1941-05-21

[Stage Direction]
First report of joint committee of both houses on the printing of parliament.-Mr. Dupuis.
Second report of standing committee on miscellaneous private bills.-Mr. Fournier (Hull).
Second report of standing committee on banking and commerce.-Mr. Moore.

[Stage Direction]
Mr. ERNEST BERTRAND (Laurier) presented the first report of the standing committee on railways, canals and telegraph lines, and moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
Mr. W. H. MOORE (Ontario) presented the third report of the standing committee on banking and commerce, and moved that the report be concurred in.
Motion agreed to.

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, an exchange of notes took place with Washington on Tuesday of this week, permitting additional diversions of water at Niagara Falls for the purpose of developing hydro electric power, in order to meet urgent war needs. It was expected it would be possible to table the exchange of notes to-day. But in order to secure simultaneous tabling at Washington and Ottawa it will not be possible to table them until the end of the week.
I mention this more particularly, because I heard on the radio mention of the existence of these notes, and I thought my hon. friend opposite would probably question me as to why they had not been first tabled in the House of Commons. I want to assure him that the information that has come over the radio has not come from any government source, either in the United States or in Canada.
[Mr. Ilsley.J


Hon. R. B. HANSON (Leader of the Opposition) :: I suppose I should have asked for it, but I will be frank with the Prime Minister (Mr. Mackenzie King) and tell him I had not heard anything about it.


Mr. J. R. MacNICOL (Davenport):: Is the Prime Minister in a position to say whether the government intends to consider the reports of the board of engineers between 1921 and 1926 on the whole subject of the controlling of water at Niagara Falls? The way it is now proposed to be done it looks like a piecemeal affair that will dry up the falls, whereas the adoption of the engineers' report would probably solve the whole problem.


William Lyon Mackenzie King: I cannot recall at the moment what is contained in the report of 1926, but I am able to promise my hon. friend that it will be considered.



QUESTIONS

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

Mr. HANSELL:: 1.	Who is the editor of the Canadian National Magazine.
2.	Is it the official organ of the Canadian National Railways?
3.	What is the salary of the editor?
4.	What is the circulation of this magazine?
5.	What is the total cost per month of publishing this periodical?
6.	Is this cost met by (a) popular subscription; (b) advertising; (c) other methods?


Mr. CARDIN:: 1.	R. H. Ayre.
2.	The Canadian National Magazine is published monthly by the Canadian National System for employees and their families. It features railroad facts, messages from the management, staff changes and general activities on company's rail lines, air lines, steamships, hotels, express, telegraphs, etc. Forwarded to home address of employees at the following rates: one year, SI; three years, $2; five years, $3.
3.	It is the policy of the management not to make public the salaries of its officers and employees.
4.	31,400 copies monthly.
5.	Paper and printing, mailing including postage, illustrations and engravings, articles and miscellaneous expenses $2,736 per month (first quarter, 1941).

Questions
6.	Net revenue from advertising-(other than Canadian National Railways' advertising)-and from subscriptions SI ,407 per month (first quarter, 1941); balance of cost is a C.N.R. publicity and advertising expense.


CONSCIENTIOUS OBJECTORS
Mr. CHURCH:: 1.	How many conscientious objectors are there in each of the military districts in Canada?
2.	What is their country of origin?
3.	How many have been assigned to war or other work since the outbreak of war?
4.	In what capacity have they been used?


Mr. GARDINER:: Mr. Speaker, I think the answer to this question is contained in an order for return which I tabled to-day.


LUMBER CONTROL-EXPORT OF SAW-LOGS TO JAPAN
Mr. MacINNIS:: 1.	Has the Pioneer Logging Company of Port McNeill, Vancouver Island, British Columbia, made application for a permit, as required by the order issued by the lumber controller on July 6, 1940, or under order in council No. 7156, of December 4, 1940, to export saw-logs to Japan?
2.	If so, (a) what was the date thereof; (b) was the application granted, refused, or is it still pending?
3.	What variety or varieties of logs were mentioned for export?
4.	Has the said company exported logs to Japan since July 6, 1940?
5.	If so, (a) what varieties of logs were exported, (b) what quantity of each variety, from July 6, 1940, to date?


Mr. MacKINNON (Edmonton West):: Mr. Speaker, I believe I have the consent of the hon. member asking this question that it should be dropped.
Question dropped.


HON. C. A. DUNNING
Mr. POULIOT:: 1.	Did the Hon. C. A. Dunning act as director of certain insurance companies subject to government inspection, since 1930, and is he still director of same?
2.	If so, (a) what companies; (b) from what date to what date; (c) who are co-directors with him on boards of such companies?


Mr. ILSLEY:: 1.	Yes of five companies, and is a director in 1941 of four of those companies.
2.	(a), (b), and (c):
Years of duration
Company	of directorship
1. The Ontario Equitable Life and Accident Insurance Company.	1930 to 1935
2. The Globe Indemnity
Company of Canada.	1941
3. The Liverpool-Manitoba
Insurance Company.	1941
4. The National Liverpool
Insurance Company.	1941
5. The Liverpool and London and Globe Insurance Company Limited, (x)	1941
(x)Canadian directorship.
Co-directors in final year or in 1941
H. Begg, H. G. Bertram, F. C. Biggs, J. G. Breithaupt, A. W. Briggs, J. C. Haight, H. W. Laird, J. A. Martin, H. MacPherson, E. C. Mitchell, C. S. Morton, W. E. Payne,
E.	K. Reiner, J. M. Walton.
G. B. Gordon, J. T. Leclerc, P. M. May, J. Matson, F. E. Meredith, A. B. Purvis, J. D. Simpson, C. F. Sise, R. F. Smith, L. A. Tasehereau, F. J. Williams.
G. B. Gordon, J. T. Leclerc, P. M. May, J. Matson, F. E. Meredith, A. B. Purvis, J. D. Simpson, C. F. Sise, R. F. Smith, L. A. Tasehereau, F. J. Williams.
G. B. Gordon, J. T. Leclerc, J. Matson,
F.	E. Meredith, A. B. Purvis, J. D. Simpson, C. F. Sise, R. F. Smith, L. A. Tasehereau, F. J. Williams.
G. B. Gordon, J. T. Leclerc, F. E. Meredith, A. B. Purvis, C. F. Sise, L. A. Tasehereau.
Note: The foregoing information is based, as to company No. 1, on the annual reports of the Department of Insurance of the province of Ontario and, as to the other companies, on the statutory returns made by the said companies to the Department of Insurance, Ottawa.

Questions as Orders for Returns



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. COLD WELL:: 1.	How many tons of Canadian coal were moved nnder assisted rates for the calendar year 1940, from, (a) Nova Scotia; (b) New Brunswick; (c) Alberta; (d) Saskatchewan; (e) British Columbia, and what subventions in dollars were paid to each province?
2.	Which department of government is charged with the responsibility of advertising or otherwise encouraging the use of domestic coal?
3.	How much was spent in 1940 by the government in advertising Canadian coal in Canada?


EMPLOYMENT OF HALIFAX LEGAL FIRMS
Mr. MacKINNON (Kootenay East):: 1.	Has the legal firm of Burchell, Smith, Parker and Fogo, Halifax, Nova Scotia, or any member thereof, been employed by the Department of Justice or any other department of the government to do legal or other work since November 1. 1935?
2.	If so, what services, cases or work has this firm or any member thereof performed or been engaged in, and what amount was paid in each case for (a) services; (b) expenses; (c) disbursements, in each fiscal or calendar year?


ROYAL CANADIAN AIR FORCE-ENLISTMENTS BY PROVINCES
Mr. BRUCE:: 1.	What number have enlisted in the Royal Canadian Air Force in each province?
2.	How many in each province have enlisted (a) as air crew; (b) for general duty?



GOVERNMENT-OWNED GRAIN ELEVATORS

[Stage Direction]
Mr. DIEFENBAIvER:
1.	How many terminal or interior grain elevators in (a) Canada; (b) the United States, are owned, leased or otherwise controlled by the government of Canada?
2.	Where are such elevators located and what is the capacity of each?
3.	Which of said elevators are used exclusively by the government for storage on its own behalf?
4.	How many of said elevators have been leased to private corporations or individuals, and where are they located?
5.	What is the amount paid for rental per annum by each of such lessees?


Mr. POULIOT:: For a statement showing a complete list of all the civil servants whose names and salaries do not appear in the report of the auditor general for year ending March 31, 1940.


William Lyon Mackenzie King: Mr. Speaker, I have spoken to the hon. member for Temis-couata who has asked for this return. I have

explained to him that it would involve a considerable amount of search and unnecessary expenditure to publish a list of all the civil servants whose names and salaries do not appear in the report of the Auditor General. Of necessity, such report would have to be compared with the entire list of civil servants. I am told that altogether there are some 60,000 or 70,000 names. I believe my hon. friend agrees with me that this is an unreasonable request. It might be better to make the request in some other form in another year.


Jean-François Pouliot: Mr. Speaker, I thank the
Prime Minister for the consideration he has given this question. I do not insist upon an answer right away, but I hope he will get it before the house resumes after the adjournment. I hope, also, that next year the public accounts will mention the names of all those who served the crown and received salaries.


William Lyon Mackenzie King: I doubt if I
could promise the list for this session, but I hope that in some form a list will be available for next session.


Jean-François Pouliot: Thank you.



MOSSBANK, SASK., AIRPORT

Mr. DIEFENBAKER:: For a copy of all letters, telegrams, reports, memoranda and other documents in the possession of the government in connection with the establishment of an airport at Mossbank, Saskatchewan, and in particular with regard to tile supply of water for said airport.



WEYBURN CONSTITUENCY CENSUS COMMISSIONER

Mr. DOUGLAS (Weybum):: For a copy of all correspondence, letters, telegrams, reports and other documents in the possession of the government with respect to the appointment of the census commissioner for the federal constituency of Weyburn, Saskatchewan.
Also a copy of all correspondence, letters, telegrams and other documents exchanged between the Minister of Trade and Commerce or any official of the government and the said census commissioner for Weyburn.



CANADIAN PACIFIC RAILWAY


[Stage Direction]
On the orders of the day:
Hon. J. L. ILSLEY (Minister of Finance):: Mr. Speaker, yesterday the hon. member for Temiscouata (Mr. Pouliot) asked me whether steps were being taken for the repatriation of Canadian Pacific Railway shares held in the United Kingdom. No such steps have been taken or are being taken.

Labour Conditions



CANADIAN ARMY


[Stage Direction]
On the orders of the day:
Hon. J. L. RALSTON (Minister of National Defence):: Mr. Speaker, yesterday I was asked a question by the hon. member for Lincoln (Mr. Lockhart) regarding the use of huts and tents by the active army and the reserve army. The information which I have received is that two advanced training centres are being established at Petawawa, one an artillery training centre and the other for engineers. These will shortly contain both active and reserve recruits who are arriving from basic training centres. No distinction is being made between them.
Present hutted accommodation is insufficient to take care of larger establishments. I might say that establishments of advanced centres have recently been increased. To avoid expense of constructing additional hutments, it has been decided for the summer to use canvas camps. These camps will be used by units whose present hutments are close to training centres, and hutments so released will be used for expansion of training centres. The reasons are, first, that training centres must be concentrated for administrative and training reasons, and, second, that units going into canvas camps may be moved in due course to other training areas or overseas.
I may say the hon. member mentioned that the camps were twelve miles from the present training camp. He is incorrectly informed with regard to that. I understand the camps are all within the camp area, and within a radius of about one mile from the centre of the hutted training camps.



COMMITTEES OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. JOSEPH HARRIS (Danforth):: Mr. Speaker, on a matter which might be considered a question of privilege I should like to bring to the attention of the chairmen of the different committees of the house the position in which they find themselves as a result of the adoption to-day of motions for concurrence in the reports of several of those committees. Speaking for myself, I am asked to serve on the railway committee, the railways and shipping committee, and the war expenditures committee. These committees are asked to sit while the house is in session, which means that some members, if they are to attend the meetings of committees
on which they serve, will have to be in four different places at the same time. I ask the chairmen of these committees to give some consideration to the convenience of hon. members when calling the sittings of their committees.



LABOUR CONDITIONS


[Stage Direction]
On the orders of the day:
Mr. ANGUS MacINNIS (Vancouver East):: I should like to ask the Minister of Labour (Mr. McLarty) if his attention has been called to information which I have received that the S. and G. Clothing company of Montreal has violated its contract with the government by paying a wage to its employees less than that provided for in the contract. If the minister has been so informed, has any disciplinary action been taken and will this company be eligible for further orders or contracts?


Hon. N. A. McLARTY (Minister of Labour):: The hon. member for Vancouver East (Mr. Maclnnis) was kind enough to give me notice of his intention to ask this question, and I think I can throw some light on the subject. The department was advised some little time ago that the condition which he has outlined to the house was a fact, that there was underpayment in connection with the minimum wage rates. The Department of Labour took up the matter at once and it has been adjusted. The company has paid the amount needed to bring up the rates to those required by the fair wages act. So far as disciplinary action to be taken is concerned, the company has rectified its mistake without delay, and the money will be paid to those who did not receive the minimum rate provided by schedule B of the fair wages act.



CORVETTE CONSTRUCTION


[Stage Direction]
On the orders of the day:
Mr. CLARENCE GILLIS (Cape Breton South):: About three weeks ago I inquired from the Minister of Labour (Mr. McLarty) whether he had been informed that essential war labour had been transferred to the repairing of ships for the Misiner company in the Port Arthur district. He replied at that time that he would have to ascertain the facts before he could make a reply. Is he now in a position to answer?


Norman Alexander McLarty: I cannot throw the same light upon the question asked by the hon. member for
Special War Revenue Act

Cape Breton South (Mr. Gillis) that I did upon the question asked by the hon. member for Vancouver East (Mr. Maclnnis). Unfortunately I did not catch the question which was originally directed to me, but it had to do with priorities in connection with shipping repairs at the head of the lakes. As I understand it, one company had had its ships repaired in priority to the construction of certain other vessels. That is not a question for the Department of Labour. The priorities given by ship repair companies to particular projects are not under the jurisdiction of the Department of Labour, nor can they be regulated by that department.



BUSINESS OF THE HOUSE

[Stage Direction]
SUSPENSION OF SITTING ON ACCOUNT OF FAILURE OF ELECTRIC LIGHT PLANT
Mr. SPEAKER:: I am instructed that the electric light plant has been struck by lightning, but the lights may be on at any moment.


Richard Burpee Hanson: I would suggest that we take an intermission of a few minutes and resume immediately the lights are turned on. We cannot intelligently carry on our work without light.


William Lyon Mackenzie King: I move that the house
suspend its sitting until the light returns.


[Stage Direction]
Motion agreed to.

[Stage Direction]
At 3.20 p.m. the sitting of the house was suspended during pleasure.

[Stage Direction]
The house resumed at 3.30 p.m.

[Stage Direction]
The house in committee of ways and means, Mr. Vien in the chair.

[Stage Direction]
6.	That there shall be imposed, levied and collected an excise tax of three cents per imperial gallon on gasoline imported, or produced or manufactured in Canada; and that where the gasoline is imported, such excise tax shall be paid by the importer or transferee who takes the gasoline out of bond for consumption at the time when the gasoline is imported or taken out of warehouse for consumption, and where the gasoline is manufactured or produced and sold in Canada, such excise tax shall be paid by the manufacturer or producer at the time of delivery of such gasoline to the purchaser thereof.
Richard Burpee Hanson: Before
we proceed with resolution 6 may I ask the minister if resolution 1 was held over?

Hon. J. L. ILSLEY (Minister of Finance); Yes, I asked that resolutions 1 and 2 stand. They are really connected.
Mr. HANSON (York-Sunbury); There was no discussion with respect to them?


James Lorimer Ilsley: No.


Richard Burpee Hanson: Then I
shall reserve what I have to say on them until they are called.


Clarence Gillis: There has been an extensive debate on this resolution providing for a tax of three cents a gallon on gasoline, and practically everything that could be said upon it has been said. I shall therefore be as brief as possible.
The farmers' side of the question has been very well presented, with perhaps one exception, and I should like to make this general observation with respect to the representatives in this house of the farmers of the west. I have heard several members ridicule members of this group who have made presentations on behalf of the farmer, the contention being that they had no right to speak for the farmer because they were not practical farmers themselves. I can see very little in that argument. The Minister of Fisheries (Mr. Michaud), for example, is not a fisherman; nevertheless he probably does a much better job of administering the Department of Fisheries than the average fisherman could do. The farmers of the west are to be congratulated upon the calibre of the men whom they have sent here to carry their message, and I am not confining that compliment to the members of any particular party but apply it to all those who have made representations on behalf of the farmers.
I view this proposal to tax the farmers in exactly the same light as I would view a similar situation affecting industrial workers. I view the present legislation and finding a solution for the problems of the farmers of western Canada in exactly the same light as I would view a situation where industrial workers were asked to reduce their time by fifty per cent, losing approximately fifty per cent of their earnings, and accepting a tax on their machinery of production. There is no difference between the two cases.
Some hon. members may wonder why no presentation is made on behalf of the farmers of Nova Scotia. It will help them to understand when I mention that a survey of farming conditions in Nova Scotia disclosed that in the period from 1901 to 1937, eighty per cent of the farms of Nova Scotia had become vacant, and this had been caused by people drifting away from the land and engaging in industry and other occupations because they were practically starving on the land. That

Special War Revenue Act
is not a good situation. One of the most essential steps for this government to take in any rehabilitation programme in the aftermath of this war would be to make a survey of the whole dominion with a view to laying down a well-planned agrarian programme. People in the last twenty years have pulled up their roots from the land and have become nomads wandering across the country searching for that elusive something which does not exist, namely, a job, and our job in the future ought to be to get the people back on the land where they really belong. The Minister of Finance and other ministers concerned could benefit by getting in touch with the extension department of Nova Scotia, which has inaugurated a programme with that end in view and has been studying it for the last few years as a partial solution of the problems of the people of that province, where, eighty per cent of the farms which were operating in 1901 are now vacant.


John Ritchie MacNicol: Where is it that eighty per cent of the farms are not now operating?


Clarence Gillis: In Nova Scotia. That was shown by a survey of the period from 1901 to 1937.
I am, however, particularly interested in the fisherman and how this tax will affect him. The fisherman can very well be classed as the forgotten man. Our fishermen have really no one in this parliament to speak for them who understands their problem. I have interested myself in their problems to the extent of meeting with the fishermen in my constituency, and with all due respect to the Minister of Fisheries, who is doing his best to administer his department in the interests of the fishermen, no one can know the practical problem as it actually exists among the fishermen without being among them.
Unfortunately the Department of Fisheries has been crippled by a cutting-down of its estimates. Its estimates for 1940-41 were cut $150,000, which meant a considerable curtailment in the services rendered by the department in caring for the needs of the fishermen. Grants used to be made by the government to assist in the establishment of cold storage plants, and it was of great assistance to the fishermen to have proper storage facilities. That grant had to be eliminated because the appropriation for the Department of Fisheries was reduced. In addition, a twenty-three per cent cut was made in the inspection services. These inspectors moving round among the fishermen served a very good purpose in instructing them. The vote for fish culture was also reduced. The proper preparation of fish and the establishment of fish processing
plants was another service that had to be discontinued because the estimates of the department were reduced. The reduction may have been necessary on account of the war, but the curtailment of these services was a direct blow to the fishermen.
An examination of the earnings of the fishermen in the maritime provinces for 1940 shows-and this is set out in government statistics-that there were 40,000 fishermen and their gross earnings amounted to $879,000. Dividing that amount among 40,000 fishermen gives an income of about $220 a year to the fisherman.
Unemployment relief has also been discontinued. That is another blow to the fisherman. I think I am safe in saying that during the winter seventy-five per cent of the fishermen had to seek unemployment relief. That means of sustenance has gone from them. Indeed, the fishermen, of all classes of people in this dominion, have, I believe, suffered the most severe blows since the outbreak of the war. Everything that has happened has had a direct effect on their livelihood. They are not vocal. They have no one to speak for them, and as a result their story is not told. I hope the Minister of National Defence (Mr. Ralston), in his recruiting campaign, will take as many fishermen as possible from the maritime provinces, because I know it will be a welcome vocation to many of them to get into the army and have their needs taken care of for a short time.
This gasoline tax is an added burden on the fisherman. Since the outbreak of war they have experienced an increase in the cost of twine, rope, gear and everything else that they require to get out upon the water in the spring of the year. The cost of living has also risen to some extent. The fishermen are really in the pauper class; they have no income. This three per cent tax is now imposed on gasoline, which is the fuel they use in their fishing operations. Personally I am not particular how far the Minister of Finance goes in taxing gasoline that is used for pleasure purposes, but I wish to add my voice to those we have already heard on behalf of that forgotten class of people, the fishermen. The Minister of Finance would be well advised if he considered some alternative tax. I do not see any revenue in this tax for him anyway so far as the fishermen are concerned, because it will be an added burden on that class of people and will mean that they will not be able to go out and pursue their calling. As I said, government statistics show that the average income of the fisherman is $220 a year. In addition, the cost of living
Special War Revenue Act

and the cost of gear have increased, and there is always the hazard of losing that gear in storms. Conditions generally are such that the fisherman will not be able much longer to continue in his calling. Many of the reductions in the votes of the Department of Fisheries, while it may have been necessary to reduce expenditure on account of the war, might very well be reexamined, and some of the votes certainly should be restored.
In addition to that, I do not think any other group of people in Canada have made greater efforts to do something for themselves. For the past two or three years the fishermen have tried to organize, form cooperative groups, educate one another, and promote markets; and they have gone a long way in that direction. Instead of the grants for the cold storage plant, the fish processing plant and the educational activities which they are carrying on, being discontinued, they should be continued. I suggest that the Minister of Finance make a reexamination of this matter.


James Lorimer Ilsley: Mr. Chairman, on a point of order I suggest that the hon. gentleman is going considerably beyond the discussion of the item. His argument on the point of order would, I suppose, be that he contends that the fishermen need as much assistance as they can get, and one way to assist them would be not to put this tax upon them, but that does not justify a long examination, in committee of the whole, of the economic conditions prevailing in the fishing industry. If that is permitted, my colleague the Minister of Fisheries, who has been referred to, should certainly be permitted to reply, and I think his speech itself would be out of order. I suggest that hon. members should not make speeches of this general nature in discussing a specific item, but that their remarks should be directed specifically to the item before the committee.


The CHAIRMAN:: Does any hon. gentleman desire to speak to the point of order?


Mr. COLDWELL:: The hon. member was outlining the economic conditions of the fishermen of the maritime provinces and-inferen-tially-of British Columbia in order to suggest to the minister that the additional burden of this tax would further increase their difficulties; and under that contention, I submit, the hon. gentleman was in order.


Thomas Vien: Is any other hon. member desirous of speaking?


Mr. QUELCH:: I should like to stress this fact, that the minister has laid down in the past the policy that taxation would be imposed on the basis of equality of sacrifice, having regard to ability to pay. I believe the hon.
[Mr. GiZIis. 3
member is showing that the fishermen have not had the resources to pay this tax; I think it is within his rights to point out that they are not financially in a position to pay, and the only way he can do so is to stress their economic position.


Thomas Vien: Does any other hon. gentleman desire to speak to the point of order?
It is the undoubted duty of the Chairman or of Mr. Speaker to maintain the rules of the house in debate. The rules of the house have been adopted as a result of the experience and wisdom of parliament. Many of our rules have come down to us as a result of the experience of the mother of parliaments, the British parliament, to carry on in an orderly and practical way the proceedings of parliament; and without these rules there is no doubt that our proceedings would fall into contempt, not only as regards hon. members, but in the minds of the public as well.
Standing order 58 is well known. I have had occasion several times to draw the attention of hon. members to it. It reads, in part:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.
In the debates on the address and on the budget great latitude has always been allowed to hon. members to discuss the principles involved in the speech from the throne or in the budget speech. When, however, that stage has been passed, when we have reached the committee stage, we are governed by standing order 58, and particularly by subsection 2, and I draw the attention of hon. members to the word "strictly" which is therein used. That means that there is very little latitude. The rule must be interpreted in a restrictive way, and a discussion in committee should be strictly relevant to the item under discussion.
It is at present proposed to impose a tax of three cents a gallon on gasoline. General discussion of principle as to the effect of this legislation on this, that or the other class of Canadian citizens is not, in my opinion, strictly relevant to the item now before the committee.


Major James William Coldwell: What would be relevant?


Thomas Vien: It is too wide. I must maintain that the point of order is well taken. Hon. members should discuss this item; their remarks should be strictly relevant.


Clarence Gillis: I had just about finished, anyway. I realize that the Minister of Finance is probably right.


An hon. MEMBER:: You got on Hansard what you wanted to say, though, did you not?

Special War Revenue Act


Clarence Gillis: Certainly. Last night I listened to a fellow roaming round here with a horse and buggy, back a hundred years ago, and no objection was taken to that.


Some hon. MEMBERS:: Oh, oh.


Thomas Vien: Order.


Clarence Gillis: I am merely trying to point out that a particular group that will be affected by this tax are not in a position to pay it, and that if the trend in the direction of curtailment of moneys necessary to keep these people in employment is continued much longer, there will be no revenue from this particular group and they will be unemployed one hundred per cent. That was what I tried to make clear, and in order to do that, I must of necessity talk about the economic conditions of these people as related to legislation which has recently gone through the house. I trust that someone else will take up the case of the fishermen, make an examination of it, and see if we cannot give them a little more attention in this parliament.


Mr. PERLEY:: Last evening, when this item was first called, I at once lodged a protest. My remarks were brief because I was trying to' facilitate these proceedings, but I pointed out as concisely as I could that this tax would impose a hardship on producers, particularly in western Canada. I could have gone, as many did, into great detail. During the discussion I listened to a good many arguments, which seemed to me sound, in opposition to this tax on the producer, and I also heard a suggestion that producers should be granted an exemption or a rebate of some kind. In the minister's many replies I was unable to find any really sound objections to the suggestions which were made; indeed, I thought he admitted that a certain amount of hardship would be enacted if this tax goes through. He pointed out that this tax is first of all on the refinery. In that respect it seems to me that an injustice is being done. In western Canada some cooperative refineries have started up. One I have in mind, the Consumers' Refinery, in Regina, began operations in the last year or two under great difficulties. They are doing an important work in distributing gasoline direct to producers within a radius of many miles of Regina.
The minister also suggested that there were certain difficulties of administration in connection with either a rebate or an exemption, and I must say that I was not impressed with his arguments in that regard. As to the system in Saskatchewan and Alberta, I do not think that if it were employed, and if coloured
gas were used as indicated, there would be any great difficulty. The minister spoke about certain prosecutions-over 201. I suggest that if a severe penalty were imposed, such as there is in Saskatchewan, it would meet the difficulty. Where it was found that coloured gas was illegally used, they could suspend the use of the offender's car for a month, and no man would take the chance, for the sake of three cents a gallon on eight or ten gallons of gasoline, of having his car impounded. I do not see why the difficulties could not be overcome.
I think the great majority of hon. members last night were opposed to this tax being imposed at the present time, and if a vote had been taken I believe that the opposition would have carried. In order to be brief and to bring the matter to a point, I move the following amendment:
That resolution 6 of the Special War Revenue Act be amended by adding thereto the following words:
Provided, however, that a rebate of the full amount of the tax paid by any farmer or fisherman shall be made upon satisfactory proof that the gasoline upon which the tax was paid was utilized by such farmer or fisherman exclusively for power purposes upon his farm or in his fishing boat.
That amendment is seconded by the hon. member for Souris (Mr. Ross). I have no doubt that the minister's staff could carry it out so as to exempt from the tax the producers indicated in the amendment. I do not think there would be any difficulty. I could mention many directions in which the staffs of different departments are employed, and money is spent, to do work and to get information in connection with matters of little or no consequence. There is no reason, therefore, why the staff of the department could not cany out this amendment.
Reference has been made to the nationalization of the whole industry. In this connection, I would point out that in western Canada, in Saskatchewan and Alberta, there is a great deposit of tar sands which, if properly developed, would pay the whole cost of the war. There we have a natural resource, and a formula for extracting or refining gas from tar sands has been discovered which would make the project quite feasible. Gas could be produced cheaply and could be delivered in the city of Regina at nine cents a gallon. Towards Hudson bay there is a natural supply which could be reached by pipeline, and it would provide gas at a considerably reduced rate.
Special War Revenue Act


Mr. CHURCH:: I have no objection to
giving rebates to farmers and fishermen; far from it. In fact, I have supported that kind of legislation for bonuses, subventions, subsidies, rebates and so forth. Surely, however, in the name of all fairness, some consideration should be given to the industrial workers in our cities, who constitute nearly forty-two per cent of our population and live eight, ten or fifteen miles from the city and the munitions plants. They are obliged to walk considerable distances when the street cars are not running. If the principle of this amendment is to apply at all, it should be made to apply to the industrial workers who are engaged in the manufacture of munitions, working on three shifts. I repeat, many of them have to walk miles in the middle of the night. Why should they not be considered?
We have dealt generously in this parliament with farmers and fishermen. Take, for example, the Farmers' Creditors Arrangement Act. In 1935 I urged that the principle of that act should be extended to take in the industrial workers. Soldiers should not pay this three-cent tax on gasoline, I do not know where this process is going to stop. If this rebate is made we might as well abolish the whole revenue bill. I understand that no amendment to a revenue bill can be moved involving discrimination between one class of taxpayers and another, unless the minister consents. How does the minister expect the munition workers in Mimico, Brampton, Richmond Hill, Newmarket, Scarboro and other centres, who are engaged in the manufacture of all kinds of munitions, to carry on and discharge their duties effectively if they are discriminated against? Many of them are farmers who do not wish to work any longer on farms, when they can get forty-five or fifty cents an hour making munitions. I appeal for common justice for our industrial workers, urban and suburban, in connection with this tax. I think the amendment is out of order, and in any event, unless the principle is extended as I suggest, I will oppose it. We have had enough of bonuses, exemptions and subsidies, discriminating between different classes of taxpayers and against soldiers and industrial workers.


Mr. ROSS (Souris):: As seconder of the
amendment I wish to add a word to what the hon. member for Qu'Appelle (Mr. Perley) has said. In the first place, with reference to the hon. member for Brant and the hon. member for Fort William, who advocate the horse-and-buggy system-


Mr. McIVOR:: No; it is a team in a
horse-buggy.


James Arthur Ross: Sometimes they use
the team and the buggy too. A few years ago, officials of the federal department made a survey of the prairie provinces iff order to find out the cost of producing a bushel of wheat. The survey was carried out on a yield considerably higher than the average for the past twelve years, and the finding was that it cost, to produce one bushel on a quarter-section, with a man and four horses, $1.02, whereas with a tractor and power equipment on a two-section farm the cost was fifty-four cents. Even that does not reimburse the producer for the cost of production as intimated by the Minister of Agriculture during the past few months.
In the last few years the number of tenant farmers has increased not only in the prairie provinces but throughout the country. As was pointed out last night, many of those whose parents had owned their farms have lost ownership in recent years, and that condition is on the increase. The disparity has been greatly enhanced by the present government, in some instances by order in council. I am referring to the disparity that exists to-day between industry and organized labour on the one hand and the agricultural population on the other, even without this added tax on gas. Like many others, I am heartily in accord with the suggestion that gas for pleasure purposes should be taxed. I advocated this myself when the budget was under discussion a year ago; and I cannot see why, under a system of proper cooperation with the provincial government, the collection of the gasoline tax could not be handled for the federal government and the necessary rebates for agricultural producers put into force.
The previous speaker made some reference to the Farmers' Creditors Arrangement Act, but the people of Manitoba do not enjoy the benefits of that act at the present time, and with the present prospects for agriculture they are going to be in a veiy serious position this year. I implore the minister to do something about refunding this tax. I am satisfied that a majority of the members of this house, not only .those of the opposition but those on the government side as well, are opposed to this tax on gasoline used for agricultural purposes, and I trust that they will do their duty as private members in voting on this amendment.


Mr. SENN:: I cannot allow this opportunity to pass without adding my voice to those who have already expressed themselves as being in favour of a refund of the tax paid on gasoline used by farmers and fishermen in the conduct of their business. One of the main

Special War Revenue Act
reasons mentioned by the minister for not making this refund was the difficulty that might be experienced in connection with administration. Well, already the provinces are administering similar legislation, and while there might be some difficulties I believe many of them could be ironed out by cooperation with the provinces and by accepting their methods of granting refunds.
The minister says that refunds in such cases would make the whole scheme very difficult to administer. That may be so, but already the minister has imposed taxes that are equally difficult to administer. I have particular reference to the national defence tax as it relates to farm labour. All farm labour is subject to the national defence tax if the rate of pay is equivalent to a certain sum per year. I should think that would be far more difficult to administer fairly than these refunds possibly could be, because the majority of the farmers of this country are not making returns in connection with their periodical or day labour. If in one case the minister does not hesitate to impose a tax that may be hard to administer, he should not fear the difficulties that may be experienced in connection with refunds on gasoline used by farmers and fishermen.
I am sorry that the amendment moved by the hon. member for Qu'Appelle did not go a little further. In this province, and I think in other parts of the country, we have what is known as custom threshing, carried on by men who own and operate threshing machines using gasoline or crude oil. The man operating a machine that uses crude oil will pay no tax whatever, while the man operating a machine using gasoline will have to pay this tax. Thus one man will be placed in a very unfair position in relation to the other, and a matter of that kind is very difficult to adjust because it is almost impossible to change most tractors from one fuel to the other. A tractor built and . equipped for the use of gasoline can hardly be changed over to use crude oil, certainly not without considerable expense. Therefore the thresher who is using gasoline will find himself at a distinct disadvantage. The minister might consider this point also.
I rose merely for the purpose of expressing my full agreement with the amendment which has been moved by the hon. member for Qu'Appelle. I appeal to the minister once more to adjust this tax, because after all it will add considerably to the cost of production on the farm, and if there is one thing we need to watch to-day more than another it is the cost of production.


Mr. NICHOLSON:: In rising to support the amendment moved by the hon. member for Qu'Appelle I do not plan to review the present position of agriculture in Canada. When the minister delivered his budget address he announced that the provision exempting from income tax all interest payable in currency other than Canadian funds would be repealed. Before a single protest was made in this house, however, the minister announced a change which he said would cost the treasury between eight and ten million dollars in revenue. In explaining the reason for this change the minister said, as reported at page 2878 of Hansard:
After I heart! a number of these representations, many by gentlemen who were most considerate, most friendly, and who appeared to be as anxious as we are to advance the war effort of Canada, I was convinced that it would be injurious to the credit of Canada if we continued that provision.
I do not intend to review the discussion that has taken place in that regard, but I want to point out that the minister listened to people outside of this house, to the extent of relieving them of a burden of from eight to ten million dollars. Hon. members in all parts of this house have taken exception to this tax on gasoline as applied to farmers and fishermen, which will take money from the pockets of Canadians who cannot afford to pay it. I am sure hon. members have received a great many protests in this connection, of which perhaps this is typical:
Most farmers are obliged to use high test fuel in their tractors, and thus have to pay the tax, which greatly depreciates farm income. We even pay this tax in order to get the summer-fallow bonus. This seems a misplacement of burden to us in this locality, as we farmers feel we already are carrying the major part of this war burden.
This is a mild statement of the predicament in which Canadian farmers find themselves. I do not believe many people in the country will take seriously the remarks of the hon. member for Brant and the hon. member for Fort William, but I am very glad only two hon. members of this entire house are in favour of going back to the horse and buggy days. When our electric lights failed a short time ago and this chamber was lighted by the equivalent of about one candle power, it occurred to me that very few hon. members would seriously suggest that we should return to the days of candles and horses and oxen.


John Ritchie MacNicol: The hon. member for Brant talked a lot of good horse sense all the same.


Alexander Malcolm Nicholson: Perhaps, from the point of view of the hon. member who has just spoken; and perhaps that means that we have
Special War Revenue Act

three members of this house who hold the view expressed by the hon. member for Brant. This year we are being asked to appropriate over $13,000,000 for the ordinary activities of the Department of Agriculture, without taking into consideration the $35,000,000 bonus and other special grants. Surely in this day and age no one is going to suggest that we should ignore the findings of those who have carried on investigations into various aspects of agriculture during all these years. I hope the minister will extend to hon. members of this house the courtesy he has shown already to people outside the house, who have been able to relieve their friends of from eight to ten million dollars in taxation.


James Lorimer Ilsley: This discussion is proceeding as though the amendment were quite in order, and I think perhaps that matter had better be cleared up at the outset. If I remember correctly the hon. member for Qu'Appelle moved a similar amendment last year in regard to another tax, and at that time his amendment was ruled out of order on the grounds on which I suggest this amendment is not in order now. Beauchesne's Parliamentary Rules and Forms, second edition, paragraph 552, at page 164, reads:
Though it is the function of the committee of ways and means to impose rather than to repeal taxes, examples of the repeal of taxation effected in this committee are to be found upon the journals. Proposals for the variation or modification of taxation can therefore be made in the committee; but these proposals must be grafted upon the financial scheme submitted by the government, and must not affect the balance of ways and means voted for the service of the year. Amendments, therefore, can be proposed to substitute another tax, of equivalent amount, for that proposed by the government, as, for instance, a proposal to substitute probate and legacy duty on real property as an alternative for an inhabited house duty, the necessity of new taxation, to that extent, being already declared on behalf of the crown.
It is an essential part of the financial scheme submitted by the government that we impose taxes intended to yield $300,000,000, of which $25,000,000, it is estimated, will be derived from the gasoline tax. The proposal to pay refunds or to make rebates on this amount will substantially diminish the receipts; I do not know just to what extent. I believe the figures show that the provinces pay back about one-sixth of the amount collected on gasoline. That is, about five-sixths of gasoline sales are taxable. If that proportion held in this instance it would mean a diminution of our revenues, and a curtailment of the financial scheme submitted by the government, to the extent of between $4,000,000 and $5,000,000. Therefore I submit the amendment is out of order.


Thomas Vien: Does any other hon. member wish to speak to the point of order?


Thomas Langton Church: If anything is done, will the minister include returned soldiers?


Thomas Vien: The question now before the committee is a point of order, and that is the only matter which may now be debated. Does any other hon. member wish to speak? If not, I shall proceed to give my ruling.
The amendment is to the effect that there shall be. a rebate of the full amount of the tax paid by any farmer or fisherman, upon proof that the gasoline upon which the tax was paid was utilized by such farmer or fisherman exclusively for power purposes upon his farm or in his fishing boat.
There is not the slightest doubt that the effect of the amendment would be considerably to reduce the revenue to be derived from the scheme of legislation now submitted to the committee. Therefore such an amendment would detrimentally affect the balance of ways and means to be voted for the service for the present year. For these reasons I must declare the amendment out of order. My ruling is in keeping with rulings made in the past in respect of similar motions.


Victor Quelch: Apparently the minister has adopted a defeatist attitude on this question.


Mr. MARTIN:: Just the opposite.


Victor Quelch: He has said, and in the past the Prime Minister has emphasized, that during the war we should do everything possible to maintain the principle of equality of sacrifice. Apparently the minister has considered it desirable, if possible, to exempt farmers and fishermen from this tax, but he says he has not been able to devise any means by which this may be brought about.
The purpose of the tax is twofold: the conservation of foreign exchange by reducing gasoline sales, and the raising of revenue. I should like to deal with the first of those two purposes. To what extent will the application of this tax on gasoline used on the farm reduce consumption of gasoline by farmers? I am satisfied it will have little or no effect. Once a farm becomes mechanized and is being run efficiently, in order to reduce costs the farmer will use as little gasoline as possible. But even though the price of gasoline be increased, he will have to use it in order to operate his machinery. Therefore the placing of a tax on gasoline used by the farmer will not affect materially its consumption.
I always enjoy listening to the hon. member for Brant (Mr. Wood). I do not think his

Special War Revenue Act
arguments are sound when he is speaking about farming operations in western Canada, but as a rule they are amusing. He suggested that some hon. members on this side of the house should keep both feet on the ground. I suggest that his feet are below the ground, and he is completely bogged down. The hon. member may be competent to discuss questions of agriculture in eastern Canada, because I believe he has farmed in this part of the country, but his arguments prove conclusively that he understands very little about agriculture in western Canada. I have farmed in western Canada for over thirty years, and therefore I feel justified in making one or two comments in reply to the arguments raised yesterday by the hon. member.
He suggested that farmers should dispense with tractors, go back to the use of horses, and thereby eliminate consumption of gasoline and avoid any payment of gasoline tax. He has suggested that the financial plight of farmers in western Canada is due largely to the purchase of tractors. But if he will go into the wheat belt of western Canada he will invariably find that the best farmers are tractor farmers, while the poorest farmers, speaking financially, are horse farmers. This seems to prove conclusively that his argument does not hold water.
Why has western Canada become mechanized? The hon. member has tried to show that the mechanization of the west has brought about the financial difficulties of the farmers. Western Canada has become mechanized so as to make it possible for the farmers to produce wheat at the low prices they have had to accept. When the price of wheat is reduced, then the only way to produce wheat at the reduced figure is to increase the size of operations. To do that one must farm on a larger scale and spread the overhead over a larger number of acres. It has been the policy of this government from 1935 to 1939, that of allowing the price of wheat to fall below a proper level, which has brought about an extension of the large mechanized units. Whether or not the government intended that that should be the result, its policy has had the effect of driving the small farmer off his farm. The small farms are being taken over by mortgage companies and are being incorporated in large mechanized units. I do not say that that is the object that the government has had in view, but that has been the result of its policy. I do not think anyone would suggest for one moment that it is a desirable condition.
I wonder if the hon. member for Brant really thought out the facts when he said 14873-191
yesterday that the farmers of western Canada should go back to the use of horses. If his proposal were adopted, what would be the result in respect of the large mechanized units? Those large farms do not have horses at all, so that they would have to purchase horses. They have no bams, so that they would have to build barns. They have no harness, so that they would have to buy harness. They have no horse-drawn machinery, so that they would have to buy horse-drawn machinery. It is obvious that his suggestion would bring about a tremendous expenditure of capital. Would that be advantageous to Canada's war effort? If the farmers were to go back to farming with the use of horses, what would be the result in respect of the labour situation? A tremendous number of men would be needed to operate those farms. Would that help the war effort? Would it be advantageous to our war effort to take men away from industry and place them on farms, or to take men who might enlist and place them on farms? Yet that would undoubtedly be the result. The combine has displaced a tremendous amount of man-power. Take away the combines and go back to the old type of farming and threshing and you will again need your harvest trains to transport men to western Canada.


Mr. WOOD:: At present there is an overabundance of wheat and we are asking Canadian citizens to pay for something they do not want. There are 500,000,000 bushels stored in the elevators in the west. There is no sale for this wheat, and yet you are asking the taxpayers for more money with which to grow more of a commodity which they do not want.


Victor Quelch: But that condition has
been brought about by the government's policy. Had the government adopted the policy which we have advocated in this house year after year, 'that condition would not have arisen. We have advocated a guaranteed increased price for limited deliveries of wheat. Just as long as the farmer may sell all the wheat he produces even at a low price, he will have to increase his operations in order to reduce his overhead.


George Ernest Wood: And aggravate a situation
which is already bad.


Victor Quelch: As a result of the government's policy. If you have a guaranteed price on limited deliveries, that situation will not occur.


James Garfield Gardiner: We had more wheat in 1928 than we have had since.

Special War Revenue Act


Victor Quelch: Deliveries were not
restricted then to 1,500 bushels; the price was at a low figure and deliveries of 5,000 bushels could be made. Mr. Chairman, if I am out of order I have been drawn into that position by certain questions which have been asked.
The second reason for introducing this tax is the necessity for raising revenue. Will the minister dare say that this tax carries out the principle which he laid1 down on a former occasion when he stated that taxation should be imposed upon the basis of equality of sacrifice having regard to the ability to pay? The minister knows very well that this tax absolutely contravenes that principle. If he has any doubt, I suggest that he get in touch with the Minister of Agriculture (Mr. Gardiner) and have him repeat what he has said to the farmers of western Canada. The Minister of Agriculture said this:
They know that this policy is taking money out of their pockets and making it possible for this dominion to finance the war to the extent of at least $100,000,000 more than would be the case if the government did for the wheat growers of the west what they are doing for most of the other people of Canada.
I wonder if the Minister of Finance (Mr. Ilsley) will agree with that statement. If he does, then he must admit that this tax does not carry out the principle which he has laid down on eveiy occasion on which he has discussed the financial policy of this dominion. Speaking throughout .the country the Minister of Agriculture has stated that he realized that the farmers of the west were not getting a square deal. He criticized the high prices of farm machinery.


James Garfield Gardiner: Any time I have referred to farmers, it has been .the farmers of Canada.


Victor Quelch: This tax means more to western Canada because it is there that you have the large mechanized units. I was referring to the prices of farm machinery. The Minister of Agriculture objected to these high prices, but the only excuse that he could present .to the farmers was that he was simply one of a cabinet of sixteen and therefore was not able to do anything about it. Instead of saying that, I suggest to the Minister of Agriculture that now is the time to protest in this house while these matters are being discussed, If the Minister of Agriculture were to rise in his place and criticize this tax it might have a beneficial effect upon some of the other Liberal members from western Canada. I have not heard one Liberal member from Alberta rise in his place and protest against this tax. If the Minister of Agriculture would lead the way I am satisfied that other members would have the courage to criticize this measure.


James Garfield Gardiner: I am leaving the discussion of that question until I am on my estimates, when I think I would be more in order. A number of hon. members from that corner have referred to my opinion as to the use of horses or gasoline in farming. I should like to say that I have a farm in western Canada and I have never had a tractor.


Victor Quelch: The Minister of Agriculture is not dependent upon his farm for a living; he has quite a substantial income as a minister and a member of parliament. If he were dependent upon his farm for a living he would be broke by now.


James Garfield Gardiner: If I were dependent upon my farm for a living, as I have been at times, I certainly would not use a tractor.


Victor Quelch: The minister is apparently admitting that his farm is not suitable for a tractor; therefore his argument is not relevant.


James Garfield Gardiner: It is a pretty good farm, just about the average for western Canada.


Victor Quelch: That might be a matter of opinion.


Mr. JOHNSTON (Bow River):: Can the minister raise wheat for 38 cents a bushel with horses?


Thomas Vien: Let us come back to the gasoline tax.


Victor Quelch: Practically every member who has spoken has been opposed to this tax. I believe that every hon. member who truly represented the feelings of his constituency would be opposed to it.


Paul Joseph James Martin: What is the provincial tax in Alberta?


Victor Quelch: Seven cents per gallon.


Paul Joseph James Martin: In the light of the fact that we are at war, could not the hon. member, as a citizen of Alberta, persuade the government of that province to reduce the provincial tax on gasoline?


Victor Quelch: The provincial government recognizes the fact that the farmers are not in position to pay that tax, and they are exempt. We use a coloured gasoline to carry out that exemption. I suggest to the Minister of Finance that if the provinces can find ways and means of exempting the farmers from the gasoline tax, the dominion government should be just as competent to deal with the matter.
I was pointing out that I believe that the majority of hon. members, if they truly represented the will of their electors, would oppose this tax. But we all know that the tax will

Special War Revenue Act
go through in its present form. It is not a pleasant reflection upon what we call democracy when we realize that that will happen. We hear a great deal about democracy and how we are fighting dictatorships, yet in this country we have nothing more or less than a financial dictatorship. This is the dictatorship which sabotaged the industry of this country before the war. As the hon. member for Battle River (Mr. Fair) suggested the other day, this is the dictatorship which has the brake firmly clamped down upon our war effort to-day. This is the dictatorship which has sabotaged agriculture to a point where the small farmer will be driven off his farm and absorbed by the mortgage companies. We all know that the plight of agriculture is tragic. Debts are being built up which will never be paid. I say in all seriousness that the work being done now through the Farmers' Creditors Arrangement Act and the other boards will have to be done all over again. There is a very serious problem which will have to be faced in the future. This is not a problem which can be solved by a large colonization scheme after the war, under which the mortgage companies which have taken over these farms will sell them to immigrants and turn our farmers off the land. We must still face the problem of what to do with the men who still have farms but who have gone broke.
The minister has suggested that this revenue must be raised and that we have offered no alternatives. When I spoke on the resolution having to do with the ten per cent tax on railway fares I pointed out that the minister was missing one very good source of taxation by not taxing advertising in the press and various periodicals as well as over the radio. For instance, a tax could be imposed on the soap programmes, the quiz programmes, and many others. There is a source of revenue which might very well be tapped by the minister and which would make it unnecessary to impose this particular tax.
I have on several occasions pointed out that we do not object to reasonable taxation so long as it is imposed upon the people in the most equitable way, but we feel that once we have placed upon the people as great an amount of taxation as we think they can bear, the logical thing from that point on is to utilize the services of the Bank of Canada. I have not yet heard from the minister one sound argument why that should not be done. He did make the excuse that as the result of such an operation there would be inflation on the part of the chartered banks. But that could be overcome by compelling the chartered banks to increase their cash 14873-1914
reserves. I have never yet heard the minister answer why that could not be done. In this way we could impose reasonable taxation without going down into places where great hardship and injustice will be done, as will be the case with regard to this particular tax.


Mr. TUCKER:: I listened to what the
Minister of Finance said yesterday with reference to the gasoline tax. He impressed me definitely with the idea that he felt this tax should not be imposed on agriculture and fishing and that the only reason why he was not in favour of a rebate of the tax for agriculture and fishing was the difficulty of administration. This bears out what I said in my last speech in this house. I stated that the minister got from administrative officials only his information about the difficulties of administration and abuses where different systems of rebate are in operation. But from my knowledge of how the purple gas system works in Saskatchewan, and having spoken to the people administering the system in the province, knowing also how successful it is, I say, and I think every member from Saskatchewan who says exactly what he thinks will say the same, that there are no wholesale evasions of the tax in Saskatchewan such as the minister mentioned and such as his administrative officials suggested. Actually the act which provides for the sale of purple gas to farmers for agricultural purposes only is working extremely well. Saskatchewan did have a system providing for the sale of gasoline to farmers and providing for application for rebates in connection therewith. It was suggested, however, that if a specially treated gas were sold to farmers for agricultural purposes it would save the long delay in the farmers getting the rebate and might lead to fewer evasions of the act by making claims where gas is not used for agricultural purposes. There were many who doubted the wisdom of introducing this system of purple gas, but what has happened, to the knowledge of almost every member from Saskatchewan, is that the purple gas system has worked better than the system of rebates, and more money is realized than when the system of rebates was in force. Without any increase in the number of inspectors the act is being successfully enforced. It is true that since the act came into operation over two years ago there has been an average of thirty prosecutions a month, but I understand that these prosecutions are getting fewer because it is being brought home to everyone that the tax cannot be successfully evaded. There is no question about that; all you have to do is ask any person from Saskatchewan who knows anything about it.
Special War Revenue Act

What does happen is this. If a very little bit of that purple gas is left in the tank and the tank is then filled up with regular gas, an inspector can tell right away that at one time there was purple gas in the tank. Some persons have found this out to their cost, and when a few of them are caught, it soon becomes known that you cannot get away with any attempt at evasion of the tax. The purple gas system is pretty well accepted now in Saskatchewan as being better than the refund system, and the provincial government is maintaining it because it finds that it works. It certainly would not maintain it, not for one minute, if there were wholesale evasions. Actually in this regard the situation is improving day by day.
That being so, Mr. Chairman, I come to the point I raised in my last speech in this house, that if hon. members were consulted instead of departmental officials, who I am afraid in some cases are more concerned about getting a tax that is easy to administer than one that is fair to the people as a whole, a different attitude might be taken. I have been very much perturbed over this situation. Coming as I do from Saskatchewan, where, to the knowledge of every member from Saskatchewan, the system of the sale of purple gas to farmers works excellently, I am told on the floor of this house by the Minister of Finance that while he realizes that his proposed gasoline tax should not be imposed on the agricultural industry, it is being adhered to because of the difficulties of administration in an alternative system, that his administrative officials tell him something which I myself, so far as any one can know anything, know to be not so. If then I do not stand up in this house and tell hon. members exactly what I know to be the facts I am abdicating my position, Mr. Chairman, in favour of these departmental officials. I cannot see it in any other way. Finding myself in this position, and knowing how necessary it is for the government to raise money-I do not for a moment wish to embarrass the government- I then have to ask myself what I should do. The hon. member for Comox-Albemi (Mr. Neill) said last night, and he was not contradicted by the government, that a motion in respect to this matter would not be a motion of want of confidence in the government, that it would be merely giving expression to what we think about the tax. After very anxious consideration, therefore, I have decided to move an amendment. It is the first time I have done this as a member of the house, and I shall tell the house, after moving the amendment, why I felt I could not do otherwise.

I propose, seconded by the hon. member for Springfield (Mr. Turner), to move the following amendment:
That resolution 6 of the Special War Revenue Act be amended by striking out the word "three" wherever it occurs therein and replacing it by the word "four" and by adding thereto the following words:
"Provided that gasoline referred to herein shall not be presumed to include power fuel sold in any province solely for and limited by the law of such province to agricultural or fishing purposes."
In the first place I do not think anyone will deny that the people who use gasoline for pleasure purposes can much more easily afford to pay four cents than agriculturists and fishermen can afford to pay three. Therefore I do not think anyone will argue as to the equity of my proposal. In fact the Minister of Finance himself said that he had thought of imposing a tax of five cents. I have suggested that the tax be increased only by sufficient to make up for the diminution in revenue by exempting gasoline used for agricultural and fishing purposes.
It may be said that we have not that system in every province. My answer to that is this: you are not imposing a tax on diesel fuel or on distillates. You could very well, then, exempt fuel which is used solely for power purposes in connection with agriculture and fisheries. There is no change in the principle.
In regard to the question of administration, I grant that there should be uniformity throughout the country, but I am satisfied that if the law in the form proposed passed this parliament, the coming into force of the provision could be suspended until a conference was held between all the provinces, as a result of which they would probably agree to impose this system of putting out, under the law of the province, a special coloured fuel for agricultural purposes; and when that was done, this provision could be brought into effect. All the provinces are interested in seeing to it that no gasoline shall be used without a tax for purposes other than agriculture and fisheries because otherwise they lose revenue. In other words there is, as far as this government is concerned, no problem of administration. All it has to do is simply to say, we do not tax diesel fuel, distillates, and power fuel which by the law of the province can be used only for power purposes; and as every province of Canada, I believe, exempts this class of fuel, every province will see to it that the law is enforced.


An hon. MEMBER:: Diesel fuel is not mentioned in this resolution.

Special War Revenue Act


Walter Adam Tucker: I know; there is no tax on it, and there is no tax on distillate, but I am just saying that the tax should not apply to power fuel.
I was born in western Canada; I was brought up there and have spent my whole life there. I have seen what has been happening to agriculture in the west, particularly in Saskatchewan. I am not going to discuss what I have seen, but it makes me feel that a further tax upon the farming industry in western Canada, and particularly in my own province, will not be a good thing for Canada.
I say advisedly that in the long run it will have as grave an effect upon the unity of the country as anything else which has happened in the last ten years. The feeling out there is that they have been driven to the limit of their endurance, and if a further tax such as the one proposed is put upon them, the results will not be pleasant to contemplate. If that is only my opinion, at all events it is the opinion of one whose father was born in Canada, who himself was born in the west, and who feels it his duty to his conscience and to his country to warn the minister not to insist upon putting this impost on an industry which has been driven almost beyond the limits of endurance.
I do not need to go into the present position of the farmers, especially in Saskatchewan. I do not need to point out the effect which an additional tax will have upon the ability of our farmers to provide their children with educational facilities. I do not need to emphasize the consequences in the matter of their getting hospital and medical facilities for their children. Certainly it is not necessary to point out any of these things to this committee, because they are familiar with the report of the Sirois commission, which states that unless something is done we shall have in this country "second-class" citizens who cannot afford for their children things which are available to people in other parts of the dominion; and that condition is not being remedied through this war, although an impartial commission, upon which not a single Saskatchewan representative sat, made this solemn finding. In other words, you are condemning some of our people to be second-class citizens, and if there is anything we condemn overseas, it is that hellish doctrine of Hitler's that there shall be a master people and a second-class or servile people. We cannot rationally condemn-I say this with all earnestness-the practices against which we are going to fight to our last drop of blood, and condone anything approaching these practices at home. We ourselves may
not say anything along this line, but people will be found to go out and tell the farmers what is happening to them and what is being done by the government of this country.
This tax cannot be passed on by the agriculturists. The prices of everything they have to sell are fixed by government boards or by agreements, and in the case of practically our only purchaser, Great Britain, they are fixed fairly rigidly, excepting possibly as regards bacon. Now, when we place a tax upon a labouring man, for example, a railway man, and so increase his cost of living, we immediately give him the right to apply to have his wages raised in order to take care of that increased cost of living. In all earnestness I ask every hon. member, and I ask the labour representatives particularly-
Mr. MacNIC'OL: There aren't any.


Walter Adam Tucker: -I ask every hon. member: can you condone a system which protects labour from increases in the cost of living due to the rise in taxes, and put further taxes upon the agricultural industry, which cannot pass on its costs and which to-day is down to the minimum standard of living?
I assure my colleagues of the party to which I belong that I take this position with some regret, but I do it, Mr. Chairman, because I feel that the people who trust me to come here and speak for them would not have me do other than I have done. When some hon. members say they have received no protests against this tax from their constituencies, may I observe that, for my own part, I like to think that my constituents have enough confidence in my devotion to their interests not to think it necessary continually to write and advise me as to what I should do, or to remind me of my bounden duty. They are, perhaps, sitting at home, feeling and knowing that this government will do what it feels to be the very best it can under the circumstances-I am sure that is what the government is doing-and convinced that the government will not impose any tax beyond what it is impossible to avoid, because, they will say, "The government must know we cannot afford to bear it". Therefore they rely upon us to see to it that a tax of this kind shall not be laid upon our farmers and fishermen if it can possibly be avoided.
I believe I have shown a way by which this exemption can be granted without any diminution of the revenues required by this country to prosecute the war. I believe I have shown the Minister of Finance-and by the look of him I fear I have not convinced him-one way of avoiding this tax. I believe he will admit that he does not desire to put any further burdens upon the classes of citizen of
Special War Revenue Act

whom I have spoken. If there is any possibility of making this scheme work which I have proposed, it is worthy of further consideration; above all, it is worthy of a hurried consultation with, at least, some of the members of the provincial governments, to find out whether the wholesale evasions which the minister fears would in fact take place.


James Lorimer Ilsley: I am certainly not prepared to answer such an impassioned and also reasoned speech as that which my hon. friend the member for Rosthern (Mr. Tucker) has just delivered. As I said last night, this matter was given serious consideration and two alternatives were discussed. One was that a considerably higher tax on gasoline should be imposed which would apply to the general public, with a system of refunds or rebates to farmers, fishermen and tourists. The plan we had in mind would have yielded a great deal more money than this plan, and, as I said last night, after considerable investigation and discussion of the matter, not only with officials of the Department of Finance and the Department of National Revenue but with members of governments-not of all governments- persons who had been members of governments, and others who are pretty well acquainted with the abuses and evasions in the provinces, which, as the hon. gentleman himself admits, have led to an average of thirty prosecutions a month in Saskatchewan in the last two years, it was decided that we could not afford to put the dominion government into this type of business. It has been said to me on more than one occasion-at least on one occasion-that if those engaged in provincial politics had the thing to do over again they would at all costs avoid refunds.
Apparently the members of the house who have spoken regard it as an unimportant consideration that the government of Canada should tax cleanly and effectively and that when it imposes taxes it should collect them. I cannot regard that as unimportant; I think it is one of the most important considerations. After full study, therefore, it was decided that we would modify the tax, that we would reduce it to three cents. While it will affect numbers of people in Canada who cannot very well afford to pay it, at the same time we are imposing a great many taxes on people who cannot afford to pay them, in the sense that they cannot afford to do so without sacrifice. We did think that the farming and fishing communities, under the very grave circumstances of the hour, would not protest, would not take violent exception to the tax. I am perhaps inclined to be led into the introduction of

considerations that are not strictly relevant, but hon. gentlemen must realize the tremendous gravity of this hour. They must realize that the government of Canada is doing things which it would not think of doing under normal conditions.
I thought that certain members, including the hon. member who has just spoken, would sooner or later make exactly the type of speech which he has made. It does not surprise me a bit, because he made just about the same type of speech last year in connection with the war exchange tax. I do not blame him altogether, but he places a loyalty to the financial dollar and cent interests of his constituents above practically every other earthly consideration.


Walter Adam Tucker: I rise to a point of order. That is absolutely uncalled for. I am suggesting that we raise the same amount of money or more by another means which will be fairer, and as a person who in the last war, as soon as he was eighteen, got into the army and went to France to serve his country even at the risk of his life, I resent most fiercely the suggestion that I put loyalty to my constituents' financial interests above loyalty to my country. I ask the minister to withdraw that suggestion.


James Lorimer Ilsley: If the hon. gentleman is asking me to withdraw the suggestion that he placed such a consideration above loyalty to his country, I withdraw it; and perhaps the words "earthly consideration" were a little too wide. There are, however, times and circumstances in which this violent plea not to touch people at all under conditions like these is a little bit out of place. As everyone knows, it is not an easy thing to finance this war. I had to sit through a debate here the other night, and I did not altogether blame members for making the speeches they did. We have placed a national defence tax on girls and boys, on men and women who are earning as little as $660 a year, which is only $55 a month. There was a considerable protest about that from all parts of the house. If, however, we are to be driven out of all taxes that cause sacrifice, we are not going to be able to finance the war except in the way suggested by the hon. member for Acadia (Mr. Quelch), who says we should do it by creating money, printing money. He says, "call in the services of the Bank of Canada," which means printing money.


Victor Quelch: Only to the extent that the government cannot raise the required revenue from reasonable taxation and sale of war savings certificates.

Special War Revenue Act


James Lorimer Ilsley: I do not know what the committee wants to do with this resolution. I did not correct an hon. gentleman last night when he said it would not be a vote of want, of confidence in the government, but I may tell the House of Commons that the government has seriously considered these various proposals and has come to the conclusion that, nevertheless, realizing what it is doing, it has to ask the Canadian people to assume this burden. As I have said before, the general public expected that we would increase the sales tax, but we have refrained from doing so. On every occasion, with the possible exception of the war exchange tax, when imposing taxes we have refrained from making levies which would affect the agricultural portion of the community; and no tax we have imposed has borne with particular weight upon that section of the population. It is simply that they pay what happens to light upon them as part of the general body politic. I cannot make my record one hundred per cent perfect of not imposing taxes that will to some degree be borne by farmers. I cannot do that and get ahead with the financial programme of the government.
I believe that this three-cent tax, which is very small in proportion to the tax that we originally intended to suggest to the House of Commons, the agricultural community of Canada generally will be prepared to assume. A great many farmers in the west will not be paying tax on power because they will be using in their tractors a type of fuel which is not taxable. Some of them will be paying this tax. I do not think, however, that at a time like this that fact justified the impassioned and violent type of speech which we have heard from the hon. member for Rosthern.


Major James William Coldwell: Is the minister aware that the majority of tractors used in western Canada are high-powered tractors which must use gasoline? The diesel form of tractor is very rare.


James Lorimer Ilsley: I have had conflicting reports and conflicting stories about the proportion that must use gasoline.


Thomas Vien: The amendment purports to raise from three cents to four cents the tax on gasoline used by all consumers other than farmers and fishermen, and further purports to exclude those farmers and fishermen from the application of the tax. It has been ruled time and again that no increase can be considered, either of an existing or of a new or temporary tax for the service of the year, except on the initiative of a minister acting on behalf of the crown. Further, it is not shown that the increase of one cent, to
four cents, on other classes of consumers would not affect the balance of ways and means voted for the service of the year. Therefore I must declare the amendment out of order.


James Arthur Ross: Mr. Chairman, I
resent some of the remarks made by the Minister of Finance, although perhaps they were not intended as I took them-


Walter Adam Tucker: In view of what the minister had to say, Mr. Chairman, I am not really surprised that you should rule this amendment out of order without calling upon me to make any remarks. In connection, however, with the amendment moved by an hon. member belonging to another party, the question was asked repeatedly whether anyone else wished to speak to the point of order. My amendment is treated very cavalierly indeed; no one is given a chance to speak to the point of order.


Thomas Vien: Order, please. The
point of order was raised from the Chair. When the other amendment was before the committee the point of order was raised by the Minister of Finance, and all 'hon. members had an opportunity to speak to it. When the Chair takes it upon itself to decide -that a resolution is out of order, there is no debate; it is a ruling from the Chair.


James Arthur Ross: I have a great deal of sympathy for the minister in the gigantic problem with which he is faced in connection with the budget. I come from a province which in the last war had the greatest per capita enlistment in Canada; I think the figure was 10-8 per cent, and I am sure that if the figures could be obtained by provinces to-day, Manitoba would head the list once more. It has been pointed out repeatedly in this house that a great disparity exists at present between industry and organized labour on the one hand and agriculture on the other. Much as I sympathize with the minister, I submit that there should be some equality of sacrifice at this time. There are no people in Canada more patriotic than those in Manitoba, not only in the matter of enlistments but in the matter of contributing financial assistance to the greatest extent humanly possible. There is, however, certainly nothing like equality of sacrifice at the present time, and hon. gentlemen sitting on the front benches opposite are, to a large extent, responsible for that situation. Even now, as was pointed out last night by many private members, many transportation companies throughout this country use diesel engines entirely. I am told on reliable authority that some gasoline companies in this part of the dominion transport their products in
Special War Revenue Act

vehicles propelled by diesel motors and using crude oil as fuel. These companies, therefore, will not be called upon to pay any tax under this measure. That is most unfair. I understand that fuel for diesel engines is taxed in Ontario. I do not see why these companies should be exempted from this tax, and therefore I should like to move, seconded by the hon. member for Vietoria-Carleton (Mr. Hatfield):
That resolution No. 6 of the Special War Revenue Act be amended by adding thereto the following words:
Provided, however, that a rebate of the full amount of the tax paid by any farmer or fisherman shall be made upon satisfactory proof that the gasoline upon which the tax was paid was utilized by such farmer or fisherman exclusively for power purposes upon his farm or in his fishing boat; that the difference of revenue be made up by a tax on diesel or fuel oil used for transportation purposes, of three cents per gallon.


Mr. KINLEY:: It seems to me that this
amendment would involve the question of administration to an even greater degree. Diesel oil is largely used by the fishermen of Nova Scotia and by the merchant marine; and when you interfere with the merchant marine you place it at a disadvantage because it has to meet the competition of the rest of the world. Vessels will not bunker in a country where diesel oil is more expensive than it is in a neighbouring country. For that reason I was very glad that the minister excluded diesel oil from payment of this tax. The deep-sea fishermen of Nova Scotia, especially in the riding which I represent, use boats powered with diesel engines. They work on a cooperative basis; the amount received by the men is determined by the size of the catch and the cost of operating the boat. Therefore I hope the minister will not alter his position in this connection.
We must realize that all exemptions bring about greater administrative costs and reduce the amount of money available for the public service. The amount of money we require is definitely known. These exemptions will not lower the amount required from the people of Canada. With lower overhead costs, however, the people will pay less. When we adjourned last night we were talking about exemptions to the provinces. For the last decade, provinces have been approaching the federal government with the complaint that under our economy they were not obtaining enough money to run their own affairs. There was considerable virtue in their claim, too, up to the time this war broke out. Now, however, the situation is completely changed. The federal government needs money now as it has never needed it before. On the other hand the provinces are reporting surpluses. On account of war-time activities

they have fewer obligations and demands on their treasury, and they have growing revenues, as a result of those war-time activities for which they are not at all responsible.
It occurs to me that we should give some thought to control of the price of gasoline in Canada. It may be that the price of gasoline is too high, and that there is monopoly control. I have some knowledge of gasoline transactions, and it is my belief that that commodity is closely controlled, so far as the eastern coast of Canada is concerned. While there is some indication of importations by certain companies, most of it is sold to them by the one big refining company. We refine crude oil in Nova Scotia, but for years we have been paying more for gasoline in Nova Scotia than is paid in many other parts of Canada. In these days of trial when we must do extreme things to keep the economy of our country on a level basis, it seems to me that we might give consideration to fixing the price of gasoline to be used by our people.
Our western friends seem to be solicitous about the fishermen. They were not so solicitous the other day when they wanted a fifty-cent processing tax on wheat, which would have raised by $1.25 a bag the price of flour used by every fisherman in Canada.


An hon. MEMBER:: Nonsense.


John James Kinley: But they come to us now
and say, "Oh, we put the fishermen in the same category as the farmers of western Canada."
I do think we should not exempt the provincial governments. I believe the federal authority should, especially at this time, reach conclusions on national grounds. This parliament represents every citizen and every province. While the claims of provincial governments are important, they are not the first consideration, nor should they be unduly influential outside their own sphere of government.
If there is going to be any exemption at all, then I do think the farmers and fishermen deserve it, ahead1 of the provincial governments. The minister has shown that this is a national matter, and a critical moment. He has pointed out that, due to conditions, people must make sacrifices and be prepared to pay. Therefore I believe that if there are to be no exemptions at all, it will be better and cost everybody less.


Thomas Vien: I should like to advise the committee of my ruling in respect of the new amendment. The same ruling applies. In the first place the amendment proposes to impose a new tax of three cents a gallon on diesel or fuel oil used for transportation

Special War Revenue Act
purposes. According to May, page 511, this is an increase in an existing tax, or a new or temporary tax for the service of the year.
Moreover the amendment purports to exclude farmers and fishermen from the application of the tax, thereby depleting the receipts by so much. That gap, it is proposed, will be filled by the tax of three cents a gallon on diesel or fuel oil used for transportation purposes. There is, however, no evidence before the committee to show that this procedure would not affect the balance of ways and means voted for the service of the year. Therefore I must rule the amendment out of order.


Mr. ROWE:: It is quite evident that no amendment is going to shake this item.


Thomas Vien: I do not believe that is a proper deduction. There might be amendments which could disturb the resolution before the committee. The Chairman rules only when occasion arises. I do not believe it would be in order to say that nothing would shake the structure of the resolution.


William Earl Rowe: Mr. Chairman, I do not wish for one moment to reflect upon the dignity of the Chair.


Thomas Vien: I know.


William Earl Rowe: I realize, as the Chairman has stated, that it might be possible to find an amendment which, if it did not shake the provision, would at least disturb it.
I find myself, however, to some extent in agreement with the contention of the Minister of Finance. I believe on second thought-yes, on first thought-that every hon. member realizes the gravity of the situation. That is uppermost in our minds. The challenge with regard to taxation and in connection with war expenditures is to get on with the job, and to meet the whole war situation. No doubt with that in mind the minister has made all possible tests and has studied carefully ways and means by which he might raise this huge budget.
I believe the seriousness of the situation is much more important than some of the representations might indicate. In all fairness I must say I believe the hon. member for Rosthern has advanced splendid reasons why some further consideration might be given by the government. I do not think we are particularly concerned how heated the hon. member might have been, or in what eloquent terms he might have spoken. In my opinion, however, our whole war effort is in some degree affected by the type of taxation we impose. It has been said that equality of sacrifice means equal taxation right along the line, and no exemptions. That sounds very 14873-192
well. But as the hon. member for Rosthern has said-and I believe you will agree, Mr. Chairman-the tax which the farmer pays on gasoline used for power on the farm is about the only tax, in a long list, which cannot be passed on to somebody else. That point must be clear to all.
For instance, the man who drives a motor truck will no doubt feel this imposition very heavily. But if you hire that motor truck to carry the products of your farm or your factory, you will pay the driver an extra amount, and he will see that you do so. You, in turn, will consider the charge quite proper. Then, to some extent the man who drives his automobile from his suburban home to the factory is being cared for. Recent arrangements have been made for a cost-of-living bonus for labouring men. In many places, labour is receiving better wages, and better hourly rates of pay. Other charges against their earnings would soon be brought to the attention of employers by the well-organized unions. Employers, in turn, usually yield, rather than see any more hardship suffered by labour. I am quite in accord with the principle of giving labour a square deal in that regard.
The great mass of taxation raised by this three-cent imposition will be collected from the drivers of motor cars, from those who are driving for pleasure and from tourist traffic. It is true that this three-cent tax will be in some degree an imposition upon any hon. member who takes his family out for a drive, but he can afford to pay it. A man who is driving thirty or forty thousand miles a year can better afford to pay this tax than the man who uses his car to meet the bare necessities of his farm and often runs it only two or three thousand miles a year. I think the gasoline tax is a fair tax if it is not raised to an exorbitant figure. In many of the provinces the tax is quite high, but I still think it is a reasonable and fair tax. Many hon. members use their automobiles a great deal, especially in election years, and if we drive 25,000 or 30,000 miles a year, there is no better way in which we can pay our share of the cost of the roads.
I have no criticism to make of the government for imposing this tax at a time when they are in need of revenue. This tax works out to about fifteen per cent of the cost of the gasoline. The Minister of Agriculture (Mr. Gardiner) has stated that he uses horses on his farm and implies that horses are cheaper. As one who considers the production of horses a profitable proposition and realizing that this statement might help the horse-breeding indus-

Special War Revenue Act

try, I am glad to see someone advocating the use of horses. However, even though I am a horse man I still use a tractor, as do most modern farmers, in order not to impose too much work upon my horses. I think a tractor can be used economically on a reasonably sized farm.
This tax of approximately fifteen per cent upon a major item of the production cost of the farmer affects not only the individual farmer, it affects the cost of production of many primary products. I am not speaking particularly for those farmers who have sold their horses and have bought gasoline tractors and who may not be in a position this year to utilize horsepower; I am speaking with reference to the gravity of the whole situation. Our farmers are faced with greatly increased rates for labour. Help is difficult to get, and many farmers are letting their horses go and buying tractors because one man on a tractor can do as much work as three men with horses. The maintenance of production is, to my mind, relevant in assisting in connection with the gravity of the whole situation, and this should be considered on that basis if on no other. Not that the farmer has not been receiving enough for what he has been producing, but in order to maintain efficiency of production I suggest that the minister might give serious consideration to this matter. He might let this resolution stand and study some of the proposals that have been embodied in the amendments which have been ruled out of order this afternoon.
In many districts we find the farmers are discouraged, and the Minister of Finance knows this. I am concerned about that; we all are, but I am more concerned with its effect upon the bigger picture, in other words, the gravity of the larger situation. As I have mentioned before in this house, I have picked up some of these slips on the train which tell us not to consume any more butter than we can help. We have a price control board, and we seem to be bending every effort to see that the farmer does not get too much for his bacon or too much for his butter. We are trying to keep prices down in the belief that it offsets a tendency toward inflation. The farmer is the only one who cannot pass these things on to the consumer. He must produce at less than cost, and his labour problem to-day is greater than it has been at any time in the last quarter of a century.
I ask the Minister of Finance to consider this issue, not on its possible reference to class legislation, not on its possible advantages to certain individuals throughout the country, but more especially on its possible effect, in the
^Mr. Rowe.]
long-range point of view, upon our whole war economy. Boats filled with foodstuffs are being sent to the bottom; we have more men in the army and fewer men for production. The day is rapidly approaching when, even though some people may love the horse-drawn system, we shall be forced to put every modern convenience into effect in order to maintain our standard of production and the efficiency in that regard which is necessary for an all-out war effo.rt. What happened in the last great war? It was not long after the war started that prices started sky-rocketing because there was a shortage. It may not be entirely relevant to the issue, but I say that it would be better if hogs were selling at $12 a hundredweight, if butter were five cents a pound higher, if cheese were four or five cents a pound higher, in order to encourage a steady production, than to wait until a shortage occurs and prices skyrocket.
I trust I shall not be misunderstood, but I wish to speak of this matter in the light of the larger picture. To my mind, that is the one fundamental issue before us. We must win this war. We must do this job. We must maintain supplies for our troops overseas. We must be ready to meet the hungry families of Europe immediately after the war. We must be ready to meet the losses that have taken place and will take place on the high seas. I think anyone who has had any experience in agriculture will agree with me when I say that if an attempt is made to encourage our people to go back to the use of horse-drawn implements when there are only about half as many men available, production will be affected materially.
A tax of three cents a gallon is not a great deal to me. I shall have to pay more on what I use in my automobile than for what I use in my tractor, so I shall not suffer particularly. I think I should pay a substantial tax toward our war effort when I use the roads much more than another farmer. Another man may have a tractor which is not yet paid for but which he was forced to buy in order to farm two or three hundred acres because his boy has gone overseas and he cannot hire a man anywhere. To my mind, this is a factor which enters into the picture.
I am speaking on the gravity of the larger picture. I ask the minister to reconsider this tax, not because some of his supporters have risen to oppose this quite heatedly, not because it would please certain farmers in my riding, but because of its effect upon the broader picture. It is highly essential that we go full-steam ahead with our war effort. At a time when labour is hard to get, a reasonable use of mechanical devices such as these new

Special War Revenue Act
modem tractors is necessary. The farmer is not making any profit to-day, and I ask the minister to assist him in his war effort by not imposing this fifteen per cent tax upon this most important item of production. In many districts where hydro-power is not available, the farmer must use gasoline for grinding grain, and so forth. I ask the minister to reconsider this tax on the basis of the efficiency of the larger effort.


Mr. SLAGHT:: I had intended to reserve my views on this matter until the bill was brought down when we shall again have an opportunity of discussing this gasoline tax in detail. I wish, however, to declare myself as being in favour of exempting both the farmer and the fisherman. I suggest to the minister that he should consider all the views that have been placed before him and see if it is not possible to make these exemptions.
Having declared my view in that way, I wish to express myself with reference to the practice that has been adopted this afternoon by at least three hon. gentlemen-and I understand there is a fourth on the doorstep-of moving, at this stage of the resolution, amendments which hon. gentlemen know are out of order.


Mr. DOUGLAS (Weyburn):: The Chairman said they might be in order.


Arthur Graeme Slaght: Which hon. gentlemen, I repeat-my hon. friend is not one of them- know are out of order when they move them.


James Arthur Ross: I resent that statement, Mr. Chairman. I moved an amendment, and I took it from your ruling on a previous amendment that I was in order. I ask the hon. member to withdraw his insinuation.


Arthur Graeme Slaght: As I understand the ruling, all three amendments were ruled out of order. In my district I have farmer settlers and fishermen-


James Arthur Ross: On a point of order, Mr. Chairman, the hon. member for Parry Sound (Mr. Slaght) said that the movers of the amendments knew at the time they moved them that they were out of order. I say I did not, or I would not have moved my amendment. I took it from your previous ruling that I was in order.


Arthur Graeme Slaght: I accept the hon. gentleman's statement. I will put it in this way: They ought to have known their amendments were out of order because they were so clearly out of order.
The reason why I take exception to that practice is this. If I wished to make a hero of myself with the electors of my district, I could write out a resolution that is out of 14873-192J
order, bring it in and make a fiery speech about it. We have, however, wasted a great deal of time this afternoon because certain hon. gentlemen cannot resist the desire to make heroes of themselves by so doing.


James Arthur Ross: I protest, Mr. Chairman, and rise to a point of order. I asked that the hon. member for Parry Sound withdraw the statement which he has just made including motives concerning myself.


Some hon. MEMBERS:: He did withdraw it.


Arthur Graeme Slaght: I accepted without reservation the hon. gentleman's statement that when he moved his amendment he did not know, he says, that he was out of order. I assure him that I have accepted that statement.
I did add something else which he heard, and I have not heard him take exception to that.


James Arthur Ross: Mr. Chairman, the hon. member went on to impute motives about making a fiery speech for the benefit of the electors of our constituencies. I was speaking purely from a national point of view on behalf of the agriculturists of the whole country.


Thomas Vien: Does any other hon. member desire to speak to the point of order? The point of order is that there was an implication, the imputing of motives.


Richard Burpee Hanson: Improper motives.


Thomas Vien: If no other hon. member desires to speak to the point of order, I am afraid that the last remark of the hon. member stating that hon. members in moving their amendments were prompted by the desire to become heroes in their own ridings is out of order, and I would ask him to withdraw it.


Arthur Graeme Slaght: Then let me withdraw that statement, in accordance with the ruling of the Chair. Let me put it in this way. From now on, should we not attempt, with serious war measures of this kind, either to take some care to observe the rules of the house or to amend those rules if, in the view of the majority of the house, amendments of that kind ought to be permitted? I have the greatest sympathy with every hon. member who has spoken in favour of these exemptions to-day. I am for them myself. After all, however, there is the procedure which we can take some greater pains to give heed to, and express our views without acting in an unfair manner or in a manner which is prejudicial to other hon. members who have just as strong views as those expressed by the hon. gentlemen who have spoken before them.
Special War Revenue Act


Thomas Langton Church: I have an amendment, Mr. Chairman, but I am not going to move it because it may be ruled out of order. My amendment was to exempt soldiers engaged on military duties from the operation of resolution 6. I think that should be done, especially when we know that military camps are scattered all over Canada in out-of-the-way places and getting to them involves considerable travel. I hope that when the bill is brought in, the Minister of Finance will give consideration to exempting from this tax members of his majesty's forces, who, after all, receive only $1.30 a day.
I have a short question to ask of the minister. Will he consider having an inquiry before the banking and commerce committee into the high cost of gasoline in Canada? We had such an inquiry a few years ago. I should like these two points to be considered by the minister before the debate concludes.


James Lorimer Ilsley: I think my hon. friend's first suggestion would not be workable. I do not wish to be raising administrative difficulties all the time, but to do absolute justice, to return taxes to everyone who cannot afford to pay them, would not be administrable. We could not do it at all. You might as well say that the sugar tax should be refunded to people below a certain income. That would probably be fair because it is a consumption tax which bears on people of lower incomes, but we would not be doing the right thing to undertake a system of refunds as impracticable as that. I still repeat that hon. gentlemen must bear in mind the importance of maintaining governmental services in such a condition that the public will have respect for them and have respect for the law. That is a fundamental consideration, and hon. gentlemen must not get away from that.
As to my hon. friend's other suggestion that the matter of gasoline prices be referred to the banking and commerce committee, I shall give it consideration. That is the most I can say. But I do not think it would be practicable to do it this session.


Richard Burpee Hanson: I have
not taken any part in the discussion this afternoon. The minister must be aware from the course of the discussion that there is a substantial opinion in this committee against his proposal, in its entirety, to tax gasoline. I am anxious that these budget resolutions should be put through in order that the bills may be introduced and we may be able to study at first hand their contents. All I am going to ask the minister is this. If he cannot yield at the moment to the arguments which have been made in favour of exemptions or rebates 
from the gasoline tax-perhaps I had better call them proposals because there have been so many of them-and I do not see how he could at the moment yield because in a degree and in principle they would upset his budgetaiy proposals, will he undertake to say to the committee that, in view of the widespread requests and arguments in support of those requests which have been made here yesterday and today to eliminate the gasoline tax on farmers and fishermen, he will review the whole position with his colleagues and announce his decision when he introduces the bill? I do not think I should go any further than that.
I am in this position. I think I can weigh evidence, and judge and see both sides of a question. I know we do not do that in political matters; but I am trying not to treat this matter in a political way or from a partisan standpoint. There are, however, certain arguments in favour of the tax as it is. The minister has stated fairly the reasons which actuated the administration in coming to the conclusion which it did. They have had an effect upon my judgment and my mind, and I am wondering whether they are not the major considerations; as yet I have not arrived at a final conclusion in my own mind in that regard. But the minister, in common with myself, must be aware that there is in this chamber a very large body of opinion which, could it be given effect to in a legal way under the rules of this house, and without the intervention of the whips, would put this proposal as it stands in grave danger of defeat. I may be wrong in my view on that, but I believe that if the whips were taken off, the proposal would be defeated. Although I had not intended to do so, I therefore request, as respectfully as I know how, that the minister and the government review this proposal and let the resolution stand, because of the considerations which have been stated here, and of which he is as fully aware as I am.


Jean-François Pouliot: I have not spoken on this matter, and I take this opportunity to express my views about it. I find that this is one of the most sensible taxes which has been proposed, and I am sure that if the leader of the opposition had been minister of finance this is the first tax which he would have imposed upon the Canadian taxpayer. It is a tax which is paid according to the consumption of gas. The man who uses ten gallons of gas pays his three cents ten times; if he uses a hundred gallons, he pays it a hundred

Special War Revenue Act
times. It is unseen, and it is collected at the source. Therefore, in the first place, it will require no special staff for collection.
I regret, of course, that some farmers, and especially some fishermen, will have to pay the tax. But we cannot forget that the western farmers are supposed to receive $30,000,000.


An hon. MEMBER:: Thirty-five million.


Jean-François Pouliot: Yes; I thank my hon. friend for correcting me. This means that they will also make a contribution. Their role must be not only to receive money; they must pay some. In the east the farmers have nothing; they do not get anything, although they need it. In the west they receive subsidies of every kind, and now, not satisfied with that, they will not pay taxation. I find this hard to understand, sir; not because I am not in sympathy with the farmers, and not because I have not a soft spot in my heart for the leader of the opposition. It is not these considerations which influence me; I speak now in support of a fair distribution of taxation. I was opposed to a certain tax proposal which was put before us yesterday, but I am in favour of the one now under consideration- which shows that one can have his own views on different matters.
The hon. member for Dufferin-Simeoe (Mr. Rowe) this afternoon made one of the best speeches of his career. But all these speeches, except perhaps that of the hon. member for Rosthem (Mr. Tucker), who spoke on behalf of the farmers, and certainly that of the hon. member for Comox-Alberni (Mr. Neill), on behalf of the fishermen, were inspired by fear. All the hon. members who have spoken against this tax are afraid to explain it to their own constituents.


Mr. CRUICKSHANK:: Will the hon. member permit a question?


Jean-François Pouliot: Just a minute-when I am through. That is the answer the hon. gentleman gave me when I asked him a question in the middle of his speech. They are afraid to speak to their own constituents and tell them it is their duty to contribute in this way to the war effort.


Charles Edward Johnston: What will they contribute with?


Jean-François Pouliot: I am sure the leader of the opposition is afraid to meet the good farmers of York-Sunbury and tell them it is their duty to pay this tax. I am convinced that the hon. member for Dufferin-Simeoe is afraid to meet
his own constituents, the good farmers of western Ontario, and tell them that now is the time for them to make this contribution.


George Alexander Cruickshank: I will run against the hon. member in his own riding.


Jean-François Pouliot: If my hon. friend comes to speak in my riding he will be welcome, but nobody will listen to him.
Now, sir, the situation is that all this is playing politics. The leader of the opposition is playing politics; so is the hon. member for Dufferin-Simeoe, a past leader of the conservative party of Ontario. I would not accuse the hon. member for Souris (Mr. Ross), but I might venture to include a number of hon. members, with the exception naturally of my good friend the hon. member for Broadview (Mr. Church) whom I do not put in the same class. Let them be courageous and tell their constituents that this does not affect at all the autonomy of their provinces. Let them also approve the minister's proposal. This is a good tax; it is so good that I am sure it does not come from the intelligentsia which surrounds the Minister of Finance. It is good, logical taxation; I approve of it, and I am sure that in their hearts most of the hon. members who have spoken against it cannot say it is bad.


Mr. FRASER (Northumberland, Ont.):: I have listened to the speeches made this afternoon in connection with this gasoline tax, and I must admit that I was not fully convinced of its unfairness until I heard the speech of the hon. member who has just taken his seat (Mr. Pouliot).
I heartily endorse the suggestion made by the leader of the opposition that the Minister of Finance should reconsider this item. The class of producers upon which this tax would fall are at this time the low bracket producers. I am not unmindful in the least of the seriousness of the problem with which the Minister of Finance is confronted, or of the crisis which faces the dominion and the empire at the present time. As the hon. member for Dufferin-Simeoe (Mr. Rowe) has said, we have a job of work to do, and we must do it. That is paramount to every other consideration. But I do submit, and here I concur in what the leader of the opposition has said, that the Minister of Finance should reconsider this item in its aspect of placing a tax upon gasoline used by the basic producers. As has been said repeatedly, the farmers are not only in the low bracket but they are in the lowest bracket of the producers of wealth in Canada.
They are also filling a present need, and, as has been said this afternoon, they will fill a much more imperative and important need in the weeks and months to come. But these
Special War Revenue Act

farmers are discouraged. I have a seven-page letter from one farmer, and I may say in reply to the hon. gentleman who preceded me, that my remarks are not prompted by fear, nor are my sentiments expressed except on the basis of a realistic knowledge of the condition of the farmers.
The farming communities of Canada are the only communities which, during the last ten years, have adhered to the sound milch-cow economy of the country. In peace time or in war time, it is not a part of the policies of a Liberal government to place taxation on the shoulders of the basic producers. I sympathize with the minister in the problems with which he is confronted, but I am not convinced of the impossibility of his raising revenue without taxing the basic producer. If he wishes to raise revenue on gasoline, let him stand on No. 2 highway any day. The other day I counted within five minutes $35,000 worth of pleasure cars passing a given point. Let him increase the tax on people who waste gas and oil, coming from nowhere and going nowhere, consuming the wealth of the country. But let him not place this burden on the farmer.
Someone says that the farmer does not burn much gas. Well, I do not like to interject a personal reference, and I do so only to illustrate the point I am making. On my own farm we bum from forty to fifty gallons a day to produce a crop of questionable market possibilities. I therefore plead with the minister, and I do so not by means of moving a resolution. That is not the proper way; you cannot get anywhere by bringing in resolutions. I appeal to the minister and his advisers in the civil service to reconsider the imposition of this tax on gasoline used by basic producers, whether they be farmers or fishermen.
Let me go a step further. The Minister of Finance knows quite well, and so does the Minister of Labour, that labour is gradually coming into its own in Canada, particularly labour engaged in war industries, labour with mechanical qualifications. Such labour is in great demand, and as the hon. member for Dufferin-Simcoe (Mr. Rowe) has said, whether wages are affected by war savings certificates or national defence tax, labour expects an increase in wages to take care of the difference. But these men are coming off the farms of Canada; they are coming off the farms of Ontario. The result is that the farmer cannot procure labour at a price which he can pay out of his product. Drive along the highways of this province, as I did the night before last, and you will see on farm after farm the farmer in a tractor equipped with headlights to enable him to carry on his soil preparation at night-one man working fifteen to sixteen hours a day.

And at the end of every ten hours these tractors have consumed in gasoline tax the equivalent of one dozen eggs collected by his wife that day.
Let us be realistic and consider the farmer's condition from the national standpoint. Money can be raised in other ways. The minister's advisers will tell him a hundred different ways of raising this money without increasing the burden on the low bracket producer. If ever there was a time when the farmer needed every encouragement and cooperation and guidance he can get to help him out of a dilemma and enable him to carry on patriotically, that time is now when we are all making a war effort. A duty rests on the shoulders of the Minister of Finance therefore to reconsider the tax. Let him say to the farmers, "We will help you at least to the extent of eliminating the tax on the low bracket basic producers."


James Lorimer Ilsley: It is intended to get into
supply to-night with two departments, and I therefore move that the committee rise and report progress.


Richard Burpee Hanson: Will the
minister consider the suggestion I made?


James Lorimer Ilsley: I will discuss my hon. friend's suggestion with my colleagues.
Progress reported.

The house in committee of supply, Mr. Vien in the chair.



DEPARTMENT OF PUBLIC WORKS

[Stage Direction]
Administration.
257. Departmental administration, $188,030.
Mr. CRERAR:: The item will stand.
Item stands.



DEPARTMENT OF NATIONAL REVENUE

[Stage Direction]
Customs and excise divisions.
193. General administration, $991,785.
Thomas Alexander Crerar: Stand.
Item stands.


Thomas Alexander Crerar: The next is item 69.


Richard Burpee Hanson: That will do for to-night.


Thomas Alexander Crerar: Does the leader of the
opposition wish to stop there? *


Richard Burpee Hanson: Two are
enough.


Thomas Alexander Crerar: Well, we will leave it at that.
Progress reported.


[Stage Direction]
At six o'clock the house adjourned without question put, pursuant to standing order.

United Grain Growers
Thursday, May 22, 1941.