1941-05-06

CANADIAN NATIONAL RAILWAYS


Hon. P. J. A. CARDIN (Minister of Transport) :: Mr. Speaker, I desire to lay on the
table the budget of the Canadian National Railways and Canadian National Steamships for the year 1941, and to move:
That the annual budget of the Canadian National Railways and Canadian National Steamships, tabled herewith, and the annual reports laid on the table of the house on March 27, 1941, be referred to the standing committee on railways and shipping, together with the following items in the estimates:
i03, Maritime Freight Rates Act, Canadian National Railways, eastern lines; J/0J/, Maritime Freight Rates Act, railways other than Canadian National Railways; J/16, Canadian National (West Indies) Steamships, Limited, capital advances, and J/1T, Prince Edward Island car ferry and terminals deficit 1941.


[Stage Direction]
Motion agreed to.

Dartmouth Airport

[Stage Direction]
On the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, I desire to direct a question to the government, and I should like to have the attention of the Minister of Finance, the Minister of Agriculture and the Minister of Trade and Commerce. My question is based on a report appearing in the western press. I quote from the Leader-Post, of Regina, dated May 3, under the heading "Farmers assured good crop prices under proposal in United States":
Washington, May 3.-The United States agricultural department laid before farm leaders in and out of congress Friday a broad legislative proposal which would assure farmers cooperating with this year's federal crop programme $1.04 a bushel for wheat and 78-8 cents for corn.
These returns compare with present receipts of about 83 cents for wheat and 75 cents for corn. In both cases the figures are averages, and government benefit payments, at present rates, are included.
New loans would be made at 75 per cent of parity for basic crops-wheat, cotton, et cetera. At present loan rates are about 56 per cent of parity for cotton and wheat. (Parity is a term used to describe crop prices which would give farm commodities purchasing power, in terms of non-farm goods and services, equal to that which they possessed in some past period, usually the years 1910-14).
Under the department's proposal, the commodity loan rates would be increased from 66 cents to 85 cents for wheat.
This is the announcement I referred to as coming when I spoke the other day. My question is this, Mr. Speaker. Will the government, in view of this announcement by the United States government, now reconsider its 1941 wheat marketing policy and set a fair parity price, net, to the Canadian wheat farmer comparable with the price, net, set to the United States farmer according to this announcement? If the government is not prepared to answer to-day, will it agree to take my question under consideration and give an answer perhaps to-morrow?


Mr. CRERAR:: Does the hon. member
vouch for the accuracy of that report?


Ernest Edward Perley: It is in the Regina Leader-Post, which I think all western members take. I should like to have a statement from the government.


Mr. HOMUTH:: Does the Minister of
Mines and Resources (Mr. Crerar) deny the report?



DARTMOUTH, N.S. AIRPORT INQUIRY AS TO TILLEY REPORT

[Stage Direction]
On the orders of the day:
Hon. R. B. HANSON (Leader of the Opposition):: If there is to be no reply from the ministry to the question of the hon. member for Qu'Appelle (Mr. Perley) I have a question which I should like to direct to the Minister of National Defence or the Prime Minister, in the absence of the Minister of National Defence for Air, with reference to the Tilley report on the Dartmouth airport. Last November this project was subject to review and investigation by an independent tribunal set up by the government itself. At that time the member for Cumberland (Mr. Black) and myself interviewed the Minister of National Defence for Air and discussed the matter very freely and confidentially, and we were told then that so far as he could see there was no reason why we should not have a copy of the report. That was six .months ago. I have from time to time since then asked for the production of this report. On April 2 I asked the Minister of National Defence for Air, as reported at page 20S9 of Hansard, when we might expect to receive the report. I expressed the pleasure which we felt at seeing the minister safely back after the tour he had been making in eastern Canada. Then I asked him if he had received the Tilley report. Perhaps I should have asked if the government or any member thereof had received the Tilley report. Now I ask, has any such report been received, and if so, when may we expect to have a copy of it? This is an important matter.


Hon. J. L. RALSTON (Minister of National Defence):: So far as I know no report has been received by the Minister of National Defence for Air nor by any member of the cabinet. I will make inquiries of the ministry of air this afternoon and ascertain if that is correct.


Richard Burpee Hanson: Well, there is no doubt that the investigation was held, is there?


James Layton Ralston: I understand so.


Richard Burpee Hanson: And a report is in preparation. Will it be here before the end of the session?


James Layton Ralston: I cannot tell my hon.
friend, because I have made no inquiries about it. All I can say to him is that I will make rnquiry and ascertain-


Richard Burpee Hanson: That is
all I can expect.
Bren Gun


James Layton Ralston: -whether the report 'has been received. I do not think that it has, or I would have heard of it.


Karl Kenneth Homuth: Will the Minister of
National Defence assure the house, in view of the fact that months have passed, that we will 'have an answer?


Some hon. MEMBERS:: Order.


James Layton Ralston: All I can say to my hon. friend is that I understand that my colleague the Minister of National Defence for Air asked Mr. Tilley to make a report in connection with this matter, and I have no doubt the Minister of National Defence for Air will consider that matter when the report is received.


Karl Kenneth Homuth: It should not take that long.



BREN GUN


[Stage Direction]
On the orders of the day:
Mr. G. A. McLEAN (Simcoe East):: I wish to address a question to the Minister of Munitions and Supply, based on an Empire Press Union news item appearing on page 16 of the Ottawa Citizen of to-day. Commenting on the production of Bren guns in Australia and Canada, it states:
Australia's Bren factory came into production early in the year. . . . Unlike Canada, which imports many component parts from England, Australia makes every part in her own workshops.
Is it a fact that the John Inglis company import component parts of the Bren gun from England, or are they all manufactured in Canada, as we are led to believe?
Hon. C. D. HOWE (Minister of Munitions
and Supply): I can assure my hon. friend that every part of the Bren gun is made in Canada, of Canadian steel.



DECENNIAL CENSUS


[Stage Direction]
On the orders of the day:
Mr. GORDON GRAYDON (Peel):: May I direct a question to the Minister of Trade and Commerce? In the press yesterday there were reports that the census was being postponed for a couple of weeks in view of the coming victory loan. Would the minister care to make any comment?
Hon.J.A. MacKINNON (Minister of Trade and Commerce): Mr. Speaker, the national loan campaign was slated to begin on June 2,

the day on which the census enumeration was to start. To avoid any duplication of canvassers for the first two weeks following June 2, it has been arranged that the census commissioners will not begin their canvass until two weeks later, but that the census will be taken as of June 2.
Mr. KARL K. HOMUTH (Waterloo South): According to several advertisements which have appeared in the newspapers, certain schools are setting up examinations for census takers. Is this done under the authority of the Department of Trade and Commerce?


Mr. MacKINNON (Edmonton West):: The statistical branch of the Department of Trade and Commerce in charge of the taking of the census is arranging for schools for the enumerators who are appointed and for the census commissioners, but it has nothing to do with any instruction which may be given by private schools.



UNEMPLOYMENT-DEBATE ON MOTION OF MINISTER OF FINANCE

[Stage Direction]
The house resumed, from Monday, May 5, consideration of the motion of Mr. Ilsley for committee of supply.
Mr. CLARENCE GILLIS (Cape Breton South):: I am sorry to have to prolong the debate on the matter raised by the hon. member for Weyburn (Mr. Douglas), but I consider it to be of sufficient importance to hon. members to express briefly an opinion on the question, as I see and understand the government's proposal to discontinue direct relief.
During his discussion of the matter, the hon. member for Weyburn pointed, out to the house that in November, 1940, the last date on which figures are available, the number of people on direct relief was approximately 250,500. That in itself, in my opinion, should give hon. members cause for reflection. At that time there was that large number of citizens of this country who, in order to eke out an existence, depended on the federal government's contribution to assist the provinces to carry out their relief schedules or schemes. I am particularly interested in the question as it pertains to the province from which I come and with whose situation I am familiar.
On checking over the figures, I find that the returns for Nova Scotia as of October, 1939. listed heads of families on relief as 958, the total number including dependents being 4,573. The figures contained in the report of November, 1940. show heads of families on relief in Nova Scotia as 228, the total number on relief at that time being 898. For purposes

Sup-ply-Unemployment
of comparison between 1939 and 1940, the figures are misleading. In checking them over one would be led to believe that there has been an increase of employment, and that relief has automatically dropped off because of that fact. I know that that is not true.
Another thing in that connection with which I am concerned is that every province with the exception of Nova Scotia has made a declaration of where it stands in this matter. British Columbia, Saskatchewan, Ontario and other provinces have stated that they are prepared to carry that burden to the extent of, in some cases, 75 per cent. In our province there has been no declaration from the government as to whether they are going to make any contribution to relief, and I know that in many of the towns and municipalities there is an urgent need of the continuation of direct relief until such a time as the recipients of it shall have been absorbed into employment.
The figures are misleading when compared with those of 1939 and 1940. For October, 1939, they are as I have given them. The reason for the apparent decline in the number of those receiving relief in Nova Scotia is that the provincial government has discontinued direct relief in any town, city or municipality where there is not five per cent of the total population totally unemployed. Under that regulation hundreds of people who were and should be receiving relief have become a charge upon the municipality or the city or town. These bodies have been obliged to assume the total cost of issuing relief and as a result the recipients have disappeared from the statistics compiled by the federal government.
Let me give a few examples. Last session I read into the record a resolution from the town of New Waterford complaining of the very thing I am trying to put before the house at the present moment. Owing to the fact that the provincial government had discontinued relief in that town because there was not five per cent of the total population totally unemployed, the citizens were petitioning the federal government for some action looking to the alleviation of the distress in the town. That resolution stated that there were at that time 350 men unemployed in the town of New Waterford, that there was no prospect of their obtaining employment, and so forth. Notwithstanding that these 350 men would be qualified for relief under the conditions obtaining in the rest of Canada, that town was obliged to accept the responsibility one hundred per cent of caring for them. But these men do not appear in the statistics for 1940 as compiled by the federal government. Relief in that town was discontinued by the provincial government in February, 1938, and the town has been 14873-163
struggling to take care of its own unemployment problem. It has meant for the town a burden which it is not very well able to carry.
When the Minister of Labour (Mr. McLarty) announced that relief was to be discontinued on a certain date I made it my business to get in contact with some of the larger towns in my province, particularly in my own end of the province. I received a telegram from the mayor of Glace Bay, where relief is quite serious. It was dated February 19 and in it he stated that the present weekly disbursements amount to approximately SS00. The other facts he indicated were that there were 100 heads of families, 50 single, no home connections, involving in all approximately 500 dependents, 50 employable in industry if employment could be found. For the rest the town would assume responsibility if the government would find employment for others who were on relief at that time.
In the city of Sydney relief has been discontinued since the provincial government made the stipulation with respect to the five per cent. The mayor of the city sent me this telegram on March 8:
No direct relief received by Sydney for two years. Provincial government insists five per cent population unemployed before relief given. Sydney spent $35,000 last year on relief. Drain too heavy for the city. Urge federal government supply total relief but not to able bodied men alone. Large number undernourished men on relief employers will not employ.
That is the situation in Sydney. These were men not registered with the steel company for employment. In this last month approximately 1,600 able-bodied young men were seeking employment. That city has been endeavouring for the past two years to care for its own unemployment situation, and while the war has absorbed a small percentage of the men, the city has still a serious unemployment problem on its hands.
I take these few telegrams merely as examples of the general situation throughout that end of the country. Take the town of Reserve Mines. I have been checking up on the facts in that town. One of its mines closed recently, and that means that there is an additional unemployment problem. That particular town is not getting its taxes-probably about forty per cent of them. The school teachers have not been paid for four months because the town is not able to collect the necessary taxes to pay them. The teachers were threatening a strike because their salaries had been four months in arrears, but some temporary arrangement has been made in that on that question. There is, however, a serious unemployment problem there, affecting the

Supply-Unemployment

life of the whole community, even to the extent of disrupting the educational system.
I know that the people in charge of affairs in that particular municipal council cannot meet relief requirements, and the same is true generally. In Thorburn on the mainland of Nova Scotia there are approximately 1,200 people. It is a relief camp. These people depend absolutely on relief and owing to the action of the government in discontinuing direct relief they are now without any means whatever. Nothing will be done for them. A large percentage of people there are unemployed through no fault of their own and cannot obtain work.
Perhaps the men in the different governing bodies who have studied the question have been misled by the statistics as compiled. As I read them they would lead one to believe that there has been a sufficient decrease in the unemployment relief rolls throughout Canada to warrant the action that has been taken, but I have given examples to show how these figures can mislead. It is not that the necessity for relief has disappeared; the fact is that the provincial governments have ceased to issue relief and have relegated past recipients of relief to the ranks of pauperism, to work out their own problems for themselves.
During the recess I had meetings with a large group of men in the town of Glace Bay, heads of families cut off at a moment's notice. They were appealing to some one to find a way out of the difficulty. They appealed to the provincial government. The tdwn has carried them as far as it can, and their families are dependent upon relief. These men have been trying to get into the army but they have not succeeded and they cannot get any work. So that until that situation is met completely to the satisfaction of those who are concerned about it, the government's action in discontinuing relief should be reconsidered.
There are thousands of people who depend absolutely upon relief for their livelihood. As pointed out yesterday by the hon. member for Weyburn (Mr. Douglas), the cost to the government for the last year was thirteen and a quarter million dollars. After listening here to people talking about billions during the past year I have begun to look upon thirteen millions as small change.
If we can spend millions of dollars to prosecute the war, which is necessary at this time, and if we are to maintain and extend democracy, then there is no justification for the present condition. The first consideration is the need of the people within the framework of the democracy that we talk so much about. It is not an inspiring sight to see young men coming from different parts of

Canada billeted in towns and cities and hundreds of men and women seeking relief and not able to get it. The first question I would ask under similar circumstances is, is this the democracy I am going to fight for? I find the governing bodies of the country unmindful of the needs of the people to the extent that they are left milling around in the middle of the road without direction; is that the democracy I am going to fight for? It does not tend to encourage recruiting.
The whole thing is a relatively small matter and one that should be handled carefully until, as pointed out by the Minister of Labour and the Minister of Munitions and Supply, within the next six months or a year there is a shortage of labour and we may be able to utilize these unemployed people and give them a chance to work; for work is the solution of our problem. Until they are absorbed in some gainful occupation and made self-supporting, relief should be continued.
I have no intention of delaying the house with matters that perhaps others consider less important. But I wanted to make these few remarks because I think that this discontinuance of relief, and this refusal of provincial governments to accept responsibility, thus throwing it upon towns and municipalities which are bankrupt through taking care of the problem during the past ten years, is a matter that should not be handled as it is being handled at present. It reflects on the judgment of those in authority; it is anything but inspiring and it is a condition which should be remedied at once.


Mr. E. G. HANSELL (Macleod):: I intend to take just a few moments to discuss this matter and to voice most strongly my protest against the situation that exists in this country in respect of unemployment and relief. My protest is that the federal government has saddled the entire responsibility of relief upon the provinces, something which at this particular time they could ill afford to do. I do not know how each of the nine provincial governments is handling this added burden. Some of them may be passing it on to the municipalities; others may be striking a happy medium with the municipalities, while still others may be taking up the entire burden that the federal government has thrown upon them. I know that the Alberta government has assumed the entire burden. It is not passing the burden on to the municipalities.
The very moment that the federal government handed this burden on to the provinces the reaction was that some municipalities took advantage of the action of the government by intimating to the public that there

Supply-Unemployment
was no further need for unemployment relief, and immediately cut families off their own relief lists. That is absolutely unfair. People must be cared for if they are unable to care for themselves. This action has led to a good deal of dissension and dissatisfaction. If we want to maintain a measure of contentment in this country and full cooperation in the war effort, it ill behooves any municipality to act in such a manner.
I strongly protest against the situation as it exists. I protest against the fact that we have any unemployment and relief in Canada at all, after nearly two years of war. The present government came into office in 1935. In that year nazism was becoming a glaring danger to the democratic countries of the world; yet after almost six years of administration by the same government and nearly two years of war, we still have to discuss in this house, as matters of national importance, unemployment and relief. The problem still remains. I was out west some few weeks ago, during the Easter recess, and had occasion to observe the situation in some measure. I discovered there were certain types of individuals, of certain ages, certain groups of people, who were cut off relief, who wanted to find employment but could not find it. I know this is only a small part of the whole national situation, but I have reference, for instance, to mining communities. If they are all like the one in my constituency the situation is this: that during recent years when the coal mining sections were running part time-now of course they are running a little better, perhaps nearly full time

many of the miners reached the age of sixty or sixty-five, and they are now told that they are too old to work. But they are too young to get the old age pension, and there is no relief for them. If this country is trying to attain a total war effort, there should be some place in our national war effort where those men could be usefully employed and enabled to keep the wolf from the door.
It has been brought to my attention also that there are other types of people who were on relief and have been cut off on the pretence that the dominion government has done this because psychologically at least there should no longer be unemployment and relief. I have reference to widows with families, who have to live on the barest necessities because there is no relief for them.
I am not going to prolong the debate, but I protest against the fact that there should be about a quarter of a million people in this country either on relief or unemployed when we are supposed to be engaged in a total war effort. It is really a shame. I believe hon. members of this group are with me in saying that we strongly protest against that condition.


Mr. ROBERT RYAN (Three Rivers):: Mr. Speaker, I should like the indulgence of the house for just a few moments in order to refer to an article which appeared in Life magazine under date of May 5, and to make a protest with regard to one paragraph contained in that article, which was written by one Eliot Janeway, an associate editor of Time magazine, under the heading "Roosevelt vs. Hitler." The paragraph is as follows:
Canada, on the other hand, has not yet begun to integrate with Roosevelt's new order and Roosevelt has not been needling her. Toronto greeted Willkie enthusiastically. Yet the timid, unimaginative Mackenzie King government continues to be blackmailed by the crudely proAxis French Canadian minority (an ideal nazi fifth column). The war has boomed Canada's economy, and made her a liaison between the U.S. and England. Yet all Mackenzie King wants to talk to the U.S. about is munitions financing. And he has dared only to raise Canada's original one-month conscription term to a scarcely less absurd four months. King and Churchill are not close, although King and Roosevelt are. (They are both Harvard men.) This accounts for the most promising step about to be taken toward Canadian-U.S. integration; the beginning of Roosevelt's favourite St. Lawrence seaway, which will in a few years embrace big sections of both countries in a unified regional structure comparable to TVA. Meanwhile, leadership is needed, and only Roosevelt can provide it, if he will. Ottawa's job is to declare independence from the axis transmission belt in French Quebec.
I am an English-speaking resident of the province of Quebec; I represent a county of that province, and I protest with all the force at my command against this reference to the people of my province whose language is French. Those people are just as patriotic and loyal as any Canadians in this parliament or anywhere else, and they should not be slandered in this way. I would ask that someone in authority take up this matter.


Karl Kenneth Homuth: Why not ban the magazine?


Robert Ryan: I would agree to that, if it were possible, but I do think this matter should be taken up. The Prime Minister (Mr. Mackenzie King) can defend himself; the members of the government can defend themselves, but I do not think this slander against the province of Quebec should be allowed to pass.
I remember that at the opening of this session two very popular members of this house, the hon. member for Rosthern (Mr. Tucker) and the hon. member for Selkirk (Mr. Thorson) made reference to the loyalty and patriotism of what they called the French-Canadians. I prefer to call them Canadians whose language is French, because we are all Canadians. I appreciate the statements of those two hon. gentlemen, because I do not
Supply-Unemployment

think anyone in this parliament knows the people of Quebec whose language is French better than I do. I know them inside out and outside in; I have been associated with them all my life, and I claim that they have just as much patriotism as any other group of Canadians. I think it is a shame that any reference of this kind should be made to them.
It is often said that the Roman Catholics of Quebec obey, their clergy. No doubt when that is said it is meant that they obey the cardinal of the Roman Catholic church. I should like to read a statement made in Toronto on April 17 by Cardinal Villeneuve, who said:
There is far down within us something deeper than personal interests, than personal kinships, than party feeling; it is the need and the will to be of service to our country and that will is rightly termed patriotism. . . .
We are fighting for ideals which are imponderable; ideals which cannot be measured, weighed and calculated, but are priceless; righteousness, honour, peace, freedom, ideals which cannot but be pleasing to God. And we may confidently leave their triumph in His almighty hands.
Last year, at a religious demonstration _ in Quebec City, the cardinal voiced his opinion of Hitler in terms which leave no room for doubt as to the Catholic attitude towards the German reich:
As a persecuting and sacrilegious potentate, murderer of women and children, Hitler represents the felony and the very organization of evil. His adversaries and victims represent patriotism and right.
The premier of the province of Quebec is one of the finest gentlemen ever to occupy that position. I am going to read what he said to his people, and to ask if anyone then will say that the people of my province are not loyal and patriotic:
"Our sons," he told the Canadian Club of Montreal, "have risen for the defence of Canada. They have crossed the seas to succour threatened Great Britain, which has become the first bulwark of Christianity, liberty and honour. . . . No one refused to serve when national registration was called, no one refuses to help when war loans and other corollary works are organized; no one questions the justice of the cause, or holds back on the effort."
Later the premier emphasized Quebec's position in the following terms:
We are accomplishing our duty, our full duty in close formation with the other provinces and the central government. We are conscious of being among those who work with fervour, constancy and practical sense for the realization of the ideal of Canadian national unity.
Is that not sufficient proof that the leader of the Roman Catholic church in Quebec and the premier of that province are behind this government in its all-out war effort? Surely there can be no doubt about it. I do hope

this matter will be taken up with the United States minister and a protest made against this article, whose author should have known better than to write the paragraph I have quoted.
Now I should like to say a word in regard to what the people of Quebec think about this government and why they support it. Quebec has confidence in the Prime Minister and the Minister of Justice (Mr. Lapointe), and I am sure every hon. member of this house will agree that these two hon. gentlemen are great Canadians. We may not agree with everything that is being done, but we must agree that on the whole the Prime Minister and his government are carrying on a gigantic undertaking in a very satisfactory manner, and that they are keeping the members of the house continually informed as to what is being done. I make this statement in order to put in clear language exactly why we in Quebec support the Liberal government. It is not just a matter of politics; we believe this is the best government this country could have at the present time. There is no doubt at all about that. I believe the Prime Minister and the Minister of Justice will go down ini history as two of the greatest Canadians this country has ever known.


Karl Kenneth Homuth: How about the rest of the cabinet?


Robert Ryan: I am not talking about the rest of them. I rose to make a protest, and I am adding this statement to make that protest all the stronger. I say that the province of Quebec is in favour of this government not only because it is a Liberal government but because my people believe it is the best government Canada could have.


Some hon. MEMBERS:: Oh, oh.


Robert Ryan: You may laugh all you like, but there is no doubt in the minds of more than people from Quebec.


Karl Kenneth Homuth: Not many.


Robert Ryan: This government went to the people during the war; there is no doubt about that.


Karl Kenneth Homuth: Under false pretences.


Robert Ryan: And it was given a large
majority. I do not wish to enter into a discussion with the hon. member who is interrupting. I have said what I wanted to say, and I believe what I have said is correct.


Mr. G. H. CASTLEDEN (Yorkton):: Mr. Speaker, I had not intended saying much about the matter of relief, but, no matter what history may say about the Prime Minister (Mr. Mackenzie King) or any of his cabinet-

Supply-Unemployment


Karl Kenneth Homuth: It does not say anything.


George Hugh Castleden: during no time in the history of Canada did the common man, the labourer or the youth of this nation decay more rapidly than under the rotten system of relief forced upon the people of this country.
What is relief? It seems to me it is a natural consequence of the change in the economic and industrial life which has taken place throughout the world. It is the result of a changed economy in which machinery has replaced the labourer, and production can take place with reduced manual labour. Naturally many people have been thrown out of work.
Canada is a nation of about 11,000,000 people who occupy the north half of the richest continent in the world. Canada has more wealth, resources, food and everything man requires, than have the people of any other nation. The United States is a nation of 130,000,000 people living in the southern half of the same continent. But they have been able to arrange for their people a fairly decent standard of living-or at least 100,000,000 of them. Only a few years ago we in Canada sent over a million people to our relief rolls. I do not know that there can be anything more deteriorating than that the youth of our nation and others who want to work, who are willing to do almost anything to keep their homes together, should be denied the right of exchanging their labour for a decent living.
I condemn the government for not having made a decent analysis of the problem, for not having found the causes, for not taking any decent, constructive attitude toward a condition which has tended to ruin the nation. To-day we are reaping some of the results of the degeneration which took place since 1935, and even before that time. For centuries man laboured to save himself from starvation. People starved because they did not know how to produce sufficient food, clothing and shelter to keep themselves supplied. But since the industrial revolution, since the advancement of science, much progress has been made, and we have now reached the point where a man has been able to produce far more than he can consume. We are smothered in a load of abundance which leaves us starving.
We now have to take money from the taxpayers to pay bonuses to the farmers on the prairies so that they will not produce food. At the same time in some of the cities and even in rural parts of the very same country we find people who are hungry and in need. It would seem to me that after centuries of struggle, man, suddenly reaching the goal toward which he had struggled so many years, that of having gained power
over the resources of nature, finds that the cup has been dashed from his lips and that he is left in a state of want, poverty and degeneration.
Now when our young men go up for medical attention they find they cannot pass the physical examinations. Why? They have endured too much hardship. There has been too much riding on box cars, too much begging from door to door, insufficient food, improper nourishment, lack of medical and dental care. The medical records of the military authorities are a disgrace and a blot on Canada's record. The blame is to be placed on governments of this country which have refused to face the facts in a decent and scientific way and have had no constructive policy to place before the people. The degeneration has seeped right into the very homes, the foundation and core of a nation. It is because of those homes that Canada is failing to-day.
Now with a war upon us and with thousands of people still on relief the government refuses to continue to grant even that little crust of bread needed to keep body and soul together. I do not know what the government is going to do about this matter, but if it does not begin doing something at this time to cure unemployment, eradicate the disease of relief which is eating like a cancer into the very heart of our country, then that disease will ruin it when this present conflict is over.


Hon. N. A. McLARTY (Minister of Labour):: Mr. Speaker, I believe it would best meet the wishes of the house if I were not to deal with the broader aspects of the problem mentioned by the hon. members for Yorkton (Mr. Castleden) and Three Rivers (Mr. Ryan). I regret exceedingly that when I rose previously I did not see the hon. member for Three Rivers standing in his place; otherwise of course I would have at once accorded him the privilege of speaking, which is his due.
The debate in this instance has been instituted by the hon. member for Weyburn (Mr. Douglas), and he has been followed by the hon, member for Cape Breton South (Mr. Gillis). The discussion has been as to whether or not the government of Canada was justified in discontinuing its direct contribution to unemployment aid. I do not intend, sir, to engage the attention of hon. members at too great length in debating that matter. The fact that we did disengage ourselves from unemployment relief placed the responsibility on the provinces and municipalities, and so far we have yet to receive one protest from those provinces or municipalities. In other words, it has been accepted.
And why not? Even the Sirois report, mentioned by the hon. member for Weyburn, states that the primary responsibility is on the provinces.
Supply-Unemployment


Mr. DOUGLAS (Weyburn):: Not for the unemployed.
Mr. MeLARTY: Oh, yes; it so refers to all matters of welfare.


Thomas Clement (Tommy) Douglas: But not for employable unemployed.
Mr. MeLARTY: It suggests-we might as well have the record correct-that subject to the transfer of certain resources, it is the duty-


Mr. JOHNSTON (Bow River):: And you are taking those.
Mr. MeLARTY: -of the dominion to look after the employable unemployed, by way of unemployment assistance. But that is subject to a mutual arrangement which was not arrived at.
I want to make it plain that the action taken by the government was not as a result of any conference that has been held. Let me make this clear and definite-and I believe it is a point which has been accepted by the provinces. What is the reason? I't is this: The government of Canada, bearing in mind its contributions in peace time, such as the old age pensions, and its war-time contributions, is paying about $135,000,000 in connection with social service work. I believe the figure mentioned by the hon. member for Weyburn as to cost of unemployment aid is a fair one.
Let me make it clear that the millions of dollars that are being spent in our war effort, so well known to this house, must necessarily and inevitably have an effect upon the financing of the various provinces, and it certainly has. But apart from that, we are spending approximately 855,000,000 in contributing assistance to the dependents of the men who are serving in the active forces. Then we are spending over 85,000,000 in training men to equip them to carry on the industrial work of this country, and we propose to spend, and will spend, in unemployment insurance more than the amount we are eliminating in unemployment aid. In other words, I think it is fair to say that since the war started our contributions per annum in the matter of additional social assistance have been in excess of $70,000,000.
It might be a hardship, let us admit, if we cut off this aid, except for one fact, namely that there is not one single province in Canada which is placed under an additional burden by reason of this government cutting off its aid-I mean an additional burden over what it suffered.


Richard Burpee Hanson: Over
what it suffered?

Mr. MeLARTY: I will make that quite clear when I read the figures. We were contributing on a 40-40-20 basis, and there is not one province in Canada in which the grants for unemployment aid have not gone down more than the 40 per cent we cut off. In other words, when I say that no province suffered, that might be misleading, but what I meant was this: that their contribution would have to be no greater than it has been prior to the cutting off of federal aid. Naturally they suffered to the extent that we were not contributing the 40 per cent, but on the other hand they did not suffer in proportion to the contribution they had had to make theretofore.


Thomas Clement (Tommy) Douglas: When the
dominion government cut off its relief that automatically ended the dominion government's guarantee of provincial and municipal borrowings for relief, did it not?
Mr. MeLARTY: I do not follow my hon. friend.


Thomas Clement (Tommy) Douglas: In Saskatchewan the provincial and municipal contributions for relief have largely been furnished through borrowing under dominion government guarantee, and that guarantee is now ended.
Mr. MeLARTY: That is another aspect which the budgetary proposals dealt with, and I should be glad to deal with that. I should like to place on Hansard the percentage of reduction in relief for March, 1941, over 1940, to show that the dominion's diminution of its contribution did not place an additional burden on any province-the leader of the opposition took exception to my saying that no province suffered.
In Prince Edward Island the actual diminution was 59.9 per cent; in Nova Scotia 86.7 per cent.


Clarence Gillis: Relief was cut off but the need was still there. The provincial government refused to accept the responsibility.
Mr. MeLARTY: In view of the fact that the administration of relief is within the hands of the provinces we necessarily have to accept their figures, and I assume that a provincial government will deal honestly with the figures.


Clarence Gillis: That assumption is wrong.
Mr. MeLARTY: I am going to accept it because I believe they do deal honestly with the figures. In New Brunswick there is no registration because there is no direct relief.

Supply-Unemployment


Richard Burpee Hanson: That does not say that there is no need for relief. I have stated in the house several times that the New Brunswick government automatically cut off relief in spite of the fact that there was need for relief.


Norman Alexander McLarty: I agree-or rather I should not say I agree; the statement that the leader of the opposition has made that statement is correct. I am simply stating that I cannot give the figures for New Brunswick because there is no registration in that province.


Richard Burpee Hanson: Quite right.


Norman Alexander McLarty: Whether or not the New Brunswick government adopted the proper policy is a question that would be extraneous to this debate. But there is no registration there.
In Quebec the figure went down to 66-2 per cent; in Ontario, 65'9 per cent; in Manitoba, 40-2 per cent; in Saskatchewan, 40-7 per cent; in Alberta, 56-6 per cent, and in British Columbia, 52-2 per cent. Consequently the point I was trying to make, that no additional burden was placed upon the various provinces by the dominion government cutting off its 40 per cent contribution-


Charles Edward Johnston: But the dominion government is invading the provincial field. Would not that place an additional burden on the province in raising the money required?


Norman Alexander McLarty: That is a matter I should be glad to deal with.


Charles Edward Johnston: I should be glad to hear the minister on that.


Norman Alexander McLarty: I will deal with it right now. While the dominion is invading the provincial field, the hon. member will recall that the Minister of Finance (Mr. Ilsley) stated that action would be taken to stabilize the finances of the various provinces.


Richard Burpee Hanson: If they conform.


Norman Alexander McLarty: I am dealing with the point raised by the hon. member for Bow River. Here is what the Minister of Finance stated:
Such payments will be augmented by appropriate fiscal-need subsidies where it can be shown that these are necessary. At the same time it is proposed to discontinue the present special grants which are voted annually by parliament.
And that is exactly what has happened. The fact that the dominion is invading the provincial field does not and cannot alter this fact, that as compensation for so invading, the dominion is willing to make substantial contributions to the provincial revenues.


Richard Burpee Hanson: Under
certain circumstances.


Norman Alexander McLarty: It must be under certain circumstances.


Richard Burpee Hanson: There is a condition there.


Norman Alexander McLarty: You would not make it except under certain circumstances.
The hon. member for Weyburn made the point yesterday that employment in Canada is not being distributed equally over all the provinces. That is true; I think that must be agreed to. But employment in the province of Saskatchewan on March 1, 1940, was 97-5 per cent, and on March 1, 1941, it was 107 per cent.


Mr. COLD  WELL@: 107 per cent of what?


Norman Alexander McLarty: As compared with 100 in 1926.


Mr. MacINNIS:: But what does that mean in the actual number of people employed or unemployed?


Norman Alexander McLarty: I could not give the actual figures-just the percentage.


Angus MacInnis: That is important.


Norman Alexander McLarty: But I do say this, that employment was higher by .that percentage as compared with the two years. On March 1, 1940, employment in Saskatchewan was 97-5 per cent, and on March 1, 1941, 107 per cent of the figures for 1926.


Angus MacInnis: But by how much has the population of Regina increased since 1926?


Norman Alexander McLarty: These figures are on a percentage basis, and I am comparing the percentage of employment as between the two years.


Mr. COLDWELL:: Is that industrial employment?


Norman Alexander McLarty: General employment;
compiled by the bureau of statistics.


Major James William Coldwell: Of course, since 1926
General Motors established a plant in Regina, which would make some difference in the figures.


Norman Alexander McLarty: I have heard some question as to how definitely that has given employment. I do not know.


Major James William Coldwell: During the depression it was a liability, undoubtedly, so far as employment went; but just now, with the manufacture of automobiles and other things speeded up, it would assist in respect to these particular figures, I believe.
Supply-Unemployment


Norman Alexander McLarty: I cannot reply to the
other question of the hon. member for Rose-town-Biggar. I do not know. I am merely giving the figures which the bureau of statistics prepares; and after all, as the hon. member suggests, that is all I can do.
The hon. member for Weyburn mentioned a figure of $10,000,000 which, he said, had been spent on welfare. I do not know where that figure comes from.


Thomas Clement (Tommy) Douglas: I said thirteen and a quarter million dollars.


Norman Alexander McLarty: Well, bearing in mind
that the government has cut off its direct contribution, the total in Saskatchewan in 1940-41 to which all three contributed was $4,784,000, in rough figures, not ten million dollars.


Thomas Clement (Tommy) Douglas: I repeated the figure given by the premier of Saskatchewan in his budget speech-$10,600,000 spent in relief last year.


Norman Alexander McLarty: I do not know any other figures, but I believe the one I have mentioned is correct, namely, S4.784,000. Of this amount the dominion contributed $1,913,000, leaving the province and municipalities to pay $2,870,000.


Thomas Clement (Tommy) Douglas: Which year?


Norman Alexander McLarty: The estimate this year is $520,000 less than the Saskatchewan provincial government and municipalities will have to pay.


Thomas Clement (Tommy) Douglas: Which year? Probably we are talking at cross purposes. Which fiscal.year is that?


Norman Alexander McLarty: The fiscal year 1940-41, which ended March 31 this year. In other words, when the hon. member was dealing with the figures, he forgot to mention that actually, with the dominion government's contribution entirely cut off, the amount which that province and the municipalities had to pay was $520,000 less than it was last year.


Richard Burpee Hanson: That is, without any grant in aid at all?


Norman Alexander McLarty: Without any dominion
grant in aid at all, the amount to be borne by the province and municipalities is $520,000 less than it was when the dominion made its grant last year.


Thomas Clement (Tommy) Douglas: Do these
figures include agricultural aid?


Some hon. MEMBERS:: Order.


Norman Alexander McLarty: I have no objection to these questions. I think they are helpful.


Thomas Clement (Tommy) Douglas: There is a
discrepancy in the figures. I merely want to get them straight.


Norman Alexander McLarty: I am giving the hon.
member for Weyburn the figures which were given me by my department and which are compiled by the bureau of statistics. I believe that they include all branches of contribution by the dominion government to unemployment aid.
There is another point. This, it can be urged against us, is an afterthought; namely, we decided it was wise in connection with our war effort to cut off our contribution to unemployment aid. The hon. member for Weyburn made the comparison that whereas we are expending $1,300,000,000 on war, and only about one per cent of that amount, or $13,500,000, on relief, we should not have further reduced it. If you apply that argument, sir, to all matters of expenditure, I imagine that you would have a total outlay which would outrun even the expenditure which unfortunately we have to make because of the necessities of war.
But in his budget speech the Minister of Finance (Mr. Ilsley) stated that he is prepared to consider and make recommendations; that if it becomes necessary to compensate the provinces by reason of the income which has been taken from them-referred to by the hon. member for Weyburn-he is prepared to give consideration to compensatory measures. If we consider that this government is saddled with the expense naturally involved in the war, if we assume that because of the economic upsurge the provincial revenues are much higher than they ever were, and if we assume that the number on welfare is so much lower that the expenditure is not going to be placed on the provinces and the municipalities, I believe this house will agree that the government has taken the proper course.


Major James William Coldwell: Just before we leave this matter, may I suggest to the minister that before the labour estimates come down the figures might be looked into. I have here the figures which were given by the premier of Saskatchewan in his budget speech. They are as follows:
(round figures)
Federal contribution	 $4,500,000
Provincial contribution	 5,200,000
Municipalities' contribution... 900,000
Total for the year	 $10,600,000
There is a discrepancy somewhere here. We might have it straightened out when the proper time comes.

Supply-Unemployment


Norman Alexander McLarty: There is no question that there is a discrepancy. I do not know what the provincial treasurer of Saskatchewan had in mind, but I should be very glad to give the 'hon. member the figures. I believe that those which I have quoted are correct.


Major James William Coldwell: The figures I have mentioned are the budgetary figures of Saskatchewan. We will get it straightened out when the labour estimates come on.


Angus MacInnis: Mr. Speaker,-


Mr. SPEAKER:: I would call the attention of the hon. member to the fact that he has already spoken in the debate.


Mr. MARTIN:: He did his best to speak.


Angus MacInnis: And my best-*


Paul Joseph James Martin: was not the best.


Angus MacInnis: -was not good enough. I do not think I have spoken in this debate at all. In any case, I am not going to speak now in this debate-that is to say, not on this particular subject. But while we are under this order of business there is a matter to which I think the house should give some attention: I refer to the question of labour disputes and the government's attitude and policy in regard thereto.
There has been since a certain occurrence last week a considerable amount of editorial comment in some of our papers, and the leader of the opposition (Mr. Hanson) indicated last Friday that he would like to have a debate on the matter. I do not intend to criticize the government in respect of the matter to which I am going to refer. In fact, strange as it may seem, I am going to do the opposite and commend it for certain things that have been done. Moreover, I am anxious that means may be found of resolving labour disputes in conformity with the high principles for which we are contending in this war.
When I tried to raise this question a week ago yesterday, you, sir, ruled against me. I am not now holding anything against Your Honour for that, considering how things have gone. Last Monday evening the Minister of Munitions and Supply (Mr. Howe), with the concurrence and maybe on the advice of the Minister of Labour (Mr. McLarty). appointed a controller to take charge of the National Steel Car corporation's plant at Hamilton. I commend both ministers for this action. No sooner, however, was Mr. R. J. Magor of the National Steel Car corporation shown that he was not as powerful a fuehrer as he thought he was than he rushed
into the press with a half-page advertisement of the most scurrilous and libellous kind; and then certain newspapers, whose only reason for existence, so far as I have been able to find out, either in peace or in war, is the defence of privilege, began to urge the government to clamp down on labour.
I refer particularly to the Montreal Gazette, which, with its usual bias against organized labour and its usual disregard of the facts where there is a clash between organized labour and employers, editorially incited the government to strong-arm action against labour. Indeed, on this occasion the Montreal Gazette forgot the proper functions of a newspaper to the extent of contaminating its news report with opinions and suggestions in regard to this matter.
The Ottawa Journal also had an editorial on the subject, which in my opinion was an attempt to creat prejudice against the Congress of Industrial Organization. I was surprised that the Ottawa Journal should stoop to that kind of thing; it is not a role which is worthy of the high standard of the editorial policy of that paper.
The Ottawa Citizen also commented editorially on the question of labour disputes, in a manner which met all the requirements of the low standard to which that paper has sunk during recent years.
The Montreal Gazette, in an editorial on May 1, under the heading "No Strikes During War," has this to say, among other things:
When wages are high and employment good it is no time to be calling strikes,-
I presume the Montreal Gazette was referring to the wage of 30-7 cents per hour in the Peck Rolling Mills of Montreal as wages that are high.


Richard Burpee Hanson: That is
the lowest, is it not?


Angus MacInnis: If my hon. friend was
getting the lowest wage he would not think he was getting a high wage.
[DOT]-especially when the calling is done by a foreign labour organization-
A foreign labour organization! Looking around the house I see a number of people, including myself, who are members of "foreign labour organizations," if we wish to call them that; but I submit that we are just as good Canadians and Britishers as the editor of the Montreal Gazette.
-and to the impairment of a war effort that is vital. ... It is impossible for authorities at Ottawa to be unaware of the character and significance of the C.I.O. campaign in this country, of the danger present in that campaign. To be aware of it and to refrain from dealing with it is a dereliction of duty, and things like



Supply-Unemployment
that are not permitted in time of war where the war effort itself is concerned. It will not do for the government to step in and take control when the grievance is on one side, unless it is equally prepared to act as promptly and as forcefully when the grievance is on the other.
That is an assumption that the case of the Peck Rolling Mills and that of the National Steel Car company were on a similar basis, which is erroneous, as the editor of the Gazette could have found out for himself. Then I take the Journal of May 3. I quote:
All of us must admit that what might have been a good case for any industry or business in peace is not necessarily a good case in war. Concessions must be made; seeming injustice and wrong accepted, for* the sake of war effort. More: no one in this country should want any industry or employer to retard war production by standing at this time against the rights of unions, against collective bargaining, or against the rights of workers to select their own bargaining agency.
But that is exactly what has been done in almost every instance, finally ending in labour dispute and strike. The Journal goes on:
Above all, there can be no toleration of agitators (some of them not even Canadian citizens) who seem bent upon trouble, and who evidently have no regard-to say the least tor Canada's war position.
That, I submit, is a libellous and scurrilous attack on the labour movement in the country. Take the leaders in the trades and labour congress in Canada, affiliated with the American Federation of Labour here. Take the leaders of the Canadian Congress of Labour, people who, as far as I know, are all Canadians and in my opinion very conservative Canadians-not using that word in its political-


An hon. MEMBER:: Objectionable.


Angus MacInnis: No, not objectionable. I am not using it in its political sense. But certainly these people are just as patriotic, just as loyal as either the editor of the Ottawa Journal or the editor of the Montreal Gazette.
I am going to take a little time to show the difference between the situation in the National Steel Car company and in the Peck Rolling Mills. There are other strikes that these papers do not say anything about. They do not tell the people that there was a conciliation board in connection with the Canadian Seamen's union and certain ships on the great lakes; a unanimous award was made by the conciliation board and the employers have disregarded it. They do not come out and say that the employers must be made to accept these awards; that would be tramping on the toes of the employers, whom they are so anxious to protect. The next thing

we know these men will be calling the Right Hon. Ernest Bevin disloyal and a traitor! In this country he would have the greatest difficulty in rising from the ranks of the unskilled workers, which he organized and built up into a powerful trade union, himself coming to the position of second most important minister in the imperial cabinet.
The situation in regard to the National Steel Car company, as I understand it, is this. They had been for over a month trying to get a conciliation board.


Richard Burpee Hanson: Whom
does the hon. member mean by "they"? How many?


Angus MacInnis: The employees, or certain employees in certain sections of the National Steel Car corporation plant.


Richard Burpee Hanson: What proportion of the employees?


Angus MacInnis: That is a part of the whole question at issue. A conciliation board was granted. It consisted of His Honour Judge Dowler, R. R. Evans, K.C., representing the employers and J. L. Cohen, K.C., representing the employees. After the investigation had gone on for a short time the chairman, Mr. Justice Dowler, and Mr. Cohen decided that iu order that the board might carry on its work and be in a position to make a report, certain things should be done. One of the matters in dispute was that men were being dismissed because they were members of the union, and in order that that matter might be settled and that the board might find whether the employees of the company wanted to be represented by the steel workers' organization, the board made two proposals. It did not make an award; it made an interim report. The purpose of the interim report, if accepted by both sides, was that the board would then go on to investigate and conciliate the differences between the company and its employees, or else would bring the company and the employees together so that they could settle their own differences without the intervention of a third party. That is the proper way for a conciliation board to act-first to try to get the parties together in order that they may settle their own affairs amicably if possible. It is only where it is impossible to get the parties to negotiate, or where they cannot agree, that the board carries on its work and finally makes an award.
In the interim report one of the proposals was-I am reading from the report:
We have also indicated in the direction for the vote that the employees entitled to participate in such ballot, other than office or clerical employees or foremen, are as follows:

Supply-Unemploy merit
And then they enumerate the employees concerned and draft the form of ballot that is to be used when the vote is taken. I continue to read from a copy of the report:
Upon our being advised by the registrar of the result of the vote we will at once advise the parties and if, as a result thereof the right of the union to represent the employees is established, we would deem it the duty of the corporation to enter into negotiations with the union on behalf of the employees with a view, ' in accordance with the language of order in council P.C. 2685, to a collective agreement and the mutual disposition of all outstanding issues and differences. . . .
We feel, however, in respect to the specific case of George A. Tanner, president of the local union, and one of the applicants for the conciliation board, that we should at once, in view of these circumstances, make the finding and recommendation, which we now do, that Tanner should be immediately reinstated to his former employment pending-
Note the word "pending".

pending the proceedings of this board and pending any final disposition of his case, either by agreement between the parties or by recommendation of the board if we are still called upon to deal with the matter.
There you have the case. All that the board did was to ask that Tanner be provisionally reinstated. The company refused to do that. The board said: Reinstate Tanner and see if the employees want to be represented by the steel workers' organizing committee; then we will be in a position to carry on our investigation and make a final award. Possibly the final award would be that Tanner would not be reinstated, but it was necessary to make that recommendation in order to get a vote of the employees. The employees accepted that, although the ballot to be taken was much wider, covered the whole plant, which they had not contemplated when the board was applied for. That is the case in regard to the National Steel Car company.
The case of the Peck Rolling Mills is quite different. Here we had a board, the members of which were Hon. Mr. Justice Lucien Cannon, of Quebec province, L. A. Forsyth K.C., who I think is legal adviser to the company, and J. L. Cohen, K.C., of Toronto. The board made a majority and a minority report. I think it is stated in the majority award that on all matters except that of wages the board was unanimous. I am not going into the whole matter. But first, as is usually the case, the company objected that the steel workers' organizing committee did not represent the majority of the employees. The board had a vote taken, with the result that of 278 workers eligible to vote, 250 voted: 233 to be represented by the steel workers' organizing committee, and 17 against.
14873-164}
There were a number of issues in dispute: first, recognition of the union and the conclusion of a collective agreement; also wages, hours of work, overtime and holidays, adjustment of skilled and semi-skilled rates, sanitation, Christmas bonus, and possibly other matters. As I said, all these questions, except that of wages, were satisfactorily disposed of.
The hon. member for New Westminster (Mr. Reid) drew attention to the long hours these men w^ere working. These employees were working a five-day week, but for four days they worked eleven hours, and the fifth day ten hours. It came out at the investigation that some of the men worked an enormous amount of overtime. Some of them worked as many as over four thousand hours a year; a great many of them worked over three thousand hours, and the others worked a larger number of hours than they would if they worked at the rate of nine hours a day, six days a week. When this was brought to the attention of the company they said they were not aware of the fact, that they believed the men were working the normal number of hours per day. I am also informed, though I have no absolute proof, that by a decision of a Quebec court in the matter of overtime rates, when these men worked overtime they were paid sometimes as little as for straight time, or even less. The board, however, recommended that overtime work should be paid at the proper overtime rates.
In the matter of wages, the majority report refused to grant any increase; but they did not say, and it is implicit in the report, that they did not believe an increase was necessary under the circumstances. They based their findings altogether on what they considered to be the intent of order in council P.C. 7440. I read from page 9 of the majority report:
It would appear that the government of Canada has, by the terms of P.C. 7440, for the apparent purpose of ensuring stability of wage levels and averting needless industrial disturbances, enunciated a war-time wage policy to which it directs the attention of boards such as this one. The principles which this policy incorporates are those to which this board, in our view, must adhere.
In other words the majority of the board felt that they could not go beyond what they considered to be the strict legal interpretation of order in council P.C. 7440. But I cannot believe that it was ever the intention of the Minister of Labour or of the government, when this order in council was passed, that decisions had to be worded exactly in conformity with this order. It is one thing to keep wages which are already fair and reasonable from rising unduly; it is an entirely different thing to keep depressed and deplorably low wages at such levels for the duration of the war.
Supply-Unemployment


Norman Alexander McLarty: I do not wish to interrupt the hon. member for Vancouver East, but he will see from the wording of the order in council itself that where wages are depressed any board has the right to increase them. The hon. member referred to my intention in connection with the order in council, and I think perhaps the order in council pretty well speaks for itself.


Angus MacInnis: In this case I think fifty per cent of the men were paid only 30'7 cents per hour, plus a small bonus which now raises that figure to 32 cents per hour. All of these men, I think with the exception of about twenty, are married men with families. The minister will agree that 32 cents an hour is an abnormally low and depressed wage; and if the board took that view of the order in council as it did, in my opinion it is a wrong view which should not be allowed to stand. Not only is this wage low; Peck Rolling Mills Limited is a subsidiary of the Dominion Steel and Coal company, and this wage is considerably lower than the wages paid in the steel mills at Trenton, at Sydney, at Algoma and at Hamilton. I do not see why workers in the province of Quebec, speaking the French language, should have to subsist on a lower wage level than that prevailing in other provinces.


Richard Burpee Hanson: That is pretty much the fault of the provincial authorities, or so it would seem to me.


Angus MacInnis: Even if it is the fault of the provincial authorities, that is no reason why the condition should exist. Let me repeat what I quoted from the report before the minister made his interjection:
It would appear that the government of Canada has, by the terms of P.C. 7440, for the apparent purpose of ensuring stability of wage levels and averting needless industrial disturbances, enunciated a war-time wage policy to which it directs the attention of boards such as this one. The principles which this policy incorporates are those to which this board, in our view, must adhere.
The report goes on:
Applying these principles, therefore, in our effort to ascertain whether the wage rate now under discussion before us is one which we must consider to be a fair and reasonable one, we proceed to a brief analysis of the facts and circumstances as disclosed in the material before us.
Then it quotes paragraph 3 of P.C. 7440, which was passed on December 16, 1940, and the report continues:
So that applying this- standard the wage rate now paid to employees of Peck Rolling Mills, Limited, would appear to be one which the board is bound by the provisions of the order in council to consider a fair and reasonable one.
[Mr. Maclnnis.l
It is not that the board would consider the rate fair and reasonable if it had any latitude in the matter, but it feels bound to consider it so because of the language of P,C. 7440. Then I quote from page 10 of the report:
This we have done and having found the present rate to be higher than that of 1926-29

It can be imagined what the rate was in 1926-29, if it was lower than the rate in 1941.
-we are, we think, bound by the order in council P.C. 7440 to consider that the rate is a fair and reasonable one, unless it falls within some exception created by the same order in council.
Turning to page 11 of the report I quote:
Applying, therefore, the standards set up in the order in council enunciating the war-time wage policy of our government, we feel ourselves bound to conclude that the wage rates in question before us are such as must be considered fair and reasonable ones.
The emphasis which in this majority report of the board is placed on the point that they are bound to consider the rates fair and reasonable because the order in council says so to me appears to be a case of protesting too much, and is proof positive to me that the rate is not fair and reasonable.
I do not wish to say any more about that. I believe I have shown that there is a wide difference between the case of the Peck Rolling Mills-and it is unfair to ask the government to take action, which I am glad it has not taken, and I hope it has no intention of taking-and the case of the National Steel Car Corporation at Hamilton.
I shall briefly draw the attention of the house to the strike of the seamen's union on the great lakes.


Richard Burpee Hanson: Before the hon. member leaves that point, would he not refer to P.C. 7440 in which it is stated that the minimum wage standards established by provincial law and regulations shall be regarded as minimum standards only? In the face of those words, how can he say the conciliation board has taken such a stand? It is a minimum which has been established.


Angus MacInnis: I have no alternative,
because that is the stand the board has taken. And my objection to the report is that the board has taken that stand. It needlessly, in my opinion considers itself bound by the language of P.C. 7440. I hope there may be some way by which we can get around the board's interpretation of that order in council.

The Budget-Mr. MacKenzie (Neepawa)
Possibly the editors of the Montreal Gazette, the Ottawa Journal and the Ottawa Citizen do not read reports of this kind. If they did, they might be able to write better editorials.
I shall read briefly from the Labour Gazette of February 1941 respecting the report in connection with a dispute between the -Canadian Seamen's union and certain shipping companies operating in the great lakes. The chairman of the board was Mr. Justice McTague, and this is what he has to say respecting the rights of labour organizations and the desirability of collective agreements: 19. The abstract rights which it is now conceded belong to labour, can only be said to exist in a concrete sense if collective bargaining is practised and collective agreements are concluded.
Collective agreements are not concluded until the companies and employees have a written agreement, or, for that matter, a verbal agreement, which becomes the basis for wages, hours and conditions of work, strictly adhered to by both parties, and departed from only by mutual consent. He continues:
It cannot be said too clearly that labour can no longer be regarded, if it ever was correct so to do, merely as a commodity. Labour is a partner in industry, and as such it is entitled to have not only the right to organize but the corresponding right and opportunity to utilize its organization for collective negotiation and agreement with employers.
That is a fine statement, and I am proud to see it made by one of our justices. I should hope that some of the employers of labour, who have seen what has happened when labour organizations have been put out of existence, would take that attitude, and realize that we cannot have democracy and freedom and liberty in Canada until labour has the full right to play its part in the industry of the country, and all that pertains thereto.
Motion (Mr. Usley) agreed to, and the house went into committee of supply, Mr. Vien in the chair.	[DOT]



DEPARTMENT OF MINES AND RESOURCES

[Stage Direction]
123. Departmental administration, $155,450.
Richard Burpee Hanson: The minister does not want the item to pass just now?


Thomas Alexander Crerar: No; if it is agreeable to the committee, we will let the item stand.
Item stands.



DEPARTMENT OF TRANSPORT

[Stage Direction]
363. Board of Transport Commissioners for Canada-Administration, maintenance and operation, $280,760.
Item stands.
Thomas Alexander Crerar: Item 99, page 17.


Richard Burpee Hanson: I thought only two departments were to be opened.


Thomas Alexander Crerar: Let us go ahead.


Richard Burpee Hanson: Two departments are enough for to-day.


Norman Alexander McLarty: They are all small items.


Richard Burpee Hanson: The understanding was that only two departments were to be opened; nothing more was asked. Let us carry out the arrangements.


Thomas Alexander Crerar: I was unaware of such an understanding.


Richard Burpee Hanson: The minister made it.


Thomas Alexander Crerar: If the leader of the opposition feels that way, I shall move that we rise, report progress and ask leave to sit again.
Progress reported.



THE BUDGET


[Stage Direction]
The house resumed from Monday, May 5, consideration of the motion of Hon. J. L. Ilsley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the amendment thereto of Mr. Quelch.
Mr. F. D. MacKENZIE (Neepawa):: 
Mr. FRASER (Peterborough West):: May I ask a question with regard to that transportation? Was that bought by New Zealand and Australia, or did Canada supply it?


Frederick Donald MacKenzie: Canada
supplied it.


Gordon Knapman Fraser: Is the hon. member sure of that?


Frederick Donald MacKenzie: But why were not Canadian troops in the Libyan desert, and later in Greece? There are two reasons. First, has the critic ever campaigned in north Africa? I have, and I wish to say that more than a year ago I warned the then Minister of National Defence as to troops from northern climates being sent to campaign in a country with so different a climate. We had the experience of Egypt, Gallipoli, Palestine, to go on from the last war, and that minister was not unaware of the dangers. That is one reason.
Here is the other. Where is the key position in this war so far as the free peoples of the world are concerned? That is no secret; layman and professional soldier alike know that it is Britain. These other campaigns are important, certainly, but Britain is the key. If Britain should fall we would lose the war.
Then where should Canadians stand if not ini Britain? The Canadian troops held the place of honour on many momentous occasions in the great war-the key positions at the second battle of Ypres, and in the Lens-Arras sector in the spring of 1918, when the huns made the last desperate dash for the channel ports, destroying the fifth army to the south of us and the Portuguese and reserves to the north. The French president had especially asked that Canadians be kept in that position, the Lens sector, the key to the channel ports.
I shall never forget the tense days and tenser nights of the spring of 1918 when the Canadian troops held that front, as to the north and south the German hordes poured through to the west, while valiant British-troops of all kinds and descriptions, flung into* the broken line in the attempt to stem the tide, fought a wonderful rear-guard action or fell where they fought. Every night where the Canadians stood, that salient became deeper and sharper; every night the gun flashes were farther back and behind us, until it looked as though we could not be saved from being completely cut off by the German armies. For days and nights one division alone held the whole corps front-necessarily a very thin sprinkling of men. One night word came up to the batteries that an attack was expected. The officers commanding units paraded their men to tell them how serious the situation was; remember, only one division folding a corps front, with no supporting infantry, no supporting artillery, no infantry in reserve, no artillery in reserve-Canada's
2594	COMMONS
The Budget-Mr. MacKenzie (Neepawa)
thin line holding the gate to the channel. Those were perhaps the most tense moments in years of tenseness, with Canada 'holding the gate to the channel ports. And, Mr. Speaker, you know, and I know, and history records the fact that Canada held.
Now, with Britain and the world in peril, is it not right and proper that the sons of those men should have that honour to-day? Where else should they be? Is it not proper and a source of pride that they are in Britain on the main job rather than on any side issue? Make no mistake about it, our boys will be worthy sons of hard-fighting, resourceful and disciplined sires. That is why the majority of Canada's overseas troops are on that little island whose security is so vital to the world to-day, and whose defence is being watched with bated breath round a tensely anxious world.
Newspaper armchair fighters, members of this house, and others, may, with impunity, attack those of us, now civilians, who are doing as best we may the meagre, prosaic tasks allotted to us-not easy tasks by any means for those of us who always prefer action and despise .mere words. They may attack us, but when, that ill-informed criticism touches our boys on guard over there, a myriad of spirits of that other generation who found heroic graves at Ypres, Vimy, the Somme, Passchendaele, Amiens, and all the rest, will rise up in protest even though the living remnant remains dumb.
There is, of course, a certain amount of tension in war time, but it should not be necessarily as great here as in England. I am afraid there is more than hysteria in the criticism. On analysis it looks like almost four-fifths politics. There is no need of hysteria. Cool, purposeful people are what are needed in Canada to-day. Thank heaven this government can be credited with the minimum of behaviour which would lead to mass hysteria. That was one of the things I detested in the last war in Canada for the few months I stayed here after war was declared. But there need be no hysteria this time. It is a grim business. It is a time to keep one's head. And this government is giving the required lead. This sort of criticism is just as ill-informed, as ill-advised, as unfair, as one who has studied the whole problem, both in the great war and in this, would expect to find.
I wish to put on Hansard, for this house and the country to read and ponder, a short paragraph which describes, in the clearest terms, criticism in war time. The excerpt is from Trotter's great work on mass psychology, which should be studied at this juncture. This book, "The Instincts of the Herd in

Peace and War", has been called one of the only two significant books which grew out of the great war.
I have tried to show to how great an extent the average educated man is willing to pronounce decided judgments, all of which he believes himself to have arrived at by the exercise of pure reason, upon the innumerable complex questions of the day. Almost all of them concern highly technical matters upon none of which has he the slightest qualification to pronounce. This characteristic, always obvious enough, has naturally during the war shown the exaggeration so apt to occur in all non-rational processes at a time of general stress. .	.	. Generally the more technical a
given matter is, the more vehement and dogmatic is the counsel of the utterly uninstructed counsellor. Even when the questions involved are not especially such as can be dealt with only by the expert, the fact that the essential data are withheld from the public by the authorities renders all this amateur statecraft and generalship more than usually ridiculous.
Need we say any more, as to criticism
in war time? Go back over these newspaper editorial pages. Go back for some time over those pages, scan the pages of Hansard- perhaps .some pulpit has filled your ear at times-then go to the master author of "The Instincts of the Herd" and make your own comparison.
It is unnecessary to say to most clear-thinking Canadians that the men who are directing Canada's war effort have done more than a fair job; that this budget is just another example; that they have a killing burden to carry; and, although they are human, criticism which is fair, informed and constructive would be more welcome than kind words. I know, because, Mr. Speaker, I have tried them with just that kind.
The cause of most democratic sickness at the present time, of weakness in this parliament, and of most of our noise and confusion, is that too many people are saying too much about matters of which they know too little.


Mr. J. R. MacNICOL (Davenport):: It is not my intention to refer to the principles of the matters mentioned in the budget by the Minister of Finance (Mr. Ilsley). I may have something to say when the items are before the house in committee. I intend at this time to introduce a new subject. I have a recollection that on several former occasions, two of them in particular, I introduced new subjects which were acted upon, and I hope the subject I am about to discuss will likewise be acted upon. A few sessions ago I made a speech on a national iron policy, and I am happy to say that that policy has been largely adopted so that at the moment in Ontario some 4,000 tons of iron ore are being mined daily. On another occasion I referred

The Budget-Mr. MacNieol
to a national flood control policy, and again I am happy to say that in Ontario the Grand river is being put under control against flood. I trust that on this occasion what I have to say will be followed by those in authority.
Before, however, commencing my subject, I wish for a moment to compliment the Minister of Finance upon his clear, concise presentation to the house. He had a difficult task to perform and he did it without trying to add anything to, or to take anything from, what the people of Canada ought to be told. I compliment him upon not trying to conceal facts. I also take this opportunity to compliment my leader (Mr. Hanson) upon the high plane to which he raised this debate when he made his remarks. In fact, since my leader has become the head of this party he has on many occasions raised debate to a high plane, and he deserves the commendation of the whole house for the invariable assistance which he has given the government and which he has induced those sitting behind him to extend to members of the administration in reaching their objectives.
On this occasion I wish to base some remarks upon an article that recently appeared in Collier's Weekly. After reading that article, one is bound to ask oneself this question: What is the future of our nearest British neighbour, the great island of Newfoundland, until recently a dominion but at present governed by a commission? The article to which I refer affords a great deal of food for thought as to what the present and perhaps the future position of our nearest British neighbour will be. After reading that article, I asked myself, as I will ask my fellow members to ask themselves after I have quoted some extracts from it: What is the position of Newfoundland going to be? (a) a dominion again within the empire? (b) a tenth province in our own confederation? (c) outside this empire, perhaps, as the article suggests, a state of the great republic to the south of us? I hope the answer is (b)-a tenth province in our own confederation.
For some thirteen hundred miles across the front of our country, across our Atlantic seaboard, Newfoundland's domain, including Labrador, stretches right across our great artery of commerce, the gulf of St. Lawrence. It is an extremely important question to Canada, what the future of Newfoundland will be. It is of great importance to Canada, particularly from the point of view of our defence; and similarly we are of importance to the defence of Newfoundland. The defences of the two countries are intertwined; one can scarcely exist without the other. Having in mind what the war has revealed, and also facts and figures which I myself compiled
after an exhaustive survey in that land, from one end to the other, covering a considerable period of time, I am of opinion that, taking everything into consideration, the time has come, and I hope now is, when the government should again consider approaching Newfoundland or, if the Newfoundland commission of government has not the power, then the British government, with a view to having the former dominion incorporated into Canada as a tenth province.
What did a great writer of Collier's, one of their main writers if not their leading writer, have 'to say in the issue of that magazine of April 12? I will quote a few sentences from an article referring to the bases which our cousins to the south are now establishing on that island:
Contrary to popular belief in America, the island is no part of Canada but a separate dominion in suspended animation.
By which the writer means that it is without popular government.
The belated defences in Newfoundland have nothing to do with that destroyer swap. Mounting guns on its headlands and demolishing fishing hamlets for airports, camp sites and marine bases was an afterthought. Our war and navy departments wanted them.
That is a revelation to most of us.
Canada, eager to have the yawning maw of the St. Lawrence stoppered, urged England to cede the land and the job to the states. And England herself, thinking of future exigencies as probably she has never thought before, granted a ninety-nine year deed of base occupation.
There is something new there. Later on, under the proper item, I will inquire whether Canada did ask Great Britain to grant bases on Newfoundland to our cousins to the south.
One after another, from Water street in St. John's-the street of the merchants-to the fishing villages they told us-
That is, those who were investigating and who wrote the article.
-that were Newfoundland permitted to vote upon it, eighty per cent of the inhabitants would ask the United States to take them over.
That is not so. I made a careful survey in Newfoundland and I can say this about Newfoundlanders; they are intensely patriotic, and if they went anywhere other than where they are, I am satisfied they could come into Canada.
The Yanks had come for ninetyrnine years. Maybe they would never leave. .Maybe presently they'd take the whole island' over, ship the commission of government back to England, build roads, start industries, set up Yankee relief, restore self-government.
Well, if Newfoundland comes into Canada as a province, our government will restore self-
The Budget-Mr. MacNicol

government on the island. Lastly, and perhaps one of the most important of the five sentences. I quote:
Out of all this comes the overwhelming sentiment for the adoption of Newfoundland by the United States, and there are plenty of Newfoundlanders, high and low, who'll predict that this is going to happen if they can help it.
I am not going to discuss the question from the point of view of the sentences I have just quoted, but state again that in my judgment if Newfoundland is to change its position the government of Canada might well interest itself in inviting it to come in as Canada's tenth province.
One might ask whether the time is propitious for the Canadian government to discuss this question with Newfoundland, for, if Newfoundland does join Canada, it will have to be of its own free will and on terms that are mutually satisfactory. Are the times propitious? In my judgment they are. I have always felt that there is no reason from the point of view of a Canadian why Newfoundland should not be a province of Canada. I have tried to survey the question from every angle, both for and against, and as a Canadian I see no insurmountable reason why Newfoundland should not be the tenth province of Canada, if Newfoundland herself is willing.


Mr. GIBSON:: Have you asked the
N ewf oundlanders ?


John Ritchie MacNicol: their total imports of about $28,000,000, some $10,000,000 worth come from Canada, about $9,000,000 worth from the United States, $6,000,000 worth from the United Kingdom and $2,000,000 worth from other countries. Our exports to Newfoundland have had a beneficial effect, in bringing about in that country a greater knowledge of Canada than otherwise might have been the case.
There are many other affiliations between Newfoundland and Canada. If I am not mistaken, this government maintains the Bot-wood airport; at least when I was there, the airport was under construction, and since then I believe we have taken it over. In addition, Canada maintains all the larger lighthouses, at cape Race, cape Ray, Belle isle, Bauld, etc. In addition, if I am not mistaken, we also operate the ship that goes from North Sydney to Port au Basques. I may be wrong in that, but that was the information I received. Then the three great churches of the island are very closely connected with Canadian churches. Two of them, I believe, have their head organizations interlocked with Canadian churches, and I believe they also interchange ministers. Their school system, while not founded upon ours, uses books that have -much in common with those in this country. Therefore the incorporation of Newfoundland into Canada would be more or less of an easement; it would not be a revolution in any way at all.
A few moments ago the Minister of National Revenue (Mr. Gibson) made some interjection which I did not quite understand, but I believe it was to the effect that the sentiment in Newfoundland is entirely against union with Canada. I made a very careful survey in that regard, but I did not come to that conclusion although during the course of my investigation I came close to being thrown off a dock at one of the outports; I will tell about that in a moment. In St. John's, ithe capital, I found many business, financial and travelled people, if not pronouncedly in favour of joining with Canada, at least willing to listen quite sympathetically to the suggestion of confederation. When I got below that class, however, I found the people to be strongly against confederation. I was told in St. John's that the outports were strongly against any suggestion of confederation. Therefore I went to the outports. I went up Conception bay, and got off at a number of small places. There was one small town in particular, however, about which I should like to tell the house. The main street of that town could not properly be called a street. I believe it might better be described as a road because, not having any municipal 
government, they scarcely have streets as we have them. They have no pavements, or anything of that kind.
While in that town I engaged in conversation with everyone I met. I observed one man coming through a gate in front of a fairly substantial house, and I accosted him, in an effort to lead up to a talk about confederation. They are an inquisitive people, and one has to give them credit for that. When I told him I had come from upper Canada he said, "What are you here for?" I thought I had better play safe, right away. He said, "This is a small, out-of-the-way place; why did you come here?" I said, "I came here to get the opinions of citizens in the outports in connection with confederation." I had been told at St. John's that opinion in the outports was decidedly against confederation. This man said, "If anyone advocates confederation here, we throw him into the bay." We were only about ten feet away from the bay at that time. The water was about fifty feet deep, so I said, "Well, my opinions in reference to confederation are not fixed. However, having heard in St. John's opinions respecting confederation, and having heard some people speak in favour of it, I wanted to get the contrary opinions down here."
I said to him, "My good friend, why are you opposed to confederation?" I shall try to repeat the conversation, so as to give the whole background of the erroneous basis of arguments against it. He said, "You see my residence, there?" I said, "Yes." He said, "I can turn the key in my door and go away for thirty years, if I want to. When I come back I can go right up to my front door and walk right in. No one could take my house, because there are no land taxes here; we have no municipal taxes. So my house is safe." I said to him, "But if you came into confederation with Canada you would have exactly the same situation. In Canada the provinces are responsible for municipal taxation. The federal government at Ottawa would not have a thing to do with it. Therefore, so far as Ottawa is concerned, your house would be just as safe whether you were in the Canadian confederation, or whether you remain as you now are, as an island dominion by yourself."
I said, "Look here, my friend; you call this a street?" He said, "Yes." I said, "That is not what I call it. Look at my boots. I am standing in mud right over my heel tops while I am talking to you." I might explain that it had rained that morning, and the road was very muddy. I continued, "You have not proper streets. What do you do at nights, when you go to the store up-town? You have no lights." He said, "I take my lantern with me." I said, "You have no street lights, and

The Budget-Mr. MctcNicol
you have no library. What do you do for schools?" "Well," he said, "we have three schools, operated by three churches." I am happy to say that their schools have given satisfactory service.
But municipal life as we know it here in Canada is wholly out in Newfoundland- except, of course, in the city of St. John's. In Corner Brook and in Grand Falls conditions are better, and I found some sentiment, particularly among what might be called the better educated and travelled people-business and otherwise-in favour of confederation. But the situation is changed to-day. They have lost their government. They have only a commission of government. Only a few days ago I had a letter from Newfoundland-and I do not wish to give the name of the writer, because I am not going to read it. It is, however, from a prominent man, and he states that sentiment has changed considerably.
I said to that man, in the outport to which I referred, just the same as I said to the people in other outports, that if Newfoundland joined Canada her living costs would be much less than they are to-day. I visited the corner store and took special note of the prices of certain household commodities. For instance, the price of corn flakes was slated as seventeen cents a box. In Canada we never pay more than two for twenty-five cents, and frequently we can buy three for the same price. Gillett's lye is sold for twenty cents a can in Newfoundland, and it can be bought for ten cents a can in Canada. And so on, all down the list. So I said to him, "If you joined Canada your cost of living would be cut in two, and you would be able to buy some of the comforts we enjoy".
Some people in Newfoundland are labouring under the erroneous impression that joining the Canadian confederation would mean heavy municipal taxation. It would not mean anything of the kind. On the contrary, in my opinion joining Canada would be greatly to their advantage. They would receive many benefits they do not now enjoy. They would have a greatly reduced cost of living, and would be in a position to have many of the household comforts which are commonplace with us.
In one other outport I talked to a number of sailors who had just returned from the north shore of the St. Lawrence, just west of Labrador. Lord knows it is bad enough on the Labrador coast, and it may be just as bad on the north shore in Quebec that far east. However, I said something to one of them, and he replied, "I go out there fishing. Here in my town we have nice stores, and so on. Up there in Canada there are thousands who are worse off than we are." He was speaking
of those fishing villages away down on the north shore of the St. Lawrence, in Quebec, and along the coast of Labrador. They have a wholly erroneous idea of what Canada really is.
Then, on the contrary there are many Newfoundlanders in my part of Canada, and a large percentage of them are in favour of confederation. There are hundreds of Newfoundlanders in my own constituency. I know their names

names like Cornick, Hibbs, Preston, Young, Yates, and so on. All those people are confederationists. They have come to Canada and have benefited. They would like to see their own, people in Newfoundland have the same advantages that we have.
Confederation with Newfoundland would enable us after the war to develop our whole economy right across the north half of this continent. The 40,000 Newfoundlanders engaged in fishing, the 2,500 in mining, the 5,000 in lumbering and the 5,000 in farming could take part in a continent-wide after-war development. The iron mines in Newfoundland are of great importance to Canada, and with their proper development our national steel production could be put on a more satisfactory basis, and one which would be beneficial both to Newfoundland and to Canada. Travel would be increased between the two parts of the country, and there would be profit for them as well as for us.
I have only a few moments to refer to the financial set-up of Newfoundland. They have a debt of about $120,000,000, of which $20,000,000 has resulted from their railways and telegraphs. These are owned by the island. If Newfoundland were to enter the Canadian confederation, both the railways and the telegraph system of the island would be incorporated with our Canadian National railways and telegraphs.
We could assume that cost, and relieve the island of that portion of their debt. The whole debt is guaranteed by England. I have not time now to deal with it in detail. If the old land were to take over the balance of $100,000,000, the island could enter the confederation free of debt. If we were to take over the debt of the telegraph and railway operations, $20,000,000, and Great Britain were to take over the remainder of the debt, the island would come in free. Then, with ordinary provincial grants, which we make to our provinces, and their own provincial revenue, they would be able to operate without incurring new debt. Under those circumstances they would need have no fear whatsoever of that great bugbear, municipal taxation, unless they want to adopt it themselves. I suggest
The Budget-Mr. MacNicol

that these points are worthy of consideration. Their fear of municipal taxation could be eliminated.
In conclusion, just look at the picture. For over four thousand miles on the north half of this continent we would have a truly majestic dominion, with the waters of the Pacific on the west and the waters of the Atlantic on the east bathing our shores. In matters of defence we would have full control, something which is very much needed for the added protection of Canada. We need have no fear about getting along well with our neighbours to the south. There would be no trouble over United States bases in Newfoundland. I am not going to discuss at the moment whether they should have them or not, but the United States is a great nation, very friendly to us, and we have got along peaceably with them through all the years along our four thousand mile border. Therefore there would be no difficulty between the United States and ourselves.
I submit this proposal to the government in the hope that they will consider approaching Newfoundland with a view of incorporating this island as a province and that they will approach the question in a spirit of magnanimity and courtesy, and by negotiation endeavour to get Newfoundland into confederation so that they will come in happily and be truly a part of ourselves. Then there could be no possibility of the import of the article from which I quoted coming to pass.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. F. D. SHAW (Red Deer):: Prior to the six o'clock recess, the hon. member for Davenport (Mr. MacNicol) took us on a delightful although imaginary journey to Newfoundland. I regret that I am unable to continue the same line of thought. I have elected to pursue a different course. It may not be as pleasant, but I believe it is necessary; it may even have reference to certain restrictions with regard to travel.
This third war budget, this alleged indication of the scope and scale of Canada's 1941 war effort, this offspring of strictly orthodox parentage, is essentially drastic but, in the main, was anticipated. I believe - that Canadians generally realize that sacrifice and inconvenience are essential to a total war effort. I believe that they also realize that the victory of democracy with its freedom, over [Mr. MacNicol.)
dictatorship with its slavery, necessitates the utmost utilization of our energies. It was hardly anticipated, however, that certain impositions which by this budget have been placed upon us would be imposed. Yet, to be fair, I must admit on the other hand that we expected certain impositions which have not been laid upon us.
Upon examination of this budget I regard its purposes as twofold: first, to curtail the normal peace-time activities of all Canadians -and the normal peace-time activities of certain classes will be curtailed, although I am not so sure that curtailment will extend to some other classes-second, to direct to the Canadian treasury sums of enormous and unprecedented magnitude. In fact the budget, as possibly was its purpose, reaches into the pockets of all classes of .the Canadian people.
I have in mind first the well-to-do. Undoubtedly it will reach into their pockets, but I do not know that it will curtail to any great degree their normal peace-time activities. So far, I have not seen much evidence in that direction.
Then there is the position of those of average means. Many Canadians in this class secured during this war 'the first regular jobs they ever had. During peace time they encountered innumerable difficulties in meeting the ordinary, everyday conditions of life.
Finally we have the poor, and with them I associate those of veiy meagre incomes. I might even have in mind the 279 married civil servants who receive $60 a month or less.
As regards the first class, the well-to-do, and the effects which the budget may have upon them, let me observe that the degree of sacrifice is not necessarily measured by the amount of money or purchasing power which the government takes away from people; what counts is the amount of money or purchasing power which is left after the government has finished with them. As I said a moment ago with regard to the well-to-do, I have not noticed any appreciable reduction in their standards of living. I believe that if hon. members will recall whait they have seen during the first year and a half of war, their observations will agree with mine, that there has not been an appreciable reduction. The hon. member for Acadia (Mr. Queleh) has just remarked, "No appreciable reduction in the waist-line." I agree; I could not do otherwise.
Then, as regards those of average means, it is unfortunate, but undeniably true, that there are hundreds, even thousands of young Canadians who, prior to the outbreak of hostilities in 1939, did not know what it meant to have a decent income or a steady job. Please do not misunderstand me. Moved by feelings of patriotism just as strong as

The Budget-Mr. Shaw
yours or mine, they enlisted, but not the least of their reasons for doing so, as some of them have told me, was that they were thereby enabled to provide at least the necessities of life for their wives and children. We are now, as a consequence of this budget *-and I realize that here, again, I am likely to be misunderstood-giving to them what we call a recompense for their services- although in fact it is not-while with the other hand we are taking something away from them. I do not think details in this respect are necessary, but I cannot refrain from saying that I do not like the pressure which is being put upon the men in uniform to subscribe for war savings. Here I am expressing my own personal view. Many of these men, some of them in uniform, some of them engaged in the civil service, have seen in the windows of the stores and in the factories things which go to make life worth while but which hitherto have been denied them. Now, upon securing the first regular employment they have had, they naturally wish to secure these commodities which up to the present have been beyond their reach. But we are going to deprive them of that privilege. We also realize that many of these people in the low income brackets have been making purchases on the instalment plan, and I know, too, that this budget is going to render it extremely difficult for them to meet the obligations they have assumed.
I could say more in that connection, but let me go on to those who come within the last category-the poor, including those of hopelessly inadequate means. I have in mind there the old age pensioners, and in a moment I shall have "more to say about them. I think of the widowed mother with children, in receipt of a paltry pittance to rear and educate them. We have also the blind, who receive pensions at the age of forty. It is an abomination to declare that a blind man shall reach the age of forty before being given consideration in the form of a pension. It is just as difficult for him to secure the means of livelihood at thirty as it is for him to do so at forty. We have not been generous enough in this regard; in fact we have been just the opposite.
I think also of those people between fifty and seventy who are to a very large extent unable to take advantage of the jobs which are created as a consequence of the war. Yet they are altogether too young to receive pensions. Ever so many of them are on relief. I have the statistics in this connection, although not before me. It is a rank abomination that we should say that while there are
many of these people over the age of fifty, unable to secure or to hold a job, and in receipt of relief, these relief allowances shall be definitely and drastically curtailed on this occasion, when there is on every hand ample evidence that the cost of living is rising rapidly in spite of the war-time prices and trade board and in spite of the innumerable declarations that have been made in this house about there being rigid control over fluctuations in prices. We have also soldiers, veterans of the last war, many of them incapacitated to a certain degree. They are in receipt of pensions, but pensions that are very, very meagre, and this added burden upon them will make it difficult indeed for them to get by.
Then we have the tens of thousands of farmers-I may be putting that figure a little high-[DOT]


An hon. MEMBER:: Hear, hear.


Frederick Davis Shaw: The hon. member who says "hear, hear," must be an urban dweller whc makes infrequent Sunday visits to the country. I feel sorry for him rather than critical. We have tens of thousands of small farmers who have to face this agricultural policy, which guarantees less than cost of production. These people, after we have pleaded for them, are further burdened with another three cent tax on gasoline consumed on the farm. This is a terrible situation, although the representatives of agricultural areas in Canada have pleaded for the farmers. We have the labour which is dependent upon the revenue the farmer is able to derive from his efforts, and then we have the small businesses in the smaller towns in the agricultural areas, depending once again upon those, mainly farmers and farm labourers, whose incomes are going to be terribly reduced, while at the same time prices of retail commodities which they require are moving steadily upward.
Upon these classes will fall the real burden of this war. Upon those who have suffered for years and years a degree of pauperism and misery will fall the burden, notwithstanding the fact that the problem of production has been solved, so that we are really able to produce far more than the needs of these small populations we have in Canada.
I believe that we entered this war-I will go so far as to say I believe that our government entered this war-with an outlook and understanding not in keeping with actual conditions as they exist. I said a moment ago I would have more to say about old age pensions. The consideration which we have given to the old in this country, not only during war time but during the peace which preceded the war, illustrates a condition of
The Budget-Mr. Shaw

disgrace abounding, and I do not believe I am emphasizing it too strongly when I say that. These old people were the pioneers of this country, who faced the wilderness and out of it brought the vast production which we see evident on every hand. With their vision, initiative, courage, sacrifice and thrift they opened the vaults of nature in Canada and revealed the untold wealth which is to be found there. They solved the problem of production years ago, to such an extent, it is said, that in Canada we are able to feed a population four or five times as large as that which we have at the present time.
Let me make this observation in passing. If we are not able or willing to give better consideration to the population we already have, I think it ill becomes us to advocate the supporting of a population four or five times greater. Out of our lakes and forests, out of our streams and mines and plains, we are unquestionably able to satisfy all the needs of a growing nation. We have here a land area of three and a half million square miles, which is equal to three times all Europe, not taking Russia into account, including the British isles; yet we have a population only one-twentieth of that of those areas.
These old people of whom I speak, many of whom are pioneers of the country, left assets far greater than the needs of this nation, but we have failed hopelessly in the question of properly rewarding them, as those who made it possible for the people of to-day to enjoy the things which we have in abundance. During the lifetime of each pioneer, he encountered situations where his earnings were inadequate to provide for his daily needs and also to arrange for an accumulation of savings. The result is that when he was confronted with certain unforeseen economic reverses, his meagre savings were depleted and he passed into the evening of life at the mercy of those to whom he had left the developed assets of this country.
During the time the pioneer was developing this dominion we also found developed in this country a certain system of acrobatics, if I may call it that, of economics and finance. There were brought into being certain mysteries of calculating and recording; we found the debit and the credit systems being evolved so far as they applied to this Canada of ours, and the mysteries of accounting and bookkeeping. What came out of it all? So far as the pioneer is concerned, the old person, this is what he has received out of it: in Canada we examine carefully into all the conditions surrounding persons who have reached seventy years of age; and after we are definitely assured that the sons and daughters cannot support them, after we are certain that there 
are no hidden relatives of some complexion or another able to provide for them, we grant them a mere pittance, a sum which we charge against any real estate which they may own, together with five per cent interest compounded annually. What do we give them? I have some figures here. The average old age pension in various parts of Canada is as follows: in the northwest territories it is $20 a month. There are only seven of them, and that is the highest paid from the Pacific to the Atlantic so far as we are concerned. For the other provinces the averages are:
Saskatchewan	 $16.76
Quebec	 17.84
Prince Edward Island-
Listen to this, hon. members from Prince Edward Island.
In Prince Edward Island the average
pension is $11.28.
Ontario	 $18.53
Nova Scotia	 14.82
New Brunswick	 14.62
Manitoba	 18.66
British Columbia	 19.13
Alberta	 18.53


Charles Edward Johnston: Are these
lawyers?


Frederick Davis Shaw: I shall come to that in a minute. That same system of economics and finance which gives to the old people of Canada, after forcing them into a condition of pauperism, the paltry sums I have mentioned, has given to the retired judges of this country something like this, to one, $1,000 a month; to another $750 a month; to another, S666 a month, and ito another, $666 a month. There are five getting $583 a month, thirty at $416 a month, five at $500 # month, and one at $555. In other words, the lowest average old age pension received in Canada is $11.28 paid in Prince Edward Island, while the lowest judge's pension is $416 a month and there are thirty of them getting that. Someone suggested to me this afternoon that judges were lawyers and lawyers are usually politicians and so forth; hon. members can trace it back for themselves.
There are those who say that no consideration should be given to this matter at the present time; that we are at war. But Great Britain lowered her qualification age to sixty-five and increased the amount of pension during war time. The United States of America, through amendments to the social security act and through congressional enactment, are paying as much as $40 a month, allowing certain incomes for the upkeep of personal property, and paying $50 to $100 to meet doctor's bills and funeral expenses.

The Budget-Mr. Shaw
It is absolutely necessary at the present time to give further and more adequate consideration to this question, especially in view of the fact that we have in Saskatchewan an increase in the cost of retail commodities of 12 * 1 per cent, while in the other provinces the figures are:
Per cent
Quebec	 10'5
Ontario	 f'6
Nova Scotia	 15-2
New Brunswick	 12-4
Manitoba	 10'2
British Columbia	 9-1
Alberta	 9-8
This averages a little over ten per cent increase in the cost of the retail commodities which these people have to buy. In other words, in actually determining the amount of the average old age pension, one must reduce the amounts I stated by these percentages representing the increase in the retail price of commodities.
I would say, and I feel extremely keen about this, that it is a gross injustice which we are placing upon the shoulders of the people whom we call the old age pensioners. I do not see why this government cannot reduce the qualification age to sixty-five with sixty the ultimate objective, and raise that meagre pittance from .the present average level to at least S30 or $40 a month. In this way we should be actually accomplishing something m parliament.
I note that in this budget we have a further tax upon sugar. I do not know what line of reasoning was followed when the government finally determined to add to the tax upon sugar. By doing so they are reaching into every sugar bowl in Canada, while at the same time they are not reaching into every glass of whisky that may serve as a substitute in many instances for the tea or coffee which the humble folk drink. I said a while ago, and I reiterate it now, that I am definitely opposed to that tax increase on sugar. I do not know whether the government regard sugar as a non-essential essential or an essential non-essential; it has my head in a whirl. I do not believe that any adequate explanation was given for the tax increase.
I wish to place emphasis once more upon the fact that I am protesting against this added three cent tax on gasoline which is consumed on the farms. It is a very poor reward for the effort and energy and the contribution which the farmers of western Canada have offered for the prosecution of this war. I said that I think we failed to give recognition to the existing condition among this class of people when we entered upon this war.
The Minister of Finance (Mr. Usley) has asserted time and again, as I presume all members of the cabinet have asserted, that we are desirous of bringing about equality of sacrifice; but I say that, as a result of the gross inequalities which prevailed prior to the outbreak of war, the minister is just about as close to his goal to-day as he ever will be while he continues to pursue the course of action, with regard to finance, that he has pursued in the past. With the obnoxious agricultural policy which has been thrust upon us; with the inadequate pension policies to which I have already alluded; with the disregard for relief needs in this country, even yet, and with the centralization of industry in Ontario and Quebec, the minister cannot possibly get any closer to his goal than he is at the present time so long as the government continues to pursue the present policy.
We have now the imposition of a ten per cent tax on travel tickets. So far as the civilian population is concerned, I have nothing to say; but so far as the soldiers are concerned, I could not say what I think and still comply with the rules of this house. Hon. members have risen in their places here time and again in an endeavour to secure consideration for the boys in uniform in connection with the matter of travel. We first pointed out that we thought they should have free transportation. When that was refused we said we thought at least the soldiers should receive the same consideration that is shown civilian travellers with regard to special excursion rates and so forth. We in this group also suggested that we might afford pool rates; but what do we get in answer to our pleadings? We get a ten per cent tax on the cost of their transportation, and I say that is an absolute disgrace. I have had thousands of soldiers fell me what they think of this situation. I wish the Minister of National Defence (Mr. Ralston) and the Minister of Finance could have walked into some of these training camps about the time the soldiers learned of this new imposition. As I said a moment ago, even if my voice were not failing I would not be able within the rules of this house adequately to describe my feelings in the matter.
My time is practically exhausted, Mr. Speaker, and in conclusion I should like to make this observation. The people of my constituency, Red Deer, are behind this war effort absolutely. We are not all satisfied with that war effort, but in any event we would rather push something with which we do not entirely agree than sit idly by. May I say, too, that in the constituency of Red Deer we have given generously of the best of our manhood. If time permitted I could mention
The Budget-Mr. Graydon

figures to illustrate that point. Suffice it to say that in my home town of Innisfail we have given approximately 260 men out of a total population of about 1,250. Our people are subscribing generously to the various war services; but on the other hand my constituents, whether Liberal, Conservative or anything else-and I represent them all in this house-are definitely opposed to the agricultural policy which has been proposed. They are also definitely opposed to this three cent excise tax on gasoline used on the farm; at least I have heard nothing to indicate the contrary. Furthermore, we are definitely opposed to this ten per cent tax on travel tickets, as it will apply to men in uniform. I should like to say also that in my travels across Canada I have made it a point to talk to many soldiers, without divulging my identity, in order better to understand what they are thinking. Each of these soldiers expressed acute dissatisfaction because of the fact that we have no proper rehabilitation programme for them when they are discharged at -the end of the war. Someone may say that there is such a programme in process of being drawn up, but, as the hon. member for Acadia said on another occasion, when the scheme has been completed probably the Minister of Finance will say that we have not the money necessary to put it into operation.
I say, Mr. Speaker, that it is not enough for us to say to these boys when they are. demobilized, "Thanks a lot. There is the boxcar we took you from; we shall see you when the next war breaks out." If this war lasts ten years we shall still have the resources of this country, and they will be more completely developed than they were at the time the war started. We shall have all the things necessary to make life worth while for our boys-food, clothing and shelter. The financial balance sheet of this country will declare us bankrupt. Just because we have a debt of perhaps nine or ten billion dollars, are we still going to deprive our boys of the fruits of the efforts of the Canadian people over a number of years, that is, the products of their own efforts, which guarantee economic security?


Gordon Graydon: Mr. Speaker, to-night I wish to take only a very brief time ito discuss the budget. In general I think the people of Canada will be in agreement on one point, namely, that the money must be raised for war purposes as well as for the ordinary conduct of government. Once they are satisfied that the money is being spent wisely and well, there will be no general disagreement with the taxation 
proposed, except where some obvious inequalities are found to exist. So far as inequalities in the incidence of taxation are concerned, I am not going to deal with all of them to-night. Rather I wish to leave them for discussion when the various items come up in committee. I rise to-night, however, because of a deep conviction which has come to me after reading one particular item in the budget. I thought perhaps I might bring my point more forcibly and emphatically to the attention of the government if at this time I dealt with that one matter only. Because of that one item upon which I am going to speak for a moment or so, I find that it is only with the greatest difficulty that I am able to vote for the budget.
While I was never convinced that it was a proper policy, the government may have had reasons for denying free transportation to the members of our armed forces in Canada. I am prepared to accept the word of the Minister of National Defence (Mr. Ralston) in that regard, because in what I have to say to-night I have no desire to embarrass either the Minister of National Defence or the Minister of Finance (Mr. Ilsley). I am mentioning this matter only because I wish the Minister of National Defence and the government to change the item in the budget to which I am going to refer. I do not care whether or not they take all the credit themselves; I want no credit in connection with it, but I do want this one thing changed.
The men in our armed forces have enlisted for the purpose of saving the very institutions which make possible this budget and the discussion which is now proceeding. Therefore I ask you, Mr. Speaker, if it is fair that we should ask certain classes of our citizens not only to fight but to pay an extra tax while they are training for that fight, Canada desires to do the right thing by every man in uniform; I know the feeling in this dominion in that regard. If we err at all, it ought to be in the direction of dealing too generously with the men in uniform, rather than being even suspected of treating them in a niggardly fashion. To ask, as this budget does, every man in uniform to forego the right to some form of free transportation is bad enough. Personally I am not proud of Canada's stand, so far as that is concerned. But to ask them-and I wish to emphasize this point as best I can-to pay an additional tax of ten per cent on every railway or bus ticket offends my sense of justice and, I believe, offends the sense of justice of every hon. member. I ask the government to change that provision, without further delay.
I never was more serious in my life in proposing a change of government policy than I am at this time. The bargain, excursion

The Budget-Mr. Matthews
rate on a return ticket from Ottawa to Toronto for the ordinary civilian passenger is $6.25, plus ten per cent tax, making a total of $6.88. At certain times anyone can buy a ticket at that price. The return railway fare for men on active service who wish to travel from Ottawa to Toronto is $7.40, plus the ten per cent tax, or a total of $8.14. I protest with all the vigour at my command that this is a rank injustice against our fighting men, and I cannot think for one moment the government intended that it should be so.
For that reason I make this serious and earnest plea to the government, namely, that they give exemption from that tax to those passengers who are on active service, and that some arrangement may be made at least for furlough passes as well. I have nothing further to say at this time respecting the budget resolutions. I have brought this one point only to the attention of the government, and I say it will be to the credit of this parliament and the country if this change is made.


Mr. J. E. MATTHEWS (Brandon):: Mr. Speaker, I have never intruded unnecessarily on the time of the house, but to-night I should like to say a few words about that famous budget speech we heard a week ago. I would join with other hon. members in extending hearty congratulations to the Minister of Finance (Mr. Ilsley) upon his clear, concise and courageous presentation. It was not tlie type of budget he or any other minister of finance would wish to deliver. Nevertheless it was a speech which will go down in history, and was undoubtedly the most important and far-reaching budget which up to this time has ever been delivered in Canada.
The minister has not shrunk from his colossal task. He has given us the plain, cold facts, without any sugar-coating; and in doing that, he has rendered a signal service to the Canadian people. His frankness, his earnestness, his absorbing grasp of the financial situation appealed to me most strongly. While he was speaking, I thought again, as I have thought before, of the sagacity of the Prime Minister (Mr. Mackenzie King) and his genius in selecting for his cabinet men so peculiarly fitted for the performance of their respective duties.
I would congratulate the leader of the opposition (Mr. Hanson) upon what I considered was a very fair, moderate and desirable criticism of the budget speech. I believe that his observations appealed to all hon. members in every section of the house. I believe that what I have said might apply equally to the remarks of most other hon. members who so far have spoken.
It is my intention to offer a few words of criticism of the opposition groups in the house for the delay they have caused in getting along with the business of the country. I hope what I shall say will not be considered unfair. To my mind much of that delay has been unreasonable and unnecessary. Much of it has been caused by the asking day after day of irrelevant questions, the answering of which has taken considerable time. Much of that delay has been caused by monotonous and meaningless discussion.
For these reasons I wish to speak for a very few minutes as the representative of the largest and most populous constituency in Canada;
I refer to the constituency of overburdened and long-suffering taxpayers. When I use the expression "overburdened and long-suffering", I mean exactly what I say. I greatly regret there is not time to develop that thought to-night in the way I should have liked to do. I shall take time for only one practical illustration, and- it is this:	These
sessions of parliament cost money. Yes, they cost a lot of money. Every day this house is in session unnecessarily means an added drain upon the pockets of the taxpayers. I often wish some of our taxpayers-thousands of them from all parts of Canada-could take their places in these galleries-


Some hon. MEMBERS:: Hear, hear.


James Ewen Matthews: Yes, and listen to some hon. members opposite-


Mr. BLACKMORE:: Right now would be a good time.


James Ewen Matthews: -and I believe they would see for themselves, and obtain a new idea as to how their money is wasted. We hear speech after speech expressing the same thought, in dreary repetition, while the taxpayers foot the bills and the Minister of Finance tries to collect the cash.
All hon. members realize that a task of colossal magnitude has been thrust upon the Minister of Finance. It is not one of his seeking. Everyone knows how unprepared Canada was a few years ago, so far as the implements of war are concerned. We know how unprepared we were for the present appalling war expenditures. That is not to be wondered at. We in this dominion are, and always have been, a peace-loving people, but in many instances the love of peace was permitted to override our better judgment. That was true also of England, of some European countries, and particularly true of Canada. All across this country in the last decade there swept a demand for disarmament. In the pulpit, on the platform and in the press that demand prevailed, until
The Budget-Mr. Matthews

one wonders to-day whether many of its * good and well-intentioned advocates were not the deluded victims of German propaganda.
Even this House of Commons was not free from the effect of that propaganda, if I may so describe it. The pages of Hansard tell us a sorry tale-speeches made in this chamber only three or four years ago, opposing most bitterly the voting of money for military expenditures. Those speeches will remain in Hansard, and will stand as a sad commentary upon the discernment of many of us.
I have been looking over Hansard for previous years, and I had first planned reading some of those quotations to-night. I do not, however, intend to do so, because I believe the speeches made at that time were made in absolute good faith, but in view of these facts I would suggest that some hon. members should be less caustic in their remarks about what they are pleased to term the inadequacy of the government's war effort.
Some of them, perhaps all of them, are educated gentlemen and will not be unfamiliar with that Shakespearian phrase, "Consistency, thou art a jewel." Yes, many people were fooled during those pre-war years; but some were not. I remember four years ago next August talking nearly the whole of one afternoon to a friend of mine who had just spent a few weeks in Germany. He was not fooled. He said: "There is not the slightest doubt in my mind that we shall be at war with Germany inside of two years," and he was right almost to an uncanny degree.
I am not offering these remarks, Mr. Speaker, in any spirit of recrimination-far from it. "To err is human; to forgive, divine." But I do wish to urge with all my might that now, when all our energy should be directed to winning the war, this pop-gun criticism, particularly from those who have themselves grievously erred, should be suspended. I honestly think that in causing so much delay in this house, some hon. members have not been playing fair with the country, or playing fair with themselves. History does not tell us how long Nero fiddled while Rome was burning, but I have come to the conclusion that there are some among us who have Nero trimmed to a standstill. In saying this, I have no thought of suggesting that all these modern Neros are to be found on one side of the house. Nevertheless, judging by the remarks of some hon. members, one would almost suppose that some of those on the other side of the house must have fallen asleep twenty years ago. Their dreams disturbed by unpleasant recollections of happenings in the last war, they are only now arising from their slumber and are incapable of realizing that this is a new and vastly different kind

of war, more expensive because a more mechanized war. The government of Canada to-day in the prosecution of this war has nothing to hide. But some hon. members on the other side have taken so much of the time of this house, groping for supposedly unsavoury deeds and finding none, as to lead one to suspect that during their slumber they had contracted an attack of political jaundice. I think it is Pope who tells us:
"All seems infected that the# infected spy,
As all looks yellow to the jaundiced eye."
If I may be permitted, I would suggest that the opposition groups in this parliament rid themselves of their fiddling Neros and dreaming Rip Van Winkles, and that they cultivate within their ranks a greater desire for helpful cooperation. But every cloud has its silver lining, and when I heard the hon. leader of the opposition state yesterday that it was not the intention of his party to move an amendment to. the budget, I thought it was a commendable gesture which enabled me to forgive the opposition for a multitude of their sins.
A few minutes ago I expressed a desire to say something on behalf of the taxpayers of Canada. The budget will mean a measure of sacrifice, either directly or indirectly, to every one of us. I believe that our people from coast to coast in studying this budget will realize as they never did before, the magnitude of our country's task. I quite agree with a speaker who in Ottawa a few days ago said that we are living in an unreal atmosphere, still enjoying the amenities of life, long since gone in the old land. Up to the present many of our people, so far as the war is concerned, do not know the meaning of the word "sacrifice." Believe me, we shall all know it before this war is over. I have seen it stated that the cost to Canada of the present war is already two million dollars more than that of the last war from its beginning up to the March offensive in 1918, and, further, that this year's budget alone is more than the Canadian total cost of the last war and six months of demobilization thereafter.
Figures were recently made public comparing the income tax payable by a married man in Canada, with two children, with the income tax paid by a man in similar circumstances in Great Britain. The figures are as follows: Income tax Income tax
Earned	payable in payable in
income	Canada Great Britain
$ 2,000	
$	60	$	4663.000	
215	9664.000	
450	1,46650,000	
26,437	35,032
However, this other side of the question was pointed out, that whereas the taxpayer in

The Budget-Mr. Matthews
Great Britain pays only one income tax, the Canadian taxpayer, up to the present at least, has been paying income tax also to the province, and sometimes to the municipality. Moreover, in Britain there is no sales tax, and real estate taxes are lower than in Canada. It is also pointed out that Britain, according to the latest available figures, is spending approximately fifty-five per cent of her national income for war purposes alone. Canada this year will be spending over fifty per cent for war and allied purposes.
Therefore you see, Mr. Speaker, that so far as taxes are concerned, the Canadians are taking it, and will continue to take it. Our young men are taking it also. They are not inclined to shirk their duty. The Minister of National Defence (Mr. Ralston) is, I believe, authority for the statement that in the sixty mobilization and training camps across this country there are 175,000 young men fitting themselves for military service anywhere, and, in addition, another 10,000 in training centres for the defence of Canada. Besides those, there is the Royal Canadian Air Force, now numbering 50,000, many of whom are valiantly defending Canada in the clouds over Europe.
This is just about what we would expect. Most of us have always lived in an atmosphere of freedom, a heritage from preceding generations. These liberties, these freedoms, someone has said, were conceived in British hearts, born and bred on British soil. Alice Duer Miller expressed the thoughts of many Canadians rvhen she wrote these words, "In a world where England is finished and dead, I do not wish to live."
I have presumed to speak some words of admonition, good-natured, I trust, but none the less sincere, to our friends of the opposition groups. Now just a word of suggestion, of warning, if you will, to those on this side of the house-and again I speak in the interests of the taxpayers of Canada.
The Canadian people will raise the money. We shall raise it gladly for the security of our freedom and the safety of those we hold so dear. But the Scottish instincts I have inherited prompt me to say very plainly that we are not willing to see that money recklessly or wastefully expended. I do not believe that this has happened to any great extent, although some mistakes and some waste were unavoidable in the initial stages of such tremendous war undertakings. But now that we have caught our stride, every needless expenditure should be, and I am sure will be, ruthlessly eliminated. I venture to hope and to believe that in this regard the governmental departments will have the alert
cooperation of every officer in uniform, of every person in a position of responsibility, yes, of every citizen of this country. It is only by cooperation of that kind that the government can obtain the best results.
It is regrettable that among a certain type of people war has always developed a spirit of greed and a desire to profiteer. Canadian taxpayers will not be inclined to tolerate or to excuse any such spirit no matter from what source it may develop. In this connection every one of us should keep in mind the old maxim,-"Eternal vigilance is the price of safety."
Let it not be forgotten that this is the fight, or should be the fight, of every man and every woman in Canada-every one of them. It is in a special sense the fight of every young man and every young woman in Canada, every one of them; for, after all, it is they who will have to live their lives either in freedom or in servitude according to the outcome of this war. No men, no women, young or old, are entitled to enjoy the liberty of their country unless inspired with the determination, the enthusiasm, the love of country, to defend that liberty to the last ditch.
Mr. Speaker, I had the honour in this house in January, 1939, of moving the address in reply to the speech from the throne. At that time I made reference to the approaching visit to Canada of their gracious majesties, the King and Queen of our beloved empire. They came two years ago. No words of mine are necessary to recall to you the marvellous impression made by that charming couple upon the people of this dominion. Ever since that visit the singing of our national anthem has to me, in some way I cannot explain, taken on a deeper meaning, a new appeal. There is no question about it-the visit of their majesties to Canada strengthened immeasurably the bonds of empire and has given to Canadians an even deeper personal interest in the prosecution of the war.
To-day I am in the happy position of making reference to another anticipated visit of paramount importance-the visit of that great man, President Roosevelt. What a thrill we all felt, what renewed confidence we all experienced when a few short weeks ago we listened to his significant declaration, "all aid short of war to Britain and closer collaboration in defence measures with Canada." That far-flung broadcast brought hope and cheer and confidence to every democratic nation in the world.
Then on Sunday last, the day before yesterday, speaking at the dedication of that immortal shrine erected to the memory of that great democrat, Woodrow Wilson, the president declared to the world that America is
The Budget-Mr. Matthews

ready to fight rather than have on American soil any violation of the principles of freedom or any violence to the American way of life. I have spoken of these two visits to Canada, so outstanding in their significance, so far-reaching in their results. How illuminating it would be if we could have the full story of the conferences leading up to those visits!
Some day the historian of the future will dwell upon those two events, emphasizing their tremendous significance in the winning of the war.
Some day that same historian will extend deserving tribute to a great Canadian who, more than anyone else, contributed to that spirit of good-will which culminated in those two eventful visits. He will place upon the pages of history the recognition of a grateful world to one of the greatest statesmen of the twentieth century, that far-seeing and unostentatious gentleman whom we are privileged to have in this trying period of world history as the Prime Minister (Mr. Mackenzie King) of this great dominion.


Mr. J. A. ROSS (Souris):: Mr. Speaker, may I first of all compliment the Minister of Finance (Mr. Ilsley) upon his able presentation of the war budget 'the other day. In my opinion he is a very capable minister.
I should also like to compliment the leader of the official opposition (Mr. Hanson) upon the high plane at which he kept the discussion of the budget in his address the other day.
I desire to offer one or two observations upon the budget, more especially with reference to the increasing disparity between the positions of the agricultural, the industrial and the organized labour population of this country; also, the lack of coordination among the various departments of government which are administering the present war effort.
In view of certain assurances, effective for the duration of the war, which have been given to industry and organized labour by the government of the day, I would urge first of all upon the Minister of Finance that he rebate the tax on gasoline which is used by the farmers for agricultural purposes. May I point out in this connection that it has been customary to recognize the gasoline tax as pertaining to the provinces for the building and maintenance of their highways. Notwithstanding that, in the province from which I come, the tax of seven cents a gallon has been rebated to date to the farmers in so far as their gasoline is used for agricultural purposes. I trust, therefore, that the minister will give serious consideration to the rebating to the farmers of this tax on gasoline which is used for agriculture.
As my leader stated the other day, the tax of twenty per cent on moving picture theatres 
will, in many instances, particularly in towns of less than two or three thousand population, which have not benefited by war industry, put the operators entirely out of business. Since the budget was presented, I have received many telegrams from operators in our province pointing out that the effect of the levy of twenty per cent under present agricultural conditions will certainly be to force them out of business. Without a doubt, this would be a hardship upon the rural population at this particular time.
I am astonished that, neither in the budget of last year nor in that of this year, has any increased tax been placed upon liquor, which is certainly a non-essential in so far as our war effort is concerned. By contrast, it does not seem to me that the rural population should be deprived of the educational and recreational facilities which the moving picture theatres provide for them.
As to the added tax on travelling of ten per cent, the matter has been ably discussed by previous speakers, from the point of view of the efforts which have been put forth on this side of the house to obtain reduced fares for men of the armed forces travelling in uniform. It is something beyond our comprehension that a soldier should have to pay one and a half cents a mile to travel in this country, while upon the same train, in many instances, civilians are journeying at excursion rates for one cent a mile. I am sure the minister will be considerate enough to see to it that these chaps in uniform are exempt from the ten per cent which he proposes to add to the cost of travel. The minister was thoughtful enough, following representations by hon. members on this side of the house in respect of a previous budget, to exempt members of the armed forces below the rank of warrant officer from paying national defence and income taxes, and I am sure that he will give no less consideration to the exemption of these men from the new tax on travelling.
It was disappointing to me to note, in that budget presentation, the elimination of exemptions for repairs to or the building of small homes. I well remember a speech delivered in the old laud by the late King George V, wherein he stated that the success of the British isles depended more than anything else upon the home or family life of that country, and I believe that we should do everything possible to foster at all times the building of small homes and the development of family life.
There is a great deal of extravagance in the expenditure of public money at this time. As an example, let me refer to the spending of several millions of dollars among some 17,000 persons to be employed in the taking

The Budget-Mr. Ross (Souris)
of the census, despite the fact that, if it was thought advisable to take this census at this time and under these war conditions, such an efficient organization as the Teachers' Federation of Canada had offered to do this work, even during June, at no cost to the country. Several millions might well have been saved during these times of stress and strain, but the government has seen fit to appoint census commissioners on a patronage basis throughout the dominion, and millions are to be thus spent in taking the census.
Millions are being wasted in the enlistment, training and discharge of thousands of men in the army and air force at this particular time. It has been said that this is the most difficult army in the world to get into and the easiest to get out of in these days. The fact that well over 20,000 men have already been discharged from the Canadian army is sufficient proof of extravagance and waste somewhere. May I remind the house that it cost $2,300,000 to equip these 20,000 men before they went on parade; then it cost another $3,275,000 a month to support them while in Canada, and if they were overseas the cost to support them would be increased by another thirty per cent. It costs a great deal more to equip and train air men, and yet a pilot or observer who fails for some reason or another to pass his examinations, after receiving considerable training, is discharged. In my opinion, a great many men, both in the air force and in the army, should have been transferred to some other branch of the service where they could render useful sendee after having received this amount of training, instead of being discharged, especially if they had passed anything like a proper medical examination on enlistment. Certainly this is not in keeping with the plan of selectivity in dealing with the man-power of the country, both as regards industry and in the army, which was recommended by General McNaughton on September 11, 1939.
May I refer for a moment to the Canadian Pension Act. On September 2, 1939, order in council P.C. 2491 was passed conferring all the benefits of the act upon members of the Canadian active service forces enlisted for service in the war with the German reich. The terms of the order in council conferred the benefits of the insurance principle upon all members of the forces regardless of their field of service. On May 2, 1940, a further order in council, P.C. 1971, was passed rescinding the regulations contained in P.C. 2491. It conferred the benefits of the insurance principle only on those who served in a theatre of war outside Canada. In my opinion, that is not conducive to voluntary enlistment, and I think those who offer their services, all that they have, on our behalf.
should at least be given the same consideration as the men in industry during this time in the matter of protection, not only for themselves, for those who are on service in this country, but for their dependents. In my judgment, a great deal has been done by this administration, in such matters, to discourage voluntary enlistment in the armed forces throughout the country.
I should like to discuss agriculture for a moment or two. First, may I say that there is a young man from my constituency who was farming on his own in 1940 and personally performed all the duties in producing and harvesting the crop within a township which qualified under the Prairie Farm Assistance Act for crop failure assistance. He enlisted in the air force after the harvest of 1940 and is having the work done during 1941 with his own equipment; yet, because he enlisted, the Department of Agriculture refused to pay him his acreage bonus for 1940. I should also like to point out that while the Minister of Agriculture (Mr. Gardiner) is also Minister of War Services, on the staff, which comprises 1,061 persons, there are some thirty-four on war service staff reported as returned men or wives of men with previous war service. Is this encouraging the development of an all-out war effort? On the one hand, while another department of this government has the question of western wheat pools liability for corporation income tax before the Department of Justice for decision at this time, on the other hand we have, under the Department of Trade and Commerce, a Canadian government elevator at Port Arthur, with storage capacity of some 3,250,000 bushels, leased to the McCabe Grain company with head offices in the United States, at a rental of $51,000 a year; and at two-thirds of a cent a bushel a month for storing grain, this company is drawing $260,000 a year from the dominion government for storing wheat in an elevator owned by the dominion.
Many references were made by the Minister of Finance, when delivering his budget, to the method of procedure at Washington. When Mr. Roosevelt brought down his war appropriation bill last March, he proposed therein the spending of one dollar out of every five for assistance to the farmers of the United States. Under our war appropriation bill for $1,450,000,000 recently passed, we allocated one dollar out of every $180 to assist the farmers of Canada-quite a contrast between the two countries in the amount of assistance given to farmers. On May 3, the United States senate committee proposed a price of $1.15 a bushel for 1941 wheat on a quota basis of eighty-five per cent of parity price, which is recognized there as approximately $1.39 a

The Budget[DOT]-Mr. Ross (Souris)
bushel. What we have in Canada at this time is far from equality of sacrifice. When the price was set for the 1941 wheat crop in this country, there was a spread of approximately eight cents between May wheat in Chicago and in Winnipeg. That spread to-day for May wheat, as between Chicago and Winnipeg, is 20| cents, which is a considerable difference in favour of United States producers.
It has been pointed out by many people, and even people who supported this government in March of last year, that the government of the day has been following rather than leading public opinion since that time. Yesterday evening the hon. member for New Westminster (Mr. Reid) was rather apologetic over the great contrast, from the point of view of inspiring leadership, between Mr. Churchill of Great Britain and President Roosevelt of the United States, on the one hand, and the Prime Minister of Canada (Mr. Mackenzie King) on the other, although he went on to point out the great unity which now prevailed in this country. I sincerely trust that is true, although he did not explain at what cost to the all-out effort that unity l->nrl been brought about.
There is some doubt as to the great unity prevailing in all respects, apart from the fact that the people of Canada are determined to win the war whether given proper leadership or not in so doing. I was disappointed to hear a minister for whom I have great respect, the right hon. Minister of Justice (Mr. Lapointe), speaking in this house on February 24 of this year, make the statement that his province was unanimously opposed to the proposal that there should be a national government.
I cannot conceive that he really meant the interpretation which we have from that statement, with respect to either himself or his province. I know that we as Canadians are much more concerned than that about an all-out war effort. He quoted the Winnipeg Free Press of March 27, 1940, on that point. Suggestions were made this afternoon that if we really wish to know the record of this government on an all-out war effort we might refer to the various editorials in the press of this country during the past year or so. I suggest to the Minister of Justice, seeing that he quoted the Winnipeg Free Press of that date, that he might read the editorials from the Winnipeg Free Press as reprinted in the Ottawa Journal of February 22, 1941, concerning both the Prime Minister and the national government. I do not intend to quote them at length, but just refer to the matter.


Mr. GRANT:: Quote from the last election.


James Arthur Ross: Does my hon. friend realize that we have had a very serious war effort on our hands since the last election?
I have many letters from people who supported this government whole-heartedly in the last election who are not satisfied.


Thomas Vincent Grant: This war was on before the last election.


James Arthur Ross: One of these editorials
states:
An impressive case for a national war government is stated by the Winnipeg Free Press. Its impressiveness is not lessened by the fact that the Free Press is the ablest journalistic champion of Mr. King's government. In its Liberalism the Free Press is the Manchester Guardian of Canada.
The Free Press' case for a war reorganization of the cabinet is stated in two articles: An Ottawa dispatch from Mr. Grant Dexter, its able press gallery correspondent, and an accompanying editorial, obviously from the pen of Mr. J. W. Dafoe.
Further on it says:
Considered in the mass, rather than in detail, the war programme seems to have suffered from a lack of coordination, an inability to identify the soft spots quickly and concentrate on remedial measures. The desperate burden of war administration is being carried by a handful of ministers, while the cabinet at large makes small contribution.
Further on it says:
. . . while the composition of the government shows so clearly that it was originally created in keeping with party customs, conventions and necessities which rightly govern in the formation of a party administration.
Then the Journal editorial goes on to say:
Asking what changes are advisable, "bearing in mind that our sole national purpose ... is to hasten efficient production of men and material for war", the Free Press urges "government reorganization" which would involve remodeling the existing system of administration and the creation of an inner war cabinet.
It goes on at some length along these lines, and concludes:
The time and tide of war waits for no man.
May I add that the people of Canada, irrespective of how they voted on March 26, 1940, are now very much concerned about strengthening this cabinet, the formation of a central war council and an all-out war effort based on equality of sacrifice at all costs.
I close by repeating the words uttered in [DOT] this house a year ago by one hon. member:
While the sweet red wine of youth is being spilt to defend all man's highest dignity, liberty and freedom, we who occupy another form of service might well spend our time building the fabric into which may be incorporated a sounder system, which will reveal a high conception of national duty.

The Budget-Mr. Gauthier


Mr. PIERRE GAUTHIER (Portneuf) (Translation):: Mr. Speaker, though this has no particular bearing upon the budget, I must say that the rule forbidding hon. members to read their speeches seems to me wrong and likely to lower the quality of the debates. However comprehensive a speaker's learning, however deep his knowledge of the question at issue, however great his oratorical ability and his skill at improvisation, he can always by adequate preparation improve not only the marshalling of his arguments, but also-and this is not without importance-the literary quality of his presentation. How often have we not seen a brilliant extempore speech spoiled by an error which has lowered in public estimation a political man worthy of a better fate? We all know that the best speeches, the finest lectures are those which are delivered before learned societies where the author always prepares them in advance and reads them to his hearers who are thus certain that the statements made to them have been carefully studied from all their angles.
Even in this house the most important pronouncements, statements of national and international policy and budget speeches are written and read, for the greater benefit of the members and the public. When a member speaks in a language other than his own, he wishes to clothe his ideas attractively for the greater satisfaction of his audience. Even though he may use his mother tongue, he cannot introduce any bitterness into the debate, having had ample time to think over his arguments. I dare hope, Mr. Speaker, that the house will agree with the views I have just expressed quite sincerely in my introductory remarks.
I believe that the burden imposed by the budget that is now before the house is quite heavy, and the hardships it entails should be a matter of serious thought both for those who favour a moderate participation in this war and for the advocates, nay the faithful apostles of an out and out participation, or of a crippling or even ruinous war effort. In my opinion, what has been done so far is just a beginning. Sooner or later blood donors will have to come forward in an attempt to make good our losses. In the popular language, we are burning the candle at both ends.
When war was declared one fact was selfevident; on one side, all necessary preparations had been made, while on the other everything had been left undone. So long as the unprepared are unable to meet their opponents with the same weapons and on a ground of their own choice, it is useless to expect a decisive victory. That is why the democracies must make such a tremendous effort in order to be able to fight on equal 14873-165
terms. Some see in this an indisputable argument in favour of a supreme effort, and to others it suggests deep thoughts upon the
mistakes of the past and the failure to foresee the future.
The democracies have fallen into excessive materialism. Two different factors concur in convincing a nation of its military invincibility: perfect and plentiful armaments and an absolute faith in the justice of its cause. In most cases this faith degenerates into fanaticism, and this is true of the German nation. While the money powers of democracies were trafficking with Germany and supplying it with war weapons, the German military staff, through the medium of a puppet, whom popular imagination is ever inclined to endow gratuitously with merits and qualities strange to him, was awakening in the German mind the thirst for world domination and the sentiment of moral and intellectual superiority. At the same time, prompted by the democracies on the one side, and the German political men and philosophers on the other, both the body and mind of the whole nation were becoming equally prepared to accept with enthusiasm the war which might be declared against it.
The conditions attributable to the events that have followed the declaration of war, are naturally bound to incite the inhabitants of our hemisphere to look for some means of defence, not only for the present, but for the future as well. Ignoring the existence of pan-germanism and underestimating its strength would be childish. It is imperative-and the present situation of the belligerent nations proves this fact beyond all doubt-that another driving power, just as active in its preliminary work, both spiritual and material, be set in motion and acquire at least an equal striking strength so as to put a check to the existing power whose might is in its most complete development.
It is, I believe, the Americas, the countries forming this new world of ours, who have the responsibility of organizing such a power and making it invincible. We should not fear pan-Americanism any more, for it has become a necessity and cannot be brought about without the full cooperation of all the countries whose geographical position alone is a reason for being interested in the movement. I do not wish to scandalize anybody by publicly suggesting that the seat of Canada should be filled at the next meeting of the pan-American conference.
We have the unquestionable advantage of having as premier of Canada, a man whose knowledge of politics and economics is profound, who has understood the economical, geographical and strategical importance of

The Budget-Mr. Gauthier

our beautiful and vast country long before the partisans of colonialism had discovered the existence of Canada as an entity. Should the British empire survive the terrible attacks which it is now repelling with all its might, it will be indebted for this, in a large measure, to the man who has realized what a free federation of free countries really is, and understood that the strength of such a federation resides in the added might of the individual countries. Through the friendliness that he has maintained, in spite of narrow and unwarranted criticism, with a man and a country who have become, at the present moment, the surest support and possibly the only hope of the economic body that we are accustomed to call the British commonwealth, the present Prime Minister (Mr. Mackenzie King) will truly have been the organizer of the union of Anglo-Saxon races, whose blending with the French races will form the most effective coalition against German ideology.
As a true and disinterested democrat he gives all the credit for this achievement to the Canadian people by this sentence included in his statement of March 25 last. I quote:
I venture to say also that Canadians have reason to be proud of the part which Canada has had in the reconciliation of the Englishspeaking peoples, the healing of ancient wounds, and the closing of the great schism of the Anglo-Saxon race.
Whether we want it or not, the empire, should it survive the present crisis, will owe a real tribute of gratitude to the descendant of William Lyon Mackenzie, of 1837 fame.
Our budget will impose tremendous sacrifices on our Canadian people, even though they are not the culprits. They suffer and will keep on suffering because those who were masters of the situation in 1918, and who should have acted as masters, have unfortunately given ear to the large financial interests exclusively, whose activities acknowledge no boundaries, and who believe that just reparations are nothing but bedtime stories for the weak; the halting of the allied armies on the frontiers of aggressive Germany, the exemption from reparations due by the Germans to the French people (in 1871 France had paid her indemnity in full to Germany) have been the first steps in a whole series of errors, equivocations, bargainings, and financial schemes which, after 25 years, have left us in our present situation. Those who were prompted by fear that France might become too strong, have seen their wish fulfilled. We will have to put into practice principles against which we are now fighting, and do it at the right moment.
*The word "dictatorship" frightens many people. However, we shall be forced to resort

to dictatorship against evil, be it represented by the powers of darkness or by the advocates of freedom at any price. In endeavouring to protect freedom of speech, we have allowed the propagation of too many harmful political microbes.
The countries who are now attacking the democracies have been the victims of a wrongful conception of freedom. A door opened by theories such as those propounded by Marx has led to an inferno like that of the three main socialistic and communistic dictators of Europe.
Collectivism has bloomed in those countries and it has caused the complete disappearance of personal initiative and the development among the people of a state of mind which renders them incapable of thinking for themselves.
On the other hand, great financial interests have misused freedom and even in Canada the law has been far too lenient. While war means taxes for them, it also means profits, and after the close of the conflict, they shall have the duty of helping their less fortunate fellow-citizens. To prevent a recurrence of unemployment and relief, governments should require them to supply the funds necessary for the continued employment of those who will find themselves destitute on account of a decreased activity, for some years at least, in war industries. It should be possible, for example, to open new lands to settlers, thereby offering new opportunities to all trades and callings.
Governments and parliaments have sometimes been remiss in granting too extensive privileges to bodies or boards which, after all, are not answerable to the people. For example, the civil service commission holds its powers from parliament, and the latter seems to have transferred to it some of the rights conferred upon it by the electors of this country. That commission sometimes goes too far in its rules and orders related to certain sections of Canada. Here is a concrete case: One of my electors from St. Basile, a young man of marked initiative and intelligence, wishing to put his education to good use, applied for admission to examination No. 40-1141 for the position of immigration inspector at Quebec. The commission told him:
I have to advise you that the said examination is limited to persons residing in the city of Quebec or in federal electoral districts which include some part of the city of Quebec.
A young man from a rural district, whose father has given him the opportunity of acquiring an education, is thus barred from civil service positions that are available to

The Budget-Mr. Gauthier
young men living in cities. Are not the people of my constituency also paying taxes? Are they not doing their duty toward the country as well as city people? This is quite unfair to my constituents, who, like everyone else, have a right to secure an education and to obtain the positions for which they are thus qualified. I believe that such action on the part of the civil service commission is quite contrary to democratic principles and that it rather deserves condemnation in terms which are now being merely whispered lest they reach the ears of the all-powerful chairman who has made it his realm. This is more prejudicial to Canadian unity than other things perhaps more conspicuous. I know of numerous other cases of flagrant injustice committed by the same organization. I shall take them up on another occasion.
The government should not take pattern by this organization, some of whose members claim that it is more powerful than any government at Ottawa, in the matter of leaving on the land the men absolutely required to work the farms even in war time and particularly in war time.
There are at present farmers' sons who, though absolutely needed on the land, have left for military training which will last four months-and more. I have taken the liberty, as a member of parliament and as a citizen, to apply for their release which, I hope, will be granted soon. It is necessary that the land should continue to produce if we want to feed the workers of our factories who are supplying munitions to our allies. In regard to the latter, likewise we will have to be very careful if we wish to continue producing war material. It must not be forgotten that our most practical war effort lies in every species of production. I may draw upon myself angry or scandalized looks from those who, still reeling under the impact of the new taxation, still have sufficient strength to cry "conscription," but I wonder whether they would still be able to breathe were we to add to our burden that of an expeditionary force of one-half or three-quarters of a million men. Let the government not allow itself to be frightened and deterred from its policy of voluntary support, which is all the more effective because free from coercion, by those who, for some time more, will seek by their parrot cry to remain persona grata with a small group of people for whom Canada is only a holiday resort or a land to be exploited.
Let us advise these people to try to acquire the philosophic spirit of those who are not rich but who pay their taxes while saying that after all they are easier to endure than bombing.
The Minister of Finance (Mr. Ilsley) expressed in his budget speech the hope that the tourist industry would yield $130,000,000. I hope he is right, but I would ask him to give a little help to the minister of roads of the province of Quebec. The normal route for tourists in Quebec is the one which follows the north shore of the St. Lawrence from Montreal to Quebec. This is the Montreal-Quebec national highway, where the scenery is the most attractive. A piece of good advice will do no harm to the Quebec minister of roads, and perhaps he will convince the minister of the need to finish this highway, the worst section of which is now in the county which I have the honour to represent. I venture to hope that the intervention of the Minister of Finance will prove effective.
It was inevitable that the state of war should set the old pot of prejudice boiling. Following the elucubrations of the Gospel Witness, the magazine Lije reproduced an article in which French Canada is represented as a fifth column. Why are people so afraid of Quebec? Is Quebec not doing her duty as the other provinces are doing theirs? Are her war factories not producing like the others? Her sons are serving in the army, some of them overseas. If the French Canadians show a marked preference for the forces intended for the defence of Canada, who can blame them for thinking of her own country before other countries? Has Lord Tweedsmuir not said:
Canada is a sovereign nation and cannot take her attitude to the world docilely from Britain, or from the United States, or from anybody else. A Canadian's first loyalty is not to the British commonwealth of nations, but to Canada and her king, and those who deny this are doing a great disservice to the commonwealth.
Is it so wrong for French Canada to think like this former British governor? I know that a large number of our fellow-citizens of English or other origin share this view. They *were born in Canada or have become pure-blooded Canadians.
Those who are most prejudiced against us are those who do not know us. Why do they not visit us? We would understand them, for few among us speak only one language. Our government has just taken another step forward in the teaching of English. Is Switzerland, with her three official languages, worse off than other countries?
Nearly every summer, the convent at Sillery is visited by a group of school teachers from Ontario and other provinces, who repair there to study French. Do you think they fare the worse for this? Mr. Speaker, we have in this house a host of members of French stock coming from the other provinces.
The Budget-Mr. Gauthier

Do they not do their share equally as well as the representatives of other nationalities? Are they not an asset for our country? Let us consider what happens in this house: do you ever see the members from Quebec rising together to oppose the measures submitted for the great advantage of the western provinces or industrial Ontario? All they require is the share to which their constituents are entitled. To this end, they do not make numerous and long speeches, they do not organize mass delegations, for they are convinced that the true Canadianism inspiring the administration will reasonably and adequately work to the best advantage of the respective provinces.
For most Canadians, it would not be necessary to insist on details, but I would like this small group, who ceaselessly acts as an ever more powerful irritant to the old wound, to lose its caustic property, and become diluted by associating with those who are anxious to see sectionalism disappear. Even if I should succeed in convincing only one of them, I would be happy of such a contribution to Canadian unity. The French-Canadians of Quebec and of the other provinces of this dominion sincerely desire the unity of the whole country. We are in unison with the different nationalities of the other provinces; in common with them all we want unity in all parts of Canada. The fifth columnists are really those who try to divide the country, to create racial discord, by using the irresponsible people of whom I have spoken. Those who stir up strife in this country and between the different races are doing the work of the fifth column. An example of the same methods may be found in the history of France, and of Yugoslavia where German propaganda succeeded in dividing the Croats and the Serbians.


Paul Joseph James Martin: Hear! Hearl


Pierre Gauthier: The baneful influence of spreaders of discord in the two countries I have just mentioned is well known, as well as the result of their schemings. Their role consists in preparing the ground in which they later sow the seeds of disunion.
It is not we who belong to the fifth column but rather those who want to deepen the gulf between the races.
In conclusion, Mr. Speaker, may I be allowed to quote an example from Quebec. In that province there are two organizations of St. Lawrence pilots: one at Montreal, the other at Quebec. Although I cannot give their complete history, I wish, in holding them up as an example, to pay them the tribute of gratitude which they have earned.
Strikes have been breaking out occasionally throughout the country since the beginning

of the war. Happily, they have not been numerous, thanks to the prompt and effective intervention of the government.
The two organizations I have mentioned, working in complete harmony, have experienced no strikes since 1896. The strike they declared then was in protest against the refusal to grant them a charter. They obtained their charter and have had no trouble since. These Canadians of Quebec are working for the best interests of the country.
The first organization, that of Montreal, comprises 77 pilots. They cover, between Quebec and Montreal, a distance of 139 miles.
The Quebec organization comprises 60 pilots. The distance between Quebec and Father Point is 150 miles.
The average time taken by passenger liners to make the journey between Quebec and Montreal is twelve hours. Freighters take from eighteen to twenty hours and the pilot in charge has to remain on duty from fifteen to twenty hours. There is a case of a pilot having had to remain on duty during twenty-six hours between Quebec and Montreal. The ship evidently proceeded at a slow pace.
The rates charged by the corporation of Quebec pilots varies according to seasons. It is higher in the spring and the autumn than in the summer. That of the Montreal organization is $4 a foot for ocean liners and $3.50 for other ships.
The rate for the Montreal-Sorel route is $20 a trip, and for the Montreal-Three Rivers route $30 a trip. The latter rate was adjusted at the request of the board of directors of the Montreal organization when the present Minister of Munitions and Supply (Mr. Howe) was Minister of Transport. Allow me, Mr. Speaker, to congratulate him once more on his treatment of the Quebec and Montreal pilot associations.
I mention those associations in order to show that in Quebec, as elsewhere, and as much as elsewhere, we want to do our duty, and when we work in Quebec, even though people from other parts of the country may not know it, we do so not with any hopes of reward but because it is our duty.
In conclusion, Mr. Speaker, I say that the people of the province of Quebec will show that they think in terms of Canada first and foremost. You may rest assured of the firmness of Canadian unity, of dominion unity; you may rest assured that should their example be followed by other Canadians, this country shall never be divided and subversive theories shall never become implanted here, even if through devious means and unwitting tools attempts should be made to divide us.


Mr. T. L. CHURCH (Broadview):: Mr. Speaker, I did not know until ten minutes ago

The Budget-Mr. Church
that I was to take part in this debate to-night. I am one of the few left who came into this house in 1921, of what I might call the die-hard Conservatives. Both the Conservative party and the Liberal party in the past have done a great deal for the people of this country. There have been a great many public men coming from the Toronto district to serve Canada at Ottawa, some on one side of politics and some on the other, but we respect them all in the Toronto district and in the province of Ontario, because after all is said and done, all the good and all the bad are not to be found in one party. So far, however, as I am concerned I have been a consistent Conservative, and I say that the Conservative party need never be ashamed of its record in both dominion and provincial fields.
I have always stood up for principle. I do not always follow leaders. Sometimes I do some leading myself. The principles I have supported in the past I support to-day: for example, the protective tariff, that policy which has done so much for Canada from the day of Sir John A. Macdonald down to to-day. I believe that a right application of the doctrine of protection would solve all the economic ills, in peace and war alike, of the people of this country from Prince Edward Island right out to the Pacific coast.
I have also supported the principle of the British connection and what I believe to be the principle of sound money, brought up to date. True it is that capitalism will have to clean house; there is no doubt about that at all. There is a widespread opinion even among those who formerly were conservative in financial matters that something should be done with respect to our monetary system and monetary reform, in view of the greatest war now raging that the world has ever seen.
I think too much time has been taken up in this house in the past month with party politics. The fault is not on one side only but on both sides, even among hon. gentlemen to my left. I like them and have a great deal of respect for them. I do not agree with them all. I believe they are sincere men; yet they are not above taking a little party advantage, war or no war, and we cannot blame them for that. The past month in this house has been devoted largely to party politics, whereas in my opinion we should forget all that and meet the enemy at the gate.
Who is to blame for this budget, with its colossal expenditure? Who are the people in this parliament, past and present, who are responsible for the events that have led to this huge war budget and for this heavy assessment on the people of Canada? I
answer the question by saying that those responsible are not the only "guilty" men but those in this country and elsewhere throughout the British commonwealth who supported throwing away armaments and self-defence and threw away our friends as well and urged Britain to scrap the finest army and navy and air force the world has ever seen. Britain and France at the end of the great war of 1914-18 led the world, and if they had stood together and had not disarmed we would never have had this war to-day. We would never have seen another war. Those who supported collective security in this parliament were very largely to blame for the stand of the dominions. As a leading prime minister of France since the war once said, "It is a hard thing to deal with Britain; you can never tell about her or where she stands, for there are so many people, so many dominions, which have a finger in the pie." Canada at the various Imperial conferences, instead of lining up with New Zealand and Australia, lined up with a few other representatives and ever since the last war supported a policy of neutrality, isolationism and separatism. The guilty men are in all parties who supported Geneva doctrines, separatism, the sham of collective security and the league. Collective security is only security when you have a powerful armed Britain. The principle is all right, but it requires armed force to support it. You need force for your protection and safety to maintain the liberties and freedom and civilization which you enjoy under the constitution. I define "collective security" as leaving to others what one should do himself for his security.
Cowper, in his "Task" says, "But oh the important budget ushered in-the loud laugh -the tart reply-the learning, the wisdom and the wit-I love them all."
This budget, Mr. Speaker, forsakes the whole principle of taxation that we have followed ever since confederation. The fathers of confederation decided upon three fields of jurisdiction, a dominion government, the provincial governments, and municipal governments. When I first entered this house I proposed that we should have parliamentary, constitutional, cabinet and law reform, and that there should be a reallocation of the powers conferred under sections 91 and 92 of the British North America Act. After that motion had been discussed in two or three sessions, a committee or Rowell-Sirois commission was appointed and made its report. But no reform was instituted.
This war, however, by big-stick methods, has caused a reallocation of the taxing powers in this country. In the last war the city of
The Budget-Mr. Church

Toronto, for example, was assessed cine mill on the dollar of assessed value by the provincial government. What for? For war purposes. Yet the war under the British North America Act was not the concern of the province of Ontario. It was the responsibility of the dominion government, under militia and defence. Right in this house, two or three sessions ago, the present government proposed that the provinces be enabled to impose a duplicate sales tax. Very fortunately that was thrown out in the senate, or we would have had to pay, in every province, duplicate sales taxes on almost every article of provisions and so forth that the consumer buys. We have seen the result of all this, in overtaxation and overgovernment in this country, with one, two, and three taxing bodies imposing taxes upon the same individual. Often one person pays duplicate, and in some instances, as in British Columbia, triplicate taxation, in the form of income tax and in other directions.
In my opinion, fifty per cent of the present budget is not for war purposes at all. It relates to a whole lot of things known as "home defence," and kindred services to protect Canada's neutrality. Let me remind hon. members that home defence here in Canada is not as important as it is in the old country, where the enemy is, as it were, almost across the road, and where new mechanized methods of warfare on land, on sea, and in the air, have caused such changes. Half the budget relates to matters which are not war essentials, which are not of primary but only of secondary importance. The defence of this country is not going to be decided at Vancouver or Montreal or Quebec or Saint John or Three Rivers. It is going to be decided over there in the English Channel in the battle of Britain, in the battle of the Atlantic, in the battle of the Mediterranean. If they fail over there, it is all over for us. Nobody in America is ready for war. I pointed this out before the war broke out, upon a motion which the chairman of the war contracts committee, the hon. member for Selkirk (Mr. Thorson), in a private bill, introduced into this house on March 31, 1939, which I opposed. What was it, and what was it for? It was merely a proposal to declare to the world that if war came, Canada was going to be neutral, and would decide herself, or that she could do nothing without parliament, and all that kind of thing, the same as the stand of Canada at the imperial conference. We have no commitments; parliament will decide when the time comes.
As I look over the budget I find very little evidence of paring of estimates or reductions

of any kind. It has been suggested that we on this side of the house should pass this budget, that we should be just "me too" men as far as the government and the Minister of Finance (Mr. Ilsley) are concerned, to enable the minister to impose whatever taxes he and his professors and brain trust and the technical experts of his department see fit to place upon the long-suffering taxpayers of this country, with all its overgovemment, overtaxation and duplication. Very little paring of the civil estimates has been done. If the money were earmarked for real war work, nobody would object, but, as I said the other night, forty to fifty per cent of this so-called war budget will not amount to a snap of the fingers to beat Hitler in any primary theatre of war.
The people of Canada will rise to the situation if they are given proper leadership and told it is necessary to give us that security that is better than opulence. But what have we had? Expenditures on the League of Nations, on which we have now spent a little less than four and a half million dollars; useless legations the world over on all the seven seas, thinking you are a nation when you are not a nation, when you had neither any army, navy nor air force to defend your shores; the luxury of the party system; the luxury of two railway systems; the luxury of a huge stay-at-home army; the luxury of exemptions for some of the military all over Canada. We have universities in practically every capital of the dominion. I was surprised to find, according to a return made to the house last Thursday, that, of all this tax exempt university property in the various provincial capitals, hardly any buildings had been turned over to the government for the conduct of the war. Each university is listed separately. I was astonished that, even in the city of Toronto, where the air force are badly in need of better housing, the university of Toronto have provided only one or two small buildings for the use of the government: brick residence, 184 College street; basement of mining building; south basement engineering building; small rifle range in Hart house. In the last war many of the larger university of Toronto buildings were given by the various colleges to the government. What has been the result? Duplication. Camps have been built from the Atlantic to the Pacific, at a cost of ten millions of dollars; it is said that the grand total will amount, with training and equipment, to no less than twenty-five million dollars. Where is there any evidence of saving in that direction?
In addition to all this, we have fifty-six government boards in the city of Ottawa and

The Budget-Mr. Church
other places. Fifty-six separate boards have been appointed to continue till the end of the war. The House of Commons is just a forgotten agency of government, with all these boards across the country. They are like the daily arrival of a new comet; every day, it seems, some new board is appointed. I do not know how it is possible to keep track of them. I cannot keep track of them, and I have received so much duplicate information from the bureaux that the waste-paper basket is the only place for it, because the more you receive the less you know.
Just now we have a defence board of blessed memory, which is doing a lot of talking. I said it was all board and no defence. But Hitler is not going to be beaten by talk. If Hitler could have been beaten by talk he would have been conquered long ago. Further, Canada is not going to be talked out of the British empire. If Canada could have beeD talked out of the British empire she would have been talked out of it long ago, right in this house, and outside it, by those who advocated the Statute of Westminster, that empire-wrecking statute, that pointless empire divider, a year before the war, and after Munich, when we did little or nothing to prevent or provide against the catastrophe and gave away our defence and bases. But Canada will not be talked out of the British empire. Canada will have to be fought out of the British empire.
I am surprised at some elements of this particular budget. The minister has copied a great deal of it from the United States. Washington seems to be the popular place from which to borrow all our financial and tariff measures. But even down at Washington the pros and cons of the lend-lease bill were discussed for three months by the United States senate. The budget presented by the treasury has to be presented by the senate to a committee known as the committee of ways and means, and they go over every article; whereas we in this house have no power at all. Our system is two hundred years old, the constitutional system whereby we cannot strike one dollar off this present budget because, if we move to strike it off, it is regarded as a vote of non-confidence in the government. That system should be changed. We should adopt the municipal system, whereby the minister and his colleagues and all parties in the house could meet others round the table and, if it was thought fit, one or two or three million dollars could be lopped off. At Washington the Secretary of the Treasury presents his estimates and budget to the senate, and every item is gone over by the committee on ways and means.
What has been the policy in the United States with respect to war expenditures?
During the great war they charged two-thirds to capital and one-third to income. That is now reversed and only one-third charged to capital. Of course they are not actually in the war; they think they are, but they are not. In Canada the principle of paying so large a share for the war out of current taxation requires some change. The minister has to raise the money by taxation or capital loans. The minister seems to forget that this generation are suffering also in flesh and blood; they have taken on their shoulders the sins of the whole human race, and they should not be called upon to stand all the costs of the great war, of the depression, and of the present war. The minister should consider the capacity of the people to pay. It is the small man who is getting hit; even the poor women who work in casual employment during the week are not spared.
In England, under the system of government over there, the budget can be discussed day by day; one Chancellor of the Exchequer five years ago, was asked to withdraw his budget and had to do so, and he had to bring in another one, when the Right Hon. Neville Chamberlain harkened to the objectors.
It is the duty of the opposition to offer constructive criticism. The fact that the Minister of Finance and his technical experts decide upon a particular form of taxation is no reason why the opposition should be a lot of me-too's and yes-men and nodders and assenters to everything proposed and done as necessary. If we do not protest before it is too late, we shall wind up with the government adopting the whole totalitarian system, and we are heading for the Marxian state.
Under this particular budget we have federal invasion of the taxation centres of the provinces and municipalities. From confederation down to 1917 income tax was the exclusive field of the municipalities, but in that year the then Minister of Finance, Sir Thomas White, appropriated it to federal uses. The municipalities sent representatives to Ottawa, and they were told that it would be only temporary, for the duration of the war, but that assurance was not lived up to. Then came the provinces and invaded the field also. After the war the dominion government retained its newly asserted right to income tax, and then we had a situation where people were paying municipal, federal and provincial income taxes, as in British Columbia, on the same property or income received.
This session was only a week old when I was urging upon the government the importance of taking advantage of the lease-lend bill to get back for Canada some of the
The Budget-Mr. Church

money she has had to spend on defences on the north American continent. Do not forget that for two hundred years Britain protected America's shores, and enabled that great nation to become the country it is to-day. That was the result of the protection afforded by Britain. The mother country also protected Canada's shores; and while we admire the courage of all his majesty's forces in Canada, in the army and navy and in the air force especially, I must say that all the freedom which we have enjoyed we have owed to Britain. We are just back to-day where we were in 1812-in a state of complete dependence upon the mother country for all the protection we have-because Canada has never at any time been able to protect her own shores.
The two cardinal principles of the government's defence policy are these: First, home defence, and, second, the necessity of protecting our neutrality in the event of a foreign power attacking the United States. As I said the other day, there is very little sunshine in this particular budget, though there is a lot of moonshine and a lot of eye-wash in it. It will put a damper on all public and private enterprise.
In the last two years we have been slow to see that rights with respect to the possession of private property have been gradually taken away in this country. In the old days of Macdonald and Laurier everyone in Canada owned some private property. It might be a small mill or a small store or a cow barn or a team of horses, but the individual owned it. As I say, however, we have been slow to realize how the right to the private ownership of property has been eliminated in the last few years, with the result that the Canadian people have all become proletarian. We do not realize this. As I said a few years ago, the right to possess private property is derived from nature and not from man, and the state has no right to abolish it. Its sole function is to regulate its use. One of the glories of the Victorian era was that the people kept the state; now the state keeps the people.
In believe in the principle of protection. Sir John Macdonald, speaking in Kingston on October 5, 1844, said:
It is my firm belief that the prosperity of Canada depends on its permanent connection with the mother country, and I shall resist to the utmost any attempt, from whatever quarter it may come, which may tend to weaken that union.
I am glad to see that the minister is reducing the duty between Canada and the mother country, but he should have gone further and wiped it out when the war broke out. It should have been wiped out for the

whole period of the war. The people will not be satisfied until we get a budget that achieves that desirable end, after all Britain has done for us. Everything we have of freedom and liberty we owe to the mother country.
There are many errors in this budget. It is a piece of patchwork. It is significant, not for what it contains but for what it omits. It is a generous gesture to hon. gentlemen to the left. The professors who helped to make the budget have seen to that. This is no time for politics, but I suggest that if hon. members will carefully examine the budget they will find that the whole taxing principle upon which the government is acting is wrong. The people who are paying the taxes are the people in the industrial provinces. They pay eighty per cent of the cash taxes of the dominion.
We have had ten years of reduced consumption in consequence of the depression; there has been a good deal of belt-tightening, and taxation on the little fellow is still in force. He is taxed to death. The small white-collar worker in the department store and in other walks of life is taxed beyond his capacity, as are also the more wealthy. There are too many theories being advanced. The British economist, John Maynard Keynes, has said that unless a brake is applied to consumptive buying, the war effort will be severely hampered. That may be applicable to England, but it is not true of Canada. Taxes should be levied according to ability of large and small taxpayers to pay, and after a detailed accounting has been taken. There is too much big stick and threatening. Those least able fo pay are paying most. The burden is put upon those with small fixed incomes. The government apparently is adopting the law of the jungle in encroaching upon the former exclusive field of taxation of the municipalities and the provinces. That field, as I said before, the federal government is appropriating to its own treasury.
A few years ago, in connection with this matter, I asked whether the government would give to the municipalities a share of the income tax, but they would not do it. The pay-as-you-go system is all right, but when the government can borrow money on the terms that have been suggested, for a small fraction-the minister's predecessor borrowed, he said, for two-thirds of one per cent-I submit that a larger share, at least two-thirds, should be charged to capital. I am alarmed at the small standing army of people engaged in the publicity branches of all the departments. I suppose is gives a little more of the Hollywood touch to the various departments of the public service, but it will not help to beat Hitler.

The Budget-Mr. Church
The minister the other day in his address seemed to take considerable self-satisfaction and pride in the size of the budget, probably for fear the people of Canada would think the government was doing nothing. A great deal of the budget is only secondary. The fact is that the House of Commons to-day has no control over expenditures. We cannot strike off a dollar. A civil war was fought two hundred years ago for the purpose of giving to the House of Commons control over expenditures and over the executive, and power to supervise and regulate the executive. Now that is all abolished, and the House of Commons to-day is the forgotten agency of government. The executive rule, assisted by their new henchmen of the various boards. We have no control. Consider what is going on in the various committees to which we refer matters, and you will find that they are only conducting postmortem examinations and white-wash expeditions. The money has been spent, and no one can do anything.
The visit of the king and queen in 1939 demonstrated the tremendous popularity of the monarchy and the decay of parliament. It showed the decline of the House of Commons as a result of the house assigning its duties, powers and functions to others and abrogating its own functions, powers and privileges. As Walter Bagehot said once, the House of Commons does not like positive statements.
The House of Commons does not want to be told that two and two make four, it would rather be told that two and two do not make five. The mere size of these expenditures is no guarantee of wise or capable or prudent spending. The first casualty in this war, as I see it, has been truth, and selfrespect is the first victim of neutrality. It is hard to get the truth from the radio and from the campaign of propaganda and press agents and publicity departments to which we are subjected. The government have control of the whole thing, not only of the radio but also of the large spendthrift information bureau. There is to be a further great publicity campaign which I understand is to cost nearly a million dollars a year.
The Geneva fad is tied on to it. If you ask me, this budget is making a great many thousands of people in this country believe that Canada is heading for a Marxian state and the totalitarian form. We have gone about seventy-five per cent of the way now, and it is going to lead this country sooner or later to national bankruptcy under the guise of "socialism in our time."
Another matter to which I wish to refer relates to the soldiers. I have brought it up before, but I should like for a moment to H873-166
call the attention of hon. members to the return I received the other day about the amount of money which both the railways are making as a result of the policy of having troops stationed all over this country. I have received a copy of a letter signed by three men, good soldiers, one of whom has the D.C.M. and the military medal. I have given a copy of this letter to the Minister of National Defence (Mr. Ralston) and to the Minister of Justice (Mr. Lapointe). These poor men landed in gaol through forging railway tickets. A motion for going into supply is, I contend, the time to get redress of grievances, especially on behalf of soldiers of this country and free fares and insurance for soldiers. These three men write me, with reference to the ticket trial for participating in the Canadian Pacific railway fracas from Petawawa military camp, and they say:
To say the least, the whole affair has been very unfair, as only the surface has been scratched, and we few used as the goat. In fact if an honest, thorough investigation had been made, many hundreds of troops would have been involved, as this practice of travelling via Canadian Pacific railway on furlough and week-end leaves has been in practice for months, prior to any of us who were convicted being transferred here.
This statement was made by one of the Canadian Pacific investigators. Even with the full cooperation of the military authorities at Petawawa, and all the evidence necessary, the C.P.R. were quite content to choose we three and drop all the other charges. . . .
The commanding officer wants these three soldiers back. They go on to say:
All those arrested, except two, were even allowed out on their own bail a week before trial. . . .
The Canadian Pacific railway were quite content to choose the three and drop the other charges, although over twenty soldiers had been apprehended. The letter continues:
The C.P.R. officials took two and three different statements from some, and had same used in court, saying misrepresentation and other underhanded evidence was presented.
These soldiers say:
This is a very poor example of "British justice". Otherwise, the C.P.R. were not very anxious to have a wholesale inquiry and all those implicated punished according to law; it was causing too much publicity and discussion in general.
We, who openly admitted our part, are not using this as a means of covering ourselves.
Those who pleaded guilty were sentenced, but those who pleaded not guilty had their statements ruled out by the trial judge as not being voluntary, so that if they had all had counsel and all had pleaded not guilty they would have got off, because these constables who laid the complaint got two or

The Budget-Mr. Church

three contradictory statements from them, which were ruled out as not a voluntary statement. The letter continues:
Since we were arrested on March 8, 1941, not one orderly officer from the camp has ever completed his duty by paying us a visit, even before we were convicted.
Also, we were denied legal representation by our training centre, although there are many officers available who are lawyers in civil life. We had to obtain our own legal representative, paid by some of our fellow soldiers, as we cannot even draw any pay coming to us while in civil custody.
A married soldier who has to assign $20 of his pay monthly to his loved ones at home, draws $19 per month, being paid on the fifteenth and thirtieth respectively.
It costs $9.40 for a return furlough ticket to Toronto, leaving him ten cents to spend; otherwise he pays the C.P.R. one-half of his earning on railway fare in twelve months to get home for one and a half days' leave to see his family and friends, being allowed one week-end pass per month.
The entertainment is very inadequate in a camp of such a size, in comparison to Borden, Toronto, London and other depots.
It costs the soldier eighty cents return, packed in taxis to go for an evening on midnight pass to Pembroke, there being no other means of travel available, as it 'is approximately twelve miles from camp.
We three, whose signatures appear in this letter to you, have been good soldiers, and our officers commanding are more than willing to accept us immediately upon our release from civil custody. Thanking you for all the uphill struggle you have waged for soldiers as you did so nobly in the last war, sir, we are making a plea, asking you to intercede on our behalf, in obtaining a remission of sentence.
I contend that these men should have been released long ago; they did not get a fair trial. They were supposed to have a lawyer. I asked the justice department and the Minister of National Defence to provide a lawyer, but they did not. I asked the attorney general of the province, but he refused, and nothing was done. That is not the way to help recruiting, and recruiting is going to be seriously interfered with unless the government adopt some other policy, and grant free fares, abolish the hitch-hiking decree, and give soldiers insurance.
Many matters have come up here; I wish to refer to one. We have heard a great many statements made in connection with the tariff here to-day, and proposals have been made by the two parties on my left. After all is said and done, I believe that the time has come when we in this country shall have to give attention to the writing on the wall in connection with the better prosecution of the war. It was said by a writer in the National Review that:
When the socialists agreed to join Mr. Churchill's government and to support the
fMr. Church.]
prosecution of the war, they made their conditions. The most important of these was that no manufacturer or other employer was to be enriched by war industry. The wage-earning class, on the other hand, might make as much as they could. Their incomes might be trebled or quadrupled, but all other workers for the national effort were forbidden to profit in any way.
The men who made this stipulation and those who yielded to it forgot that there is something more powerful than a political agreement, something which thrusts across all such arrangements and defeats them: this is human nature.
Without some immediate and visible incentive men will not work-for very long-with ardour. When a manufacturer is told that however great his skill and devotion, however long his hours, however much war material he produces, he will not have any reward, his efforts necessarily slacken. Mr. Bevin and his socialist colleagues know that this is so in regard to their manual worker clients. They expressly said: "Make as much as you can." Suppose they had asked the men to work for seventy hours a week for the same wage as for forty-eight hours, what would have happened? They knew quite well. Production would have slackened. The masters are like the men, like the men they need a stimulus, a rewrard, the fun of getting a prize. Both masters and men are patriots, both ardently desire to serve their country, but both need, if the arduous grind is to be maintained, the fillip given by gain.
I have been a consistent supporter and friend of labour ever since I entered the school board and the city council; I have been a supporter all my life of the trades union movement; I believe that labour is entitled to proper and adequate protection, but the war should have precedence over both capital and labour for full war effort. I hope the government will take the stand-it will have the unanimous support of the country- that the war	effort to	the limit takes	precedence over	politics	and all	parties,	andalso over both capital and labour. It has been said that a number of people would like to see the theories they have set forth prevail, but I believe the day is not far distant when	the two	political	parties,	thenew and the	old, will	have to	take notice
of the handwriting on the wall and give consideration to this matter. If I am the only man in the house to say it, I do not like this, and while I have respect for the hon. members to my left I do not like to see the war used by any parties here, large or small, as a way of advancing their own pet schemes and economic theories till Hitler is beaten.
Collective security is the primary cause of this war. As a principle it is all right if its supporters had told the world that its cornerstone was a powerfully armed Britain. Canada

The Budget-Mr. Roy
thought it had all eternity to prepare to fight Hitler. It has just a stay-at-home army, their energy being wasted. You cannot fight Hitler in that way. No troops from Canada can be sent from Great Britain to any other hard-pressed war area unless the high command in Britain get an order from the high command or some agency in Ottawa. Such separatism in war is fatal.
Ottawa never knows what the rest of the country is thinking. Everything is as usual in Canada, and the powers that be are always thinking of what men and munitions they will have at the end of 1941, 1942 or 1943. Ottawa, which misjudged the whole European situation for three years before the war, misjudged even more the present situation, and manpower. The national war service act, the thirty-day training and the four-months' training plan have got us nowhere. Recruiting has been on again and off again; conscription has been on again and off again. How is Britain to take the offensive anywhere without adequate man-power from Canada and the other dominions? We are far behind Australia, and I have been keenly disappointed in our war effort so far. What do the people of Canada think of the Geneva-minded men, belonging to all parties, who were responsible for the absolutely defenceless position of Canada when war came? The Department of National War Services is run by civilians, who do not know much about war. The ordnance and pay departments are filled with civilians, too, and I think the time has come when they should stop wearing uniforms. Why should these people in the civilian branches wear army uniforms and go up and down the streets of our towns and cities taking salutes from real soldiers? Why should they be eligible for pensions and other benefits, just like the men who are actually going to fight this war? When the British troops went to Greece there were only two divisions left in Libya and Egypt to carry on the war there. How can Britain take the offensive unless this government does its duty? When the war broke out we were told that conscription would never come, nor would it if the voluntary system had fair play. Well, unless this government stirs itself, conscription will come, and is coming, and be a factor, although unnecessary if we had a full government effort. We have conscription now for four months, and unless we do something we may have conscription the year round, because if Hitler comes to this country he will not recognize any political party but will treat everyone in the same way.
For these reasons, I do not think the budget goes as far as it should. We are taking away the revenue of the municipalities, and I do not know how they are going to carry on. The burden that will have to be carried by real estate will be terrific; and goodness knows real estate carries a heavy enough burden to-day.


Mr. JOSEPH SASSEVILLE ROY (Gaspe):: Mr. Speaker, the heavy taxes contained in the budget seem to have caused a great surprise to our population. Sacrifices exacted are assuredly very great, but they are the answer to the desire constantly expressed by both sides of this house which has always proclaimed an "all-out war effort.''
Nevertheless the analysis of new taxes brings up many points which it would be very interesting to study. I will mention only one, that relative to the reimbursement to the provinces of an equivalent sum to the income tax collected by them in 1940.
I see in this project the enforcement of which would be detrimental to provinces which do not collect this tax or a lighter one than that collected by others, a disguised attempt to enforce certain theories of the defunct Sirois commission. For the present I will not comment on it further.
At this moment when the issue of the supreme contest becomes more and more dreadful, I do think I can be of greater help to my country which has a direct interest in its ultimate result, in calling the government's attention to two elements of victory offered by Gaspe.
It is needless for me to recall that experts have said that oil would be a factor of victory. A mere reference to what is going on to-day and to Mr. Churchill's statement regarding the dangers threatening that vital point called Iraq, allows us to embrace at a glance the magnitude of oil importance.
The securing of new sources of this precious fuel is very important. I have already referred to the possibilities of oil-bearing areas in the Gaspe bay surroundings. From 1860 up to 1901, with rudimentary machinery, fifty wells have been drilled at a relatively small depth. One can read with profit and interest the records on each of these drillings and their oil output in the annual report of the "Quebec Bureau of Mines" for 1929 by Mr. William A. Sparks. Oil occurrences can be found to-day on the surface of the soil in many places over an area of 600 square miles. In his 1929 report, Mr. William Sparks writes this on page 7:
The occurrence of oil in small quantity has been fully established, with the result that the district has continued to attract attention and it must still be regarded as a possible source of oil on a commercial scale.
The Budget-Mr. Roy

And here is what we read in a recent report by the joint engineers. Doctor I. W. Jones and Mr. H. W. McGerrigle, for the year 1937 at pages 36 and 37:
There is some oil of good quality in this region, as has long been known. .	.	. The
region is recommended to the serious consideration of those in search for oil.
By reason of the imperative necessity imposed by actual events of attempting to discover new sources of oil, and, by recalling the past policy of Great Britain in investing large capital to develop oil wells in Roumania, Iraq and many other well-known countries, I deem it is the government's duty to undertake forthwith the drilling of such areas in Gaspe as are recommended by these engineers.
According to quotations I have lately received from Robert McMaster and Sons, of Onondaga, Ontario, the drilling of a 7.000 foot well-the probable oil-bearing depth- could be undertaken at a cost of $78,000. The investment of $500,000 would then permit the drilling of seven wells which could be concurrently done and completed in eight months' time to supply, thereafter, at Gaspe seaport, the navy and the air force, with oil which at that time might have become scarce elsewhere.
Since I have mentioned Gaspe seaport, may I add another remark on this subject matter? Has not the contingency of seeing the British navy moved to our shores been mentioned? The agreement between the United States and Canadian governments for a joint defence programme of the Atlantic coast, referred to Halifax as the pivot of this military scheme. May I mention here that Halifax, located as it is outside of this halfclosed natural barrier formed by Newfoundland and Cape Breton, is rather more a port of attack than a defensive one. From the defensive point of view, the Gaspe seaport located within that natural barrier is the most important in Canada. Engineers' reports which are in the department's hands will support this statement.
Besides, if it crosses to our shores, the British navy will be compelled to use this seaport as that of Halifax is too small and already too overfull to shelter it. Gaspe seaport therefore would offer a double utility: As a defensive port it would first be the pivot of our naval defence on the Atlantic; second, it would protect the St. Lawrence of which it is the key and which has no organized defences on either shores as far up as Quebec. But, what have we in this large and deep water harbour of Gaspe for the accommodation and supply of this navy? Practically no wharf, no transport or storage facilities for supply reserves.

If the experiences of "too late" given us by the European tragedy are to be of profit to us, we should hasten to take the benefit of these advantages immediately and have these oil resources and this harbour put to use.
So guided by imperative logic, the government will not only have the opportunity of adding greatly to Quebec's share in the struggle, but it will also grant our province a more equitable share of public expenditures for our war effort.
It is not here superfluous to say that Quebec is receiving an unequal treatment. The government information bureau informs us that, in March last, in the numerous war commissions appointed by the federal authority to organize and control our war effort, there were 63S English-speaking appointees and merely thirty-nine French-speaking. I could point out also a similar disproportion in the granting of munitions or supply contracts and of war industrial establishments in the country.
This disproportion is even greater in the granting of subsidies to industries in different provinces; some receive hundreds of millions to help them in their difficulties, while the Quebec industries are receiving very little, particularly the farm industry, the fisheries and the lumber industry which, this year, have to struggle against most adverse conditions.
We have had long debates in this house on the economic problems of other provinces and the needs of their population.
So far, with the exception of the hon. member for Temiscouata who was the only one to take a positive stand in expressing his own views, neither the government nor the opposition have paid the slightest attention to or care for the interest and rights of the Quebec province, in spite of my numerous appeals.
Quebec is surrounded by such a silence that we would think it is non-existent or of trifling importance. However, numerous propagandists do not forget Quebec when new sacrifices are needed and asked for. Quebec's contributions which have been so far quite remarkable in view of the limited resources of its population and the adverse political education it has received in the past, may diminish against our will if our economic structure is not receiving the same attention as is given elsewhere. During the Easter recess I had the opportunity of observing that commercial activity is declining in the province of Quebec. At Gaspe and along the shore the retail business has dropped this winter 50 per cent by comparison with the previous winter.
Many of our industries are seriously hit by war conditions. The lumber industry suffers gravely by reason of difficulties and especially the impossibility of transport. This industry

The Budget-Mr. Roy
is one of the pillars of our provincial economy. Will the government come to its rescue as it has done for the wheat growers in the west? Will it refuse its help as it has stubbornly done so far with regard to the fishermen of the Magdalen islands who are battling against the worst misery for over a year?
May I, Mr. Speaker, bring once again to the attention of parliament the fate of that population of Gaspe and Magdalen islands zone, geographically situated as it is to make the best defence against an eventual aggression by the enemies of democracy. The valuable contributions it has already made to our war effort have been stressed by me.
So far in the course of this session, parliament has approved of the expenditure of about one billion six hundred million dollars, all that for the security, defence, peace, order and welfare of Canada, and further, providing for the carrying out of any measures deemed essential to the existing state of war-a war we are told, and properly so, for the survival of justice and democracy.
To come back to the budget, if we are willing to share in the defence of democracy throughout the world, would it not be wise to worry about its preservation in our own home?
In this regard, Mr. Winston Churchill, speaking with the courage and frankness characteristic of his frequent utterances, declared recently that in the future the policy of the British government will be oriented towards the settlement of popular grievances. Is it not an urgent necessity for Canada to direct our policy in that very same way? In the light of the assaults suffered by democracy elsewhere, it is imperative for us too, if we are sincere in taking up the challenge, that we return to certain principles almost forgotten.
It is readily admitted, particularly under such conditions as prevail to-day, that all members of a democratic system have the same obligations, and compulsory military service and taxation upon everyone according to his means are proof of that. But if the said members have the same obligations, they are equally entitled to the same rights and privileges.
The people of the Gaspe and Magdalen islands constituency, suffering from the loss of certain foreign markets as a result of the war, are accepting, as everybody does, their share of the sacrifices required for the defence of Christianity, liberty and democracy. They pay taxes as far as their meagre income will permit. The islands alone have given more than 200 of their sons to the armed forces of Canada. We could hardly reproach these people with such a contribution. They are surely doing their duty.
But are they receiving from our democratic government the just treatment they deserve?
I have already told the house, Mr. Speaker, the causes of the misery afflicting those fishermen of the Magdalen islands: the non- or under-selling of fish, the absence of any industry other than that of fisheries and also the complete absence of any wood.
As I forecast in my speech of December 3, last, the scarcity that already existed during the summer and fall has been much aggravated since. Cold has come to add to the sufferings of those ill-fated who cannot get the coal needed for their comfort.
According to reports from individuals and mayors of the different municipalities, stocks in the hands of the Red Cross have not been sufficient to relieve most pressing eases. A family of ten, after a journey of fourteen miles with a dog-team, was given ninety-eight pounds of flour, ten pounds of sugar and one pound of beans to last for a month. Two family heads who didn't get a thing were near death from exposure when they were rescued. Many families had to share the same shelter because they had not the fuel to heat up their own separate dwellings.
Under present conditions, after so long and hard a struggle, there is yet a serious problem for a good many fishermen, that of equipment for the reopening of the fishing season. Will the government grant the help needed to permit them to earn their daily bread?
Before going on with my exposal, I must correct a statement made by a provincial officer, in March last. He stated that the increase in price of mackerel to $6.50 up to $7, in the latter part of the winter, was to put a happy end to the miseries of the Magdalen islands fishermen. It is neither the merchants nor the fishermen who have benefited by that increase in price, but a Jewish American merchant who bought that mackerel last fall for $3.50 and S4 a barrel and who kept that fish in storage at Halifax till he sold it with that fine profit. Hence the situation has not changed in the Magdalen islands, and all the letters I received are full of accounts of the most harrowing misery.
We have helped the victims of war and other cataclysms in practically all European countries. Why do we refuse help to our Canadian citizens whose right to receive it is first and foremost? It is true, however, we have helped a certain portion of our people who, from want or plenty, claimed itself to be in need. For instance, we voted millions of dollars for the wheat growers of the west when they suffered from drought. Well done! Again to-day, the government gives them hundreds of millions to retain their surplus. Now, considering the present year's abundance as cumbersome and detrimental, another
The Budget-Mr. Roy

$35,000,000 in the form of premiums is being offered them in order to prevent the same superfluity of wheat next year. When people in the Magdalen islands and elsewhere are starving why so great a sacrifice of money to fight this glut of the staff of life?
Permit me, Mr. Speaker, to point out another anomaly-not to use another description-also inherent in this question of wheat: With a view to solving the problem brought about by the superabundance of wheat, the government, by means of a direct taxation, forced the price of flour to go up, with the natural but false result of reducing the consumption instead of increasing it because the poor consumer is being given less for his money.
Partisanship, the canker of the democratic system, is the reason, in the case of the Magdalen islands, for the absence of any trace of humanity and generosity. If my constituents could not guess which of the two parties would win on polling day, are we to keep up a grudge against them? Such a free use of the ferula of party discipline explains why democracy has lost its primary form in many countries of the world and is being exposed here to the worst dangers.
It would be easy to do away with the misery existing in the Magdalen islands and with the remains of unemployment in Canada. An approximate sum of $300,000 would provide most urgently needed fishing harbours on the islands and the organization of new methods of preparation and marketing of fish. Out of the considerable sums asked from parliament, why can we not set aside a few millions and a little bit of our surplus wheat, to straighten out the economic conditions in the needy regions of our country?
The billions we spend in our war effort have developed industry in practically all the cities and favoured a great number of ph'-es in the country. Their people are benefiting from it to such an extent that we are already talking of a scarcity of man-power.
According to an official answer tabled on February 25, there is no war industry or factory in the Gaspe constituency. No contracts have been granted for either war materials or equipment in that county.
There is surely equality of sacrifice in our struggle for the preservation of those democratic principles which ensure our welfare and happiness. In equity the enjoyment of this welfare should also be shared on equal terms. It is important here, Mr. Speaker, not to overlook the fact that a great portion of the Canadian people do repeat freely that the present democratic methods, in recent years, have better served finance and machinery than they have the people and workers who suffer from this false state of things.

Through the hon. Minister of Fisheries, the government have already recognized the precariousness and the causes of the situation in the Magdalen islands.
In support of this, the following is from a letter by the minister dated July 31, 1940, and addressed to me. Here is what he wrote:
J'ai ete h meme de constater cet etat de choses et vos commentaires sur cette question n'ont pas manque, en outre de m'interesser. J'ajouterai que mon departement s'occupe en ce moment d'effectuer des recherches a cet egard et les dirigeants de l'Office du Poisson Sale sont a etudier la situation en vue de trou-ver eertaines mesures devant etre prises pour y remedier.
My own translation:
I have been in a position to ascertain the situation, and, moreover, your remarks on this matter did not fail to interest me.
I might add that at the moment my department is inquiring on the matter and the directors of the salt fisli^board are making a survey of the situation* in view of finding measures to be passed to straighten it out.
On another occasion, the government, through the right hon. Minister of Justice, promised to give help to the islands.
On December 3 last, the right hon. minister replied to me as follows:
With the first part of the hon. member's address I am almost completely in agreement. We sympathize with the distress of the fishermen of the county of Gaspe, and in helping them, we certainly will be happy to second the efforts of the various associations and even those of my hon. friend.
That is from Hansard, 1940, at page 703.
In spite of these promises the government continues to ignore the hardships and sufferings that grip more and more tightly these afflicted people, and apparently wants to persist in this unwillingness, if I judge by the letter from the hon. Minister of Fisheries, dated March 18, 1941, and addressed to me, which I now read:
J'ai votre lettre du 15 eourant, de meme que copie de celle que vous adressait monsieur X, comte de Gaspe, P.Q.
C'est avec regret que je vous fais part qu'il ne m'est pas possible d'acquiescer a la demande de monsieur X, puisque cette annee il n'y a pas de credits votes par le Parlement pour nous permettre de venir en aide aux pecheurs necessiteux.
Votre bien devoue,
J. E. Michaud.
My own translation:
I acknowledge receipt of yours dated March the 15th and also copy of a letter addressed to you by Mr. X, Gaspe county.
I regret to say that it is impossible for me to grant the request from Mr. X, because this year no provision has been made by parliament that would allow me to help the needy fishermen.
Yours truly,
J. E. Michaud.

Questions
After that, can I, in fairness, ask these people to consent to new sacrifices for our own welfare, when so little is done to ensure their own?
However, hoping the government will answer my appeal on behalf of the destitute fishermen of Magdalen islands, and that it will put to contribution, by organizing them, these two essential factors of defence and victory which are offered by our oil sources and the Gaspe seaport, I will abstain, for this reason, to oppose the new exigencies contained in the budget.
On motion of Mr. White the debate was adjourned.
On motion of Mr. Crerar the house adjourned at 11.04 p.m.
Wednesday, May 7, 1941.