized it inside and outside this house both in peace time and in war time because it is a racket which becomes more contemptible in time of war. Let me quote what has been said in this regard by two authorities whose word cannot lightly be set aside: first, Lord Kindersley, who I understand is chairman of the National War Savings Committee in England and a director of the Bank of England. He is quoted in the April 9 issue of the Parliamentary Debates of the British House of Commons by Mr. Stokes, M.P., as having said:
I do not disagree with the expressed belief that it does not make a pennyworth of difference whether you subscribe or not, provided you bank your money and do not spend it.
The minister would agree with that statement because he has stated that the purpose of the sale of bonds and of taxation is primarily to curtail purchasing power. But if people are prepared to stop spending and to put their money in a bank, the same end is achieved, so far as not spending it is concerned, as if they had bought war savings certificates or bonds. The minister has stated in the house that the main purpose of taxation and the sale of bonds is not the raising of revenue but to curtail the spending of the people. That statement was also made by Professor Plumptre.
I want to quote one other authority in this regard. He goes a bit further than Lord Kindersley. I quote from the Western Producer of October 9, 1941, which has an editorial on the August letter of the Royal Bank of Canada. The editorial says in part:

Tlie same issue of the Royal bank letter went on to quote with apparent approval criticism voiced by the London Economist. That leading periodical is cited as having said:
"The whole cast of savings propaganda needs to be quite radically altered. The individual should be told that his duty is to reduce his consumption by every possible means. He should have the lesson driven home to him on every hoarding that every act of consumption uses shipping space and labour-the two scarcest of commodities. Once he has economized as much as he can, it matters very little what happens to the money he saves thereby-"
I drawr the attention of the Minister of Finance especially to this:
"The saving once done, it is of no advantage to the state to pile up enormous figures of subscriptions to savings certificates and war loan. Indeed it is to the state's advantage not to borrow' at two and a half per cent or three per cent if it can raise the money more cheaply, and the truly patriotic citizen is he who, having reduced his consumption to the absolute minimum, leaves his spare money in the bank."
I quite agree with that statement, and I think everybody should agree that it is far more patriotic to curtail your spending and not impose a debt on the nation than to curtail your spending through a process of increasing the national debt.
The minister is introducing a form of price control. It is a blanket price control. As I have stated, we believe that a better system could be introduced; nevertheless this plan will have the effect of preventing the exploitation of the people by certain industries. At the present time we have not effective control of the issue of currency and credit. Therefore I would ask the minister this question: Why does the government not take the necessary steps to obtain absolute and effective control of the issue of currency and credit and then, instead of obtaining credit through the chartered banks or financing the war by the issue of bonds, why not use the services of the Bank of Canada? Or perhaps I should ask this question rather: Is the government intending to utilize the services of the Bank of Canada? The minister in his speech left that question up in the air. He stated that he needed $600,000,000 but did not know where he was going to get it. He thought he had pushed taxation as far as he could and he did not like issuing any more bonds. He did not state what action the government proposed to take. I wonder whether he could at this time tell us what is the government's objection to utilizing the services of the Bank of Canada, having first of all obtained effective control of the chartered banks.


James Lorimer Ilsley: This is one of those academic discussions which the hon. gentleman is very fond of starting in this house. I have engaged

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in them before, but I really do not know that much advantage would be gained by entering upon another one to-night. If we are to do that, I will make some preparation, as the hon. gentleman has done, and then come back and we will have a debate of that kind if he wants it. But I do not see what is to be gained by it. He has his views as to how this war should be financed and we have our views. We have both put our respective views before the house and the country. He talks about the 8600,000,000 that I was speaking of the other night. I do not admit that that particular $600,000,000 is ever going to be needed, because that was the additional amount which would be needed after the price level rose by 20 or 30 per cent, and we do not intend that the price level shall rise.
With regard to whether we intend to borrow from the Bank of Canada, there has been some small borrowing, as the hon. gentleman knows, from the Bank of Canada. The returns which have been produced in the house have set out the borrowings from the chartered banks, from the public, and from the Bank of Canada. When the hon. gentleman asks me whether it is the intention of the government to borrow from the Bank of Canada, and how much we intend to borrow from the Bank of Canada, those are questions which I should not, and indeed cannot, answer at the present time.


Victor Quelch: Would the minister care to comment upon the August letter of the Royal Bank of Canada? I ask that question because throughout the country there is a great deal of discontent at the way in which the government is financing this war. There is a feeling that we are building up a debt which is going to have the effect of causing depression and a great deal of grief after the war. The statement in the Economist is a very clear one. It is one for which people in this country have been branded as unpatriotic when they make it. I do not think that stigma can be attached to the Economist, whose statement is quoted with apparent approval by the Royal bank. If it is a correct statement of fact, unquestionably something is wrong with the government's policy.	y.


James Lorimer Ilsley: To what statement is the hon. gentleman referring?


Victor Quelch: The one which I quoted from the Economist.


James Lorimer Ilsley: What part of it?


Victor Quelch: The one which stated that people would be just as patriotic or more patriotic if they placed their money in the banks rather than purchase bonds or war savings certificates with it.


James Lorimer Ilsley: Whatever the validity of the statement may be, the fact is that if the money is not borrowed from persons, they do not place it in the banks, they spend it, and that exerts an upward pressure on the price level. Therefore, from a practical point of view the only thing to do is to secure the money from the people, to channel money back to the government from the people either by taxation or by borrowing. We cannot go very much further by taxation, so we have to do it by borrowing. We have to offer some incentive to people to lend money to the government; that is why we pay interest.


Victor Quelch: In other words, the government feels obliged to place the nation in debt rather than allow the people to spend the money. Surely the logical thing would be to increase taxation.


James Lorimer Ilsley: The nation is in debt to itself.


Victor Quelch: That would be true only if everybody were buying an equal amount of bonds. I know we are assured by Mr. Towers that the greater the debt, the greater the prosperity: "Look at central Africa-no debt, no prosperity!" But that would be true only if everybody were buying an equal quantity of bonds. We know that is not the situation. We know the situation is that a very small percentage of the people hold by far the greater part of the bonds, so that for evermore the people of this country are going to be compelled to pay tribute to that small number of bondholders. That is why I contend that the correct procedure would be to tax those people rather than sell bonds to them. After all, the minister has stressed again and again that we should have a pay-as-you-go policy. When we take into consideration the tremendous sacrifices which are being made to-day in Europe and by our own people; when we call to mind that many are going as far as to give their lives, is it too much to expect that people in this country should be content to maintain their pre-war savings entire, and to have a fairly decent standard of living for the duration of the war, but that after the war they should not be any better off than they were at the start? The person who finds himself in that position should regard himself as exceedingly lucky. No one should expect to build up, as a result of this war, great accumulations of bonds which will largely represent profits from the war. It seems to me a very unfortunate state of affairs that when certain people buy, say half a million dollars worth of bonds, we call them patriots-patriots for having invested their money at three per cent in a gilt-edged security. I do not like the use of the word "patriot" to describe a man who, as a result of good business, is able to get hold of a

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security which will provide him with three per cent for the rest of his life. We use the same word to honour the man who goes overseas and sacrifices his life. I should say that the correct procedure is. to tax those who have the greatest amount to lose as a result of this war; they should be prepared to make such sacrifices in line with the sacrifices which are being made overseas.


James Lorimer Ilsley: 
Richard Burpee Hanson: They are less.


James Lorimer Ilsley: Well, no. On an analysis of about 320 companies which was made by the Bank of Canada, and which did not include certain classes of companies such as railways and some others, but covered 320 representative industries in Canada, it appeared that the profits after taxation had increased by 6 per cent in 1940 over 1930-which was a very moderate increase. The Financial Post made an analysis of the balance sheet of, I believe, 280 representative companies, and the conclusion to which they came was that the profits after taxation had increased 2-2 per cent. The increase in income after taxation has not been to any extent to commercial, industrial or financial corporations; it has been in the lower income earning groups. It is very largely in the wage-earning groups that the great increase has taken place in the incomes of the people of the Dominion of Canada. Of course, we tax them, but at a so much lower rate that their net incomes after taxation have been very substantially increased.


Victor Quelch: I should just like to
mention that I notice, from the returns of the profits of the chartered banks, that in the case of the Bank of Toronto the profit increased in 1940 from, I believe 16 per cent to 24 per cent after the taxation had been paid.


James Lorimer Ilsley: I do not know whether that was after taxation or before, but I think it was before.


Victor Quelch: It stated "after taxation".


James Lorimer Ilsley: I am not sure about that. But that was 24 per cent upon the original capital, without rest, without reserves being taken into account; and as rest was not taken into account at all, it is open to question whether that is a fair basis. If a financial institution has been operating over a long period and has made profits in previous 3'ears and has a large rest fund, then, to take the earnings upon original capital, which may have been invested fifty years ago, is not a very sound test as to the earnings of the money actually employed in the business.


James Arthur Ross: This price ceiling order in council is a great experiment, and, as has been said, will be a matter of trial and error, but I think the minister should have the cooperation of the general public in working it out. At page 4156 of Hansard the minister is reported as saying:
.	.	. we could never have imposed a price
ceiling until we had given agricultural prices a chance to rise. Agricultural prices were very low before the war; I do not dispute that for a moment. But on the basis of percentages there has been a tremendous increase in everything except wheat. I am going to give some percentages, and I want it clearly understood that I am not expressing approval of the level of agricultural prices in August, 1939.
I wish to put on record some figures as to prices in August, 1939 and September, 1941. This government has for several purposes connected with the prosecution of the war used the basis of 1926-29 for organized labour and industry. To use the same basis for agricultural prices gives an entirely different picture in the circumstances in which we find ourselves to-day. I quote figures for that time also:
		Aug.,	Sept.,
1926-29	1939	1941Wheat, Fort William..	1-417	0-549	0-726Oats, Fort William.. . .	0-603	0-273	0-493Barley, Fort William..	0-716	0-323	0-526Rye, Fort William....	0-971	0-370	0-547Butcher steers, Toronto	9-04	6-37	8-79Bacon hogs, Toronto...	11-01	7-85	10-99Creamery butter, Mont-	real	0-382	0-215	0-344Eggs, Montreal	0-482	0-318	0-394
There is a very great discrepancy in these prices, and on any basis of equality with organized labour and industry it places agriculture away dowm the list. True, something has been done in the way of an acreage bonus, but that does not begin to make the necessary adjustment.

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I have here an article from the Toronto Globe and Mail of Tuesday the 11th instant, quoting the Searle index. It says:
Searle Grain Company makes the following points:
United States government has adopted the principle of 1913-14 parity, which means that agricultural products should have the same purchasing power now over the things that farmers have to buy as they had in 1913-14.
For wheat in the United States to be at the 1913-14 parity would require a price of approximately $1.22 in store Chicago. To-day May wheat, Chicago, is actually $1.19 a bushel.
For Canadian wheat to be at 1913-14 parity would similarly require a price of about $1.20 for No. 1 northern in store Fort William. To-day No. 1 northern in Fort William is 72| cents a bushel.
A maximum of 223 million bushels has been set for the amount of wheat that western farmers are permitted to deliver during this present crop year.
In order to narrow somewhat the wide gap that exists between the farmers' low income from wheat and the high cost of the things that farmers have to buy, the government has given wheat growers certain bonuses which we estimate amount to 52 million dollars. (An additional 8 million dollars to farmers who grow grain other than wheat.)
Including these government bonuses the total income from wheat during this present crop year will amount to about 152 million dollars as compared with 234 million dollars revenue from wdieat last year, and 441 million dollars in 1928.
This is that original basis .of which we spoke.
Certainly I think the great mass of the agricultural population must receive some further consideration to put them on a basis of equality with organized labour and industry, and while, as I stated, I think the minister should have the cooperation of all the people of the country, certainly this will have to be equalized in some manner.


Alan Webster Neill: It is one of the disadvantages of the system we have adopted in this committee that it is the right and privilege of every one of us to talk, as regards the particular minister whose policies are under debate, on any phase of his activities. The result is that twenty men all want to talk about different subjects, and it produces an awful lack of coherence. If the chairman had authority, once a subject is introduced, to have it threshed out and then, so to speak, pass that item, we would get along much better.
We started this evening, when there were not very many hon. members present, with a. statement from the minister that he would like to hear hon. members state their views on the question of a condition which compels retailers to sell at a price lower than they
are paying wholesale now, because that is what it amounts to. The minister invited expressions of opinion, but only three hon. members have spoken on that. Going back to that feature for a moment, I think the minister indicated that when he heard our views he would take them into consideration. It seems such a simple matter that for the good of the project which we all hope will be a success, namely this price restriction policy, it would almost seem impossible to have it said that a very considerable body of people are compelled to sell goods for less than what they pay for them and carry their overhead as well, which generally runs to from fifteen to twenty-five per cent. It is obvious that this is not desirable. Suppose we carry it far enough and put them out of business. Some people have the same regard for retailers as hon. members in the far corner have for banks; they think they are very bad, but we cannot do without them, and to put them out of business would be a disadvantage.
An. hon. MEMBER:	They serve a useful
purpose.


Alan Webster Neill: They serve a useful purpose.
It will hurt the success of the scheme if it is demonstrated that, a certain class of people are compelled to sell for less than they pay, and these men who have written to me show, without any trouble, that to be the situation.
While I have the floor I wish to put another situation before the minister. I do not quite know how he comes to have control of this matter, but in these days one is liable to find any department under any minister. I rang up a department yesterday and asked the young lady what minister a certain branch came under, and she courteously said she did not know but she would find out. Half an hour later she told me it was under a totally different minister from the one I anticipated- which information I afterwards found to be wrong.
The minister has become heir in some way to the war-time prices and trade board, which board is responsible for the prohibition of the export from British Columbia of dogfish and soupfin sharks' livers. It has been the subject of a brief presented by the fishermen; no doubt he has seen it. To put it as shortly as possible, the board have put a prohibition on the export of these livers to the United States market. Apparently the custom was, in the early part of the war, to send them to the United States to be processed, on the understanding that the product would find its way to Britain where it is badly needed; it is a valuable source of vitamins. There was possibly some idea that

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this was not being done, that it was being retained in the United States, where they also have a shortage. At any rate the board put on an embargo.
The result from the fisherman's point of view is this. The price being paid by United States buyers to United States fishermen for dogfish livers is about 44 cents a pound, and for the soupfin sharks' livers, about S8 a pound, while the price to the Canadian fishermen for dogfish livers is about 11 cents a pound in the Vancouver area and for soupfin sharks' livers, between $2 and $3 a pound. They say the board has informed them that the embargo is temporary and may be lifted in the future. The result will be that the dealers who have been buying these commodities in British Columbia will make an enormous profit, and the fishermen will be out the difference between 11 and 44 cents. They suggest one or two remedies: either lift the embargo, or allow clearance for Canadian vessels so that they can fish in the same areas and take the catch to the United States, or that the government should buy this stuff at United States market prices.
It does appear to be one of those cases which call for recognition of the fact that when a man has produced or caught or grown something, he should be permitted to market it to the best advantage. The difference in price is due entirely to this embargo; in other words, our fishermen are suffering as a consequence of this step having been taken. It may be argued that it is necessary to retain this in Canada so that it may find its way to Britain; but we have only two small plants in British Columbia handling this article, one in Prince Rupert and, I think, two in Vancouver; they are processing it only to what might be called a minor extent, I believe ultimately it has to be sent east before the process can be completed.
These fishermen have made out a good case from their point of view. They say it is not fair that they should be the goats to such an enormous extent. Of course we know this is war time and we must protect ourselves and the British nation; but the idea seems to be that it is going to Britain anyway, that the embargo is going to be lifted shortly, and in the meantime these men who have been buying it up in British Columbia will reap an enormous profit. Therefore I should like the minister at least to promise to look into the matter, which is rather complicated. If he will study the brief he will see the argument they have put forward. This seems to be a fairly genuine case, and I believe the fishermen are entitled to the very best price the market will provide.


James Lorimer Ilsley: I read over the brief last night, and I have sent for some information with regard to it. There are some things about the brief which I do not understand, and in order to understand it I require some information from the war-time prices and trade board, which I have not received as yet. I will look into the situation.


Mr. T. L. CHURCH (Broadview):: For a few moments I should like to refer to one or two features of the public policy of the Minister of Finance which have developed since the house met last June. Last night St. Paul's hall in Yorkville, where Hon. Alexander Mackenzie, a former finance minister, used to speak, was destroyed by fire. It was in the Prime Minister's old constituency of York East, and where he used the phrase, "I had to sleep on the strong-box." It seems to me that since the war started, many of the old policies of the Liberal party have been gradually discarded in favour of national socialism. We had a victory loan not long ago, with a great flourish of trumpets and the usual posters, billboards, full-page advertisements, military parades, bands and so on, which, according to a return brought down by the minister, yielded almost $900,000,000. It cost eight and a quarter million to put over. In that return, however, the minister forgot to include the cost of the troops, a huge sum all over Canada, who were used for publicity stunts at a time when they should have been training for active service. They are used also from time to time in the war savings certificates campaign, and I protest against that sort of thing.
There is no coordination between the various government departments. The minister is taking twice as much money as he should take from the pockets of the people in these victory loans, and in maintenance charges, in income tax and all the rest of it. I believe the victory loan cost the government too much, and at the same time I believe the rate of interest is not what it should be.
When parliament adjourned last June the government said they would take up with the government at Washington the possibility of applying lease-lend act to the understanding reached at Ogdensburg as it applied to Canada. They also said that during the adjournment an attempt would be made to see if the exchange regulations could not be eased a little, particularly with regard to amounts not exceeding S100, for the tourist trade. Now, after nearly four months, we find that nothing at all has been done to

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ease exchange or to allow Canada to come under the lease-lend act for part of its work of home defence.
I have charged that the minister is taking too much money out of the pockets of the taxpayers. Almost 45 per cent of the money he is spending on home defence could and should come under the lease-lend act, because [DOT]hat money is being spent to protect Canada's neutrality in case the United States is attacked by a foreign power, and is for America's defence. That is the basis of our whole defence policy. No effort has been made, apparently, to point out to the government of the United States that Canada is spending these huge sums of money on what is called home defence. Actually there is no such thing as home defence; it will not amount to a snap of one's fingers in defeating Hitler. We spend all that money jointly to aid America as part of its first line of defence were she attacked.
As I pointed out last June when discussing this department of the government, there is no coordination between the various departments. They seem to be able to spend as much money as they like and spend money like water. Where is the auditor general with his vast power? Every department has its own auditors. The auditor general is not fulfilling his functions under the Audit Act. What is the matter with the treasury board that it allows these huge expenditures"? Not long ago we had the Minister of Agriculture announcing a policy which will cost the country over $100,000.000, and which is to be brought into operation by order in council. That money has to be found somewhere, and a large part of it will come from the income tax. The small taxpayer, who has to pay real estate taxes, interest on mortgages, insurance, and all that sort of thing, simply is not able to carry the load because he is taxed to death. Now that the government is taking so much more out of his pocket, with his fixed income he finds it almost impossible to carry on. I had hoped that during the adjournment the minister might work out with the treasury board some way of eliminating a great many of these expenditures, because, when all is said and done, a great deal of the money the minister is collecting for home defence will never be used to defeat the enemy. It seems that the various departments do not have to apply to the minister when they want to spend money. They simply say they are going to spend it, and it is spent. The Minister of Munitions and Supply goes ahead with a policy costing millions of dollars. He does not know how it is going to be financed and neither does anyone else. Then we have the Department of National War Services, which never should 14873-277
have been created, which does its work in a very roundabout way, duplicating the defence departments.
My principal point is that all the departments spending money should be brought under the control of the Minister of Finance and the auditor general. In the olden days that was the situation. I have referred to one minister of finance, Hon. Alexander Mackenzie. In the old days there was some control; we had an auditor general, Mr. McDougall, who checked up on all these expenditures before a dollar was released by the finance department. There should be some central authority for all these commitments. In England it took nearly two hundred years of civil war before parliament obtained control over expenditures in peace and war alike. Now we are losing that control; we are here to-day and away tomorrow, and in the recess every minister just goes to work and spends money like water. Not by the widest stretch of the imagination could some of these expenditures be said to be for war purposes. As I have pointed out already, they are very largely for home defence, and home defence will never win this war.
In conclusion I should like to mention a matter which the minister promised to look into during the recess, because it reacts severely on soldiers and civilians alike. I refer to the question of a national moratorium on mortgages for soldiers and civilians. When I brought up the question last week, the minister replied that it was a matter of policy. I think it is about time he came down out of the clouds and obtained some control over these shark loan companies, some of which charge soldiers and others 200 per cent interest, as well as over the departments of this government that are spending so much of the money of the taxpayers.
I believe the greater part by far of the Conservative vote of this country comes from the working classes, who are paying a great share of the taxes being collected by the minister. I am one of those Conservatives who do not believe in the nationalization of our industries or of the means of production. Neither do I believe in collectivization or many of these other social doctrines which have been taken up by the Liberal party and have been expressed by the government since we met last June. It will lead eventually to the abolition of all private property once the government, through its many boards, abolish all private enterprise and thrift and retail and wholesale business with all these artificial barriers and burdens. I do not believe, once the government, through its boards and officials, control everything, we



J386 COMMONS

[Stage Direction]
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shall be better off. Nobody knows what expense has been entailed by the appointment of these various boards, and these dollar-a-year men. We have never had a return set-[DOT] ting out the expense accounts of them all. More than that, the government's policy seems to be that a board a day keeps Hitler away. That would seem to be what is contained in the statement made to the house by the Minister of Finance, and it adds little or nothing to the war effort.
What has been the result? Hordes of civil servants and other government officials have been going round the country, and they are making a sad mess of the affairs entrusted to them and of business and private enterprise. It is high time that this house exercised its function, and put a stop to some of the things these people are doing, because they will go much farther during the recess of parliament.
Under this policy of nationalization everybody will be working for the government, the land owner will disappear and the farmer become a paid official, if the programme is carried out to its logical conclusion. Large sums of money have been spent in the name of socialism-because that is all it is. If it is allowed to continue, and if it is carried out to its logical conclusion there will be great danger, and it will nationalize the means of production, the manufacturers and the banks. Why do our opposition not oppose it? I believe a certain ceiling of prices is necessary, if regulated.
It would seem that the government hope by taxation so to discourage the owners of land that they will be willing to abandon their properties on any terms. That is the way the statements from the Department of Finance must be considered. They hope that in the end the farmer will go out of business, the land owner will become desperate, and the whole country will be under socialism. As a member of the opposition I object to the fact that this vast life and death contest, this great war we are in, is being used as a means for bringing state socialism on a huge scale to Canada. I wonder why the opposition fall for it, and why they do not raise more objection to the inequality of it. Thrift, and the hereditary principles upon which this country has become great will have passed away, while this is taking place. I should hope that in the recess of parliament the Minister of Finance would assert his rights and prerogatives, and see to it that there is some coordination and central check in respect of these expenditures, and so reduce his budgets with a large share to capital and not so much to income.

Not only have we the boards I have indicated, but we have a joint defence board. It is binding Canada for the next hundred years, and doing it over the head of this parliament. Things are being done by it to which agreement has never been given by the House of Commons.
What is this lease-lend act? It is just what the chairman of the United States Senate has said. It is lease and lend, and he quoted Mr. Coolidge that they are simply hiring out money to Canada, for what? Canada is financing munitions for England1. There will be a day of reckoning, and they will make a demand on Canada for payment under the lease-lend act. It will be pointed out that there must be so much from Canada for this war. They will not be satisfied in Washington with payment by old, obsolete ships, but will want gold, because the United States have nearly all the gold in the world.
This opposition is not doing its duty unless it asserts the Conservative principle of conducting this war on a proper basis. It may be necessary to do some price fixing, and if properly administered that would do no harm. But it should be done only to a limited extent, and certainly not to the extent to which the minister has gone.
John George Diefenbaker: Mr. Chairman, there are a few observations I intend to make respecting the matter of the ceiling on prices. I believe we all agree that the minister made a most able presentation when he placed before the house and country the order in council. It constitutes the greatest single act of regimentation that has ever been introduced in this country. Similar action has become necessary in various parts of the world. A similar type of legislation was introduced in Australia on October 8, 1939, freezing the prices as at August 31 of that year. While the principle is that of controlling the operation of the economic laws, nevertheless it has worked out in that country with a reasonable degree of success.
The information I have with regard to Australia shows that in consequence of price fixing in that country, the increase in prices of foods and groceries from the outbreak of the war until October 1, 1941, was about 3 per cent compared with an increase of over 40 per cent in the same period of the last war. For the cost of living as a whole, including rent, clothing and miscellaneous items, the increase since the outbreak of this war has been 8-6 per cent compared with over 30 per cent in the corresponding period of the last war, and wholesale prices in this

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war have increased by approximately 15 per cent compared with over 50 per cent in the same period of the last war.
As far as the principle is concerned, I think one and all are agreed that in the interests of preventing inflation some such legislation should be introduced. But I do not agree with the minister when he contends that the proper way in which to introduce it is by order in council. He says it would have been dangerous to have the date fixed by parliament, on account of the probability of evasion being practised. To guard against such a possibility, an order in council could have been passed fixing the date when the legislation would go' into effect, before the legislation was brought before parliament. Then parliament would have been in a position, with legislation before it, for the members to discuss each and every clause, each and every section, and, through debate, suggest necessary changes.
It is hard to conceive the reason the government had in calling parliament together when only two days before the opening of parliament, through an order in council the most drastic regimentation ever applied in Canada was brought into being. Was parliament not to be trusted? Could parliament not be trusted to debate the matter, point by point, if the legislation was introduced in the ordinary way?	The minister says, "Well, the
government could not tell just how long parliament would argue." The date fixed, namely, November 17 as the original date for the application of the order in council, and now postponed to December 1, was far enough in advance to have permitted full debate.
If this matter had been brought before parliament, there would have been a real justification for the calling of this session. We could have considered such a measure item by item. I remember well that last spring when the Minister of Agriculture introduced his order in council with respect to summer-fallowing he introduced the regulations one day, and amended them before the print was quite dry. Then a new set of regulations was presented; then he added a further amended set, and finally issued a revised edition, all because the terms had not been clarified by debate. Why did the government not place this matter before parliament and give the members of the house an opportunity to discuss the several items clause by clause? I should like now to refer to one particular clause which I think is most dangerous. Section 8 reads:
Nothing contained in these regulations shall be deemed to supersede any provision of any order heretofore made by the board or to 14873-277}
derogate from any power conferred on the board by the war-time prices and trade regulations and-
This is what I object to:
-without restricting the generality of this provision, the board, in its discretion, may vary any maximum price, may prescribe other or additional terms or conditions of sale, may exempt any person or any goods or services or any transaction wholly or partly from the provisions of these regulations.
That is a terrific power to place in the hands of any board, giving it the power to discriminate between individuals.


James Lorimer Ilsley: It is necessary to meet the kind of cases mentioned by the hon. member for Yale (Mr. Stirling) and the hon. member for Comox-Alberni (Mr. Neill) among others.


John George Diefenbaker: It may cover those cases, but it goes further than that. I repeat: It permits this board to exempt any person. I suggest that if such a section was necessary to cover such cases as have been mentioned, an additional provision should have been added to the section providing that all such exemptions shall be placed before parliament immediately or be published in the Canada Gazette, to the end that the dangers inherent in that type of legislation would be obviated. I suggest such an additional provision for the minister's consideration so that any exemptions would be recorded in a public way immediately, thus avoiding any possibility of discrimination.
The minister quoted with approval from the evidence given by Mr. Baruch before the house banking and currency committee at Washington on September 10 last. I have those representations before me, and I should like to ask the minister some questions arising therefrom. Mr. Baruch said:
As a matter of basic principle, a price control law should make no exceptions. All citizens should be treated alike as part of one nation joined in a great emergency and every segment of our economy, agriculture, labour, business, should be treated as parts of a single, living, sensitive organism.
Further on he says this:
Prices, rents, wages, commission fees, interest rates-in short, the price of every item of commerce or service-would not be permitted to rise above the maximum on that date. They could fluctuate below this ceiling.
What control is there going to be over commission fees, interest rates and so on? I do not know whether I read the order in council aright, but I can find no reference to interest rates.


James Lorimer Ilsley: That is correct.


John George Diefenbaker: Nor to commissions. The minister mentioned in his speech that it was the intention of the government to place

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a ceiling upon all managerial and executive salaries, directors' fees, et cetera, and that in a few days- he would be in a position to announce that policy. I ask him to make that announcement while parliament is in session.
The hon. member for Souris (Mr. Ross) dealt with agriculture and the prices that prevailed between 1926 and 1929. Mr. Baruch in his presentation before the United States house committee dealt with agriculture. When the minister quoted with approval from Mr. Baruch's presentation he failed to place before the committee the representations made by that gentleman in connection with agriculture. Mr. Baruch said:
The over-all ceiling does not mean that the producers of agricultural commodities or labour would get less. If the cost of all things were kept down, they might get more.
And further on:
Agricultural prices and probably wages will fall further than other prices-they always do.
He is referring to the period after the war.
The ceiling for agricultural prices can be set at "parity" which has become an accepted principle and this same "parity" relationship can be retained after the war. Thus agriculture could shift from war to peace with a minimum of dislocation.
The Minister of Finance admitted quite frankly that he could not do very much for agriculture, that he was unable to bring this order in council into effect at an earlier date because he had to wait until agricultural prices had risen to a reasonable level. What about wheat? As was pointed out by one hon. member this evening, in consequence of a question asked of the Minister of Finance the farmer will receive a price not exceeding 77 cents a bushel on the domestic market. We are not dealing with prices abroad at the moment. That is the maximum price he can get, but that is not a parity price. In his presentation before the United States committee Mr. Baruch said that the farmer should get a parity price. What is the wheat farmer's position? I notice the Minister of Agriculture (Mr. Gardiner) is present, and I should like to have his reply to this question. How can he justify the position which he took the other day in a radio speech when he endeavoured to show that the western farmer was getting a price of from 90 cents to $1 a bushel?


Mr. GARDINER:: Does the hon. member want me to repeat the radio speech?


John George Diefenbaker: If that is all that is repeated, there will be veiy little enlightenment on the subject. The minister said that the bonus of 75 cents an acre announced

recently was an income, and by adding the other bonuses already in existence the farmer would be receiving a price of 90 cents to SI a bushel for wheat.


James Garfield Gardiner: I did not use the word
"price" in dealing with that matter in the radio speech.


John George Diefenbaker: Advance.


James Garfield Gardiner: Income.


John George Diefenbaker: By taking the income and dividing it by the number of bushels, the minister ultimately arrived at 90 cents to $1 a bushel.


James Garfield Gardiner: I did not arrive at a
price at all; I arrived at an average income.


John George Diefenbaker: I do not think
any farmer listening to that radio address was convinced that his income had risen to a level ensuring a price or an income of from 90 cents to $1 a bushel. The bonus is commendable as far as it goes; it is a nice gesture, and it will mean a considerable , income to western Canada, but it does not give the wheat farmer any large additional income; it does not place him on a parity basis.


James Garfield Gardiner: 
John George Diefenbaker: Possibly the minister will be able to establish that when he gets his opportunity. I do know that the position in western Canada is this:	The
farmer depends mainly upon wheat; the cost of living has gone up 14-8 per cent since the beginning of the war while the price of wheat is little higher than it was at the outbreak of the war. He is poorer to-day, as far as his return is concerned, than he was at the outbreak of the war.


James Lorimer Ilsley: His main sales are export
sales.


John George Diefenbaker: I am dealing with parity prices. In the United States parity prices are domestic prices, and the farmer there is receiving SI.17 or thereabouts a bushel.
Mr. ILS'LEY: For information, would the hon. member explain what he means by the term "parity prices" in Canada? It has a statutory meaning in the United States and relates to a specific period, but in Canada it means whatever the person using it means by it, and I want to know what the hon. gentleman means by it.


John George Diefenbaker: The term "parity prices" has a definite m- aning by legislation in the United States.


James Lorimer Ilsley: Right.

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John George Diefenbaker: The term "parity prices" is used in Canada to indicate that the farmer receives equivalent purchasing power for what he produces compared with a certain other period.


James Lorimer Ilsley: And to what period is the hon. member referring?


John George Diefenbaker: I am dealing with the present period, and to-day the return which the farmer receives for his wheat is down to a level a little higher than, it was at the outbreak of war, while the price of the commodities that he purchases, by reason of the increases in the cost of living since the beginning of the war is on a considerably higher level. In other words, the farmer is in the position where he has not the purchasing power with the wheat he produces that he had at the beginning of the war.


James Lorimer Ilsley: The question I was putting to the hon. gentleman was this. He has been using the term "parity prices," which as he says and as I said has a definite, specific, statutory meaning in the United States, where it is related to some previous period. The hon. member for Souris seemed to be relating it to 1926-29, either the highest price or the average price during that period, and I was seeking to learn from the hon. gentleman what he meant.


James Arthur Ross: The average price for the same period which was used with reference to wages.


James Lorimer Ilsley: The present order in council does not make any reference to 1926-29. I was just asking for information, what period the hon, member for Lake Centre was talking about.


John George Diefenbaker: I have given my answer. I think the minister will agree that the freezing of the price of wheat to the level prevailing between September 15 and October 11 is detrimental to the welfare of the wheat producer, and I ask that consideration be given to fixing a price ceiling for wheat higher than the price prevailing between the dates mentioned.


James Lorimer Ilsley: Consideration will be given to all questions like that as the policy develops, but I do not think there is any immediate prospect of wheat going higher than seventy-seven cents on the market in Canada, is there?


Mr. P. E. WRIGHT (Melfort):: Mr. Chairman, from various ministers we had a comprehensive review of the activities of the government. Some of the government's accomplishments have been very satisfactory while others have not been so impressive, at
least to some of us. From the Minister of Munitions and Supply (Mr. Howe) we have had figures of the production of small arms and explosives that were very good, but this war is not likely to be won by small arms but rather with tanks, aeroplanes, ships and heavy ordnance, but as yet, after twenty-seven months of war, our production of these arms is not so satisfactory.
It seems to me that the government should have cut out civilian spending at a much earlier date than they did. According to the bureau of statistics, in the month of September, 1941, we were spending one million dollars more on cars and trucks for civilian use in Canada than we did in the corresponding month in 1940. Yet the minister of munitions admits that we are in need of the steel for use in our shipyards. It seems to many of us that the government is following very much the same policy as it did in peace time; that is, doing nothing until forced to it by pressure of public opinion.
Public opinion in Canada to-day with regard to our war effort is much ahead of the government. I believe that the great majority of our people are prepared to see complete mobilization of our whole wealth and resources, both material and human, for an all-out war effort, and the government has had various representations made to it to that effect by various organizations across the country. The Canadian Legion made one of the most comprehensive recommendations yet made to the government, and I personally believe that it is one which the government would do well to follow. It seems to me that in Canada to-day, instead of having an all-out war effort we are still using the wasteful methods of the voluntary approach. We are spending on advertising and salesmanship, for instance, money which could be much better spent on war materials. In eveiy paper we see pages of advertising trying to sell the people of Canada luxury goods. On other pages will be seen advertising by the government asking people not to spend money on luxuries. On yet another page will be seen an advertisement by the Department of National War Services urging the people to save the very paper in which we are contradicting ourselves. These things seem very contradictory to the man on the street. Surely we cannot call that an all-out war effort?
During the summer I have heard many expressions like this while travelling through Saskatchewan: "Why should I buy war savings certificates and save gas? The government will only use the money to hire another inspector and buy him gas to drive round." That is not the spirit that is going to win this war.

The War-Finance-Price Ceiling
I think remarks like that were made largely by reason of the appointment of great numbers of inspectors under the acreage bonus scheme. During the last sitting of the house the Minister of Agriculture (Mr. Gardiner), when he introduced this scheme, told us that they would probably use the inspectors they had working under the Prairie Farm Assistance Act, approximately one hundred, and it might be necessary, he said, to hire an additional twenty-five inspectors. As a matter of fact, however, we have inspectors for every municipality in Saskatchewan, and there are over three hundred, and inspectors I believe for every local improvement district in the province. That applies, I believe, also to Alberta and Manitoba.
When this government have demonstrated by definite action that they are prepared to mobilize the wealth and resources and manufacturing capacity of Canada for an all-out war effort without profit to anyone, they need have no fear about the mobilization of the human resources of this country. If we are to have an all-out war effort, which is the objective of all members of this house, we must have in Canada much greater equality of sacrifice than we have at the present time. This year we floated in Canada one of the largest war loans in our history. Before launching the campaign the Minister of Finance did what I think was a wise thing. He called together some of the best financial experts in the country and business men with a nation-wide reputation, and they laid down plans for the campaign. They allotted quotas for the various provinces. The quota for Saskatchewan was, I believe, some $8,000,000, and for Ontario some 8300,000,000. The population of Saskatchewan was between 900,000 and 1,000,000 and the population of Ontario about 3,000.000. These people realize where the wealth of this country lies. As a matter of fact, there were several companies in this country, I believe, each of which was able to subscribe more to our war loan than the quota allotted to a million people in Saskatchewan.


Richard Burpee Hanson: May I ask the hon. member this question: Are they not the big insurance companies, which represent hundreds of thousands of policyholders, whose money it is?


Percy Ellis Wright: Some of them were. Some of them w'ere mining companies engaged in operating and exploiting the natural resources of this country. I believe the McIntyre mine was able to subscribe some $5,000,000 to our war loan. Certainly that did not come out of the small policyholder.


James Lorimer Ilsley: If I may interrupt, my recollection is that the insurance companies subscribed for $120,000,000 worth of bonds.


Charles Edward Johnston: Did they resell the bonds afterwards? Did the minister say?
Mr. ILSLEY": I did not say, because I do not knowr that. I would be astonished if they had. Some may have been sold, not very much, I think.


Percy Ellis Wright: It still remains a fact that these people realized that Saskatchewan, containing a million people, could afford to raise only $8,000,000 because in that province we are engaged largely in agriculture, and agriculture during the last ten years has been the most poorly paid industry in this country. The leader of the opposition stated that it was the insurance companies which were taking out the most of these loans. As a matter of fact, I saw a report in the paper yesterday that the profits in the first nine months of this year of the International Nickel company were $25,000,000, and they had listed among their assets some $32,000,000 of treasury bills and securities. That is more than is held, I believe, by the million people in Saskatchewan. I cannot agree that there is any equality of sacrifice in this country while these conditions prevail. I believe that if, at the beginning of this war, the government had taken over every resource in Canada and had then called in the best brains of this country to plan intelligently their very best use, without regard to any private interest or advantage to any section or class in this country, we would have had a very much more effective war effort.
It seems to many of us that the war effort has been held up by the refusal of industry, in many instances, to expand their plants beyond a capacity which they believe could be economically used in peace time. After unnecessary delay, the government have had to provide the capital for the additional expansion which they require. Industry has been given charge of the building and the operation of it, and, upon the minister's own statement, has received the assurance that the use of this additional plant and equipment will be abandoned by the government after the war is ov.er. It seems to me that if the government wish to raise money in this country to build these plants and their equipment, one of the best methods they could use would be to assure the people that when the war is over, this additional plant and equipment which the people have built and paid for will be used to produce the goods which at the present time we are being asked to do without. We

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could thus produce those goods and sell them to the people at a price which they could afford to pay. The government would get all the money they wanted if they would give the people that assurance.
I agree with the minister that it is necessary to prevent unlimited inflation. Nobody in this country believes in unlimited inflation. I do not agree, however, that the method which the minister has adopted is the best one. Rather, I believe that, before issuing the regulations, he should have consulted the people who are going to be most affected by this legislation. As far as labour is concerned, I understand that they were called in some forty-eight hours before the order in council was issued, and shown those regulations. As far as agriculture is concerned, they have not been consulted to this day. We have in the city of Ottawa here an office of the Canadian Federation of Agriculture, established here for the very purpose that they may be in contact with the government and able to give advice to the government with regard to agricultural matters. As far as this government are concerned, that office might as well be in Tim-buctoo as in Ottawa. They have not used it; they have not consulted with agriculture, and they did not consult with agriculture with regard to these price-fixing regulations.


James Garfield Gardiner: Mr. Chairman, 1 can
hardly let that pass without any remark at all. As a matter of fact, they have taken up at least three-quarters of a day of my time this week, from that office. They have been consulting-


Percy Ellis Wright: Yes, after the regulations
have already been issued. But before these regulations were issued, the office of the Canadian Federation of Agriculture was not consulted.


James Garfield Gardiner: The national federation of agriculture were here in September discussing the matter with the v'ar-time prices and trade board.


Ernest Edward Perley: What reply did they get?


Percy Ellis Wright: But these regulations were not discussed at that time with the Canadian Federation of Agriculture.


James Garfield Gardiner: The possibility of setting a ceiling to the price was discussed.


Thomas Clement (Tommy) Douglas: Mr. H. H.
Hannam, president of the Canadian Federation of Agriculture, gave a statement to the press on Monday morning, following the Prime Minister's statement over the radio, in which he said the federation had never been consulted.


James Garfield Gardiner: I am not discussing what Mr. Hannam said. I said Mr. Hannam and the secretary of the federation were here and discussed with the members of the board in September the matter of a ceiling for prices.


Thomas Clement (Tommy) Douglas: But not to
discuss these regulations.


James Garfield Gardiner: These regulations would not be discussed with any organization.


Thomas Clement (Tommy) Douglas: That is the
point.


Percy Ellis Wright: That is the very point I
wanted to bring out. These people represent organized agriculture not only here but over this whole dominion, and I believe that the government would have been well advised to consult them on problems of agriculture more than they are doing at the present time.


James Garfield Gardiner: Might I suggest, was there any organization they were placed before? My hon. friend is trying to indicate that agriculture was discriminated against. Were they placed before any organization?


Percy Ellis Wright: I do not know of any organization they were placed before. Evidently they were the government's own baby.
I should like to take up a little time with reference to the government's policy regarding agriculture. It seems to me that it is about as broad in its vision as the height of the minister who conceived it. Under this order in council P.C. 8527, prices are fixed at levels which have no relationship to the cost of production. In every other industry engaged in the production of goods for war purposes not only are these costs allowed, but a profit as well. I have in my hands a copy of the Economic Annalist for October, 1941, issued by the Department of Agriculture under the authority of the Hon. James G. Gardiner. It Show's that, using 1926 as a base of 100, the price of farm products in August of this year stood at 72-1. Field products, of which approximately 75 per cent of the income of the western farmer consists, stood at 56-7, while farm living costs were represented by the figure 112-3. Now, according to the fall index of the cost of living, this figure has risen to 116.
I should like to give the committee the average prices of grain as compiled by the marketing branch of the Department of Agriculture, for 1926-29, compared with September, 1941:
No. 1 wheat
The average price for No. 1 wheat, basis Fort William for 1926-29.... $1.41
September, 1941	72

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The highest price to which it can rise under these price regulations is 77-3 cents. Other prices were as follows:
	1926-29	1941
Oats. 2 c.w. ...	60	.49Barley	71	.52Flax	
$2.09	$1.55This represents	a drop of approximately 50	
per cent. In 1926 it took 230 bushels of wheat to buy a binder; in 1941 it takes 700 bushels. In 1926-29 it took 700 bushels of oats; in 1941 it takes 900 bushels. In 1926-29 it took 610 bushels of No. 1 feed barley; in 1941 it takes 920 bushels. These are the prices at which the minister is proposing to fix agricultural products, at a time when their buying power as represented by what the farmer can buy machinery for is entirely out of line.
Not only that, but these regulations do not fix the prices of farm machinery. One of the most important items of farm machinery is the tractor. Tractors are imported one hundred per cent. If the price of these tractors in the United States goes up, the farmer here has to pay the increased price. Since the outbreak of the war, the price has already risen by about 25 per cent. If agriculture in Canada had been in a prosperous condition prior to the war, it might have been possible to carry on for a short time at these prices, but unfortunately this was not the situation. According to the Sirois report the average farm income for Saskatchewan for the four years prior to the war was, in cash, $102. If we take into consideration cash and kind, that is making allowance for the produce that the farmer uses from his own farm and rent for the house he lives in, it was $291. The fact is therefore, that agriculture to-day in practically every part of Canada is in a serious position, and in western Canada in a desperate position. The income of the grain growers has been drastically reduced. I know the Minister of Agriculture may produce figures to show that this situation is perhaps not as serious as some of us represent it to be. It may not be to the minister, who has a salary to live on as well as his farm, but I know the people of Saskatchewan, I know the conditions under which they are living, and I know those conditions are serious.
I should like, in proof of that statement, to give some cases which have come to my attention during the year. May I say that my constituency is one of the best in Saskatchewan, one in which we have never had a crop failure, have always had good crops, and in which a considerable part of our income is derived from dairy products and live stock, not all grain. This summer I went into one of the districts in which people from the ' 
southern part of the province have been reestablished. I went to the chairman of the school board and questioned him regarding the school in that district. He told me they had built a new school there the year before. He showed me the register. That register showed that there were seventy-five children of school age in the district. They built the little schoolhouse themselves out of logs and made their own desks and blackboard. I asked him how many children were attending, and he told me that during the summer months they had an average attendance of about fifty, but during the winter the attendance had dropped to twenty-five. I asked why. Well, he said, the clothing allowance to the people of that district during the last winter had been $5 a head, a family of seven receiving an allowance of $35 on which to clothe the family for the year. Because of that the children could not attend school; the parents could afford to dress only a few of the brighter ones and send them. I asked what salary they were paying the teacher. He said that his own daughter was doing the teaching, that they had promised her $700 a year, the minimum set by the Saskatchewan government, but they had been able to pay her only $350 and had given her a note for the rest. To-day that school is closed, and in the constituency which I represent there are from three hundred to five hundred children who will not be able to attend school this winter owing to lack of clothing or because the school is closed by reason of its being impossible to pay the teacher's salary. The secretary of the teachers' federation in Saskatchewan made the statement that he believes that during this winter there will be probably two hundred such schools closed in Saskatchewan simply because the agricultural income in that province is not sufficient to maintain the educational facilities we should have.
Another instance I should like to relate has to do with the question of medical attention. In many districts in Saskatchewan we have no medical attention; people are thirty to fifty miles from the nearest doctor. This instance came to my attention this summer. In one of the reestablishment blocks, a mother was taken ill. In order to get her to a hospital the husband had first to see the relief officer. To do that, he had to travel some thirty miles. He went, got the order, came back, started to take the woman to the hospital, some thirty-five miles distant. They could not get in with a oar. This woman was the mother of ten children and was expecting another child. He loaded her in a wagon and started to take her out to where a car could he obtained. She took sick on the way; he

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had to take her out on the side of the road, make a bed with some sheaves, the child was born there; he had to go home, get a manure boat with which he cleaned out his barn and take her back home on that manure boat. The child died; the mother is a cripple for life. In a country like Canada with our wealth and resources things like that are a disgrace. That is not an isolated instance. These conditions are a direct result of the prices that agriculture has been receiving in the prairie provinces for its products for the past ten years.


Mr. WHITE:: You do not have to go to the prairies for that; we have it in Ontario.


Percy Ellis Wright: So much the worse. The present policy of the government with regard to the prices of grain is simply placing the grain growing industry of this dominion on relief. In effect, it says to western Canada: "You produce grain at less than cost. We know you cannot continue to do it, so to keep you from starving we will give you relief in the form of acreage bonus or summer-fallow bonus."
I have never believed in relief; I have always believed that the work and wage programme is to be preferred. We in this group were called visionaries in the years prior to the war when we suggested such a programme. We were told it wras impracticable, "Where would the money come from?" That sounds rather flat to-day, and I suggest that the present position of the government with regard to agriculture is just as weak. Agriculture does not want relief; what it wants is just what is being given to every other industry in this country, namely, a fair price for its products which will allow it to live and produce the food required for ourselves and for Great Britain in the increasing quantities that she desires. A price for our products in line with the costs we have to pay is essential to efficiency and increased production. Setting a maximum price below that point will certainly lead to decreased production.
In 1926-29 the average price for No. 1 butter, basis Montreal, was thirty-eight cents The average for the past year was considerably below that. Setting the price of butter last year at a level below the cost of production resulted in an increase in the export of dairy cattle to the United States in the first six months of this year of approximately 35 per cent. All this is taking place at a time when Great Britain is asking for more dairy products. We are deliberately forcing thousands of people out of agriculture and into industry. In the district from which I come, and all through Saskatchewan, there are thousands of sale bills displayed, and I believe the situation is the same in Ontario. Every farmer living on marginal
land or on land which has not been producing is being forced into industry. I should like to remind hon. members that when a dairy herd is disposed of, it cannot be replaced overnight; it requires from five to ten years of careful breeding. I feel certain that if present prices of agricultural products are maintained, within a year we shall be faced with a distinct shortage of dairy products in Canada, and Great Britain will still be asking for more of these commodities. In any agricultural paper in Ontario this belief will be seen stated time and again.
The actions of some of the boards and controls established by this government, for which the government alone must accept responsibility, have deliberately impeded the growth and development of the cooperative movement in Canada. This year our cooperative refinery in Regina has been unable to secure sufficient crude oil for its requirements and has had to buy large quantities of refined products from the regular oil companies while its own plant stood idle. The allotment of cars to the pools during the past year is another instance. As a result of this allotment, the handlings of the pool elevators have been reduced by approximately 40 per cent.
Finally, I should like to say that if this government are anxious to secure the cooperation of all classes and sections of this country in an all-out war effort, as they -wish it to appear, they have the remedy in their own hands. Let them consult labour and agriculture in the same manner that they consult industry to-day. Let them cut out the petty political patronage which is rampant throughout this country. Let them demonstrate byconcrete action that it is their intention to bring about real equality of sacrifice. We have heard platitudinous phrases coming from the Prime Minister and the Minister of Pensions and National Health. These are not enough. Here is what Hon. Ernest Bevin, who next to Mr. Churchill is the greatest leader of the British people to-day, has to say:
This war has taught us that never again can we be complacent; that it is not in platitudes or phrases that the world's solution of injustice, poverty, and social inequality can be solved, but in wise planning, thinking and action of the nations actuated by these motives.
That is what we need in Canada to-day, more action and less talk.


John James Kinley: I should like to say just a word with regard to that paragraph of the order in council which is really the adjustment clause, and which has been so vigorously attacked by the hon. member for Lake Centre. To my mind that is the redeeming feature


Mr. NICHOLSON:: I have received a number of complaints from farmers in western Canada respecting the arrangement with regard to instalment buying. It has been pointed out that it is impossible for those who receive their principal income from the sale of wheat

The War-Finance-Price Ceiling
to meet payments on a monthly plan. Would the minister make a statement as to whether it is possible to have a 50 per cent down payment, and then have the balance paid next harvest, or a year from the time the purchases are made?
Automobiles are now a necessity in many areas of western Canada. Tractors, too, must be used. I understand they come under the regulations, and I should like the minister to make a statement respecting them.


James Lorimer Ilsley: I have received a number of representations similar to those of the hon. member, and I have forwarded them to the war-time prices and trade board. I am informed that the matter of the amendment of the regulations is under consideration at the present time. Perhaps I am not thoroughly acquainted with the principle underlying the monthly payments; but I should think that the important elements are, first, the size of the down payment and, secondly, the period within which the remainder of the price must be paid. If that is correct, there is an opportunity for some amendment to the present provision for monthly payments, without vitiating the principle of the order. The matter is under consideration.


Angus MacInnis: My impression of the
regulations with respect to instalment buying is that they are not helpful to anyone, excepting the financing corporations. They shorten the time, but as far as I know, the commodity is not reduced in price for those buying on that basis. I believe when the time is shortened, and the financing corporations are given a better deal, it should be reflected in the benefit accruing to those who buy on the instalment plan. I do not know much about these matters, because I have not bought on instalments. In my view, however, that is a point which should be considered.


James Lorimer Ilsley: The object of the order in
council relating to instalment buying is not that of making it any easier for the purchaser to buy. The idea is to make it more difficult for him to buy.


Angus MacInnis: But there should be no
objection to performing two functions at the same time, if it can be done.


James Lorimer Ilsley: The matter of price fixing or price control is separate altogether from the matter of t'he regulation of instalment buying. There was a tremendous amount of durable consumer goods being bought in Canada on the instalment plan. Small down payments were accepted; long periods were given for the completion of the payments, and people

were loading themselves up with obligations. They were buying goods which were using up valuable war materials. People were running into debt and making their futures very uncertain by entering into these long-term instalment contracts, and it was considered desirable to make the payments more strict. The objective there has nothing to do with the objectives of the price control regulations.


Mr. H. C. GREEN (Vancouver South):: Has the minister given consideration to the effect of these price control regulations upon what is known as "loss leader" legislation in certain of the provinces? Some of the provinces have such legislation. In British Columbia in the last few years they have developed an act known as the Commodities Minimum Loss Act, the purpose of which is to prevent chain stores in particular from advertising certain goods at a rate below the cost to them, really using that method to sell their other products. Such a practice does not necessarily mean any benefit to the consumer and it was considered an unfair method of merchandising. The passing of this legislation brought about more orderly merchandising, and in the province it was considered a step in the right direction. The retail merchants now fear that these regulations will upset that legislation, the result being that retailers, large and small, will be brought back to the position in which they were some years ago. Regulation 5 (2) reads:
No such federal, provincial or other authority shall fix or approve any specific, minimum or maximum prices or markups in respect of any goods or services without the written concurrence of the board.
That would seem to be in direct conflict with the language of the British Columbia act, which states in section 3:
No retailer shall offer for sale, sell, or keep for sale in the province any grocery product at a price less than five per centum above the cost of the same to the retailer.
I believe there is a similar statute in Alberta.
I ask the minister to give the most careful consideration to the provincial legislation. The dominion regulations should not be such as to interfere with that act. These retailers are to be found in all our cities and towns and are generally the key men and women in their respective communities. I am convinced that they are only too anxious to cooperate in making this price control effective, and they can do it far better than any other class. I think this matter should be looked into, and the minister should make sure that these retailers do not lose their present position by virtue of the new regulations.

The War-Finance-Price Ceiling


James Lorimer Ilsley: I shall bring the hon. gentleman's representations to the attention of the board. Before I heard my hon. friend speak, I was not aware that there was any conflict between these regulations and the "loss leader" legislation of British Columbia.


Howard Charles Green: Was it intended that there should be no conflict between these regulations and the "loss leader'' legislation of British Columbia?


James Lorimer Ilsley: I do not know that it was considered. There are provincial boards, such as milk boards, which fix minimum prices, and it was considered necessary to make sure that the war-time prices and trade board would have power to carry out its responsibilities regardless of the power vested in any local body. I think that was the situation which it was thought would be covered by that particular regulation. As I understand the hon. gentleman, he is suggesting that under the "loss leader" legislation of British Columbia it is illegal to sell below cost plus a certain mark-up, and that in that sense a minimum price is fixed by the legislation, whereas the regulation referred to by the -hon. gentleman provides that any fixing of minimum prices is subject to the written concurrence of the board.


Howard Charles Green: That is what I am afraid of.


James Lorimer Ilsley: I am not in a position to say that the board would give written concurrence. If the cost plus the mark-up brought the price above the ceiling, I suppose the board might not give its written concurrence, and to that extent there might be a conflict between the maximum price regulation and the "loss leader" legislation of British Columbia. I do not, however, think the regulation was framed with a view of enabling the board to break through that legislation. That is an accidental rather than an intentional result of the regulation.


Howard Charles Green: I suggest that provincial legislation should be considered as being stronger than a regulation passed by a provincial board. When the act is working successfully in the province, I think it would be unwise to interfere with it by these price control regulations, certainly without giving the matter the most careful consideration.


Mr. GERSHAW:: There is one point I should like to bring to the attention of the minister in connection with the control of instalment buying. I refer to the sale of automobiles. In many ranching and farming districts the distance between the homes of the settlers and the market towns is considerable. Automobiles are needed, not for pleasure but to carry on the business of farming or ranching. The regulations provide that instalment payments shall be made at rather short intervals, whereas the average rancher or farmer has money at practically only one season of the year, when he sells his live stock or the product of his farm. Automobile dealers feel that this regulation will bring about a great change in their method of doing business and will prevent many people who need cars in their business from getting them. When this matter is being considered I hope that this situation will not be overlooked.


James Lorimer Ilsley: I can assure my hon. friend that the matter is being given consideration by the board at the present time.


Grote Stirling: Would the minister indicate by what method a price will be decided upon for a commodity which was not on sale in the period mentioned; for instance, asparagus next May?


James Lorimer Ilsley: I do not want to commit the board, but I think it is fair to say that there are certain seasonal fruits and vegetables which may be outside this order altogether. It may be impossible to make it apply to them. But that is a matter which will have to be dealt with by the board. I say that because it is obviously unfair to apply these regulations literally to certain fruits and vegetables which have a high value in one month, a very low value in another month, and perhaps had a very low value in the base period. I hope I am not saying anything which will be taken as a commitment or any intimation of what the board is going to do, because they must have complete freedom to work these things out themselves. But from the beginning it was thought that in the case of fruits and vegetables it might be necessary to go rather far in departing from the literal terms of the order.


Alexander Malcolm Nicholson: I should like to support the view expressed by the hon. member for Melfort in connection with the controls which will be necessary. He mentions the attractive advertisements in newspapers urging people to buy certain commodities. I followed with a great deal of interest the minister's statement the other night and I entirely agree as to the evils of inflation, but I think even further controls are going to be necessary and I think they should be introduced.
I have before me the bureau of statistics' August, 1941, report of monthly sales of new motor vehicles in Canada, and I find that new motor vehicle sales in Canada during

The War-Finance-Price Ceiling
August, 1941, excluding deliveries to the government for war purposes, numbered 7,222 new vehicles, an increase of 45 per cent in number and 56 per cent in dollar value over August, 1940. There is also another report giving a comparison of retail sales in Canada for the period January to September, 1941, compared with the period January to September, 1940. and it contains some alarming figures. Boot and shoe stores have increased their sales by 18-5 per cent; candy stores, 18-4 per cent; men's clothing stores, 2T8 per cent; women's clothing stores, 19-4 per cent; department stores, 17-8 per cent; drug stores, 15-7 per cent; furniture stores, 14-4 per cent; grocerj' and meat stores, 14-1 per cent; hardware stores, 18 per cent; radio and electrical stores, 17-1 per cent; restaurants, 16-1 per cent; variety stores, 21-3 per cent.
A comparison of retail sales of boot and shoe stores and jewellery stores for September, 1940, and September, 1941, shows that in the maritime provinces boot and shoe stores have increased their sales by 19-1 per cent; jewellery stores, 43-8 per cent; Quebec, 17-9 and 21-2 per cent respectively; Ontario, 15-1 per cent and 24-5 per cent; prairie provinces, 19-3 per cent and 16-3 per cent; British Columbia, 16*2 and 44 per cent respectively.
These statistics indicate that the consumption of goods has proceeded at a very remarkable rate right across the country, and therefore I think that, in addition to the controls which the minister has outlined, it is going to be necessary to control the manufacture of these commodities. When one considers the need for mechanized equipment for the army, an increase of 45 per cent in the number of motor vehicles sold indicates that we have a very large number of workers and a large amount of material going into the production of these motor vehicles which are sold chiefly or to a very large extent for pleasure purposes and using material which should be devoted to war purposes.
I have here a very interesting article on " Economic Organization for Total War " by E. F. Penrose, economic adviser to the International labour office. I might mention to the committee that this is the international organization with head offices in Geneva until war broke out, which our government have been supporting financially. Mr. Penrose in his article discusses methods of restricting consumption, and says:
, There should be no reduction but an increase in the consumption of basic necessities by those who at present consume less of them than is required to maintain health and efficiency. Next, as regards the incomes of those who earn more 
than is required for the maintenance of health and efficiency, the higher the income the greater should be both the absolute and the proportionate reduction of the amount left available for consumption, up to a certain level above which no further income should be left for consumption.
I know that the minister considers he has gone a long way in increasing the income tax, but I feel that he will have to go a great deal further because people with large incomes are still left in the position where they can go into the market and buy luxury goods, thus forcing up the price level and creating a serious problem with which the minister will have to reckon. That will be in addition to the schemes he has so far devised.
Mr. Penrose goes on to discuss the different types of methods that can and should be followed. He mentions the rationing of consumer goods, and says:
Rationing of consumers' goods subject to w'ar scarcity is essential in communities in which income is unequally distributed, to ensure necessities to the lower income groups and to prevent hoarding and remove the need for queues.
Rationing of raw materials is also an effective weapon in the hands of the central government, for the purpose of controlling private business in war-time with a view to maximising the production of war goods and minimising the production of consumers' goods which can be foregoing with least injury to the public. This form of control is speedier and more direct than one based on fiscal and financial measures alone.
He goes on to examine the effect of taxes and loans on the distribution of the restriction of consumption among different income
groups, and says:
The distribution of the restriction of consumption has to be examined from the standpoints of equity and of the efficient conduct of the war. Voluntary loans have the advantage over compulsory loans and taxation, of facilitating adjustment between persons of similar incomes but different financial responsibilities and different future prospects. But they have the grave disadvantage of allowing less conscientious persons to continue a higher level of consumption than more conscientious persons; this is both inequitable and prejudicial to the conduct of the war.
Voluntary lending tends to produce unfavourable results on the distribution of income after the war, since high income groups are in a better position to save than low income groups.
Regarding taxation and social justice he
says:
First, incomes below the minimum amount necessary to purchase a specified standard of consumption goods should be exempted. Second, above this minimum the higher the income of the individual, the more should his previous consumption of goods and services be restricted. . . . On grounds of equity the entire amount of very large incomes above a certain point should be taken.

Gasoline
There are people in Canada who are not willing to accept that, but I should like to repeat that they are the people to whom Canada has been very kind; they have a great deal at stake and should be prepared for much higher income taxes. Mr. Penrose goes on to say:
The majority of economists have held that high income taxes do not reduce the efforts of business men, since the tax is only imposed on income actually received. However, this view has been criticized on the ground that high taxation diminishes net yields to invested funds and thus reduces the advantages of investing over holding cash idle. . . .
But on grounds of equity it cannot be claimed legitimately that customs and excise duties are the best means of restricting the consumption of things which produce harmful physical effects if consumed in excessive quantities.
Then he mentions the sales tax as unfair taxation, and says:
Financial policy should aim at preventing as far as possible price rises that give opportunities for excess profits, and excess profits should be subject to a one hundred per cent tax.
The argument that entrepreneurs will relax their efforts in war emergencies unless they are permitted to make large incomes in excess of the amount they pay in taxes implies that, as a class, business men are less willing than other sections of the community to make sacrifices to save the community in the hour of need.
As I said, I think the minister is going to have to go a great deal further than he has as yet gone. I realize that there are grave dangers in giving to a board the very wide powers which have been given, but the minister well stated the alternatives, and I think we should not be unduly concerned as long as those boards are appointed by governments which are elected in a democratic way, and as long as the elected representatives of the people have controls over those who are devising and enforcing the regulations. In a democracy, although members may be critical of government policies, we have to bow to the will of the majority and hope that those who have been granted very wide powers will use them in the best interests of the democracy, and to enable our democratic country to make its greatest contribution in this very critical time.
I submit this point of view to the minister because I anticipate that he will have a great deal of pressure from other groups who are going to be constantly complaining that these regulations interfere with profits. I imagine that representations are made by thousands of people who say, "We are not going to be able [DOT]to make the profits we formerly made." But sacrifices have to be made by all groups in the community in the present emergency, and
those best able to do so should make the greatest sacrifices.


Norman James Macdonald Lockhart: May I ask the minister whether he believes that by December the firsl the board will be in a position to indicate fairly well their attitude, so that there will be some opportunity of planning for the future, as regards seasonal commodities such as fruits and vegetables?


James Lorimer Ilsley: I think so, yes.


Norman James Macdonald Lockhart: I believe that would relieve the situation.
The committee rose and obtained leave to sit again at the next sitting of the house.
On motion of Mr. Mackenzie (Vancouver Centre) the house adjourned at 10.55 p.m.
Friday, *November, 14, 1941