1944-07-04

[Stage Direction]
Bill No. 157, for the relief of Everett Roy Clow.-Mr. Douglas.
Bill No. 15S, for the relief of Elmore MacLean MacKay.-Mr. Douglas.
GENERAL DE GAULLE On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, the house will 100-282
be interested to learn that General de Gaulle has accepted the invitation of the government to visit Ottawa- It is expected that he will be here in about a week's time, for a brief stay immediately following his visit to the United States. In view of the great interest which will be aroused here by the presence of this distinguished French leader, arrangements will be made, with his consent, for General de Gaulle to appear publicly on parliament hill before the proceedings of parliament open on the day he happens to be here. Details of the arrangements will be announced as soon as possible.


Mr. GORDON GRAYDON (Leader of the Opposition):: May I thank the Prime Minister for informing the house as to the arrangements made for General de Gaulle's visit. As the Prime Minister will recall, I made inquiry on an earlier occasion and my right hon. friend was good enough to say that he would give the information as soon as possible.



INDEPENDENCE DAY


[Stage Direction]
On the orders of the day:
Gordon Graydon: Mr. Speaker, as this is Independence day in the United States, will the Prime Minister inform the house whether the government has made any move toward sending our felicitations and best wishes to the United States government.


William Lyon Mackenzie King: Yes. As my hon. friend is aware, I received from the President a most cordial communication on Dominion day, and I have sent to him to-day on behalf of the Canadian people a communication which, I hope, may prove to be equally felicitous.



ISSUE OF CHEQUES FOR PARTICIPATION CERTIFICATES

[Stage Direction]
On the orders of the day:
Mr. J. G. DIEFENBAKER (Lake Centre):: I should like to ask a question of the acting Minister of Trade and Commerce, with respect to the hold-up or delay in the issue of cheques for participation certificates in respect of the sale of wheat. Would he explain what the situation is, and when it is expected this job may be completed?


Hon. T. A. CRERAR (Minister of Mines and Resources):: I have not the information which would enable me at this time to answer the hon. member's question. I do know that

Housing Programme

a very considerable amount of work has been involved in getting these payments out. I shall make inquiries, and I may be able to give the hon. member a report to-morrow.


Mr. PERLEY:: Read the report of'the committee on agriculture, where the question was asked and answered.



INTERNMENTS


[Stage Direction]
On the orders of the day:
Mr. LIGUORI LACOMBE (Laval-Two
Mountains) (Translation): I wish to ask the hon. Minister of Justice (Mr. St. Laurent) a question. Has he received the medical report following the examination of Mr. Camillien Houde, together with the document he is supposed to have signed?
Hon. L. S. ST. LAURENT (Minister of Justice) (Text): Mr. Speaker, the hon. member has inquired if I have received a report from the physicians concerning the physical condition of Mr. Camillien Houde, and if I have received a certain document he is supposed to have signed. I know of no document he is supposed to have signed, and I have not yet received any report from the medical men who, I understand, have made a physical examination of Mr. Houde. I inquired this morning, and no report had yet reached the Department of Justice.
Mr. SPEAKER:: May I suggest that this question might have been placed on the order paper. Any further questions along this line will certainly have to be so dealt with.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. LIONEL CHEVRIER (Parliamentary Assistant to the Minister of Munitions and Supply):: On Friday of last week the hon. member for York West (Mr. Adamson) asked if a conference had taken place between Wartime Housing Limited and the Soldiers' Dependents' Society of Toronto, with regard to the building of one hundred units for soldiers' dependents. The answer is yes, and a contract has been entered into between Wartime Housing Limited and the city of Toronto for the construction of a certain number of these houses. Construction will proceed shortly.
The hon. member for Cumberland (Mr. Black) asked if any steps were being taken by the department to facilitate the sale of

wartime houses to war workers who are now occupying them. Thus far it has been the practice of the department to refuse to sell wartime houses under any circumstances, the reason being that these houses are considered necessary for essential war purposes. If there is to be a change in this practice it will be a matter of government policy which will be announced in due course.


Gordon Graydon: Is the parliamentary
assistant yet in position to answer the question I propounded to him, I think either on Thursday or Friday, with respect to eviction or removal from wartime housing accommoda' tion of dependents of war workers who had enlisted.


Lionel Chevrier: I received the clipping from my hon. friend this morning only and I am not yet in position to make a reply. I will do so as soon as I can.


Mr. ADAMSON:: The position of the
soldiers' dependents is frequently desperate, and these houses are urgently needed.



THE BUDGET


[Stage Direction]
The house resumed from Monday, July 3, consideration of the motion of Hon. J. L. Usley (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go , into committee of ways and means, and the proposed amendment thereto of Mr. Rowe.
Mr. KARL K. HOMUTH (Waterloo South): Mr. Speaker, there is an old adage that chickens will come home to roost. Considered in relation to the problems with which this government is faced, perhaps no truer statement was ever made. Some of these old ghostly, moulting and non-productive chickens are coming home to the Liberal government hencoop. Their condition is such that they threaten to destroy the whole flock. It is with some of those chickens that I wish to deal to-day, because they have cost and are costing the Dominion of Canada millions of dollars.
As I sit in the house I often wonder what passes through the mind of the Prime Minister (Mr. Mackenzie Rung) as he sits gazing around the house and counting the number of parties therein. I look back a few years when the Prime Minister stood in his place in this house, pointed to the third party which then existed and asked, "Who is responsible for that?" He said, "The Conservative party is responsible. Why are they responsible?" The reply was, "Because they have brought so

The Budget-Mr. Homuth
much discontent into the country, they have caused so much disunity that the malcontents have formed a party of their own."
I look over the house to-day and count the number of parties. It is a goodly number. First, we have the Progressive Conservative party. I name that party first because when the election is over it will be first. Second, we have the Cooperative Commonwealth Federation party. Then we have the Social Credit party. Then we have the unity party; then the Bloc Populaire party; then the Two Mountains party. Then we have the Liberal party divided into three parts. On the one hand we have the party of the hon. member for Wentworth (Mr. Corman), the party to which he referred in his speech in Hamilton as the "dead guinea pig party." Then we have the party of the hon. member for Hamilton East (Mr. Ross), which was referred to at the same meeting as the "nothing party." I would say that that is the largest group in the Liberal party. Then of course we have the official Liberal party, which is gradually dwindling.
This gives a true picture of the discontent, the disunity and the dissatisfaction that have grown up in this country during the last few years as a result of the administration given by the present government. It has been a government of bureaucrats, of orders in council, a government which in spite of its promises has neglected to take labour, farmer and other appreciable groups in this country into its confidence in order to discuss their problems with them.
I intend to-day to deal particularly with the income tax and manpower policies. There are many inequalities in the income tax act. If there is one act on the statute book that should be ironclad, that should not be subject in any way to the likes or dislikes of some administrator, that should not be subject to appeal by some member on behalf of a taxpayer, it is the income tax act. When the hon. member for Dufferin-Simcoe (Mr. Rowe) was speaking in the house the other day he referred to the tax on farmers, and the Minister of National Revenue (Mr. Gibson) said that they were allowed to spread this over five years.
There is nothing in the statute which permits the government to do that, but apparently they can do it if the officials wish to do it. In other words, there is a law which permits the government to exercise its friendship or dislike in order to give to its friends a five-year spread, and to those it dislikes only one year. There are farmers who have had to pay it. Perhaps if they appeal to the department they may get that spread, but it should
not be necessary for a man to have to go to his member to have an appeal made on his behalf to the income tax department.
Mr. GIBSON:: That is only where the
entire stock is being sold, a dispersal sale. It is not a case of distributing annual income over a period of years.


Mr. HOMUTH:: Quite right, but in some
cases it has been taxed and in other cases it has not. If there is one law, I say, that should be ironclad and not subject to the interpretation of departmental officials it is the income tax act.
There is another provision in the income tax act which I think is grossly unfair. I refer to the taxation of the various ministerial pension and relief funds. I believe appeals have been made to the Minister of Finance (Mr. Ilsley) with regard to this, but nothing has been done. They have been advised that when the money is paid out in the form of annuities it will not be taxed. It cannot be taxed because these old ministers who have put in years and years in the service of their churches will not receive sufficient as annuities to be taxed. These are some of the inequalities that exist under this act.
One matter which is perhaps causing the most concern is the income tax on industrial workers. We have had a peculiar set-up since the war began. There has been tremendous extravagance since the war began; millions of dollars have been wasted in the construction of army camps and other necessary buildings.


Some hon. MEMBERS:: Necessary?


Some hon. MEMBERS:: Oh, oh.


Karl Kenneth Homuth: Millions of dollars were spent in the construction of plants to make munitions of war. Much money was wasted because men had to stand idle while plans and specifications were changed. The people of this country realize that that was necessary and they did not find fault. They knew we were at war and they were willing to make any necessary sacrifice. But as we went along we built up in many of these centres an average of wages that was far beyond the wages paid in other parts of the country. The average of wages around some of these military camps had reached such a level that if a man knew one end of a hammer from another he could get a job tacking tar paper on buildings at seventy to seventy-five cents an hour, witu double time on Sundays and time-and-a-half for overtime. Men left the farms to go into the towns and cities to earn these wages, and the result was that the whole industrial and agricultural economy in those districts was
44S0
The Budget-Mr. Homuth

disrupted. Then came the freezing of wages. Where men in one section were getting very high rates of pay, that was the rate at which wages were frozen in that section; where men in other sections were getting low wages, that was the rate at which wages were frozen there.
New plants were completed, but one thing more was needed-employees. We had a tremendous shortage of tool makers, machinists, skilled workers in all the different iron trades. The men in these trades were willing to work long, hard hours; they were willing to work overtime; they were willing to do anything in the war effort, because they felt it was part of their job. Then some bright mind in the Department of Finance or within the ranks of the government conceived of the income tax as now applied to industrial workers. First there was the national defence tax. That was done away with and a straight income tax was imposed instead. Who are the bright minds in the department who know anything about industry? Who are the men in the cabinet who know anything about industry? You have a couple of men there who used to be farmers, you have some lawyers and you have some business brokers, but you have only one man in the cabinet who knew anything about industry and that was the Minister of Labour (Mr. Mitchell) himself. He did know industry; he did know labour; he did know the conditions under which labour works. When he was first appointed to the cabinet I felt, and I believe the feeling was general across this country, that at last the government of the day was extending itself to the point of taking into the cabinet someone who was was nonpartisan, who was not of the Liberal party, because of the knowledge that he had of the department over which he was presiding. I remember meeting him on.e morning in Toronto on his way to his by-election campaign in Welland. I congratulated him upon his appointment. I suggested to him that he had the confidence of the people of this country and of labour particularly. I think perhaps I have known the Minister of Labour longer than any other man in this house, but in [DOT]congratulating him I said this: "I believe you can do a job in that department if you are permitted to do it, but I am afraid that your job will be predicated not upon the needs of labour or of industry or of production in this country, but rather upon political expediency." I think, Mr. Speaker, that that is what has happened, because I cannot conceive of the Minister of Labour sitting in a cabinet and agreeing to the enactment of an income tax act the effect of which could only be to cause absenteeism in industry.

We have a tremendous labour shortage in this country. We go to men and appeal to them to work overtime. But the Canadian people have learned how to work out the income tax. The Canadian people cannot be fooled. The Canadian worker sits down and figures out that if he works on Saturday afternoon over and above his regular time he gets very little extra pay for it because of the income tax; if he works overtime he gets very little pay for it.
Then the appeal went out to women to work in industry, married women who could get away from their homes. Come into industry- we need you. That was the appeal, and the women came. Some will say that they came for the money. I know many of them who came into industry and who had sons overseas. They came in-why? Because they felt they could do a job, because they felt it was their duty to come into industry and produce the things that were so necessary in the carrying on of this War. They came in, and what happened? As soon as they started to earn money the whole tax structure in that home changed. Immediately these women were penalized for going out and doing a necessary war job. Is it any wonder that we say now, and I have always contended this, that any extra pay for overtime should not be taxed, that we should sit down and work out a system of taxation that will bear less heavily on the industrial worker so that we may get longer hours of work and greater production, and at the same time bring more money into the treasury?
On June 19 a meeting was called in the city of Toronto by one of the officers of the wartime prices and trade board. The heads of industry of western Ontario were invited to attend. I went there. Evidently a very large gathering was not expected because the first thing they knew there were between four and five hundred men at the meeting, and they had to hurry out and grab more chairs until the ballroom of the Royal York was filled to capacity. Who were the four or five hundred men who attended that meeting? They were men who were operating industry in western Ontario. They were men who knew all about industrial headaches. They were men who knew all about the troubles of industry in getting production, in keeping the lines working, in keeping the machines busy. These men came to that meeting because they felt that they would have an opportunity to discuss their problems. They were men who knew the headaches of absenteeism and could do nothing about it.

The Budget-Mr. tlomuth
We went into the meeting and were handed the agenda. The agenda provided for a speech from one gentleman from . selective service. It provided also for a speech from a gentleman from the Department of Labour, and then it provided for the showing of a motion picture. At the bottom of the agenda it said: "No discussion will be permitted, but if you have anything to discuss there are a large number of men here from the Department at Ottawa and you can sit down privately and discuss those matters with them." Five hundred men had given up their time and money-


Mr. MITCHELL:: I would like to know
the name of the man who said that.


Karl Kenneth Homuth: Go and look at the agenda. It says right on the agenda: "No discussion will be permitted."


Humphrey Mitchell: Whose agenda was it?


Karl Kenneth Homuth: The agenda was drawn up by the wartime prices and trade board, who called the meeting.


Humphrey Mitchell: My hon. friend said
selective service.


Karl Kenneth Homuth: Pardon me; I did not.


Mr. MACKENZIE (Vancouver Centre):: Yes, you did.


Karl Kenneth Homuth: I said that a man was there from the selective service to make a speech. My little friend from Vancouver Centre will please keep quiet-I mean little mentally.


Ian Alistair Mackenzie: It would be better if you did too.


Karl Kenneth Homuth: I said that a speaker from selective service spoke at the meeting.


Humphrey Mitchell: You got mixed up in your thoughts.


Mr. ROWE:: You got mixed up in your agenda. Who wrote the agenda?


Karl Kenneth Homuth: A Mr. Mackenzie and, I think, a Mr. Hooker.


Humphrey Mitchell: My hon. friend is trying to be too clever.


Karl Kenneth Homuth: I do not have to take any lessons from the Minister of Labour as to truthfulness; let me tell him that. I have known him too long.


Mr. GARDINER:: You might be mistaken.


Karl Kenneth Homuth: This meeting was called, as I say-


Ian Alistair Mackenzie: By whom?


Karl Kenneth Homuth: These men came there in the hope that they could discuss these problems, that as a result of the knowledge thus gained they could send recommendations back to the government, and that the government would then benefit by the advice of perhaps the most representative group of men who could be gathered together at any time in any part of this country. Instead of that, no discussion was permitted, until in the afternoon groups gathered again. There was no general discussion; little groups gathered here and there, but these men could do nothing, they could not take recommendations back to this government. Why? The speeches they made were fine and were well delivered, but they dealt with things which we in industry have known for years and which most industries have put into practice. The advice they gave would have been excellent four or five years ago, but now is not the time to tell the industrialists of western Ontario how to do these things. These men simply came to tell us, without discussion, what to do. They had no cure for such industrial ills as absenteeism. Everything that was done had to be predicated on government policy. When these various laws which deal with industrial workers were being drawn up, how often were the heads of labour and of industry invited to take part in the discussions? I venture to say that if the government had selected any six men from the employers' group and any six representatives of labour that day they could have sat down and worked out income tax provisions covering industrial workers which would have brought the government more money, would have given us greater production because it would have led to more work, and would have borne less heavily on the people who pay the taxes. Instead of that course being taken, recourse is had to so-called experts, college graduates, economists and so on, men who have no idea whatever of the headaches which industry experiences in trying to maintain production. Now-


James Garfield Gardiner: The hon. member snould read his speech.


Karl Kenneth Homuth: One thing I will say about the Minister of Agriculture (Mr. Gardiner) is that he, like myself, has never read a speech in this chamber. Perhaps it would be better if we did.
Another of the headaches of industrial workers is in the making out of income tax forms. I do not know of any official requirement which has caused them more concern.
The Budget-Mr. Homuth

Year after year they are told that a simplified form will be provided, but when the form comes out it is more of a mystic maze than ever. I believe that an easier and better way of collecting income tax could be devised for our industrial workers. Many who since the war began have been forced to make out income tax forms never before had to deal with government, and when the order was issued that on such a day the return must be in, they were worried and bothered. The same trouble occurred in the United States, so that recently they simplified the collection of income tax from those who pay on an income of $5,000 or less per year. In the Monetary Times of July, 1944, is an article on the tax simplification measure which has been passed by the United States Congress. I quote a clause on page 73 which I think is interesting and to which the government could well give attention with a view of trying to work out some such system here:
It is in the handling of taxes on wages and salaries the greatest simplification has taken .place. An individual earning up to $5,000 a year, with $100 from other sources allowed, will have his total tax withheld at the source of income. He will be permitted to claim a flat deduction of 10 per cent to cover donations to churches, charities, et cetera. At the end of the year he will receive from his employer a statement showing his total earnings and the .amount of tax deducted. The individual will 3>ut down on this paper his marital status and 'dependents and whether he had earnings from other sources. Total income and tax deductions will be set out. The statement will be sent to the treasury department and the officials there will do the calculating. If he owes the government additional taxes he will be billed in thirty days. If too much has been deducted be will get a refund.
Now that compulsory savings has been done away with it may be much easier to simplify the income tax return, because taxpayers will not have to cite their various insurance policies and so on. If there is one object at which the Department of National Revenue should aim, it is the simplification of these returns. At the present time they are a headache to the people who have to fill them out, and also to every branch of industry, because office staffs are kept busy making out returns for their employees.
Let us deal for a moment with the question of compulsory savings. In his budget speech the other day the Minister of Finance said that the decision not to continue compulsory savings would be a great boon to industrial workers and others, and he pointed out that there would be more money in the pay envelope. It looked to me like a subtle attempt to bribe the industrial workers of this country with their own money. If he wished to do

something effective he should have reduced the income tax rate, and then the compulsory savings could easily have been kept going. But the workmen in the factories are not going to be misled into supposing that they are getting something from this government; all that has been conceded to them is money which they would have eventually received any way. What they are interested in, and the one thing they are interested in, is the rate of income tax. In supporting the amendment of the hon. member for Dufferin-Simcoe (Mr. Rowe), I express the opinion that every hon. member who represents an industrial riding believes as we do, that there should be an exemption at the very least up to these amounts, and that in that way we would be. able to encourage our industrial workers to work more hours and get much greater production.
Here we have a cry going up from the Department of Munitions and Supply for thousands more men to go into the shell factories and the shell filling plants because it is found suddenly that there is a greater need for shells than was anticipated. Well, where were they going to get these men? At the same time, the selective service was calling men from the farms and factories, and so these men were removed from one industry to another with the result that the whole industrial picture of the country was disorganized, until to-day industries that are working on necessary military production have in many instances reduced production by fifteen, twenty, and twenty-five per cent. If there is one thing that has caused disorganization it is the manner in which the whole man-power policy has been handled.
I realize apparently men are needed for the army-not from anything in particular that the Minister of National Defence (Mr. Ralston) has told us in the house as to requirements for the army, but certainly his officers who go from one end of the country to the other, and the advertisements that have appeared in the newspapers of the country, which must cost a very considerable sum of money, have made it known only too well how badly men are needed for reinforcements for overseas. Yet at the same time we keep calling men from the farms and from necessary industrial jobs and sending them into this home defence amiy. I do not think the people of Canada will ever forgive this government for the way in which they have handled the whole man-power situation.


Humphrey Mitchell: We are not calling men from the farms.

The Budget-Mr. Homutli


Karl Kenneth Homuth: You are calling men from the farms.


Humphrey Mitchell: We are not.


Karl Kenneth Homuth: Go and talk to some of your selective service boards across the country as to whether you are calling men from the farms. In spite of the promise made on more than one occasion that men in the army could get relief for seeding and harvest, you cannot get it.


Humphrey Mitchell: That is a different thing altogether. My hon. friend said that we were calling men from the farms, and I say we are not.


Mr. HANSON (York-Sunbury):: I have evidence of it.


Karl Kenneth Homuth: The hon. member cannot see the forest for the trees. If he were out in the Styx once in a while instead of living here in Ottawa he would get some idea of what is going on in the country.


Mr. McILRAITH:: The Styx of Waterloo South?


Karl Kenneth Homuth: There are a few sticks there and they are pretty good sticks too. I say that these men are being called into this army out of industry and from the farms. The whole man-power policy has been wrong from the very start. First we had a month of training, and then four months, and then training for the duration, but only within Canada, and that was extended beyond the Canadian shores. Now we have these men being called from the farms. What has been the idea? Efforts have been made, even under the four-months training plan, to shame and humiliate men to go active. The Minister of National Defence has at times suggested that he. had no knowledge of that, that that was not so. Ask the Minister of Agriculture if it is true. Ask him what men told him at a meeting in Waterloo county a couple of years ago as to what was going on in military camps, trying to humiliate men to go active. Ask the hon. member for Waterloo North (Mr. Breithaupt), who knows the story. Ask the hon. member for Lambton West (Mr. Gray). He knows about it. Ask other hon. members of the house. Was there anything more disgusting in connection with our whole man-power situation than when the order came through the department saying that young men of 18i years were to be called, and the next day, in every newspaper across the country, there appeared large advertisements saying, "You are going to be called at 18^ years; why don't you join now
and choose what service you want to go into?" Imagine saying this to young men under the age of 18i years. That has been the story of the whole man-power situation. It is a serious situation. If these men are not needed for overseas there is only one place for them, and that is back on the farms and in industry. If they are needed for overseas service, they should be told so. They ought to know what is ahead of them. Let us be honest with them and let us say to them just what their position in the country is.
I have only a few moments left, but I did want to deal for a few minutes with the question of family allowances. I will say this, Mr. Speaker, that if there is one thing that labour wants to watch it is the hand-out it is being given supposedly by this government that is in power. Labour wants to watch them as closely as it possibly can. It wants to watch the hand-outs it is getting from thi3 group that forms the government of the country. Why? Because, when you start to subsidize industrial wages-


Some hon. MEMBERS:: Order.


William Earl Rowe: Go ahead.


Karl Kenneth Homuth: When you start to subsidize industrial wages out of the treasury of the country by passing certain paternal legislation which is going to give money to people, then I say that labour is in a very dangerous position, because on that day you lower the whole trend of labour in the country. That day you put labour in the position where its wages will be based on-what? On requirements? On output? On the job they are doing? No; it will be based on money that is coming into their homes. One of the most important things for labour is to watch this tendency, and that is why organized labour throughout the country has protested against this paternalism. It has protested against it because labour knows what it is going to mean. I say to labour, be very careful of these gentlemen who bring gifts to you; because, in my experience in this house in the last four years, since the election of 1940, regardless of all promises-


Some hon. MEMBERS:: Order.


Karl Kenneth Homuth: I have seen-


Mr. TUCKER:: On a point of order, Mr. Speaker, yesterday of your own motion, as reported at page 4443 of Hansard, you stopped me from discussing the question of family allowances.


Karl Kenneth Homuth: I did not say family allowances.
The Budget-Mr. Homuth


Walter Adam Tucker: Yes, you did. You are discussing that.


Mr. KINLEY:: He is discussing the tariff.


Walter Adam Tucker: I suggest that he is discussing family allowances as much as I was, and the same rule should apply to him.


Thomas Vien: I did not understand that the hon. gentleman intended to speak of family allowances.


Karl Kenneth Homuth: I was not speaking of family allowances, and I have never been as much out of order as the hon. gentleman.


Humphrey Mitchell: What are you talking about, then?	.


Karl Kenneth Homuth: I do say that labour must be careful, because in spite of the promises that no matter what board was set up, where labour was interested labour would be consulted, labour would have a say, labour would have something to do with initiating such legislation, or orders in council-in spite of the promises, that has not been the case. What is the situation with regard to all the boards on which labour was to be represented? It is this. Government policy had been laid down and these men could agree with it or not; it was government policy anyway. That is the whole picture all the way through; otherwise we would not have had these difficulties with labour in the first place.


An hon. MEMBER:: Ah!


Karl Kenneth Homuth: My hon. friend says "Ah!" Well, after the next election he will not be able to say it in this house.


Thomas Vien: I regret to inform the hon. member that his time has expired.


Karl Kenneth Homuth: I have been watching the clock closely, Mr. Speaker, and I believe I have one minute left. I did want to say something about the hon, gentlemen to my left. I have not time to do that now, which I am sure will please hon. members. However, there is some satisfaction in knowing that now they feel they have a Moses who is going to lead them to the promised land. I checked up on what Moses really did, and found that it took him forty years and then he never got to the promised land, so that we are fairly safe. After the next election, when we come into power, we will bring the Canadian people to ' the promised land without any particular Moses.


Mr. G. G. McGEER (Vancouver-Burrard):: In listening to the sort of appeal we heard from the last speaker (Mr. Homuth) I hope the people will not conjure up the kind of promised

land we had in this dominion after the election of 1930. It would seem to me, Mr. Speaker, that there are many reasons for believing that the people of Canada have not forgotten the attempt of a Conservative government to cure a national depression with an appropriation of $20,000,000. As I read the election returns it seems to me the people have not forgotten the kind of plutocracy that was established when the privately-owned plutocratic monopoly of the Bank of Canada was established by a Tory administration. If that is the kind of promised land Progressive Toryism has to offer, I think it is the kind of promised land the people of Canada will be glad to wander in the wilderness for at least forty years to avoid.
I do not want to get into the bickerings of party politics to-day, Mr. Speaker. I want to deal with what has been to me, during my experience in parliament, the most important and far-reaching of all its institutions, namely, the budget. I think every hon. member will agree that the growth and distribution of wealth, not the persistence of poverty, must provide the true way to a more useful life, a greater regard for order, and that love of independence which alone can assure a greater and more enduring freedom. You know, sir, that we of the British race have always prized freedom above everything else. Our whole constitution was born of the revolution inspired by a hatred of autocracy and a love of freedom; and in the armies of liberty that have marched down the ages of our civilization we have built an empire, the greatest force in our modern world, upon the foundations of freedom. To-day our great leaders meet and propound the issues as we see them in this conflict, as centering around four great freedoms. But I want to come to that great freedom which is involved in the budget.
As a young man I started out in life with a fear of debt. I made up my mind there would never be a mortgage on my home. While that home was very modest, I achieved my aim; but I completely overlooked three things. I forgot that there was a crowd up in my city hall; I forgot that there was another group of fellows in the provincial legislature, and that there was still another galaxy down in my national parliament, all conspiring together to make a mockery of my ideal of having a home without a mortgage. My city fathers succeeded to the extent of putting a billion dollars on it; my provincial legislators put on another two billion and my national parliament already has added another thirteen billion.


Richard Burpee Hanson: How much did you put on when you were mayor of Vancouver?

The Budget-Mr. McGeer


Gerald Grattan McGeer: I reduced the debt; I borrowed the only money ever borrowed by the city of Vancouver at three per cent; I built the best and cheapest city hall in the British empire, and still found time to come down here and try to put you right as leader of the Tory party.
I should like to draw the attention of the Liberal members of this house to a passage which I studied many long years ago. I thought then and still believe it is a splendid conception of the economics of industry and humanity. It was written by a man who had been minister of labour in Canada and who is now, next to Winston Churchill, one of the most distinguished prime ministers in the British empire-the Right Hon. W. L. Mackenzie King. Listen to what he says about debt:
Workmen's compensation, sickness and invalidity insurance, widows' pensions, maternity and infant benefits, recognize wherein personal relationships in industry have changed, and where as a consequence of new conditions permanent handicaps arise. The social legislation of which these measures are an expression rejects, as unworthy, the thought that men and women voluntarily incur accident, sickness, disease, enfeebled health or dependence in distress, any more than they willingly seek enslavement of any kind. It recognizes the difficulty of differentiating between industrial accident and occupational disease, and between disease occasioned by occupation or its environments and illness otherwise contracted; also the impossibility of dissociating from economic conditions the social waste caused by excessive and preventable illness. It seems that debt binds health as it binds freedom.
These are letters that should be written high in the mind of every Liberal in Canada- "it seems that debt binds health as it binds freedom." Mark that statement, with the debt load being developed in the Dominion of Canada under the leadership of the Prime Minister who wrote those words. It was not surprising that a man acknowledging and declaring as a principle that debt binds health and freedom should in parliament, at a later date, when the question of the supremacy and enthronement of plutocracy by toryism was the issue of the day, should declare:
As I said the other evening, once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government

And not merely restored, Mr. Speaker.
-and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile. Those are strong words, they constitute a strong argument, and they are words which this house ought to take full account of before it is too late.
Now I come to our situation to-day.


Richard Burpee Hanson: To the apostasy.


Gerald Grattan McGeer: I come, not to the idle twittering and chattering of the hon. member for York-Sunbury (Mr. Hanson) who laughs
at a nation in a great crisis-


Richard Burpee Hanson: Oh, no; I am laughing at the apostasy of your own leader.


Gerald Grattan McGeer: You are laughing and sneering as a nation passes through its most dire situation.	*


Richard Burpee Hanson: Not at all.


Gerald Grattan McGeer: And faces its most difficult problems.


Richard Burpee Hanson: Not at all.


Gerald Grattan McGeer: If you feel that it is time for laughing and sneering, then it is your privilege; but, Mr. Speaker, I ask you to direct the hon. member to keep quiet while I have the floor, because I have no facility for speaking in choruses, much less in choruses with him. It may be a matter of laughter; it may be a matter of jeers and sneers, but it was not so-


Richard Burpee Hanson: And abuse.


Gerald Grattan McGeer: It was not so in 1939. Now, Mr. Speaker, I am fairly tolerant on the floor of the house; but I must ask that that remark be withdrawn.


Thomas Vien: I did not hear it.


Gerald Grattan McGeer: He referred to abuse. I never offered him any abuse.


Richard Burpee Hanson: No? You don't do anything else but abuse people who do not agree with you.


Thomas Vien: I would ask hon. members who wish to interrupt the hon. member who has the floor, to address the Chair and to ask permission.


Richard Burpee Hanson: I apologize, Mr. Speaker.


Gerald Grattan McGeer: 
Mr. BLACKMORE:: No.


Gerald Grattan McGeer: Well, I am not so sure
that we can dismiss one who was taken out of retirement and placed in charge of the nation's finances by the Liberal government of 1936 and kept there until the appalling strain of the policy he was following forced his health to collapse. I do not believe we can dismiss the conclusions of one so understandingly skilled in all the practices of orthodox finance, without first giving them some grave consideration.
The point I want to bring to your consideration is this. We lifted our debt from four hundred million in 1914 to two thousand million in 1920, to three thousand million in 1930 and in 1940 to roughly four thousand million dollars. Under a load of less than $4 billion the economy of Canada collapsed because this nation was unable to meet its uncontrollable obligations and to finance the needs of the growing and expanding nation. Because of that the whole nation collapsed with millions of jobs to be done in every part of the Dominion of Canada, and hundreds of thousands of people wholly unemployed or only partly employed, and the whole standard of living collapsing and deteriorating in the midst of abundance. Now, what happened in the last four years? I quote from the report of the Bank of Canada, which states that the net debt outstanding as at August 31, 1939, when war was declared, was $4,693,000,000; as at December 31, 1943, it was $11,302,000,000.
That is not the end. We come now to this budget and you must add to that $11,302,000,000, another $3,200,000,000 for the coming year, making a total debt on the presently known factors at the end of the present fiscal year of $14,502,000,000. If the former minister of finance, who expressed a devout wish for a balanced budget and the reduction of taxes, was unable to sustain the economy of Canada from 1936 to 1939, tell me how under orthodox finance the minister of finance who must carry the burden in the post-war years is going to carry, how much?-$14,500,000,000? It will be much greater, Mr. Speaker, than that. The course of this war will be the same as the last war. It will come to an end, as all wars do, and there will be a period of demobilization following this war which will be much more expensive than that which followed the last. There will be a vast programme of rehabilitation much more expensive than the last one. If this war follows the same course as the last war; if demobilization finances follow likewise, we can look forward under the present system to binding the health and freedom of our people with a load of interestbearing debt that will total something over

The Budget-Mr. McGeer
$20 billion. I do not think there are many who can take much comfort from that. A nation is just like an individual. The day comes when the load of debt becomes an intolerable strain and then something breaks. The governor of the Bank of Canada warned this government and this parliament of that danger when he said:
I do not wish to suggest that public debt could *be increased at the present rate for an indefinite period without placing an intolerable strain on our economy.
When is the time when that intolerable strain is going to be placed on our economy? I suggest to the government that the time of that intolerable strain is already here. The people of this country are in revolt against a system of finance being maintained in the nation which leaves no outlook for the creation and distribution of wealth. Where the hobbling, hindering features of unpayable debt and unpayable charges for interest go on as the inevitable fate, not only of this generation or the third and fourth generation but of all generations yet unborn.
If men resign themselves to the fate of debt; if men will assume that there is no other way of financing a democratic government or the progress of civilization than by accumulating a pyramid of debt, then the day when disaster will overtake us is inevitable. No freedom-loving people are going to submit to a system that piles up an increasing load of debt, that binds their health and their freedom.
I say that you are not living under a democracy to-day, but you are seeing a plutocracy, blind, indifferent and subservient to the rules of its own creation, a -plutocracy committing suicide by its own unwise and demoded methods. I am going to suggest to this government that the day has come when a complete revision of our monetary system as far as public finance is concerned is overdue.
I believe we should1 have in Canada a great conference betwen the federal government, the provincial governments and the municipal governments where a national programme could be defined upon which the people of Canada could and would unite. I believe that the first fundamental of the work of that conference should be an appreciation of the need of a redistribution of the responsibilities and powers of our respective departments of government. Our parliament has neglected its responsibility to the junior branches of government ever since it came into being in 1867. It is always assumed that it could' shoulder on to the provincial and municipal governments the direct needs of the people, the care of their health, the care of their education, the building of their local roads, the maintenance of their local institutions; and it left them to carry on that tremendous responsibility, not with wide powers of taxation, but only with the powers of direct taxation. The federal authority reserves to itself the power to do the general things and to use all the powers of taxation, to glean its revenues in the easy way from the sources of indirect taxation. What is the result to-day? The standard of living in our cities in Canada, the standard of living conditions throughout our provinces, even the maintenance of our present order, our educational system and our whole system of government, are far below what they should and could be in a Canadian civilization. I may be wrong about the possibility of improving that standard of living, but other men greater than I have assumed that that is one of the responsibilities that fall to our lot.
As this war comes to a close, may I quote a great man from South Africa, Field Marshal Jan Christian Smuts, who, speaking to the British House of Lords and the British House of Commons, said this:
I feel that in this vast suffering through which our race is passing we are being carried to a deeper sense of social realities. We are passing beyond the ordinary politics and political shibboleths.
It is no longer a case of -socialism or communism or any of the other isms of the market place, but of achieving common justice and fair play for all. People are searching their own souls for the causes which have brought us bo this pass.
May it be our privilege to see that this suffering, this travail and search of man's spirit shall not be in vain.
Without feeding on illusions, without nursing the impossible, there is yet much in the common life of the -people which can be remedied, much unnecessary inequality and privilege to be levelled away, much common sense opportunity to be erected as the common birthright and public -atmosphere for -all to enjoy as of right.
Health, housing, education, decent social amenities, provision against avoidable insecurities-all these simple goods and much more can be provided for all, and thus a common higher level of life be achieved for all.
A-s between the nations, a new spirit of human solidarity can be cultivated, and economic conditions can be -built up which will strike the root causes of war, and thus lay deeper foundations for world peace. With honesty and sincerity on our part it is possible to make basic reforms -both for national and international life which will give mankind a new chance of survival and of progress.
Let this programme, by no means too ambitious, -be our task, and let us now already, ev*n in the midst of war, begin to prepare for it. And may Heaven's blessing rest on our work in war and in peace.
Do you think for one moment, Mr. Speaker, that going ahead under this policy of pluto-
The Budget-Mr. McGcer

cratic power, pyramiding billions upon billions of interest-bearing debt, the dream offered in 1942 by the Prime Minister of South Africa to the British House of Lords and the British House of Commons can ever be achieved? Oh, I know it is hard to break away from securities that have long been relied upon. But no man in his senses, no man in his sane moments has ever assumed that for his well-being and the well-being of his own household the accumulation of a mountain of debt was a good thing. If it cannot be a good thing fof an individual, how can it be a good thing for a collection of individuals?-for that is what a' nation is.
We have established great reforms. We have cut the interest rate. We have provided the facilities for issuing an inexhaustible supply of medium of exchange in the form of bankers' debts, in the form of public debts. Let me put this to you, Mr. Speaker. The government has the power to issue money, and to-day Canada has adopted and is operating and is winning this war with a system of managed internal paper currency not secured by gold and having nothing for security behind it but the integrity of the government, the common sense of the people, and the going-concern activity of the nation. There is no other security. Yet what does the government do? It gives away to a private monopoly that power to issue money. It creates that private monopoly, bonuses it with Bank of Canada cash, and then goes bankrupt borrowing bookkeeping entries built up on Bank of Canada cash reserves. Yet although that is an undeniable fact, I heard the hon. Minister of Labour (Mr. Mitchell) the other day say: You cannot get something for nothing.


Humphrey Mitchell: I still believe it.


Gerald Grattan McGeer: You are not a banker. If you were, you would know better.


Humphrey Mitchell: I still believe it.


Gerald Grattan McGeer: I do not hope to convince you or anybody else tied to the present system. But I want to tell you that even though I have no hope of convincing the government, I know the day will come when I shall be glad that I had the privilege of standing alone and warning against the inevitable disasters that will come if this nonsense is not stopped. You say that if we issue money we are going to destroy the value of money. What do you think of the value of an investment in Canada's national debts as they were in 1939 now that you have flooded into the same investment pool another ten thousand million dollars or thereabouts? Do you think that this Dominion of Canada can 
carry a burden of fourteen thousand million dollars with the same ease with which it could carry four? Mind you, your banking monopoly stands not upon the security of gold but upon the security of the appallingly inflated debts which the Dominion of Canada has issued. I do not speak in criticism. I argued in 1934 for the establishment of a national bank and the issue of currency and credit in terms of public need, not private gain. I hoped that we would issue our own currency through the Bank of Canada to free the government from the binding force of unpayable debt. We have the opportunity to build the Dominion of Canada into a great,, vigorous, and powerful nation. We have the power to continue to be the linchpin between the United States and the British empire. We have a part to play in creating a new and a better standard of living, a new and better hope of the future by making Canada a nation, powerful, growing and expanding, the greatest overseas dominion in the British empire. We can do that, sir, when we move to operate a monetary system that will take the shackles of debt and interest off the body politic of this dominion, so that the government of this dominion-and that will mean the people of Canada-may live in a future of peace free from those obligations of which our own Prime Minister wrote in his great book, those debts which bind a democratic government, the health of the people and the freedom of the land.


Mr. WILLIAM BRYCE (Selkirk):: In rising
to take part in this debate I wish only to touch on a few agricultural items.
I am disappointed that the government has not as yet seen fit to establish a board of live stock commissioners. That is something for which the farmers of Canada have asked for a long time, and in view of the almost unanimous demand I do not know why something has not been done about it. The board would be on a similar basis to the board of grain commissioners. If I quote, Mr. Speaker, from the brief presented by the Canadain Federation of Agriculture I am sure that hon. gentlemen will understand better the nature of the request:
It requests that the said board be empowered to administer, under the Department of Agriculture, the Livestock and Livestock Products Act, and that the members of the board shall be appointed in consultation with organized agriculture. The Livestock and Livestock Products Act should be amended and consolidated with other legislation in order to vest in the board the power to license, regulate and control the facilities for assembling, transporting, yarding, slaughtering, processing and packing, together with the facilities for grading and selling all live stock and carcass products

The Budget-Mr. Bryce
44S9
designed for 'human consumption, and in addition all live and dressed poultry and eggs should be subject to the jurisdiction of the board, in the above manner.
I am sure that gives everybody a good idea of what is wanted1 by the farmers. When we applied in days gone past for the setting up of this board we were asked where the money was to come from to finance it. In a previous talk in this house I said that I was quite sure the money could be found by taking over the condemnation insurance; that is the board of live stock commissioners would handle the condemnation insurance. In the veterinary directors' report for 1943, page 31, you will find that -19 of one per cent was sufficient to handle condemnation insurance as far as hogs were concerned. It is indicated on the same page that the costs as regards cattle and sheep were higher, but taking the averages together you will find that a quarter of one per cent would have carried these charges in 1943. This would mean that neither the government nor the farmer would need to pay any more than they are paying to-day.
A tremendous number of animals are slaughtered in a year. The last figures I have, taken from the report of the Department of Agriculture, are: Hogs, 6,140,614; cattle, 929,157; sheep, 832,070. I do not wish to enlarge on this matter; I have drawn it to your attention, Mr. Speaker, in the hope that the government will do something about it.
I would also appeal at this time to the Minister of Agriculture (Mr. Gardiner) to do something about the 186-pound hog. It is his argument that there must be a jumping off place somewhere, but on to-day's market that one pound of pork costs the producer $2.32, which is too large a jump at one time. I ask the minister to try to get it halved. The effect is perhaps worse to-day than it has ever been before, because transportation is difficult. We have quite a job getting our hogs away in time; they easily get over that 185-pound weight. An alteration of the present regulation would create a favourable impression wherever hogs are produced.
On a previous occasion when I was trying [DOT]to speak to the Minister of Agriculture about wool and sheep I was ruled out of order. I understand that it is permissible to bring the subject forward to-day. It is unfortunate that the agreement for a bonus on wool requires that the provincial governments must pay their share or the farmer gets nothing. The federal government pays a bonus of two cents for the production of good wool. In Manitoba our provincial government do not consider it their business to subsidize wool or anything else; they regard that as a federal obligation.
But across the border, in either Ontario or Saskatchewan, one finds the farmers getting four cents for good wool. I can assure the house that Manitoba produces just as good wool as the other provinces, but because our provincial government is not sympathetic we do not get anything. I again appeal to the government to do something about this matter, so that Manitoba producers may receive at least the two cents which Ottawa pays farmers in other provinces.
I have here a cutting from the Winnipeg Tribune, October 15, 1943, showing that sheep sold for seventy cents each on the Winnipeg market:
Whole live sheep weighing 120 pounds sold to-day on the local market for 70 cents each. Local live stock men thought this was an alltime low. The quoted price at the close was 50 cents a hundred pounds. .
There were 500 sheep on the market that day. I understood when the meat board was established that it was to be their duty to protect these markets. The sheep which were bought on that market were sold at the ceiling price. The Minister of Agriculture may tell me to-day, as he told me before, that no doubt they were old sheep. Suppose they were old sheep. There were two shanks and a brisket of mutton there. We had meat rationing and meatless Tuesdays and that was valuable meat because it was good for stewing purposes, no matter how old a sheep was. Moreover, on the back of that sheep there was a fleece w'orth $1.80, and it cost only thirty-five cents to process the carcass; that is, to clean it and get it ready for the butcher. Where was the meat board? It should have done something about that. But let us carry that a little further. In my constituency there are a good many sheep growers. It cost them fifty cents a hundred to ship sheep to the Winnipeg market. You can understand what was left for the farmer when he got his returns back selling at fifty cents a hundred. I do not think the meat board were up to their job when they allowed such a thing to happen.
Now that I have mentioned the meat board I might as well say something about them. Most hon. members know who compose the board. There is the Hon. J. G. Taggart. Then there is Mr. A. Morin, Associate Deputy Minister of Agriculture in Quebec. There is Mr. L. C. McOuat, general agricultural representative of the Canadian Pacific Railway Company. There is Mr. S. E. Todd, managing director for the council of Canadian meat packers. Mr. J. G. Taggart is chairman; the government appointed him. He has been superintendent of experimental farms, a member of an agricultural school, and he has been
The Budget-Mr. Bryce

a minister of agriculture, so that he should fit into that job to perfection. As to the next man, I do not know why we need another minister of agriculture. We have one already, Mr. Taggart, who should be able to look after that part of the bargain. Then we have Mr. L. C. McOuat, general agricultural rep-sentative of the Canadian Pacific. I do not know why he was put there. It would be interesting to the shippers of the west if the government would come out openly and tell the farmers of western Canada that he has no interest in the eastern packing concerns. Then we have Mr. S. E. Todd, managing director for the council of Canadian meat packers. But there are no farmers there; there is no one representing the producer. He is left out entirely. There is no representative of organized agriculture on that body. If it is necessary to have on that board, the managing director of the meat packing industry in Canada, then I say that it is necessary that the farmers should be represented on it. I think it is a big mistake that organized agriculture has no say on the board. When you analyse the composition of the board you find that these gentlemen know more about the packing industry than they ever did about producing.


James Garfield Gardiner: They were all farmers at one time.


William Scottie Bryce: I believe that to be true, but I can assure the minister that many of them have forgotten that they were ever on a farm. As someone says here, they may have been born on farms, but as for being actual producers, I know the minister will admit that they are not producers in that sense to-day. I repeat that organized agriculture should be represented on such a board. You will never give the farmers satisfaction until you give them producer representation.
And now a word about the bacon agreement. We farmers have waited patiently for a statement from the minister regarding this four-year-old contract. It will be a great stabilizing thing if he will come out and tell us that we shall have a steady price for the next four years; and, as I say, we are patiently waiting for that.
I appeal to the government to hurry up health legislation, and I mean particularly preventive medicine. In Manitoba to-day one person dies every ten hours with cancer and one person every twenty-four hours with tuberculosis. Surely it is time that we had health regulations and preventive medicine. That is a terrible death rate; something should be done about it.
The subsidies that are being paid to the farmers to-day are causing them a good deal of annoyonce. We really do not know where we are. The government has already taken action to establish cost-of-living bonuses as part of the basic wage rates for urban workers. If it is the intention of the government to have subsidies added to and become a part of farm prices, then at least a reasonable differential between urban and rural workmen must be maintained. I do not want to take up the time of the house but I would like to quote two items. The government is paying a subsidy of ten cents a pound on butter. Why? Because it was not profitable to produce enough butter before. Six months after the war ends we shall be back where we were before we got that ten cents. If it did not pay us before it will not pay us then. Something will have to be done about that. That has to be worked into the price of butter. Either that or it drops off and production will go down again.
As regards milk, we have a bonus of thirty-five cents a hundred pounds. Because it was not profitable for the farmer to produce milk he gets a subsidy to-day to help him. If nothing is done about that there will be a great hardship. I hope the Department of Agriculture is alive to the situation and will take the necessary action.
Floor prices are worrying everyone, out west especially. If the nation can undertake complete control of the price structure in war time and prevent prices rising unduly, it can and should use price control in the post-war period to prevent prices from falling unduly. The people believe that a general price floor may be as urgently needed, from the point of view of the general national welfare, as an over-all price ceiling has been during the war years. Agricultural producers were gratified to hear the Prime Minister (Mr. Mackenzie King) assure them in a radio broadcast over a national network on December 4 of last year that it was the intention of the government to establish a floor under farm prices. His statement was as follows:
The government recognizes that farmers are anxious about their post-war prospects. They do not -want to face a disastrous fall in farm prices within a year or two after the war. If, to help win the war, the farmers are asked to accept a ceiling on prices, we believe they are entitled to a floor under prices to ensure them against an agricultural depression after the war. As an essential part of its post-war policy, the government intends to ask parliament, at t'he next session, to place a floor under the prices of the main farm commodities.
The purpose of such a floor would be to support and stabilize farm prices in order to

The Budget-Mr. Mclvor
maintain a proper balance between farm incomes and those of other groups; and to assure to farm people a satisfactory level of purchasing power which at long last is becoming recognized as basic in the national wellbeing. The value and success of such floors will depend upon how and at what level they are set. This is a matter which will require the careful and constant watchfulness of every 'branch of our industry-agriculture.


Mr. DANIEL McIVOR (Fort William):: Mr. Speaker, I was very much- interested yesterday when the hon. member for Rosthem (Mr. Tucker) was called to order. I was reminded of a story of two clergymen, one of whom believed in reading his sermon while the other did not. The man who believed in reading his manuscript said, "When I am in my study I am clear, calm and collected, but when I am before the congregation and see all the different people I am not quite so clear." The other man said, "That is all right, but you leave little blanks in the manuscript, and when you come to a blank you tell a story to illustrate your point. The devil is looking over your shoulder and he suggests something that spoils the whole thing for you, but when I am speaking the devil himself does not know what I am going to say." So that I am not going to read my speech.
I am not a financial expert, but I know what it means to earn a dollar; I know how far that dollar goes, and I know how useful it is after it is earned. I have not yet come to the place where I felt that I could get a dollar out of nothing. I should like to thank the Minister of Finance (Mr. Usley) for not increasing the taxes this year. I certainly looked for some increases, having in mind the many things that must be done and the many plans now under consideration. I would thank him, too, for cancelling the compulsory savings. A great many people did not understand what compulsory savings meant; they thought it was a tax instead of a savings account. Now they are satisfied, and I am grateful to the minister for having lifted that load, even though it was never intended to be a load. I am thankful for the removal of duties on farm implements, so that now there are no duties payable on farm implements coming to Canada from any other country in the world. One could speak on that point for some time, but it is not necessary. I am grateful to the minister for the increase in old age pensions, although my difficulty in that connection has not been and is not now the amount but rather the trouble of getting the pension for those who may wish to hold some small asset in order
to pay for their funeral services. I am thankful, too, that the minister has extended tax exemptions to include in-laws. Why should a man receive exemption for his own mother and at the same time have to pay in respect of his mother-in-law who is living with him? I think this change is sensible and practical. I am thankful, too, for the change that has been made in our smallest silver coin. I can remember asking former ministers of finance why that big nickel could not be changed, because it was a nuisance. Now the minister, or someone under his direction, has created an entirely new nickel. There has never been anything like it in shape, colour or design, and we have every right to be grateful for the change.
I have received several letters from labour leaders suggesting that I should say something in this house about the sessional indemnity. I should like to tell the minister how he can give us a lower sessional indemnity and at the same time increase our incomes, and I am not trying to make something out of nothing. I am going to suggest that the sessional indemnity be reduced to $2,000, so that the minister would have to pay us only half the amount he pays now. Then I suggest that each member should receive. $2,000 for the upkeep of his car. I understand that at the present time cabinet ministers receive an allowance of $2,000 in respect of their cars, on which they do not pay income tax. I am sure I drive my car farther and faster than any other minister in this house, including the members of the clergy who are in the Cooperative Commonwealth Federation. I know some hon. members of this house are not as well fixed as I am, because I have access to an unlimited supply, on which I have been drawing for forty years. I have always had a dollar when I needed it; if I did not have it there was no one to blame but myself. However, I will deal with that in another way a little later on, because I believe it is even greater than money.
At the head of the lakes we have some things which stand out and which I believe contribute to the national budget. Therefore I will speak of mining, lumbering and farming at the head of the lakes. During the depression we had every reason to be thankful for the mining industry in the Thunder Bay district. But for that I do not know what we would have done. The wages the miners received were the highest, and1 the encouragement they were given was wonderful. The mining industry does not ask for preferential treatment in regard to taxation, nor does it want to shift its tax responsibility to anyone else. It wants
The Budget-Mr. Mclvor

to pay its own taxes, but it would like to have mining taxation placed upon a sound basis. It would ask also that a reduction in taxation should be undertaken as soon as possible, because at the present time it is impossible for mining to carry on. There is a high labour cost in the mining industry; about sixty per cent of the cost of mining is accounted for by labour. One man employed underground necessitates the employment of fourteen others, so that you see what happens.
I have certain suggestions to make. First, the geological survey branch of the Department of Mines and Resources should be increased many fold. I went out with the surveyors in our district, and I was amazed to see what is done there.
Second, the present cooperation with provincial departments of mines should be increased, especially in connection with the construction of mining roads. When roads are built in to mines, it has always developed that more mines have been discovered. Then those roads will be available for lumbering operations, and also will be a great attraction for tourists.
Third, plans should be made for opening up out-of-the-way areas, through the use of aircraft. Many of our young men are pilots, and if this were done they would have work when they come home.
Fourth, revision of the present tax concessions, pending their complete removal, should be undertaken. Most of the mining companies have built up huge liquid reserves. I do not think this is necessary. I would say that if the mining companies would declare dividends of from fifteen per cent to thirty per cent instead of from five per cent to ten per cent, and have the shareholders pay the taxes, instead of the companies, it would be far better.
The present income tax legislation allows generous deductions in respect of money invested or speculated in connection with exploration of new minerals. This concession should be extended to all minerals.
I know the dominion government does not do much in connection with education, but 1 have one or two suggestions to make along this line. We should have one history for all Canada. That should be a history which would suit Quebec and suit Ontario, and which would satisfy the provinces in the east and in the west. It should set out both the good things and the weak things about Canada. I believe this is coming.
I know there are many schools in which radios are found. However, I know, too, that there are a great many schools in which there are no radios, and many homes to which no

local papers are delivered. I would suggest that these little red schoolhouses, away from the larger centres, should have their radios, even if they are only battery sets.
I would suggest to the Minister of Finance that parents of nurses in training should receive tax exemptions for those girls. I know-not "I think"-that a girl who is taking a course in nursing will cost her parents more than she cost before going to public school. Surely this is necessary, and especially at the present time when nurses are so greatly needed. This tax exemption would help a great deal.
The bright students from those little red schoolhouses away out yonder should be encouraged. They should receive special treatment, and be given an opportunity of earning their way, so that they can take more advanced education.
I now come to farming. I am grateful to the responsible parties for establishing floor prices in respect of so many farm products. The farmer must pay the price quoted him by the storekeeper or the implement agent, and it is just as necessary that the farmer be in a position to tell the business man in the city what he must pay for pork and beef. This is a fine step in the right direction.
At this point I should like to give a picture of farming in that section of Ontario from which I come. Some farmers from Ontario may have the impression that there is no farming carried on at the head of the lakes. May I tell them that we have farmers in that district who are second to none in Ontario. A young man on a farm seventeen miles outside Fort William, near Murillo, Geo. Elchuk took first prize for potatoes for all Canada, and ten other prizes, in competition with both eastern and western Canada. May I state further that Fred Stewardson of Slate river district raised 140 bushels of Ajax oats per acre. I doubt if one would find many farms in Ontario which would give that yield. Two hundred and twenty-five bushels of potatoes per half acre are 450 bushels per acre. That is a huge crop, especially when it is from a place which some believe consists only of rock, scrub, logs and timber. And yet we have farms and farmers that are doing those things.
In our district we have the potato king. This man, Mr. J. R. Hutchison, is noted for the potatoes he raises, and for the market price they demand. We have, too, the com king, a gentleman named George Sovereign. One could go into his field and see corn which would delight the eye of any farmer from Ontario, and he would wonder how Mr. Sovereign does it?
Then I have the picture of a young man who went into farming about four years ago.

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This man. had to have exemption from military service, and was called back every once in a while. He was told a little while ago that he should increase his production. That young man now has 425 pigs on his farm, 26 cattle, 50 sheep, 650 chickens, 70 acres of oats and barley, 75 acres of hay, and a young wife into the bargain. He is certainly showing the farmers of that district, and others who know him, how to do things. I learn now that his number is called, and I am going to work hard to see that he is not called-and the Minister of Labour (Mr. Mitchell) is supporting me, up to the hilt.
When I think of farming in my district I must pay a tribute to the Department of Agriculture for placing a substation in that area. In the past five or six years this has been a splendid stimulus to the farmers, and has done a good job.
When I think of the farmers who are carrying on during the present war, I think of a man and his wife who are producing as much as was produced on that farm when there were two sons at home, working. One of those sons is now in the air force, and the other, who also had his wings, is in Kingdom Come.
Coming next to the Department of Labour, I find that one of the first fruits of this war has come to labour. If hon. members will look up the Labour Gazette of May, 1944, they will find that away down yonder in Italy labour unions have been reestablished. In those unions the principle of collective bargaining has been set up, whereby employees and employers work together. That is one of the most encouraging things to come out of the war, so far as labour is concerned. For twenty years they were silenced by fascist rule.
I have always said, and I now repeat, that if there are two working on the same job, one a man and the other a woman, if anyone gets less pay it should be the man, because he has more strength to do the work. It is my view, however, that, doing equal work, they should receive equal pay.
I now come to Sunday work. I do not think they should have any Sunday work, under any consideration, except in cases of great necessity, and to carry out acts of mercy. One day in seven. Some of those across the way who have Scottish blood in their veins will note that I am quoting the Shorter Catechism, which has had a great influence in the shaping of human character. Yes, one day in seven. One can trace the need of one day in seven if he looks through history. I carried that out, and received a great thrill in doing so. Homer told of it. Chinese literature reveals that one day in
Nseven was necessary, and that it was to be a day of rest. We say that, too, and we add that it should be a day of worship.
One day in seven. I say that if a man must work on a Sunday, he should have double pay-and even then he would not be repaid for the loss he has sustained.
One day in seven. I would warn the house and the people that we may just wink at the man who goes out to do things on Sunday that he should do on the other six days of the week-whether it be making political speeches, or anything else-and say, "Well, he does not know it all." I do not need to quote anybody but myself.
I come now to the Department of Pensions and National Health. I was privileged to speak at the dominion convention of army and navy veterans held in Fort William, and I was thrilled to hear a young officer from the navy say that when the men come back from the war this time things will be different. He told about vocational training on the boats and behind the lines and how men were being fitted for something different from what they could do before. I enjoyed hearing that man tell the truth. That is the type of truth which is slipping out from sources other than members of parliament.
I have been greatly encouraged at the treatment our returned men have been receiving. If any hon. member knows of a man who is not well treated it is his bounden duty to report that to the minister. I would advise him to send the minister a telegram collect. I know he will find that the minister does not want to save the taxpayers at the expense of the man who has risked his life overseas.
In Fort William there are many people who were not fortunate to be born where I was; there are many who are not Anglo-Saxons. Many of these people speak English when I am with them in order to suit my convenience. There are Ukrainians, Czechoslovakians, Slov-acks, Finns, Italians and many others who have banded together to put across the war effort of this country.
I try to listen to everything that is said in the house but much of it slips away. However, I was pleased to hear the Minister of Labour say that there has been no trouble in connection with call-ups at the head of the lakes. Port Arthur and Fort William are patriotic places. When the victory loan campaign was on, many places had a terrific time in trying to keep ahead of Fort William. I believe that city came second in the collections for all Canada.
I should like to say a word about our timber resources. I was informed by an expert in a
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great lakes pulp and paper company that without the use of mining, fishing or farming he could keep all the population at the head of the lakes employed in turning out wood products.
I should like to pay a tribute to the Red Cross, the Salvation Army and our churches. I wish to pay a tribute especially to the chaplains in our war services. They are a great bunch of men. They know what they are doing. When a man is seriously wounded the chaplain knows what direction to give him in order that he may rest in peace and go to victory in the other land.
I should like to say a word about Doctor Davidson. You do not shake your head, so that I suppose it is all right. I was the first one to bring Doctor Davidson's cancer cure up in the house and I was ably supported by the hon. member for St. Boniface (Mr. Howd-en). He was a 175 a day man before he came to this house. Doctor Davidson is no quack, and he never was when he played on the medical football team. We knew what he was worth when we went up against him. Doctor Davidson has worked for the good of others. He is not a rich man, and I say to the Minister of Finance that some money should be provided in order that the work done by Doctor Davidson may not go by the board. I gave the history of two cases in Fort William that had been sent to Winnipeg and been cured. It is not only the hon. member for Portage la Prairie (Mr. Leader) who wants to see the expert work and the records of this man saved for the good of the country. We all do.
I come now to the Department of Justice. I am sorry I was not in the house the other day when the amendments to the criminal code were up, because I know something about criminals. I have made arrangements to have over one hundred men and five women released from the provincial gaol and the penitentiaries. Everyone of them has made good. Four of the men did get me for a little bit of cash, but I got more from another source.
I know one man in Stony Mountain penitentiary who is serving four years for manslaughter. I have appealed by means of a petition to have this man placed on probation because he is not a criminal. I take the stand that when a man ceases to be criminal, when what he has done is owing to an accident, he should be freed. If a man is a criminal he should never be freed. I know whereof I speak. I asked that this man be let out on probation. I asked that a boy from Fort William be let out and I promised to take him into our home, but I have not as

yet succeeded. I think if we had him there for a little while it would do him good. It would do us good as well just to see the difficulties under which he has been working.
I have another case of a man serving four years for bigamy. I have a lot of sympathy with him because if a man can get along with one wife he is doing very well, but this man tried to get along with two. I wanted to get him back to his first wife but I have failed so far.
I ask the Minister of Justice to pay some attention to the literature available in this countiy. I have two magazines here which are printed in Toronto and which were sent to me by a soldier on the west coast. These magazines are of such a character that you, Mr. Speaker, would not let them into your district; yet one can pick them up on any newsstand for twenty-five cents apiece. I do not want to advertise these magazines by giving their names because some of my hon. friends may want to buy them.
More important than money, more important than monetary reform,, more important than jobs, more important even than health is the teaching that can be given by the best book the world has ever known, the greatest seller to-day. I suggest to the new Department of Reconstruction that they should see that a bible is placed in every home. I want to pay a tribute to the Gideons. Some hon. members know what they do, but we never hear them being talked about. They go along quietly doing their wcfck, but when you enter any hotel room you are able to pick up a Gideon bible. Perhaps for the first time you read a chapter; you go, on and you may come across the story of the prodigal son. You then decide to write home to your better half and by doing that you make others feel a little more comfortable.
It is absolutely necessary for the reconstruction of this country to have Christian literature, to have the bible in every home. What did the police chiefs recommend at their conference the other day as a cure for juvenile crime? They said to teach them the bible. I see some men who I know read it every day and then I compare them with others who never read it. I am sorry for what they lose. What we need is not more money because we never had as much money before; what we need is good men, men who will put God first, others next, and themselves any place. If you get that, you are going to have a Canada that will be greater than ever, a Canada that will ring true and be an example to the world Thank you for your patience, Mr. Speaker.


Mr. J. R. MacNICOL (Davenport):: Mr. Speaker, ever since I came to this house four-

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teen or more years ago I have felt it my duty to say a word on every occasion when I could do so for those engaged in industry and for those associated with industry. As the Minister of Finance (Mr. Usley) gave his comprehensive budget address on June 26 I listened carefully to hear what there was in it for the industrial worker. When I heard him announce that he was going to abolish the compulsory savings which employers of labour have had to deduct from the pay cheques of their men I wondered what the reaction of the industrial workers would be. I went home for three days over the week-end, and in the course of my visit I talked the matter over with a great number of men and women working in industry in my riding. I found their reaction to be this. They appreciated the increased spending which they will now have, although of course they will have less later on, but what affected them most was what they were going to do when they left the jobs at which they are now working. There are approximately one million men and women engaged in munition plants and plants making component parts, and many of these workers said to me on Friday and Saturday last, "What I am interested in, Mr. MacNicol, is, where am I going from here if this plant closes, as it is sure to close, very shortly after the war?" The average industrial worker does not kid himself, and rightly so, that industrial plants making munitions will continue making munitions when the war is over. It never has been that way and I doubt if it ever will be. So that what the war worker wanted to know was, "where am I going from here after the war when this factory closes or when my machine stops running?" That is the big question with him.
In the fourteen years or more that I have been here I have listened to and taken part in many budget debates, but I have learned one thing and that is that nothing that I can say can add one dot or one dash to what is contained in the budget. While I should like to say something about the budget to-day, and perhaps will when the items are before the committee, I am not going to deal with the budget itself or with what was said by the hon. member for Dufferin-Simcoe (Mr. Rowe), except that I intend to vote for the amendment which he moved.
I wish to deal with another problem, a western problem and I deal with a western problem once again because I have observed from much travel and study that the west has not received that to which it is entitled, and because I know that unless the west can be restored to full-out prosperity, or at least be given a chance to exist, we eastern people cannot advance as Canadians should advance.
I have in mind a situation which in my judgment is a menace to a very large portion of southern Saskatchewan, that portion of the province which is most populous, and which extends all the way from the capital city of Regina to the South Saskatchewan river 125 miles west. What I am going to say I shall say without any tinge or flavour of politics, because I -want to help the west and I cannot do so if what I say has a political flavour.
The area I speak of is menaced through a lack of water. There is an old adage familiar to engineers which states that a city can grow only in proportion to the abundancy and permanency of its water supply. There are two fine cities in southern Saskatchewan, the capital city of Regina and the city of Moose Jaw. Perhaps a dozen or two dozen communities between Regina and the South Saskatchewan river were thriving centres some years ago. I visited a number of these communities last summer and to-day these once thriving centres are ghost centres. They have become extinct because the area roundabout and the villages themselves have dried up for lack of water. There is a verse in the bible, I believe it is the 19th verse of the 2nd chapter of II Kings, which tells the story of the return of Elisha to Jericho. He was met by a delegation, a delegation of the city fathers of those days, and they said to Elisha, who was supposed to be able to do anything, having performed many great miracles, that what the city wanted was not only pure water but ample water- because all roundabout the country was dried up.
I am going to appeal now to the Minister of Agriculture (Mr. Gardiner) in this government, after he surveys the problem which I now intend to put before the house, to come forward and ask for any amount of money required to give fair play to the city of Regina and the city of Moose Jaw. I am not going to find fault with anything that has been done. I am not going to find fault that something which should have been done was not done. Perhaps never before did anyone come forward and ask parliament for what they likely knew was required out there. But always heretofore they did not have enough money to do what many commissions at one time or another told them should be done I will support the minister and the government to the limit in any appropriation they ask for if an honest-to-goodness effort is made to give an abundancy and permanency of water to these two cities of the plains.
Someone might say, what business is it of the member for Davenport to speak for Regina or Moose Jaw or any other city outside his riding? Well, Mr. Speaker, it is
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my business, and since I am going to confine my remarks to these two cities and the adjacent municipalities, just as I could speak for a score of other districts throughout Canada, I wish to say that from the riding of Davenport there goes each day to those two cities not less than one carload of goods made by the workers of my riding, by people I know, many hundreds of them, who make these goods to be shipped out to build up the cities of Regina and Moose Jaw and other adjacent municipalities in Saskatchewan. Since they have purchased not less than one carload a day for forty years-it may be longer than that but I will say forty-it means that we have shipped out not less than fifteen thousand cars, and taking the average as twenty tons to the car, this means that
300,000	tons of freight have been shipped from Davenport riding to help build up that area of the west. Therefore, Mr. Speaker, the people of my riding owe a lot to the people of Regina and the people of Moose Jaw as well as to the people of other cities all over the west, but I want to confine my remarks to those two cities and their problems. I shall speak for them because I know that if they could have water in abundance and permanently it would be greatly to their advantage. They cannot procure it to-day from the sources upon which they now draw for their supply. An abundant supply of water on a permanent basis would result in many new industries going into those cities.
I read a few days ago that because of lack of water Moose Jaw is likely to lose the shops of the Canadian Pacific Railway. That would be a calamity; it must not be allowed; they must be given sufficient water. If by obtaining an abundant water supply the population of Regina could be raised to 150,000 and of Moose Jaw to 75,000, what would that mean to my workers in Davenport riding who make agricultural machinery, radiators, boilers, valves, fittings, furniture, tools, electric and plumbing goods, and one hundred and one other lines? It would mean more orders, more business, more jobs, and not only for Davenport riding but all across the country, because as those towns and cities grow they will provide, as they have done for years, orders for eastern manufacturers and invite to their communities branches of industry and new manufacturers that will build up their populations. The more they grow, the better it will be for the whole country. If such measures are not taken I would fear that the unity of this country would be affected.
A man said to me, what concern is it to Canada whether Moose Jaw or Regina gets water in abundance or not? Well, it has been

Canada's business from the very inception of those cities. It was the federal government which selected the site of Regina, and from the very first the major trouble was that of an adequate water supply. In 1894 the government of the Northwest Territories appointed Mr. J. S. Dennis, an engineer, who made a survey from Regina to the South Saskatchewan river and reported that that river was the only potential source of an ample and permanent supply of water. After Mr. Dennis' time, in 1905, the government of the Northwest Territories went out of business and the province was formed. After it became organized, in 1911 it faced the water problem, and three different groups of engineers made surveys in that year from Regina and Moose Jaw to the South Saskatchewan river. The first survey was made by Mr. T. Aird Murray, a celebrated engineer, who pointed out something which is very important in reference to the flow of the South Saskatchewan river, namely, that the federal government, being in control of interprovincial rivers as well as international rivers, should set aside a permanent division of South Saskatchewan river water so that 100,000,000 gallons a day should be allotted to these two cities. That amount represents only 185 cubic feet per second, and is only a comparatively small flow, but it should be safeguarded. The next man who made a survey in 1911 was Mr. W. J. Francis, an eminent engineer. He recommended that a dam be built across the river near Riverhurst, where a suitable foundation could be found-and that is perhaps the most important part of any dam- and that a conduit-I suppose, a British Columbia fir conduit-be constructed to convey the wafer from the river to Regina and Moose Jaw. In the same year another engineer, Mr. B. Russell, who is still living, made a survey, and he, too, recommended that a dam be built across the river and a pump and conduit constructed to convey t-he water from the river to Regina and Moose Jaw.
Mr. Dennis reported fifty years ago, but nothing was done. Messrs. Murray, Francis and Russell reported thirty-three years ago, but nothing was done, except, I assume, talk. In 1913-14 the federal government made a survey and obtained a report that the only permanent and adequate supply of .water obtainable was from the South Saskatchewan river. In 1913-16 the provincial government nominated a commission to make a survey, and it reported that a ditch should be built to convey water from the South Saskatchewan river to the two cities.
I have examined very carefully the whole area. The river bank at that point is 310

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feet high, so that a substantial amount of power would be required to pump water over the bank; but, once over the bank, it would flow by gravity seventy miles to Caron and a further twenty miles to Moose Jaw, or ninety miles to Moose Jaw and 120 miles from the river to Regina. The topographical situation is peculiar, in that once the water is pumped over the river bank it will flow by gravity 120 miles east. It is not a difficult engineering problem, although considerable power would be required to elevate the water.
From 1914 to 1919 both those cities suffered from shortage of water. I have ascertained from an examination of the reports of city engineers that at no time did they have a sufficiency of water as we would regard it in Ottawa, where every citizen averages 117 gallons a day. Regina would scarcely know what it means to have that much water per person for domestic purposes.
By 1919-21 the situation was so bad that the cities, the province and the federal government cooperated in making a very careful survey, after which the report from the combined engineers recommended that a conduit should be built to convey water from the South Saskatchewan river to the cities. I examined the report carefully and I did not see where a dam was recommended to be built, but I presume a dam must have been included, because the report states that the whole works would cost approximately $6 million. I do not see how it is possible to render any real and adequate service to those two cities unless a dam is built across the river to provide an adequate reservoir from which the water could be pumped. In 1929-30, again, there was low water and the people suffered considerably. In 1930 Regina engaged an outstanding New York engineer, Mr. N. S. Hill, and he was associated with Mr. R. O. Wynne-Roberts of Toronto. These two engineers made a thorough survey and reported that, to supply a permanent and adequate amount of water to the two cities, it would be necessary to bring it from the South Saskatchewan river. In 1930-33 Moose Jaw city engineer was consulted, a very capable man. I met him last summer and discussed the matter with him and I know his qualifications. I refer to Mr. A. W. Ellson Fawkes, and in association with him there was a local financial man, Mr. A. E. Martin. They recommended the building of a dam across the river near Riverhurst and conveying the water by conduit to the two cities after pumping it over the river bank. They proposed to pay for the construction, operation and maintenance by irrigating 500,000 acres of irrigable, but low moisture land, between the river and
Regina, and from the profits thereof they would have defrayed all costs. Nothing, however, was done. That last proposal was made eleven years ago.
By 1936 the water situation, after having been investigated and pronounced wholly insufficient for the growth of the two cities, was again thoroughly discussed. I have a whole sheaf of clippings from the Regina Leader and the Moose Jaw Times, as well as reports to the city councils of both cities, all indicating the magnitude of the problem and the necessity for the development of an abundant, permanent and adequate supply of water. A citizens' committee was appointed; they associated themselves with the province and with the federal government and a plan was proposed in conjunction with the prairie farm rehabilitation board. The P.F.R.B. men have done a splendid job in the west, and later on I shall have the pleasure of speaking of the good work they have accomplished. The
P.F.R.B. engineers made a survey of the situation, as it would appear that from the beginning it was recognized as the business of the federal government. You cannot expect two cities in the financial condition of those cities out there, and having regard to the financial position of the province of Saskatchewan and the magnitude of the whole problem, alone to undertake a project of this magnitude. As an easterner I know what the government has done in the east and I endorse it; and as an easterner I take the stand that the time has come when the federal government must take a greater interest in assisting such projects in the west. We have built here canals that have cost between $650 and $700 million, and I endorse these, too. What have we spent in the west on canals? A paltry $2J million. In Montreal we have built a bridge costing $20 million, and I endorse that; but where have we built a bridge of that kind in the west? I say, therefore, that if it does cost ten or fifteen or twenty millions to erect works equal to the provision, for those two cities and the municipalities between Regina and the river, of a permanent, adequate and abundant supply of water, it is something that merits' the support of everyone. I am sure that every board of trade, every chamber of commerce, and eastern members of parliament would be glad to support whatever the government might determine was required to give those two cities an even chance with others. If they go down through lack of an adequate water supply, if the people move out of them, it will be a tragedy that will have its repercussions in the east as well. That is why I say as an eastern member-and I know that all eastern members will agree with me in this-that provision should be made for
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an adequate, permanent supply of water for those people. I appeal to the minister to bring in a gigantic programme, if that is required, in order to give those cities the water supply to which they are entitled. Many industries would be attracted to them as a consequence of such an undertaking and they would expand and give handsome returns to the people of the east, the workers of the different ridings in the east, by providing jobs to make the goods that would be required.
By 1938 that commission finally presented a programme and by 1939 commenced to build the present works. I will not say anything about the present works apart from this. I am satisfied that if the P.F.R.B. engineers had been furnished with the number of millions of dollars necessary to do a real job they would have done it, and a permanent, adequate supply of water for those cities would have been provided. More than that, I believe they would do as good a job as any other engineers could perform. That is the best I can say for them. But of course they did not have the money. I will not say anything about the work they have done, but I will ask the minister to come forward with a real programme, and a real programme would consist in the building of a dam across the river. According to the figures I have, a dam fifty feet high would provide water for the two cities but not for irrigation, but it would provide the power required to deliver an abundance of water to the two cities. But there are dams that can be built piecemeal. The Ambursen Company of New York city have built a number of dams, some of which I have examined. Some of them have been constructed to a certain height, say fifty feet, at the commencement, and as more power was required they have oeen added to. There is one in New Hampshire, at Bristol, I believe. That dam was raised thirty feet some years after it was first built. But that is neither here nor there. If the government decides that only water for domestic purposes shall be provided, a fifty-foot high dam may be sufficient. If it decides that the land must be irrigated between Regina and the river it may require a 150-foot dam to produce the 75,,000 horse-power, more or less, that would be needed to pump the water over the hill and to provide irrigation water as well as domestic. At any rate, while it is an engineering problem it is not an insuperable one. If the engineers are directed to do it they will do a good job. I have sufficient confidence in the engineers to believe that, given the necessary money to do the job, they will overcome almost any obstacle; and it is not an impossible task.

I strongly recommend this. The people there are entitled to it; they need the water. Just consider what would happen if either of those cities were overtaken by a catastrophe. In the recent fire in Montreal caused by the falling plane-and that was a comparatively small fire-they required twelve lines of hose which poured out 3,000 gallons per minute for two hours to do the work. In that time they' required 360,000 gallons of water. At that rate a fire lasting ten hours would require a million and a half gallons; or a fire lasting a full day w'ould require three and a half million gallons. I hope neither of those cities will be so unfortunate as to require this amount of water for this purpose, but could either of them supply the water necessary if it should he required? Moose Jaw could not supply
3.500,000	gallons in twenty-four hours. The total capacity in Moose Jaw to-day, even under the most favourable circumstances, does not exceed two millions gallons a day, and that would not allow water to be used as it is here in Ottawa.
I made a careful tabulation of the requirements of thirteen eastern cities and arrived at an average of 117 gallons a day per person. I do not believe either Moose Jaw or Regina ever had that capacity. To adequately meet that requirement Regina, with its sixty thousand inhabitants, would need a capacity of eight million gallons a day, while the twenty-five thousand population of Moose Jaw would require not less than four million gallons a day. In order to have that supply of water available they will require a pressure line, and they will need a large reservoir, which in turn will require an adequate dam and pumping plant to get the water over the liill and through conduits to the two cities. If it were put into a pressure conduit the line would be much straighter; perhaps a good deal of it would be underground, and hence much safer. It would have to be of wood, because steel would not stand the frost, and then it could operate all year. The present ditch has never even had its maximum flow of water. I do not want to enter into rhat question, but I can say that in 1941, when the test of the-present ditch was made, the plant pumped
550,000,000 gallons of water, but the amount that reached the Caron saturation plant was infinitesimal. When it finally reached Caron, according to a letter I received, the stream of water was about fourteen inches wide and seven-eighths of an inch deep. It was run at this capacity for only a very short time. In 1942 it was not run at all. In 1943, the year I was out there, an engineer at the plant told me-I am now speaking from memory-that

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in operating for nineteen days lie had pumped down to the Caron saturation plant about fifteen million gallons of water, and that the maximum in any twenty-four-hour period was only 270,000 gallons. That is wholly insufficient for cities of that size.


James Garfield Gardiner: They did not try to pump any more.


John Ritchie MacNicol: The pumps went out of commission, anyway. I do not want to get into any argument; I want to help the minister, and I want to help those cities. I am just saying that while the present plan may have some merits, it is utterly inadequate as far as those two cities are concerned.


James Garfield Gardiner: The present system would not take care of Regina at all.


John Ritchie MacNicol: Well, Regina needs water also. I am getting close to the end of my time, Mr. Speaker, and I do not want to ask for an extension. My argument is that the west is entitled to a much better deal, as far as engineering works are concerned, than it has had up to the present. I have no doubt that before long a delegation wall be coming here from cities in western Ontario such as London, Chatham, Stratford, Ingersoll and other cities and towns in the Thames river valley, asking this government to do for that valley what it has begun to do for the Grand river valley. I spoke on this subject ten years ago; as far as I know I may have been the first to bring it up in this house. I did so after making exhaustive surveys of the rivers in the northern United States on which flood control and water conservation works had been erected. In that survey I learned that the United States federal government paid 374 per cent of the cost of such works; that the state governments also paid 374 per cent, and that the municipalities benefiting paid the remaining 25 per cent. That is a good ratio. That matter was argued in this house, and the government of the day-I have forgotten which government it was but that is neither here nor there-agreed to build the Shand dam north of the town of Fergus on the Grand river, the first dam built in Canada, as far as I know, for the purpose of flood control and water conservation. This government paid 374 per cent of the cost of that dam. It should do the same in connection with flood prevention works on the Thames or any other river.
Therefore I am going to appeal to the minister to bring forward a real plan to provide an adequate, permanent supply of water for the two cities I have mentioned, Regina and Moose Jaw, and the surrounding municipalities. According to the city engineer of Regina that would cost approximately $10,000,000 for water for the two cities for domestic purposes alone. According to the city engineer of Moose Jaw it would cost approximately 115,000,000 for both domestic water for the two cities and water for irrigation purposes. The government should determine what ought to be done; then this government should put up 374 per cent of the cost; the provincial government should contribute 374 per cent, and the two cities and other municipalities should make up the remaining 25 per cent. I will go further. Since neither those two cities nor the province of Saskatchewan can borrow money as cheaply as this government- can borrow it, I would say that this government should meet the whole cost and accept notes or bonds from the province and the municipalities for their share, which might be paid off as per agreement. This money could be advanced to them at a rate not more than three per cent, which is the rate at which this government can borrow money.
I am in earnest on this subject. I have kept away from politics; I have attempted to speak from the point of view of one who has been associated with industry for a long time, one who saw what it meant to industry to have the west grow. I am thoroughly convinced that if both Regina and Moose Jaw are given water to the extent I have suggested, that is not less than eight million gallons a day in the case of Regina and four million gallons a day in the case of Moose Jaw, with provision for doubling those amounts if and when that is required, it will result in the population of those cities doubling and in the rebuilding of many of those little dried-out communities between Regina and the South Saskatchewan river. As an easterner I hold that it is the duty of the east to see that those cities and the little municipalities in southern Saskatchewan whose growth has been restricted so greatly through the lack of water are given a chance to live in the sun. Every dollar spent for this purpose will be returned in profits from the manufacture of the goods required to build them up and the goods that will be distributed through the growth of those centres. The government will be repaid through 'taxes of one kind and another, and in the long run it will not cost the country anything.
Let me close with these words. As an easterner I feel that this is the least we can do. As I said in commencing my remarks, my suggestions could be applied to many other centres in the west, but I believe this is the least we can do in return for what those
The Budget-Mr. Jaques

cities and communities have done to help build up the east and to bring about harmony and unity across this country. To me this is a national problem, as well as a municipal and provincial matter.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. NORMAN JAQUES (Wetaskiwin):: Mr. Speaker, as a fellow member I should like to congratulate the Minister of Finance (Mr. Ilsley) upon the manner of presenting his budget, but as a social crediter I am afrai'd I cannot congratulate him upon the matter contained in the budget. There seems to be nothing new in it to meet new conditions, or perhaps to anticipate the new order which we are told we must have. It is based on the same old method of piling up debt.
In every budget debate since the war started I have raised my voice against the method of debt finance. I still believe that it would have been possible to finance the war without debt. It seems obvious to me that if the debt is widely and equitably distributed then it surely would cancel itself out. On the other hand, if the greater part of it is held by a small fraction of the people, it means that the poorer and larger section will be in debt to and must pay tribute to the richer and smaller portion of the people.
On those grounds I cannot see that it will lead to anything but trouble in the future. And, speaking of the new order, from what I have heard I have not been able to find anything new in it. Apparently we are to have a work state. Everybody is to be put to work. There is nothing new about that. Moreover, that is exactly what Hitler did. He put Germany to work; then he put Europe to work and now he is putting the whole world to work.
We do not hear anyone say that what we need is a happier world. People say that we need a harder working world, and perhaps a richer world. But it would seem to me at the present time that the world is under the domination of fear and hatred. Surely the best antidote to fear and hatred would be love and laughter. I should like to hear someone voice the opinion that after the war is over we should have a happier world-not merely better and richer, in a materialistic sense. Many people are saying to-day, of course, that we must have a new order, and that the old order of individual enterprise and individual freedom is finished. They say that it will no longer work. I do not hold with that view.

I believe that with some adjustments to the financial system the old order would work very well. We could preserve all that is good in the old order, and at the same time bring about a state of affairs in which poverty and insecurity will be things of the past, without sacrificing our individual liberties, as the socialists say we must do.	-
I do not understand how people can think that individual enterprise will fail to bring the necessary results. I have always noted that if there is any demand, there are always plenty of people who are more than ready to fill that demand. I think if our socialist friends had ever been in productive business they would find that the difficulty is not so much to find the individual for the enterprise, as to find an opportunity or an opening for the enterprising individual.
Of course we in this group have often been referred to as funny-money people, and as those who believe in something for nothing. I was pleased the other day when I received a publicatioin of the federal reserve system of the United States, dealing with the method adopted by the United) States treasury in acquiring their gold reserve from; the federal reserve banks. As everybody knows, the federal reserve system is a system, of private banks and private institutions. This little bulletin answers a question asked by a United States senator as to what steps the United States treasury took in securing their gold reserves from the federal reserve system.
Roughly, the procedure was this: The United States treasury went to the federal reserve banks and said, "We would like to buy or acquire your gold, but we have no money." Therefore the federal reserve system very kindly lent the treasury of the United States the money to buy the gold. According to this bulletin, that depleted the credit of the United States treasury with the federal reserve system. But the credit of the treasury was restored immediately they had possession of the gold, although they had borrowed the money from the owners of the gold in order to acquire the gold. In the words of the governor of the federal reserve system the treasury of the United States had acquired the gold for nothing. It cost them nothing, so that you see it is possible to have something for nothing. It seems to me to be obvious that if the treasury of the United States, or the government of the United States if you like, can acquire $20 billion worth of gold for nothing, then it could very easily finance public works or anything else of that kind equally at no cost to itself.
There is no doubt a drift at the present time toward socialism. I am quite

The Budget-Mr. Jagues
sure that the average member of the public does not realize what socialism really is. In my opinion the votes that have been registered during the last year or so have not been votes against this particular government or any other government; they have been votes against the frustration from which the Canadian people suffered for so many years before the war. In spite of the war the people of Canada, generally speaking, are better off than they have been for many years, and they assume-I do not agree with the assumption-that their better condition is due to planning and control. In our social credit opinion it is due simply to the fact that there is plenty of money about and that the problem of marketing has been solved.
It is a curious thing that while the whole world is fighting to resist the imposition of one German philosophy, people are blindly adopting another German philosophy known as socialism. The founder of socialism, Karl Marx, was certainly a German, and a Prussian at that. It seems to me that what we need is a Christian solution of our economic problems. Socialism in my opinion is not a Christian solution. Christianity is based on the freedom and responsibility of the individual, whereas socialism, to put it shortly, means irresponsible masses controlled by irresponsible individuals.
1 am quite sure that one reason for the spread of socialistic ideas in Canada and elsewhere-I have heard this out in the country, especially in western Canada-is the totally misleading propaganda about Russia. I am not going to criticize Russia in any way at all. AVhat they do in Russia is the affair of the Russian people, but when the radio and other means of communication are used to spread propaganda that Russia is even more democratic than Canada, then I think it is time somebody made a protest. I want to make that protest with all the strength I possess.
I am not libeling any one when I say- I have not his exact quotation, but I think I remember it correctly - that President Roosevelt has stated that Russia is as complete and absolute a ^dictatorship as any that has ever existed. That is true, but most people do not know that. They are occupied with their own affairs, and they listen to those who should know and are given a totally false picture of communism in Russia and elsewhere. I should like to quote a man who will not be accused of being prejudiced since he is a socialist himself. Professor Laski is professor of political history at the London school of economies, and a few years ago he published an essay in the United States entitled, "Recovery through Revolution", from which I quote:
The communist hypothesis . . . insists that no socialist government can attempt seriously to put its principles into practice without encountering determined resistance which will issue in civil war. To maintain socialist principles, in short, socialists will be driven to become communists or to betray their socialism. If they become communists they will find themselves involved in the grim logic of Leninism-[DOT] the dictatorship of the proletariat, the drastic suppression of counter-revolution, the confiscation of the essential instruments of production, the building of the state, in a word, upon the principles of martial law until the security of the new order is firmly established. The transformation of capitalism into socialism means revolution, and that implies an experience akin to that through which Russia has passed.
Last winter it was my privilege and1 pleasure for a few days to occupy a seat in the gallery of the mother of parliaments. I was seated in the gallery reserved for members of dominion parliaments. This is a little gallery and I found it filled with men, all of whom were in uniform but myself. They represented the armies of New Zealand, South Africa, Australia, Canada and the United States. On one occasion in the House of Commons at Westminster the post-war settlement of Europe was being debated, and it seemed to me as I listened to some of the speakers that they were apologizing for the surrender of the interests of the smaller countries in Europe which they thought might have to be made at the end of the war. A man sitting next to me, an officer, a chaplain in the Royal Air Force, turned to me and said, although he did not know me from Adam, " Is there no one in this house with the courage to get up and speak the truth?" I should like to pay a tribute to those countries and peoples that at the beginning of the war stood by Great Britain to the best of their ability and fought the Germans when everything looked black and apparently all was lost. The Poles put up a magnificent fight. Their air force in Great Britain I was told had a very large share in the victory of the battle of Britain over the German air force in 1940. The skill and daring of the Polish airmen were, I was told, unsurpassed. The Polish government has never surrendered and its soldiers still are fighting against the common enemy.
Then there was Yugoslavia, which also fought gallantly against the Germans when everything appeared lost, and they are still fighting. Then there were the Greeks, who also fought magnificently, and whom we tried in vain to relieve. I heard from responsible men, mem-

The Budget-Mr. Jagues

bers of the House of Commons at Westminster, that their faces burned with shame when they thought of the treatment which these countries had received, how they had been denounced as fascist, and how all the credit and even the help were now being given to those who had held their hands until Russia was invaded. I discussed this question a great deal with responsible men in Great Britain who knew what they were talking about, and I should like to pay my humble tribute to these gallant peoples who, when apparently everything was lost, fought and are still fighting. They seem now to be discredited and forsaken, but I hope they will not be forgotten by the Canadian people when they realize the part they played in winning the war.
I should like to close with a story that I was told in the House of Commons at Westminster which made a great impression on me. As I suppose all members know, the house itself is not very old. It is a part of the old palace of Westminster, of which Westminster Hall still stands. The office of the Empire Parliamentary Association is situated in Westminster Hall and I used to go there every day when I visited the House of Commons. I had to walk though Westminster Hall itself to get there. I had seen the hall as a boy but I was much more impressed with it now than I was then, possibly because I could compare my own puny efforts at building with the work of those old master builders. I noticed one of the old beams lying in a corner of the building. Members will probably remember that just before this war the roof of Westminster Hall was found to be unsafe owing to the borings of the death-watch beetle and the roof had to be restored. One of the members of the house showed me this old beam. There it was, honey-combed by the death-watch beetle. He told me this story. When this great hall was being built some eight hundred years ago the old builders decided to construct the finest roof in Europe. They said, "We shall have to have the finest oak timber in England, in order to build the finest roof." They searched all over England and finally they found what they wanted in a spot in Sussex and bought the oak from the owner of the land, who was then a member of the House of Commons, and out of that oak they built the roof of Westminster Hall. Eight hundred years later when they came to repair the roof the modern builders said, "We shall have to have the finest timber in England to build the new roof." Accordingly they searched all over England for the best timber, and finally they found it growing in the very same spot where their ancestors had found it eight hundred

years before. More than that, the land on which the oak grew belonged to a descendant of the owner of eight hundred years ago, and the present owner is also a member of the House of Commons. I thought it was a remarkable story from which we can draw a great lesson now. The lesson is this: When you come to build permanently you should always use local material. Those old builders had the faith and the courage to build for all time, and the roof they built stood for nearly a thousand years and would have stood for another thousand yearn had not the death-watch beetle bored its way into the very heart of the oak beams supporting the roof. When they decided to rebuild the roof they did not say, "We should have a new order of roof; we should have an alien roof made of alien materials"; they said, "We must have the finest English oak to build the finest English roof." And so the roof stands to this day, defying not only the elements but the blitz; and it will stand for another thousand years, a sublime monument to the skill and faith of those builders of old.
And so it is with our constitutional roof of British justice and liberty which our ancestors have taken centuries to build, in the faith that it would stand, and that Britons always would be free. 1 To-day our British constitution is under attack from within and from without by the death-watch beetles of state socialism, fascism, communism and international finance-ism. We are told that we must have a new order, designed by aliens, an alien structure of alien materials, in place of our old and tested British constitution of justice and liberty. But, Mr. Speaker, we do not need a new order of alien design. Let us build on our old British foundations of liberty and justice which our ancestors laid down through the centuries. Let us destroy these alien death-watch beetles, these isms that would undermine our own foundations of freedom. We must repair our own Canadian structure. Let us renew our faith in our own ability to build, as did our ancestors to the end that there will always be a sovereign Canada of justice and freedom.


Mr. L. A. MUTCH (Winnipeg South):: Although I address the house on the occasion of the annual budget debate, I do not imagine that the Minister of Finance (Mr. Ilsley) would be grateful, although I am thankful to believe he would survive it, if I should suddenly at this time and in this place begin to discuss the question of money or the closely allied problems of finance which are so often a part of budget discussions. In the brief remarks which I intend to make to-night I *propose rather to say something in a more

The Budget-Mr. Mutch
general way on the subject of planning, and I have elected to make those remarks on the annual budget debate because, in the experience of ages and in modern experience everywhere to-day, ideas of practical planning are inextricably interwoven with the fiancial structure of the country. However, I do not propose to-night to relate those general remarks on the subject of planning to the financial or the taxation structure of this dominion except in a very general way.
I have had the somewhat unique experience, shared by nearly everyone in the house, of seeing this country pass through two of the most trying periods which happened in the lifetime of anyone living: first of all, the period of the major depression which preceded the war; and second, the period of the war itself. Perhaps no two periods in the history of any country were or could be more conducive to planning and the realization of the need for planning, the need for thinking ahead, than those periods have been.
Back in 1935 I remember writing a letter to the people who are now my electors, and have been since that time, and discussing with them the conditions which then prevailed. I remember saying to them that I was not one of those who venerated something because it had always been that way, but I thought it would be possible to examine those things which had been done with the same critical eye as one applied to those things which were proposed for the relief of the conditions in which we then found ourselves. Throughout the period of time since then I have had no reason to change my view of the practical need of retaining something of that which has served us well, while not being afraid to examine those proposals which come to us from time to time and from various sources looking to the amelioration of present conditions or an improvement in the future.
I was not dismayed in those years by the often-expressed view, so common in eastern Canada at that time, that the west, economically speaking, was done. By 1939 we had begun to come out of that black period, and the hope and confidence shared by a large percentage of us had begun to be justified. Then war came; and for a little while, following the depression throughout the country, people were anxious to get something of that immediate war prosperity which seems always to come with the taking up of the slack between civilian occupation, particularly after the depression, and the somewhat feverish activity of war. Then, as the next phase, fear came, and during those fateful days of 1940 everyone was willing to pay almost anything in order to preserve what we called our way of
100-283J
life. For a little while during that period which I have called the period of fear we forgot the black days which had preceded it; and those were days when people went about saying, I think without realizing the unconscious ironyr of what they said, "This time we are all in the -war". But as the pendulum swung slowly and painfully7, almost imperceptibly for a long period of time but nevertheless steadily, in our favour, people began to look backward again. As we began to take victory for granted we looked backward with a measure of unhappiness and forward only with distrust. It was at that period, I think, that we in Canada began to experience what one might call the active period of the planners.
Sir, there are plans and plans just as there are planners and plotters. There are plans which are based on dreams of the future, and there are plans which have their origin in what one might call the nightmares of the past. It seems to me that from Beveridge to Tim Buck, most of our professional planners have based their plans on the backward look,, on the nightmares of the past, and that very few7 have visualized the brighter future which I for one believe faces this country, or boldly planned to make that come true.
I do not anticipate a return to the depression of the thirties. I am not afraid of the.' future for Canada once this war has terminated, but if I were, frankly I should be more afraid of an artificial and unnatural boom in the immediate post-war years than I should be of a depression. But, sir, it is my conviction that we shall go forward to better things, and that for two reasons. One of them is this. Already in this country we have progressed far beyond the conditions which made possible the depression of the thirties and though we may lose something here and there, that type of progress will not be wiped away by any adjustment period following the war.
The second reason why I believe we are going forward to something better is that the young people of the country, mobilized largely in the forces but to some extent in industry and in business, will it. They have made up their minds that they are not going back and we agree with them; and all the forces of reaction cannot keep back either them or us, who must go with them if we are to continue to function. Under these conditions those who are skilled in the arts of leadership, and experienced in leadership in this country, will either look forward and lead in that direction or cease to function, or new leaders will arise. To those who have dominated the modem world picture, as well as the Canadian scene, the leaders of a society of free enterprise, it is
The Budget-Mr. Mutch

purposes, however, that man's whole income is classed as that of a single man, 'because his daughter has quarters in the hospital and his domicile is used by her as a sort of auxiliary home. There is not a great deal of difference between these cases, but I cite them now in the hope that, if possible, the regulations may be reconsidered. I have been informed that no change has been made in the provision barring student nurses from the consideration which would have been granted them if they had chosen the comparatively less useful course of studying for their senior matriculation, or had gone to university.
I do not think anyone greatly resents the terrific pressure of our present taxation, but I suggest to the minister that some of these considerations, perhaps small in the aggregate but important to those concerned, might be reconsidered with a view to building up on the part of our people a spirit of greater good-will in connection with the sacrifices they are called upon to make.


Mr. G. K. FRASER (Peterborough West):: 
An hon. MEMBER:: Far better.


Gordon Knapman Fraser: I
expected to hear that. The third alternative is a beauty:
The present government has bungled and should be replaced.
Then further down the page:
The Progressive Conservatives will run the country as it should be run.
And further down:
All politics are a waste of time.


Ian Alistair Mackenzie: Where is that from?


Gordon Knapman Fraser: Air Force poll No. 6.


Gordon Graydon: And you are paying for this.


Gordon Knapman Fraser: I Bay it is nothing but waste.
I have been speaking about injustices. It was a week ago to-day that I asked the Minister of Finance this question: Vv hy is it that creameries in Quebec can gather cream three times a week, whereas those in Ontario can gather cream only once every two weeks?


An hon. MEMBER:: More cream.


Gordon Knapman Fraser: No, that is not right. If you know anything about farming you will realize that that is the most foolish answer anyone could give.


An hon. MEMBER:: They had more sap.


Gordon Knapman Fraser: The butter production in Ontario has gone down because they can collect only three times every two weeks. The result has been that the small butter factories are shipping their butter in the form of seconds because the cream is soured before it can be made into butter. Ontario butter is really the best in the world, as the hon. member for Fraser Valley knows. These creameries should be able to collect once every two days. On Thursday I asked the Minister of Finance if he could give me an answer and he said, " Put it on the order paper and save time." On Saturday I went into a creamery and the first thing that greeted me was, " Well, those sons of guns down at Ottawa, the wartime prices and trade board,
The Budget-Mr. Fraser (Peterborough)

have evidently seen the light; there is an order out to-day that we can collect cream three times a week."


Karl Kenneth Homuth: Did they "sons of guns" or what?


Gordon Knapman Fraser: I will not repeat it because it would not be parliamentary. The wartime prices and trade board should treat every one fairly and squarely. It should not be up to a member of parliament to rise in this house and complain when an injustice is being done. A few months ago I referred to the slaughtering of cattle and hogs. They were allowed to do this in Quebec without a. permit but we could not do it in Ontario. However,.that was changed to some extent. That is as far as I am going on that and from now on I am going to deal with the budget.
I have here an editorial which I should like to read because I think it covers the ground very well. It is from the Peterborough Examiner of Friday, May 19, 1944. Sometimes this paper treats me well and sometimes it does not, but when it knocks me it is generally a boost, and when it boosts me it generally means a knock; they are fair, however. The editorial reads in part:
Is Mr. Ilsley going to do anything to remove the feeling of the ordinary taxpayer that lie is feeing bilked. In a recent complaint which he made about expenditure Mr. Ilsley seemed to take the attitude that all the money in the country is under his control, and that the portion of a man's income which is left to him when his taxes are paid is a favour which he enjoys trom the government. Quite the contrary is the case: the portion of a man's income which he pays m tax belongs to the government, and the remainder is his own. It is well that we should not lose sight of this simple truth And many taxpayers feel that they are treated in an unjust and punitive manner because of abuses in the tax system. These abuses have been widely discussed, but it will not be amiss to set them down here again.
And further down it says:
At present our forms are so complicated that a taxpayer may easily make a mistake and pay either too much or too little. But if he pays too little he niay be billed for the balance, plus accumulated interest, any time within twenty-six years of the time of payment. But if lie finds that lie.has paid too much, he must make his claim for redress within a year of making the mistake, or he gets nothing. And he gets no interest on the money which he has involuntarily paid to the government, either. Neither Great Britain nor the U.S.A. permit this tricky business of reopening old tax bills.
The powers possessed by tax officials are exercised, to a great extent, on their own discretion, and thus vary greatly from one district to another. There' is no good reason why so much power should be reposed in officials, and there is a strong feeling that their powers should 
be clearly stated, and applied equally everywhere in the country. This is important, because there is no appeal against the decision or one of these men except through the Exchequer Court of Canada, and proceedings in that court are far too costly for the average citizen to invoke them. In Great Britain and the United States there are courts for handling tax matters which are easy to appeal to and which do not cost more than the humbler taxpayers can afford. Why should Canada have tax officials against whom there is virtually no redress?
I know the taxpayers of Canada feel that there should be a limit upon the number of years which the income tax branch can go back.


Colin William George Gibson: Even in case of fraud?


Gordon Knapman Fraser: That is a different proposition, but they should prove the fraud. It is an imposition to go back twenty-five or thirty years. If the Minister of National Revenue (Mr. Gibson) gets caught by their going back thirty years he will be the one who will do the kicking. I know the minister knows of many cases where they have gone back quite a ways.
If they go back that number of years the income tax branch will charge you interest on the amount computed. There should be a limitation of not more than five years on the time they can go back. No interest should be charged on the unpaid portions of succession duties. Many estates have been tied up for two or three years. I realize that the dominion government entered this field of taxation only a short time ago. As I say, the government should not charge interest on unpaid balances unless an account is first sent in to the trustee or the executor or whoever is in charge of the estate. This should apply also to income taxes. An account should first be presented before interest is charged.
The government said that the simplified tax forms which were issued last year could be filled out in ten minutes. Apparently the forms for those in the higher brackets are also extremely easy to decipher, because it appears that the income tax branch provides for the income tax officials a book on the income tax act which is printed in Montreal and priced at SI.25. They give all the officials in the income tax branch one of those books absolutely free so that they can work out what the government has set down. In other words, the government feels that the income tax officials in Ottawa and throughout the country cannot possibly work out the income tax problems unless they have this book costing $1.25. If they give these books to the officials, why should not the ordinary taxpayer be supplied with one? He certainly is the goat; he is the one who has to pay.

The Budget-Mr. Winkler
Last year I made a suggestion to the Minister of Finance. He took me up on it and he carried it out. He put in item 36 in the 1942 income tax form and it would appear that the Department of National Revenue did very well under that time. The following question appeared in a return under my name:
What is the total amount of money received to date under item 3G, general income tax T.l *form for the year 1942?
The minister's answer was:
The total amount of deferred tax received as of May 31, 1944, under item 36, T.l general 1942 is $4,743,111.
I should like again to make a suggestion to the minister which I made last year. The time for paying that deferred tax, the 1942 tax, for those who had an investment income, was April 30 of this year. That tax brought in 84,700.000. Would the minister not be wise to allow that to continue on in 1945 and 1946 or even longer? It is based on an expectancy of life table anyhow. If that went on, I know that many dollars would come in. We need the money now; we do not need it fifty years from now. I think the minister would be wise to accept my suggestion and allow that to carry on. I believe the minister would also be well advised to send out a notice to all those who are on that list telling them what their deferred tax is, and also send them a table of life expectancy such as I have here. I know very few people know that there is such a table got out by the government; in fact, many people do not know that there is such an item as item 36 in the tax form. They do not know that when they die the estate has to pay the balance of the tax. Many would like to pay it now. I would also suggest that instead of making people pay the whole tax at once, they be allowed to pay half or one-quarter or three-quarters or any portion they like, but at the same rate of discount as allowed before.	*
In regard to payroll deductions I have talked to industrial workers and many of them say, "We would rather that the government took 100 per cent of the tax instead of only 95 per cent, so that at the end of the year we would not have to pay the government five or ten or fifteen per cent, but would likely have the whole tax cleared off. If not, we should have to pay only a very small amount, and in some cases the government would owe us money and we would have money coming to us."
The budget imposes different rates of duty on different articles entering this country. There is one duty or luxury tax which I think should be removed entirely. I have mentioned this in the house before and I am mentioning it again now. I refer to the tax on the poor man's alarm clock. I think the tax should be taken off entirely on alarm clocks costing not more than $4.50. It is hard enough to get an alarm clock as it is, and the luxury tax should be taken off altogether.
I have a suggestion to make to the Minister of National Revenue. I have mentioned it before and am mentioning it again, and then I am through. In the city of Peterborough we have been asked to subscribe to the different victory loans. In the first loan our objective was $2,750,000 and we subscribed $3,085,000. In the second loan our objective was $2,750,000 and we subscribed $3,027,900. In the third loan our objective was $3,250,000 and we subscribed $3,546,450. In the fourth loan our objective was $4,350,000 and we subscribed $4,679,550. In the fifth loan our objective was $4,600,000 and we subscribed $4,700,000. In the sixth loan we went away over the top, subscribing over $4,700,000. The people of my district are doing everything possible to help the war effort, and I am going to ask the Minister of National Revenue, as I asked him last year, to open an income tax office in Peterborough, at least during the time when the returns are being filled out, and have there one or more men to help the taxpayers to make out their returns.


Mr. H. W. WINKLER (Lisgar):: Mr. Speaker, my main purpose in rising is to ask for consideration for infant industries in my riding of Lisgar in Manitoba. I know that is a very unusual request to make on the budget, but that is my main purpose in rising.
Before doing so I should like to congratulate the Minister of Finance (Mr. Ilsley) especially upon removing entirely the duty on agricultural machinery. Prior to this budget the duty was only 7^ per cent, but that duty weighed heavily on the agricultural producer, especially in the west, because the implements of industry are so essential in production there, and with the mechanization of farms the cost is steadily rising, and therefore the task would have become increasingly burdensome. The removal of the duty has been something which has been sought ever since I can remember, and it is very gratifying indeed that it has actually come to pass at last.
I should also like to refer to the announcement which was made within recent weeks that United States funds would be forthcoming for those who wish to travel in the United States. I would suggest that the amount be extended so that those who require treatment for health, especially those with a delicate constitution, be permitted to visit the southern states in the winter time, particularly between

The Budget-Mr. Winkler

October and May, when the sun's rays become very oblique and when one becomes impoverished more or less from not receiving those rays on one's anatomy. Few of us are rugged Stefanssons, and very few of us regard the Arctic as friendly as Mr. Stefansson did. With the month of October or November arctic weather begins to encroach on the Dominion of Canada and one cannot very well receive the rays of the sun to advantage in this climate during the winter months. For that reason I believe it would be advantageous to the health of the Dominion of Canada if sufficient United States funds were forthcoming to permit people seeking health to visit the southern states. I do not anticipate that there would be any great difficulty in making the necessary arrangements. It would be an investment that would soon bring a return. Further, I do not think this country would lose a dollar by it because, as those of us who have ever travelled in the United States know, there are dozens of people wherever you go down there seeking information as to Canada's summer resorts and every Canadian who visited the southern states would be a missionary for our resorts. It would mean that twelve people from the United States for Canada's one would travel increasingly in Canada. Therefore, Mr. Speaker, I am convinced that this country would not lose one dollar.
Speaking of tourists, when this war ends, as we all hope it will soon, and it may end suddenly, the United States tourist, who is a great traveller by car, will possibly try to enter the Dominion of Canada. The constituency of Lisgar, which I have the honour to represent, extends along the international boundary line for seventy-eight miles. There is no barrier, no river whatever, nothing to prevent anyone from crossing the border. Five United States macadam roads approach the boundaries of my constituency. Two of them meet Canadian roads; the other three do not. I assume that this situation could be described as fairly general in the Dominion of Canada, where we are not too amply equipped to meet the tourist demands which will likely follow the war. I therefore suggest that consideration be given to the creation of a fund which would permit the provinces, already impoverished as we know, to enter upon the construction of all-weather roads which lead to the United States.
There are two industries to which I wish particularly to refer. The first, which is only two years old is known as the bentonite industry. There is in Canada only one deposit of this material which is being worked. As the age of the industry would indicate, it is a war-

time enterprise, and made possible only by the war. I emphasize the words "made possible." As many know, this metal is a volcanic ash which was deposited on portions of this country in prehistoric days, or rather, deposited on the ancient sea and washed into coves and deposited in beds ranging from a few inches to several feet deep. That clay or rock is mined very readily. Inasmuch as at one time it was subjected to intense heat it is suitable for certain purposes connected with war-time industry. It acts, among other ways, as a filter which is necessary in the production of oil and gasoline. It also acts r. s a catalyst in the production of synthetic rubber. Its most useful purpose before the advent of the oil business was as a binder for moulding sands in steel foundries. These are the three purposes for which it is needed, and one can readily surmise that war industries cannot get along without it.
There is one corporation in the United States with which this company is now competing. The Manitoba company is a joint stock company organized among farmers, although there are a few lawyers and quite a number of artisans interested in it. One might call it a shoe-string company; it used a lot of makeshift machinery since the promoters did not know what they would be up against, but they now have a pretty good plant, because of the expansion made possible by the war. The United States firm could easily run them out of business, but for one thing: at the present time it has about all it can look after in filling United States orders and practically none of its product is coming to Canada. Under these circumstances one would think that ordinarily the Canadian industry would have a fairly good chance to survive, but here is what it is up against. The company is not asking for tariff protection to exclude the United States competitor after the war, but it would like to be treated at least with fairness with regard especially to freight rates.
I wish to place a few figures before the house regarding freight rates on the raw clay from Jackson, Mississippi, to Sarnia, as compared with the rate for the same commodity from Winnipeg to Sarnia. In Canadian dollars the rate from Jackson is $7.40 per ton, as against $8.50 per ton by the Canadian National Railways from Winnipeg. Of course the distance from Jackson is shorter than that from Winnipeg, being 995 miles as against 1,500 by the Canadian National; however, a direct line from Winnipeg to Sarnia would lead through the United States, this route having a mileage of 1,113. There is not any great complaint about the difference as regards freight

The Budget-Mr. Winkler
on raw clay, but the activated clay, that is clay which has been treated and rendered suitable for the purpose for which it is intended, is a different matter. The freight in Canadian funds from Jackson, Mississippi, is only $9.46 per ton as against the Canadian rate of $16.00 per ton. This indicates far too wide a differential, $8.10 per ton on Canadian shipments as compared with $2.06 in respect of United States shipments. If that disparity is permitted to continue after the war, the Canadian company cannot begin to compete with the United States vrcpariy, and, it is safe to say, would be forced out of business. What would be lost? First, the company, which now employs a good many people-I do not know the exact number-would cease to exist. Last year it paid in freight rates to the Canadian National Railways over sixty thousand dollars. The other loss would be that of post-war expansion, the hope of enlarging the plant and thereby giving employment to ex-servicemen when they return.
There is another handicap under which the company operates and for which it has sought redress, but without result so far. It has asked for the milling-in-transit rate. Those hon. members who are accustomed to concerning themselves with the wheat milling business know that Canadian mills are accorded a milling-in-transit rate, which is a nominal rate with a stopover privilege; that is, the grain is brought a considerable distance in the bulk state, and is dumped into mills or elevators, at Kenora, at Winnipeg, at the head of the lakes and farther east too. This stopover privilege means quite a bit to the millers; they can, as I said, ship and mill products with a nominal charge for the stopover privilege. The bentonite company, which is known as Pembina Clays Limited, has been refused this privilege; and I think the time has come when this matter should be made public, because it is apparent that this young company, energetic and virile as it is, cannot hope to survive post-war competitive conditions unless it has some redress for the handicaps which I have described.
There is in my constituency another industry which is also in the infant stage; it is that of corn growing. It also was pioneered, as far as western Canada is concerned, in the constituency of Lisgar, and in the eastern half of that constituency practically all the grain corn in western Canada is grown. In 1941, when we had a very good crop, about twenty per cent of Canada's production was raised in that small area. Since then we have run into difficulty. In 1942 we had eight killing frosts in September, night after night,
and the crop was virtually ruined. In 1943 there was a considerable improvement, but still there was very cold weather all through the season and cold weather is not at all suitable for corn growing. In that district we have twelve commercial corn driers, and it could safely be described as a thriving industry up to a point. In my own case, com on the farm with which I am connected is used as a substitute for summer-fallow, but in most cases it is used as a cash crop by the small-acreage farmers.
In 1941 freight assistance was started in connection with the bringing of grains to eastern Canada. It was first announced that corn would be included in those grains, but later that was withdrawn and still later it was mentioned that, instead of western corn coming to Montreal, which is the main market, it would be accorded a freight subsidy from Calgary and Edmonton to Vancouver, instead of from the head of the lakes to Montreal. Under that arrangement in 1941, from October to December, 17,420 bushels were shipped to Vancouver; in 1942 a portion of the crop, 162,200 bushels, and in 1943 only 80,679 bushels, which would indicate that less than ten per cent of the product from our district has been shipped to Vancouver. All the rest, I am told by those who engage in the drying, shipping and selling, has been disposed of, mainly in Saskatchewan and some in Alberta.
It has come to my notice around the corridors of this building, I have been told by several persons, that the Ontario farmer does not like to see Manitoba corn sold in Ontario. I think that is a mistaken idea, because there is as much difference between Ontario and Manitoba corn as there is between Ontario and Manitoba wheat. The wheat of Ontario produces the best pastry flour; our wheat, of course, is, as we think, better for producing bread flour. The same holds in regard to corn. Eastern corn is starchy and produces corn starch and corn syrup, which the western com cannot under any circumstances as yet produce. Western corn is highly protein and produces the best chick feed and corn meal. In 1941 western corn was sold in Ontario at twelve cents a bushel over Ontario corn, the reason being that the demand for corn meal and chick feed was such as to force the price up. This did not mean that the situation would always be so, but that was the condition then. I think that explains roughly why our western corn is sometimes in demand over eastern corn, although at times during the last two years eastern wheat has been at a premium over western wheat.
What we would like to see is a fund set aside so that a freight subsidy on com will be
The Budget-Mr. Winkler

returned to the Fort William-Montreal point after the British Columbia market has been satisfied. We have run into this difficulty, that the companies of British Columbia, which are in the habit of dealing in corn, do not particularly like our Manitoba corn. They are accustomed to Argentine and South African corn, and a good many dealers in Manitoba who have been shipping say that they will ship no more corn there. If we should again have as large a crop as in 1941 we would be under a considerable handicap in having to ship it to Montreal in competition with other grains which receive a freight subsidy.
In that connection I would refer to sessional paper 345 dated June 2, 1944, moved for by the hon. member for Colchester-Hants (Mr. Purdy). What I am endeavouring to show is that in asking for this freight subsidy the people of Manitoba are not asking for anything unreasonable because, when one looks over the freight subsidies over the years, it would indicate that Manitoba has not been at all grasping in what she has obtained. This order asks for costs of federal assistance for twenty years. I have in my hand only the part that refers to the Department of Agriculture which covers the years from 1936 to the present time. In that period $53,937,000 was paid by the dominion government in freight subsidies. The province that received the most was Ontario, with $15,357,000-1 will not give the odd dollars. Saskatchewan and Quebec almost tied for second place. The second last was Prince Edward Island, with $944,000, and last of all was Manitoba with $352,000. The total, as I said, was $53,937,000. So that in asking for the return of the freight subsidy on corn from Fort William to Montreal we of southern Manitoba are not asking anything unreasonable.
There is in my riding another industry, not yet born, which I would refer to in passing. It is to be known as the vegetable oil extraction industry to be located at the village of Altona, where 16,000 acres of sunflowers are being grown by cooperative producers in that vicinity. In addition to the 16,000 acres there are a great many more on nearby farms not under arrangement with the cooperatives, although it can safely be said that com and the sunflower industry go hand in hand. It appears that, inasmuch as the cooperatives diesire themselves to go into the oil extraction business, there has been considerable feeling on the part of private industry that this is a mistake and should not be permitted or encouraged. On the other hand, I think that attitude is a mistake, because I am a firm believer in the idea that cooperatives and

private industry can exist side by side. I do not wish to go into details with regard to the attempts to establish this industry, but I mention it in passing and will refer to it when it comes up under another item.
I should like to say before taking my seat that I have been a member of one or more cooperatives since 1915, and at the present time I am a member of two. I also take an equal or a greater interest in private industry, because I am connected with agriculture and I have great faith that agriculture will remain a private industry inasmuch as we are individualists. I think that is all I need say at this time.


Mr. MAXIME RAYMOND (Beauharnois-Laprairie) (Translation):: Mr. Speaker, the budget speech has made it clear that our war expenditures, far from being decreased, as we had been given to understand in previous discussions, will be increased to such an extent that they will reach the tremendous figure of $5,300.000,000, which will bring our total expenditures to $6,000,000,000 for 1944-45. In view of the statement which the Prime Minister (Mr. Mackenzie King) made in this house on March 30, 1939, when he said that our country did not have unlimited powers and referred to the heavy burden of our national debt which then amounted only to $3,385,000,000, while to-day it reaches the sum of about $11,000,000,000 and will be $14,000,000,000 at the end of the fiscal year, Canadians have every reason to entertain fears about the future of their country.
I for one do not hesitate to repeat that our war effort is beyond our means, that it is leading us to ruin, and that it is a breach of the pledges that were given to the people. To meet those expenditures, the government is resorting to taxes, especially the income tax, and to loans.
The Minister of Finance (Mr. Ilsley) complained the other day about those who sell their victory bonds. That is unavoidable for the very reason that the country has exceeded its financial capacity-


Mr. LACOMBE (Translation):: Why has it exceeded its financial capacity? Do tell us.


Mr. RAYMOND (Translation):: -and that even if the people can be intimidated and compelled to purchase bonds, they cannot be prevented from converting them into ready cash because they need it to live.


Liguori Lacombe: Under legislation which you supported.


Donat Raymond: As regards the income tax as usual the budget does not

The Budget-Mr. Raymond
make sufficient allowance for family obligations. A living income must not be lower than a certain minimum, and the larger the family is, the more money it takes to support it.


Liguori Lacombe: And you ought to know that.


Donat Raymond: This budget, like the others, discriminates against the family. The tax should have been lowered in the case of those whose salary is insufficient to meet the cost of living, especially those who have families to support.
Thus, according to the Marsh report, the average cost of the support and education of a child in Canada is estimated at about $140 a year. But the head of a family is not allowed to deduct from his tax more than $108 for each child. That is a glaring injustice against large families.


Liguori Lacombe: You did not
say that in 1938.


Donat Raymond: Mr. Speaker,
I would ask you, Mr. Speaker, to see that these interruptions cease.
(Text):


Thomas Vien: Order. If the hon. member wishes to ask a question of the hon. gentleman who is now speaking, he may do so; but he must rise and address the Chair. Interruptions such as he has made cannot be permitted.


Liguori Lacombe: These are not interruptions. These are remarks on the speech being delivered by the hon. member.


Thomas Vien: Order. The hon. member for Beauharnois-Laprairie may not be interrupted except with his consent, and he objects. There must be no further interruption.


Donat Raymond: Immigration has been mentioned. Instead of spending money to bring in refugees who will take the place of our own people, let us help our large families by every means at our disposal, especially by tearing down slums where death is rampant.
I would now like to avail myself of the opportunity afforded by the budget debate to make a few remarks about the Canadian Broadcasting Corporation.
The independence of the Canadian Broadcasting Corporation, its autonomy, the lack of government interference in its administration and of political partisanship have been loudly proclaimed, and, last March, the chairman of the board of governors said that the corporation operated solely in the public interest, and reference is always being made to the guiding principles draughted in 1939. May I recall some of these guiding principles.


Section D:: 35. The Canadian Broadcasting Corporation is opposed to alfd will resist any effort which seeks to regiment public opinion or stamp out freedom of speech.


Liguori Lacombe: That's a joke!


Donat Raymond: It favours free access to airwaves for useful discussion. . . .


Liguori Lacombe: Another
hoax.


Donat Raymond: ... of all controversial matters. It is firmly convinced that the safest way to preserve freedom of discussion lies in the adoption of a policy which allows the holders of the greatest possible number of opinions, to express these views, be they ever so varied and dissimilar.
And Section 46 reads as follows:
The thorough exchange of ideas constitutes one of the means of safeguarding the freedom of our institutions. In every democracy, each individual is recognized the right of rebuttal.
The airwaves belong to the public and the constant purpose of the Canadian Broadcasting Corporation is to place within hearing of all the main viewpoints relating to matters of primary import.
Before the special committee on radio broadcasting, the Minister of National Services (Mr. LaFleche) spoke as follows:


Liguori Lacombe: Of War
Services, don't forget.


Donat Raymond: Of National War Services. Thank you.
As has already been stated by the Prime Minister and by my predecessor, the corporation is not a department of the government. On February 8 of this year the Prime Minister said: "Certainly the government's view is not that the Canadian Broadcasting Corporation is a department of the government. It is not; it is a separate corporation.


Liguori Lacombe: It is through the facilities of that corporation that the hon. member has spoken as official candidate, in 1940.
(Text):


Thomas Vien: Order. I wish again to call the attention of the hon. member for Laval-Two Mountains (Mr. Lacombe) to what I have said already, that the hon. member for Beauharnois-Laprairie (Mr. Raymond) must not be interrupted while he is making his speech.


Liguori Lacombe: I will permit my hon.
friend to interrupt me.


Thomas Vien: Order. The hon. member must take his seat.


Liguori Lacombe: I want to know the truth about this question, Mr. Speaker. This is a question, and I want to know the truth.
The Budget-Mr. Raymond


Thomas Vien: Order.


Liguori Lacombe: And vm all-


Thomas Vien: The hon. member must
take his seat, and I must warn him that I will not allow the hon, member for Beau-harnois-Laprairie (Mr. Raymond) to be further interrupted in his speech.


Donat Raymond: In the
month of June, 1943, the chairman of the board of governors explained to the select committee on radio broadcasting the general principles that were being followed by the Canadian Broadcasting Corporation:
The independence and flexibility of administration of the national broadcasting authority to be assured by its constitution as a public corporation. .	.	. The independence of the
corporation from partisan control to be assured by its constitution. As a trustee for the people of Canada and the payers of licences, the board of governors should render an account of its istewardship regularly to parliament and be subject to ultimate parliamentary control.
I made it a point to enumerate the guiding [DOT]principles that were being followed and to quote the statement of the minister, who is responsible for the radio broadcasting activities as well as that of the chairman of the -board of governors.


Liguori Lacombe: Who is he? You say: the minister. Is he the Hon. Mr. Mitchell? The minister, that is not very plain. We want to know. Are you afraid to say?
(Text):


Thomas Vien: Will the hon. member for Beauharnois-Laprairie please be seated.
I have already said to the hon. member for Laval-Two Mountains (Mr. Laeombe) that I would not tolerate any further interruptions of the speech made by the hon. member for Beauharnois-Laprairie. It is apparent that the hon. member does not intend to obey the injunction of the chair, and I will have to name the hon. member.
I therefore name Liguori Laeombe, member for Laval-Two Mountains.


Ian Alistair Mackenzie: Mr. Speaker, in accordance with the rules of [DOT]the house-


Liguori Lacombe: I only put a question to my hon. friend.


Thomas Vien: Order.


Ian Alistair Mackenzie: In accordance with the rules of the house, and in the absence of any explanation by the hon. member, I shall have to move, seconded by the Postmaster General (Mr. Mulock):
I Mr. Laeombe.]
That the hon. member for Laval-Two Mountains, Liguori Laeombe, be suspended from the service of the house for a period of seven days.


[Stage Direction]
Motion agreed to.
Thomas Vien: I would ask the Sergeant-at-Arms to retnove the hon. gentleman.


Mr. DORION:: I would not rise at this
time, but-


Thomas Vien: There is no discussion.
[Whereupon the Sergeant-at-Arms touched the hon. member on the shoulder, and he thereupon retired.]


Thomas Vien: The hon. member for
Beauharnois-Laprairie may now resume. In view of the fact that his speech has been constantly interrupted since the beginning, he may go over his speech again, and commence his forty minutes from this moment.


Donat Raymond: As I was saying a moment ago, I wished to set out the guiding principles quoted in support of the claim that the CBC was an independent and self-governing body, free from governmental interference. I regret to say that the facts are not in accordance with these contentions. I call the attention of the house to the 1942 plebiscite. As soon as the plebiscite was announced, the League for the Defence of Canada was organized in Montreal. On February 13, 1942, the secretary of the League wrote to Mr. Augustin Frigon, assistant general manager of the CBC, requesting the use of the CBC radio stations. On February 16, 1942, Mr. Frigon replied as follows:
Most likely, our regulations, Which apply to general elections, will be enforced during the campaign which, in all probability, will precede the plebiscite announced by the government of Canada.
Our services are offered free of charge to all recognized political parties, and according to a policy which was adopted almost three years ago. I feel that so far we have observed, in this regard, a strict neutrality.
To sum up, your league may use individual private stations, but our corporation, in view of its national character, must remain neutral in any political matters.
The secretary of the League for the Defence of Canada replied that it was not a case of conducting elections or electoral campaigns or ascertaining the views of the parties or electing a party in preference to another, and that the policy mentioned in Mr. Frigon's letter should not apply in this case.
On February 24, Mr. Frigon wrote as follows to the secretary of the League for the Defence of Canada:
Our regulations in regard to the broadcasting over the CBC stations and networks of political

The Budget-Mr. Raymond
or controversial matters are quite clear and do not allow any other interpretation than that given in my letter of February 16.
I shall deem it a duty to convey to the proper authorities the remarks contained in your letter of February 18. In view of the importance of the plebiscite and the peculiar conditions of the campaign which will be waged on this issue, it is quite possible that our board of governors will place a special interpretation on our regulations.
And on February 28, 1942, Messrs. Murray and Frigon communicated the following message by telephone:
(Text):
The broadcasting arrangements for the publicity are still under consideration, and the league's claims are being taken fully into account; decision cannot be taken until the enabling bill becomes law. Meanwhile the league for the defence of Canada is in the same position as any other political organization.
(Translation): The act ordering the plebiscite was passed on March 5, and there was another exchange of correspondence. On March 11, Mr. Frigon wrote to the secretary of the league, as follows:
Nothing has been decided yet about the use of the stations and networks of our corporation for the discussion of the problem connected with the plebiscite recently ordered by parliament. So far, your request is the only one which we have received for the use of our stations.
On March 30, the secretary of the league wrote to Mr. Frigon, as follows:
The newspapers announce that the Prime Minister will soon speak on the question.
Should we understand that you have come to a decision, and would you be kind enough to let us know what that decision is.
There was no answer to that letter. But on April 4, the press announced that the Right Hon. Mr. King, Hon. Mr. Hanson, Mr. Blaclcmore and others would broadcast on the question. The league wrote another letter, and finally on April 8, the secretary received the following answer:
Ottawa, April 8, 1942. Mr. Andre Laurendeau,
League for1 the defence of Canada.
Dear Sir,
In accordance with instructions received from the federal government, our corporation has placed at the disposal of the administration a certain number of periods on its various networks for the use of speakers who will discuss the plebiscite.
Your last letter, dated April 4, shows that you already know' how the transcontinental network is to be used in that connection. Eight half-hour periods will also be allotted to this matter on our French network. We have not yet been informed of the names of the speakers.
Such is the position. It is claimed that the Canadian Broadcasting Corporation is absolutely independent of any governmental control, but we have a convincing proof of
the contrary, in the letter from Mr. Frigon, assistant general manager, who states:
In accordance with instructions received from the federal government, our corporation has placed at the disposal of the administration a certain number of periods on its various networks for the use of speakers who will discuss the plebiscite.
You call it an independent corporation. Yes, to camouflage all the government's propaganda over the Canadian Broadcasting Corporation's stations.
. We had been asked to answer "Yes" or "No", but all those who were in favour of an affirmative answer had the opportunity of speaking over the radio, including the leader of the social credit, Mr. Hanson and Mr. Coldwell.
But all those who were in favour of a "No" vote were prevented from using the facilities of the national network. Even our offer to pay for the use of the radio, was turned down. Let us stop fooling the public by leading them to believe that the Canadian Broadcasting Corporation is independent while it is a political tool of the government. We hear much talk of freedom, justice and democracy. It would be better to respect those principles in Canada before attempting to enforce them somewhere else.
The 30 per cent of our people who voted "No" and who contribute to the maintenance of the corporation had the same rights as the other 70 per cent who voted "Yes", if it be true that the corporation's object is to ensure the expression of opinions, and that its guiding principles, that I just quoted, are that the radio waves belong to the public and that the Canadian Broadcasting Corporation has among its objects that of ensuring that the various views on matters relating to questions of foremost importance will be expounded.
Here is a matter of foremost importance, yet the proponents of the negative vote were barred from expressing their views through the facilities of the Canadian Broadcasting Corporation.
I wish to quote the following excerpt from an article published in Saturday Night by Mr. Sandwell, who is at present, I believe, one of the governors of the Canadian Broadcasting Corporation. I quote:
(Text):
The Freneh-Canadian press is regarding with a sort of cynical amusement the attacks which are being directed against the CBC in connection with the Bracken broadcast and-though these are dying down-the "Things to Come" series. For the Freneh-Canadian press has a long memory, and it is now recalling, with ample justification, the fact that from no Englishspeaking source did there come any protest against the extraordinary error of policy by
The Budget-Mr. Raymond

which the CBC refused to allow any broadcasting from its stations on the No side of the plebiscite campaign. It is difficult at this distance of time to understand, and quite impossible to justify, that profoundly illogical policy. The people having been asked by their government to express their views upon a specific question, the arguments upon both sides of that question should have been presented with equal freedom. It was not treasonable, it was not even contrary to the defence of Canada regulations, to vote or to argue on the No side. The press was permitted to disseminate No arguments; the private radio stations had equal freedom. But the CBC carried the Yes arguments and the Yes arguments alone. The policy was not only illogical, it was most unwise. Its result in Freneh-Canada was to increase the No vote by creating the impression that the Yes case was being stuffed down the throats of the Frencli Canadians.
We have to express our own penitence for not having raised our voice against this piece of unwisdom at the time. Our only excuse is that we entirely failed to realize its import.
(Translation):	I am very glad that Mr. Sandwell has been appointed one of the governors of the Canadian Broadcasting Corporation. I hope that such mistakes will not recur.
Here is another instance. Two or three days after Doctor Gauthier had been appointed organizer for the Bloc Populaire in the Quebec district, he was arrested and it was announced all over the country, through the Canadian Broadcasting Corporation, that Doctor Gauthier, organizer for the Bloc Populaire in the Quebec district, had been arrested and court-martialed. There was no ground for the charge laid in that case, as was shown by the evidence; that fact was known and an attempt was made to bring him into disrepute only because he had just been appointed organizer for the Bloc Populaire. For many weeks that trial was mentioned over the radio, and each time it was stated that Doctor Gauthier was an organizer for the Bloc Populaire. When he was acquitted after the court which tried the case had deliberated for a few minutes only, the Canadian Broadcasting Corporation merely announced that Doctor Gauthier had been acquitted. For once, the words "organizer for the Bloc Populaire" were omitted, and some people would afterwards have the public believe that the Canadian Broadcasting Corporation is not a political organization, that it is a body free from political influence and government interference.
I wanted the public to be aware of these facts. If the complaint is sometimes voiced that we lack confidence in our public men, all I can say is that they well deserve what they get since they have been deluding the people far too long.
One more remark before I conclude. In. the course of the debate this afternoon, the Min-

ister of Labour (Mr. Mitchell) intimated that farmers' sons were no longer called up for military service. I regret to say that I know of cases where such men are still summoned for military duty. I regret to say that some farmers' sons asked for postponement months ago that they might work on the farm, and they have received no reply or have been turned down. I also regret that the inquiry requested by the hon. member for Temiscouata (Mr. Pouliot) concerning happenings in British Columbia where force has been used to have recruits signed up for active service has not been granted. I have received many letters dealing with this matter and a recent message was really heart-rending. It concerned a sick recruit who called on the doctor for treatment. The first question which the doctor asked him was; "Have you signed up for active duty?" As the recruit replied "no," the doctor refused to look after him. These are the means resorted to in order to compel men to enlist for active service. And yet the public is still led to believe that we are following the voluntary system! Well, if we wisn to retain the confidence of the public let us cease to mislead them.
(Text):
^ Mr. P. E. WRIGHT (Melfort): Mr. Speaker in taking part in this budget debate I intend to restrict my remarks to one particular section of the speech made by the Minister of Finance (Mr. Ilsley), namely, that dealing with trade and tariff policies.
I think we are all agreed that the freer movement of trade in the after-war years is essential not only to our own prosperity but for the peace and welfare of the world as a whole, and any movement made to bring about that desirable end is welcome at this time. I should like, however, to point out to the minister the position of the various countries of the world. They have changed to a remarkable degree during the past five years, and if we are to export our goods to them we must be prepared to take in exchange for our goods either manufactured goods or raw materials from the rest of the world. Every nation both large and small has increased its manufacturing capacity during the war years, and every other nation will be doing just what Canada is doing after the war, seeking to find a market for exportable surpluses. This can mean only one thing, that we must be prepared to take other goods in exchange for our own.
It appears to me that the problem of prosperity after the war is not entirely one of finding export markets but rather one of every nation being able to increase its own capacity

The Budget-Mr. Wright
to use goods and services. In other words, each individual nation has to organize its internal economy so as to raise the purchasing power and standard of living of its own people, so that we may all be able to use more goods than we were able to consume in the nineteen-thirties. The freer exchange and export of goods has its place but, as I listen to government members and read certain papers in this country, it seems to me that in placing responsibility for a prosperous Canada on export trade alone they are on very narrow ground indeed. As a matter of fact, I think it is just looking for an excuse to go back to the conditions which existed before the war. During the depression years that was the story to which we listened, that we could have prosperity only if other nations were prepared to buy from us larger quantities of goods and services than we were prepared to buy from them. For five years under the Tory government of Mr. Bennett we starved at home in order that we might have a favourable balance of trade and in order that we might export more than we imported. We in this group believe that if we are to have this freer movement of trade which everyone desires we cannot leave it to the exporters and importers. We believe that we must have government export and import boards that will be prepared to give direction and, if necessary, assistance in these exports.
In the past we have only exported when the exporter could make a profit, and to make that profit the exporter very often found that he had to force the price of the article which he was exporting on the domestic market down low enough to make a profit on it when he wanted to export it. Therefore we found that a small exportable surplus of five or ten per cent of any particular article controlled our domestic price. Take beef and butter, for example, before the war, and eggs as another example. Before the war we found that in the summer months in western Canada eggs could be bought at seven cents a dozen, while five months later in November and December the same eggs were worth fifty cents a dozen. No industry can be prosperous with price fluctuations such as that, and the price fluctuations are caused largely by the fact that when surpluses come on the market they have to be exported and the exporter has to force the price down to where he can make a profit on it. On the other hand, we have found that certain companies which had a monopoly and complete control over the price structure of the article which they had to sell have often used our domestic market as a means ofbonus-ing their export trade. We have found this in our cereals I have seen advertisements, for
instance, for breakfast foods made in western Canada in the city of Saskatoon offered for less money in London than had to be paid for them right opposite the factory at home. These conditions have not led in the past to freer trade but rather to restrictions and world cartels and monopolies which have divided the world into economic spheres of influence, which has been one of the major factors in causing world wars in the past.
We believe that the duty of these government export and import boards would be to see to it that we have a freer movement of goods both out of and into Canada. These boards would be used as an instrument of government policy in creating better and larger markets for Canada's exports and1 controlling our imports so as to fit them into an expanding Canadian economy.
We do not believe, however, as the government does that we should use the fact that other nations are not prepared to go as far as we are as an excuse for doing nothing at home. Our domestic market is our largest market. Up to the outbreak of the war approximately seventy-five per cent of all the goods and services produced in Canada were used here. This is something over which we have complete control, and we cannot say that we have done our best as long as there is one home in Canada that lacks anything which can be produced in this country. This leaves a wide field open, and neither this nor any other government has the right to use the hackneyed excuse that lack of world trade prevents us from having prosperity. It is, after all, only surpluses that we need for export.
In this pre-election budget the Minister of Finance keeps a promise that was given by the Liberals some twenty-five years ago when he removes the tariff on farm implements. In other words, he gave to the implement manufacturing companies twenty-five years notice of the government's intention, and then the government seems to be surprised that these companies have so arranged their business largely to nullify, so far as the farmer is concerned, the beneficial effects of this lower tariff. The minister himself states at page 4183 of Hansard of June 26, 1944:
Changes in the custom tariff would here and now have little, if any, effect on the supply or cost of goods.
That was the government's experience in the past when they reduced the tariff on farm implements. In 1935 the government reduced the tariff on these products from. 25 per cent to 124 per cent, and the price of farm implements promptly went up 4-4 per cent. As a result a committee was set up in Ottawa to in-
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The Budget-Mr. Wright.

vestigate the prices of farm, implements. That committee brought in certain findings. But have the government done anything about those findings? I am going to read a few as they appear in the minutes and proceedings, report No. 20, on farm implement prices by the special committee appointed by the House of Commons in 1937. I will not read all these recommendations, since there are thirty-six of them, but will read just a few to show what the government have failed to do in carrying out the committee's proposals:
7. That farmers have a right to expect the level of farm implements to be based on the most efficient and economical manufacturing and distribution cost. . . .
13. That the matter of freight rates on farm implements should receive immediate attention with a view to restoring lower rates thereon.
There has been no change in freight rates on farm implements since that time.
22. That indirectly this retention of profits in the United States affected the price level of farm implements in Canada, as tile true profits arising out of their Canadian operations were not properly appreciated by the United States companies.
I shall have more to say about that later on.
24. That the companies should encourage the further standardization of replacement parts in the same implements manufactured by different companies and in addition standardization of the implements themselves.
Well, the government has done nothing during the past number of years to see that these recommendations in regard to standardization are carried out.
28.	That the profits to the farm implement companies on the sale of replacement parts is excessive, and the price of these to the consumer should be materially reduced.
They have been going up steadily ever since.
29.	That the increases announced by the companies in January, 1936, were not justified by an increase in manufacturing or distribution costs or by the financial results of the companies in so far as these were affected by the price level of farm implements.
Yet nothing has been done about it.
30.	That over the period 1891 to 1936 retail prices of farm implements have been maintained at too high a level as shown by the financial returns to the companies engaged in the industry, during that period. . . .
33. That the committee is of the opinion that the cost of distribution of farm implements is unnecessarily high and constitutes an important factor in the prices to the consumers.
These are recommendations made by the Ottawa committee. As a result of the failure of this government to carry out any- of these recommendations, in 1939 a Liberal government in Saskatchewan set up another com-

mittee to investigate this matter. On page 10 of sessional paper No. 124 of the Saskatchewan legislature it has this to say with respect to this matter. The findings and recommendations of the select special committee on farm implement prices and distribution include the following:
Early in 1936, the companies announced an increase of price in farm implements amounting to 4-4 per cent as found by the Ottawa committee. It w'as this particular increase, announced after a substantial reduction in the tariff from 25 per cent to 12J per cent, that gave rise to the Ottawa inquiry. Despite a further reduction in the tariff to 7J per cent and despite the findings of the Ottawa committee that this increase was not justified and that the prices of farm implements had been, over the years 1913-1936, too high, despite, too, a definite finding that there was an excessive mark-up over cost on cream separators and repair parts, and that the prices of these should be particularly and substantially reduced, this committee finds that none of these findings wrere given effect to, and that, in addition, further price increases occurred in 1937.
As this report states, the dominion government set up in 1937 a special committee to investigate this matter, and despite the fact that they spent thousands of dollars in this investigation and made the findings some of which I have read into the record to-night, they failed to follow up the investigation by taking any concrete action to give effect to those findings. As a matter of fact, the only people who made anything out of those proceedings were the counsel hired by the government, and they were paid a nice fat fee for their services on the various commissions. It was as a result of this that in 1939 a Liberal government set up another committee. They, too, brought in certain recommendations, but -again-the government failed to take any action with respect to them. I am going to read some of the things which the Saskatchewan investigation committee recommended. It states, on page 27 of its report:
This committee is of the opinion that, in the light of the findings in these two reports-
That is, the Ottawa report and the Saskatchewan report.
-and because of the general knowledge of the maintenance of prices at a given level by all companies engaged in the industry, a fair inference can be drawn that a tacit agreement exists between the companies to maintain substantially uniform prices above the level justified by manufacturing and distribution costs plus a reasonable profit.
This committee made a recommendation which, as stated on page 47 of the report, is as follows:
That, as the provisions of the Combines Investigation Act of the dominion appear to

The Budget-Mr. Wright
have been violated by the major companies in the industry, consideration should be given to instituting proceedings under the said act.
I ask this government if they have taken any action with regard to this monopoly control of the price of farm implements. Did the Saskatchewan government take any action with regard to it? None whatever. One of the reasons for the defeat of the Saskatchewan government in the last election was that they had taken no concrete action with respect to the findings of this committee. I say further that one of the reasons for the defeat of the present government when they go to the polls this fall will be the fact that they have failed to take any concrete action with regard to the findings of this committee and other committees which have been set up by this government. It reminds me of a story which an old gentleman who was the chairman of one of my recent meetings in the west told me. He said that the present old political parties reminded him very much of a flock of old hens which he kept over one year; he said they" did an awful lot of cackling for all the eggs they laid. That has been the position of the present government; they have done a lot of cackling for all the concrete action which they have put into effect to remedy some of these things.


James Garfield Gardiner: Do you think the new
government will take action?


Mr. WRIGHT:: 'We will wait and see about that. If they are as remiss in their activities as the last government was, they will probably suffer the same fate; but I do not think they will be.
It would therefore appear that, from our experience as farmers in the past, we can have little hope of any material lowering of the cost of implements through the present reduction in the tariff, unless the government is prepared to go further than it has ever done in the past and to see that these reductions are passed on to the consumer. Where we have international companies operating on both sides of the border they are able to flout any change in tariff and to maintain the price structures in both countries at whatever level they see fit. At the present time there is little, if any competition in the farm machine industry. I have here an extract from a speech delivered by Professor A. B. Macdonald speaking at a convention of the Canadian live stock cooperatives, maritimes, in Moncton, in December of last year. He said that monopolistic control had reduced the standard of living of farmers steadily over the past sixty-five years.
Farmers throughout the maritimes, he declared, were compelled to pay the highest prices
for needed commodities while receiving only the lowest prices for their produce. In 1905 there were 503 manufacturers of farm machinery in Canada and the United States. In 1927 there were, as a result of mergers, only twenty-five and in 1942 there were only eight, with two of these controlling ninety per cent of Canadian sales.


James Garfield Gardiner: Under a socialist government there would be only one.


Percy Ellis Wright: I shall have something
further to say about that later on, as to who will control that company. In the report of the committee appointed in the United States in 1935 to investigate the farm machine industry the following appears:
The effect on prices of this concentration of production is such that, with respect to the most important farm implements, the prices established by the leading manufacturers, especially International Harvester Company and Deere and Company, constitute in so far as the machines are of a closely similar character, the price level which all manufacturers observe.
The Saskatchewan committee in investigating this phase of the matter state:
This committee has noted the simultaneous increases which have been put into effect by all of the companies, since 1935, and have taken notice of the well known fact that, generally speaking, the price of each comparable implement is fixed at approximately the same amount by each company marketing such an implement.
The Ottawa committee, appointed by this government, state:
The committee is of the opinion, as a result of the above finding, that there is competition in the matter of securing sales but little or no effective competition in the matter of prices as between companies. . . . The companies state that it is the practice in the industry to exchange price lists and it may well be that this practice enables the companies to quickly gain uniformity in the matter of price levels.
Now you have the opinion of every committee that has been appointed, and I think it is quite evident from these findings that if this government is genuine in its desire to assist the farmers it will have to go much further and take further action than simply the removal of tariffs from farm implements. I would ask the minister if it is the intention of the government to remove the dumping duty on the importation of farm implements and parts? That is to say, if farmers or a cooperative wish to go over to the United States and go bargain hunting for cheaper implements, should they secure such implements will they be allowed to import them without duty, or will the dumping duty be placed on them and the retail price in the United States paid? This is a very important matter if we are to get any benefit from the
The Budget-Mr. Wright

reduction in tariff, and I believe it is something which the minister will have to take into consideration.
I am strongly of the opinion that if the government is genuine in its desire to help the farming industry one of the best ways in which it can do so is by assisting the cooperatives in western Canada in entering the farm machine industry. That was the finding of the Saskatchewan committee, and it was one of the recommendations of the Ottawa committee. As indicated in the Saskatchewan report at page 29, the committee-
. . . recommends the development in this province of a cooperative movement among the farmers to handle and distribute farm implements with a view to substantially reducing the cost. The committee feels that the farmers of this province, individually, and collectively in such cooperative groups, should have every source of supply opened up to them if their efforts to reduce prices are to be successful.
One of the ways in which this government might assist in this matter is by seeing, when the war is over, that government plant and equipment which might be suitable for the manufacturing of farm implements should be turned over to the cooperatives already formed in western Canada for the purpose of manufacturing and distributing implements at reasonable prices, and every assistance should be given them in supplying their needs.
In 1939, as a result of the Saskatchewan investigation, Canadian Cooperative Implements Limited, a cooperative company, was set up with head offices in Regina, to take definite action with respect to the manufacture and distribution of farm implements. It was incorporated under dominion act with an authorized capitalization of SI million, and a large portion of this capitalization has already been collected in cash from the farmers supporting this cooperative in the west. The cooperative, however, have been unable to obtain the allotment of farm machinery because they were not in operation prior to the setting up of the wartime prices and trade board. They are at the present time affiliated with United States cooperatives and have bought a manufacturing plant in the United States which is now engaged in manufacturing war supplies but which, immediately on the conclusion of the war, will be used for the manufacture of tractors for distribution cooperatively in both the United States and Canada. It is only reasonable to expect that this government should first give to this cooperative a quota of farm implements and repair parts. That is something the government should see to immediately, as soon as implements are available.


James Garfield Gardiner: That has already been taken care of.


Percy Ellis Wright: Well, they are certainly not able to distribute farm machinery as yet; the only thing they handle is second-hand machinery.


James Garfield Gardiner: The correspondence in the matter has got to the point where understandings are being reached.


Percy Ellis Wright: I am glad to hear that and I hope that something definite is done about it. It is over two years since the company was set up.
In the second place the government should see to it that, after the war, plant and equipment are made available to the cooperative for manufacturing any particular line of cooperative farm implements in the dominion that they wish. As shown in these reports, to all intents and purposes a monopoly in this industry exists in Canada and the United States, and this monopoly has flouted the government in the matter of reducing prices when tariffs were reduced. In fact, the Saskatchewan committee, at page 35 of their report, state:
This committee is of the opinion that, where a reduction in duty does not result in a reduction in price, it is because of a tacit agreement between the leaders in .industry that the savings resulting from the tariff [DOT] reductions will not be reflected in a lower price and the resultant maintenance of the .former and unjustified price level. The committee is further of the opinion that, where the effect of such reductions in duty is ignored by the companies concerned, this should be constantly and persistently brought to the attention of the consuming public. If this is done, the committee believes that it will have a salutary effect on the companies and that, as a result, the companies engaged in the industry will be forced to pass the savings on to the consumer.
What a pious hope, that one of these monopolies in the United States will be affected by public opinion in Canada when our own government has not backbone enough to institute proceedings against them under an act which the government itself has drawn up and which it admits that it believes the companies are flouting!


James Garfield Gardiner: The act provides that any six people can start action.


Percy Ellis Wright: I must say that this public opinion has never had the desired effect in the past, and I would strongly urge that the government take definite steps at this time to see that the 7i per cent tariff reduction is passed on to the farmer, together with the ten per cent reduction in the war exchange tax. The only reason given by the companies

The Budget-Mr. Macdonald (Brantford)
for not passing on these benefits to the consumers was that they were losing money on their Canadian companies. This fact, however, was not borne out by evidence submitted both to the committee in Ottawa and to the committee in Regina. The Ottawa committee found that the International Harvester company, Deere and Company, and other companies in a similar position when importing from the United States to serve the Canadian market, retained substantial profits arising out of the Canadian business, and that in examining the Canadian results no consideration was given to this amount retained in the United States being properly attributable to the Canadian business. To illustrate, in the period 1926 to 1935 inclusive, which it will be noted included five quite abnormal depression years, the International Harvester Company showed in its Canadian books a profit of $7,500,000 before payment of income tax. However, it was found that an additional $17,000,000 of profits had been retained in the United States, making the total profits accruing from the Canadian business some $24,000,000. In excuse the company stated that they were of the opinion that unless they invoiced all their goods to the Canadian company at a fair market value as determined by the Department of National Revenue, a dumping duty would be imposed. That is why I say it is very important that this government do something about the dumping duty.
In view of all these investigations and the findings which have been brought down I would strongly urge upon the government the desirability of either establishing a government-owned plant for the manufacture of farm implements in Canada immediately after the war, or giving the necessary assistance to enable the cooperatives of western Canada to establish a plant of their own in order to break this monopoly which, without doubt, exists in the farm implement industry in Canada.
This government has paid a great deal of lip-service to cooperatives. I should like to see it lay a few eggs that would be of some benefit to the cooperative industry. The Canadian federation of agriculture and various other agricultural bodies throughout Canada have been urging the necessity of a cooperative act in Canada. I should like to read from a booklet entitled, "Post-War Reconstruction for Agriculture", issued by the Canadian Federation of Agriculture, in which they say:
Canada would be well advised to go all-out in encouraging people's cooperatives as a positive feature of reconstruction policy.
A federal cooperative act, to clearly define the principles, the rights and the place of cooperatives in our national economy is needed at once.
While paying this lip-service the government has failed to clarify the position of the cooperatives in Canada, with respect to taxation. Therefore I say that two things which should be done immediately are these. The government should give assistance to the cooperatives in western Canada which have been formed for the purpose of manufacturing and distributing machinery, and should bring in at this session a cooperative act which will clarify the position of the cooperatives with regard to taxation in Canada.
On motion of Mr. Macdonald (Brantford City) the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, July 5, 1944