1941-05-08

[Stage Direction]
Mr. W. H. GOLDING (Huron-Perth) . presented the third report of the standing committee on standing orders and moved that the report be concurred in.
Hon. R. B. HANSON (Leader of the Opposition):: I am not rising for the purpose of objecting to this motion, but I really have not been able to comprehend what was in the report of the committee. Could it stand until to-morrow?
Motion stands.



SUSPENSION OF PROVISIONS OF STANDING ORDER 28 FOR PRESENT SITTING

Right Hon. L. W. MACKENZIE KING (Prime Minister) moved:: [DOT]
That the provision of standing order 28 relative to Mr. Speaker leaving the Chair without putting any question be suspended for the present sitting of the house.


Richard Burpee Hanson: What is the effect of this motion?


William Lyon Mackenzie King: To allow the debate on the budget to continue to-day with His Honour the Speaker in the chair.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the order for motions:
Mr. T. L. CHURCH (Broadview) moved:: That the house do now proceed to the second reading of Bill No. 2, entitled, "An act to amend the Railway Act."
He said: I shall have to ask for leave first.


William Lyon Mackenzie King: I understand my hon. friend's motion to be that we should proceed to discuss his bill, which appears on page 7 of the routine proceedings, being a bill to amend the Railway Act. The hon. member will have noticed that a moment ago I asked the house to suspend one of the rules in order to give precedence to-day to the debate on the budget. In the circumstances I do not think we should attempt to take up any other measure in the interval. My hon. friend's 'bill appears among others under public bills and orders. A date may be fixed for its consideration at an appropriate time, but not to-day.


Thomas Langton Church: I regret that through a typographical error yesterday the word "not" was used instead of the word "now".
Motion stands.



QUESTIONS

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

Mr. CHURCH:: 1.	Have any defeated candidates in the last federal election been appointed as district census commissioner?
2.	If so, how many?
3.	(a) On whose recommendation was each appointed; (b) what are their names and respective electoral ridings?
4.	What party or group did they represent in the last election?


Mr. MacKINNON (Edmonton West):: 1.	Yes.
2.	Eleven.
3.	(a) On the recommendation of the minister; (b) defeated candidates named as commissioners:
Ontario-
1.	Frontenac Addington: Defeated candidate, Angus Neil McCallum, Sunbury, Ont.
2.	Kent: Defeated candidate, Arthur L. Thompson, 361 Wellington St. W., Chatham, Ont.
3.	Prince Edward-Lennox: Defeated candidate, Howard Weese, Carrying Place, Ont.

Broadcasting-Technical Employees
Toronto-
4.	Broadview: Defeated candidate, George Gressewell, 90 Chester Ave., Toronto, Ont.
5.	Greenwood: Defeated candidate, Thomas E. Reilly, 768 Coxwell Ave., Toronto, Ont.
6.	Parkdale: Defeated candidate, John P. Travers, 411 Lansdowne Ave., Toronto, Ont.
7.	Rosedale: Defeated candidate, J. Louis Shannon, K.C., 45 Richmond St., Toronto, Ont.
8.	St. Paul's: Defeated candidate, James H. Rooney, 288J Yonge St., Toronto, Ont.
Manitoba-
9.	Souris:	Defeated candidate, G. W.
McDonald, Boissevain, Manitoba. Saskatchewan-
10.	Qu'Appelle: Defeated candidate, James A. McCowan, Box 31, Summerberry, Sask.
Alberta-
11.	Bow River: Defeated candidate, A. B. Claypool, Swalwell, Alta.
4.	Liberal.


RADIO BROADCASTING
[Stage Direction]
On the orders of the day:
Hon. C. D. HOWE (Minister of Munitions and Supply):: On May 5 the hon. leader of the Cooperative Commonwealth Federation party (Mr. Coldwell) asked certain questions in regard to the association of technical employees and their relations with the Canadian Broadcasting Corporation. I have the answer to those questions, furnished by the Canadian Broadcasting Corporation, which I will read:
The Association of Technical Employees advised the management of the Canadian Broadcasting Corporation on January 16, 1941, that the members of the engineering division of the CBC in Toronto had authorized them to apply for a collective agreement on their behalf. In this letter the following statement was contained ". .	. with recognition of this association previously established by the board of governors . . .". In a letter dated August 21, 1940, the general manager said, in a communication addressed to the chairman of the radio committee of the A.T.E. ... "I write now to tell you that the governors have accepted my recommendation about the attitude of the CBC to the A.T.E. There was, of course, no question of 'recognition'. What I recommended was the kind of cordial and effective cooperation which you and I discussed last week."
The letter of 16 January, 1941, was signed by Philip Dawes (not a member of the CBC staff) as national secretary of the A.T.E. In this letter it was suggested that the general manager of the CBC and Mr. J. A. Murphy of the corporation's Toronto engineering staff should have a talk about preliminary questions.

The general manager wrote to Mr. Murphy on February 6 and explained to him that any proposals he had to make must be referred to the board of governors both as to procedure and as to objective. The written proposals were received from the A.T.E. on February 20, 1941.
The proposed agreement was submitted to the Department of Justice and they were asked whether in their opinion "it is a fit and suitable contract for the corporation to sign."
The Department of Justice gave their opinion on April 17 stating "Your corporation is, in many respects, in the position of a department of the government and I would not think that the board of governors or the general manager would have the authority to enter into such an agreement which would restrict the authority of the corporation to act as freely as the government itself in all matters relating to its employees."
Under date of April 17, 1941, advice was received from the Assistant Deputy Minister of Labour that an application dated April 7, 1941, had been received by the Minister of Labour for the establishment of ". . .a board of conciliation and investigation to deal with a dispute between the CBC and its engineers, announcers, and producers being members of the Association of Technical Employees."
The corporation's answer to the assistant deputy minister was dated April 22. It was pointed out that the Department of Justice had given the opinion that the CBC was not authorized to enter into any agreement with the union as such. However, it was stated that the CBC was making every reasonable effort to allow its employees to express themselves through their appointed representatives and to negotiate as employees with the corporation regarding salaries and working conditions generally. It was further stated that the CBC was anxious to facilitate the establishment of staff councils throughout the entire service in order that both employees and the corporation would be in a position to have adequate means of discussing mutual problems.


Mr. M. J. COLDWELL (Rosetown-Biggar):: May I ask the minister one other question? If the broadcasting corporation is an emanation of the crown, have we not a right on the floor of this house to inquire into the business of the corporation? I think that is the point. If the view of the Department of Justice is right, it would bring this corporation within the purview of this house, would it not?


Clarence Decatur Howe: We have an excellent precedent for not answering questions about the internal management of the Canadian Broadcasting Corporation. The British Broadcasting Corporation is even closer to the government of Great Britain than the Canadian Broadcasting Corporation is to the government of Canada, and in England questions are never answered as to the internal operations of the British Broadcasting Corporation.


Richard Burpee Hanson: Upon what principle? Would the minister elucidate that?


Clarence Decatur Howe: Upon the principle that we have removed the CBC from the control of the government for the purpose of efficiency.

The Budget-Mr. Lapointe (Quebec East)
We have set up a board of governors to manage the affairs of the corporation. No member of the board of governors is a member of this house. Questions must be answered more or less remotely, through a minister, and it has been believed, I think wisely, that a far better way for the house to obtain information is through a parliamentary committee which can summon the governors and the officers of the corporation and obtain the information first-hand instead of second-hand through a minister.


Richard Burpee Hanson: That is not always possible-only intermittently so. That is not the answer. But there is something in the theory the minister first stated.


Mr. GORDON GRAYDON (Peel):: May I ask the Minister of Munitions and Supply (Mr. Howe), in view of his statement with respect to a parliamentary committee to review the policies of the Canadian Broadcasting Corporation, whether he has in mind the setting up of a committee some time soon to review the affairs of the Canadian Broadcasting Corporation? One difficulty is that we have not had a parliamentary committee; we are not able to get information in the house, and therefore the door is almost entirely closed so far as ordinary members are concerned.


Clarence Decatur Howe: At a time when the activities of the broadcasting corporation necessarily must be restricted in a good many ways-I may say the efforts of the corporation are being directed as much as possible to the advancement of Canada's war effort-as minister directly in charge I did not feel that at a war session it was desirable to have a committee of this house to deal with these matters. I know of no general demand for such a committee; but I think it is the policy of the government to have such a committee at frequent intervals, to examine the report of the corporation and look into its affairs generally. At this stage of the session, however, I do not think it would be wise to suggest setting up such a committee.


Gordon Graydon: I take it that it does not follow that we will not have a committee until the war is over?


Clarence Decatur Howe: Oh, no; I should not think that would be a reasonable assumption.


Mr. MacINNIS:: I wonder if the minister is aware that the technical staff of the Canadian Broadcasting Corporation is now organized.
14S73-168


REFERENCE TO STATEMENT THAT BUTTER IS NOT BEING SHIPPED TO BRITAIN
[Stage Direction]
On the orders of the day:
Thomas Langton Church: Will the Minister of Agriculture clarify the statement he made yesterday, that no butter is being shipped to Britain at the present time? Surely the dominion can help out the mother country by sending large consignments of butter, if necessary without charge. Certainly it is badly needed. The minister says none is being shipped at the present time, and I aan asking why.


Mr. SPEAKER:: Order. Apparently the practice is growing of asking supplementary questions after answers have been given by the ministers. That has not been the practice hitherto, and I would ask hon. members to observe the rule. After an answer is given there are other opportunities for obtaining further information, but on the orders of the day there cannot be questions and answers, supplementary questions and supplementary answers, and so on.


THE BUDGET
[Stage Direction]
The house resumed from Wednesday, May 7, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Quelch.
Right Hon. ERNEST LAPOINTE (Minister of Justice):: Mr. Speaker, I crave the indulgence of the house for a very few minutes for the purpose of making a statement which I feel it my duty to make to-day.
I was absent from the house yesterday afternoon, attending a meeting of the war committee of the cabinet, and did not hear the speech made by the hon. member for Beauharnois-Laprairie (Mr. Raymond). I have seen a copy of that speech to-day, with deep regret. Still, the hon. member has merely repeated some of the things he said in this house when he opposed the participation of Canada in the war. The hon. member will permit me to say that he does not represent to-day, as he did not represent then, the sentiment of the province of Quebec. On two memorable occasions that province has spoken unequivocally and has rejected views similar to those expressed by my hon. friend. The voice of Quebec also has been heard on many

2652	COMMONS
The Budget-Mr. Lapointe (Quebec East)
occasions through the speeches of her leaders and the success with which all war service efforts have met when appeals were made.
I am particularly sorry that 'the hon. member spoke as he did, because of the false statements which appeared recently in certain publications, which are the work of ignorant and mischievous people. The words of the hon. member for Beauharnois-Laprairie will help the nefarious work of the enemies of Quebec. I would have expected the hon. member to modify his views in the light of events which have occurred since the outbreak of the war. Surely he should know, like all leaders of world opinion both spiritual and temporal, that to-day the very fate of civilization is at stake and no one has the right to be neutral. This he denied yesterday.
In his speech on September 9, 1939, when he opposed our participation in the war, the hon. member used the following words, which appear in Hansard, second session 1939, at page 63:
Why should we not adopt a policy which would keep us out of conflicts, as in the case of Belgium, Holland, Sweden, Norway, Denmark, Switzerland, Finland and so forth?
Then he continued:
But the difference between them and ourselves is that they are not seeking instruction in London, they are governed by their own interests.
Practically every one of the neutral countries mentioned by my hon. friend has been crushed, and has endured and is enduring innumerable and terrible sufferings. It is Herr Hitler who has brutally and barbarously answered the argument of my hon. friend; yet he still seems to stick to his policy of neutrality. I ask the hon. gentleman where else in the world would a citizen of a nation at war, a member of a legislative body, make a speech such as he made yesterday and be protected by the free institutions which are the glory and pride of a British parliament.
Fortunately this morning I saw an editorial which was published yesterday in a newspaper of Quebec City, L'Action Catholique, which certainly is not a political newspaper. I am going to read an extract from that editorial, which is in French, and I commend it to my hon. friend. The editorial has to do with a United States publication, Life magazine, and certain things which it said last week:
Here is the translation:
Stupid as it may be, Life's action affords us all a lesson: the lesson of carefulness and discretion. Life has evidently lied. But if we do not possess our Lindberghs, it is nevertheless unquestionable that we do not all have the

same understanding of the situation. As in every warring nation, some elements are found here who are not as much "in the war" as the rest.
Attacks like that of Life should make us more careful. A single word dropped in the press, from the speaker's platform, in social circles or even in private conversation, is enough, when a paper or a magazine uses it in a dishonest or blundering manner, to put us in a false position in the eyes of the world.
If there are some to whom has not yet been brought home the gravity of the hour for the world, for America, for Canada and for the French-Canadian people, we beseech them to do a little thinking. In times of danger, levity takes on a criminal character.
Since we are being spied upon by some who do not hesitate to distort our utterances, let us hold back every word whose meaning, misrepresented by a malicious whim, could make us seem to be what we are not. Even with the best intentions towards one's own people, the lack of a discipline based upon carefulness, wisdom and a good understanding of realities, can be prejudicial. Never has it been as necessary as it is to-day to keep watch on one's tongue.
My hon. friend has referred to two matters in connection with which I agree with him, but I am afraid his whole speech will be one of the arguments I shall have to face when I oppose the advocates of those policies which I will not accept. Instead of helping, he is doing great harm. Is that what he wants?
I intend, Mr. Speaker, in a very short time to broadcast some words to my own province, but meanwhile I desire to repudiate the words and opinions of the hon. member. My task and the task of my colleagues will be made, possibly, more difficult. His attitude will encourage the few ill-inspired individuals who are taking a most deplorable stand in the present situation. But we will do our duty and carry on the work necessary to the achievement of the purpose to which we have devoted ourselves. And I may assure hon. members that we will maintain in our province the fine unity of purpose and the spirit of harmony which has permitted Canada to do a great work since the opening of hostilities.


Mr. J. M. DECHENE (Athabaska):: Mr. Speaker, it is with a deep sense of responsibility, after listening to the stirring words of the Minister of Justice (Mr. Lapointe), that I now claim the privilege of addressing hon. members who are representatives of the Canadian nation at war. May I add, sir, that when I was preparing my speech the one to which the minister has referred was not in print. Coming from the western prairies, from one of the largest constituencies in

The Budget-Mr. Dechene
Canada, I say to the minister that the views he has expressed so eloquently to the house are held throughout that part of Canada. There are about 25,000 electors in my constituency, of whom about 5,000 are of French-Canadian origin; the others are drawn from almost every race under the sun. There are Canadian-born citizens from other provinces, thousands bom in the United States, and large numbers from almost every country in Europe. I am sure I speak for the great majority of my constituents when I say to the Minister of Justice that there is only one sentiment and only one voice in that great northland, and it supports to the full the war effort of Canada. It is with pride that I express in the house these sentiments on behalf of my constituents.
If the words hero, heroic and heroism had not already formed part of the English tongue we would at this time have had to coin them and write them into the lexicons of our language to describe the magnificent stand taken by the British, which was so ably and stirringly described yesterday by the Prime Minister of Australia. He referred to the conditions affecting the common people, the men and women of Great Britain, who for many months have been going through a terrific ordeal. They have shown marvellous courage and fortitude.
Those of us who have reached my age unfortunately are unable to offer service in one of the forces. Those of us who suffered from the depression are not in a position to help greatly with the financial situation. But there is one thing I can give and, if it is worth anything, I give it willingly. I have asked the privilege of taking the floor so that I might give my words, my voice, so that I might lend it to my country in this great crisis, to bring good cheer, to help in this time in carrying on our war effort, to show to everybody the necessity of meeting generously the taxation imposed by the budget now under debate. That voice, if it is worth anything, I offer to my government and my country. After prorogation I intend to give every minute of my time to help in this manner, because, unfortunately, it is the only way in which I am able to serve.
On Tuesday evening the hon. member for Red Deer (Mr. Shaw) addressed the house. I remember that part of Alberta when only the river was there, before the town had yet been built. This district has become one of the most prosperous parts of Alberta. I crossed that stream before there was even a ferry; I had to ford it many years before the mem-14873-168}
ber for Red Deer was born. It amazes me to hear him speak of pioneering in the west and refer to the terrible treatment of the pioneers by this government. With reference to the hon. member's use of the word "pioneer", it is with pride that I say that fifty years ago last fall I had the honour, as a little boy, to become a settler of the great province of Alberta, I ask him, as a friend of Alberta, to leave this word alone in the future. This noble word can be applied to the builders of western Canada, the Olivers, the Ross's, the Davis's, the La-combes, the Princes, and the Chevignys. These men and others like them were the architects of the western plains. These men were the type of men referred to by the hon. member for The Battlefords (Mr. Gregory); they have done much to contribute to the welfare of this country.


An hon. MEMBER:: What about the debt that they created?


Joseph Miville Dechene: If the hon. member will just listen, I will reply to him in the words of the hon. member for The Battlefords. He has occupied more of the time of this house than I have. I have been very patient, listening for hours to some of the things which he has peddled-pardon the expression-to this house. All I ask is that I be permitted to use my own time, having given the promise that I shall be as brief as possible.
I do not suppose he cares about it, but speaking on behalf of the people I represent I should like to congratulate the Minister of Finance (Mr. Usley) upon the presentation of his budget. It was not an easy task, because one who imposes taxes is never popular. It all depends upon whose ox is being gored. Every hon. member is willing to tax the other hon. member; every fellow is willing to let George pay the taxes, but no one seems to want to have taxes that affect his own pocket. The minister did a splendid piece of work, if he did nothing else than indicate to the members of this house and the people of the country the tremendous war effort which has been undertaken. The people who will have to meet these tax bills, the people who will have to subscribe to a loan and produce $2,500,000,000 this fall, will realize that Canada is carrying on generously and bravely, as she should; they will know that Canada has undertaken her full share in this struggle for existence.
As I address the house this afternoon, Mr. Speaker, I realize that the beast of prey is snapping his teeth at the jugular vein of Great Britain in the battle of the Atlantic. You and I who have read the press of late, who have listened to Mr. Churchill, who have
The Budget-Mr. Dechene

listened to President Roosevelt and Secretary Stimson, who have listened to our own Prime Minister (Mr. Mackenzie King); those of us who have 'been able to understand the things which cannot be told but which have been implied, realize the magnitude of this battle upon which will depend the fate of the one nation which stood in the way of the conqueror, unprepared as she was, and gave the free men of the world an opportunity to prepare themselves, as we did in Canada, in Australia, in south Africa, and as the great republic to the south is doing at this moment.
I have referred to the leaders of democracy, and I have mentioned some great names, names that will live forever in the history of this world wherever freedom is respected. In the years and centuries to come, whenever men gather together to discuss the effect of this crucial period upon world history, in the schools of all lands where freedom and liberty may still exist, the names of Churchill, Roosevelt and Mackenzie King will live forever. No less a person than Wendell Willkie, the great American leader, has named these three as the great leaders of democracy to-day. Had it not been for the attitude adopted by certain people in Canada I would have hesitated to take up more of the time of this house.
Last fall, as the representative of Athabaska, I attempted to tell this house what Canada owed to the Prime Minister for the services which he has rendered to humanity. Strange as it may seem, I received a letter from a man who belongs to the same group as the hon. gentleman who just interrupted me. If you please, this man wanted to know what I meant by praising the Prime Minister. I received a letter from another man who wanted to know what I hoped to get from, it. What a narrow view! Is there anyone here who hopes to get anything out of this war except liberty? This thought was ably expressed yesterday by the Prime Minister of Australia. As he said, what does it matter if we are to be bankrupt, so long as we are able to live in a world where freedom and liberty exist? But this man went on to say that if I were a little rough and tough with the Prime Minister I might get more for Athabaska. What can a man hope to get for Athabaska at this stage of the game?


Mr. DUPUIS:: Was he a member of parliament?


Joseph Miville Dechene: No, and he never will be. But he was a supporter of the man who ran against me in the last election and lost his deposit.

A feeling exists throughout the world- unfortunately more strongly in Canada; why I am unable to explain-that seems to make people hate to recognize the things which are done on their behalf by those who give their lives in the service of their country. We can get applause from any audience by simply mentioning the name of Franklin Roosevelt. Hon. members will pound their desks at the mention of Churchill. But what happens when you mention the Prime Minister of Canada?
The Prime Minister of Canada did more than any other man to bring the two great democracies together. He was able to do this because of his great knowledge of conditions in the United States, because of his appreciation of what the sentiment was in that country, because of his personal friendship with the President of the United States. That made it possible to bring about the understanding which now exists between the two countries. All one has to do is to mention reciprocity, to mention Ogdensburg, to mention Hyde Park, to realize the momentous steps which have been taken in the history of this country and in the history of Great Britain and of the world. During the later years of his life the Prime Minister has seen erected these monuments to his ability, to his understanding and to his services to Canada and the world.
An amendment to the budget has been moved by our friends of the Social Credit party-or is it the New Democracy? I never have been able to find out. Just imagine, Mr. Speaker, if we were to pay our soldiers, our sailors and our airmen with that celebrated fountain-pen money of the prophet Aberhart in Alberta! What a wonderful way of expressing our thanks to the gallant men who are risking their lives for us! I will ask hon. members of the Social Credit party to take a message back to the big prophet in Alberta.


Mr. BLACKMORE:: Happy to do it.


Joseph Miville Dechene: I represent a constituency which covers a large part of the province of Alberta. The hon. member for Peace River (Mr. Sissons) also represents a large constituency in that province; his constituency and mine comprise almost the entire northern half of the province. I would like hon. members of the Social Credit party to tell the Premier of Alberta that he has not been pulling his weight in this war. The province of Alberta has not yet done one solitary thing

The Budget-Mr. Dechene
to help this government in carrying on the war so far as I have been able to ascertain except for the offer of some building to use for war purposes.


Mr. HANSELL:: The hon. member had
better make further inquires.


Mr. FRASER (Northumberland):: Keep
quiet.


Joseph Miville Dechene: And what have they
been teaching the school children of Alberta-[DOT] not the older people in the province or those who were supposed to get $25 a month, but the school children? I have here a school book that was used in the ninth grade of our schools in Alberta up until a little more than a year ago, when public opinion compelled its withdrawal. Our children in the ninth grade, when their minds are most receptive, were being taught from this book that the British empire could not stand another war. They were told-I have the page marked here-that Britain and France enforced a humiliating peace upon Germany.


John Horne Blackmore: Who wrote the book?


Joseph Miville Dechene: It was published on the authority of the Minister of Education for the province of Alberta, and it is people of the sa/me party who have the effrontery to interrupt a member when he is speaking on behalf of his province.


John Horne Blackmore: Who wrote the book?


Joseph Miville Dechene: Probably the hon. gentleman himself and his colleagues who happen to be school teachers.


John Horne Blackmore: Who wrote the book?


Mr. QUELCH:: In the province of Alberta-


William Alexander Fraser: Order.


Joseph Miville Dechene: I am not a bit worried by the interruptions, but I would ask the hon. gentleman to meet me on a public platform in Alberta if he feels like talking. I have spoken only once in this house this session, while these gentlemen over there have had the floor a dozen times and have filled Hansard with their propaganda for distribution throughout Alberta.
Our children were taught in this book that the representative system of government had failed.


An hon. MEMBER:: What is the title of the book?


Joseph Miville Dechene: It is called "The World of To-day", and this is what these gentlemen who are so eager to win the war with paper money were teaching to our children in Alberta.
In this book it is mentioned that there are three alternative systems of government to the present democratic system-communism as in Russia, C.C.F.-ism and social credit. It is-I was going to use an unparliamentary term, Mr. Speaker, but I will say that that is the kind of bunk that was taught our school children in Alberta until two years ago, when public opinion compelled the Minister of Education to withdraw the book to make the necessary corrections therein.


John Horne Blackmore: Who wrote the book?


Joseph Miville Dechene: I will say to my vociferous friend, who follows the man who sabotaged and torpedoed the Sirois conference, that he might well ask Premier Aberhart to withdraw from the income taxation field as suggested by the Minister of Finance. Premier Aberhart torpedoed the Sirois conference not for the same reason, that actuated British Columbia or Ontario, because, after all, Ontario stood to lose something by the adoption of the Sirois recommendations, but Alberta had everything to gain. I say to this man who sabotaged the conference that he ought to do something to help win this war. He should immediately accept the offer of the Minister of Finance and withdraw from the field of income taxation. The offer of the Minister of Finance was a generous one. He offered to pay over to Alberta, if the province vacated the income tax field-and I say that it is the duty of the province to do so-a lump sum equivalent to the amount of income tax collected by Alberta in 1940. We fear that Premier Aberhart will not accept this offer because very few of the small people with whom he deals are liable to income tax. If this offer of the Minister of Finance is not accepted, our merchants and business men in Alberta may be compelled to pay double income taxation. I say as a member from Alberta that it is the duty of the Aberhart government to follow the example of the other provincial governments, accept the offer of the Minister of Finance and withdraw from the income tax field.
We are spending almost two and a half billion dollars on the war, almost one-half of which is to finance British purchases in Canada. Let the province of Alberta do its share and assume the burden of the three-cent tax on gasoline and not allow it to be passed on to the consumer. That would be but a small thing for Alberta to do. Last

The Budget-Mr. Dechene
year Alberta had the largest budget of expenditure in the history of the province, and I do not include in that $25,000,000, in round figures-$24,758,000, to be exacb-the $3,500,000 of just debts which Alberta refused to pay to the municipalities of Ontario and to other provinces which had invested their savings in what they considered to be gilt-edged securities of the province of Alberta. And that budget, providing for the greatest expenditure in the history of Alberta, was brought down by a government that was going to reduce taxation! So I say that we have a right to expect Alberta to do its share, in view of its huge expenditure, and in view of the fact that Premier Aberhart thought the province could afford to increase his own salary at the last session, as was done.
I do not know whether this tax of three cents on gasoline applies to trucks and tractors used on farms or only to automobiles, but that does not matter; it has been found necessary and it is everyone's duty to pay it. But what do we find in Alberta? They have done nothing but discourage the people.
My time is nearly up and I shall have to leave until another occasion, perhaps at some other session, some of the things I wanted to say. We shall come back here and there will be another opportunity for us to consider such questions as the resettlement of the vast northeastern part of Alberta and the Peace River district. There are many possibilities of settlement and development in that part of the country in connection with the timber industry, fisheries and so on, and when the time comes I shall submit plans for the consideration of my fellow members.
In this time of crisis we should be careful in safeguarding the right of everyone in this democracy to speak freely. It is a right that I enjoy and a right which my friends opposite, apparently, enjoy quite well.


John Horne Blackmore: Preaching disunity,
that is all.


Joseph Miville Dechene: You can travel throughout the land to-day and you will find every heeler of the Social Credit government trying to injure this administration. You will find them in my home town, with both office and car paid for by their government, and they travel throughout the length and breadth of that country. The lady member (Mrs. Nielsen) the other day referred to heelers, but evidently she does not know the kind of heeler I am speaking of. I hope that sometime she will be introduced to some of them and then she will know what heelers really are. She will see them distributing the party paper

published at the cost of the province, printed with the funds, the taxes of Liberals, Conservatives and members of the United Farmers of Alberta, and distributed broadcast throughout the province in order to throw mud in these people's faces.
In Alberta we are not getting the help and the support we should get from the provincial government. I appeal to them to support the government here instead of attempting to discourage the people, instead of criticizing, instead of being in the way all the time.


Victor Quelch: You had better appeal to the member for Beauhamois-Laprairie (Mr. Raymond). If you want subversive statements, read his.


Joseph Miville Dechene: I do not mind these
interruptions. I was in public life when the hon. member was born.


John Horne Blackmore: And you stopped learning about that time.


Joseph Miville Dechene: During the last two years, at any rate, ever since the war broke out, I have been trying to give all my time and my energies to the task of helping to cheer the people and to advise them as best I could. I have gone throughout the land and tried to encourage the people, instead of arousing them and appealing to their jealousies, their prejudices and their narrowness. I have not gone among them and told them there was something wrong with Ontario and Quebec, be-eause that is the sort of policy, that is the sort of teaching that is bringing disruption in Alberta. The result has been that the banking institutions and others have withdrawn from the province and we have been reduced from the position of a wealthy province to the necessity of taking in other people's washing, so to speak, in order to make a living.
Service is the duty of the day.


Some hon. MEMBERS:: Oh, oh.


Joseph Miville Dechene: Will hon. gentlemen
please keep quiet? I have never interrupted them.


John Horne Blackmore: Canadian unity.


Joseph Miville Dechene: The hon. gentleman's manners are poor and his arguments rotten. He does not understand the word "service. He does not know what it means to be a citizen of the country and to meet the demands of the times as the Prime Minister and his cabinet are doing to-day. T.he members of the ministry have no family life of their own;

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twenty-four hours of the day every day of the week they are devoting themselves to the duties entrusted to them in the administration of the various departments of government.
Let me ask hon. gentlemen who are so fond of criticism to consider the fact that something like $1,000,000,000 was spent during the last twelve months, and that, in the expenditure of this vast sum of money, not a single dollar has been questioned. There has not been the slightest suspicion, not a shadow of doubt in regard to the spending of all this money. There may be errors in the spending of it. If there had not been some errors it would indeed be strange. I know that if any minister said that he had made no mistakes at all-well, if he is not married, then I say he will never get married, because no woman would love a man like that. The integrity and honesty of this government have never been called in question. Their record is a remarkable one, and I am proud to pay them that tribute.
When we go back to the country, I say to hon. members of all parties, let us impress upon our constituents the importance of service to-day. Some of us are too old to serve, but there is still something that we can do. There are many ways in which we can serve democracy. Democracy lives on sacrifice and service; it is the very life-blood of democracy. When the day comes that men and women are no longer found ready to serve their country, wherever they can, without remuneration, whether in civic life or in the provincial field or in this great assembly, then we shall not need to fight, because democracy will have ceased to exist. So long as there are men willing and anxious to give their time to their country, the best that is in them, their thoughts and talents, then there is hope for our democracy. The Liberal teaching is the democratic teaching in this regard, and that is that the man in his shack in the Peace River or in the Athabaska country is just as important to the welfare of the country as the greatest man in Canada.
Life is intricate, and democracy is one of the monuments of God. You cannot take away the smallest wheel in the machinery of democracy without injuring the whole mechanism; if you do, it will cease to operate. That is what I have said to the people. I have never suggested to them that they can get something for nothing, that they can be exempt from taxation, or that they can obtain relief without the country paying for it in some w'ay. I say to hon. gentlemen and to the people, in this hour of trial for Canada, let us carry on and give to our country the best that is in us, whether as school trustees, as
aldermen, as members of legislatures or as members of this parliament.
Whatever sacrifices we may have to make under the budget we should make gladly. We shall not pay as much as Ontario and Quebec, but we will do our part; we will do our share. And, Mr. Speaker, not only in spending the money. I say to the hon. member for Beauharnois-Laprairie and anyone who heard him that courage, loyalty, is not the appanage-I think that is a good word-or the monopoly of any nation. In Canada, in Athabaska, every race stands willing to do its share. And they will do it nobly, knowing that when this war is over, as was so stirringly said yesterday in this chamber-and I want to repeat those words-we may have nothing left. But actually we shall have a great deal left. We shall have pride in ourselves, in our boys. If those of us who lived through the last war, as I did, and who live out this war, as we hope to do, cannot leave to our children any heritage of this world's goods, let us so act that we shall leave to them a heritage of glory and of duty well done.
Mr. KARL K. HOMUTH (Waterloo South): May I first extend my very deep sympathy to the loved ones of those who were lost in the terrible sea disaster last week. Such tragedies as this bring home to us only too clearly the terrible havoc of war. Perhaps they do more; when this war is brought home to us as these tragedies bring it home, it steels in us the determination to go on and on with the fight for freedom until those who are responsible for this struggle are driven to their knees and the terrible tragedy of war is brought to their own country.
Yesterday afternoon we were privileged to hear in this chamber an address which to my mind was one of the most inspirational ever delivered in this house or in this country, a speech that I felt would reecho in the hearts of every hon. member of this house and every man and woman who heard it or read it in the press. It was a call to arms. It was a call to every one of us to go on with the job that we have to do. It reminded us that in this job there can be no east and no west, no religious divisions, no distinctions of nationality. It was a call to every one of us to go on in a bigger and better way even than we have in the past.
Then shortly after that speech had been delivered, what happened? An hon. member of this house rose in his place and made a speech of which I am not going to read any part into the record, because I feel that once on Hansard is sufficient for any such speech as that. I am particularly pleased that the
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Minister of Justice (Mr. Lapointe) rose in the house to-day and repudiated that hon. member and his sentiments. I am glad he did it, because someone had to do it, and in that regard no one had a greater responsibility than the Minister of Justice. Had he not done it I would have felt that I had much more to say about that speech than I have said; and unfortunately when one does deal with a speech of the kind in this chamber at a time like this he might be inclined to use bitter words for which he might be sorry later. I feel that the sentiments expressed by that hon. member are his alone, that there are no other hon. members in this house who would think of standing here and expressing them. The hon. member said that we are fighting only because British interests are in danger. Everything that we hold dear, as the Prime Minister of Australia said yesterday and as has been said so often in this house, the future of our children, our church, everything we have, is at stake, and as the hon. member who just sat down (Mr. Dechene) has said, if, when this war is over, we have nothing of a material nature left to us we shall at least have our freedom and the chance of building a future under that freedom.
I rise to-day not particularly to criticize the budget. I endorse my leader's stand on the budget; I intend to vote for it. But there are a few matters with which I should like to deal, because I feel that if we are not careful we are going to build up in this country a regimentation that we shall not be able to get rid of when the war is over. What I am fearful of is the advising body, the men- who to my mind are formulating the policies of the government.
I followed closely the debate on agriculture. Listening to hon. members from various parts of this country who have discussed questions affecting agriculture and the dangers they say are going to beset the agriculturist in various parts of Canada, one is almost led to believe that the agricultural policy of the government is the brain wave, not of men who are engaged in agriculture, but of men who see a very serious problem before them and try to find what they think would be the easiest way out. It looks to me as though we are going to build up in western Canada mixed agriculture; western Canada is to be looked upon as the agricultural district of Canada, while the east must develop industrially. That to my mind will be the result of the policies brought down by the Minister of Agriculture (Mr. Gardiner).
The only way to develop a real national economy in Canada is to develop industries from one end of this country to the other. In Alberta and in Saskatchewan there are

vast stores of fuel of various kinds, fuel with which power can be developed cheaper than we can develop hydro-electric power in Ontario. There are places in the western provinces where industries can be and should be built up. What will that do? So often I have heard hon. members from western Canada questioning industry and industrialists and the policies that are necessary in this country to build up industries. They seem to feel that the industries of eastern Canada are more or less parasitic and are taking a great deal of wealth and life out of the west. Such statements as these, I believe, are often made because hon. members from districts where there are no industries do not really understand the problems of industry. Scatter the industries throughout the country; then you will bring home to the people in all constituencies some of the problems with which industry is faced, and at the same time you will develop for the farmers a local market, which is the best market they can have. Go through western Ontario, with its local industrial centres and local markets. The farmers in those districts have not suffered to anything like the extent that the farmers have suffered in districts where there are no industries. If we are to have regimentation, at least let us be careful in our planning. Sometimes when I look at the ministers sitting opposite I just imagine how they long for the days of the past when they fought so bitterly against any planned economy for Canada. Now they have come to it, and I repeat that I am afraid we are not going to get away from it so easily later on.
Another feature of the budget which I think should be considered very carefully is the danger of the curtailment of certain industries in this country. I was amazed the other day to learn of the large number who are still unemployed in Canada. The minister, by levying taxes, is trying to curtail the manufacture of certain commodities which he classes as luxuries. I quite agree that if it came to the question whether a soldier should have a uniform or a civilian a new suit of clothes, the uniform should be provided. I quite agree that if it should come to the question of producing either a washing machine or part of an aeroplane, the aeroplane part should be made. But SO1 long as we have a large number of unemployed, and so long as we have the industrial capacity to produce these things, we should do everything possible to encourage that production, thus taking people off the relief rolls and getting them into the earning class. They would then be in a position to help produce; they would help create wealth; they would help pay taxes, and it would be beneficial all round. Perhaps there was a time when

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washing machines, electrical appliances and even bathrooms were considered to a certain extent luxuries; to-day they are necessities. Our whole system of living has changed, and I think in these budgets we should be careful not to impose taxes which will lower the standard of living. Even with the war on surely we should do everything possible to maintain the standard of living, and when the war is over we should try to raise it beyond the level of to-day.
There is one matter, however, which I feel certainly deserves the serious consideration of the minister. I believe he should amend those provisions of the budget which are going to impose such tremendous taxes upon the low income groups of this country. The minister has stated that our national income has increased by a billion and a half dollars, or more; I think those were his figures. That may be true, but a statement of this kind gives people a false picture of the situation. When they read it they are inclined to believe that our national income has increased because of the fact that individual incomes have increased, while as a matter of fact the increase in our national income is largely due to the circumstance that tens of thousands of people are back at work now who for years were unemployed. While, therefore, it is true that our national income has increased, the individual income is not very much larger.
In this budget we are levying much higher taxes on all our people. The thousands of people who were unemployed for years are endeavouring to-day to pay off many of their old bills; to do the little things for their families and their homes that they have been unable to do for a long time; to purchase what they really need, but the very heavy taxes proposed by this budget will not permit them to do these things. The taxes now proposed will take away a great deal of the money they need for their family expenses. The average working man in Canada is getting little enough to provide any luxuries for himself and his family, and I feel that some of these taxes are most unfair to him, particularly when you consider what he has gone through in the last eight or ten years. We ask him to save by buying war savings certificates. We ask him to pay a national defence tax. We ask him to contribute as much as he can to the war services funds. The working men have responded. In my district a real effort was made to have the employees of every industry contribute one hundred per cent, and the effort was very successful. But what is the picture? In one industry the employees have so much taken off their pay for a scheme of health insurance maintained in that plant; so much for contributions to the war services fund; so much
for war savings certificates; so much for the national defence tax, and in July there will be another deduction from their pay for unemployment insurance. The pay envelopes of these employees are invaded five times before they actually get into the hands of the workers.
I 'believe all this is the start of the spiral of inflation. Not long ago I wrote the Department of Labour asking for their figures on the family budget in the various provinces. We will have an opportunity to debate these matters when the labour estimates are under consideration, but these budgets provide only for the bare necessities of life. Under an order in council it is provided that wages must have a relation to the cost of living; that is, if the cost of living in Canada goes up, wages must go up also. Surely these taxes are part of the cost of living. Surely if we keep levying more and more taxes on our people they will demand higher wages.


Mr. MARTIN:: Some of it is savings.


Mr. HOMUTH:: How much can the average workingman save out of his pay?


Paul Joseph James Martin: War savings certificates are savings.


Karl Kenneth Homuth: Oh, quite so, but the worker is more or less forced to buy war savings certificates. It is being put up to him in such a way that he feels he must buy them. These things are all part of the cost of living; and as a result of our system of taxation we are going to help bring about inflation in this country. I do not know whether it is a bad thing; but I do know that we cannot go on levying more and more taxes upon the people without their getting something with which to pay them. They have to get the money with which to pay the taxes.
There is one tax in particular against which I wish to protest. I refer to the tax on theatre tickets. In this instance the government is levying a tax against something which all must admit is the poor man's pleasure. The records for last year-and these are government records-show that of all the patrons of motion picture theatres throughout Canada 77 per cent were patrons of theatres having an entrance fee of 25 cents or less. There are only about ten theatres in Canada which have an entrance fee of over 50 cents. The minister said yesterday that the government was going to defer collection of the tax so that arrangements could be made under which it could be passed on to the patrons of theatres. If the minister felt the theatres were making large sums of money and that he should have some of it, then there should have been some other system of taxation.
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But the tax has been levied on the tickets, and payment is to be deferred so that it may be passed back to theatre patrons.
The man who walks into the Chateau Laurier and pays three dollars for his dinner pays no tax. The man who buys a five-dollar ticket for a symphony concert pays no tax. The man who pays a dollar and a half or a dollar to attend a hockey match pays no tax.


Richard Burpee Hanson: Why not?


Karl Kenneth Homuth: There is no tax in Ontario, although there are in some provinces.


Richard Burpee Hanson: Why not here?


Gordon Graydon: It is an old-fashioned
province.


Paul Joseph James Martin: They have no hockey teams in New Brunswick.


Karl Kenneth Homuth: Under the new ruling the federal government will not be taxing these things I have mentioned. Why not? Why does it not levy a tax where the people can afford to pay it? I believe that if taxes were levied in the places I have mentioned the government would collect almost as much as it will by taxing the poor man's theatre ticket.
In the United Kingdom at the beginning of the war, when bombs were dropping, the government closed the motion picture theatres. Afterwards however they found they had to open them so as to keep up the morale of the people. People in the. United Kingdom were encouraged to attend the motion picture theatres. When an ordinary building is bombed and destroyed, rebuilding cannot take place without the government's consent; but when a moving picture theatre is destroyed, and there are no other theatres within easy reach, automatically the government issues a permit for the rebuilding of the theatre, because it wants the people to have places to which they can go for entertainment.
A man will stand at his machine all day; a farmer will work in the field from morning until night; but in the evening he wants to have some enjoyment, some pleasure. He cannot afford expensive pleasures, but the motion picture theatre offers him the relaxation he requires. At a cost of only 25 cents for himself, 25 cents for his wife and 15 cents for his child, a total of 65 cents, the small family can enjoy two hours of entertainment. Now we say to the labouring man, "Your theatre tickets are going to cost you more money." We know, too, that if the admission price figures out to an odd cent, that extra cent will be added to the price [Mr. Homuth.l
of the ticket, as it was added in connection with the tax on cigarette papers which became effective after the last budget.
These are some of the provisions of the budget which I feel should be withdrawn. We should do everything possible to encourage the worker and to keep up his morale. We are asking our factory workers to work long hours, seven days a week. All labour regulations in the various provinces have been cleared off the slate so far as war industries are concerned. Let us be careful as to how we handle the men on whom we depend so largely for the production of the things England needs. At the same time let us take the same interest in the mothers and the children at home, who are doing so much to help the men in their jobs at the factories. These are matters I hope the minister will take under advisement, and I hope that when the resolutions are under consideration he will recommend some changes.
I do not wish to delay the business of the house. Before taking my seat, however, may I add my support to what has been said by many hon. members from all parts of the house with regard to the taxation of soldiers' railway tickets. There is no reason why the government should not exempt soldiers' railway fares from taxation. In fact the government might very well pay soldiers' railway fares for the one or two long leaves they receive. I do not say that soldiers should receive week-end passes on the railways or anything of the kind, but I do suggest that at least in respect of the long leaves they should not have to pay railway fares.
Let me give a picture of the present situation. The Highland Light Infantry, from my county, is now stationed at Debert, Nova Scotia. It costs the men of that regiment $30 to travel from their camp to their homes in Galt, Ontario. Yet here in my hand I hold an advertisement, appearing in maritime newspapers, which sets out special rates for civilians, and states that one may travel from Halifax to Toronto or North Bay and return for $20. The ticket is good for six days. If such concessions can be granted to the civilian population,, surely we can do as much for the soldiers.
One of the officers sent me this clipping, with the comment that while the officers might be able to pay their fares, it was much more difficult for the privates in the ranks to do so. Part of their pay is sent home. He pointed out that on occasions when men have received word of serious illness at their homes and have obtained special leave, they have had to pass the hat to get enough money to buy a railway ticket. We dare not be coldblooded about these things. If the railways

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can grant special rates to civilians, why can the government not say to them, "You must do the same thing for the soldiers who are fighting to protect your very interests".
As I said earlier, I am going to follow my leader and support the budget. I realize that we must pay and pay and pay. I realize that we must have money to fight this war and to destroy the thing which is threatening the peace of the world. But I say to the minister that there are many places where he could economize. As the watchdog of the treasury I do not think he could do better than appoint a committee, even a committee of this house, to consider these matters. The committee which has been set up to consider war expenditures is going to get nowhere, but a committee of this house could go a long way in advising the ministry as to the many ways in which economies could be effected, thus permitting money to be diverted into the channel in which it ought to go. The people of Canada are going to give the minister the money he wants, but the people of Canada are going to require the government to account for the way in which it is spent.


Ernest George Hansell: Mr. Speaker, I did not intend to take part in this debate, but I do not think the speech of the hon. member for Athabaska (Mr. Dechene) should be allowed to pass without a reply being given to-day. I am not so much concerned with the criticism which is usually offered in connection with the Alberta government. We who have been in this movement for the past several years are used to that sort of criticism. We are not so much concerned when men rise up and call Social Crediters crack-pots or silly fools or any other expression which they might desire to use. We are not so much concerned when people remind us that we believe in a national dividend and that in the Alberta provincial election of 1935 that dividend was estimated at $25 a month. We are not so much concerned about those things, but when any hon. member from Alberta rises in his place in this house and declares that the premier of that province, that the government of that province or that the people of that province are disloyal to the British empire, then we protest most vigorously.
Yesterday we listened to the Prime Minister of Australia. I had the privilege of hearing that honourable gentleman at the Canadian club luncheon in the Chateau Laurier, and we all had the privilege of listening to him speak on the floor of this house. I think every individual who listened to him was inspired, inspired to a greater war effort, inspired to greater unity among the various
nations of the British commonwealth. His message was followed shortly by a message to this house by the hon. member for Beau-harnois-Laprairie (Mr. Raymond). I do not intend to offer severe criticism of that speech, although I think the hon. member was all wrong in his attitude. To-day we heard the Minister of Justice (Mr. Lapointe) make a statement in defence of the government in reply to what the hon. member for Beau-harnois-Laprairie had said yesterday. But may I remind the Minister of Justice that the hon. member for Beauhamois-Laprairie is sitting in this house to-day because of the war-time election policy of the Prime Minister (Mr. Mackenzie King). I believe the hon. member for Beauharnois-Laprairie was wrong, but I believe also that he has a sense of honour. He does not go out through his constituency one time and say one thing, and then come to this house and say something else. I have in my hand an editorial which was published in the Toronto Telegram after the last general election, and I should like to quote this comment:
There is no use pretending that the electors have given King a mandate for a more vigorous prosecution of the war. The reverse is the case. The King government was indicted on a charge of holding back and denying Britain loyal cooperation and the charge was backed up with abundant evidence.
I am not saying that. I read that simply as an editorial which appeared in the Toronto Telegram after the last general election. But that must have been the impression and the opinion of a vast number of people in Canada at that time. What was the stand of the Alberta government at the time? I would take hon. members back to before the declaration of war upon Germany by this country. I would take them back as far as September 5, 1939. I should like to read certain statements which were made by the premier of Alberta at that time, and then I shall ask people to judge whether the Alberta government is loyal to our war effort. As I sat here and heard the hon. member bring down such a tirade upon Alberta, I declared to myself that that was an insult to the men from Alberta who are in uniform.
What was the declaration of the premier of Alberta at that time? The premier gave a statement to the press, and later, on September 14, he gave, over the air, a message to the people of Alberta. I do not intend to read the entire message, but I should like to quote some excerpts from it. The premier said:
We were firmly convinced-
The past tense is used because there had been a meeting between the Social Credit members of parliament and the premier of
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Alberta and his cabinet. The special war session had been called, and it was thought that perhaps Canada would be declaring war upon Germany. A meeting was called between the provincial government and our members of parliament, and we discussed the matter. We came to this house-I might say that the hon. member for Athabaska was not here at that time-and as a consequence of the meeting which had been held in Edmonton we dared to go further in proposing Canada's war effort than any other party in this house went at the time. I ask hon. members to refer to the speech made at that time by our house leader; I ask them to read it and see for themselves the stand we took. That stand was taken as a result of the meeting with the premier of Alberta. Let me read from his broadcast. Referring to that combined meeting he said:
We were firmly convinced that a great wastage of life and property can be prevented by throwing the full weight of our resources behind Britain and her allies at the very beginning of the conflict.
Further on in the broadcast he used these words:
I want to say in conclusion that the provincial government have every desire to give its civil servants the privilege of taking any part they wish in connection with this struggle and we assure them that we will guarantee their reinstatement in the civil service when they return. This will alsq include the safeguarding of their superannuation rights. . . .
May I say that the provincial government and the federal social credit members took the uncompromising stand that in the present conflict Canada should give the mother country the most effective support possible. This surely meant that Canada should take her place with Great Britain and the British empire and organize all her resources in order to perform her utmost in this conflict with a proper sense of responsibility and with a full realization of the grave issues that are at stake. Subsequent events have shown conclusively that this is the united attitude of the nation as a whole.
Further on, he said:
These were the definite proposals-
He had been citing a good many of the proposals in our platform.
These were the definite proposals submitted, but in addition to them there are other important matters which have arisen and which also need your careful attention. No one will question the fact that it is most essential that there shall be the closest possible cooperation between all provincial governments and the federal government at this time. That cooperation this government intends to give unstintingly. This means that we shall press into the service of the nation all the help we can give without reserve even though it be with those who have hitherto been our political opponents. I should like to emphasize that point.
The premier went on to mention to his radio audience some of the things which the

Alberta government had taken upon themselves to do to help the dominion government. Most of them are concerned with the matter of prices. There is, for instance, the appointment of an investigator to examine with regard to supplies, to ensure that there shall be no restriction of supplies, and so forth and so on. The premier continued:
We feel sure that in taking this firm stand we are not only helping the federal government in its difficult task but that we shall have the people of the province solidly behind us. We are in a terrific struggle. It is essentially vital that no misunderstanding should disrupt our complete and effective support of the British empire in removing from the world one of the greatest menaces to true democracy that has arisen in the last quarter century. Remember the exhortation of Abraham Lincoln on a similar occasion, "United we stand, divided we fall".
As I conclude with that quotation, may I say that if 'Canada is to listen to such tirades of abuse as the hon. member for Athabaska brought down this afternoon upon the heads of a certain section of the people of this country, we had better not send him across Canada, for he would tear this country apart from stem to stern. What we want in this country to-day is unity, and there are no people more anxious for unity in our war effort than the people of Alberta and the premier of that province.


Mr. EDWARDS:: As evidenced by his stand at the recent dominion-provincial conference.


Ernest George Hansell: Since my hon. friend the member for Calgary West has mentioned that matter, which was also mentioned by the hon. member for Athabaska, we have men in our group who are quite capable of entering into a discussion of the Sirois report. But that is another matter. The hon. member for Athabaska bravely said that he was willing to meet any man on the public platform. Well, we have met men before on the public platform and discussed the Sirois report, and we shall be glad to do so again at any time and place.


Mr. JOHNSTON (Bow River):: And with any other hon. member.


Ernest George Hansell: One cannot always discuss matters at the time they are brought to one's attention; but may I add this, that the day will come when premiers Hepburn, Patbullo, and Aberhart will be seen as the heroes of that conference, not the wreckers of it. There are some men who are not willing to hand over their economic liberty to a centralized financial dictatorship.
I wish to refer to the speech that was made in this house on May 1 by the hon. member for Cochrane (Mr. Bradette). The hon.

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member is a French-Canadian. He has never had very much use for social credit, but I did admire his attitude when he was speaking on May 1. I am going to quote his words, and I want the house to notice the difference between his attitude and that of the hon. member for Athabaska to-day. At page 2460 of Hansard the hon. member for Cochrane said:
We have seen the development of the Social Credit party and other progressive movements. If an easterner takes the trouble to study those developments thoroughly he will find there is a reason for such political and economic eruptions. We may describe as fallacious and dishonest such things as debt repudiation in the west, but I suggest we cannot throw them out as easily as that. We must look into them more thoroughly. We must study social credit and its cause in our political life, approaching it from the western viewpoint, the reason for its flourishing; and always remembering that it is the policy of one of our great western provinces. The same reasoning must be applied to debt repudiation and other political movements of the last thirty-five years.
I cannot always agree with the hon. member for Cochrane, but if his attitude as expressed in those words is the attitude of this house, there is a little hope of our getting together and understanding one another. But to have to sit and listen to such an exhibition as we had this afternoon from the hon. member for Athabaska could, I am certain, have only the opposite effect.
I shall conclude, Mr. Speaker, by reiterating -and I cannot do it too often'-that the government of Alberta and this group here are as loyal as anyone in Canada to the British empire and to Canada's war effort. May I add that in 1935, when this group was first elected to the House of Commons and before we ever came here, we issued to the press a statement of our policy with regard to foreign relations. That policy has been reiterated here over and over again-a policy of absolute loyalty to the British empire, a policy of national defence such as at that time this country did not know.
When	this government first brought
down an appropriation for national defence in 1937, I believe-that is when they began to wake up-a great number of people in the Liberal party voted against that appropriation. As I recall, an amendment was submitted that the appropriation for national defence for that year be reduced to $1. Men in this group voted against the amendment and for the appropriation, because we had, I think I can say, vision enough to see what the country was eventually coming to. The hon. member for Lethbridge (Mr. Black-more) reminds me that all our leaders did that very thing.
It ill behooves anyone to rise in his place in this house and indulge in such abuse as that indulged in by the hon. member for Athabaska with the intention of putting in the minds of the Canadian people the impression that the social credit philosophy is against the best interests of the British empire.


Mr. HLYNKA:: He does not know any better.


Ernest George Hansell: I would remind hon. members of the statement made by the Right Hon. Mr. Menzies yesterday in an interview with the press in which he declared a financial policy very much akin to what this group had been advocating for the past number of years. If this government had adopted some of the principles we have been proposing in the last six years in this house, our war effort would be a long way ahead of what it is to-day.


Mr. KUHL:: Even if they had adopted their own.


Ernest George Hansell: Yes. What did we discover in 1935? The Prime Minister went on the stump and declared that he would take up the cudgels against the money-powers. He was going to issue currency and credit in terms of public need.


Mr. BLAIR:: So he did.


Ernest George Hansell: Did some one say, "so he did?" For ten years there have been about one million people in the country on relief; at least there were until a few years ago. Was that not public need? Did we not have public need when the war broke out? What is the attitude of this government? What has it been right along? It is this: "We will do just as much as we have money to do it with." The social credit philospohy is the converse of that. The social credit philosophy says: "What do we need?" I know what happens when the Minister of National Defence for Naval Services (Mr. Macdonald) wants to build a dozen ships. He goes to the Minister of Finance (Mr. Ilsley) and says, "How much money can you give me to build a dozen ships?" The Minister of Finance tells him. If some other minister wants something else he does the same thing. The social credit philosophy is the opposite of that. It says: "We need ships. Not, how much money have we, but how much steel have we? How much engineering skill have we? How much raw materials have we? Then we will make our financial resources fit our needs; we will make our financial system reflect the physical possibilities."
The Budget-Mr. Hansell


An hon. MEMBER:: That is true
patriotism.


Ernest George Hansell: That is true patriotism, as some one has said. I regret having to make this speech altogther extemporaneously, because I had no time to go to my office and pick up certain quotations which I wanted to use; but I recall that the Prime Minister was going to do battle with the money-power. That was in 1935. What happened? Some time after that, the government bought fifty-one per cent of the stock of the Bank of Canada. The quotation to which I wished to refer was one from the London Times of England. The Times declared that the financial world had nothing to fear from the Prime Minister's action in buying fifty-one per cent of the stock of the Bank of Canada. A year or so later, the Prime Minister came down with the announcement that he would purchase 100 per cent of the stock of the Bank of Canada. You should have heard the Liberal majority pounding the boards out of their desks, as though we were going to enter into a glorious millennial golden age. But the next day, or a couple of days after, a Liberal government was returned in Saskatchewan.
I would challenge the government to tell the house one thing. I would challenge the Minister of Finance to tell the house one thing. I would challenge them to tell the house whether or not the banking policy of the country has changed one little tiny bit since the government took control of the Bank of Canada. I would challenge them to tell me whether the policy of the Bank of Canada has changed one bit, whether the financial system of the country has changed one tiny bit since they took control of the Bank of Canada. I would suggest to hon. members that if they want to examine the records of the Bank of Canada to discover whether the policy has changed, they will be refused access to those secrets.


Anthony Hlynka: Bankers' secrets.


Ernest George Hansell: Yes, as my hon. friend the member for Vegreville says, it is a bankers' secret. I placed on the order paper last session a question asking whether the minutes of the directorate of the Bank of Canada were available to the people's representatives, the members of this house. The answer I was given was an emphatic no. I told that to one gentleman in my constituency and he was alarmed. He said, "What! A government-owned bank and yet the people's representatives cannot read the minutes of the board of directors." I wanted these minutes only to discover whether there had been any change in the banking policy

of the country; that is all. But one cannot get access to these minutes. One thing that is guarded with jealous secrecy is Canada's financial policy, which is inherently linked with the financial .policy of every other country in the world; for let us remember that finance knows no such thing as national boundaries.
An hon. MEMBER; And no patriotism.


Ernest George Hansell: Yes, and finance knows no such thing as patriotism. Those leaders who bow down in humble obeisance to the present financial system are more careful to save the system than to save the empire.


Mr. JACKMAN:: Utterly false.


Ernest George Hansell: I am sorry if my speech this afternoon has been rather disjointed, but I do not think the hon. member for Athabaska should go unanswered. Let it never be said that the social credit forces of this country, or the government and the premier of Alberta are disloyal to Canada's war effort or to the British empire.


Mr. DANIEL McIVOR (Fort William):: I do not need to congratulate the Minister of Finance (Mr. Ilsley), because we did that when he sat down, but I should like to congratulate the hon. leader of the opposition (Mr. Hanson) and the leader of the Cooperative Commonwealth Federation (Mr. Coldwell) upon their constructive criticism. I thought it was helpful.
In the word "budget" there is music for all those who prefer to pay taxes to losing the war. There is one thing about the budget that ought to please any hon. member,, namely, that the money which is collected from many sources and put into manufacturing for the war goes back again to the toiler.
I would also congratulate the government upon their care for the men and women at the bottom of the pyramid in the civil service. Fifty or sixty dollars a month does not seem very much, but the increase was certainly well received. I would also remind the Minister of Labour (Mr. McLarty) that there are more boys and more girls who follow the same studies in school and start work in local offices and banks who get far less. The Minister of Labour would do well to look into the salaries that are paid to bank clerks; for I have known young men who worked in a bank for six years before they got sixty dollars a month. This is not right. His Honour the Speaker of this house leads us each day in the petition to the-

The Budget-Mr. Mclvor
Master Workman, "lead us not into temptation," but the bankers are not observing that precept. I think of our soldiers; they also have had an increase of twenty cents a day; and as I have listened to hon. members speaking about railway fares for soldiers I am sure my hon. friends would join me when I say that I would rather pay the tax on my pass or have my pass revoked altogether than have the soldiers obliged to pay a tax on their tickets. I was one of those who thought, and I still think, that a soldier away from home and serving faithfully for small pay should have a free fare.
A little while ago in Fort William we had a banquet to a returned soldier, a real man. I refer to Colonel Doctor McCartney, who organized the fourth field ambulance and has now returned home. He thrilled that big audience by saying there were no politics in promotions overseas. Doctor McCartney was well known for his stand in politics. I do not need to say he was not a Liberal, but even so, he had a great deal of common sense. There are other places besides overseas where there are no party politics in war work, and I thank the Prime Minister (Mr. Mackenzie King) and the Minister of National Defence (Mr. Ralston) for one of the latest appointments, when the former leader of his majesty's loyal opposition in this house was sent to Great Britain as Colonel R. J. Manion. I take this opportunity of expressing the thanks of those in Fort William who supported me and of those who did not. We think the government made a fine choice in that appointment and did a fine act for our country.
I think also of the service that our government has given to the men who toil, in the legislation passed not long ago that gives a man the right to belong to any union he chooses and makes it a criminal offence for anyone to be dismissed because he belongs to a union. We had a splendid example of how the government sees that its own policy is put into practice when in the city of Hamilton the Minister of Labour and the Minister of Munitions and Supply (Mr. Howe) took control of affairs. To-day anybody would be short-sighted if they did not see a new social order coming into being. At the beginning of the war there were many industrial concerns that refused to operate for a five per cent profit. What did the government do? I cannot give the number of industrial concerns taken over by the government, but hon. members know they were not a few, where the machinery was purchased and the
plant set up and controlled by the government. This shows the coming of the new social order referred to by the Prime Minister in his splendid speech. No matter what interpretation may be put upon it by some hon. members, it is going to be better than anything we have had before. This idea is supported by the splendid speech made by the Minister of Pensions and National Health (Mr. Mackenzie) at the close of last session.
The reason why I am speaking to-day is that I see an improvement, not in the war work but in the life of Canada. I should like to give one example. Within a short distance of Thunder Bay we have a splendid opportunity in the development of iron ore, as spoken of frequently by the hon. member for Davenport (Mr. MacNicol). But what I wish to speak of particularly now is the socialization of the muskrat. I do so because it has meant a great deal to the finances of this government, and will mean more in the future.
In northern Manitoba there are nearly two million acres of territory broken up with rivers and small lakes which in days that are past was a great trapping ground. I am not now going into details of this vast scheme because I expect to do so later on when the estimates are up. It was found that the muskrats had practically disappeared from this vast district, although it contained all kinds of natural food for them. Our scientists tried to open up this territory for agriculture, but their attempt was a failure. After the professional men failed, however, a nonprofessional in the person of Tom Lamb, of Moose Lake, undertook an experiment. He found that food for the muskrats was there in abundance, and he wondered why the muskrats were not there. He gave consideration to fall trapping, too intensive trapping, rat spear, disease, epidemics, fur cycles and so on, but none of these seemed to satisfy him. Then he thought it might be because of lack of water, and conceived the idea that instead of the Saskatchewan and other rivers flowing through, leaving no water behind, he might erect dams and retain some water. This he did, and as a result 135,000 acres were selected, which are now in production after four years of water control, conservation and protection. Another area of about 160,000 acres is about to enter its third year. Splendid support was given by Hon. J. S. McDiarmid of Manitoba and the Minister of Mines and Resources (Mr. Crerar). This district north of The Pas now stands out as one of the greatest examples of socialism in the fur trade.
The Budget-Mr. Mclvor

I should like to give hon. members figures to show the growth of this industry, in terms of rats:
Number of rats
Start (1935)	 500
First year (1936)	 4,000
Second year (1937)	 20,000
Third year (1938)	 65,000
Fourth year (1939)	 164,000
Fifth year (1940)	 377,000
The value of these rats has increased from $30,000 in 1937, $100,000 in 1938 and $250,000 in 1939 to more than $600,000 in 1940. These were the results obtained by this young man, employed by the Department of Indian Affairs, who does not take any credit to himself but who carried on this work partly in his spare time and partly during office hours. The second project is now in its third year, and the figures with regard to it are as follows:
Number Number of houses of rats
Start	(1938)	65	520End of first year... (1939)	719	5,750End of second year (1940)	5,047	40,376
I mention this matter, Mr. Speaker, in order to suggest that if the brains of this country were applied to the socialization of our war industries as this young man applied his brains to this project, we would have no unemployment in Canada. I wish also to express the hope that something will be done in connection with the iron ore and other minerals which we have in such vast quantities at the head of the lakes. All we need is some brilliant man to apply himself to that problem, with the support of the government, and we shall realize a tremendous national benefit.
Coming back to the question of the war, I should like to make another suggestion. I know we do not all agree on these matters; we are all made differently, but I am convinced that no industry and no human being can thrive while working seven days a week. The law of God and man says that a man requires one day's rest in seven; a worker will do more work in six days than he will do in seven, and at the same time he will be happier about it and there will be less discontent and less labour trouble. One question has been asked me many times in connection with our war effort, and perhaps I would not be speaking out of turn if I mentioned what that question is. I am asked, "How do we know that God is on our side?" I wonder how hon. members would answer it? My reply is something like this: It is not whether we know that God is on our side but whether we know we are on His side; and we know, by the way we think and act, whether 
or not we are on His side. To me the only thing that will count after we win this war will be a life that is surrendered to the Prince of Peace; and when we have that, we shall have a social order that will have no backfires. When I think of our country and our empire, I am heartened and encouraged. I used to read history a bit; and if I have not forgotten what I read, the reason for the fall of Chaldea, the fall of Persia, the fall of Rome and the fall of ancient Greece was not that the common people were corrupt, but that the leaders became corrupt and citizenship could be purchased for cash. I take courage when I think of our king and queen, than whom there have been none better on the throne of England, and when I think of the Prime Minister of Britain and the leaders in the commonwealth of nations. Yesterday in this house we had the great leader of a sister dominion; and I am sure many hon. members noticed, as I did, the reverent way in which that great man referred to the Supreme Being. Then, when I think of our own leaders, I know we are on the right side, that we are bound to win, because the devil is going to lose in this battle.
We shall have many heart-burnings before this war is over; no doubt we shall have many moments of doubt before the terms of this budget are fulfilled. Many questions will have to be answered, although personally I find it far easier to explain this budget than to meet its obligations. If, however, each of us is willing to do his part; if every man keeps himself right, then we shall be able to give leadership to our constituents.


Angus MacInnis: I think we all appreciate the magnitude and difficulty of the task that confronted the Minister of Finance (Mr. Ilsley) in preparing the budget now before us. Taking the budget by and large, I would not be honest, either with the minister or with myself, if I did not say that in my opinion he accomplished a difficult job fairly well. I have, however, a few criticisms to offer. Most of what I am going to say has been dealt with by other speakers, and consequently I shall deal with each point very briefly.
My first criticism is directed against the increase in the national defence tax on the lower incomes. I protested against this tax last year, and pointed out to the best of my ability the undue burden which it placed upon people whose incomes were already too low to give them a decent standard of living. This year the minister has raised from $600 to $660 the amount of income exempted from the tax. But the increased exemptions are already more than offset by the increase in

The Budget-Mr. Maclnnis
the tax, and the increased cost of living over that of last year. Single persons in receipt of incomes of $660 and married persons with incomes of 31,200 are at the best of times getting just a mere subsistence. To the extent that those incomes are reduced by taxation, just to that extent is the subsistence reduced, and health and morale, and our war effort is retarded.
I know the minister might have imposed indirect taxes which would have raised as much or more revenue than will be raised by the increase in the national defence tax. I believe, however, that quite properly he preferred the more direct and harder method. For that I am grateful. But it does not make the tax on these people any lighter. To a great many people this tax means that they are going to be on reduced rations so long as the war lasts. I would suggest that if we are going to ration some of our people, it would be better to ration all of us. I, therefore, wish to associate myself with other hon. members, including the leader of the opposition (Mr. Hanson), who have already protested against the increase in this tax. For purposes of the national defence tax there is no reason why the exempted incomes should not be the same as they are in respect of the ordinary income tax, namely, $750 for single persons and $1,500 for married persons.
I should like to say a few words with respect to death duties or inheritance taxes. This is a new departure for the federal government, and I wish to commend the Minister of Finance for it. While agreeing with the criticism of the leader of the opposition with regard to the application of the national defence tax to low incomes, I cannot agree with him in his strictures on the inheritance tax. I agree with the Minister of Finance that death duties provide an eminently fair form of taxation. Whatever reasons may exist for not making a capital levy on accumulated fortunes while the original owners are alive, that reason disappears when the owners die and the fortunes pass to others who took no part in their accumulation. The tax is to be graduated according to the size of the estate. The minister stated, for example, that there would be a tax of $8,500 on an unearned, inherited fortune of $100,000. In my opinion that is not excessive. Indeed, it is excessively mild when we compare it with a tax of $35 on the earned income of a person making $700 a year.
There is another modification in the income tax I should like to criticize. I refer to the reduction in the tax on the timber industry. In fact I would protest in the strongest possible terms against the proposed reduction
in this tax. It is not warranted. I do not know what the situation may be in other provinces, but I know that in British Columbia for years the lumber operators have carried on their business with the utmost disregard for any and every interest except their own. They operated the industry with the utmost abandon and criminal waste. The minister said the operators were becoming alarmed because of the rapid depletion of valuable timber limits. This is the first time it has come to my notice that lumber operators in British Columbia have ever given any consideration to the greatest asset of that province, except to get as much profit out of it at as little cost as possible. Log-cutting practices of British Columbia, as carried on by the lumber companies during the last twenty-five years, has been a major crime. The method of logging has been such that far more timber has been destroyed annually than has been produced. Logged-off areas were left in such a condition as to be a continuous fire hazard. The result has been that, of our British Columbia forests, at one time the finest in the world, more have been destroyed by fire than have been converted into timber.
Then, in addition to that, it was next to impossible to secure the cooperation of the operators in British Columbia for any measure of forest conservation. They may have been acting a little better during the last few years, but their record is exceedingly bad. What many British Columbia lumber operators, both past and present, should get, is not favourable consideration with regard to income tax but a term in the penitentiary.
I wish now to say a few words respecting the amendment moved for the Social Credit group by the hon. member for Acadia (Mr. Quelch). The amendment reads:
That all the words after "that" in the said motion be struck out and the following be substituted therefor:
"This house regrets the failure of the government to establish effective control over the issue of credit by the chartered banks to the end that the amount by which the proceeds from reasonable taxation and sale of interest-free war savings certificates fails to meet government expenditures, may be met by funds from Bank of Canada, without fear of inflation.
This amendment divides itself into two parts, in the first of which it advocates government control of the issue of credit. We agree entirely with that, and could gladly support that part of the amendment.
The second part, however, seems to be obscure. It refers to the raising by funds from the Bank of Canada, of that amount of the revenue which cannot be raised by taxation and interest-free war savings certificates. I do not at the moment know what is meant
The Budget-Mr. Maclnnis

by "interest-free war savings certificates". I do not believe the government is issuing any such certificates at the present time. I know a certain type of war bond, non-interest bearing, is being issued by the government, but unfortunately they are not advertised. I am not sure that I understand the words "by funds from Bank of Canada." I do not know whether it is intended to raise additional revenue by the issue of currency, or whether it is to be done by some other means. If it is the intention to raise additional revenue by the issue of currency, we should keep in mind the fact that the amount to be issued will be enormous. I believe that my figures are correct and that the amount will range from a minimum of around $700,000,000, the expected deficit on Canada's account alone, to a maximum of $1,668,000,000, the combined deficit on Canadian and British accounts. In any event, one gathers from the amendment that the amount to be raised is large, because mention is made of the dangers of inflation. To guard against inflation the amendment proposes, "effective control over the issue of credit by the chartered banks." That is to prevent the money issued by the Bank of Canada from being made the basis of further credit by the chartered banks when it reaches them.
With regard to the necessity of there being effective control over the chartered banks, this group is in agreement with our Social Credit friends. In fact I think we are to some extent ahead of them because we have been advocating this for many years. It seems to me that the amendment admits that the government policy as operated through the Bank of Canada may be nullified by the action of the privately owned chartered banks, or because of lack of control over the chartered banks. I think we can also agree with that. We have advocated for years government ownership and control of Canada's financial system, to the end that the government, acting in the interests of the people as a *whole, should be in complete control of the country's [DOT]financial resources. Therefore, I beg to move, seconded by the hon. member for Weyburn (Mr. Douglas):
That all the words after "banks" in the third line of the amendment be struck out and the following substituted therefor:
"Further that in order to achieve a maximum and equitable war effort, the nationalization of the financial system and its use as an instrument of public policy are fundamental steps in the elimination of interest and the dangers of inflation."
We propose this subamendment because, while we agree with part of the main amende ment, other parts are not quite clear to us.

There is another matter with which I should like to deal and which is not mentioned in the budget. For the last two or three sessions I have had upon the order paper a resolution in connection with the matter of old age pensions, but because of the war situation no time has been given to a discussion of these resolutions. I was prepared to deal with this matter at length, but after listening to the capable manner in which it was dealt with by the hon. member for Red Deer (Mr. Shaw) a few evenings ago, I shall confine my remarks . to merely mentioning the subject.
I am in receipt, almost daily, of letters from old people who find themselves in the most difficult circumstances because they are not able to get old age pensions on account of some provision in the regulations or because the amount of the pension is not sufficient for them to live on. I noticed in the Montreal Gazette of March 5 a report from the French federation of charities which pointed out that the increased tempo of production since the war began is placing more and more men and women in the "too-old-to-work class". This report states:
To the people who are out of the job category and still too young for old age pensions is now being added a new class of people unable to fend for themselves. They are men and women who emerged from the depression without work, without money reserves, and without relatives able to help them. Consequently, demands upon social organizations caring for such cases are heavier than ever, despite the expansion of employment as a whole.
The government should realize that, while industry has increased considerably, what is wanted to-day in industry more than ever before are young men. Men who were fifty-five or fifty years of age when the depression began and who have not yet reached seventy years of age cannot find employment and must be cared for in some way. It does not help our war effort to have the plight of these old people continually before us as a reminder of the callousness of the government in dealing with poverty and destitution. Some little time ago the Vancouver Sun, a newspaper which supports the Liberal party, had an editorial on old age pensions. It was entitled "Fifth Commandment Betrayed at $20 a Month." It said in part:
For the thousands of years since God spoke to Moses that fifth commandment of the mighty decalogue has shone unchallenged. It has been an integral teaching of Christianity.
It then went on to show the amount that an ordinary man and woman adds to the wealth of the country during his or her forty years or so of productive life, and it continued:
And for this service to their country and their fellow men, this man and woman will, if

The Budget-Mr. Maclnnis
in need near the journey's end, receive $20 a month-sixty-six cents a day. They are to live on that. They are to maintain their little home-and thus spend their last years in peace.
That is really not good enough. Although we are at war and although the war makes tremendous demands upon our productive effort, still the resources of this country are sufficient, if properly organized, to enable us not only to carry on and double our war effort, but to ensure a decent standard of living to every man, woman and child in the dominion. Therefore there is no reason in the world why our old people should have to continue to live in the destitution that many of them are living in now.
This, Mr. Speaker, is a war budget, and before I sit down I wish to say something about the war. I am not going to criticize what we have done or failed to do. The times are too critical for anything of that kind. Indeed, I am too anxious to win this war for me to engage in futile criticism. I am interested in defeating Hitlerism and in maintaining for ourselves and the world those principles for which we are fighting in this war. How best we can do that is a problem which I think occupies every waking hour of every serious man and woman in the Dominion of Canada to-day.
There are so many things to be done besides the drilling of men and the production of munitions. These, of course, are of great importance. But Hitler does not win his victories by these means alone, and it would be well if we, too, gave some thought to other phases of modern warfare.
The German nazis have two things which we must acquire for ourselves if we are going to defeat them. These two things are: first, unification of purpose, and second, the tools and equipment which we are to use in the war. We are doing a great deal in the latter direction, but I think a great deal of our difficulty, and a great deal of the difficulty of nil the democracies, both before and since the war started, was that there was no unification of purpose within their countries.
Hitler knows what he wants. He has had a clear picture of it in his mind for the past twenty years. What does he want? He wants power and he wants conquest. What he will do with that power and with that conquest when he gets it, he has not yet -stopped to think. Indeed he cannot stop to think what he is ultimately going to do, because he has as yet set no limits to the power and territory which he aims to acquire. Even a superficial examination of Hitler's record since he came into power will convince Anyone who takes the trouble to look into it
that what I have said is right, that Hitler has one purpose-power for himself and for the German nation.
From the very beginning he organized his campaign with masterly, if diabolical, ingenuity. He used every passion and emotion, the worthy as well as the unworthy, among his friends and among his enemies for his foul purpose. In Germany itself, and outside Germany as well, he said to the rich: "I will save you from the trade unions, from the socialists and the communists". They believed him, and they financed him.
To the middle class and the professional classes, he said: "I will save you from the trusts, the chain stores, the monopolies, and above all from the Jews who are taking far too large a share of the positions and the wealth which are rightly yours". And they believed him.
To the farmers and small business men, he said: "Your enemy is international finance; I will put them in their places and make you the masters". And they believed him.
To the youth and unorganized workers and the unemployed of Germany, he said: "You have been betrayed by the social democrats who are working in league with the capitalist class; I will give you work; I will give you a share in the government of the country; I will give you outlets for your energy and for your creative skills." And they believed him. To some extent he has kept this promise; so much has he kept it that to-day the youth of Germany are a menace to the world.
To the returned soldiers and to the military caste he said: "You were not defeated in the field; you were betrayed by an incompetent and corrupt government; I will give you an opportunity to show the world that the German soldier is unbeatable." And they believed him. His technique was the essence of simplicity. He made promises to everybody and he broke every one of them.


Mr. HENDERSON:: Is that what you want us to do?


Angus MacInnis: No; I want you to keep your promises but you have not done so.
Everyone has some grievance, and the nazis always have a sovereign remedy. Each of the classes or groups that I have mentioned believed that the nazis were working for the interests of his particular class or group.
Hitler is now doing with nations what he formerly did with groups and individuals within Germany. He will get what he wants by cajolery. If not, will get it by threats, and if that is not enough, he will take it with tanks and dive bombers.
The Budget-Mr. Maclnnis

He never moves until he is ready, and when he does move, he has overwhelming force at his command. It seems to me then that if we are going to defeat Hitler, the first thing to be done is to put before the people a picture of the world for which we are planning after Hitler is defeated. We must have before us a picture of the new world for which we are fighting, because we cannot struggle and sacrifice enthusiastically and determinedly for something that we are not clear about; for things about which there is a conflict of opinion even among our leaders. To say that we are fighting for the destruction of nazism and fascism is not enough.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Angus MacInnis: When the house rose at six o'clock I was trying to put in words what I thought we had to do if we were to win the war. I mentioned a number of things, and I was just saying that it was not enough to say that we are fighting for the destruction of nazism or fascism; neither is it enough to say that this is a struggle for the preservation of freedom, liberty, democracy and other such desirable things. We must make these words real facts in our every day lives, not for some but for all. They must stand out, bold and clear, as so many of the good things of life now. In my opinion, it is sheer impertinence to tell a man who is trying to maintain a home and family on an impossible wage and who, if caught trying to organize with his fellows to better his condition, may be instantly dismissed from his employment, that he has great stakes in the fight to destroy Hitlerism. As a matter of fact, such a man is too close to the essence of Hitlerism to believe you.
There is, indeed, much that is good in democratic society, much that is worth while saving even for the lowliest; but it is no wonder it is hard to convince many of the hundreds of thousands who for the past ten years have suffered the miseries of the damned that these benefits have reached down to them. I have already pointed out how Hitler won the confidence of the German people. The promises he made could not, of course, be kept because they contradicted one another. Consequently, in order to keep his dupes quiet he has had to continue to make more promises. The last he has made to the German people is that when they have conquered the world they will have the world's peoples for their slaves. That is the picture they have before them to-day.
[Me. Maclnnis.]
The democracies, however, in my opinion can still defeat the nazi hordes if they are willing to pay the price. The price is more democracy. We must extend freedom. We must make the common, ordinary working man feel that he is not a mere worker, a mere hand in a mill or a factory, but that he is an important person in the community and that the country is interested in his welfare. To acquire the force and unity of purpose to win this war, we shall have to do certain things. We must get clear in our minds that the present struggle is not only a war; it is a world revolution. Hitler never ceases to tell his people that. We must realize that we can never go back to conditions as they were before the war began. We either go forward to a more perfect democracy than we ever had before or go backward to fascism. We must remember that democracy can live only by growing; that if we at any time try to set a period to it, to say, "Thus far you shall go and no farther", then we have taken the first step on the road to fascism.
The second thing that must be done is to put forward a positive programme of what we are fighting for. This programme obviously cannot be a blueprint of a new social order. It must, however, provide measures of social betterment, and, above all, it must adopt humane social attitudes toward economic problems. It must state in clear terms what will be done as soon as normal conditions are restored. It should and it must, if we are to succeed, be able to tell the young men who are to-day fighting the battle in the field, in the air, on the sea, the men and the women who are fighting in the mines, on the farms, in the mills and factories behind the lines, that they and their brothers and sisters will not have to go back to the life that was theirs between 1930 and 1940. In fact, such a programme must bring the benefits of democracy so close to the poorest of our people that they will be so obvious that the people will be prepared to fight for them and, if necessary die for them.
We must drastically cut the spread in income and opportunity which now exists among our .people. The adoption of this programme by our government would give the principles for which we are fighting, or for which we say we are fighting, more meaning in the eyes of the people than they now have. Let us not forget that we are in this war because the ruling classes and the wealthy classes of the countries of Europe preferred their class privileges to democracy. They were prepared to build up Hitler. They did build up Hitler on his promise to destroy the trade unions and the socialist movement.

The Budget-Mr. Jackman
We shall have to get it into our heads, therefore, -that we cannot organize effectively to win this war while our energies and efforts are hampered by sectional interest and -class strife. We must find ways of resolving our differences in the face of a common and ruthless foe. If we are to win the war and the peace that will follow, and gain for the world an opportunity to build a better -and more glorious future than man has ever before known, we -must begin now and realize before it is too late that we must have the minds and the souls as well as the bodies of men.


Harry Rutherford Jackman: It would perhaps be surprising to -members of this house, and to many people in Canada, if they were told that financial policies might cause the winning or the loss of a war depending upon whether or not the right or the wrong policies were adopted. As the Minister of Finance (Mr. Ilsley) so ably stated in his budget address on April 29, the financial policy of the government must be directed toward mobilizing the maximum war strength of Canada. The first objective in doing this is to give sufficient financial aid to bring about the full use of our resources and man-power. The second objective is to follow a pay-as-you-go policy as much as possible. This government has followed that policy as far as is practicable. Civilian demands for goods must not be allowed to conflict with war demands. So long as there were unemployed workers it was not likely that the government would have to do very much to restrict the civilian demand, because enough goods could be produced to supply -both civilian needs and the demands of war. Inflation was to be avoided at all costs.
On the assumption that these objectives were the proper ones to be adopted in the management of a country at war, a brief consideration of what has happened and what the financial alternatives were may not be out of place. As is well known, under a profit or enterprise economy, goods or services are brought to the market because there is offered for them a price sufficient to repay the cost of production and to yield some return on the capital employed. The higher the price, the greater the amount brought to market. No one questions the effectiveness of the price mechanism in getting a job done. With the ceaseless hunger of war to be fed, however, there would be a never-ending demand for munitions, and the price would be expected to rise until such time as every factory in the country would be engaged at a good profit on the production of some form of war material.
But the use of such price mechanism is costly and results in mounting costs to the government as well as increasing the general price level and setting in motion the vicious spiral of inflation, with consequent difficulties for all, although to the profit of a favoured few. Particularly was this method hard on those with bonds, savings accounts, insurance policies, annuities and the like, for, with the rising cost of living, fixed dollar incomes did not go so far. Nevertheless the financial hardships and volume of debt created during the last war did not seem to be overwhelming.
This war, being a mechanized one, is a much more costly war. The alternative method of financing the war, namely, through a controlled economy-and not only of financing the war but of producing war goods-was adopted. That is undoubtedly an experimental method with regard to both doing a production job and maintaining financial integrity. If sufficient of our national income cannot be diverted through taxation and loans to pay for the war, then it is possible that the cure may be worse than the disease. In a long war I can only hope that the hardships will not be greater than those which would have been produced under a free economy.
On more than one occasion we have heard in this house the eminent British economist, John Maynard Keynes, cited as an expert in monetary matters. In the last budget recently brought down in the United Kingdom, a policy which he has been advocating for some time, namely, that of compulsory savings-although I believe another name is given to itr-was adopted. I should like to quote from a book he wrote some years ago called "Treatise on Money." He has this to say about war finance:
At such a time-
That is, a time of war.
-it is necessary to direct productive resources of all kinds from one employment to another on a large scale and as rapidly as possible.
That is to say, we must change over from a peace-time economy to a war-time economy and change our factories from making peace goods to making war goods, and he says that must be done on a large scale and as rapidly as possible. He continues:
It would be next door to impossible to achieve this except by invoking the assistance of the price mechanism, namely, by placing credit facilities at the disposal of the new employments and allowing them to bid for productive resources against the old employments-
In other words the new war industries must be allowed to outbid the old peace-time industries for the services of labour and material.
-thus allowing some measure of income inflation. Any government which, in the
The Budget-Mr. Jackman

The Budget-Mr. Raymond

called experts, final determination must be made by those responsible to the people. That obligation can be discharged only through consideration of fiscal policies in a committee empowered to call witnesses, and thus to know, first, something of the possible ways and means of raising the revenue and, then, to recommend to this house those proposals which are considered to be in the best interests of Canada.
In the resolution stage I hope to set forth the injustice of the administration in not allowing the $400 exemption to foster-parents of British children, also in imposing the ten per cent passenger transportation tax on soldiers' railway fares. I consider the first to be unpatriotic and the second to be unjust, if not subversive. I protest also against the tax on sugar as being contrary to the welfare of the people. May I here remind the minister that there are other ways and means of raising the revenue without committing gross injustice upon certain of our people whose incomes, notwithstanding the increases of which we have heard in the total national income, are still so low that they find it difficult to get three square meals a day.
Mr. MAXIME RAYMOND (Beauharnois-Laprairie). Mr. Speaker, in view of some observations made this afternoon by the Minister of Justice (Mr. Lapointe), I wish to make a short statement. In September, 1939, the question of the participation of Canada in the present war was submitted to parliament to decide. I then advocated a benevolent neutrality and suggested that a plebiscite should be taken. My views were not accepted and parliament decided in favour of participation. Since then, a majority of the Canadian people have ratified the decision of parliament in the last general election held in March, 1940.
The question now is not one of neutrality but of the degree of participation, and that is what I discussed yesterday. Some have opposite views. Some advocate conscription, to which, I repeat, I am opposed. As I said yesterday, the whole of Canada has, at the polls, unequivocally condemned conscription. I added also: We have no right in a democracy to ignore the sentiment of the people so clearly expressed. To do so would be to expose ourselves to a calamity worse than war. This afternoon, the Minister of Justice said that in my speech yesterday I still advocated a policy of neutrality. He certainly misinterpreted my remarks. I consider that this matter has been decided already by the people of Canada. Inasmuch as I expect others to respect the expression of sentiment of the Canadian people, I do respect it myself.

May I conclude by asking those wffio, like the Gazette of Montreal, persist in asking for conscription, to respect the sentiment of the Canadian people so unequivocally expressed in voting against conscription at the general election of 1940?


Mr. M. E. McGARRY (Inverness-Rich-mond):: I am not disposed to take up very much of the time of the house, or to delay proceedings in order to make what might appear to be a needless speech, but there are one or two matters to which I wish to refer and which I trust, Mr. Speaker, you will regard as relevant to this debate.
I shall not at the outset attempt to follow the long, winding and rather narrow financial trail traversed by the hon. member for Rose-dale (Mr. Jackman) who preceded me, because I feel that, like himself, I might become bewildered and return from the hunt with nothing to offer.
The discussions throughout the sessions of this parliament have borne a close relationship to our war effort, and that is only natural when we are facing in Canada at the present time an all-time crisis. The emergency makes our war effort our paramount concern, because we see in Europe to-day the greatest tragedy of carnage the world has ever seen, and the ghosts of that tragedy hover over our very doors.
From time to time the ministers upon whom the responsibility rests of organizing and implementing ways and means to provide the men, money, munitions and equipment required for our war effort, have read factual statements to the house showing what has been accomplished to date, and they have offered forecasts of the military prospects. These statements of achievements and the forecasts which the ministers have made have been criticized by some hon. members, particularly those sitting at your honour's remote left. The aggregate of their criticisms has been voluminous and their character varied; but when we consider what a small proportion of their criticisms was constructive, we are forced to the conclusion that they have contributed very little either to expediting or enlarging our war effort. No reasonable man in this house or outside could expect that a project of the magnitude that has been undertaken by this government could be carried through to the end without some venial errors of omission and commission. Canada is not a warlike country, and the twenty-five years which intervened between the termination of the last war and the beginning of this one were not spent by our statesmen and economists in trying to mobilize and prepare for a future war, particularly a war of aggression. Rather they were spending

The Budget-Mr. McGarry
their time in trying to work out the problem of redeeming Canada from its economic ugliness as a result of the last war. In spite, however, of their peaceful temperament, war came and there was nothing for Canada to do but to go to the assistance of Great Britain, that fortress which to-day stands unconquered and undaunted between tyranny and democracy.
I do not intend to pose as a judge and to say definitely what the aggregate of our war effort should be; but when I recollect that only nineteen months ago Canada's military position was one of almost total unpreparedness, and when I consider its military prowess to-day, I am not surprised when I hear or read expressions of admiration and the complimentary plaudits given to this government for its great achievements in mobilizing our resources in men and material for Canada's great war effort.
In this all-out effort it is necessary that every element of our citizenship should sacrifice to the limit. The wage-earner, the salaried man, the business man, must give their earnings and their profits to the point of suffering. The producer must produce more and more. Just at this point let me give this warning to the government. When we ask the producer to produce more, we should take care that we do not take away from him the very facilities he requires to enable him to effect that purpose.
The centralization of war projects unfortunately has left some sections of this country in a position where their earnings or incomes have not increased since the war began. Strategical considerations no doubt govern the location of these war projects. That may be all right, and certain sections of the country may not be penalized thereby; but in sections such as my own constituency, not only are no war projects being carried on, but expenditures for ordinary public works have been withheld necessarily, on the ground of war economy, and that has left us dependent almost entirely upon emergency public works. This condition reduces the people in those sections of the country almost to the standard of a relief unit. This is a matter which the government should consider, because these conditions, if they are allowed to persist, will lead to a discontented and discouraged people who, if the war lasts too long, will lose their ardency in the cause. After all, we can scarcely call that a true democracy which does not accord to every citizen in every stratum of life at least a decent living.
I have particularly in mind one section of producers, the fishermen, who comprise about one-fifth of the .population of my constituency. It is essential that they should produce,
and the fishermen in my constituency, in industry, honesty and hardihood will take second place to no other element in the community. I hope I shall not be charged with being too regional, but this is really a matter of importance. In this regard I am speaking for one-fifth of the population of my constituency. In the district of Cheticamp we had a gypsum mine in operation. It absorbed about 100 of our fishermen, but it has been closed down owing to the war, because bottoms could not be obtained for shipping out the product. The result is that 100 men have gone back to fishing. These fishermen pursue their industry in small boats. Two. years ago we had a life-boat at Cheticamp-for the protection of these fishermen in going to and from their fishing grounds. This gave them security so that they would venture out on days that were not altogether propitious, because they had an assurance of protection. Since that boat has been taken away, the productivity of these fishermen declined last year almost fifty per cent, for the simple reason that these men, who had only small craft, refused to go to the fishing grounds except on extremely fine days. If anything happened on their way to or from their fishing grounds they knew they had nothing to rely on for protection.
This is a small matter. These boats could be maintained at a cost of a very few hundred dollars, and it would render a wonderful service to these men. The fishermen feel that they are in a paradoxical position. They are asked to produce, and at the same time they are deprived of the means of facilitating production. I am not criticizing the government in this connection, but I know whereof I speak. I know the feeling that prevails in that section. If we are to have that unity which is so desirable in this great struggle, we must remove any element of discontent that may exist among the people. No section should feel that there is any reason for them to be dissatisfied.
There is another matter to which this government should pay particular attention. I know that they do, and I mention the matter merely to emphasize its importance. I refer to the health of our people. The health of a people is the wealth of that people. That is an old adage; this is a truism. Certainly it is as true to-day as it ever was, because the lives of the people, whether in peace or in war, are of the greatest concern to the individual as well as to the state. A man-and the same is true of a woman or a child-is in good health if his organs function properly, and no man can satisfactorily fill any position he holds unless that condition is satisfied.
The Budget-Mr. McGarry

Therefore this is one point which this or any other government should bear in mind.
The profession of which I happen to be a humble member has long since given up the erroneous idea that it exists merely for the purpose of treating the sick. Fortunately for ourselves and the public, we have realized that there is another phase of medicine which is far more important than the curative, and that is public health for the general good of the community. Nothing designed for this purpose can function satisfactorily unless we have, first, the cooperation of the public and, second, a government that will furnish adequate means to carry out a programme- not only to maintain it but to enhance it, if possible.
I wish to congratulate the government upon the efforts they so promptly put forth at the very outset of the war. I refer particularly to the war-time prices and trade board. As a result of that and of the persistence *with which its objects have been put into practice, we have not that hoarding and [DOT]consequent profiteering which obtained in the last war. We all remember the orgy of profiteering that went on in the war of 1914-18. The efforts of the war-time prices and trade *board not only have been beneficial so far as the prosecution of the war is concerned, but will prove an important factor in the time of reconstruction at the close of the war. Some people will argue that we should not consider the aftermath of the war, and I admit that while our principal thought and purpose in Canada to-day should be the successful prosecution of the war, at the same time I suggest that, without detracting one iota from this high purpose, we must keep in mind the time when our men who are now engaged in making implements of destruction and of death, will revert to the positions they held in private life.
There should be some reorganization during the process of organizing for the war. We should look to the time when price levels will fall from the altitudes of war time to the more stable basis of peace. There is a trend of continuity going through the process of war and peace, and personally I believe that the foundation of a proper reorganization after the war is an intelligent organization of the war process itself.
At the present time matters are looking dark in the east, but we are not discouraged. We feel that England's military record will be unbroken, and we know that she always wins the last battle. The ultimate battle will be on the Atlantic, and I do not think anyone doubts what the outcome of that deciding struggle will be.
I have the honour to represent a constituency in Nova Scotia. In that province

the truest and fullest expression of national spirit exists, and the fulfilment of that spirit will not be something brought about by might or power. That national spirit is the will to act and to do things. This is the third budget of this war. While we realize that the manufacture of material weapons of war is important, we must also remember that it is just as important to have a people so imbued with the determination to succeed that they will follow that trumpet which to date has never sounded a retreat.
My purpose in mentioning some of these local matters was not one of criticism but merely to emphasize a few matters to which I think it would be well for the government or some department of the government to give a little attention. We in Nova Scotia are not blessed with as many war projects as other sections of the dominion. Having such an abundance of coal and steel, we sometimes wonder, when we see projects in other sections where the cost of freight is very high and, therefore, to my mind manufacturing costs would be higher than in the maritime provinces, why we have not more of such projects. It is possible that the vulnerability of our position causes it to be regarded as unsafe for military plants; but I notice that in England almost all the war plants are at vulnerable points, and in the United States I believe eighty-five per cent of their war plants are at vulnerable points. Any part of Canada will be vulnerable if the British fleet is driven from the seas. When that happens, the relative location of war plants will not make much difference. We feel, however, that the ministers who have to deal with this matter are possibly taking wise precautions, but I suggest that we watch very carefully that in this distribution of favours there are no step-children in this national family. It seems that only in war and in national calamities the worth of the little province of Nova Scotia economically and strategically is recognized. On account of the fact that we are not getting as large a proportion of military projects as we think we should, the government should keep in mind matters such as those of which I have spoken, where certain sections of the country are being penalized, and see to it that some compensation is made in order to bring our wage-earners and others up to a standard of living similar to that of those whose fortune it is to live in busier sections.
The most important factor in this whole war effort is unity, and unless we have a contented people we cannot have absolute unity. In other words, we should see to it that that life-line which goes to the British

The Budget-Mr. Hlynka
fortress which to-day is the last bastion of liberty in Europe, that life-line which extends to Nova Scotia, that long wharf of north America, that spearhead of attack against the Berlin beast and the jackal of Italy, shall remain unbroken until the end of this conflict, so that the powers of democracy, liberty and freedom shall prevail over the powers of darkness whose designs are nothing less than to destroy everything that is worth while and spiritual in man.


Anthony Hlynka: Representing the men of the soil, men who built the great Canadian west, men who form the very foundation of our national economy, men who are shouldering a great portion of our national tax burden-the men who are commonly known by that unromantic name "farmers", I am privileged, indeed, in this debate, to add my word on their behalf.
Last week the Minister of Finance (Mr. Ilsley) brought down another orthodox budget. In it he did not forget to impose a new levy of additional taxation upon our farmers, who are least able to pay. Notwithstanding the unhappy financial position of our farmers, the minister still seems to think that a heavier burden should be placed upon them.
To make my stand clear, I wish to say that we all realize that in time of war our taxes must of necessity be higher than in time of peace, and that all our people should gladly share in the burden. Nevertheless we have heard so much from this government about its endeavours to distribute additional taxation evenly, and upon those who can best bear it. The additional tax on gasoline purchased by our farmers fails to convince me that it could possibly be helpful to our farmers, without mentioning other new indirect taxes which will further reduce the purchasing power of our farming population.
The farmer does not expect to make a profit out of this war, but he does expect this government to help him to carry on without getting further into debt. He also expects this government to place him in a position to be able to contribute his maximum to the winning of the war. I therefore propose, and feel it my duty, to give this house a more or less complete resume of the economic position of our farmers, and to point out their problems and the method by which at least some of them could be remedied; that is, if we expect our farmers to contribute their maximum to the winning of the war.
In addition to what was said on the subject of agriculture, last week, on the motion of the hon. member for Lake Centre (Mr. Diefenbaker), and which was directed mostly to the Department of Agriculture and the Department of Trade and Commerce, I wish
to deal with matters pertaining to the economic position of agriculture which concern other departments, including the Department of Finance. I should like again to remind this house that approximately one-third of our total Canadian population depend upon agriculture for their living. I believe, therefore, that we should all agree that the agricultural problem in Canada is one of prime importance, second only to our war effort, for Canada is primarily and fundamentally an agricultural country.
Among the many problems facing the Canadian farmer to-day, and more particularly the western Canadian farmer, I wish to deal briefly with the following:
1.	Adaptation to fast-changing conditions.
2.	The debt problem.
3.	High interest rates on private debts.
4.	Inadequate freight rate structure.
5.	Low prices on farm produce.
6.	Marketing possibilities.
7.	Price of manufactured goods to the farmer.
8.	Increased and heavy tax burden.
9.	Lack of purchasing power in the hands of the people.
10.	Low standard of living.
11.	Constant rise in the cost of living in relation to income.
12.	Inadequacy of the present debt-creating system.
13.	Lack of a positive and aggressive national agricultural policy.
14.	The post-war period.
First let me deal with the ever-changing conditions to which the farmer must be continually adapting himself in order to survive. During the last several decades the position of the farmer has been gradually changing from one of economic independence to one of economic dependence and centralization, making it possible for the money barons to get a firm strangle-hold on his security. On the one hand, technological development ha* been a blessing to the farmer, inasmuch as it. has lightened the burden of his physical labours and added to the speed and efficiency of production; but on the other hand, labouring under the disadvantages of the orthodox financial system, the farmer has become the unfortunate prey of financial institutions.
Besides the swift technological changes, the contemporary farmer is surviving two of the greatest wars the world has ever known, and, in addition, he is still struggling with the effects of twelve years of the worst economic dislocation in our history. As a consequence of this economic dilemma, the farmer has been forced to accumulate huge debts at high rates of interest, which has placed him in an
The Budget-Mr. Hlynka

even less enviable position. It went something like this. The farmer had to mortgage his farm in order to buy a tractor. He then had to mortgage the tractor in order to build a garage. Finally he had to mortgage the garage in order to buy gasoline. So went the merry-go-round.
Perhaps it might be of interest to hon. members to learn the amount of the average private indebtedness of an individual farmholding in western Canada. In stable settlements an individual farmer is, on the average, carrying a private debt load of $5,000. A further analysis of the debt situation shows that even in pioneering and quite recent settlements, such as the Peace river district in Alberta, the total private indebtedness of an individual farmer has, on the average, reached the $2,000 mark. If time permitted, I could produce figures showing how many farm-holders in these same areas are valued at less than $5,000 and $2,000 respectively.
I wonder how many of us have yet realized that a great part of our accumulated debt is not made up of original loans. In many instances, those have been repaid over and over again. It is the accumulation of interest that keeps our people in debt and has been responsible for many foreclosures in western Canada. Let me stress this point. In many instances the original debts have been repaid several times in our generation; that statement may be verified by examining almost any mortgage-debt. In reality, this situation has virtually reduced the farmer's status to that of a tenant of the vested interests. It has further resulted in a lack of economic security. This, in my opinion, constitutes a real threat to our agricultural industry, which forms the very basis of our national economy. The greatest danger of all, however, lies in the fact that land ownership is gradually passing from the hands of the farmers to those of financial institutions and centralized control. This condition is one of the greatest threats to practical economic democracy, for that tendency is on the up-grade each year.
No one can deny that our federal governments of the last twelve years, in the main, should be held responsible for permitting this condition to become so aggravated. Because of their hopeless failure to handle the debt problem satisfactorily, our people have, for many years, been subjected to exploitation and abuse by the moneyed interests. The so-called debt adjustments proved, in most instances, to be debt maladjustments; yet, in the face of all this, the federal government and the courts have disallowed or held ultra vires six of the Alberta debt acts which were passed for the

sole purpose of giving the people of that province the protection they should have been given by the federal government. The most consistent excuse given by this government for disallowing those acts was to the effect that the government of Alberta was invading the field of federal jurisdiction. If that be so, Mr. Speaker, the federal government itself should have passed the necessary and adequate debt legislation so that our people could have had the protection they required, for, as we know, financial institutions have had no heart in dealing with their debtors. The governments to which I have already referred stood by and watched as financial institutions squeezed the very economic lifeblood out of our defenceless farmers of western Canada; and as a reward for their long years of toil, many farmers were turned out on the road. Fortunately, the people of Alberta have fared better during the last few years under the Social Credit government. Premier William Aberhart and his cabinet may well be proud of their record in this respect. As I have already indicated, they have done their level best in trying to save thousands of families from destitution.
This government will say, of course, that it has taken care of the debt situation by using the Farmers' Creditors Arrangement Act. Let me say at once that I have yet to find a settlement made under this act which turned out satisfactorily to the farmer. Those hon. members who have been asked, at one time or another, to assist farmers in their own constituencies, to save them from foreclosure, know very well how hard it is to persuade the creditor to be human. If the farmer fails to meet his payment on time, even for reasons beyond his control, he is immediately branded as dishonest, as not keeping his word; he is told he should be ashamed of himself, that he is not fit to be farming, and the like. This gives the company a distinct advantage in its attempt to throw the farmer off his land. Let us then ask ourselves, Mr. Speaker, why should a farmer shiver at the very sound of the name of a trust or a security company? Where does the trust or security come in? The fact of the matter is, that the farmer is always offered an umbrella when the sun shines, but when it begins to rain, the money-man asks the farmer to give back the umbrella. That is what is called a sound financial set-up. Yes, it is sound, and nothing but sound, and it is designed to serve the few, not the many.
Let me tell this government that it could help our farmers in more ways than one, and especially at the present time when foreign markets for our wheat are partly closed.

The Budget-Mr. Hlynka
Adjust and readjust the farmers' debts and you will have solved half their problems. Then the farmer will be in a better position to stand additional taxation.
Let us now examine the chances that a farmer has to extricate himself from this complex situation. His only source of revenue comes from the sale of his produce; he receives no income from bonds or other investments. In time of war, the farmer is faced with the problem of partly closed markets, and he therefore cannot make a sale of his principal product. In time of peace, the affairs of the country are so managed that unemployment is rampant, the purchasing power of the people is reduced, and underconsumption follows. This underconsumption is usually termed by politicians and other financial sycophants as "overproduction" or "surpluses." Finally, when the farmer does manage to sell some of his produce, he is forced to sell it at a price which is usually below the cost of production. Therefore, what incentive has the farmer to produce?
I wish to emphasize this point, that our farmers have been placed in the most impossible situation. If they do not produce they cannot exist, let alone live; but the more they produce, the poorer they become. In other words, the fruits of their own labours make them poor and miserable.
With respect to this "overproduction" or "surplus" idea, about which we hear so much from orthodox thinkers, I will say that that condition hardly ever exists. Let me illustrate the point. Less than a year ago this government told us that we had a "surplus" or an "overproduction" of butter in Canada. An interesting article appeared in the November issue of the Canadian Dairy and Ice Cream Journal. This article was written by Charlotte I. Johnson, who is employed by the federal Department of Agriculture, economics branch, and she fold us how the government had distributed all the surplus Canadian . butter. Hon. members will recall that the government issued to relief recipients and low-income families blue vouchers with which they could purchase additional amounts of butter. We were told that 3.081.697 pounds of butter were distributed in this wray. After that butler was distributed, there were still thousands of low-income families in Canada who did not have enough.
The point is that there never was a surplus or an overproduction of butter in Canada. But the fact of the matter is that our people did not have enough purchasing pow'er with which to buy. This year the same government tells us to go easy on butter because we have not enough of it. But the truth of
the matter is that the government showed a lack of foresight or vision for even a few months ahead. I must be frank and say that that type of policy is not good enough to suit either the consumer or the producer. I might say also that if the government took the trouble and saw to it that the farmer received a fair price for his butter, our farmers could produce more butter than we need. The same principle applies to other commodities of which it is said that we have either a shortage or a surplus.
Let me now deal with our markets. We are usually led to believe that our economy wholly depends upon our export trade. That has been the most consistent argument this government has advanced in shielding its ineffective marketing policy. We are told over and over again that a farmer could not get a reasonable price for his produce because we depend upon foreign markets, and that since those markets are partly closed for our major commodity, namely, wheat, the Canadian people cannot expect to have enough of the things of which we have an abundance. This type of reasoning is simply below anyone's dignity to advance; and yet our people have been fed with that kind of concentrated nonsense right along.
Let us now examine the true state of the situation. Let me point out that our farmers' markets are not wholly dependent upon our foreign trade. As a matter of fact, our farmers could be making a comfortable living and could contribute much more to our war effort if the government took the trouble to help them get a fair return for their produce-produce which is sold on our home markets, right here in Canada. At page 126 of a booklet entitled "The Case for Organized Empire Migration", written by Brigadier-General Hornby in May, 1937, we find the following:
Speaking generally there is a good market in Canada for all farm produce. The question of market facilities must not be confused with the question of price. It is the price on farm produce which has hit the farmer so hard. Our local markets may be expected to improve when and as employment improves, the price on agricultural products being dependent on the purchasing power of the masses, who are the largest consumers of farm products.
In my opinion, this government publication has placed before us the true state of affairs embodied in the above quotation. That is exactly what Social Crediters have been telling this house and the people of Canada for the past six years. Let me give hon. members a table taken from the 1935 "Canada Year Book," which substantiates my argument. The following is the proportion of certain Canadian
The Budget-Mr. Hlynka

farm products consumed in Canada, and the greatly smaller percentages exported:
	Domestic consumption	Exported
	Per cent	Per cent
Cattle and beef	... 97-3	2-7Hogs and pork	... 95-4	4-6Sheep and lambs...	... 99-4	0-6Butter 	1-1Poultry	.... 98-3	1-7Eggs 	... 99-8	0-2Potatoes 	... 96-9	3-1Oats 	... 94-1	5-9Barley 	... 88-2	11-8
This table shows that our markets are not dependent upon our external trade to as large a degree as we are led to believe. As a matter of fact, the figures almost surprise me. These farm products are almost entirely consumed in Canada. Then, why not give the farmer a fair price in return for these commodities? If he were given fair prices, his trouble would be considerably alleviated. But the farmer is always given the old excuse, and he accepts it in good faith. Social Crediters have been consistently stressing the idea that additional purchasing power must be placed in the hands of our people before a solution to our problems can be found, and, what is more, the Social Crediters have proposed a plan by which that may be done.
The table I have placed on record shows that our domestic market for many of our products is a remarkably good one. Let us then set a fair minimum price on those commodities, and let us do business. In view of the present unsatisfactory economic situation of our farmers, let us give them their long-overdue break. Let us tell them that they have been let down, that they have not been protected as they should have been. Let us tell our farmers that there is no reason in the world why they should not be enjoying a higher standard of living. Let us tell our farmers that they should not be denied, at least, the basic necessities of life, namely, food, clothing and shelter. Why not tell our farmer that he has been the scapegoat right along, and then he will know the truth. This mess may well exist for a time, but there must be an end to it some time.
Let that situation be remedied now, when our farmers are asked to shoulder the heaviest tax burden in Canada's history. Everyone seems to report profits as a result of war activities, but our farmer seems to be singled out as if he were not a part of our national life. Everyone reports profits, and that is what all hon. members in the house should consider. It is the duty of each of us to press the government for results, for, after all. it is only results that count.
Let us now consider another important phase of the same situation. When a farmer buys an

article, he must pay an exorbitant price for it. There is no mention of overproduction or surplus where the manufacturer is concerned. On the other hand, when the farmer sells his produce, he is forced to accept what he is offered. Surely, this state of affairs has not come about as a result of some accident or something of that sort. I should like to read from a letter which appeared in the Ottawa Journal of March 22, 1941, and which gives a good example of what I am trying to point out. I quote:
Why are apples so expensive now when there is known to be no scarcity? In November, 1939, I paid 99 cents for a bushel of Ontario apples. In January, 1941, I paid $2.25 for a bushel of the same kind and grade.
Since then I have been told that Nova Scotia apples cannot be sent into Ontario, even as gifts, except in small quantities, and that growers in that province are forced to accept ten cents a barrel at the canneries for the best apples. Surely this is an injustice both to the producer and the consumer.
That is just how the injustice comes in. The producer is always told how much he is going to get for his produce, and he is also told how much he will have to pay for the articles sold to him. Invariably there is no relationship between the prices set on the commodities which the farmer has to sell and those which he must buy.
I should like to give an example of the income upon which the farmer must depend. In the annual report of the Department of Agriculture for the year ended March 31, 1939, a table will be found at page 43 showing average farm prices, as follows:
Per bushel cents
Wheat	 59
Oats	 24
Barley	 28
Eye	 28
In the report issued by the Minister of Agriculture for the year ended March 31, 1940, the following table at page 10, showing the average farm price for the year, as follows:
Per bushel cents
Wheat	 52
Oats	 28
Barley	 32
Eye	 38
Judging from these tables, can we reasonably expect the farmer to be able to carry an additional load of taxation? How can the farmer make a living under such adverse conditions and contribute his maximum to winning the war?
Let me turn now to a comparison of the prices of commodities which the farmer must buy. One glaring example of the lack of

The Budget-Mr. Hlynka
parity in price and adjustment is the prices on farm machinery, the instruments of production. In this machine business the farmer seems to be on the short end of the bargain all the time. This is where he gets into debt, and few of them ever get out of it. On more than one occasion members of this group have quoted figures showing the cost of a binder at different times. 1 shall not repeat the whole table, but I should like to give a part of it.
Cost of a binder
Cash price Cost in bushels
Year	in Regina	of wheat1913	
$167	02	2611936	
281	00	3191940	
340	00	637
There is the obvious reason why the farmer cannot get out of debt.' It should also be obvious that something must be done to bring about a closer relationship between the prices the farmer gets for his produce and the prices he has to pay to the manufacturer. Farm machinery is one item on the list of instruments of production. Therefore the price of machinery should be cut and controlled. At the present time the farmer is paying an extra ten per cent duty on parts and machinery imported from across the line, and then, in addition, he must pay the exchange on Canadian money. How can the farmer exist under such adverse conditions when all the cards seem to be stacked against him from whatever angle one views the situation?
Incidentally, I might point out that the provincial Social Credit government has been instrumental in reducing the price on parts of farm machinery by fifteen to thirty-five per cent. The provincial government is handling this mass purchasing through the Provincial Marketing Board. In this way the Social Credit government has forced the machine companies to reduce their prices on machine parts. We should like to know now what the federal government has been doing in this respect in the last few years.
We have heard a lot in this house, and we read so much about this inflation bogy. If there is any group in this house which is against inflation or deflation, it certainly is the Social Credit group. Let me point out to hon. members who so often try to ridicule our financial proposals, and who have hopelessly failed to cope with the situation under their own system, how the farmer looks at this idea of inflation. Let us remember that it was the farmer who was inflated by election promises for the past several decades.
From the farrtier's point of view, he is at present experiencing the greatest inflation in Canada's history. To-day he must pay four 14873-170
bushels of wheat for an article which he obtained for one bushel of wheat in 1914. From the financier's point of view, it is the price of wheat that went down, while his dollar remained sound, but from the farmer's point of view, his wheat is as sound as ever. Since his wheat is sold at one-quarter of its value as compared with the past, there is an inflation of 400 per cent so far as he is concerned. After all, we must remember that the banker's certificates were never intended to represent intrinsic value. All money was intended for the purpose of transferring and distributing goods and services when and where required.
This brings to mind the game which the first white traders used to play when Canada was young. A trader would give the Indian a gun if in return he agreed to give him a pile of furs as high as the gun. The trader soon inflated the Indian by ordering the same gun from the manufacturer, but with a longer barrel. In this way the Indian had to give a higher pile of furs for the same type of gun simply because the barrel was longer. The same practice is being carried on here at the present time. The trader is the money-man; the gun is the banker's credit; a pile of wheat has taken the place of the pile of furs, and the farmer is forced to play the part of the Indian.
It is gratifying to know, however, that our farmers are beginning to see the light through this maze of complications. Make no mistake about that!
On top of these evils and handicaps, the farmer is forced to put up with a most unjust and inadequate freight rate structure for long distance hauling. As a matter of fact, he pays double freight. He pays freight on things which he buys and on things which he sells. This further reduces the income of the farmer. On top of it all, a heavy tax burden is thrown in for a good measure, which certainly is not equally distributed according to the ability to pay. As I have already pointed out, the uncontrolled pyramiding of debt coupled with the low income of the farmer results in a standard of living far below that which should be enjoyed by our Canadian people. It should also be remembered that the cost of living is rising steadily from day to day.
Of late, we have heard much in this house as well as from high-salaried government and bank officials of the so-called belt-tightening proposal, and further proposals with respect to cutting down on the purchase of luxury goods. These gentlemen may rest assured that their wishes have been complied with by our farmers for a considerable number of years. Of course, judging from the society columns of our daily press, there is no sign

The Budget-Mr. Hlynka

of belt-tightening there. These economics are not applicable to the cream of society, to use the agricultural term "cream."
I believe that I have made it sufficiently clear by my remarks up to this point that a deplorable condition exists among the farmers, and particularly so in the prairie provinces. We should, therefore, all be agreed that immediate steps should be taken toward effecting a solution of our farm problems. The stand which I have taken here to-day is supported by farmers in all sections of Canada, as evidenced by numerous resolutions from various farm and other organizations, as well as by the general commotion with which the hon. Minister of Agriculture (Mr. Gardiner) has had personal experience on public platforms.
It follows, therefore, that there are only two logical conclusions which one may draw from an analysis of the present farm situation. The first is, that the present agricultural policy is inadequate, and the second, that the government has not had a positive and aggressive agricultural policy during the term it has held office. Further, I do not hesitate to state that the government's financial policy should accept a larger share of the blame for the shortcomings as a result of which our agricultural industry is suffering.
Coming back to the Minister of Agriculture, I must say, with all due respect for his ability, that the farmers of Canada are demanding an aggressive and a positive agricultural policy. They also believe that their industry is sufficiently important, especially at the present time, to have a full-time Minister of Agriculture. As a matter of fact, it is an overtime job at the present time for any man. I might add that the Department of National War Services is also a full-time job, and half the minister for each department is not good enough, as may be judged by the way in which some of our agricultural problems are being handled at present.
Let me stress this fact:	The government
must adopt an agricultural policy which will not only remedy a more immediate aggravating situation, but that it also be far-seeing enough to prepare for the post-war period.
Let me summrize: The government must of necessity assist our farmers in meeting the changing conditions to make it possible for the agricultural industry once more to become a way of making a living and to enable our farmers to contribute their maximum to our war effort. This may be done by:
1.	Amending the Farmers' Creditors Arrangement Act, or passing a new debt act, as well as amending the interest rates act for the purpose of reviewing and equitably adjusting,
TMr. Hlynka.]
in the light of present conditions, all private debts in western Canada. I suggest that all outstanding debts be paid in goods, at standardized price values. That price must be the cost of production, plus at least five per cent. I also suggest that all the interest on all outstanding private debts be suspended and cancelled for the duration of the war; and for at least one year thereafter. It must be remembered that most of these private debts were contracted under highly speculative conditions, and as a result the farmer has become a heavy loser.
2.	I propose that compounding of interest be done away with altogether; for whoever invented the idea of compound interest could not have had the welfare of the people at heart. Compounding of interest is in reality a penalty, a punishment for failing to pay; it is the pound of flesh. Under conditions such as we have to-day, why should the farmer be punished for something which is beyond his control?
3.	This government should immediately pass a home-owners' security act for the purpose of prohibiting the foreclosure or sale of homes in Canada for a debt. This act should be patterned upon the act which the Alberta government had passed in 1938 but which was disallowed by the federal government.
4.	The government should adopt a production tax plan so that our farmers would pay their taxes according to their ability to pay, based upon production.
5.	And lastly, may I urge the government, as others have, to create the necessary amount of credit through the Bank of Canada to buy all the foodstuffs that Britain needs and all that we can spare, and give them to the British people free of charge. This should be kept up for the duration of the war. Of course, the prehistoric orthodox minds will maintain and argue that we have not the money, but that argument will not stand up against logic and common sense in time of war when this nation is fighting for its very existence. The farmer should be paid a fair price for his produce, and the British people should get the necessary aid they need. If this government bluntly refuses to accept this proposal, let it use its own system of doing it, but it must be done. Anything short of this is not good enough.
Such action on our part would have not only material significance but also the greatest moral significance imaginable.
In conclusion, may I just mention that the United States, under the leasfe-Iend bill, have put us to shame in this respect. The United States government will be suppbdng Great

The Budget-Mr. Leclerc
Britain with 81,350,000,000 worth of foodstuffs. The Argentine has donated a considerable amount of beef, and it should be remembered that those two countries do not expect to get paid for these things either. They know there will be a British market after the war. Canada has managed to negotiate trade agreements with Britain at a time when Britain needs all her finances to pay for he freedom, and for ours. What an accomplishment that was in the most critical moment of British history! Let us then do all in our power to save the British commonwealth of nations rather than try to save the orthodox financial system which has failed to serve the needs of the majority of our people. If we do that, we need have no fear of the outcome of the future.
Mr. JOSEPH H. LECLERC (Shefford) (Translation): Mr. Speaker, I intend to be brief. Before the budget is voted I wish to call the attention of the house once more to a matter that has already been discussed but has
Butter
June 15 Dec. 15
Year	Cts.	Cts.1880	
21.50	26.751881	
21.25	25.751882	
23.00	24.001883	
20.50	26.751884	
20.00	23.751885	
20.50	IS.751886	
17.00	24.001887	
18.75	22.251888	
21.50	25.751889	
19.75	23.001890	
18.75	22.751891	
18.75	23.501892	
17.75	23.251893	
18.75	23.251894	
18.25	21.251895	
15.25	19.251896	
16.25	18.251897	
17.75	19.751898	
16.75	20.251899	
17.00	21.501900	
19.25	21.251901	
19.25	20.251902	
19.75	22.751903	
18.50	21.251904	
16.75	20.751905	
18.75	23.501906	
21.00	25.251907	
20.75	27.751908	
22.25	27.251909	
22.25	26.251910	
23.25	25.751911	
22.00	30.751912	
24.75	31.001913	
25.25	28.751914	
24.75	27.251915	
27.25	33.501916	
28.75	42.751917	
38.25	42.251918	
44.25	50.501919	
52.75	68.001920	
56.25	52.751921	
29.50	40.50
not yet been settled-the fixing of a minimum price for butter for the present production year. I do not propose at this stage of the debate to enter fully into the situation of the dairy farmers. In his magnificent speech of a few days ago, on which I congratulate him, the hon. member for Compton (Mr. Blanchette), of whom his electors may well be proud and in whom they will, I am sure, long continue to place their confidence, fully explained the deplorable position in which these farmers have been for several years past. I may add to his statement of the case and to the one I made myself on June 28, 1938, when I set forth the situation of the farmers in general, that there has been very little change since.
In order that the present position of the farmer may be better understood, I wish to place on record the prices of butter, cheese and eggs for the past sixty-one years, as compiled by the secretary of the Dairy Council of Canada:
Cheese		Eggs	
June 15	Dec. 15	June 15	Dec. 15Cts.	Cts.	Cts.	Cts.10.75	12.75	11	259.25	12.25	14	2510.75	12.75	14	2510.25	11.75	16	309.25	11.75	16	2111.25	9.00	20	227.00	12.00	12	269.00	10.75	13	209.00	11.75	14	219.25	10.75	13	238.75	9.75	13	259.00	11.00	12	208.75	10.75	10	179.25	10.75	11	219.00	10.25	9	147.25	8.75	10	157.00	9.25	10	218.50	10.75	10	217.25	9.75	12	238.30	12.00	13	229.75	11.25	13	208.75	10.00	12	2610.00	12.25	14	2510.50	10.75	14	288.25	10.25	15	259.50	12.50	17	2711.00	12.50	17	2511.75	12.75	18	2811.25	12.25	19	3211.50	11.75	21	3011.50	12.00	21	3511.25	14.50	22	3711.00	12.00	23	3211.75	13.50	22	3813.00	15.50	26	4516.75	17.50	21	4816.50	25.00	26	6021.75	21.25	35	5422.75	24.50	42	6429.50	30.00	48	8028.75	26.25	56	8515.50	19.25	38	55
26S6
The Budget-Mr. Leclerc


Mr. A. R. ADAMSON (York West):: I should like first of all to congratulate the Minister of Finance (Mr. Ilsley) upon his performance of an extremely difficult job, a job of imposing taxation so heavy that he was appalled by his own words. In the light of recent events, however, we must look at the general position in which we find ourselves to-day. We must look at ourselves in the light of the changed picture. We must look at ourselves since the campaign in Greece,, the battle of Britain, the Hyde Park convention, the lease-lend bill and the battle of the Atlantic. All these have a vital effect on us here in this chamber to-night.
The first thing that we have learned is, I believe, the fallacy of limited man-power. The battle of Greece has shown us that we need all the man-power we can get in Canada. We must now consider, not what our maximum military effort must be, but what our minimum military effort must be immediately. Men and machines, not men or machines; both are needed. It is almost criminal folly to delude ourselves into thinking that we are going to be able to get through this war without large military forces. At the battle of Mount Olympus the gallant Australian troops were outnumbered, in some instances twenty-five to one. Are we going to continue to let these things happen? If we do, the words of warning spoken yesterday by the Prime Minister of Australia have fallen on deaf ears. We must appreciate, we must understand the power of the enemy. It is a first and cardinal rule that we must not underestimate the enemy we are fighting.
We must look first at our minimum military effort, and I have this to suggest in the light of the battle of Greece; that we need four infantry divisions, and with each division at complete armoured brigade and complete artillery units. Besides that, I suggest that we need two complete armoured divisions. We must be able to maintain in Canada in training complete reinforcements for these formations, assuming an annual wastage of one-third. That I submit is, in the light of recent events, the minimum commitment that we can be called upon to complete.
For Canadian coast defence, vulnerable point duty guards, et cetera, should be composed
26SS
The Budget-Mr. Adamson

of B, C, and even D category men; these can largely be recruited from veteran guard companies. Women must be trained and used foi non-combatant work in Canada and possibly abroad. We are going to need every single able-bodied Canadian; let us realize that and realize it now.
Let us see what this would entail. An infantry division is approximately 17,000 men. For safety, let us say 20,000. An armoured brigade is approximately 3,000 men. The auxiliary corps troops are approximately 2,000. Therefore a division such as I have suggested, complete with armoured brigade, would equal about 25,000 men. Four divisions, four armoured brigades, mean about 100,000 men. An armoured division for convenience can be said to be made up of 15,000 men; with specialists and workshops let us increase it to 17,500; two armoured divisions, therefore, amount to about 35,000 men. These formations total, roughly, 135,000 active personnel. 'Let us add, for simplicity, 15,000 artillery; this would mean an active fighting force of 150,000. If we take reinforcements at one-third, we commit ourselves in the coming year to an army of 200.000 men. Add to this an air force of 60,000, of which only a fraction are for overseas, and the naval service at the very maximum-I put this extremely high -of 40,000. From this we have a demand on our man-power of 300,000 men, a number of whom will certainly be remaining in Canada.
It has been asked, why train men until we have casualties? Thank God that we have had no casualties. But we must expect them, and the time to expect them and prepare for them is now. To-day every fighting man is an expert, a specialist, and he takes time to train. If he becomes a casualty, he cannot be replaced by a raw recruit. That recruit must be a trained man, and the time to train the reinforcements is before the original soldier becomes a casualty, not afterwards. That time is now.
There is one other point, and it is an extremely important one, namely, that the surest way to have a long casualty list is to send untrained troops against the enemy. If we compare the effort I have suggested with that of Germany, who is reported1 to have at her disposal 225 divisions, and England with between 80 and 100 divisions of the same size as ours-the German division is somewhat smaller than ours-we shall see that asking Canada for six divisions is indeed a minimum. Compare that with England, with a population of 45 million, raising 80 divisions; Germany, including the people of part of the occupied territory, Czechoslovakia and Austria, with a population of over 100 million with 225 divisions; and

Canada with 11| million population, with six divisions. Surely, if we are going to pretend we are making an all-out war effort, this is not asking too much. I do not need to remind the house that both England and Germany have an air force. And England, thank God, has the Royal Navy.
I come now to the question of munitions, at which I believe we must look in a rather different light since the passage of the lease-lend bill and the Hyde Park conversation. It is, I think, obvious to hon. members that we have been able, in Canada, to do certain things in Canada better than others. Some things we have done well; some things we have not done well. For the sake of brevity I have made three classifications: things we have done well; things we have done moderately well, and things we have done poorly. These are very brief classifications; and some things in one category perhaps should be placed in another. I would suggest to the house that the things in which we have been successful are:	the
manufacture of automatic weapons, anti-aircraft guns, mechanical transport, shells, small arms ammunition, high explosives, steel plate, and the production of raw and refined metal, including aluminium, copper, lead, zinc and gold. We have been moderately successful in the manufacture of training aircraft, ships, mortars, armoured fighting vehicles and antitank guns. We have been poor in the production of fighting and bombing aircraft for actual combat with the enemy, machine tools, field guns, internal combustion engines, and heavy ordnance such as large calibre naval and military artillery.
This is only an extremely limited list; and, as I have said, some of the items in one category perhaps should be placed in others. The general idea is that we are doing some things better than others. The reason for this is our national economy. In the light of our present knowledge, it is obviously fantastic to expect us in Canada to create a large aircraft industry building combat machines. It is also ridiculous to expect us to manufacture naval rifles of 9, 14, 15 or 16-inch calibre. We have not the forges or the personnel, which it takes years to train, and which some authorities consider it requires generations to train. We must approach our munitions problem from the scientific angle of man-hours. The question to be asked is, how many man-hours to produce a certain article in Canada, how many in England and how many in the United States? The question of cost must be given some consideration, but in a desperate

The Budget-Mr. Adamson
struggle such as that in which we are now engaged the time factor far outweighs all other considerations.
There is one further matter which is of interest here with regard to aircraft and any air training scheme. The essential thing about training a man to fly is to put him in a flying machine and to put that flying machine in the air. In any training scheme there are bound to be many crashes. When a machine is crashed, it is useless until it is put back in the air. At present, crashed machines take far too long between the time they are cracked up and the time they fly again. This is a serious bottle-neck. The time a machine is being repaired is wasted time. I suggest to the Minister of Munitions and Supply (Mr. Howe) that consideration should be given to taking the men now working in the construction of combat and bombing planes and turning them over to the repairing of crashed aircraft. Further, I believe thought should be given to having the repair of training aircraft placed in civilian hands. I feel certain that the air hours per machine per month would be materially increased if this were done. The essential to be remembered is that training aircraft must be kept in the air. Pilots and air crews are not trained on the ground, although they do receive some instruction there. There is a modern adaptation of the old saying about a bird in the hand being worth two in the bush. It is that an hour in the air is worth ten on the ground.
I now come a little more specifically to the question of man-power, which must engage the immediate attention of the government. I have already suggested what I believe should be our minimum commitment abroad in connection with the army. The Minister of National Defence (Mr. Ralston) has said that we need 22,000 men immediately, and that a recruiting drive is to be put on in order to get them. I hope that drive will be successful. I cannot go into details concerning this, since it is a matter on which I have official information; however, I can say that my opinion, as a member of this house, is that the method to be employed is most unsatisfactory. Recruiting is a military matter; and to resort to pep talks by prominent citizens in order to induce men to do their duty is a sad reflection on the state of apathy all across Canada, the responsibility for which rests solely on the shoulders of the government. The sober fact, Mr. Speaker, is that we need every able-bodied man, woman and child in Canada and we need them now; not to-morrow, or next week, or in the fall, but now, this very hour. The situation brooks no delay. It must be answered here in this house, and it must be answered now.
The question is: What is the government going to do if it does not get the recruits it needs for the armed forces? We who are in the army do what we are told; we obey orders. We do not do what we would like to do or go where we want to go; the time we do things is the appointed time, and the method is the appointed method. We do these things cheerfully and quickly. This is what is called discipline; the better the discipline, the better the army. So it is with nations. A happy nation is a well disciplined one. A well disciplined nation is a free nation. Where you have gangsters and lawbreakers, you have harsh laws and penalties. Where you have a happy, peaceful, free people, there you have few restrictive laws and light penalties. Any land where "verboten" is always in sight, and where the death penalty is meted out for listening to the wrong radio station, is an undisciplined land. The myth of Germany being a well disciplined country is one of the most damnable fallacies ever invented. The German is like his government and like the brazen nazi horde; he is a gangster at heart. He is ruled by fear; he understands fear, and fear alone.
I mention this subject of discipline because most people have an entirely wrong understanding of the word. The army defines "discipline" as a willing, prompt and implicit obedience to senior authority charged with responsibility. That senior authority in Canada is the federal government. There is one warning that the army issues to those in whom it vests authority. It is that a leader must, above all, have the confidence of his men, who must be resolutely and courageously led. If the government carries on that instruction, we need have no fear for the future of the armed forces.
Having briefly discussed the problem now facing us, we come to the rather uninteresting task of method or, shall we say, the carrying out of our project. The government having said that the situation is serious, in fact very serious, they must have some scheme or plan of operation. I hope they have. They may, however, be unaware of certain conditions common in Canada to-day. This may be a lack of information, or it may be wilful ignorance. The country may be under the impression that we had a registration of manpower during the month of August, 1940. It may believe that this legislation may have had a check on the available and potential reserves of the country. If that is so, let me hasten to disabuse this house of any such idea.
Like many hon. members I used to believe what I was told by ministers of the crown. This was, I found, due to a naive gullibility.
The Budget-Mr. Adamson

I know better now. I believe the national registration scheme was fairly comprehensive. I believe this, despite reports sent to me by officials of my own riding, and despite the very obvious loopholes and short-comings they pointed out to me. Their report to Ottawa was very critical of the whole set-up. I know both the registrar and the deputy registrar, and I know, too, that they did their best, under the circumstances. I have reason to believe that York West was one of the best ridings in Canada so far as national registration was concerned. The deputy registrar, who is a political opponent of mine, is now a census taker for the riding. I may say I have every confidence in him, and I have written and told ffiim so. He pointed out to me, however, several glaring weaknesses in the scheme, which I could not help seeing. Unfortunately I was on duty with my regiment at camp when the registration was undertaken. Since then I have, like all hon. members, heard the rumours as to falsification and dishonest practices. The persistence of them worried me. Eventually the case recently reported to the press concerning registration in Montreal was brought to my attention, so I decided to investigate for myself.
Last Monday, April 28, I arrived in Montreal to see if it were possible to obtain a registration card. Unfortunately I found it only too easy. Representing myself as another person-and I was-I was able to buy a registration card quite easily and openly on St. James street in Montreal. I have it here in my hand. Before I made my purchase I reported to the authorities what I was going to do, and I reported to the authorities after I had made my purchase.


Mr. CASTLEDEN:: Did the hon. member buy an exemption?


Agar Rodney Adamson: The authorities said to me that this was a genuine card. They were not surprised at the ease with which I made my purchase.


George Hugh Castleden: Politics.


Agar Rodney Adamson: I had to bring this to the attention of the house, because I believe there is a possible remedy. It is not too late to register the Canadian people. I suggest that since the government is under the necessity of taking a census, the census-taker might hand out to each individual enumerated a census card of identification. This card, however, should be safeguarded. First, it should be made on special, government banknote non-alterafole paper. Second, each card should be numbered. Third, each card should bear the print of the left index finger on it. Fourth, it should bear a signature. A card of identification such as I have mentioned would

be easily made out and quickly filled in. It would be simple to do. I understand the census-taker is asking over one hundred questions. This identification card could be made out while he was writing the answers on the sheet.


Vincent Dupuis: On a point of order, may I ask the hon. member whose registration card he has produced?


Agar Rodney Adamson: It is a blank card.


Vincent Dupuis: Do I understand he bought that from some other party in Montreal?


Agar Rodney Adamson: From some other party in Montreal.


Vincent Dupuis: From whom?


George Hugh Castleden: On St. James street.


Agar Rodney Adamson: That I am not going to
mention.


Vincent Dupuis: I submit the hon. member is bound to do so, when he advances such a thing as that.


Karl Kenneth Homuth: That is a rule you have made by yourself.


Vincent Dupuis: He is bound to produce the card, and to tell from whom he got it.


Richard Burpee Hanson: He does not have to do anything of the sort.


Agar Rodney Adamson: I said that I could buy the card, that I was able to do so.


Mr. DEPUTY SPEAKER:: Does any other hon. member wish to speak to the point of order?


Richard Burpee Hanson: It is not a point of order, anyway.


Thomas Vien: A point of order has been raised.


Richard Burpee Hanson: That is not a point of order.


Thomas Vien: The point of order has just been stated by the hon. member.


Richard Burpee Hanson: But that is not a point of order, at all.


Mr. MACKENZIE (Vancouver Centre):: Order.


Thomas Vien: The point of order is that the hon. member has not the right to mention the purchase of the identity card without mentioning the source from which he bought it.


Vincent Dupuis: Yes.


Thomas Vien: The point of order is not well taken. The hon. member

The Budget-Mr. Adamson
may stale on his own responsibility that he bought an identification card in Montreal, without having to reveal where he bought it. On his own responsibility he makes the statement of fact that he so bought the card. Under the rules of the house I do not see how I can compel the hon. member to disclose the place where he bought it or the person from whom he bought it, if he does not wish to disclose that information.


Mr. MACDONALD (Brantford City):: He should join the Royal Canadian Mounted Police.


Agar Rodney Adamson: Thank you, Mr. Speaker.


Vincent Dupuis: It might have been bought in Toronto.


Agar Rodney Adamson: No; it was not brought from Toronto.


Karl Kenneth Homuth: I rise to a point of order. An hon. member has made a certain statement, and another hon. member has insinuated that an untrue statement has been made, and that the hon. member has tried to deceive the house. I say that the hon. member for Chambly-Rouville (Mr. Dupuis) should retract what he said.


Thomas Vien: I did not hear the hon. member say that the hon. member who has the floor had said something which was untrue. The only point raised was that a statement had been made as to the purchase of a card, and my ruling has been given in that connection.


Karl Kenneth Homuth: My point of order was that the hon. member who was speaking said that he had purchased the card in Montreal. He made that statement as a member of this house. Then the hon. member for Chambly-Rouville said that the hon. member for York West (Mr. Adamson) might have purchased it in Toronto. In other words, he doubted the hon. member's word, and that is contrary to the rules of the house.


Vincent Dupuis: Mr. Speaker, a few days ago the Prime Minister (Mr. Mackenzie King) forced the lady member in the house to disclose the name of the writer of a letter. I humbly submit that if the hon. member wishes to make so grave an accusation of a civil servant anywhere in this country- whether or not it is in Montreal does not matter to me-and states that he bought a registration card under the circumstances he has described, he is bound to say where he got the card and from whom.


Thomas Vien: My ruling has been given and it must stand.


Agar Rodney Adamson: To clear up the matter,
I may say that in Ontario the registration cards were printed in one language, while in Quebec they were bilingual. This is a bilingual card.


Karl Kenneth Homuth: Never mind explaining.


Vincent Dupuis: It is a very poor argument.


Agar Rodney Adamson: I should like to mention
briefly-


Vincent Dupuis: I am tired of hearing about this difference between Ontario and Quebec.


Thomas Vien: The hon. member for York West (Mr. Adamson) has the floor.


Agar Rodney Adamson: There is another small
matter which I should like to bring to the attention of the Minister of Finance (Mr. Ilsley). I refer to the tax being imposed upon the moving picture industry. This industry has gone out of its way to cooperate with the government by giving free space and free time. I ask the minister to consider this item of taxation carefully and view it in the light of the tremendous help which this industry has given to Canada.
Another matter is the ten per cent tax on soldiers' railway fares. I protest strongly against this. No words of mine could be strong enough to condemn this additional tax on soldiers' railway fares. This is not the same war that we fought in 1914-18. It probably will be necessary to keep troops in Canada for longer than six months. At the end of six months a soldier is entitled to furlough. Leave is a privilege, but furlough is a right. I urge the government to give these men free transportation on their furloughs. In some military districts the average fare has been worked out at from $10 to $15. On the assumption that we had 100,000 men in Canada, the cost would be between $1,000,000 and $2,000,000. I suggest that this would be money well spent. From the financial point of view, it would be a good investment; from the point of view of morale, I think it is necessary.
I have said that the Canadian people are willing to follow a strong lead. To-day the demand for virile, forceful, dynamic, courageous leadership is growing into a roar-a roar that no man may not heed, a roar that has beheaded one king and dethroned another. This roar may be loud or it may be silent, but if it is there, it must be heeded. The voice of the Canadian people to-day says, "action, action, more action." It is up to us to see that they get it. We in this house are in deadly peril to-day. This very parliament is in. grave danger. The lack of vigour in
The Budget-Mr. Adamson

prosecuting the war is blamed on us. We are the head of the state; like the kings of old, parliament is supreme. This is the theory of
democracy, and I ask each and every hon. member to ask himself if it is working. Are we by our own actions creating confidence in the system we are defending? Are we doing our duty to the country by submitting blindly to government by order in council? Are we mice, or are we men?
I now make a suggestion to the house in all seriousness and sincerity. We must know the conditions with which we expect our men to contend. A good officer will not ask his men to do anything which he is not ready to do himself. We cannot all be in the army, but we can all be in the front line. I suggest that during the recess the government grant an opportunity to all members who so desire to go over to England to act as voluntary air raid precaution workers for a month or so. Nothing would so improve the morale of the Canadian people. Nothing would do more to increase respect for parliament. Nothing would add so greatly to the solidarity of the British empire. Nothing would do more to show the United States that the Canadian people were one hundred per cent in the war. Nothing would do more to show the world that the democracies are tough. Nothing would so effectively stop articles similar to those which have appeared recently in Time and Life. Nothing would so satisfy that one thing which makes us men -our self-respect. Nothing would so show that we are men, not mice.
On motion of Mr. Tucker the debate was adjourned.
On motion of Mr. Crerar the house adjourned at 10.48 p.m.
Friday, May 9, 1941.